Trade Trouble-Shooting

Report Outline
Putting Trade Troubles on Gatt Table
Almost 40 Years on the Tariff Patrol
The ‘Growth Round’ of Trade Talks
Special Focus

Putting Trade Troubles on Gatt Table

Most of the world's trading nations will sit down this month in an effort to remove obstacles to free trade. The 92 members of the General Agreement on Tariffs and Trade (GATT), the 38-year-old treaty that has governed international trade since World War II, are seeking ways to remove trade barriers and broaden the treaty's coverage. But the prospects are dim that the new round of talks—optimistically referred to as the “Growth Round”—will live up to its ambitious name. After seven months of preparatory negotiations at GATT headquarters in Geneva, Switzerland, member nations could not even agree on an agenda for the round, which is set to convene Sept. 15 in Punta del Este, Uruguay.

The reason is clear: While everyone supports free trade and fair trade in theory, the two do not always go hand in hand. One nation's “level playing field”—a common definition of fairness in trade—is grossly tilted in another country's eyes. These differences in perception are most pronounced in trading relations between the industrial nations, with their advanced economies, and the developing countries of the Third World, which are struggling to enter the industrial age.

In the United States, the prospect of the new round of talks has sparked a variety of reactions. For its part, the Reagan administration has been talking tougher on trade. After instituting trade violation actions against several countries, the administration concluded several 11th-hour bilateral agreements this summer, providing its trading partners with a clue as to where the United States will bend and where it will refuse to budge at the negotiating table. Issues that are expected to be high on the agenda include proposals to tighten GATT rules relating to farm and textile trade and a push to bring trade in services under GATT jurisdiction for the first time.