Gee Whiz, It's G-7 Time in Tokyo

July 07, 1993

For the Group of Seven summit, now in ritual assemblage in Tokyo, the question is what makes this year different from any other year. The temptation is to point to new names in the cast of characters -- Bill Clinton and Canada's Kim Campbell especially -- and the odd circumstance that the Japanese hosts are virtually nTC without a government. But what really is changed is the world economic situation.

For the first time, there is a perceived danger that the multilateral trading system that has been the engine of world economic growth for the past 40 years is breaking down. Recession, joblessness and protectionism stalk the globe, condemning poor nations to deepening poverty and rich ones to stagnancy. The worse things get, the harder it is to find the political strength or will to put things right.

For each of the past three years, the G-7 summit has duly demanded early and sweeping reform of the world trading system. And for each of the past three years, December deadlines have come and gone with no breakthrough. It can happen again, and the odds are it will happen again.

Does it matter? President Clinton, among others, makes all the right noises about the need for enlargement of the General Agreement on Tariffs and Trade (GATT) so that commerce in agriculture and service industries and intellectual property can be promoted and obstructions to trade in manufactured goods reduced. But his is the administration that is insisting on managed trade with Japan and punitive actions against the European Community. Hardly a definition of free trade. Recriminations have been flying back and force across both oceans in advance of the summit.

Yes, the fate of GATT does matter, but this week's posturing in Tokyo is of only marginal import. "We have come to a phase of secret diplomacy," says Arthur Dunkel, who just stepped down as director-general of GATT. "There are lots of meetings taking place, and they are based on new ideas." The only new idea aired publicly in Tokyo is a bid for a first-phase agreement on lower guaranteed access for manufactured goods. But this approach is mainly a reflection of chronic failure to make headway on liberalization in agricultural trade, long a U.S. objective. Once again France is balking, this time because of new U.S. steel tariffs.

Secret agreements secretly arrived at will not appear in communiques already written or in speeches by summiteers aimed chiefly at their respective home folks. But if GATT is to survive as a key part of the international economic network that developed after World War II, it will need some very forceful impetus from the G-7 leaders. Otherwise, the whole process will lose credibility -- and with it what little reason is left for these annual extravagances.

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