A word dropped in yesterday's story on gas imports from Canada changed the meaning of a sentence. It should have read: "In return, the United States promised to submit next week, at the trade negotiations in Geneva, proposed tariff reductions on imports from Canada to aid its troubled economy." The word "tariff" was missing.
The European Community yesterday apparently could not reach agreement on an ambitious tariff-reduction goal for th multilateral trade talks that reconvene in Geneva next week.
The Community's political council said it approved the so-called Swiss formula - which calls for tariff cuts averaging 40 per cent - but in the same breath said that it did not expect the cuts actually would be 40 per cent.
At a press conference in Brussels yesterday, Danish Foreign Minister K.B. Andersen, chairman of the council meeting, said he expected that the 40 per cent reduction sought in the Swiss formula would be reduced during negotiations.
The trade talks meandered on for nearly four years without much progress, but last summer U.S. Special Trade Representative Robert S. Strauss and the Europeans agreed on a negotiating timetable to get the talks moving.
The first serious deadline is next week, when major participants - including Japan, the U.S., Canada and the European Community - are supposed to put forth their tariff concessions. Cuts are to be based on a formula, but countries also will propose exceptions to the general tariff-cutting formula by offering to cut some goods by less than the formula or not at all and other goods by more.
Tariffs have become the early sticking point, even though tariff barriers are not a formidable restraint to trade in most products. The U.S. tariff wall, for example, averages about 8 per cent. A 40 per cent reduction would bring it down to 4.8 per cent.
After tariffs, the Geneva negotiators must reach agreement on a host of non-tariff barriers that often interefere more deeply with world trade than do duties. These include codes for government procurement and standards or products. Both of these codes are well along, and governments are well agreed on the limits of the negotiations.
Less developed are codes for government subsidies and when other governments may take action against those subsidies, codes for customs valuations of goods, and codes saying when governments may take action to help industries being severely injured by imports.