European Affairs

Spring 2001

 

Trade Relations
Business Wants Freer Trade, But Disagrees on How to Achieve it
Marietta Bernot
U.S. Global Issues Group Manager, Transatlantic Business Dialogue

 

Business representatives in the Transatlantic Business Dialogue (TABD) share the goal of removing all impediments to trade and investment in the Transatlantic and global markets. We support the WTO and are calling on governments to get a new round of multilateral trade negotiations underway as soon as possible.

Where we disagree is on process. That is, how to achieve the goal of trade liberalization and whether the only place for trade negotiations and agreements can be in the WTO and in a new round.

The U.S. business community tends to take the pragmatic approach. Any and all roads that lead to the goal should be followed. Let us have more efforts like the Information Technology Agreement, which was concluded outside a round of multilateral trade negotiations - and in record time.

My philosophy, which is not uncommon in the business community, is that any industry that can coordinate agreement among global member companies to eliminate tariff and non-tariff barriers should be able to see that agreement implemented by governments on a timely basis. We should support such efforts - indeed celebrate them. We should clear the path for these industry efforts and not hold them hostage to process.

The official position of the European Union, however, calls for a different approach. It advocates a comprehensive agenda that seems to mean "all or nothing." Everything must be on the agenda for negotiation in a new round and nothing should be negotiated outside a new WTO round.

The manifestation of this approach in the TABD is that our EU colleagues hold firm to the notion of a comprehensive round and resist other liberalization efforts, particularly if attempted outside a round. Even in Services where we largely agree on objectives, our EU colleagues do not want to endorse the possibility of Services moving ahead to a successful conclusion outside of a new round.

A difference of opinion in the TABD on this particular point is not new. But in this post-Seattle environment with no round in sight, the hard-fought compromises we develop to bridge these differences seem woefully inadequate to the task of helping governments find a way to start a new round.

This year we shall again call on governments to get a new round underway. We reference the benefits of a broad agenda but also point out that the agenda must take into account the capacities of member countries to undertake new negotiations and commitments. Ultimately, it comes down to the ideal of a broad agenda versus the reality that most countries, especially developing countries, cannot manage a broad agenda.

To go forward, U.S. and EU businesses and governments should keep in mind the art of the possible. I have always sought solutions to trade problems passionately and with the notion that only the ideal result was good enough. Once, after a particularly bruising trade battle with a foreign government that did not yield the results I wanted, a veteran Washington deal-maker told me: "Marietta, it is all about understanding the art of the possible."

I think that advice might also be relevant to the search for agreement for a new round. I do not want to paint a bleak picture. EU and U.S. business representatives in the TABD do in fact agree on many aspects of trade and a new round. For example, we agree:

• The agenda must be realistic and manageable.

• A new round should be of short duration - not more than three years. Both business communities particularly emphasize this point.

• There should be mechanisms for negotiating and implementing early deliverables on an ongoing basis, albeit provisionally. Agreements reached early in the round should not be held up by failure to agree on other, more difficult issues.

ur priority areas include services, the elimination of Industrial Tariff and Non-tariff barriers, greater transparency in investment rules and national treatment for investors, government procurement, and trade facilitation.

We also emphasize the critical importance of progress in the removal of tariff and non-tariff barriers to trade in agriculture and value-added food products, and the elimination of all forms of export subsidies. We insist that all products be on the table for negotiation and point out the importance of increased access to developed country markets for developing countries.

Finally, we are putting particular emphasis on implementation. Agreements reached in the Uruguay Round must be implemented on time and the governments should resist efforts to re-open agreements such as the protection of intellectual property, trade-related investment measures, and customs valuation. At the same time, we endorse U.S. and EU willingness to assist countries with capacity building to help achieve implementation and stand ready to help whenever appropriate.

We also urge increased internal and external transparency in the WTO because without it we cannot expect to foster an involved global constituency that understands and supports the institution of the WTO and its goals.