Trade Disputes Could Stop New GATT Deal Cold

Article excerpt

THE seven-year struggle to reach a new multinational trade accord is about to end - possibly in failure, trade experts say.

The Uruguay Round of trade negotiations under the 108-nation General Agreement on Tariffs and Trade (GATT) are "at a truly critical time," notes former United States Trade Representative Clayton Yeutter.

Washington trade consultant Chris Whalen is more pessimistic, stating the round "is going to be allowed to die in the crib."

Trade relations received another jolt Feb. 1 when US Trade Representative Mickey Kantor announced the US would bar government purchases of certain products from some or all European Community nations if the EC does not end discrimination against US goods by March 22.

Arthur Dunkel, director of the Geneva-based GATT, admits the talks will not be complete by March 2, the target date. After March 2, President Clinton would not be able to get a GATT treaty through Congress before "fast track" (no amendments) authority expires on May 31. The new administration has yet to signal what it intends to do about the stalled GATT round. However, getting Congressional approval to extend the "fast track" authority is considered dubious.

"As a practical matter the new administration will have to wrap it up this year or forget it," says Mr. Yeutter. The six-year-old round aims at liberalizing trade in many areas, such as services and agriculture, which will help the US. It also would open up textile markets, which may hurt US companies.

World trade problems include:

* There are signs of stronger protectionist sentiments. For example, US auto manufacturers are pushing for higher tariffs on imported minivans and four-wheel-drive vehicles. If the government goes along, it will add thousands of dollars to imported vehicles.

* The US announcement that it would bar federal purchases in telecommunications, power generation, and transportation equipment was in retaliation against an EC directive that gives preferences to companies from within the EC for such purchases. The US has tried for a year to reverse the directive.

* On Jan. 27 the Commerce Department ordered additional tariffs on steel produced in 19 countries, including Canada, Mexico, the EC, and Japan. Days later the Canadian government placed provisional tariffs on US steel. …