Veto threat hangs over Gatt round: The oilseeds dispute could yet destroy the world trade talks, David Bowen reports

A NEW crisis that could have destroyed the Uruguay Round of the General Agreement on Tariffs and Trade (Gatt) has been averted by Danish diplomacy. But the message from Gatt's headquarters in Geneva is that the round, the biggest set of trade liberalising measures ever devised, is still under mortal threat from special interest groups on both sides of the Atlantic.

At a meeting in Brussels tomorrow, European Community ministers will discuss the oilseeds deal that was reached after the US threatened retaliation if European countries did not agree to cut their subsidised production. The agreement was bitterly attacked by the French, who said they would use an arcane EC rule to veto it. The Germans and other EC members were determined to push it through with a vote, and only diplomacy by the Danes, who hold the EC presidency, avoided a showdown. The issue will not be brought to a vote tomorrow, and will not have to be settled until after the French elections at the end of the month.

The French government has thus avoided having to choose between using a veto, which would lead to a schism with the Germans and possibly a trade war with the US, and the politically suicidal acceptance of the oilseeds deal.

The confrontation may only have been postponed, however. The Socialist government is expected to be replaced by a right- wing one even more in awe of the agricultural lobby, and probably with a leader with his eye on the presidential elections of 1995. Gatt officials fear that it will be tempted to block the deal and bring the Uruguay Round to its knees. 'The man who succeeds in killing Gatt would be treated as a hero in France,' one said.

The process by which a veto of the deal could lead to collapse of the round is straightforward. The US administration would retaliate by introducing punitive tariffs similar to those threatened in November. The EC would retaliate in kind. Meanwhile Congress would refuse to allow negotiations on the round to continue without concessions that would fatally upset its delicate balance.

Even if the French do not use their veto, the Uruguay Round could still be killed by the Americans. The Gatt community was shocked by the emergence from Washington of a series of demands for changes to the text after the oilseeds deal had been signed.

'The Americans knew they had problems throughout 1992 but didn't want to think about them,' one diplomat said. 'I think they were hoping the changes they wanted would be swallowed when the agricultural deal was done, but they weren't'

The Americans said they would not accept the text on anti-dumping, that they objected to proposals to cut textile tariffs and that they wanted to keep their protection of domestic shipping. There are also pressures in Washington to renegotiate some of the fundamentals of the round, for example by adding an environmental element.

If neither the French nor the Americans throw a spanner into the works, the Uruguay Round will still take about a year to complete, officials believe. The original 'fast-track' authority to get the package through Congress expired last week, and President Bill Clinton is unlikely to ask for its extension until next month.

Congress will take about two months to approve this so negotiations are unlikely to restart until after the summer recess or to finish before the end of the year.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Recruitment Genius: Evening Administrator

£8 per hour: Recruitment Genius: This Pension Specialist was established early...

Guru Careers: Executive Assistant / PA

£30 - 35k + Bonus & Benefits: Guru Careers: We are seeking an Executive Assist...

Ashdown Group: Graduate Application Support Analyst

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable