GATT Debate Pales Beside Drama of NAFTA
US CONGRESS LAYS LOW
IN Washington, the acronym GATT does not spell political trouble for the White House - at least not yet.
The fight over the regional North American Free Trade Agreement (NAFTA) was one of the most bitter of Bill Clinton's term to date, pitting the president against many lawmakers of his own party. But, unlike NAFTA, the global GATT pact, or General Agreement on Tariffs and Trade, has not been made a prime target of organized labor. It does not seem to excite the fears and passions that swirled around NAFTA in the days leading to the final congressional vote.
That could change, of course. With negotiators in Geneva still hammering away, neither United States labor nor affected industries have a final GATT agreement to focus on. Any congressional action is still months away.
For now, ``I don't see a lot of major political sectors trying to fight this would-be GATT agreement to the death,'' says Stephen Cohen, an international economist at American University's school of international service.
Part of the reason NAFTA was such an epic political battle was that Mr. Clinton chose to make it so. He stumped vigorously for the agreement, portraying it as a symbol of American commitment to economic engagement with the world.
At the signing ceremony for NAFTA on Dec. 8, the president claimed that ``this whole issue turned out to be a defining moment for our nation.'' He publicly urged negotiators in Geneva to overcome differences and move swiftly toward completion of a strong GATT accord. Political message
If, on the heels of NAFTA, GATT is concluded and implemented and economic recovery in the US continues, Clinton could have a powerful political message to flaunt in 1996: US exports are a driving force in the economy, and he deserves credit for helping them.
``It was impressive, what he did,'' says Patrick Low, a World Bank economist and author of a new book on US trade policy.
Yet the bigger battle, in this sense, is over. NAFTA's unexpectedly wide margin of victory in the House established that a pro-trade policy can in fact be good politics. All indications are that the White House will not need to make GATT a symbol of the economic future, as it did with the North American trade agreement.
In addition, major sectors of the US economy would obviously benefit from GATT. Service industries would be a primary winner, as would much American agriculture.
All this is not to say GATT is without domestic opposition. Many US industries are reluctant to press for the agreement, believing that by hedging they may still be able to force last-minute changes they view as beneficial.
The American Farm Bureau Federation, for instance, is not happy that US negotiators have allowed European farmers to continue to receive subsidies for a longer period than previously agreed. French barriers to US entertainment products, as of this writing, were still a hotly debated GATT issue
One aspect of GATT that raises some US hackles is its creation of a supranational trade bureaucracy that would have the power to compel change in US laws it finds inconsistent with GATT. If Congress refused to make changes, the US could face economic penalties, per the GATT pact.
Environmental groups, for one, are liable to oppose this Multilateral Trading Organization (MTO). Many US environmental protection laws could potentially fall under the MTO's scrutiny.
``The environment has to be a fundamental part of any trade agreement,'' says Brent Blackwelder, vice president of Friends of the Earth. Congressional concerns
Some members of Congress are likewise worried that GATT provisions will lead to elimination of unilateral US penalties for foreign firms that are found to dump products in the US at prices lower than the cost of production.
Sen. Max Baucus (D) of Montana, a key legislator on trade issues, on Wednesday sent Clinton a letter that held: ``We would not benefit from an agreement that deprives us of remedies against unfair trade.''
But as a symbol to rally opposition around, the MTO pales beside the ``giant sucking sound'' of jobs going to Mexico that Ross Perot charged would be the result of NAFTA.
``I'm not sure [GATT] will play so loud,'' says the World Bank's Mr. Low.