Why GATT Is a Bad Deal for Middle America
The Tokyo round has done enough damage, but the Uruguay Round is even worse
A RECENT newspaper headline described the insecurity that Middle America feels about the economy: ``Rising Tide Doesn't Lift Clinton.'' But there is no rising tide.
The article states that 4.5 million jobs have been created since Clinton took office, but this is the weakest job creation ever in a recovery. One million manufacturing jobs were lost last year. And with a $150 billion trade deficit this year, another 3 million of these jobs will be lost.
President Clinton insists that the people don't know his record, and that he isn't getting credit for the economic achievements of his administration. But even as he pushes Congress to ratify the latest round of the General Agreement on Tariffs and Trade, or GATT, the Uruguay Round, he seems unaware of the record of the present GATT, the Tokyo Round. Under the present GATT:
* We have lost 3.2 million jobs and our nation has undergone the greatest outflow of wealth - $1.5 trillion - of any nation in history.
* The US has gone from the world's biggest creditor to its biggest debtor.
* Those with full-time jobs are now receiving 20 percent less take-home pay than they were 20 years ago.
The president says he needs this new GATT now because he wants to appear as a leader at a Pacific economic summit this month. How can anyone appear as a leader at an economic summit with a $150 billion hole in his pocket and a tin cup in his hand begging the Japanese to finance our debt?
America's security rests as a three-legged stool: our values, our military strength, and our economic strength. The first two legs are strong, but the third is fractured. The US willingly bore the cost of containing communism, but with the cold war over, the US should be moving to strengthen the economic leg.
Tremendous change has taken place since the latest round of GATT negotiations began during the Reagan administration: Three billion new workers have moved into the world's market economy, many of whom make 2 to 3 percent of the American wage. Capital can be transferred instantly by satellite. And today, for the cost of one United States worker, one can employ 50 Chinese, 27 Filipinos, 37 Indonesians.
Present free-trade policy in the US tells a company it can get rich by moving its production overseas or go broke by continuing to work its own people here at home. As Robert Reich, now labor secretary, wrote in his book ``The Work of Nations,'' there was no net gain in new jobs at Fortune 500 companies in the US from 1975 to 1990.