Brock urges north-south trade parley
The United States is planning an unprecedented north-south meeting of trade ministers aimed at generating new ideas for world economic growth. If it works, the spring brainstorming session of representatives from as many as 15 organizations and industrialized and developing nations might provide new keys to defusing Latin America's so-called debt bomb.Skip to next paragraph
Subscribe Today to the Monitor
The idea for the meeting, which is to be held in Washington in the next two or three months (most likely in May), comes from William E. Brock, the chief US Trade Representative. Ambassador Brock, a former chairman of the Republican National Committee, is a vigorous advocate of free trade.
As Brock sees it, the debt problem can only be resolved over the long run by keeping markets open in both the industrialized and developing nations. As it stands, the debtor nations, with the encouragement of the International Monetary Fund (IMF), are trying to increase their exports while cutting imports from industrialized nations. Experts tend to agree that this approach, while useful in the short run, carries with it the dangers of protectionism and cannot result in a long-range solution.
The Washington meeting this spring, however, would have as its topic not only the debt problem, but the entire world trading system as well. Brock hopes to get trade ministers from north and south to move away from their squabbles and into the realm of common objectives.
''We're not going into this meeting trying to sell something,'' said one US official. ''We're trying to see if a small group like this has a chance of quietly coming up with some sense of direction.''
''We've been in a holding pattern, and the pressure is on to do restrictive things,'' the official said. ''We're trying to find themes that can motivate all of us to exercise some leadership.''
The official said that trade ministers attending the meeting would come from Canada, Japan, and the European Community as well as from sizable developing nations in Latin America such as Mexico or Brazil. Representatives of the Association of Southeast Asian Nations are expected to attend as are India, Pakistan, and South Korea.
The aim is not to go around the General Agreement on Tariffs and Trade, officials say. The GATT director general is to attend the meeting. An official said that one result of the meeting could be a strengthening of GATT. But it is clear that the size of the GATT - 88 trade ministers attended its 1982 meeting - makes it difficult to create the more informal atmosphere which may be needed to bring developing nations into discussions of world trade.
The problem also appears to have evolved beyond bureaucratic, or technical, solutions. It may require the high-level clout which Brock and others, meeting in a smaller setting, could provide.
''These problems cannot be solved at the technical level,'' said an analyst at the IMF. ''And who wants to listen to a bureaucrat? A bureaucrat can't move anything. He doesn't have a constituency.''
To the layman, this groping toward solutions to the north-south trading problems may sound abstract. But a 70-page pamphlet written by Miriam Camps and William Diebold Jr., published last year by the Council on Foreign Relations, starkly states the problem:
''No one needs to be told that world trade is in trouble and that the willingness of governments to cooperate in the removal of barriers has declined, '' say the two authors in their study titled ''The New Multi-Lateralism.''
''Many fear that the whole system of trade cooperation is in peril and may collapse; we share that fear,'' say the authors, who argue that there are three major needs:
* To strengthen existing rules and procedures.
* To extend the system of cooperation to cover a wider range of national policies.
* To increase the number of countries that play a critical part in making the system work.
The ''Brock conference'' this spring could point in the direction of increasing the number of countries playing such a leadership role.
''One of the things that is really bothersome about the world trade discussion these days is that so many industrial countries are talking about protecting themselves against third-world products, and putting up new trade barriers,'' said Brock in a recent interview. ''And yet they continue to loan those third-world countries money. It is an act of national insanity to think that you can loan somebody money and then that they would be able to pay it back if they cannot sell their goods.''
''The whole essence of the debt problem is to be sure that the trading system remains open, and that the Brazils and the Philippines and the other debtor countries in the world have a place in which to sell their goods and services,'' said Brock.
''The most important step which we can take is to keep our markets open,'' the ambassador continued. ''After that, then we still have to look at the fact that this third world debt is not going to be paid in a short period of time. And I think we're being somewhat unrealistic when we ask that they try to pay it all back very quickly. It can't happen. It won't happen. And frankly, it is very damaging to world trade, because what they do then is to stop all imports in order to maximize their foreign exchange for their debt service.
''It also means that they have to subsidize their exports in order to sell more goods overseas, and that distorts world trade. So the whole problem has a self-reinforcing quality to it. One thing which we have to begin to sit down and do is to find a way to work these debts out in a common-sense, carefully programmed fashion over a period of time.''