multilateral trade issues. While attempts are made to keep them sep-
arate, the bilateral and multilateral fronts of the trade war nonethe-
less relate to one another, if for no other reason than because they
both draw down on the fighting strength of U.S. negotiators.
Possible North American Bloc Questioned
A second current example concerns the U. S.-Canada Free Trade
Agreement (FTA) concluded in 1988. This bilateral accord, heralded
as a triumph for trade liberalization, nonetheless raises questions in
many capitals over the possible evolution of a North American trad-
ing bloc, which might, together with a unified Europe after 1992, end
up destabilizing world trade. In his 40th anniversary speech to the
GATT contracting parties in Geneva, former Federal Reserve Chair-
man Paul Volcker warned of just such an eventuality. Because Can-
ada is a member of the Cairns group, the OttawaZWashington cable
traffic inevitably causes FTA issues to be checked against GATT
strategy to coordinate the two fronts. In agriculture, much of the
FTA language refers specifically to the need for such coordination.
U.S.-Japan Agreement Key
A third bilateral relationship of key importance is with Tokyo. The
bilateral agreement struck between the United States and Japan on
access to Japanese markets for beef in mid-1988, for example, pro-
vided a recipe for the 1989 U.S. tariffication proposal to GATT. The
deal with Tokyo first determined that quotas and other nontariff bar-
riers to trade were equivalent to a tariff of 96 percent. It was then
agreed to phase out the quotas and other nontariff measures and to
replace them with a tariff of 70 percent in 1991. Finally, tariff cuts to
60 percent in 1992 and 50 percent in 1993 were scheduled, with fur-
ther cuts to be negotiated as part of the multilateral process.
These three examples of bilateral relations—with the EC, Canada,
and Japan—illustrate the significance of the second front of trade
warfare. Trade policy analysts who focus only on the multilateral
front, and neglect the bilateral role, fail to see that both are crucial
to victory.
There is yet a third front of greater importance even than these
two, because it involves the political supply lines of trade negotia-
tion.
The Home Front: Relations with Congress and Interest Groups
The capacity successfully to resolve trade negotiations as complex
and overriding as the GATT talks depends crucially on effective liai-
son with Congress and affected interest groups. In agriculture, there
will clearly be winners and losers from the Uruguay Round, al-
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