TRADE, along with the outcome of the world negotiations in the coming weeks, is crucially important to all of the industrial democracies. Inevitably, it is being overshadowed to the point of eclipse by more dramatic events in the Persian Gulf and the Soviet Union. That means it's in danger of being left to the technicians. But the technicians can't build an agreement. Only the politicians can do that, and among the politicians, only those at the top.
The outcome of the trade talks won't affect the present recession, for its effects work on a longer time scale. But it will certainly affect the recovery's strength and duration. The United States is counting on a strong rise in exports to pull the economy back into growth and to keep it growing.
The central decision in the negotiations lies with the European Community. The negotiations are now paralyzed by an inability to deal with agriculture, because the Europeans refuse to discuss any significant changes in their farm programs and the huge subsidies lavished on them. Hardly anyone in Europe, other than the subsidized farmers, seriously defends the present system or thinks it can last much longer. But the farmers like it, and nobody else quite knows what to do about it. The European Community has become a gigantic enterprise, with 340 million people and a GNP similar to the United States. It presents a disquieting example of a great economic power that, with its 12 governments, has great trouble making up its mind.
The effective deadline for these negotiations is set by the American legislation that provides a special procedure for getting a trade agreement through Congress without being nibbled to pieces by protectionist lobbies. If the trade agreement isn't completed by March 1 -- and it won't be -- the law will have to be extended. The chance of that is zero without a deal on agriculture. The protectionists are numerous and are rapidly recruiting money and votes to fight off any challenge to their highly lucrative quotas on imports of things like sugar, dairy products and textiles.
It's a paradox, and a dismaying one. As the democracies get richer, they are having trouble remembering what made them rich. The Americans, notoriously, have forgotten about saving and investment. The Europeans and the Japanese, having prospered beyond the limits of imagination as traders, are now dragging their feet on these negotiations to keep markets open and to expand them. Perhaps they have become too rich to care much about such dull and unfashionable subjects as trade and investment. If that's the case, they will soon be less rich and have sharper reasons to pay attention to the sources of their economic growth.