Trade: A Will to Agree

Since the first meeting in May 1963, Kennedy Round negotiations have moved mostly in circles. The idea, advanced by President Kennedy, was to put through a big round robin of tariff reductions. But before they could present their own tariff-cutting package to the rest of the non-Communist nations involved, the Common Market countries had to settle all sorts of arguments among themselves. And as the Common Market kept calling time out, a deadline grew ever closer: the authority granted by Congress to the President of the U.S. to chop tariffs by 50% expires on June 30, 1967.

Last week in Geneva, at the Palais des Nations, the negotiating teams of 51 countries taking part in the Kennedy Round finally sat down to negotiate seriously. Present betting is that they will work out tariff cuts of 25% to 35% on most of the goods that make up the $184 billion in annual trade among nonCommunist countries. Said the chief U.S. negotiator, Ambassador W. Michael Blumenthal: "All the main participants now have the will to achieve agreement. There will be some cliffhangers, but I'm confident that in the end we will succeed."

Among the cliff hangers:

•AGRICULTURE. The Common Market countries, after many months of squabbling about farm subsidies, have agreed on a common policy that offers 5% to 10% tariff reductions on about half their farm imports. Christian Herter, President Johnson's special representative for trade negotiations, has described the Common Market proposal as "very restrictive." The American Farm Bureau Federation wants the U.S. to pull out of the talks unless the Common Market makes a more generous offer. At stake is the $1.5 billion in annual sales of American farm products to the Common Market, which the U.S. fears the Europeans want to reduce.

•CHEMICALS. The Europeans insist that the U.S. eliminate the so-called Amer ican Selling Price tariff on certain chemicals, mainly benzenoids used in dyes, medicines and plastics. The A.S.P. taxes these goods not on their actual value but on the market price of the same products made in the U.S., which is often much higher. The result is chemical tariffs running as high as 172%. The U.S. is willing to cut the A.S.P. in return for European concessions in other areas, but both sides are still far apart.

•ALUMINUM. The Common Market is trying to retain its present 9% tariff on primary aluminum, but has offered to admit a token quota of 100,000 tons at a lower rate of 5%. The U.S., which levies 51% on aluminum, and other countries want the Common Market to reduce its basic rate, would prefer to make aluminum duty-free everywhere.

•STEEL. The Common Market has of fered to halve its nominal steel tariff of 14%. But the other negotiators point out that 14% is a rate that existed in 1952. Since then, average Common Market steel tariffs have, in fact, been reduced to 9%, and it is this rate the others want cut by half.