PARIS, Aug 29, Renter: An international group of top industrialists and politicians cautioned on Monday that existing world trade agreements could be threatened by new regional accords, but said they remained cautiously optimistic.
Leading members of the United States based Aspen institute cited such bilateral pacts as the US. Canada free trade agreement or the creation of a single European market by the end of 1992 as being potentially dangerous for world trade.
Hisashi Owada, Japanese Ambassador to the Organisation of Economic Cooperation and Development, said the dangers for world trade were far from past,
“Fragmentation is one danger and we have to look at how to integrate,” Owada told a news conference.
Robert Gardner, a Columbia University Professor and a former US. Ambassador to Italy said the world trade order was poised between integration and disintegration.
But he added: “There is a feeling of cautious optimism.”
The two men were speaking after a weekend seminar that brought together industrialists and politicians such as European community president Jacques Delors, Umberto Agnelli, Vice President Of Italian carmaker Fiat Spa, and Toyoo Gyohten, Japanese Vice Minister of Finance for International affairs and one of Tokyo’s key economic devises.
Also present for the first time in the 38 year history of the Aspen Institute were two soviet economic policy experts.
The seminar was held ahead of a December Ministerial review in Montical of the current round of general agreement on Tariffs and trades (GATT) talks now going on in Geneva. It focused on ways of solving problems in multilateral trade accords.
‘The Paris gathering echoed widespread fears of a collapse of the multilateral trade order if the European community and the United States did not settle their trade differences.
The EC has so far not fallen in with a U.S. call to abolish farm subsidies by the turn of the century. The community argues it would be politically difficult to fly in the face of Europe’s powerful agricultural lobby.
A New USS. Trade bill signed into law by President Reagan earlier this month, has also annoyed community officials. William Eberle, a former top economic adviser in the U.s, administrations of Presidents Richard Nixon and Gerald Ford, said: “There is a strong feeling that the current gatt round must be successful.”
One fragile area in a reasonably sound world economy was that regional trade accords were being agreed. These included the Bnask U.S. Canada accord and a similar agreement being mooted between the U.S. and Japan.
“Unless the multilateral system can be supported within Gatt, we run a serious risk of moving to block trading areas,” Eberle said.
New economic communities such as a unified Europe would be forced to look inwards if multilateral trade agreements were not maintained. “We don’t think that is necessary. We think a unified Europe is very important but will only be workable if it looks outwards to an open system,” he added.
Article extracted from this publication >> September 2, 1988