A bipartisan foreign policy group recommended yesterday that the United States and its major allies should enter into a new, binding agreement to scrap quotas and other discriminatory trade practices in an effort to revitalize the General Agreements on Tariffs and Trade (GATT) as the centerpiece for management of international trade.
"A fresh international commitment of this order, concretely a new act of political will, is required," said John Leddy, a former assistant secretary at both the Treasury and State departments who now is chairman of the advisory trade panel of the Atlantic Council, which published the report. The Atlantic Council is a study group devoted to strengthening the United States' Atlantic and Pacific alliances.
The report says the pending Uruguay Round of multilateral trade negotiations, the eighth since the end of World War II, offers the best opportunity to inject new life and authority into GATT, which has been circumvented in recent years by special deals such as voluntary export quotas and "orderly marketing agreements."
(The talks are called the Uruguay Round because the meetings at which they were arranged were held in that nation.)
The underlying assumption of the report is that the huge American trade deficit is not caused by unfair trade practices of other countries that protectionists seek to counter, but by faulty macroeconomic policies in West Germany and the United States. The panel warned that pending U.S. trade legislation, which it regards as protectionist, "would make matters worse."
Leddy and several other members of the panel said that even though pending legislation carries authority for the United States to enter into the Uruguay Round negotiations, they would rather see the bill die if there are overtly protectionist rules in other parts of the legislation.
On the sensitive issue of agriculture, the panel -- with one notable dissent -- argued that American proposals for phasing out domestic subsidies are unrealistic in view of the entrenched opposition of farm lobbies here and abroad.
For the Uruguay Round, the panel recommended a less ambitious reduction of supports. Fred H. Sanderson, a former director of the Office of Food Policy, said: "The European Community is not about to dismantle" its agricultural price support system.
But in a vigorous dissent -- carried on in the midst of a press conference on the report yesterday -- Joseph A. Greenwald, a former assistant secretary of state, contended that "a bold conceptual approach" is needed, and endorsed the administration's proposal with some modifications to make it more pragmatic.
On other issues, the panel was unanimous, calling for better protection of intellectual property rights; coverage of trade in services under GATT rules; and replacement of the multifiber quota agreements by tariffs for five years beginning in 1991.
Leddy said that if all major nations abandoned practices that circumvent GATT, and instead rely on GATT's safeguard procedures to prevent unfair trade practices, GATT's methods of settling disputes would likely be improved.