GATT May Not Be a Hot Issue Just Now, but It Will Be Soon : Trade: Elections are focused on other issues, but Clinton wants a vote on pact this month.
In this season of political discontent, amid the swelling chorus of complaints voiced by angry and anxious voters heading to the polls on Tuesday, one particularly frustrated, even fearful, voice can be heard.
It belongs to Michael Macaluso, president of RiverView Sportswear Inc.
This year Macaluso will sell close to $8 million in women’s blouses, jackets and skirts to some of the mainstays of the U.S. fashion industry. Some 300 workers, aided by computers, cut, sew and package 2 million garments a year in his growing complex of buildings covering 90,000 square feet in this southern New Jersey suburb of Philadelphia.
His major customers used to buy all their merchandise from Macaluso and other U.S. manufacturers, but they now acquire some of their stock from foreign producers. Over the past three years, Macaluso says, competition from imports has forced him to lay off 30% of his work force.
But the landscape is about to shift. And for some, as for Macaluso, that kind of job erosion could get a lot worse.
Though most voters have other things on their minds at the moment, in just three weeks the ground rules of international trade will change if Congress does President Clinton’s bidding and endorses the newly revised General Agreement on Tariffs and Trade later this month. If approved, the new GATT accord would clear the way for expanded trade by cutting import tariffs and removing other barriers to global commerce.
Few current issues have the potential for a wider or longer-lasting impact on the U.S. economy, voices on both sides of the debate agree. The new pact would slash trade-related taxes around the world, open markets for products made in American factories, and intertwine the future of the U.S. economy with that of an international organization that would be given far-reaching authority to regulate world trade.
According to its backers, the expanded GATT would create new business opportunities and generate new jobs for Americans as foreign companies increasingly open their markets to U.S. goods. The beneficial effects could begin to be felt as soon as next year, they say.
Just don’t expect Macaluso--or others who form key voter constituencies around the country--to join in any celebration should GATT pass. GATT would gradually open currently restricted U.S. markets to products made by lower-cost overseas competitors. Some Asian clothing makers, for instance, pay their workers one-tenth or less of the wages that Macaluso says his employees receive.
The new world trade pact, Macaluso says, would “put companies like mine out of business and people on unemployment.”
On the eve of Tuesday’s mid-term congressional elections--after a campaign season focused primarily on voters’ concerns about rising crime rates and dissatisfaction with the ways of Washington--the new world trade agreement has been something of a stealth issue: nearly invisible, but potentially dangerous.
GATT’s low profile sits just fine with the Clinton Administration, which is pushing behind the scenes to win approval of the plan during a special lame-duck session of Congress scheduled for the week of Nov. 27. White House officials, in fact, are grateful that so far GATT does not seem to have contributed much to the angry mood of the electorate.
But they are mindful that GATT has formidable opponents and that the politics of trade can be explosive.
At its heart, argues Ross K. Baker, a political science professor at Rutgers University in New Brunswick, N.J., any public unease about the trade plan reflects a much broader discomfort Americans feel over a loss of control over their communities and over society in general.
“Crime and social values are the core of the debate, this sense that peoples’ lives are out of control, that these forces are exercising power at their expense,” Baker says. “GATT is one more thing that these large and impersonal forces are imposing on people. It’s a mood issue. It’s elusive, but it is out there.”
For example, the trade measure has caught the attention of some union activists and garment manufacturers. It is a subtle undercurrent in individual campaigns in the Northeast and Midwest, where particular industries feel threatened by the potential removal of protective tariffs.
The Clinton Administration suffered a setback last month when it was unable to overcome opposition and push the trade plan through Congress before this week’s election. The White House is content for now to keep a lid on the controversy and avoid a blowup similar to the one that almost derailed the North American Free Trade Agreement early this year.
Congress is considering legislation that would implement U.S. participation in the redrawn version of the agreement that has governed world trade for the past 47 years. If the new accord takes effect as planned, the existing GATT bureaucracy will be replaced by a new entity, the World Trade Organization.
When it agreed to put off the vote until after the election, the White House won assurances from Republican leaders that there would be bipartisan support.
But the delay gave opponents a window of opportunity. After Election Day, they plan to pressure the newly elected Congress to put off the GATT vote until 1995. Postponing the vote until next year could endanger GATT for procedural and political reasons. Some of the lawmakers who would vote on the issue this month will not be returning to Capitol Hill in January, and might feel less political pressure to reject the trade pact.
In Pennsylvania, allies of Ross Perot have pressed Sen. Harris Wofford, a Democrat who is in a tight reelection battle, to pledge that he would not vote for the plan until it is resubmitted to a new session of Congress in January.
Still, as a campaign issue, GATT has the labor unions and other opponents in a bind: Many of the lawmakers they want to turn against the trade plan are natural allies on other issues. As a result, they are reluctant to threaten GATT supporters in the House and Senate.
Even so, the looming fight over the trade plan has galvanized unions such as the International Ladies Garment Workers Union and the International Union of Electrical Workers. “Our members are registered voters, and they are political activists on things that are important to them, which are jobs and imports in the garment industry,” says Laurel Brennan, a business agent of the garment workers’ union in Philadelphia.
In the eyes of GATT supporters, such examples are exceptions; the rule, they say, is expanded trade.
The Administration estimates that the new GATT agreement would increase economic activity in this country by $100 billion to $200 billion annually. Others have arrived at lesser figures; the Institute for International Economics, for example, predicts that U.S. output would increase by about 1%, or roughly $65 billion annually by 2004.
