The identification of Roy Denman in his op-ed article Nov. 11 was incorrect. His correct title is head of the delegation of the Commission of European Communities.
I had a call the other day from an old friend in Minnesota. He makes machinery. And over the years we have often argued into the night about the follies and possibilities of the universe.
This time he seemed, to put it mildly, ironic. No sooner, he said, have you arrived in Washington than off you go high -tailing it to Geneva for something called a GATT ministerial meeting. I have been in business for 30 years, he said, and I have never heard of the GATT. So what use is the GATT to people like me. We simply pay for it. But I am sure, he added generously, that the Geneva meeting will be a fun place for freeloaders.
Be my guest. Fred, I said, there are several things in life you have probably not heard of, not excluding the Fourth Law of Thermodynamics and the Book of Revelations. This does not mean they do not exist. But let me explain to you about the GATT.
The General Agreement on Tariffs and Trade was launched after the war, originally as an Anglo-American initiative -- together with the IMF and the World Bank -- as an attempt to set fair-and-square rules for world trade and the world financial system. It was an attempt to banish into history the jungle of restrictions and bilateral dealings that strangled world trade in the 1930s like jungle weed.
The GATT not only established a rule of law; it also launched a whole series of major negotiations to reduce barriers to trade. And it worked. In the great blizzard of 1929-33, world trade dropped by 60 percent, and throughout the 1930s the frost was in the flower. In the 1950s, world trade in real terms approximately doubled; in the 1960s the rate of increase was even faster, and in the difficult 1970s this pace was maintained. GATT has been responsible for the biggest increase in prosperity known in the recorded history of the Western world.
Of course, like any system, GATT is attacked from time to time as imperfect. Some say it has not done enough for agriculture; there is argument that the procedures for settling disputes could be improved; a number of people want the system of safeguards improved; others want services included. No sensible person would argue that GATT is perfect. A lot of quiet and expert discussion has been going on in Geneva over the last year about subjects like this and how best to deal with them. But anyone who tells you that GATT should be torn up and rewritten should be reminded of Winston Churchill's comment about democracy -- that it may well be a lousy system of government until one came to consider the alternative.
All the more reason, then, to rally to GATT when it is in danger. And it is. The difficult and prolonged crisis in world economy, negative growth rates, rising unemployment, uncertainty fueled by persistent inflation, high interest rates and misaligned exchange rates, lack of convergence in national economic policies, have all strengthened protectionist pressures. And that situation has not been helped by the fact that not all countries apply the rules, in particular not all open their markets in the way the European Community and the United States do.
What then can the GATT ministerial meeting achieve?
We need first to avoid exaggerated expectations. Placing your hand elegantly on a five-barred gate and making an impressive leap is fine, providing you do not end up on your backside. The GATT meeting cannot in three days -- Nov. 24, 25, and 26 -- produce a new heaven and a new Earth, commodities in notoriously short supply. Nor can it even rewrite GATT. The rules can be elaborated somewhat here and there, but what is needed is not a rewrite but a commitment to observe the rules and respect GATT procedures.
Nor can it start a new trade negotiation, since in the field of tariffs and trade, the results of the Tokoyo Round, only three years old, are still being digested. And in a new field like services, solid research is necessary before a negotiation could be started.
The GATT ministerial meeting could do two things:
1. It could express the determination of the ministers of the trading nations of the world to prevent any further unraveling of the one-world trading system.
2. It could agree on a series of workmanlike steps forward. On developing countries, what the community would like to see is action aimed at further liberalization for the least-developed countries and, in parallel, a feasibility study on how the more advanced LDCs could open up their markets in conformity with GATT in return for some further liberalization of trade by developed countries. On agriculture, we would like to see a major work program to achieve genuine multilateral cooperation and to reduce tensions in agricultural trade. We can mark up some significant improvements in dispute procedures. On safeguards -- that is, whether action to protect an industry in real difficulty has to apply to all countries or can be limited to the real causes of the damage -- we can note that some useful progress has been made, but the negotiators should be firmly charged to overcome the remaining difficulties and to reach a comprehensive understanding on safeguards within, say, the next 12 months.
This seems to us a result that is significant but that avoids the trap of exaggerated expectations. And as the meeting nears, it is also of fundamental importance that the European Community and the United States, responsible as they are for nearly half of world trade, work closely together with the common aim of saving the prosperity of the West. In the immortal words of Benjamin Franklin, we either hang together or we hang separately.