Global trade pact approved

April 16, 1994|By New York Times News Service

MARRAKESH, Morocco -- Culminating more than seven years of arduous and often bitter bargaining, ministers from 109 countries signed a far-reaching trade liberalization agreement yesterday aimed at stimulating exports and slashing tariffs around the world.

The agreement is the eighth to be concluded since World War II but is easily the most ambitious, reducing import tariffs by an average of 40 percent and embracing for the first time such areas as agriculture, textiles and financial services.

The accord signed yesterday was reached in the Uruguay Round of trade negotiations, the latest set of talks held under the General Agreement on Tariffs and Trade, or GATT. The agreement remains subject to ratification by many governments.

In the United States, the trade-liberalization measures will go to the House of Representatives and the treaty itself to the Senate for ratification. But the timing of American action is unclear, because Congress cannot decide how to cover an estimated $13.9 billion decline in tariff revenue that will result. Vice President Al Gore described the impact of the agreement as "truly momentous" and said the Clinton administration would seek ratification this year.

But Mr. Gore, when he addressed a meeting of ministers here on Thursday, alarmed some developing nations by announcing that Washington would seek in future negotiations to discuss the relationship between trade and both environmental protection and workers' rights.

Major exporting nations in Asia and Latin America fear that the United States, France and some other industrial countries want to link trade to the environment and labor as an excuse for creating nontariff barriers to reduce the competitive advantage of low-wage economies.

Another unresolved problem is whether China, which never joined GATT, can achieve its goal of becoming a founding member of GATT's successor, the World Trade Organization, which was created by the accord signed yesterday.

The United States and some other countries contend that China must take further measures to open its domestic economy before becoming eligible for membership.

While potential conflicts emerged in speeches here this week, yesterday's ceremony in this Moroccan desert resort was intended as a celebration of an agreement that more than once seemed out of reach.

In a joint declaration yesterday, ministers from participating governments said the Uruguay Round "will strengthen the world's economy and lead to more trade, investment, employment and income growth throughout the world" and should augur a "progressively more open world trading environment."

GATT has estimated that the accord will increase global income by $235 billion a year. Experts also hope it will stimulate an economic recovery in industrial nations.

The World Trade Organization, in replacing the 47-year-old GATT, will join the International Monetary Fund and the World Bank as the main watchdogs of the global economy. The new body will have far greater authority than GATT to bring order to world commerce.

Peter Sutherland, the Irish lawyer who heads GATT, was visibly delighted yesterday that the seven-year struggle for an agreement was over.

"I'm tempted to do an Irish jig on this table to show what I think," Mr. Sutherland told reporters. "No one got everything they wanted but that is the nature of these sorts of negotiations."

Although 109 countries signed the agreement yesterday, GATT has 125 members, so more are expected to add their endorsements.

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