Trade Held Hostage
WHEN it comes to international trade, France wants to have its GATTeau and eat it, too. Paris wants the benefits that freer trade would produce in many areas, but it's unwilling to make concessions in agricultural policy necessary to wrap up talks on the General Agreement on Tariffs and Trade.
GATT is a negotiating and compliance structure for the 108 nations that conduct 90 percent of the world's trade. The current Uruguay Round of talks was launched with ambitious goals; these included bringing many services into the GATT tent, besides manufactured goods. But nearly six years later, the Uruguay Round drags on, and unless an agreement can be reached soon, the talks may collapse.
The primary sticking point is the determination of the European Community, particularly France, to protect farmers through an elaborate and costly system of crop import barriers and export subsidies. The United States and other major agricultural exporters insist that without fairer trade in farm products, the Uruguay Round can't be completed.
There was anticipation that at their April 22 meeting in Washington, President Bush and European Commission President Jacques Delors would announce a breakthrough on the GATT talks, but the deadlock persists.
The blame for the stalemate is shared. Some experts think the US should be more flexible on agricultural issues, in recognition of both the political clout wielded by European farmers and also the economic differences between European farming and US agribusiness. Also, the US has banking and telecommunications interests it wants to protect.
Yet all parties have much to gain through freer trade, and much to lose if the Uruguay Round fails. Beyond economics, the outcome of the GATT talks could help set the tone for the post-cold-war era: Will it be a time of global vision and increased international cooperation, or a time of inward-looking nationalism, regionalism, and protectionism?
With so much at stake, national leaders must draw on their political capital, and the leaders of business interests that will profit from freer trade must keep impressing upon their governments the price of failure.