Brussels ministerial inconclusive: GATT talks suspended to allow countries to reflect on positions - General Agreement on Tariffs and Trade

Business America, Jan 14, 1991 by Louis J. Murphy

Brussels Ministerial Inconclusive: GATT Talks Suspended to Allow Countries to Reflect on Positions

The General Agreement on Tariffs and Trade (GATT), a multilateral trade agreement with over 100 signatories, has been labeled the locomotive which powers international commerce. Seven rounds of negotiations have been undertaken under the auspices of the GATT and have contributed to the liberalization of world trade, estimated to now total $4 trillion per year. We are nearing the completion of the eighth round of negotiations--the Uruguay Round-- the most comprehensive and ambitious in scope since the GATT talks were commenced in 1947. Unfortunately, the political will of several GATT members to bring the Uruguay Round to a successful conclusion is now in question. In particular, the inability of the European Community, Japan, and Korea to commit to substantive reform of their agricultural policies has put the entire market-opening exercise in abeyance.

The Uruguay Round, launched in Punta del Este, Uruguay, in September 1986, was scheduled to conclude this past December at a Ministerial-level meeting in Brussels, Belgium. The United States was prepared to meet this deadline and sent several of its top trade officials to Brussels prepared to negotiate on a comprehensive package of agreements.

U.S. Trade Representative Carla Hills led the U.S. delegation to Brussels, which included Secretary of Commerce Robert Mosbacher, Secretary of Agriculture Clayton Yeutter, Acting Secretary of Labor Roderick DeArment, and Special Assistant to the President for Domestic and Economic Policy Roger Porter.

The United States sought to achieve four broad goals in Brussels: reduction of tariffs and non-tariff measures; strengthened GATT rules (for subsidies, antidumping, dispute settlement, safeguards, standards, balance of payments (BOP), and import licensing); agreed rules of play for the "New Issues" of Trade Related Investment Measures (TRIMs), Trade Related Aspects of Intellectual Property Rights (TRIPs), and Services; and fundamental reform of agriculture.

Fruitful discussions in several of the non-agricultural areas did take place in Brussels. However, because of the breakdown in negotiations caused by the inability of the European Community, Japan, and Korea to negotiate on agriculture, any progress made in Brussels does not have official status.

Agriculture has played a special role in the Uruguay Round of negotiations. It is the linchpin of the Round. Agreement by the developed countries to negotiate on agriculture brought the LDCs to the negotiating table in the first place and determines their support for several elements in the industrial package.

As a result of the deadlock on agriculture, the Chairman of the Brussels meeting, Dr. Hector Gros-Espiell, decided to suspend the talks to allow all participants in the negotiations sufficient time to reconsider their positions. GATT Director General Arthur Dunkel was directed to pursue intensive consultations with key countries to see if any are prepared to alter their positions. Heads of delegation will convene in Geneva, Switzerland (where the GATT is headquartered) on Jan. 15, 1991, to attempt to reach agreements on all outstanding issues, including agriculture.

The support of the United States for a comprehensive package of agreements has not wavered. We realize the enormous benefits that such a package would have for the U.S. business community. However, we cannot engineer a successful conclusion of the talks without the full participation of our trading partners. We can only hope that they will return to Geneva prepared to negotiate constructively in all areas and thereby allow the Uruguay Round to proceed full steam ahead.

Following are brief accounts of what happened at negotiations leading up to Brussels and at the Brussels Ministerial in each of the priority areas for the United States--market access, GATT rules, the "New Issues," and agriculture. In addition, the Under Secretary for the International Trade Administration, J. Michael Farren, reports on the integral role that the private sector advisors played in the Brussels exercise.

Market Access

This category encompasses the negotiations on tariffs, non-tariff measures (NTMs), rules of origin, pre-shipment inspection, tropical products, natural resource-based products (NRBPs), and, for the less developed countries (LDCs), textiles and agriculture.

Tariffs and Non-Tariff Measures: A U.S. team arrived in Brussels in advance of the formal meetings prepared to intensify detailed market access talks with interested trading partners. In addition to traditional tariff and non-tariff measure (NTM) issues, U.S. negotiators focused their efforts on the reciprocal duty-free, or "zero for zero" initiatives for key sectors, including fish, beer, pharmaceuticals, paper, wood, non-ferrous metals, steel, electronics, and construction equipment.

Despite our best efforts, however, bilateral meetings with the EC and Japan yielded little additional progress. Meetings with other delegations--principally the developing countries (LDCs)--were more fruitful, with several countries tabling improved offers to reduce and bind tariffs. But in general, despite some encouraging signs, most meetings yielded only limited progress on industrial tariffs and NTMs because of the lingering standoff over agriculture.