Feb 15, 1993

NEGOTIATIONS TO AWAIT NEW U.S. FAST TRACK AUTHORITY?

GENEVA, 12 FEBRUARY (CHAKRAVARTHI RAGHAVAN) While GATT diplomats and officials still await a clear statement of the policy and intentions of the Clinton administration on trade generally and the Uruguay Round in particular, the reports out of Washington and the few public comments however indicate clearly that trade and trade policy rank way below in its immediate preoccupations and priorities.

The idea that the six-year old negotiations could be wrapped up by the 1 March deadline of the "fast-track authority" given by the Congress to the administration was never seriously held in private by most of the key countries since October - notwithstanding the U.S.-EC "deal" on agriculture in November after the defeat of President Bush.

Most GATT negotiators privately had come to the view by late November that no serious negotiations could take place to resolve the outstanding issues before the new administration takes over and gets a renewed, but a relatively short-term fast track authority to negotiate and conclude the deals.

Few diplomats though had been willing to be quoted in public about this. But Indian delegate Balkrishan Zutshi has publicly said since mid-November that it was unrealistic for anyone to think the negotiations could be concluded by the 1 March deadline, given the fact that there were far too many issues of substance on the Draft texts that remained to be resolved and far too many details of market access in goods and initial commitments in services to be completed before anything could be signed, willed and delivered.

GATT Director-General Arthur Dunkel who kept up the public appearance of feasibility of concluding the negotiations at Davos in end-January made clear that the 1 March deadline was not realistic.

In Washington Thursday, after the meeting between U.S. Trade Representative Mickey Kantor and EC Commissioner for the GATT negotiations, Sir Leon Brittan, this fact has been officially acknowledged.

After the Kantor-Brittan talks, Kantor has announced that President Clinton will ask Congress to extend his fast-track negotiating authority and Brittan said the fact of the announcement that extension of authority would be sought "gives immediate new life to the Uruguay Round talks".

The U.S. President's request to Congress will probably figure in his address to Congress slated for 17 February, an address which might sketch out the overall philosophy and approach and where the trade talks fit into the new administration's programme.

Technically, even an "extension" of authority by a few months would need legislation and cannot be achieved by simple resolution of both Houses of Congress as was done for the extension of authority in 1991 (after the failure of the Brussels Ministerial meeting).

At that time too, even when it was only a question of extension by resolution of Congress, negotiations could restart only when U.S. trade partners were certain that what they negotiate and agree upon would be subject to an "yes or no vote" in Congress, and not subject to amendments and back-and-forth negotiations.

This time around, for negotiations to re-start and get going "without losing momentum", as Brittan put it in Washington - the time-element of the fast-track and whether there would be conditions attached etc would be important considerations.

If there are new conditions attached, altering the parameters of the talks agreed upon at Punta del Este, this would first need to be negotiated and agreed upon - and there will be others too who would have their own views and conditions.

Brittan has also been quoted as saying that the U.S.-EC bilateral talks would resume immediately and that while the U.S.-EC differences on the Round would be difficult to resolve, "we are both determined to tackle them with determination and with a constructive spirit".

The U.S. Mission's "Daily Bulletin" in Geneva has said that Kantor and Brittan sparred over a number of "highly charged" U.S.-EC bilateral disputes - mentioned the steel dumping cases, 1992 U.S.-EC agreement on Air Bus subsidisation (an issue which President Clinton raised at his "town house" meeting in Detroit). Other reports show that Kantor also has expressed dissatisfaction with the "Blair House" U.S.-EC accord on agricultural subsidies.

Kantor and Brittan were also agreed (according to the U.S. Mission bulletin) that the U.S. and EC alone could not make the Round succeed. The, bulletin quoted also the two as being in wholehearted agreement in criticising Japan, saying it should take a more active role in the Round, but that neither Kantor nor Brittan would elaborate what concessions they wanted from Japan.

Kantor has also said that "Our trading partners in Asia, the government of Japan and the developing world, are going to have to make their contributions".

All these clearly indicate that the U.S. and EC have some difficult negotiations ahead to reconcile their differences, and that when they do, others (Japan and some of the and NICs) would be called upon to pay a price -including in agreeing to other changes in the Dunkel Draft Final Act.

Kantor has been mentioned in other media reports from Washington as mentioning the changes in anti-dumping rules (and the multilateral discipline and adjudication in the GATT of the U.S. actions), the intellectual property questions and a few others, besides market openings for U.S. exports.

In substance, the U.S. under Clinton in trade is not likely to be much different from that during Reagan-Bush era, but would be much less cloaked in the rhetoric of free trade and free market.

The extent of protectionist actions during the 12 years of Reagan-Bush administrations has been found by some trade policy analysts to be more than in the entire previous post-War era.

Geneva negotiators, not prone to public hyperboles, say that some of the utterances from Washington could be attributed to "public posturings" - of the administration vis-a-vis the Congress and their domestic lobbies.

But the "Japan bashing" and the neo-mercantilist demands on others would be serious if they prove to be more than public posturing and would need some amount of coordination and unity within the major players in the South, without which their interests could be jeopardised.