U.S. in Talks With EU On Easing Trade Curbs
By Paul Blustein
A trade pact with the wealthy EU could be politically popular, and the administration is hoping that the prospect of such an agreement might improve chances for congressional passage of "fast-track" trade negotiating authority, which the administration unsuccessfully sought last year.
But it appears unlikely that a U.S.-EU trade accord will materialize anytime soon, in part because the administration is putting a much lower priority on winning new trade negotiating authority than on securing legislative approval of the U.S. contribution to the International Monetary Fund. President Clinton has made it clear in public remarks recently that while he will renew his quest for fast-track authority this year, he views the threat posed by the Asian financial crisis as a much more urgent concern, requiring the swift provision of new resources to replenish the IMF's depleted coffers.
Barshefsky is nevertheless pursuing what she called "very informal" and "very preliminary" discussions with Sir Leon Brittan, the EU trade commissioner, on how a major trade deal might be structured. "The EU has offered some ideas, and we are doing our own independent review" of trade impediments that might be eliminated, she said at a news conference.
Transatlantic trade already is relatively unhindered in many sectors, but barriers remain in a number of industries. The United States maintains restrictions on shipping and textiles, and the Europeans keep tight limits on agriculture and audiovisual products.
Eliminating all barriers in the European agricultural market is widely viewed by trade experts as a political impossibility because of resistance from France's highly protectionist farmers. Barshefsky tacitly acknowledged that a U.S.-EU trade deal would have to sidestep some touchy issues, saying that "we do not envision a free-trade agreement" -- which would scrap trade restrictions in all sectors. Barshefsky's spokesman, Jay Ziegler, said later that Washington still expects to raise some agricultural issues in the talks.
One big advantage of a U.S.-EU trade deal, from the administration's standpoint, is that it would help reestablish momentum for free trade and offset the setback the White House suffered in November when it was forced to withdraw its fast-track bill. A trade pact with Europe presumably would encounter much less political opposition than the administration's proposal for a Western Hemisphere-wide free-trade area, because well-paid European workers are not viewed as nearly as much of a threat to American jobs as are Latin American workers.
But it is far from clear that the prospect of an accord with Brussels will galvanize sufficient support for a fast-track bill even after the IMF issue is settled.
The administration has floated proposals for a narrow bill that would give it the authority to cut deals and lower tariffs in specific industrial sectors without the broader authority to reach free-trade agreements with Latin America. But Republicans in Congress have rejected those proposals, and even strong free-trade advocates on Capitol Hill admit that passage of fast-track legislation is a very long shot in an election year when the congressional calendar is full. "I just don't see how fast track is going to fit in," said an aide to one Democratic lawmaker who led the fight for last year's bill.
At yesterday's press conference, Barshefsky and Commerce Secretary William M. Daley also announced an initiative in response to last year's decision by the World Trade Organization rejecting U.S. allegations that the Japanese market for photographic film is closed.
The United States will begin monitoring the Japanese film market closely, Barshefsky said, to see if Tokyo is "living up to representations" it made to the WTO that its market is open to film made by Eastman Kodak Co. and other foreign firms.
The move means that Washington, having lost its case against Tokyo in a multilateral forum, may revert to threats of unilateral sanctions. Asked what would happen if U.S. monitoring showed that the Japanese weren't keeping the market sufficiently open, Barshefsky replied: "All tools remain open to us."
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