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GATT Is Good for the Economy - And for the Average American


TO the average American, talks about liberalizing world trade may seem rather esoteric given the demands of daily life.

But the imminent completion of the present round of trade negotiations under the General Agreement on Tariffs and Trade (GATT) will ultimately affect the pocketbook. And that is where all the seemingly interminable talk suddenly becomes relevant.

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For instance, current United States barriers to imported clothing and textiles add an extra $500 a year to the typical family's budget, economists say. Trade restrictions - often in the form of quotas - are slapped on imports as wide-ranging as ball bearings and bags of sugar.

If significant import restraints in the US were unilaterally removed, shoppers would benefit by nearly $19 billion a year, a new government study estimates. Textiles and apparel would account for almost $16 billion of that gain.

The study by the United States International Trade Commission finds that high tariffs push up prices by 3 percent on average in 44 sectors of the US economy. The biggest price hike is for clothing at 11.4 percent. Next in line is luggage with an additional 9.1 percent, and sugar with 8 percent.

Although passage of the Uruguay Round will not remove such barriers entirely, it will cut tariffs by one-third. That means cheaper goods in the shops, more consumer demand, and a welcome lift to some industries in all countries involved in GATT.

But the effect will not be instantaneous. ``Consumers won't see the price of a shirt fall, say, $5 in one day because of the GATT,'' comments one government trade analyst.

The gain for the consumer will be gradual. So gradual, in fact, many consumers ``may not know it,'' the official adds. Instead, prices may drop little by little over time, or simply rise more slowly than inflation.

What the study demonstrates, however, is the cost of protection and the benefits that economies can see from liberalization. The Uruguay Round should add another $200 billion to $270 billion to world trade by the year 2000, economists estimate.

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