The protracted international trade talks appear to be back on the track again after top European trade negotiators received detailed assurances from U.S. trade ambassador Robert Strauss that the U.S. will take legislative and administrative action to avoid disrupting $300 million worth of subsided European goods which become subject to countervailing duties Jan. 4.
The European Common Market's Council of Ministers will decide next week whether the assurances are acceptable. While reluctant to prejudge the decision, negotiators here generally are optimistic that the council of ministers, will be satisfied and give authority to European trade negotiators to continue bargaining for a package they hope will be complete around the middle of December.
Congress recently refused to extend a waiver on countervailing duties extra duties charged to compensat (for subsidies), and the Europeans retaliated by saying they could not conclude a trade package under the threat of the duties being imposed. The trade package is supposed to include new international rules for subsidies and countervailing duties, one of the most difficult issued to resolve.
"A week ago these talks were dead, and we've breathed some life into them," Strauss told reporters yesterday, after several days of intensive sessions with European negotiators in various capitals and in Geneva. Strauss has dampened European fears not only by reaffirming administration promise to urge the Congress to extend the waiver legislatively, but by supplying details on how bonds, letters of credit or other procedures permitted under U.S. Customs laws can be used to stave off the collection of countervailing duties while Congress considers the matter.
While the recent actions of Congress were the spark for the crisis, which produced an abundance of frantic maneuverings, scare headlines and dire predictions, the root of the problem is that the world's major trading partners have been unwilling or unable, amid protectionist pressure and economic difficulties at home, to make the kinds of compromises and concessions necessary to wrap up a trade package.
Negotiators have known for nearly four years that the waiver would run out next January.
As Strauss himself admitted yesterday, two years were wasted "while we developed some first-rate skiers around here, (but) we didn't make a hell of a lot of negotiating progress."
But as one long-suffering negotiator who cannot ski well notes the technical people have been busy "framing the issue," writing options in brackets and working out the complicated technicalities, which will be needed once the political decisions finally break the logjams.
Meanwhile, the Americans have not yet satisfied the Europeans in their demands that the U.S. take into account consumer interests and not just injury to domestic industry when deciding to impose countervailing duties on subsidized products under a new code.
While negotiators from industrial countries are growing visibly tired of these seemingly endless negotiations, representatives from developing countries are more enthusiastic since they have finally been brought into the talks in a meaningful way.
But as one wryly observed, "Before we were complaining because we didn't know what was going on. Now we're complaining because we do know what's going on."