GATT pulls trade back from the brink
Geneva — Relief, optimism . . . yet deep concern that the rising tide of protectionism may have been dammed only temporarily.
That was the mood in the wake of the meeting here on GATT - the General Agreement on Tariffs and Trade.
The five-day meeting had repeatedly teetered on the brink of failure. Looking tired and drained, chief United States negotiator William Brock told journalists early Nov. 29 that the meeting had been ''partially successful.''
''Overall, the results might get a grade of 'C,' '' he said. ''It could stretch to 'C+' but only time and future actions will tell.''
This view was shared by Allan MacEachen, the Canadian foreign minister and conference chairman, who won admiration from many delegates for, as one put it, ''simply never giving up.'' Mr. MacEachen described the meeting as ''very useful , very constructive.''
It took one of the longest and most exhausting meetings yet seen in this city of conferences for the 88 signatories to GATT to finally reach agreement on a complex package aimed at stopping the drift toward protectionism. And no sooner was it agreed than the arguments began: What would it mean? Would it be effective?
Against a background of stagnant economies, the conference package begins with a declaration on the dangers from protectionism. It then suggests 18 separate provisions aimed at giving the declaration teeth.
These include: the establishment of a new committee within the GATT to study agriculture, particularly export subsidies; a new GATT review of trade and services, such as shipping and banking; an agreement that any import curbs will only be applied with restraint and as a last resort; and a procedure for tightening up the GATT process of settling trade disputes.
Although the package was passed by consensus, 23 delegations voiced some dissatisfaction with it. Of these, the most serious is seen as the 10-nation European Community's reservation about GATT on agriculture. Indeed, some observers here see this reservation as so serious that it could open the way to a trade war between the US and West Europe.
Mr. Brock was accompanied by several influential American congressmen, including Sens. Robert Dole (R) of Kansas and Jesse Helms (R) of North Carolina, who had insisted at the start that nothing short of a commitment to reduce European farm subsidies would constitute a successful meeting. If this was not achieved, they warned, the US Congress could soon decide to sell off almost $2 billion of dairy surplus, thus effectively triggering an export war.
After the meeting, Mr. Brock acknowledged that protectionist measures were building up in Congress.
''We will do everything we can to ensure protectionist legislation does not pass,'' he said. ''This document will be helpful. Not as much as a stronger document would have been, but it will certainly be helpful.''
The most vocal disappointment at the conference outcome came from Australia and the developing countries. Deputy Prime Minister Douglas Anthony of Australia - a country that has seen its sugar exports undercut by subsidized West European sugar - issued an angry statement before leaving Geneva.
''In most, if not all of the important issues, the words are vague and ambiguous and shrink from all firm commitments,'' he said.
Several developing countries are also bitter at the way they have been forced to agree to a new study of trade in services such as banking and insurance. As with agriculture, this, too, was a key American proposal. But developing countries fear that it could open the way to an influx by foreign multinational companies.
''Our industries would get assassinated,'' warned Felipe Jaramillo, the Colombian spokesman for the developing countries.
Eventually, after increasingly intense negotiations, key countries grudgingly came around to the US proposal on services: first Brazil, then the Philippines, Jamaica, Pakistan, and eventually India. Third-world reports say that the United States used Brazil's debt crisis to apply pressure on the Brazilian delegation.
But several third-world delegations expressed disappointment and one Asian delegate complained bluntly of having been ''bullied.''
This, he said, could reinforce the view that the GATT is a ''rich man's club, '' more concerned with liberalizing trade with Western countries than with the special needs of the poorer nations.