Farmers are playing hard to get. Labor unions are suspicious. The big multinational companies are swinging into line, flexing their lobbying muscles. Textile makers are trying to cut a deal. And Congress, caught between conflicting pressures for protectionism at home and trade expansion abroad, is bracing for a high-stakes fight that could set global trading rules for the rest of the 20th century.
After five years of on-and-off negotiations in Geneva, about 90 of the world's major trading nations are reportedly within a few weeks of putting the finishing touches on a new set of agreements to lower barriers to trade -- now amounting to $1 trillion a year, with the United States accounting for $1 of every $8.
But even before the ink is dry over there, the battle lines are beginning to emerge here. The Carter administration has given it a top billing, as have groups ranging from dairy farmers to aerospace manufacturers. Congressional leaders, noting the pervasive effect of imports and exports on the American economy, involving 1 of 8 industrial jobs and 1 of 5 farm dollars, say the trade debate could rival all others this year in intensity as well as importance.
The curtain-raiser is a measure, now before the House Ways and Means trade subcommittee, to extend a recently expired waiver of penalty, or "countervailing," duties on roughly$600 million in subsidized imports, involving about $47 million in duty payments.
The administration, backed by threats from European countries, says it has to have the waiver to get other countries to sign the agreements. However, import-threatened industries like textiles, holding out for trade concessions of many kinds, could make a preemptive strike against the whole package by way of the waiver extension, which is why the administration is trying to reach early accommodations with prospective foes.
Protectionist sentiment, fueled by U.S. trade deficits, foreign [especially Japanese] trade surpluses and the threat that cheap imports pose to American production and thus jobs, is a powerful latent force in Congress. But it is strong abroad, too, meaning there are limits to what the U.S. can gain. "It's like kindling waiting for a spark," said a worried congressional backer of the trade package.
The pacts -- now 98 percent complete, according to U.S. Special Trade Representative Robert S. Strauss -- represent a major departure from other trade liberalizing efforts since the end of World War II, which concentrated almost exclusively on the cutting of tariffs.
The centerpiece of the new agreements in a series of codes that seek to reduce or eliminate so-called "nontariff barriers" to trade that nearly all trading nations have erected to supplant tariffs in protecting their industries.
These barriers include government subsidies that help produce cut-rate products for export, government procurement practices that favor domestically produced goods and product standards and licensing requirements that can be manipulated to exclude imports.
The agreements chip away at these barriers, modestly in some cases but substantially in others.
For instance, a participating country would be banned from giving special subsidies to lower the cost of its industrial exports in foreign markets, while less drastic steps are proposed to limit the trade-distorting effect of other forms of government assistance.
In addition, tariffs, reduced over the years to a current average of 9 to 10 percent, would be cut again by about one-third, although some of the knottiest tariff problems remain to be resolved.
On the sensitive issue of farm exports, an area largely ignored in earlier trade negotiations, the U.S. has won expanded entree to many previously closed foreign markets for products ranging from beef to citrus -- for a total market potential of $3 billion in Europe and Japan, the two principal targets for agricultural tariff concessions.
Threated through the agreements are provisions for less procedural secrecy and more due process which, like the subsidies curbs, reflect American values that often conflict with the way things are done abroad.
But the United States has given as well as taken.
One of the sacrifices is the so-called American Selling Price, under which customs valuations for imports such as chemicals are calculated on the basis of what equivalent [and usually higher priced] American products would bring on the market. Instead, the goal would be a uniform standard for customs appraisals.
Similarly, federal "Buy American" rules and preferences, dating back to the 1930s, would have to be modified to conform to new government procurement standards, raising questions also about similar state and local government policies when federally assisted projects are involved.
Also, the United States, in exchange for limits on subsidies, has agreed not to impose penalty duties unless injury to domestic industries has been shown -- something that is not now required. Some groups, like dairy farmers, fear an injury test could make it harder for them to get duties limiting the competitive advantage of subsidized products such as European cheeses.
Even more important to American industrial, farm, labor and consumer groups is what the largely skeletal and often ambiguous agreements do not say.
"So far," complained a union trade watcher, "we're being asked to say how we like the emperor's new clothes."
First, of course, there are the details yet to be worked out in Geneva, including such critical matters as a wheat agreement envisioning international contributions to a global reserve supply aimed at stabilizing prices.
Second is what most American groups consider the linchpin of the negotiations: the domestic implementing legislation that Carter will send to Congress this spring spelling out precisely how the United States will comply and containing whatever "sweeteners" the administration feels it needs to win approval. It is on this package, between now and April or May, that the most intensive wheeling and dealing will focus because the ground rules provide that once it goes to Congress the legislation can be voted only up or down, not amended.
Third is just about anything else the government decides to do in the meantime on trade, ranging from granting the steel industry its requested extension of quotas on specialty steel imports to negotiating tighter bilateral restraints on textile imports -- all of which could have a major bearing on the lobbying lineup on the trade package.
The behind-the-scenes negotiating with the textile and apparel industry is probably the most crucial. The industry, hard-hit by imports from countries like Korea and Taiwan, demonstrated its clout with Congress last year by winning approval of legislation to exempt textiles from all tariff cuts in Geneva, a move so objectionable to other countries that Carter vetoed it in order to prevent a threatened collapse of the talks.
Now, with the countervailing duty waiver extension as a handy hostage, the textile industry is seeking -- and apparently getting -- a number of import concessions, although the full extent is not yet known.
With this much up in the air, and at stake in the legislation-drafting process, many powerful lobbying interests are reluctant to draw hard-and fast lines, although the big multinational companies that operate extensively abroad are generally pushing hard for the pact. While organized labor, textiles, chemicals and some segments of agriculture and assorted smaller industries are regarded by congressional sources as the main question marks, Strauss has expressed optimism that eventually most will climb aboard. The steel industry's import jitters, for instance, have been substantially calmed by recent successes of the trigger pricing system.
The AFL-CIO is unhappy but uncommitted.Its increasingly protectionist outlook may wind up being somewhat neutralized by conflicting internal interests. Officials of the United Steelworkers, the federation's largest manufacturing union, have indicated even they may be able to go along.
Meanwhile, Strauss, the administration's master political troubleshooter, is not napping.
He has assembled a kind of kitchen cabinet of high-powered old Washington hands, including the towns' top lobbyists, and promotional activities, coordinated by a White House task force, are underway in nearly every government department remotely concerned with trade.
An early result is a series of Commerce Department publications detailing how each state profits from exports, right down to the export value of its lard, tallow, hides and skins. Computers will soon be able to tell members of Congress how much their districts stand to gain or lose in jobs and other vital political statistics.
But Strauss himself remains the principal strategist, crafter of coalitions and captain of the first brigade. Foes of the trade pact concede that may be their single greatest obstacle.