At Last, a Hurrah at the Trade Talks : Historic GATT breakthrough in everything but movie issue

It’s been a seven-year stretch, but now, finally, a milestone appears in sight for world trade talks. A breakthrough accord, achieved Tuesday by the United States and the European Union, should pave the way for a historic revision in global trading rules. A new agreement would mean that California growers would be able to get their rice into Japan, U.S. insurance firms, banks and other financial service companies stand to gain access to foreign markets, and U.S. telecommunication companies might see greater uniformity in equipment specifications.

But, alas, not all are happy traders. Hollywood is upset because the Europeans, specifically the French, refused to budge on their subsidies for domestic movies and on quotas for film imports. U.S. Trade Representative Mickey Kantor did his best to resolve the entertainment issues, but he and President Clinton prudently decided not to sacrifice an entire GATT agreement over the entertainment stalemate. It is disappointing to say the least, but EU and U.S. negotiators said the entertainment issues will be negotiated further.

A successful conclusion to the arduous trade negotiations, begun in Uruguay in 1986 under the auspices of the General Agreement on Tariffs and Trade, would be a watershed in international relations. A new global trade agreement would cut tariffs and, for the first time, cover agriculture, financial services and intellectual property rights. It would add $6 trillion in goods and services to the world economy over the next decade. California, perched on the Pacific Rim, would enjoy a huge share of the $1-trillion boost to the U.S. economy.

Tuesday, as the 117 GATT nations studied draft documents before a scheduled vote on a final accord, President Clinton said that U.S. negotiators were “on the verge of an historic victory in our effort to open foreign markets.” The agreement must be completed today to meet the congressional deadline for “fast-track” authority, which requires the Senate and House to accept or reject an agreement without making modifications. Barring any last-minute glitch, an agreement should be ready for Congress by day’s end.

Japan helped to remove another major obstacle to an accord by agreeing to eliminate its longstanding ban on rice imports. The move, however overdue, is welcome. While the dollar volume of U.S. rice exports to Japan is inconsequential relative to the huge $50-billion U.S. trade deficit with Japan, Tokyo’s rice ban had become symbolic of that nation’s closed markets. Although he called it a painful and heartbreaking decision, Japanese Prime Minister Morihiro Hosokawa assured Japanese consumers that the partial lifting of the ban, imposed for food security and cultural reasons, would bring them other benefits under a GATT agreement.

Indeed, though trade officials and special interests are concentrating on the arcane minutiae of the agreement, it is the world’s consumers who would benefit most from a liberalization of trade. A greater and freer exchange of goods and services would create jobs and economic growth.

The Administration marshaled its forces behind GATT; that followed the eleventh-hour passage of the North American Free Trade Agreement. Such efforts help focus America’s vision on the fact that its economic future depends on world trade.