GATT: Going, Going . . .

December 12, 1990

France and Ireland, and with them the rest of the European Economic Community, must bear responsibility for the ominous breakdown in world trade negotiations. Barring a revival of bargaining in good faith, a postwar system that fostered global economic growth through multilateral liberal trading rules might well be replaced. And with what? With bilateral deals, regional blocs and the kind of trade wars that spawn recessions, political instability and even armed hostilities.

Considering the high stakes, some of the governments involvemust have been relieved that world attention was deflected by events elsewhere, especially in the Persian Gulf. But chances are that when these matters disappear from the international agenda, a collapse of the General Agreement on Tariffs and Trade would linger long.

EC officials are now trying to pin some of the blame of the United States for what happened in Brussels last week. The charge is laughable. While Washington was at fault for introducing a last-minute complication in talks on bringing services under GATT rules, it withdrew its proposals before the Brussels meeting had failed.

What killed chances of agreement was the fact that the French and Irish governments are hostages to or in cahoots with farmers addicted to the huge subsidies and trade barriers of the EC's Common Agricultural Policy. Not only that. The EC's obdurate agriculture commissioner, Ray MacSharry, is bidding to become Ireland's prime minister as a hero to his country's large rural population.

Six months ago, at the seven-nation Houston economic summit, heads of government vowed to make "the difficult political decisions" to make a success of the four-year GATT Uruguay Round. They did nothing of the sort. France's foundering Socialist government even encouraged farmers to come to Brussels for an anti-GATT rally.

As the GATT talks moved to a showdown, there was some hope the conservative German government (re-elected Dec. 2) would lean on France and other EC countries to prevent world trade talks from failing over agriculture. German industry has mighty interests not only in merchandise trade but in bringing service industries, patents and copyrights under the GATT umbrella. But neither Germany nor Britain seemed able to liberalize the EC position, thus giving substance to suspicions that a Fortress Europe is emerging.

What happened in Brussels will serve only to galvanize the powerful protectionist interests already so evident on Capitol Hill. The clock is running. Unless an agreement is reached by March 1, President Bush's "fast-track" authority to gain congressional approval of a GATT package will expire with little chance of resuscitation.

The GATT failure is a threat to world prosperity and peace. It must be turned around as a matter of the highest priority.

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