World trade: E.E.C. move

Press, Volume CXIII, Issue 33113, 2 January 1973, Page 9

World trade: E.E.C. move

; (N.Z.P.A. Staff Correspondent.i WASHINGTON, January 1. The opening shots in the impending 1973; world trade negotiations were fired this week-end, the European Economic Community and the [United States both reserving their rights to {revise tariff levels. ! The Nixon Administration was notified formally of the European move on Friday, [and surprised American officials decided, in top-level con;sultations to take similar action. Today, Administration offijcials in Washington have emphasised that their action has been taken only in re-

isponse to the E.E.C. move, and is not aimed at other nations, particularly Japan and Canada. They add that discussions with Tokyo and Ottawa to consider the :E.E.C.’s initiative will be [sought in the near future. The Community made its] ’move under article 28 of the General Agreement on Tariffs and Trade, which provides ’that members may. at three-’ year intervals, exercise an option to reserve their rights) to revise existing tariff levels. The E.E.C. has taken advantage of the option before —but only after making it clear to the United States ’that it was taking action only; in respect of specific items of) trade, and not. as now, covering the whole range of its imports. White House officials hate promptly assumed that the

aim of the Community is to place pressure on the United States in the areas of trade where she is either the main or a substantial supplier to the E.E.C. They believe that the Community wants to cast doubt over America’s export trade in grains and technilogical equipment, such as computers. The effect of the actions taken by Brussels and Washington is to throw open the whole issue of future tariff levels on both industrial and farm products. Uncertainties are cast over the future course of world trade, although, for the moment. Washington officials play ’down protectionist dangers in the move. They believe that the E.E.C. initiative is the beginning of a period of intensive jockeying for strong negotiating

positions when the G.A.T.T multi-lateral talk* open in September. America has never before exercised her option under the G.A.T.T. article. Washington officials say that thev want to emphasise that, in doing so now, the White House considers it necessary only because of a need to preserve negotiating options. It is evident, however, that the unexpected and abrupt E.E.C. move, taken during the holiday season when many senior American officials were away from their desks, caused some irritation in Washington One senior official said that he regarded the timing of the European move as an indication of the tough bargaining that lay ahead for the United States as she sought reform of the world’s trading rules.