Trade Must Be Anchor of US Foreign Policy
Latest GATT agreement represents a firm foundation on which nations can build a new international order
THE prospect that consensus for passage of the Uruguay Round GATT agreement could rapidly deteriorate into a NAFTA-esque brawl is bad news for the United States. While politicians, diplomats, and columnists search for a new global view to shape our foreign policy around, they are treating the General Agreement on Tariffs and Trade as another piece of log-rolling, pork-barrel legislation. This is like treating the Marshall Plan as a farm subsidy bill, or the United Nations Charter as a highway construction appropriation.
International trade policy must be the new foreign policy of the US. Trade relations and global economics are transforming nations around the globe today and reordering our world view. Since World War II the US has promoted the liberal trading system that has propelled almost 50 years of growth, yet our trade policy has gone largely unnoticed. There were two reasons: Our real foreign policy was opposing the Soviet Union; and world trade had little effect on our economy.
But the communist threat is gone, and our economy now feels the impact of aggressive foreign economies and needs their growing markets. The dispassionate, often bipartisan way with which we have historically approached foreign-policy issues should now be our approach to trade policy. The Uruguay Round agreement and the creation of the World Trade Organization should be the bold framework not only for economic growth but for world peace and improved human rights. In short, this agreement should be the basis of our foreign policy for the 21st century.
Instead, our political leaders and pundits are trying to divine broad objectives for our new foreign policy from such trouble spots as Haiti, Bosnia, Somalia, and North Korea. Enfeebled Russian feints at former Soviet possessions give new life to policy-bankrupt cold warriors fighting rear-guard actions over Vietnam and Cuba. The world is full of conflicts, but few have global implications, and many are frustratingly intractable.
While we must continue our efforts to resolve these conflicts, they should not be the focus of our foreign policy. Trade policy ought to be the centerpiece of our new global vision.
The 1994 GATT accord is not a treaty, which would need approval only by the Senate. It is a huge piece of legislation, amending a diversity of US laws, that reflects an agreement among more that 100 nations. Unlike other bills, it cannot be amended once the president sends it to Congress. This ``fast track'' authority - a reminder of the days when trade policy was relatively low profile -
is essential for an agreement entered into by so many other nations and should raise the debate to the higher level usually reserved for major foreign-policy concerns. But because the debate over NAFTA was so rancorous, the special-interest attacks so virulent, and the horse-trading for votes so typical of the narrowest of domestic legislation, the GATT approval process risks falling to the same level.
A perfect example: the $13.9 billion price tag on the agreement, a result of lost tariff revenues under the GATT. There is little doubt that the increased trade resulting from the agreement will result in far greater government revenues. However, the current budget process requires this money be placed ``off budget'' or accounted for elsewhere through higher taxes or budget cuts.
The amount is almost trivial in a $1 trillion budget and would have barely generated a debate as a cold-war defense or foreign-aid request. Yet Republicans will try to blame Democrats for higher taxes or sensitive budget cuts, and Democrats, already a little skeptical of free trade, will refuse to cut spending programs or vote for new taxes without Republican support. It is hard to imagine this kind of squabble about our post-war efforts to rebuild Europe under the Marshall Plan.
Yet that is the magnitude of the Uruguay Round agreement. It will do more to reduce global trade barriers than any previous agreement. For the first time the GATT will apply to trade in services as well as agricultural products. It will result in a permanent framework for its enforcement and for the continuing reduction of the remaining trade barriers. Almost all of the world's trading nations, developed and developing nations alike, are parties to this painstakingly negotiated agreement.
With the undisputed triumph of the free market as the model for development, the 1994 GATT provides the firmest foundation for international order and cooperation.
US adoption of the agreement is critical for its success. While neoisolationists make common cause with old-fashioned protectionists and antidevelopment environmentalists to attack the agreement, Congress and the administration must focus on it as the key to a new foreign policy. The GATT agreement is not perfect. But the GATT trade agreement represents what US foreign policy must be about - today and for the next century. The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHEL.CSPS.COM.