In December 1990, after many years of negotiations on the further development of the world trade order, the Uruguay Round of GATT, the General Agreement on Tariffs and Trade, had to be adjourned having failed to line up expectations. Above all, this breakdown was triggered by the inability to negotiate a compromise between the USA and the European Community as regards trade in agricultural products.
The current resumption of the talks in Geneva is still overshadowed by conflicts in practically every field. GATT's founding idea of a multilateral ordering structure for all countries irrespective of their stage of development threatens to be stilfled by a web of protectionism, bilateralism and the formation of trade blocs. Consequently, there is an imminent danger of a repeat of the situation which led to the collapse of world trade in the 1930s, when the free-trade order of the 19th century was destroyed by economic nationalism and the formation of regional blocs, with disastrous result for prosperity and development.
GATT's present weakness is due to many factors. In the industrialised nations, structural crises and unemployement provide fertile ground for protectionism. In 1990 in spite of increasing liberalism Gatt listed 284 discriminatory trade barriers which are involuntary market agreements. Apart from classic protectionism for declining industrial sectors such as steel, textile, clothing and shoes, a new protectionism is developing for industrial products such as cars and high-tech goods.In addition protectionism has an adverse effect on developing countries' debt since it limits their access to the market and leads to a loss of export earnings.
An undermining or destruction of GATT means the end of free and fair world trade and will probably signify the return of trading blocks, bilateralism and trade conflicts. The pressure on the Uruguay Round therefore is thus fairly high. But nevertheless dominating countries like US or the EEC or Japan may be hesitating because they still see advantages in this situation and the problems of winning elections and answer the "clientele" are more important than the long term effects in trade. Today more than ever vision and creative political will are needed to halt protectionism.
Free and fair international trade is a system of mutual advantage provided that the rules of the game cannot be dominated by one side. It is better than bilateral agreements because bilateral liberalisation puts third countries at a disadvantage. A system of this kind is dominated by the power of the strongest nation which can also protect its interests under such a system. In particular there is the danger that the smaller nations and thus the majority of the Third World countries which have benefitted from the multilateral character of liberalisation without themselves having any negotiating power will find that their interests are ignored in future.
The finalising of the Uruguay Round is urgent. So many trade problems have to be overcome. The break-down of the communist empire and slow economic development as well as the increasing financial problems do not allow a halt to negotiations. In addition to that many problems are already waiting to be solved after the Uruguay Round such as trade and ecology, trade and safety, arms trade, international competition rules and social clauses in the GATT. The big trading powers are invited to agree in the interest of peace, more well-being of people and nations and in the interest of employment and fair competition.
Christa Randzio-Plath, MEP
