The standoff between the United States and Europe over film and TV subsidies and quotas now seems likely to bust Wednesday’s deadline for the world trade talks.Despite gargantuan efforts Monday to wrap all the remaining issues in the General Agreement on Tariffs and Trade, the European Community’s chief negotiator, Sir Leon Brittan, disclosed that continuing U.S./Euro friction in some areas — notably the audiovisual issue and aircraft subsidies — will not be ironed out by Wednesday’s midnight EST deadline. Speculation remained high Monday night in Geneva that, rather than jeopardize the whole $ 4.5 trillion treaty and seven years of negotiations, the audiovisual quagmire will be the subject of a trade-off. Under the most likely scenario, sources said, the U.S. will agree to separate it from GATT in return for Euro concessions in other areas such as aircraft and financial services. GATT director Peter Sutherland chastised the U.S. and Europe Monday for digging in over matters that “pale into insignificance against what has already been agreed. I cannot believe the dispute on audiovisual … could hold up the biggest agreement in the history of world trade.” The Irish ex-lawyer called on Washington and Brussels to quickly resolve their disputes and suggested that if the two powers failed to make peace by the end of Monday, any accord between them would be “tacked onto the treaty as an annex,” subject to the agreement of all other countries involved in GATT. Sutherland told reporters he believed Monday’s sessions had produced an “unstoppable momentum” toward final accord and that a draft GATT treaty was “tantalizingly close.” In the wake of several calls by President Clinton to European leaders over the weekend, nerve-racking games of brinkmanship continued late Monday night at the GATT negotiating table. Several European sources accused the U.S. of inflexibility in continued demands for slices of Euro film subsidies and tape levies. Anticipating further battles, the French government — which is demanding special protection for its film industry against U.S. incursion — has decided to postpone from today to Wednesday a key GATT debate. “It’s not done yet,” said foreign minister Alain Juppe. The French stand on film and TV was bolstered by a summit of EC leaders in Brussels over the weekend , which declared that any GATT accord must guarantee “special and separate treatment of audiovisual matter.” Still, Brittan returned to Geneva from Brussels to discuss the matter further with U.S. Trade Representative Mickey Kantor. They continued their discussions late into Monday night. During all-night talks, negotiators reached draft agreements on dumping — the sale of goods at below-cost prices in foreign markets — as well as a number of other issues. As part of a rush of last-minute concessions, Japanese Prime Minister Morihiro Hosokawa announced in Tokyo that his country would end its decades-old ban on rice imports.
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