INTERNATIONAL NEGOTIATIONS ON TRADE TARIFFS (GATT)

by Altiero Spinelli

SUMMARY: The European Parliament examines the prospects for multi-lateral negotiations on intemational trade (GATT) on the basis of a Commission statement.

Spinelli returns again to the question of relations between Europe and developing countries. "Speeches in European Parliament, 1976-1986", Pier Virgilio Dastoli Editor. (EP, 12 September 1978)

Mr President, I think that in this debate we ought to bear in mind what GATT can reasonably be expected to do and not load these negotiations with hopes and fears greater than they can bear.

In my view, the whole question facing us of the development of trade relations with the State-trading countries - a complicated one which must be the subject of thorough examination - is incapable of being tackled with the methods and stratagems invariably employed in GATT negotiations. Similarly, I believe that, on the question of our trade relations with the developing countries, it would not be in their interests or in our own to imagine that the issue could be included in negotiations on GATT.

The question of relations with the developing countries, which, as Mrs Dunwoody said, is one of increasing importance for our economics, depends on the extent to which we follow, as we must, a policy of mobilizing resources in order to convert the potential demand in those countries into actual demand by giving practical effect to the big development programmes, for their sake and our own. Until, as a Community, we have a development programme in which those countries are included, we cannot properly tackle the question of trade relations with them, and we certainly shall not be any more successful in settling it under the rules of GATT.

However, we must bear in mind that a not insignificant part of our economic life is concerned with relations between the developed areas; and if, in the developed areas, there were a resurgence of protectionism and economic defence measures, based on old or new methods, there would be such a breakdown of the system that we should hardly be in a position to make plans for the less developed areas.

The task of lowering the barriers separating the developed areas, taking down the barriers altogether and abolishing or reducing customs duties, is a relatively easy one during a period of growth and development. Although the Kennedy Round negotiations were tough, they nevertheless justified hopes that a settlement would be reached in a comparatively short time, and that was, of course, because we were then in a period of economic growth.

Today, however, we live in a state of widespread fear that unemployment may increase and that we may even fail to hold on to our markets; and so now, in GATT, a defensive battle is going on, a battle for position to stop the situation from getting worse, but I don't expect much to come of it.

To the speaker who thinks that we shall be giving up the subsidies to agriculture, I say: speed the day! But there is not the slightest possibility that the subsidies on our agricultural exports will be stopped either as the result of the negotiations in GATT or anything else; just as it is hard to imagine that, as Mr Pisani said, the Americans will so lightly abandon the Buy American Act.

On the specific subject of relations with our great trade partner, the United States, we must remember that relations with that country ought, in any case, to be regulated by extending the range of issues dealt with under GATT. As we all know, one of the instruments which countries have used since 1971 to change the conditions under which they trade is devaluation, so it useless to conduct lengthy negotiations to achieve reductions of 5 % or 10 % in agriculture or in customs duties if there is suddenly a devalutation of the dollar which enables traders to regain a position of artificial competitiveness, with chaotic results. In a situation of monetary chaos, we shall, of course, carry on negotiating in GATT, but there will always be a point at which we have to say 'Stop' and adopt measures, not because a particular products is less or more competitive but because a sudden monetary manoeuvre has slashed its price. In circumstances where the real things at stake are economic recovery, the achievement of moneta

ry stability and the prospect of growth, things which, in contrast to the position in the fifties and sixties, are no longer the concern of the developed countries alone, GATT will continue to reduce the mass of obstacles which separate even countries whose trade relations should be normal, but the solution of the real issues involved demands a fresh political outlook. We shall be talking about that again tomorrow but, at the moment, it is not to be found in the Community or the industrialized countries.