New Trade Body’s Power Called Overrated : Pact: Foes say the WTO will erode U.S. sovereignty. But proponents say fears of global government are unfounded and cite agency’s American origins.

Opponents of the sweeping world trade agreement approved Thursday by the Senate have persuaded many Americans that it will give birth to a new supra-government, a secretive, omnipotent international agency able to ride roughshod over U.S. interests.

The new World Trade Organization that will arbitrate international trade disputes under the agreement has stirred emotional fears that American sovereignty will be usurped. But supporters of the accord say that the cries of “one-world government” are overblown. After all, they ask, how many Americans now fear international legal rulings from the World Court?

“Hey, if the Serbs can kick the United Nations around, then why should any American worry about the WTO?” asked Jeffrey Schott, an international trade expert at the Institute for International Economics in Washington.

What’s more, supporters argue, the World Trade Organization, like other elements of the accord, bears a “made in America” stamp from top to bottom. The agency was first proposed by U.S. trade negotiators after Congress complained loudly at the refusal of other nations to abide by international trade rulings and was not imposed on U.S. bargainers by foreign powers eager to erode American clout in international trade.

“In fact, the new trade dispute system, rather than being a threat to us, will work to our advantage,” argued Rep. Anthony C. Beilenson (D-Woodland Hills), who voted for the agreement when it passed the House on Tuesday.

Trade analysts noted that, overall, the agreement is the product of seven years of detailed negotiations that were driven to a surprising extent by American trading interests.

It will slash worldwide tariffs by an average of 38%, provide new protections for an array of products and bring agriculture under international trade rules for the first time. Above all, it will mark the first worldwide agreement to provide greater market access for services and Information Age exports from the United States and other industrial nations. In return, developing nations will be granted improved access to the industrialized powers for their basic manufactured goods.

The expected benefits of the trade accord for the American economy have brought support from most U.S. business and agriculture organizations. The Administration has dubbed it the largest tax cut in history, since it will slash tariffs around the world by a total of $750 billion.

Still, the World Trade Organization remains a frightening mystery to many Americans and has become a lightning rod for liberal and conservative critics who believe that the new trade regime will cause difficulties for U.S. laws covering such issues as environmental protection, labor standards and industrial policy.

The opponents range from Patrick J. Buchanan, the conservative columnist and former Republican presidential candidate, to Texas billionaire and former independent presidential candidate Ross Perot and consumer advocate Ralph Nader.

Along with foes of the accord in the textile industry, they sought to mobilize public opinion against the World Trade Organization in last-minute newspaper and television ads, warning that the United States was on the verge of signing away its sovereignty.

“For the first time in our history, a foreign body will have the right to hear challenges to any U.S. law and rule against it as an obstacle to trade,” argued Pat Choate, a Washington writer and consultant on trade.

“The WTO puts us in a vice and squeezes,” added Michael McCloskey, chairman of the Sierra Club, who fears the impact of the agreement on U.S. environmental laws.

For such critics, the new trade regime’s basic flaw is that it will take away the ability of the United States to veto international trade rulings. They charge that the organization will give power to international bureaucrats who will operate in secret with no accountability and no conflict-of-interest rules, while stripping large nations, such as the United States, of the kind of representative power that they enjoy in other international organizations like the United Nations, the World Bank and the International Monetary Fund.

“In the U.N., we have a veto in the Security Council, and in the World Bank and the IMF, we have a weighted vote on all matters equal to our quota payments to the organizations,” noted Choate. “But the World Trade Organization will be the first time we will be in an international organization where it is one country, one vote. And we will have no more power than any other country in the world. That will be a new experience for the United States.”

Yet Schott and other supporters of the trade agreement argued that the new system was designed specifically by American trade bargainers to prevent the abuses of the old system that too often hurt American interests.

Under the previous system, no sanctions could be imposed without the agreement of all countries involved--including the nation on the losing end of the dispute.

That system frustrated the United States because Washington brought more unfair-trade cases than any other country and too often saw other nations ignore the rulings. As a result, in the 1988 Omnibus Trade Act, Congress instructed American trade negotiators to push for a stronger dispute resolution system in talks then underway on the new trade agreement.

“The opposition to the WTO is ironic because it was the U.S. that was pushing the hardest for it,” observed a spokeswoman for U.S. Trade Representative Mickey Kantor.

Under the new system, a panel of independent judges--mutually chosen by all of the nations involved--will issue rulings on trade disputes and a separate panel will be available for appeals.

The panels will not have the power to overturn national laws that are deemed in violation of the new trade rules.

Instead, they will have power to impose trade sanctions in the form of higher tariffs. And the World Trade Organization’s director-general will not have any independent authority to challenge the trade policies of the United States or any other power.

In addition, any nation will have the right to pull out of the WTO after giving six months’ notice.

Sen. Bob Dole (R-Kan.) reached an agreement with the Administration to include an additional safeguard that will create a review panel of federal judges to determine whether the United States should pull out of the agreement if its rulings go against American interests on a consistent basis.

“There is this dire feeling among some Americans that the WTO is some Stephen King-like beast out there around the corner,” noted Kantor’s spokeswoman. “But in reality, we are doubly safeguarded against any problems from the WTO.”