Keep those champagne bottles corked. Yesterday's "breakthrough" agreement between the United States and the European Community to avoid a trans-Atlantic trade war may be the best economic news of the year. It could counter a spreading global recession if followed up by a worldwide accord under the General Agreement on Tariffs and Trade. But then again, it could also run aground in the fields of France, where a weak Socialist government has whipped up sentiment among angry farmers against anything American.
For the moment, the U.S. is on the sidelines. The battle has shifted to the inner councils of the EC, where the very concept of a Europe moving toward economic and political union is under siege. France, for the first time ever, could invoke the so-called "Luxembourg Compromise" giving any of the dozen members of the community the right to veto EC actions on grounds of overriding national interest. But if France were to take that drastic step, it could torpedo the Maastricht Treaty by confirming to Euro-skeptics in Britain and elsewhere that Europe remains hostage to French whim.
In an effort to circumvent France, EC and American negotiators will switch from their bilateral talks on oilseeds exports -- which almost triggered a trade war -- and concentrate their efforts on 108-nation talks in Geneva aimed at achieving a GATT accord that could boost world economic activity by $200 billion a year.
The drama is likely to remain in France, however, where powerful farming groups have called for more protests and the French agricultural minister, Jean-Pierre Soisson, has proclaimed "this accord is not acceptable." His colleague, trade minister Dominique Strauss-Kahn, has accused the U.S. of wanting "to become the world's biggest exporter of food products, and to wield a kind of food weapon over the rest of the planet."
Actually, the oilseeds agreement announced yesterday by President Bush displays the U.S. using a BB gun rather than a cannon. Although Washington had long insisted on volume caps for heavily subsidized EC oilseed exports, it settled for acreage limits as France, especially, had demanded. That is why Sen. Patrick J. Leahy, chairman of the Senate Agriculture Committee, wants to look at the details before giving them his blessing. And it is why the EC negotiators, Frans Andreissen of Holland and Ray MacSharry of Ireland, believed they had achieved a pact in accord with the EC and GATT. "We have a deal," said Mr. Andreissen.
Let us hope so. The world today is too much under the straitjacket of protectionism, of narrow nationalism, of selfish, self-defeating beggar-thy-neighbor policies that spread misery and unrest everywhere. If this relatively minor dispute over a few million tons of oilseeds can be put to rest, a new GATT agreement could promote trade and prosperity in an age that desperately needs both.