The surge in momentum that has lifted the once moribund Uruguay Round of global trade talks continued last weekend in Toronto, but the most difficult issues on the agenda will remain unresolved until the end of this year.
Friday's meeting of trade ministers from the United States, European Community, Japan and Canada was not a negotiating session, so no real narrowing of positions occurred.But in agreeing on the broad political strokes, the ministers kept in motion a carefully scripted process and increased the likelihood that bottom-line positions will emerge early next month.
Following meetings next month, senior U.S. and EC trade officials say the outlines of a deal can be presented in July to leaders of the world's seven largest industrial countries when they meet in Tokyo.
"The main thing is they have a clear commitment on the need to develop a whole package, and there is agreement on the schedule going up to the Group of 7 meeting," said one senior U.S. official.
"Potentially we could see progress at the follow-up meeting (in Paris early next month)," said a senior EC official.
Agreement on specifics in several key areas remains elusive, however. The United States has yet to bring shipping into the seven-year-old round, which is organized under the auspices of the General Agreement on Tariffs and Trade, the Geneva-based body which governs most world trade in goods.
EC, Japanese and Canadian officials pressed the Clinton administration last week to agree on a "standstill" provision for shipping, under which Washington would be prohibited from implementing new restrictions against foreign shipowners or port operators. But U.S. officials say such a deal is unacceptable, because it would entail "freezing the U.S. market open," while stripping away the unilateral action needed to open foreign markets.
Brussels has also raised the possibility of allowing the United States to refrain from any maritime liberalization moves in exchange for a standstill and the inclusion of a reference to the importance of cultural identity in any text regarding audio-visual services. Any mention of a cultural component in the round's text would infuriate the Motion Picture Association, and its chief, Jack Valenti, who believe cultural references are used to limit imports of U.S. television programs into certain EC markets, particularly France.
"If we accepted trading a standstill for some mention of culture, we'd have both the maritime interests and Valenti after us," said a U.S. official.
On the crucial market-access talks, U.S. negotiators remain reluctant to reduce high tariff peaks on sensitive products like textiles, footwear, glass and ceramics.
Sources say before Washington accepts a substantial cut on its textiles tariffs it wants to extract from its trading partners a commitment for a longer phase-out of the Multi-Fibre Arrangement.
The present draft text put forward by Arthur Dunkel, GATT's director- general, in December 1991 specifies a 10-year phase-out.
The EC continues to resist U.S. pressure to eliminate all duties on aluminum and electronics, but the community has shown a willingness to compromise on wood and paper duties.
Japan remains unwilling to improve market access for wood products and spirits.
But a Japanese offer to bring down 770 tariffs was rejected by both EC and U.S. officials as insufficient, since these cuts would be on products where duties are already low and where Tokyo has planned reductions already.
"This is not an offer. It's a typical Japanese tactic before an international meeting. They always try to mystify the world by saying they are doing something, but it's not an offer," said a senior EC official.
Senior sources close to the meeting said Japan also came under heavy
pressure from the EC and the United States to improve its offers in the services segment of the Uruguay Round.
In particular, Japan was asked for a proposal reducing restrictions on cross-border transportation, insurance, and investment management.
However, the Japanese delegation responded their offer on the table was a good one and added that it went beyond the requirements in the GATT talks.
Trade ministers, diplomats and negotiators will meet in Paris on June 1 to discuss the round in both political and technical terms.