Negotiators are at work in Geneva to conclude the Uruguay Round - General Agreement on Tariffs and Trade

Business America, Sept 23, 1991 by Louis J. Murphy

It is difficult to overestimate the benefits that will flow from a successful conclusion to the Uruguay Round of negotiations of the General Agreement on Tariffs and Trade (GATT). For example, President Bush has termed the Uruguay Round, which counts 108 countries as participants, an "engine that can drive the United States and world economies into the twenty-first century" as well as the "ultimate competitiveness initiative." The United States was a driving force in moving countries to the negotiating table and the Bush Administration continues to view the Round as its top trade priority. This is not surprising: it has been estimated that a successful conclusion of the Uruguay Round could result in a cumulative increase in U.S. output of more than $1 trillion in a projected 10-year span following the conclusion of the Round.

The Uruguay Round of negotiations is the most recent in a series of eight trade liberalization negotiations that have been held since the GATT's inception in 1947. This Round, launched in Punta del Este, Uruguay, in September 1986, is by far the most ambitious and complex to date -- the number of participants and the number of issues under negotiation is greater than ever before.

In the five years since the Uruguay Round has been under way, the objectives of the United States have not changed. We continue to seek a comprehensive package of agreements which includes:

* Lower tariff and non-tariff barriers to manufactured products and other goods;

* Effective rules on dispute settlement, subsidies, antidumping, standards, balance of payments (BOP), import licensing, import safeguards and Functioning of the GATT System (FOGS);

* Rules to protect the intellectual property of U.S. entrepreneurs (negotiating group on Trade-Related Aspects of Intellectual Property Rights or TRIPs);

* Rules to cover trade in services;

* Fewer restrictions on the ability of U.S. investors to operate overseas (negotiating group on Trade-Related Investment Measures or TRIMs);

* Fundamental reform of trade in agriculture leading to fairer competition and market openings; and

* Full participation of the developing countries in the global trading system.

Of the negotiating areas listed above, three -- services, TRIMs, and TRIPs -- are termed "New Issues." In addition, this Round is the first to encompass negotiation of wide-ranging agricultural trade liberalization. We were fully supportive of the effort to include these four issues on the Uruguay Round agenda. Their importance to the world economy is undeniable. In 1989, it was estimated that these four areas alone accounted for more than one-third of total world trade or over $1.5 trillion.

What is the Timetable

For Concluding the Round?

Since the negotiations were resumed in February 1991, after their suspension at the Brussels Ministerial, participants have focused on resolving as many technical issues as possible, thereby leaving the toughest of political issues for negotiators to consider this fall. Recently, GATT Director General Arthur Dunkel asserted that the negotiations must be accelerated and that participants should no longer make distinctions between "technical" and "political" issues. He stated that the "dealmaking" stage of the Round has arrived and that participants should be prepared to "negotiate boldly using the linkages between issues in a positive manner."

The United States is prepared to work toward rapid progress when the negotiations continue this month. At the recent London Economic Summit, President Bush and other heads of state confirmed their commitment to a substantive and comprehensive conclusion to the Uruguay Round and suggested that all GATT contracting parties should aim to complete the Round by 1991. However, the United States is realistic about the amount of work remaining before the final Uruguay Round package of agreements takes shape, particularly in key areas of the negotiations such as agriculture.

Agriculture has been called the linchpin of the Round. Agreement by the developed countries to negotiate on agriculture was one of the major factors in bringing the developing countries to the negotiating table and determines their support for several elements in the industrial package. The United States has been fully engaged in the agriculture negotiations. However, it is not clear if some of our trading partners, particularly the European Community, are truly committed to the negotiation of fundamental agricultural reform in the Round.

Understandably then, the United States, like other participants in the negotiations, is not prepared to substitute speed for substantive content in the agreement. We believe that a new deadline will be established as soon as there are serious negotiations in all areas, including agriculture, services, and market access. These areas have been the subject of considerable technical level work in Geneva.

As President Bush stated, the Uruguay Round can act as an engine to break down trade barriers and propel world commerce. However, this engine must be fueled by the political will of all participants. The United States is doing its utmost to ensure that the Round results in a comprehensive and substantive package of agreements. Now it is up to our trading partners to demonstrate the same degree of tenacity.