Commentary: Trade war would harm UK most

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The Independent Online
The importance of today's meeting between Sir Leon Brittan and Mickey Kantor, the new US trade representative, is difficult to overstate.

If the two men soothe the frictions over supposedly unfair trade practices the world should continue along its path towards lower tariffs and more open trade. The Uruguay round of the General Agreement on Tariffs and Trade will be brought back on course.

But if they do not the danger of a rapid tumble towards protectionism is acute. This is a particularly risky time, for the workings of the US legislature make it all too easy for the president to unravel the whole Uruguay round.

The original deadline for presenting the package to Congress, 2 March, will now be missed. If President Bill Clinton asks Congress for a short extension, say two or three months, he will be giving a signal that he wants the round to be approved more or less intact.

If, however, he says Congress can have a year or more to reconsider the package, he will be signalling that he is tending towards the enemies of Gatt. Six years of work and a host of trade-liberalising measures could be thrown out of the window as a result.

He will also be giving notice that the administration is likely to follow up its tariffs on steel and restrictions on public procurement from foreign companies with other protectionist measures.

The Capitol Hill protectionist lobby is particularly well organised at the moment. It has come together around an unofficial but powerful group of politicians, officials and pundits known as Team B (after the group that persuaded Ronald Reagan to take a tough line with the Soviet Union). These are people who distrust foreigners, and especially the Japanese. Led politically by the congressman Richard Gephardt, they are now said to have a worrying influence in high places. Top jobs in Mr Kantor's office could well go to people who share their views.

Mr Kantor's own views are a mystery - he is a lawyer with no trade antecedents. The hope is that he will have a fairly open mind, but the fear is growing that he has a brief for Fortress America.

A transatlantic trade war would damage both sides, but no European country would be hurt more by the triumph of Team B than Britain. The UK exports 2.6 per cent of its national output to the US, a third more than Germany and twice as much as France.

If the mood music from Washington and from the Kantor-Brittan meetings does not improve, British ministers will need to launch their own diplomatic offensive. This is a key issue for our prosperity. America's paranoia could too easily become Britain's depression.