Sensible Talk on Trade

November 14, 1991

Can two negatives make a positive? Perhaps, in the arcane world of trade negotiations, where governments bargain in a cloud of ambiguity that shrouds their intentions from one another and from heavy-breathing interest groups back home.

President Bush went to The Hague last weekend to determine if talks with European Community president Jacques Delors could break the trans-Atlantic logjam over agricultural subsidies that has stalled the crucially important Uruguay Round of the General Agreement on Tariffs and Trade.

After the session was over, there was hardly any information given out (the first negative) and almost a complete absence of blame-casting and finger-pointing over the ostensible lack of progress (the second negative).

This has led trade-talk observers, borrowing lavishly from Sherlock Holmes, to sniff out a compromise in the making after years of disappointment. Suddenly the major industrial nations are starting to talk flexibly, sensibly, as though they are aware that the fate of the world economy in the 1990s rests in large measure on major reforms in many facets of international commerce.

Governments have to tiptoe. Each leader, having pledged at last June's Group of Seven summit "to remain personally involved" in trade issues, has to be wary of domestic backlash. The United States, as a major food-exporting nation, started out demanding the entire elimination of the huge farm subsidies that make it almost impossible to break into the European market. The EC responded with pipsqueak concession offers that were also non-starters. But now there are signs that both sides may settle at something in between. Their manufacturing, financial, marketing and legal sectors have too much to lose if they don't.

If the United States and the EC can work out farm-subsidy problems by year's end, other nations would be brought back to the negotiating table for no-nonsense bargaining on new rules for services industries, copyrights and patents and financial transactions. Japan will have to open its rice market a crack. The U.S. may have to forgo unilateral trade reprisals. Special market-carving arrangements for textiles, steel and other products may have to go. Bitter pills all.

Should GATT negotiations conclude early next year, the Bush administration may seek quick congressional ratification. It won't easy. Bad economic times breed protectionism, and in a presidential election year Democrats will not hesitate to play upon the fears of being done in by foreigners. The chairmen of the key Senate and House committees already have put the White House on notice they will "actively oppose a [trade agreement] that comes up short on issues of major concern." Many times in American history, free trade-versus-protectionism became the stuff of hot partisan debate. Lamentably, it could happen again.

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