Lawmakers Will Be Pushed To Act If Trade Talks Fail


A TICKING economic time bomb with a snooze-inducing name lies in a back closet of the incoming 102nd Congress. It's the now-stalled effort by 107 countries, including the United States, to reach agreement on liberalized rules for international trade: the General Agreement on Tariffs and Trade, usually called GATT. If the countries are able to restart talks and produce an agreement, international trade for America and other nations should increase - or so the theory goes. Congress would have to ratify an agreement for the US to recognize it officially.

But if the talks remain in hiatus, or are restarted but produce no agreement in the next few weeks, there will be strong pressure from various segments of American industry to adjust tariffs on specific goods.

Some experts say that Congress could be expected then to put its own pressure on the Bush administration to support higher tariffs on some imports, and to reach trade agreements with individual countries.

For Congress the time bomb will keep ticking until March 1. The House and Senate have promised to put any GATT agreement on a fast track to legislative approval - but March 1 is the day the agreement runs out.

What is Congress likely to do between now and then? Mostly listen uneasily to the ticking, experts say. ``I would be very surprised'' if Congress took any action now, says Robert Lawrence, a senior fellow at the Brookings Institution. ``There is little Congress can do to make the current round of negotiations succeed.

``It would be inappropriate either for Congress to jettison the whole operation or to extend'' the fast-track deadline past March first, Mr. Lawrence says.

Speaker of the House Thomas Foley (D) of Washington says: ``I hope we haven't lost'' the possibility of a trade agreement. ``There is some time yet for the negotiations to be restarted.''

GATT talks, held in Geneva, have been in recess since they broke down in mid-December.

``The real question is what Congress will do,'' Lawrence says, if no agreement is reached in Geneva.

``Congress will [then] press the administration to act'' on a number of issues, says trade expert Claude Barfield of the American Enterprise Institute. He lists them as:

Below-cost sale, or ``dumping,'' in the US of products made overseas.

Other unfair trade practices by some nations.

Increasing US exports of rice to Japan.

In addition, Congress will press the Bush administration to go forward with bilateral trade negotiations with other nations, Barfield says. But bilateral agreements are fraught with peril, he adds.

As an example he cites US trade policies with Canada and Mexico. After having reached a free-trade agreement with Canada, the US wants to have a similar arrangement with Mexico. Such an agreement would indirectly link the trade of Canada and Mexico, but without Canada having been a party to any negotiations, Barfield says. Thus, he is not surprised that Canada protests that it should be included in any US-Mexico free trade negotiations.

In addition, sooner or later ``great resentment'' would be created if the US gave concessions in bilateral trade negotiations to one nation and not to another, as happened during the 1930s, Barfield warns. ``As a practical matter, I think you have to come back to multilateral agreements,'' he adds.

But in any hiatus between multilateral trade agreements the world likely would see what Lawrence calls ``a gradual decay'' in the degree of existing international trade freedoms, as nations begin to erect tariff barriers and make their own nation-to-nation economic deals.

If the current Geneva round of talks failed, there would be ``a very serious consequence,'' says Speaker Foley. ``I would expect heightened trade tensions back and forth'' among nations, he explains, accompanied by ``retaliation'' for establishment of new trade barriers.

If March 1 brings no Geneva agreement, an early effect of the muffled explosion in the congressional closet likely would be pressure to restore the trims Congress made during 1990 in America's agriculture subsidies.

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