European negotiators had . already got the message: the European Community offered to reduce farm income supports by only 16 percent over the next 10 years. The United States, Australia and other nations proposed cutting supports by 75 percent over the same period, slashing export subsidies by 90 percent. Insulted by the paltry European offer, U.S. representatives openly considered walking out–imperiling $1.5 trillion in commerce within all 15 of the GATT’s trade areas. In the end, President Bush promised that the United States would participate in high-level GATT meetings, but areas of contention remain. The Americans have refused to discuss telecommunications and other fields where U.S. companies enjoy an advantage.
If any real progress is to be made, all sides will have to sacrifice some domestic industries on the altar of free trade. Experts warn that if the talks fail, a wave of protectionism will sweep the globe, hurting consumers and national economies alike.
