Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Looming trade war threatens chaos for new administration Date: Sun, 8 Nov 92 15:50:37 EST Message-ID: \SE A;MONEY \SS (WS) \HD Looming trade war threatens chaos for new administration \BY Robert Trautman \CR REUTERS NEWS AGENCY With a trans-Atlantic trade war looming and the six-year-long effort to reform the global trading system in near chaos, Bill Clinton could become president with monumental trade problems and no easy answers. How President Bush handles them in his waning weeks and how Mr. Clinton takes them up could help determine how fast the world's sluggish economy rights itself. Apparently viewing trade issues as cutting across party lines, the two seem to have buried political differences on the subject. "There are U.S. interests that exist and those interests remain regardless of who is president," said Jeffrey Schott, an international trade specialist at the Institute for International Economics. He added that the Bush and Clinton rhetoric might differ, but "trade policy has been pragmatic and will continue to be." The threat of a trade war and a collapse of global talks followed the breakdown of U.S.-European Community talks on ending EC subsidies on oilseeds and the U.S. threat to impose 200 percent duties on $300 million of European exports. The EC has said it would retaliate. The U.S. sanctions, aimed mainly at goods from France - seen as the chief obstacle to ending subsidies - may also doom the trade-reform effort being made by 108 nations under the General Agreement on Tariffs and Trade, or GATT. They are to be imposed in 30 days to allow time for more talks. In the past, however, once a sanction threat had been raised, further talks have been fruitless. But Mr. Schott was optimistic that if a U.S.-EC trade war did erupt, it would be short-lived. "It clearly would be in the interests of both sides to resolve it quickly," he said. "I think a political backlash would bring enough pressure on both sides to bring this thing to resolution, one way or the other." The real danger was that a trade war could sour the Uruguay Round of GATT talks, he said. "The damage it could do to the Uruguay Round could have long-term and lasting effects on the world's economy," Mr. Schott said. Those negotiations, named for where the talks opened in 1986, seek to cut farm subsidies worldwide, end textile quotas, impose tougher protections of patents and copyrights, and end barriers to trade in such services as banking and insurance. GATT reforms could boost global economic output by $200 billion a year, proponents say. The collapse of GATT talks would deny the world that economic stimulus. If a trade war breaks out before Inauguration Day, Jan. 20, Mr. Clinton will have to deal with U.S. tariffs and subsequent EC retaliation, and then decide whether to call a truce or begin new talks. For now, however, there is little kibitzing from either side. U.S. Trade Representative Carla Hills said she had not been in contact with the Clinton camp on the planned sanctions. And Mr. Clinton declined to comment on the action. "We've got one president, and he has to make those decisions," he said last week. This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM