Rolling Them Back

Representatives of 51 nations at the Kennedy Round negotiations in Geneva last week heaved a collective sigh of relief when President Johnson ordered an immediate reduction of U.S. duties on imported watch movements and most types of sheet glass. Politically and psychologically, the news came at a strategic stage of the talks--the eleventh hour--which have been held since 1963 under the aegis of GATT, the 20-year-old General Agreement on Tariffs and Trade.

When these two "escape clause" tariffs were first raised to protect U.S. industry from the squeeze of foreign competition, the reaction in Europe was, to say the very least, negative. In 1962 Belgium raised its duties on U.S. chemicals within 48 hours after U.S. duties on sheet glass were increased. In 1954 the U.S. raised its tariff on imported watch movements. Since then, the Swiss have threatened to allow no significant tariff reductions unless the U.S. eased its stand. Now both countries are pleased, and the European Economic Community as a whole is more hopeful of concrete achievements at the conference tables in Geneva.

In the U.S., President Johnson may suffer loss of support in some quarters as a result of his decision, for a few watchmakers and glass producers will be adversely affected. Generally the move should be beneficial, and some Washington officials estimated that U.S. exports will be increased by $70 million as a direct result of the rollback, thus adding a worthwhile corrective element to the U.S. balance of payments position.

This file is automatically generated by a robot program, so reader's discretion is required.