Trade Reform Marathon

April 14, 1994

International trade is one subject that imposes a condition on Yogi Berra's dictum that "it ain't over till it's over." In regulating commerce among the world's nations, the game is never over.

Proof positive is seen in the current gathering of representatives from 125 nations in Marrakesh, Morocco, to sign tomorrow the 500-page pact overhauling the General Agreement and Tariffs and Trade and transforming it into a more powerful and comprehensive World Trade Organization.

This is in no way a done deal. The new WTO agreement will have to be ratified by dozens of parliaments, including Congress, and even after this hurdle scores of separate accords on specific products and services remain to be negotiated.

As trade reform moves along its tortuous route, several issues have pushed to the fore in American debate. The Clinton administration has yet to determine how it will finance a $13 billion shortfall in revenues over five years as a result of scheduled tariff reductions. It would like to waive restrictions requiring that any such loss has to be offset by spending cuts or higher fees and taxes -- this on the theory that increased trade over the long run will more than make up the revenue costs. But Republicans are not about to provide an easy way out. Fancy budget gimmickry is in prospect.

A second issue emerged with administration plans to include in GATT legislation a renewal of its power to negotiate trade agreements that must be voted up or down, with no amendments, within 90 legislative days. Protectionist Democrats want to couple this "fast track" provision with another that would require the executive branch to include environmental and labor standard provisions in all future trade agreements. This is strongly opposed by Republican free traders already upset over new GATT provisions allowing government subsidies for high-tech projects. It could complicate plans to approve the new trade pact by year's end.

To assuage protectionists, the administration caused a flap before the Marrakesh meeting by proposing that questions about the effect of cheap labor on the cost of goods be placed on the WTO agenda. The result was the usual sort of fuzzy compromise, but not before Third World nations denounced the notion as a scheme to hinder the entry of their goods into First World markets. In India, there even were riots.

As the trade process bubbles along, Americans should not lose sight of the fact that liberalizing world commerce is very much in the material and security interests of this country. Though certain industries may be unhappy with the results of the GATT negotiations and organized labor is chronically fearful of foreign competition, the bottom line is a huge plus for American consumers both in lower priced goods and in earnings from exports.

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