GATT votes bode well for more trade agreements - General Agreement on Tariffs and Trade

Nation's Business, Jan, 1995 by Albert G. Holzinger

The surprisingly high margins of victory for legislation to implement the General Agreement on Tariffs and Trade (GATT) bode well for other trade-expansion measures sought by the business community.

Close votes had been expected when Congress returned to Washington recently for a rare post-election session to consider the measure. The legislation, however, passed the House on an overwhelming 288-146 vote and cleared the Senate, 76-24.

"Those votes confirm in unmistakable terms the United States' intention to remain a leader in world economic affairs," says Willard A. Workman, vice president/international of the U.S. Chamber of Commerce, which had worked more than seven years to ensure that the GATT agreement was favorable to U.S. businesses.

When Congress convenes Jan. 4, Workman says, it should quickly give the president authority to negotiate additional trade pacts on a "fast-track" basis. Fast-track authority means that trade pacts negotiated by the administration are voted on by Congress without amendments within a specific time.

U.S. exporters would especially benefit if the North American Free Trade Agreement, which effectively eliminated tariff and nontariff barriers to the free flow of goods, services, and labor among the U.S., Canada, and Mexico, were to be extended throughout the Western Hemisphere, Workman contends. During the recent Summit of the Americas, in Miami, the hemisphere's 34 countries agreed to pursue a free-trade pact.

When fully implemented, the 124-nation GATT agreement will cut tariffs overall by about one-third, reduce or eliminate many nontariff impediments to trade, strengthen protections against theft of intellectual property such as patents and trademarks, and take steps toward opening trade in investments and services.

"Any way you cut it, we're the big beneficiary," says Sen. Bob Dole of Kansas, who will be majority leader in the Senate when the new, Republican-controlled Congress convenes in January.

GATT opponents argued unsuccessfully that the World Trade Organization (WTO) created under the agreement to enforce GATT provisions would threaten U.S. sovereignty and that revenue lost as a result of GATT's lower tariffs would increase the federal deficit. The Clinton administration countered by agreeing that the U.S. would withdraw from the pact if Congress ever determined that the WTO was infringing on U.S. rights.

The administration also produced figures showing that tariff losses under GATT would be more than offset by income tax revenue accruing from the roughly 150,000 new jobs a year the agreement is expected to generate by the decade's end.

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