Major Powers Try to Revive Trade Talks

MICKEY KANTOR, the United States Trade Representative, will be rolling up his sleeves to move world trade talks forward when he meets with the trade ministers from Japan, Canada, and the European Community (EC) over the next two days in Toronto.

The aim of the talks is to restore some momentum to the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). The talks to liberalize world trade started in Punta del Este, Uruguay in 1986. Last week, President Clinton said, "Our aim is to have tangible progress to report when Prime Minister Miyazawa hosts us in Tokyo in July." President Clinton has set a deadline of Dec. 15 for an overall agreement.

Trade observers don't expect this to be easy. "It's an uphill task and the angle gets steeper," says Chris Whalen, a trade analyst with his own firm in Washington.

According to a European official, the major focus in Toronto will be on market access, a broad arena. "It runs the gamut from liberalizing access for services and investment, to protection of intellectual properties, to access for textiles and the reduction of tariffs," says Michael Aho, a trade specialist at the Council on Foreign Relations.

The trade talks follow bilateral meetings between the US and EC officials last week. Washington trade policy analyst Harry Freeman says the EC has become more interested in reaching an agreement in part because it has a new trade and external relations minister, Sir Leon Brittan, who has replaced Frans Andriessen.

"Sometimes when you bring in new teams you can achieve more," Mr. Freeman says.

Progress is important to keep the trade round from floundering. The French, for example, are not happy with an agricultural agreement reached last Nov. 21. An EC official notes that the French are waiting to see if they get satisfaction in other areas.

In November, the US and the EC agreed to cut internal price supports for agriculture by 20 percent across the board. In addition, they agreed to reduce agricultural export subsidies by 36 percent over six years and to reduce the actual volume of subsidized exports by 21 percent. Fair traders, such as Australia, hailed the agreement. But the US faces grumbling at home by agricultural interests such as peanut and dairy farmers who will now face stiffer competition.

Textiles remain a difficult area. The American Textile Manufacturing Institute Inc. (ATMI) has spent a considerable amount of time talking to Clinton officials about the trade talks.

The ATMI believes the Clinton negotiators now intend to reject a plan approved by the Bush negotiators to phase out the Multifiber Arrangement quickly. That deal set quotas on imports into the US. In addition, according to Carlos Moore, executive director of the ATMI, the Bush negotiators had agreed to cut textile tariffs by 50 percent in order to get the EC to support eliminating tariffs in other areas such as pharmaceuticals and non-ferrous metals. (In those deals, the US would eliminate its tariffs if

other nations eliminated theirs.)

"We have talked to the Clinton people and they have listened. The 50 percent cut is no longer on the table," Mr. Moore says. Instead, he hopes the Clinton negotiators will try to change the world textile business to outlaw child labor, improve worker safety, and mandate environmentally friendly factories.

Some fret that the treaty won't go far enough. "It will be overly compromised," Freeman says. Mr. Aho says the final result will be a "modest result relative to the great objectives out there." The North American Free Trade Agreement, he adds, will end up opening more doors for the US than any new GATT agreement.

It is also uncertain if the Clinton administration can get Congress to extend fast-track approval for GATT. Under the fast-track process, Congress can only vote "yea" or "nay" on the treaty and cannot add amendments. Fast-track approval expired in March and the president has asked Congress to extend it until April 16, 1994. "Will someone try to attach an amendment to it," Aho asks. The legislation has just started working its way through the committee process.