'Breakthrough' on Trade

July 11, 1993

World trade reform would probably have died if the Group of Seven summiteers in Tokyo had not come through with an agreement to eliminate or reduce tariffs on a selected list of 18 manufactured products. So even if the leaders of the big economic powers ducked away from some very contentious issues, their limited agreement is of large consequence in avoiding what would have been a disaster for the global economy.

The new G-7 pact might not be the record-making "breakthrough" President Clinton and his trade representative, Mickey Kantor, say it is. But neither is it just "a report that sets out the terms for future negotiations," to quote the dismissive words of French Foreign Minister Alain Juppe.

By agreeing to specific tariff reductions, the United States, Japan, Canada and the European Community set the stage for '' the resumption tomorrow of negotiations with more than 100 other nations under the General Agreement on Tariffs and Trade. They will be operating under a Dec. 15 deadline, the date when President Clinton loses his "fast-track" authority to negotiate a pact that must be voted up or down by Congress, without change.

For each of the past three years, December deadlines proclaimed at G-7 summits have been abandoned ignominiously. This time government leaders decided to agree where they could agree to revive the credibility of the whole process. The result was about as good as could have been expected despite the many pitfalls ahead.

France remains opposed to the agriculture accord worked out at Blair House last December. Bringing services industries under the GATT raises problems the government leaders chose to leave to their negotiators. Tariff levels for some key manufacturing sectors, most especially textiles and apparel, are still unresolved.

The old saw that all foreign policy is domestic is true in spades when it comes to foreign trade. In any agreement, there are not only winners and losers among nations, but within nations as well. Special interests put on the pressure when their very existence is at stake.

The president's full-court press for liberalized trade has major implications not only for a global GATT pact but for the pending North American Free Trade Agreement with Mexico and Canada. In both cases, he will have to overcome opposition from organized labor and environmentalists -- key constituencies in his Democratic Party. Mr. Clinton's need for a victory on NAFTA now assumes double significance: For if NAFTA fails, would GATT be far behind?

Political hype notwithstanding, the trade accord adds to the "success" Mr. Clinton claims for his performance at the Tokyo summit. He secured a focus on the need for jobs growth in the industrialized world, pushed through more financial aid for Russia and turned on his campaign personality to make the Japanese think better of him and of America. Not bad for his first venture abroad.

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