The Great Trade War : ...

For free traders, the first piece of good news came from Europe. For months, France had threatened to veto a deal on agricultural trade that U.S. and European Community negotiators had hammered out at the end of 1992. As Europe’s biggest farm exporter, France had complained that the deal would cost its farmers valuable overseas markets. It finally backed down under heavy pressure from its 11 EC partners, which were unanimous in their desire to ease trade tensions.

That made it easier for the United States to step away from its threats to retaliate against EC policies that it deemed protectionist. U.S. and EC negotiators promptly completed a deal by which each opened many of its government procurement contracts to bidders from across the Atlantic.

More than that, the United States withdrew its preliminary “anti-dumping” duties on steel imports from 19 countries. Seven days after Clinton’s inauguration, the Commerce Department had ruled that foreign producers were dumping steel in the United States--that is, charging less than in their home markets. The preliminary duties were calibrated to make up the difference.

But the U.S. International Trade Commission suspended the duties in mid-1993. It held the duties to be unfair because they applied to a period when steelmaking nations had agreed to limit their exports to the United States.

Clearing away these specific disputes made it easier for the United States and its trading partners to concentrate on the central trade issue of the early 1990s: the Uruguay Round of international trade talks.

Clinton had asked Congress to give him until Dec. 15 to reach a trade deal and authority to put congressional ratification on the “fast track.” That was Washington code for requiring Congress to promptly vote a deal up or down, with no possibility of amendment.

Congress consented in June, thus temporarily yielding its right to amend a trade treaty to death with provisions designed to protect special interests.

That in turn finally got the Uruguay Round negotiations off the dime. The talks, which were supposed to end in agreement after four years, had dragged into their seventh. But in early December, just before Congress’ Dec. 15 deadline, negotiators finally broke the impasse.

Under the accord, more than 100 nations, including all the world’s major industrial countries, eliminated tariffs on a host of imported goods. They liberalized trade in agricultural products and textiles. For the first time, they imposed fair-trading rules on services. They inaugurated penalties for international pirating of patents, copyrights and trademarks.

When Congress ratified the treaty, it marked the beginning of the Great World Trade Boom of 1994.

The Flow of Commerce: Trade Patterns Among Major Regions of the World

1991 total merchandise trade: exports plus imports, in billions of dollars

United States: $935

Germany: 753

Japan: 550

France: 457

Britain: 372

Italy: 335

Netherlands: 282

Canada: 250

Belgium-Luxenbourg: 245

China: 172

Source: Adapted from International Monetary Fund 1992 Direction of Trade Statistics Yearbook.