It’s been an exhausting seven years for the world’s trade negotiators, but now they are very close to the grand prize: implementation a vast trade pact that would stimulate imports and exports all over the globe and lower prices to consumers by reducing national tariffs. What a deal, right?
Unfortunately, while it’s a great deal, it’s not a done deal. There is still some opposition in Congress.
Last April in Marrakesh, Morocco, the United States and more than 100 other nations signed a new version of the General Agreement on Tariffs and Trade. Now comes what should be the easier part: implementation by each signatory. In the United States that means congressional approval, and that approval does not appear to be a slam dunk.
Fortunately, the Clinton Administration, supported by such GOP stalwarts as former U.S. Trade Representative Carla Hills, is feverishly working on GATT legislation to present to Congress. The process involves developing a legislative package that implements the changes in American laws required to bring this country into compliance with the new world trade rules. Forging legislation palatable to most of Congress is important because under the fast-track GATT authority given the President, the House and Senate can vote only up or down on the legislation, not to amend it (i.e., nibble it to death). So this is the historic moment to get this deal done.
The Senate Finance Committee and House Ways and Means Committee--the very same panels tackling the awesome task of health-care reform--are plowing through White House proposals that will implement the 22,000-page trade pact. Under the new agreement, GATT would be replaced as the international body that enforces trade rules by a new Geneva-based operation, the World Trade Organization. The WTO would have greater authority than GATT. A key element of the new agreement for this country is a requirement to scale back tariffs on imports. That could result in an initial shortfall in U.S. revenues of about $12 billion in the first five years. The Administration is working on proposals to take the string out of that short-term decline, which will eventually be made up by a very welcome rise in U.S. exports.
Obviously, implementing GATT is complex. But one hopes that the debate will not prove as rancorous as that which preceded approval of the North American Free Trade Agreement with Mexico and Canada--or that the vote will prove as close. Some members want to wait, arguing that the legislation is so technical that it needs to be reviewed line by line. But behind that is the desire to unravel the deal completely. Congress should pass GATT legislation before the end of this session. It will be disgraceful if it doesn’t.