THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Saturday, December 3, 1994 TAG: 9412030248
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER
LENGTH: Medium: 81 lines
The General Agreement on Tariffs and Trade, approved by the Senate on Thursday, should be a boon for the Hampton Roads economy, particularly the region's port, local economists said Friday.
The international trade pact will slash tariffs and quotas, bringing new economic activity around the world as it levels the playing field of trade among its 124 member nations.
``The passage of GATT will be a substantial plus for Hampton Roads,'' said Roy Pearson, director of the Bureau of Business Research at the College of William & Mary.
``Basically I think GATT's going to be good for us,'' said John W. Whaley, an economist at the Hampton Roads Planning District Commission. ``We are most immediately involved in international trade through the port.''
Despite being generally good for the economy, GATT may not translate to the addition of many jobs in the region.
Citing increasing automation at the port, Whaley said: ``If trade does expand I don't think it's going to mean much of an increase in employment.''
The port of Hampton Roads, thesecond-largest general cargo port on the East Coast after New York, can expect a higher volume of trade both in imports and exports, the economists said.
With its location close to the Atlantic Ocean and its good rail and road transportation connections to the rest of the nation, the port is situated to take advantage of any increase in world commerce resulting from free trade as a distribution center, they said.
The trade pact, which cuts tariffs by an average of 38 percent worldwide, will be phased in during the next 10 years.
``It takes time to work its wonders,'' said David Garraty, an economics professor at Virginia Wesleyan College. ``Free trade doesn't start working next week, next month or even next year.''
As for the port, GATT is also good news for Norfolk Southern Corp., the railroad headquartered in Norfolk.
``Unquestionably it's favorable for us,'' said D. Henry Watts, executive vice president of marketing for Norfolk Southern. ``We're in the transportation business and free trade means more demand for transportation.''
Between 25 percent and 30 percent of Norfolk Southern's revenue comes from the transport of products in international commerce and that's likely to increase with GATT, Watts said.
One specific example, he said, is that shipments of grain for export should increase as barriers to the import of U.S.-grown grain fall overseas.
The pact could be bad news for some manufacturers. The textile industry in North Carolina, for example, will face tough competition from countries with lower wages.
By contrast, Hampton Roads stands only to gain because it is not much of a manufacturing center.
``We don't have too many industries that could be affected by increased international competition,'' Whaley said.
Still, some area companies could benefit from the lowering of trade barriers in international markets.
``No doubt there are some companies out there who manufacture some products that will be easier to market overseas now,'' Whaley said.
Processed food companies, such as Smithfield Foods Inc., and seafood packers could benefit from the lowering of European barriers to the import of some food products, Pearson said. ILLUSTRATION: A LOOK BACK AT NAFTA
A congressional analysis by the Joint Economic Committee on the
impact of the nine months of the North American Free Trade Agreement
concluded:
127,000 U.S. jobs were gained
But, with increased imports from Mexico:
137,000 U.S. were lost
The final tally:
10,000 U.S. jobs have been lost
The study concludes:
"It will take 10 years for the full effects of the agreement to
manifest themsleves."
KEYWORDS: GATT TRADE by CNB