More divisive world trade issues surface

December 11, 1993|By Los Angeles Times

BRUSSELS, Belgium -- The 116-nation world trade talks enter a critical phase this weekend, with political pressure nearing a boiling point and more, rather than fewer, unresolved issues bubbling to the surface.

BTC With the central players -- U.S. Trade Representative Mickey Kantor and Leon Brittan, his counterpart representing the European Community -- about to resume their marathon to reach an agreement, a senior U.S. negotiator said yesterday he was "concerned but not gloomy" about the prospects for completing the talks by the deadline Wednesday.

But, amid European accusations that the United States is backtracking, the U.S. official said division over government support for two industries -- aircraft and entertainment -- remains deep enough to threaten the entire agreement. The two are the largest U.S. exporters, with foreign sales of $34 billion and $17 billion respectively.

The pattern is becoming distressing for advocates of a new trade pact, with one contentious issue resolved only to be replaced by another.

Last night, for example, Chancellor Helmut Kohl of Germany told reporters here that "there are major problems in textiles." Portugal, Spain, Italy and France objected to terms that have already been negotiated by the European Community, the 12-nation group to which they all belong, Mr. Kohl said.

But in Washington, Mr. Kantor sounded a more optimistic note than heard in Europe. "The odds have certainly shifted in favor of a successful completion, but we're not there yet," he said.

After seven years of negotiations, the trading partners' goal is to complete -- under the 46-year-old General Agreement on Tariffs and Trade -- the most extensive redesign of the world's trading rules ever attempted.

If achieved, economists estimate, the target of a one-third reduction in the world's import tariffs and cutting quotas and other obstacles to international commerce would provide a $270 billion annual kick to the value of the world's economy by 2002. This growth, they say, would provide jobs to recession-weary Europe and Japan and add muscle to the stronger American economy.

One day before Mr. Kantor planned to resume his meetings in Geneva, two central figures in the consideration of any trade issue in Congress delivered a pointed message to trade ambassadors there, including the team from Washington.

The two legislators, House Majority Leader Richard Gephardt, D-Mo., who last month opposed the North American Free Trade Agreement, and Rep. Dan Rostenkowski, D-Ill., chairman of the House Ways and Means Committee, through which trade legislation must pass, emphasized the importance of maintaining regulations that protect American industries from the below-cost dumping of foreign products.

Their message was delivered in meetings with Peter Sutherland, who, as director general of GATT, is the referee of the global talks, and to other countries' negotiators.

But a Clinton administration official said it was directed just as much at the negotiators from Washington, to buck up their resolve to resist pressures to chip away at the U.S. anti-dumping laws that have long been a point of contention with trading partners.

Mr. Kantor and Mr. Brittan, the European Community's external affairs commissioner, plan to resume their negotiations today in Geneva.

But the equation, in which progress on one issue is linked to progress on all the others, has left those close to the negotiations uncertain whether the details can be negotiated in time. "There are two or three issues which are floating round, interlocked in a complicated relationship," said a senior U.S. diplomat in Brussels.

Recently thrown into the debate is the question of government support for local maritime industries and differences over limits placed by the United States on the size of the foreign role in U.S. shipping.

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