GATT Looks to End Talks in '91

THE four-year-old Uruguay Round of international trade talks may soon be accorded a two-year extension of its negotiating time frame, to 1993. But a growing chorus of officials and observers believe the 108-nation negotiations - which would affect world trade in everything from agriculture and textiles to services and intellectual property - must conclude this year if they are to succeed.

Otherwise, according to the argument now building steam, the negotiations will run into national elections in the United States, preoccupation with completing the single market in the European Community (EC), and risks of mounting protectionism around the world - and the ambitious trade talks will fail.

``The corridor talk is that the round will be concluded this year,'' says a source within the General Agreement on Tariffs and Trade (GATT), the international trade organization conducting the talks. ``That optimism is not necessarily reflective of what the politicians back home are thinking,'' the source admits, ``but people here are saying they don't want to run into next year.''

The talks, which broke down in Brussels last December in a US-EC row over agriculture subsidies, received new impetus recently when President Bush asked Congress to extend for two years its agreement to give the round ``fast-track'' consideration. ``Fast track'' means Congress could not amend the round's final trade package, when it reviews it, but only vote for or against it.

GATT negotiators consider such an amendment-free vote essential to the Uruguay Round's success.

Arthur Dunkel, the trade organization's general director, re-launched the round's negotiations late last month, after the EC agreed to negotiate commitments to specific cuts in three areas of farm support: import restrictions, export subsidies, and internal supports. Mr. Dunkel has refused to set a timetable for completing the talks, however, saying setting deadlines backfired in the past and that a realistic goal for completing the round will flow from negotiations.

US elections play role

Less-diplomatic observers say several good reasons exist for wrapping up the round this year. The coming US elections, where trade is likely to be an important issue, would probably stall the round if it weren't completed by early 1992, many believe.

At the same time, many see protectionist pressures growing around the world as the GATT talks enter their fifth year. Some observers say anti-GATT sentiment in the US textile and sugar industries, among others, could push them to lobby against the fast-track extension. European automakers want heightened barriers against Japanese cars.

Asian group recommended

Just last week, Malaysian Prime Minister Mahathir Mohammad recommended creation of a southeast Asian trade pact to confront what he called a ``slippage towards trading blocks and the general erosion of the global trade system.'' Asians favoring the idea claim it is not protectionist, merely a ``defense'' against the EC's single market and plans for a North American free-trade zone.

Another argument for winding up the GATT talks quickly concerns momentum. Some officials say much progress had been made in many of the trade negotiating areas by the time of the December collapse, and they say the commitments already made could be lost if the talks drag on.

No one expects anything substantive to occur in the three months Congress has to vote on the fast-track extension. But that could work in the round's favor, some analysts note. ``It will give the EC a chance to work on its [agriculture] reform and entice Congress with some positive signs,'' says Anna Murphy, a specialist in the EC and international trade issues at the Center for European Policy Studies in Brussels.

With EC farm supports running $11 billion over target this year and already milking more than half of the Community's budget, the EC's executive Commission has called for an agriculture price freeze and a huge overhaul of the Common Agricultural Policy (CAP).

Budgetary constraints and growing spending commitments elsewhere - for Eastern Europe and environmental programs, for example - are the key pressures on the EC forcing the CAP reform, Ms. Murphy notes. But she says the economic importance for the EC of free trade, and thus the EC's desire for a successful Uruguay Round, are also important.

In the meantime, some representatives of third-world countries, who already expressed concerns that developed countries were using the round to force too many commitments from them, now worry that the US will use its coalition-leading role in the Gulf war to argue for stiffer concessions in its favor.