A DIPLOMAT'S SURVEY OF TRADE

Something touching doesn't happen often in this Washington international trade game. But it did a few weeks ago, when the Institute for International Economics, a Washington-based research tank, released another book.

The book, co-authored by Gary Hufbauer and Jeffrey Schott, two of the institute's senior fellows, is called "Nafta - An Assessment." Turn a page or two and you come across this: "To Julius Katz, for his lifelong achievements in support of an open world trading system."And Mr. Katz, or "Jules" as he is usually addressed, is not even sitting at home, retired. He's active in yet another new venture. Last month, he teamed up with former U.S. Trade Representative Carla Hills to help U.S. companies abroad.

Just before that, Mr. Katz had been deputy U.S. trade representative, chairing the Bush administration's interagency trade policy review group, chief negotiator on Nafta (the North American free-trade agreement) and a top coordinator of the Uruguay Round negotiations at the General Agreement on Tariffs and Trade in Geneva.

A visit to his new digs at Hills & Co. in downtown D.C. brought us face-to- face with a man who finally has time to eat a decent lunch. "It was a hard four years" is how he describes his stint as deputy U.S.T.R.

Now out of government, what does he think about government? More specifically, how does he assess the Clinton administration's "trade policy?" Some people are insinuating that it's no trade policy at all - or is, at best, unfocused.

A diplomat for more than 30 years, Mr. Katz won't be drawn into such criticism. "It's too early to say," he says. "The administration is still getting people on board."

But, he points out, since World War II U.S. trade policy has shared a ''common thread" - no matter the administration. That thread, he said, is reciprocal trade liberalization.

Still, Mr. Katz concedes, there have been deviations "on occasion," when an administration faces "specific problems."

The Truman administration, for example, resorted to "Section 22" agricultural import restraints. The Eisenhower team slapped quotas on imported oil, the Kennedy administration took steps to protect the U.S. textile, carpet and glass industries, and Lyndon Johnson instituted meat import quotas.

The list goes on: Johnson-Nixon steel import restraints, Carter administration color TV and footwear curbs, the Reagan administration's presiding over Japan's "voluntary" car export limits.

Of them all, Mr. Katz argues, the Bush administration's trade record was the "cleanest." He cites in particular the Bush decision finally ending quantitative curbs on American steel imports.

The "voluntary" car export restraints imposed on Japan in 1981 was the ''second worst" trade policy action by a U.S. administration that Mr. Katz says he has seen since joining the State Department's trade team back in 1963. It only fattened the profits of Japanese carmakers, giving them that much more money to compete in world markets.

The "first worst?" A 1973 Nixon administration export embargo on soybeans. The embargo grew out of price controls instituted in 1971. The embargo, Mr. Katz relates, caused U.S. exporters to breach contracts, putting their future reliability in doubt. And it led to big Japanese soybean

investments in Brazil and Argentina and helped bring about the European Community's much criticized oilseed production policies.

But more than offsetting such negatives, he believes, is the series of trade liberalizing agreements the United States has struck over the last quarter century - the Kennedy and Tokyo rounds and the U.S.-Canadian free- trade pacts.

What about the two latest such initiatives - the long-mounted Uruguay Round and the Nafta? How's their outlook?

Despite more than six years of negotiation, Mr. Katz remains persuaded that the Uruguay Round will be successfully concluded, but, like anyone else, he knows not when.

Whatever its outcome, he said, the round already has created "tremendous progress" in bringing nations together on both the need to liberalize services trade and to improve protection for intellectual property rights.

He freely acknowledges an error in Uruguay Round negotiating strategy: downplaying the importance of tariffs in the early bargaining. Tariffs now represent perhaps the biggest hurdle to the round's completion. When the crunch comes, "tariffs is still where the money is," he admits.

Mr. Katz confesses to some "concern" about possible new "delays" in both the Uruguay Round and Nafta. "I'd like to see the administration move faster on both," he said.

He is very down on fixing quantitative market-share goals in U.S. trade with Japan - an idea gaining currency. It would be "the worst kind" of way to try to step up exports to Japan, he believes. It would arouse expectations here that might not be met.

Instead, he feels the United States should keep trying to press Japan toward more basic market-opening "structural" reforms.

Despite disputes over aircraft and oilseed subsidies and government procurement directives, he finds that U.S.-European Community relations are still fundamentally sound. The Clinton administration's threat to retaliate against the EC's new utilities procurement rules is exactly what the Bush administration was planning to do, he said. "The papers were already drafted."

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