World Trade: The Linear Approach

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Geneva's staid old lakefront hotels looked like Chicago during a political convention last week. In crowded bars and smoke-filled rooms, politicians hammered out compromises, lined up voting blocs, and kept ears to the ground for reaction from the folks back home. The occasion: the 19th semiannual meeting of the 39 nations that are parties to the General Agreement on Tariffs and Trade (GATT), which has as its aim worldwide liberalization of trade.

The U.S., which had 40 negotiators working in relays, dickered for lower duties abroad on U.S. tobacco, foodstuffs and autos. Indian officials haggled over jute, Uruguayans over wheat and wool, Argentines over meat. The measure of GATT's success was that members have already reached agreement on most of the single items capable of being negotiated. Said one official: "It's getting very difficult to squeeze the orange any more." Prodded by the European Common Market countries, GATT was moving from piecemeal agreements toward a "linear" approach, by which nations would negotiate sweeping, across-the-board cuts on all their products—or at least on broad sectors of industry, such as nonferrous metals or organic chemicals.

U.S. Under Secretary of State George Ball gave staunch support to linear agreements in place of the nation's present maze of reciprocal trade agreements. GATT-wide adoption of the linear approach would mark the boldest move yet toward free trade in the free world.

The meeting also hoisted storm warnings from the poorer nations that depend on exports of raw materials. Despite Common Market progress, most prosperous European nations still cling to the maze of tariffs, quotas, and domestic farm subsidies that proliferated in lean postwar years to discourage imports, now hurt their own consumers as well as African, Asian and Latin American producers. Ranging from a West German levy that boosts the price of coffee to 35¢ a cup in restaurants, to the Common Market's exorbitant duties on cocoa, such restrictions actually work against the West's financial and technical aid to many underdeveloped nations, which need to expand exports to pay interest (up to 7%) on development loans. Duty-free admission for all tropical products, urged Nigeria's Alhaji Shehu Shagari, would "provide a real ray of light that would dispel the somber cloud that has shrouded the activities of this child of hope."