U.S. Taking Hard-Line Stance in GATT Talks

As negotiations to open a new round of multinational trade talks resume in Geneva, the United States has dug in its heels--to the strong opposition of its major trade partners--on behalf of its quest to extend international controls into foreign trade practices affecting agricultural products, services and “intellectual property.”

Unless those areas are dealt with in a new trade round, the deputy U.S. trade representative warned, “the United States isn’t going to play.” If that were to happen, Ambassador Michael B. Smith acknowledged, “we, like every country, will be hurt.

“But,” Smith added, quoting former U.S. Trade Representative William E. Brock III, “we will be hurt least--and last.”

The multinational trade forum known as the General Agreement on Tariffs and Trade, or GATT, is ailing and must “heal itself” by improving its generally slow and often ignored system for resolving trade disputes, Smith last week told a foreign trade seminar in Los Angeles that was sponsored by the California Council for International Trade, the American Fair Trade Council and the Foreign Trade Assn. of Southern California.

GATT’s 93 member nations unanimously agreed to form a preparatory committee that is exploring procedures and seeking to draft an acceptable agenda for a new round of trade negotiations later this year--GATT’s fourth and the first since the 1979 Tokyo Round.

The committee is to report its recommendations by July 15 so that GATT’s trade ministers can make a final decision in September.

The stakes for California are considerable. The ambassador and other seminar speakers pointed out that if California were a nation, its economy would rank it among GATT’s top 10 members--larger than the economies of GATT’s smallest 50 nations.

“GATT needs to heal itself . . . to bring it into the tail end of the 20th Century,” Smith said.

To survive, he said, GATT must, among other things, “regain its former vitality” by strengthening its procedure for settling trade disputes. “This system isn’t working,” he said.

U.S. citrus growers have been awaiting resolution of a complaint of discriminatory trade practices by the European Communities for 16 years, he said, and pasta producers have been waiting 17 years.

While the United States recognizes that there are circumstances under which a country must restrict foreign trade, “the system has been abused,” Smith said. New, universally accepted rules must be adopted--”rules for everyone to play by.”

Inclusion of agricultural trade under GATT is the Reagan Administration’s single most important issue, Smith said.

“We’ve got to fix the agricultural system,” he said. “Of course,” he added, “this may mean that we’re going to have a battle royal with our friends across the Atlantic pond.”

The United States also seeks to strengthen GATT articles covering subsidies, standards and government procurement policies--all of which can become unfair trade barriers every bit as effective as high tariffs, Smith said.

For example, he said, U.S. manufacturers cannot ship personal computers to South Korea, though Koreans are free to export them to this country; U.S. citrus growers can export to Japan, but only within a quota, and Brazil has not only shut out all competitors to protect its fledgling computer industry but has extended the reserve to include “anything containing a silicon chip--including dolls.”

Finally, he said, the United States wants “intellectual property” and trade in such services as consulting and franchising covered by GATT articles. Services, which accounted for about 25% of U.S. trade on the eve of GATT’s creation in 1947, now make up 46%, he said.

As for “intellectual property”--trademarks and patents--the United States wants them treated the way copyrights are--assuring a limited monopoly to exploit the fruits of research.