The United States, reached agreement with its major trading partners, including Japan, yesterday on a joint status report on the protracted Tokyo round international trade talks which spells out the frame-work for a trade package to be hammered out by the end of the year.
Although negotiators expressed satisfaction that much progress had been made in narrowing differences in the last few days in an intensive round of high level talks, the status report falls short of the hopes expressed by top negotiators last January that the outline of an overall package resolving political differences would be ironed out by mid-July.
The July deadline did serve, however, as a catalyst for some break-throughs in the extremely complicated negotiations involving nearly 100 countries which has dragged on for more than four years. The Carter administration's chief trade negotiator, Robert Strauss told reporters yesterday that he was pleased with the results so far, noting that "we're 80 to 85 percent of the way home."
The shape of the final agreement, however, is not a foregone conclusion. While few doubt that some trade agreement will emerge by the end of the year, it is still an open question how much trade liberalization can be negotiated in the rarified diplomatic missions of Geneva in the face of strong protectionist pressures from domestic industries and farmers in the United States, Europe and Japan. How much the loopholes in the text the new "framework of understanding" are closed will provide the answer.
There is broad agreement for example, to reduce tarriffs by between 35 to 40 percent, but the Japanese have come under intense pressure from the United States and the EECC for not making large enough tariff cuts. The Europeans yesterday officially withdrew some of their proposed tariffs reductions to the Japanese.
While the United States and the EECC are teaming up against Japan on industrial tariffs, the Americans are openly dissatisfied with European and Japanese offers to open up their portected agricultural markets to U.S. farm products. Although Strauss said that his discussions with the EECC on agricultural items was "most productive," he acknowledged that he had hoped for more progress on agriculture - than there has been at this point. Increasing American exports on items such as beef, citrus fruits and poultry involves such non-tariff barriers as quantative restriction (quotas) as well as tariffs.
Although the haggling over tariffs came prominently into public view during the last few days of bargaining, whether or not the Tokyo Round will provide a significant liberlization of world trade for the 1980s hinges more on the reduction of non-tariff barriers to trade.
Many of the codes regulating such non-tariff barriers as government purchasing policies and product standards (such as safety and health requirements) have been virtually drawn up except for some technical details. But the two most controversial non-tariff items throughout the long talks are still unresolved.
The U.S. has now accepted the European community's idea that "safeguard" meausre which place limits on exports hurting domestic industries can be applied selectively to individual exporters. Under current trade rules a safeguard action must affect all of a nation's trading partners in the product concerned. But a gaping hole in the negotiating text leaves unsettled the critical question of how and under what circumstances selective safeguards could be imposed.
Similarly, there has been a conceptual breakthrough on the politically senstive question of subsidies, such as grants or low interest loans to exporters by the govenment, and the so-called countervailing duties (extra taxes) which are levied on subsidized imports to compensate for the subsidy.