Clinton goes cool on Gatt

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AS PRESIDENT Clinton enters the last leg of a triple crown series of trade events, US momentum clearly appears to be flagging.

Fresh from a tortuous victory on the North American Free Trade Agreement (Nafta), which was followed by a successful and historic meeting of Asian trade leaders in Seattle, US officials seem much less motivated by a pending deadline for the Uruguay Round talks. Those close to the seven-year struggle over the General Agreement on Tariff and Trade negotiations observe that the US appears to be 'Gatted out'.

The most obvious reason for the lack of US enthusiasm is the sheer deadening longevity of these potentially ground-breaking Gatt talks. From the start, they have lurched from deadline to inconclusive deadline. Now, with less than a month to go before the final 15 December deadline, the US and Europe are still miles apart. Talks last week between Mickey Kantor, the US Trade Representative, and Sir Leon Brittan, his European Union counterpart, revealed that neither is willing to make the first move. In the US, Gatt is now down page news.

To his credit, President Clinton took every opportunity in the speeches and TV appearances during his two earlier trade 'wins' to press for a successful Gatt conclusion. He said that the Nafta vote had built world momentum toward a successful Uruguay Round, and he joined with Asian leaders in Seattle in listing this outcome as the world's top trade priority. However, one senses from talks with top officials that the administration's heart is not in Gatt.

In the US, the Gatt talks are seen as a European issue, not as an historic opportunity to expand free trade benefits among 115 signatory nations. This is because the protracted row between the US and Europe over agricultural subsidies - only a small portion of the talks - are still the main sticking point. The fact that the talks are seen as a European negotiation and one that implies big US concessions, particularly to French farmers, spells trouble for the future US-European relationship. This would be true even with a successful Gatt conclusion made possible, for example, by US agreement to a side letter giving France more time to meet farm subsidy reductions. The fact is that US-European relations are on a rocky road.

The Seattle talks illustrated that US policy is now focused on Asia. President Clinton has travelled to Tokyo and Seoul but not yet to London, Bonn or Paris. Warren Christopher, the US secretary of state, proclaims that 'Eurocentric' policies are anachronistic because Europe is 'no longer the dominant area of the world'. President Clinton's focus, with Nafta and the Asian rim talks behind him, will again be on domestic matters - healthcare, crime prevention and education. White House strategy in the new year has already been outlined in high-level Cabinet meetings. Foreign policy and President Clinton will take a lower profile.

Instead, Cabinet department heads will take to the road selling the President's domestic programme, and the President will be brought in only for the big ones, notably healthcare reform. He and his aides believe that the message of the recent state elections, in which Democrats lost prominent positions, is to get back to the domestic agenda.

Without some proactive measures by European leaders, this could leave US policy towards Europe in limbo. It is time for European heads of government to get involved. Europe cannot wait for the US to put a new proposal on the table to which it can react. Warnings by Sir Leon and other European officials that attempts at a last-minute deal by US officials will doom the Gatt talks are not a sufficient response. Far better for Europe to put its own proposals on the table and force the US to respond. The Gatt talks are too important to future world trade to be allowed to fail at the final hour because neither side would make the right move.

The US has always said that it would follow the bilateral trade route if the multilateral process failed, and it now has two such efforts under way. It is in Europe's interest to act, for the future of the US-European relationship as well as world trade.