GATT, Soviet Aid Dominate Talks
HOUSTON — ON a button she's passing out, United States Trade Representative Carla Hills notes that ``The Uruguay Round is not a new dance.'' It is a round of trade talks between 97 nations under the aegis of the General Agreement on Tariffs and Trade (GATT). Those talks have been the hottest issue discussed by the leaders of the seven major industrial democracies at the 16th annual economic summit that concludes here today.
Mrs. Hills's predecessor, William Brock, claims the round could be ``as consequential as Yalta, Potsdam, and Tehran were in the 1940s'' - meetings that helped shape the postwar order in the world.
That's not only because the talks are aimed at removing multiple restrictions on trillions of dollars of trade. Mr. Brock also sees this round as embracing within the world economic system those nations in Eastern Europe or the third world that have been turning to free markets in an effort to obtain greater prosperity.
``By any standard, this is the world's constitutional convention on trade,'' he maintains. Should an agreement emerge from the round, it would stimulate free and fair trade, fostering ``a new burst of economic growth, job creation, and global prosperity.''
The US accuses the European Community of holding up progress on farm trade issues and thereby endangering the whole Uruguay Round. ``They have simply not been engaged in the process,'' charges Clayton Yeutter, US Secretary of Agriculture and also a former chief US trade negotiator.
Mrs. Hills says 40 nations will walk out of the Uruguay Round if no satisfactory deal on farm exports is reached. Five months remain in the negotiating period.
On another main summit issue, the question of financial assistance for the Soviet Union, the leaders of the US, Japan, Britain, France, West Germany, Italy, and Canada have essentially agreed at the summit to go their own ways, in the short term. For the longer haul, they are expected to announce in a communique a decision to seek a common method for assessing the progress of Soviet economic reforms with an eye on where they can best help.
The European Commission already has such a study under way. But it is not certain whether the US, Canada, and Japan will join this group, or whether a separate study will be launched.
Also, the seven will respond ``in positive terms'' to a letter from Soviet President Mikhail Gorbachev to President Bush on the occasion of this summit seeking a ``sustained economic dialogue'' with the West.
Disagreements on immediate aid to the Soviet Union are ``minor'' compared to the general desire of the seven to encourage in the Soviet Union more democracy, more free markets, more openness, less military spending, and a changed attitude between the Warsaw Pact and NATO, says Marlin Fitzwater, President Bush's press secretary.
The US is prepared to send experts to the Soviet Union to help it modernize rail and communications networks, grain storage sites, and food distribution services and other services. But the White House doesn't intend to provide financial assistance.
West Germany has been suggesting the industrial democracies agree on a $15 billion Soviet aid program. Bonn has already decided by itself to guarantee some $3 billion in West German commercial-bank loans to the Soviet Union to help it pay its international bills.
Getting agreement on the Uruguay Round is proving more difficult for the seven.
Mr. Yeutter says farm subsidies are not just a dispute between the US and the European Community. ``It is a global issue and a worldwide challenge.'' The $10 billion the EC spends on exporting its farm products hurts farmers in the Philippines, Argentina, and other countries, he says.
German delay on trade?
One suspicion is that Germany would like to delay making any pledge to reduce farm subsidies until after all-German elections Dec. 2. Chancellor Helmut Kohl's government does not want to antagonize its relatively high-cost farmers, a important voting bloc.
But the US notes this would leave precious little time to present a deal to Congress. US negotiating authority expires at the end of next June. Congress must be given at least 90 working days to consider legislation implementing a trade agreement.