French Take Cool Stance Toward Progress on GATT

TARIFF CUTS

IF the ongoing Uruguay Round of international trade liberalization talks are a gigantic and complex puzzle, then Wednesday's agreement among four major world trade players on a plan to substantially cut tariffs is a key piece falling into place.

Yet despite what United States Trade Representative Mickey Kantor called "truly a breakthrough," the market access agreement on the reduction or elimination of tariffs in a variety of crucial trade sectors does not guarantee that the rest of the puzzle will be easily assembled.

Last November similar "breakthrough" language was trumpeted when the US and the European Community reached a "pre-accord" on the particularly thorny issue of agriculture. But now France, under a new government and experiencing an acute protectionist surge, is flatly rejecting the farm trade plan and insisting on its renegotiation.

Similarly, France offered the coolest appraisal of the agreement. Although careful not to sound too negative, Foreign Minister Alain Juppe said Wednesday's action "is not an accord but a report on the methods and objectives" being pursued in the talks under the General Agreement on Tariffs and Trade (GATT). French presidential spokesman Jean Musitelli added that the agreement is "mainly about working method."

Part of the French response is domestic politics. French Prime Minister Edouard Balladur and Mr. Juppe had warned that the so-called "quad" country trade talks, taking place just before the G-7's Tokyo economic summit, could produce nothing substantial as long as the agriculture issue remained, in their eyes, "unresolved." With the French economy sinking deeper and the GATT talks suffering from bad press, enthusiasm from the French government could hardly be expected.

The French coolness also stems from the country's distrust of the arrangement under which the EC countries are represented at international trade negotiations by the EC's executive commission. The EC's chief negotiator, Sir Leon Brittan, is British. That raises certain suspicions among the French, who see themselves defending Europe against an "Anglo-Saxon" free-trade bias.

But the French attitude is also simply a realistic appraisal of complex multilateral negotiations where numerous key trade sectors remain unresolved.

Among these are services, including banking and maritime services, the latter an area where the US is resisting opening up. Another areas is audio-visual services - primarily movies and TV productions - which the dominant US industry wants liberalized, but which the EC is keen on keeping restricted as a means of "cultural" protection.

Although the "quad" agreement includes some new language pertaining to textiles, that sector will remain difficult to resolve, as will steel, Japanese and South Korean rice imports, and the overall farm trade issue.

Still, observers at GATT headquarters in Geneva say the agreement is important because it will allow multilateral talks in the 111-nation negotiations to resume. "Multilateral discussions on the round have basically been stalled since December '91," one GATT official says. "This will allow the process to get moving again."

GATT Director-General Peter Sutherland called the Tokyo agreement "the signal that was needed to relaunch the multilateral process in Geneva. Most observers agree the "real work" on the Uruguay Round's sticky points will begin in September.

One of the tasks the "quad" countries will face is convincing their GATT partners, including much of the developing world, that the market access plan is a good deal for them. "What we need now is to multilateralize the quad agreement as soon as possible," says a GATT official. "The quad countries can do what they want, but it still has to be agreed by 100-odd other countries. There's no question that an agreement from the quad countries gives a political and economic impetus, but the real test remains g etting everyone to agree the same final text."