Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, December 15, 1993 TAG: 9312150171
SECTION: NATIONAL/INTERNATIONAL PAGE: A1 EDITION: METRO
SOURCE: MARTIN CRUTSINGER ASSOCIATED PRESS
DATELINE: GENEVA LENGTH: Medium
President Clinton, U.S. Trade Representative Mickey Kantor and Sir Leon Brittan, Kantor's counterpart from the European Community, all used the term "historic" to describe the agreement.
Private economists were a good deal less carried away. They said it was ironic that an agreement promoted as the most ambitious effort ever to tear down protectionist barriers left so many of them standing.
Even where historic changes were made, such as Japan's decision to drop its ban on rice imports, the market opening was modest.
French farmers may have been the most violent in their protests, but they were not alone in agressive efforts to preserve protectionism. American steelmakers, European semiconductor makers and a host of other industries and farm groups around the world did, too.
Bringing trade rules up to date, supporters argued, would cut down on trade fights.
However, the pact's first tangible result is likely to be just such a trade war. That's because of U.S. demands that Europeans, the French in particular, lower their barriers to broadcast of American movies and television shows and limit subsidies to their domestic filmmakers.
Despite an all-out effort by the Clinton administration to bring home that deal as a prize for Hollywood, it was left by the wayside.
Given Europe's adamant stand, it is likely that further talks will go nowhere and the United States will end up threatening to retaliate by slapping high tariffs on European products.
The failure to get a deal on films, movies and music means that such audio-visual services will not be included in the GATT rules, one of four big service sectors bypassed.
Financial services, telecommunications and shipping were also left out of the agreement or included in a stripped-down fashion.
That dealt a big blow to one of America's biggest goals in the negotiations, tearing down barriers that are keeping its highly competitive service industries, such as banks and securities firms, out of foreign markets.
"The failure to include services in a more significant way was the biggest lost opportunity in this round of negotiations," said Gary Hufbauer, a trade specialist at the Institute for International Economics, a Washington-based think tank.
While the administration spent a lot of time complaining about Japan's reluctance to open its financial markets and the stubbornness of the French, Washington was not above digging in its heels.
Maritime shipping was not included in the agreement because of the protests of America's highly protected shipping industry. The United States did not go as far as the Third World wanted in lowering its tariffs on the textile industry, which cost American consumers an estimated $15 billion annually in higher clothing bills.
Next to films, America's biggest battle this week in Geneva revolved around a successful effort to protect U.S. anti-dumping laws.
But even with all the flaws, economists tended to take a charitable view. They said that, given the state the world economy, there is little surprise that politicians responded to pressures from politically powerful local interests.
by CNB