The Gatt Dispute: Business horrified by political haggling

BRITISH business leaders reacted with horror to the possibility of the Uruguay Round of the Gatt talks collapsing, and criticised politicians for allowing such a vital agreement to fall victim to political lobbying.

Ian Campbell, director-general of the Institute of Exports, said that a collapse would be 'disastrous. World trade is the only way we are going to solve the negative growth problem in the developed world and the massive problems of developing economies.'

He said that big companies would be worst affected, because they trade most, but small companies would be hit as the Uruguay Round unravelled. New rules on intellectual property rights, anti- dumping and technical changes benefiting exporters are all dependent on its completion.

Neville Bain, chief executive of Coats Viyella, said that textile companies needed to replace the Multi-Fibre Arrangement (MFA), which has brought order to the industry but which restricts trade. The Uruguay Round would replace the MFA with a freer arrangement. 'People can't contemplate living without an arrangement,' he said. 'It would lead to anarchy.' The MFA has been temporarily extended but would expire in a year if the Gatt talks were not revived. 'I think it would be a total outrage if governments allowed the round to collapse,' Mr Bain said.

Paul Williamson, of Cadbury, the chocolate company, said that food and drink companies 'desperately want the Gatt talks to succeed'. The problem would come from retaliatory measures by the US, which would lead to punitive duties on a range of products. Drink companies are already stockpiling gin and whisky in the US to pre-empt new tariffs.

But Mr Williamson said that the industry was keen to see Europe's Common Agricultural Policy reformed, 'and Gatt talks are the only real lever we have on that'. The Uruguay proposals would, he said, bring down the prices of products such as sugar. Ironically, the British companies likely to be worst affected by US sanctions are those that support the American cause.