Within the Gatt, little has happened since the secretariat put forward a draft final Act in December. The EC has agreed its farm reforms, and is close to the US on cuts in export and other farm subsidies; the problem, as Gatt officials have been saying until they are blue in the face, is political, not technical.
The weakness of resolve has been evident. Britain wanted a commitment from the EC at last month's Lisbon summit to work for a deal as soon as possible; this was watered down to 'by the end of the year'. The same wording will apply in tomorrow's summit communique. John Major's initiative to bring new life to the talks was admirable, but the political timing is wrong for a breakthrough.
France does not want to move before it holds a referendum in September on the Maastricht treaty. The US would like to hold off until its election is over, though it must act by the end of the year. In both countries, the heads of state are undermined by domestic political weakness. Though financial markets would be cheered by a deal, the voters - particularly those who see free trade as the enemy, not the ally - may not be.
The argument that the delay is symptomatic of a 'hidden agenda' for the creation of regional trade blocs is flawed: you only have to look at the levels of investment and trade across the Atlantic to realise it. For all the protectionist talk in Washington and Brussels, the free trade lobby includes most large transnational corporations and is very influential.
Most of all, the G7 leaders know that a deal would help to restore economic confidence. Indeed, it is one of the few positive policy measures that the G7 countries can deliver to stimulate world recovery, since their monetary and fiscal policy options are so constrained.
But the pre-election torpor of Presidents Bush and Mitterrand - the chief culprits in the present impasse - does not augur well. Indifference may be just as deadly to the cause of liberal trade as an overt attempt to undermine it by means of regional trade blocs, particularly since any successful conclusion to the trade talks will create a new Multilateral Trading Organisation to police its rules. If the MTO is to have the clout to defend free trade, the Gatt will need more than its present collection of fairweather friends in high places.Reuse content