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Back to the Talking Table : Suddenly a little movement in the glacial trade negotiations

February 24, 1991

There's a little bit of good news on the trade front. After months of haggling and finger pointing, the world trade talks that collapsed in disarray last December now appear to have new life. Negotiators are heading back to the bargaining table in Geneva in hopes of bringing a new world order to trade. There's no guarantee of success, but resumption of the talks reflects a new pragmatism among trading partners.

The breakthrough came with the European Community's willingness to accept a U.S.-backed approach for reducing farm subsidies that distort trade. While the EC made no specific concessions in agreeing to negotiate cuts in three areas of farm subsidies--domestic price supports, export subsidies and import barriers--the move is a significant advance over the community's obstinacy last December when talks unraveled over agricultural issues. The U.S. was insisting on certain levels of reductions.

Eliminating subsidies and supports on farm products is a primary goal of the talks. Negotiations began in 1986 among 105 nations with the goal of promoting free trade by cutting tariffs and extending rules to cover agriculture, services, textiles, investments and intellectual properties.

The breakthrough comes just in time for the Bush Administration to seek an extension from Congress by Friday for the so-called fast track negotiating authority, which expires June 1. Meanwhile, the EC is facing a hefty $7-billion increase in the cost of its 1991 farm subsidy programs. They may be even more costly if world commodity prices drop necessitating an increase in subsidies and supports.

Though the EC has not publicly expressed concern over the emergence of trilateral free trade talks among the United States, Mexico and Japan, it is well aware that the United States is pursuing other trade fronts.

Free trade is expected to benefit everyone, but as U.S. Trade Representative Carla Hills has said of the breakthrough, "Tough negotiations lie ahead." That you can be sure of.

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