The Uruguay Round of Gatt talks, pronounced dead at various points over the past seven years, roared into life when Brussels and Washington finally agreed to bury their trade differences, paving the way for a global deal involving 116 countries and covering trade in more than 28 different
'Over the next decade the world economy will be dollars 6 trillion (pounds 4,000bn) wealthier,' predicted the exhausted US Trade Representative, Mickey Kantor. Sir Leon Brittan, his EU counterpart, so tired he was running on the adrenalin of success, talked of 'a much-needed breath of air for the beleaguered European economy, a dose of oxygen for the world economy'.
The results of the last, gruelling 26-hour round of negotiations were immediately fed into the parallel talks involving the 103 other parties to the General Agreement on Tariffs and Trade.
They worked through the night, building in the side-deals and amendments that had been agreed, and haggling for last-minute changes as the presses began to pump out copies of the momentously named Final Act - Gatt's formal birth certificate.
This afternoon, the Gatt Director-General, Peter Sutherland, will convene a meeting and, in the manner of an auctioneer, ask whether there is general assent to the document before bringing down his gavel on an agreement that must reach Washington by midnight local time to avoid being picked apart by Congress.
As the world's biggest trading blocs, the US and the EU held the key that unlocked the whole process. Their tactics - to deal at the very last moment - have irritated many other delegates who hoped for more from the deal, and feel they have been unfairly sidelined.
To reach agreement, Brussels and Washington had to solve four outstanding rows: US access to the European film industry; EU access to the US shipping industry; liberalising financial services and rules for subsidising the aircraft industry. In the event, the impasse on the audiovisual sector remains.
To the delight of the French, it was, in effect, pulled out of the final package which will leave the US and EU alike, as Sir Leon put it 'with their hands untied,' to develop new audiovisual technologies and compete for markets as they see fit.
Efforts to get the US to open its shipping sector much further have been abandoned for the moment. The aircraft and financial service issues have also been fudged. Those compromises amount to a considerable watering down of an ambitious package to liberalise services, which now make up a third of all trade and will grow in the future.
Despite differences, Washington and Brussels saw eye to eye on the main benefits of a Gatt deal, defined as 'the most momentous market access package imaginable'. As of April 1994, when the deal comes into effect, all barriers to trade, such as quotas, will be converted to tariffs which will be systematically reduced by at least a third.
Reductions should enable many developing economies to increase export earnings and cut costs to consumers in the West. In some cases tariffs will be scrapped or, where they were particularly high, such as on woollen goods imported into the West, slashed.
The distorting practice of subsidising farm exports is being slowly dismantled because agriculture has been brought under Gatt rules. Most importantly, the rules of international commerce will be tightened and properly policed by a specially created organisation - limiting the opportunities for the big trading powers to act alone.
The agreement is of great political significance for Europe. It has been a key plank of British and EU policy to complete the deal since 1986, when the Uruguay Round of negotiations was launched.
The deal will boost speculation that Sir Leon, who negotiated for the EU, could be a candidate to succeed Jacques Delors as President of the European Commission. Sir Leon has often been criticised by France for his free trade leanings. Yesterday, officials in Brussels said they thought that by helping France to portray the deal as a victory, he had improved his chances.
Environmentalists say the treaty gives inadequate attention to green issues, and will make protecting the environment through trade measures more difficult.
MAIN POINTS OF THE DEAL
INDUSTRIAL TARIFFS: Reduced or eliminated across the board;
AGRICULTURE: Brought into Gatt for the first time. The deal will gradually cut food prices in Europe;
TEXTILES: Freer trade will benefit consumers and exporters such as India, Pakistan and China, but could devastate other producers;
INTELLECTUAL PROPERTY: Patent rights to be protected worldwide;
SERVICES: Freer trade in financial and other services for the first time, which will benefit the City of London.
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