Trade Issues: What do They Mean to Illinois? By GEORGE H. RYAN, Lt. Governor

As Trade and Tourism Representative for the State, I am pleased to play a role in trade at the level too: that of chairing an Intergovernmental Policy Advisory Committee (IGPAC) for the U.S. Representative (USTR) — an appointment made by then-President Reagan in the spring of 1988. Our 32-member committee include seven governors, three lieutenant governors, four mayors, seven state legislators and a variety of other elected and appointed state and regional officials.

From the very beginning of when we met as a group, our first job was clear: It was to prepare for the so-called "mid-term review" for the GATT negotiations, scheduled for last December. The GATT, or the General Agreement on Tariffs and Trade, is essentially the framework of rules established for international trade.

As might well be imagined, the past 40 years have seen dramatic changes take place in the world's trading system. So if GATT is to remain "current," there have to be periodic revisions. The current round of negotiations started approximately two and one-half years ago with a meeting of the world's trade ministers in Uruguay. Since negotiations have a defined life span of four years, at the mid-way point last December, the world's trade ministers met in Montreal to review progress. The negotiations almost broke down over fundamental disagreements, but the talks got back on course in April of this year.

What are the basic trade policy objectives of the United States? They've remained fairly constant over these past 40 years: we want to maintain an open trading system and we want to maintain American competitiveness. But as trade issues have evolved, they have grown more complex and the U.S. has needed to more aggressively assert its position to ensure our companies have fair market access.

Certainly it's fair to assume that the average business may not feel the impact of GATT negotiations, but the growth of world trade clearly depends on them. With last winter's mid-term review successfully completed and the conceptual framework established, the more difficult task lies ahead in the next 18 months: achieving results.

Just a few months ago, of course. President Bush appointed Carla Hills as the new U.S. Trade Representative. But the GATT negotiations are not our only concern. She is also organizing to meet the new challenge of preparing U.S. businesses for the economic integration of Europe in 1992.

As most readers know, the European Economic Community is planning to achieve a single internal market by 1992. But what does that mean to us across the vast ocean? Depending on the rules established, "Europe 1992" could pose potential problems for U.S. firms in standards, reciprocity, local content rules, and quantitive restrictions.

To guard against these problems. Ambassador Hills established a "Europe 1992" Task Force within the Advisory Committee on Trade Policy Negotiations (ACTPN), and I was honored to have been asked to

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participate. We've been organized and meeting since February of this year, and are focusing on those priority areas that could potentially mean the discriminatory treatment of U.S. firms.

The significance of "Europe 1992" cannot be overstated. Achievement of a single internal market should benefit U.S. exporters. A market currently fragmented would be unified into one of 320 million people with a GNP of $4 trillion. There would be a free flow of goods, people, products and money across borders. U.S. exporters — including here in Illinois — can take advantage of economies of scale and increased demand accompanying a single, prosperous market.

Consider that the unified European market will be the largest industrialized market in the world — and no market will be more important for U.S. exporters. The European community and the U.S. exchanged over $160 billion in goods last year. Our trade position with the EC over the past two years has improved dramatically — from an annual deficit of $21 billion in 1986 to a $345 million surplus in January of this year. U.S. firms' direct book investment position in the EC — already in excess of $130 billion—is growing rapidly as U.S. firms seek to position themselves to take advantage of new opportunities in the EC.

I am confident that through IGPAC, we are encouraging the USTR to make the coordination of GATT/1992 issues more explicit. Ambassador Hills is leading this effort as we try to identify the challenges and the opportunities for U.S. businesses. In Illinois, we will follow-up the effort by informing our companies of what they need to do to prepare themselves for both activities in the months ahead. I look forward to the challenge and the rewards alike. •

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