Tariffs: Round's End

With a flourish of pens and champagne glasses, delegates of 49 non-Communist nations gathered in Geneva's Palais des Nations last week to sign final agreement to the most sweeping tariff reductions in the history of international trade. The meeting climaxed four years of bargaining, sponsored by the General Agreement on Tariffs and Trade, in the oft-troubled but ultimately triumphant Kennedy Round negotiations.

The final package included a massive list of 60,000 items on which tariffs are to be pulled down an average 35% by 1972, a special agreement on the thorny issue of chemical duties, a plan to provide grain for underdeveloped nations, and a code to curb below-cost "dumping" of products in world markets. Clearly reflected was the fact that there had been plenty of room for economic maneuver even after the weary Geneva negotiators, under firm prodding by GATT's British Director General, Eric Wyndham White, came to a basic agreement seven weeks ago (TIME, May 26).

Hurried Horse-Trading. The Japanese, for instance, managed a "deft switch in the important grain-aid plan, under which the industrial powers will give 4.5 million tons of grain a year to hungry nations. The plan, in itself a concession to the U.S. and other big grain producers that failed to get guaranteed access to Common Market grain markets during the negotiations, would have required Japan to purchase much of its 5% share of the total grain commitment. Loath to spend cash on that, the Japanese got eleventh-hour permission to substitute a mix of home-grown coarse grains, rice, fertilizer and tractors. Argentina, which fondly expected to sell Japan some of the needed grain, was incensed at the change, only grudgingly signed the final agreement.

The horse-trading went on almost until the moment of the signing. At one point, the delegates of the six-nation Common Market team excitedly telephoned the U.S. negotiators, sputtered that printed tariff rates on some items, mostly wool products, worth $250 million in annual trade, were not so sweet as those talked about over the bargaining table. A mistake? Not at all. The wool-product rate, the U.S. reminded them, was tied to the rate for raw wool —and the U.S. agreement to slash raw-wool tariffs was contingent on wool-producing Australia's agreement to lower its customs barriers against U.S. tobacco. The tobacco deal, as it turned out, went up in smoke—and with it, the U.S. concessions on Common Market wool products.

And so it went. Yielding to Common Market cries about a raw deal on a number of items totaling $50 million in annual trade, the U.S. further trimmed its rates on semifinished aluminum products, tomato paste, small tobacco items and eyeglass frames, got lower tariffs for U.S.-made TV tubes in return. The Danes' dander rose over the tariff on live beef, which is an important Danish export. In retaliation, Danish negotiators tacked "reservations" onto their commitment to cut passenger-car tariffs 50%, will likely stand fast on a token 20% reduction.