Washington journalists are suckers for Texans. But a Texan into a position of prominence and power and, almost instantaneously, a stream of laudatroy prose gushes forth from the city's typewriters. The glorified Texan looms as a larger-than-life character somehow able to reconcile the lofty goals of statesmanship and the grim realities of politics.
No one has yet analyzed the chemistry of this media phenomenon, though it may reflect nothing more than a continuing fascination wirth showmanship. The adulation is usually short-lived. Predictably, excessive praise inspires guilt, which leads to a backlash of excessive criticism and cynicism. It happened to former President Johnson and John B. Connally, Treasury Secretary under former President Nixon, and it may happen, too, to the latest recipient of the Texas treatment: Robert S. Strauss, the President's Special Representative for Trade Negotiations.
Despite reports to the contrary, the Overwhelmimg evidence is that Strauss if mortal. Even if he weren't, he might not succeed at his primary mission - which is not the coal strike or energy legislation - but achieving a politically acceptable and economically useful treaty from the Geneva multilateral trade negotiations.
The talks - called the Tokyo round - have continued since 1973 with all the excitement and significance of pre-game calisthenics at a football game. Until Strauss entered the picture, there was virtually no progress at all. As on ex-official recently put it, "Negotiators found themselves spending more and more time learning how to ski, or to sail in the lake by Geneva ..." Although Strauss has changed that, the current "hard bargaining" may not produce a treaty worth the name. Strauss concedes as much.
The didfficulties are as simple to state as they are stubborn to overcome. Most important, the bargaining climate has changed radically since the 1960s. Then, most major trading nations accepted the logic of mutual scrifice for mutual gain. World trade was expanding steadily and briskly (8 per cent to 15 per cent annually). If trade concessions hurt some industries, the unjuries were more than offset by benefits to others. Now, trade is nearly stagnant, unexployment is high and governments are increasingly preoccupied with preventing new injuries.
Equally troublesome, previous trade negotiations - most significantly, the Kennedy Round that ended in 1967 focused on the relatively "easy" problems, such as cutting manufacturing tariffs. Industrial tariffs were cut 50 percent, leaving the residual levels fairly low: 9.0 per cent for this country, 10.7 per cent for Japan and 9.6 per cent for the European Community.
But the remaining issues, primarily protectionism in farm products an da rising number of "non-tariff barriers," pose far more difficult technical and political problems. In contrast to cutting tariffs - mostly a matter of arithmetic - writing "codes" to deal with internal subsidies or government procurement proctices (typical non-tariff barriers) is a task of mind-boggling complexity. Politically, these protectionist practices usually involve domestic programs, such as helping farmers or supporting key industries, and all governments (including the United States) regard them as internal matter subject only to minimal outside interference.
The risk for Strauss is that he will bring home a treaty that has no constituency: a treaty providing neither larger farm markets abroad nor a credible international mechanism to police the government subsidies that U.S. businesses and unions believe have hurt them.
Take farm exports. The key product is grains, which accounted for $10 billion of America's $24 billion of food exports in 1977. And the key market is Europe, which absorbed 22 percent of those grain exports. As long as grain harvests remain good, any major expansion of American exports would have to come at the expense of less-efficient European farmers. But the European Community is not likely to allow much of that, especially with governments in almost every major country holding a slim, or even non-existent, parliamentary majority.
To protect their farmers, the Europeans maintain an elaborate system known as the Common Agricultural Policy (CAP). Basically, the CAP stes minimum prices for domestic farmers. Then, through a combination of fixed tariffs and variable levies, it prevents all prices competition by raising import prices to those levels. Thus a ton of American corn can now be bought and shipped to Rotterdam for about $110 but then is slapped with tariffs and variable levies totaling about $100.
More galling to Americans is the European practice of using the revenues collected on imports to subsidize European food exports, potentially depriving U.S. farmers of other sales.
One way to limit this system's impact is to adipt a tough code against all direct export subsidies. But predictably enough, the Europeans are insisting that separately.
Moreover, as Harald B. Malmgren, former deputy special trade representatives, points out, dealing with other subsidies promises to be equally difficult. Developing and Communist countries represent an increasingly important source of trade, and yet, in these countries, the "public" and "private" sectors are interconnected by a byzantine web of official investments, credit guarantees and nationalizations. Likewise, many European governments are drifting in the same direction as they seek to shore up weak industries of remote poor regions.
Without government aid, for example, many steel firms abroad (including much of the British industry) would have collapsed in the past four years. But the United States also provides random subsidies for its maritime, railroad, airline and aerospace industries. And there is a direct export subsidy (through lower taxes) under the domestic international sales corporation. No one really knows how to define a "subsidy."
Some economists argue that the subsides get washed out by exchange rate movements. Even if that is true, the subsidies poison the trading climate because affected businesses and workers identify them as villains. A new international trade agreement might provide a partial antidote, but as Strauss well knows, the obstacles to agreement may be as big as all Texas. Indeed,they may be bigger.