Newspaper article The Christian Science Monitor

World Trade Round Is Still in Peril

Newspaper article The Christian Science Monitor

World Trade Round Is Still in Peril

Article excerpt

ECONOMIST Jeffrey Schott's book, "Completing the Uruguay Round," came out in September 1990. He thought it would have a short shelf life since that round of world trade negotiations was scheduled to conclude a few months later. But the talks are still dragging on and the book still sells.

"Unfortunately, it shows how little impact {the book} had on the negotiators," jokes Mr. Schott, a fellow with the Institute for International Economics in Washington.

This week the leaders of the Group of Seven industrial democracies had another crack at settling a dispute over farm trade that has been holding up a broad agreement among the 108 participating nations. Hopes were high enough that United States Secretary of State James Baker III joined in the summit talks in Munich. He usually avoids getting involved personally in international negotiations unless there is a good chance for success, Washington observers note.

But a deal fell victim to the politically frail positions of French President Francois Mitterrand and German Chancellor Helmut Kohl. Neither wanted to further antagonize farm voters by ac-cepting cuts in agriculture subsidies beyond those already ap-proved by the European Community (EC) in an internal reform.

There is still a chance the talks, organized by the Geneva-based General Agreement on Tariffs and Trade (GATT), will succeed. The G-7 communique says Western nations should "strive for agreement before the end of the year," adding that an accord is "within reach."

In Munich there was speculation that once the French have voted in a public referendum Sept. 20 on the Maastricht Treaty, which mandates closer EC integration, Mr. Mitterrand will feel freer to increase farm-trade concessions. The US and the Community are close in economic terms to a deal on farm export subsidies. The hangup is political.

"The problem is, time is getting very short," says Mr. Schott. That's because US legislation granting the administration "fast-track" authority in trade talks expires June 30 next year. Under this law, Congress can only vote a trade package up or down. It cannot hassle over any details. Otherwise it becomes almost impossible to win approval of a complex international agreement because of pressures from domestic special trade interests. …

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