Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, November 27, 1993 TAG: 9404220009
SECTION: EDITORIAL PAGE: A9 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
Now that the North American Free Trade Agreement is approved, it's on to the main event: the General Agreement on Tariffs and Trade. According to a new study by the World Bank and the Organization for Economic Cooperation and Development (enough acronyms already), successful completion of GATT negotiations would add $213 billion to world income by the year 2002.
That is a lot of money, and a lot of improvement in living standards and hopes and dreams around the globe.
Now, we don't mean to diminish the importance of President Clinton's NAFTA victory last week. It is significant in its own right. And, without NAFTA, GATT probably would have been doomed. What's more, NAFTA bolsters America's bargaining clout in GATT talks at a crucial time.
Crucial, indeed. Dec. 15 is the expiration date for Clinton's so-called "fast-track" authority, under which he may send Congress a pact that it must vote up or down but cannot modify.
Deadlines have come and gone since 1986, when the contentious current round of GATT talks was launched in Uruguay. But the prevailing opinion today - among the weary, embattled, impatient negotiators representing 116 nations - is that failure to meet the December deadline would be GATT's death sentence.
It's unfortunate and telling that a majority of Americans probably have never heard of GATT. They certainly have benefited from it. Tariffs, remember, deepened the Great Depression. After World War II, a worldwide reduction of trade barriers proved a powerful engine for global economic growth, and for the kinds of social and political change that increased prosperity fosters. Since GATT was formed, world trade has swelled from $60 billion to more than $3 trillion today.
Previous rounds of GATT talks have focused on reducing tariffs. But meanwhile other forms of trade barriers, such as quotas and national antidumping laws, have been erected. And about a third of world trade - including agriculture, textiles, services (such as banking and insurance) and intellectual property (copyrighted software, for example) - have been neglected or left outside GATT's scope entirely.
The current round of talks - seven years old now - is ambitious, aiming at once to reduce nontariff barriers, to improve methods for settling disputes, and to extend oversight to trade sectors formerly not covered. Yet, because they are so comprehensive, the negotiations have provided more opportunities for compromise. Countries can more easily make concessions in some trade areas in return for benefits in others.
With exports accounting for most of its growth in recent years, the United States clearly stands to benefit from a liberalized world trading system. So do other industrialized nations, for similar reasons; and developing countries, now turning to privatization and trade as a means of boosting development; and formerly socialist nations, striving to embrace free markets and democracy.
A revised GATT would also helpfully influence the globe's current separation into trading blocs. NAFTA is part of this trend. The European Community already has formed a bloc. East Asia may be next. Each bloc of nations brings closer the goal of freer global trade only if each remains open to commerce from outside itself. An updated GATT would improve the odds against the world sinking back into trade warfare, and would provide a foundation for future progress toward freer trade.
That is more than enough reason for President Clinton and other world leaders to muster the leadership necessary to complete an agreement by Dec. 15. The global economy, America included, could use the boost.
by CNB