Jump-Starting GATT

THE Group of Seven industrial nations can chalk up the first significant success related to this week's meeting in Tokyo: injecting welcome momentum to the stalled Uruguay Round of the General Agreement on Tariffs and Trade (GATT).

In what US Trade Representative Mickey Kantor calls the biggest tariff cuts in history, the United States, Japan, Canada, and the European Community (EC) have agreed to eliminate or lower protective import duties on products from 18 key industrial sectors. By Mr. Kantor's account, the United States alone could see as many as 1.4 million new jobs created over the next 10 years as a result.

Even France gave the deal at least lukewarm support. It went into this week's summit adamantly refusing to agree to any tariff reductions at the G-7 meeting unless the US dropped the sanctions against French steel it imposed last week.

The development is a marked improvement over last year's G-7 meeting in Munich. The best the leaders could do was pay lip service to GATT's importance and express the hope that the Uruguay Round, which involves talks among 114 nations to reduce trade barriers worldwide, could be wrapped up by the end of 1992. At stake, by some estimates, is a $200 billion-a-year increase in global trade.

Frustrated by GATT's glacial pace, the body's new director general, Peter Sutherland, said on Monday, "It's not enough to claim at the end of the G-7 meeting that a positive atmosphere on trade has been created if we don't have concrete results."

Among the results, negotiators agreed to:

* Eliminate tariffs unconditionally on pharmaceuticals, construction equipment, medical equipment, and beer; conditionally on farm equipment, steel, distilled spirits, and furniture.

* Work toward halving tariffs on glass, ceramics, textiles, and apparel.

* Cut by at least one-third tariffs for scientific equipment, wood, paper, aluminum and several other nonferrous metals, and electronics.

The deal clears the way for a quick resumption of the GATT talks, perhaps as early as next Monday. A quick start is vital. Congress has given President Clinton "fast track" authority for ratifying any GATT accord. But that authority expires Dec. 15, and several nettlesome issues remain.

In agriculture, considerable opposition remains, especially in France, to a deal worked out last November between the US and the EC to lower European farm subsidies. And the US is still wary of cutting tariffs protecting its textile industry from imports.

Yet the economic benefits from a GATT agreement are too great to squander this opportunity for progress.

You've read  of  free articles. Subscribe to continue.
QR Code to Jump-Starting GATT
Read this article in
QR Code to Subscription page
Start your subscription today