Key players in trade talks prepare to cut a deal: Hopes are high that the Gatt Uruguay round will be concluded this week, writes Sarah Lambert in Brussels

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The Independent Online
THE TASK of re-organising the world's trading system is embodied in a cinema usherette - her uniform made in Portugal - who pockets the tip (that she will later deposit in a savings plan) from a French farmer taking his family to see Jurassic Park.

Gatt and its associated acronyms will not keep her in work, but for the negotiators in Brussels, Geneva and Washington, who in this crunch week will try to resolve outstanding difficulties, it is economic growth and job-creation that spurs them on to find agreement by the 15 December deadline.

'For the first time there is a strong feeling that the United States really wants a deal, that is not to underestimate the problems of reaching one, but everyone has stopped pussyfooting around - this negotiation is in earnest,' said a senior Brussels official this week.

Seven years ago the 116 nations party to the General Agreement on Tariffs and Trade, which by mutual consent establishes the rules governing international commerce, met in Uruguay for the first bout of talks designed to upgrade the system. The so-called Uruguay round, which seeks to establish the most liberal trade system ever seen by reducing subsidies and lowering tariffs, is now three years behind schedule.

Problems have arisen because the organisation groups states with hugely different political and economic interests who are trying to invent rules to govern world trade in new areas such as agriculture and financial services. The boom of 1986 has now turned to bust, governments have come and gone, and in a recession, protectionism is an easy and popular doctrine for politicians to preach.

The key players are the US President, Bill Clinton, Mickey Kantor his trade representative, Peter Sutherland, Gatt's director-general in Geneva, and Sir Leon Brittan, the European Commission's chief trade negotiator. Sir Leon and Mr Kantor must strike a deal, but the momentum to do so can only come from President Clinton. With the blueprint in place, Mr Sutherland has to persuade the other 114 states to accept it by 15 December. After this, the US Congress will be able to load the deal with so many amendments as to suffocate it.

A solution turns on resolving a clutch of particularly difficult dossiers: textiles, agriculture, financial services and audio-visual goods. In financial services, Europe and the US have a joint interest in trying to persuade Japan to open its markets and will probably bury their own differences to achieve this more profitable goal.

In the audio-visual sphere, Europe fears that without protection the cinema industry will be drowned in a flood of Hollywood blockbusters. The US fears Europe will block future technical developments, such as dial-a-film services.

The difficulties over French agriculture might also be less problematic than first thought. Restricted by a politically powerful farm lobby, Paris is railing at the Blair House pre-accord struck last November. In particular, they contest the agreed cuts in farm subsidies and exports. Although Washington insists the package cannot be renegotiated it is possible that adjustments could be made to ensure that the cuts are introduced progressively, and hit hardest later when the French will, thanks to internal European reforms, be exporting at world prices.

Textiles could prove the most difficult: Europe argues it must protect markets against cheap third world imports. It complains that tariff cuts agreed at the Group of Seven industrialised nations meeting in Tokyo in July have not been respected by Japan or the US.

Now the US has signed the North American Free Trade Agreement the hope is that President Clinton will want to consolidate his place in history as a free-trade president and wrap up a Gatt deal too.

The fuse will be lit on Wednesday when Mr Kantor arrives in Brussels. 'If I didn't think there was a real chance of success, I wouldn't bother coming,' Mr Kantor said this week, increasing optimism that the broad outlines of an agreement can be agreed in time for presentation to the French parliament before the European summit on 10 December.

Politicians are hazy about the aim of the deal. John Major has spoken of 400,000 UK jobs in 13 years, Mr Kantor of 1.3 million in the US over a decade, but there are few analyses to justify such figures.

The benefits are likely to be long- term and largely unquantifiable. But the psychological boost to producers and investors, mired in recession and with export potential stymied by high tariffs, is what everyone is banking on. As one dispassionate observer, Jean Claude Paye of the Organisation for Economic Co-operation and Development put it: 'Not to conclude a Gatt deal is a risk we simply cannot afford to run.'

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