Dole abandons his opposition to trade agreement

November 24, 1994|By Mark Matthews | Mark Matthews,Washington Bureau of The Sun

WASHINGTON -- Senate Republican leader Bob Dole abandoned his opposition to a massive new world trade accord yesterday, all but ensuring that it will win congressional approval next week.

Mr. Dole's switch removed a key obstacle to congressional approval of the General Agreement on Tariffs and Trade (GATT) and put his own prestige on the line with President Clinton's when the Senate votes in a lame-duck session Dec. 1.

His decision also might help ease fears that next year's Republican-controlled Congress will be unable to reach agreement with the White House -- even on major issues such as trade that have drawn bipartisan support in the past.

"We have moved one step closer to gaining broad, bipartisan support for GATT," a relieved Mr. Clinton said in a Rose Garden appearance with Mr. Dole. The 123-nation accord would slash trade barriers and bind the United States more tightly with the world economy.

"There should be a big, big vote -- not a narrow vote, but a big margin, a bipartisan margin," said Mr. Dole, whose support was widely seen as crucial to passage of the pact.

Soon after he spoke, a major rival of Mr. Dole's for the 1996 GOP presidential nomination, Sen. Phil Gramm of Texas, also came off the fence and announced that he would vote for GATT.

Mr. Dole had threatened to derail GATT with a series of objections to the law that would put the pact into force, and he upped the ante Sunday by demanding that the White House end its opposition to a capital gains tax cut, long a favorite proposal of Republicans.

In return for his support, Mr. Dole got a series of what appear to be modest concessions. While the administration refused to tie the trade agreement to any discussion on capital gains, Treasury Secretary Lloyd M. Bentsen pledged in a letter that any ideas on capital formation put forward by the next Congress "will be carefully reviewed."

"I did the best I could," Mr. Dole said. The Republican leader, whose state of Kansas has become a focal point of anti-GATT sentiment, also objected to the proposed World Trade Organization (WTO), which would be empowered to settle trade disputes under the accord. The WTO has become a hot-button issue with opponents, who view it as a secretive arm of world government over which the United States would have no more influence than smaller nations.

Under the pact, the United States can withdraw from the WTO with six months' notice and Congress can review U.S. membership every five years.

The president agreed yesterday to a Dole proposal that would create a panel of five appellate judges to review WTO rulings against the United States. If the judges find that the WTO has acted improperly, Congress could demand that its rules be renegotiated. If the WTO goes against the United States three times in five years, Congress could vote to pull the United States out altogether.

Hinting that the new steps are redundant, U.S. Trade Representative Mickey Kantor said, "It will ensure us that we have put suspenders on with our belt now." He nevertheless heaped praise on Mr. Dole for a constructive idea.

Mr. Dole's other objections involved how agriculture was treated under the trade agreement and provisions of the law raising various taxes and fees to compensate for reduced tariff revenue.

The White House assured Mr. Dole that it would increase -- or at least not cut -- certain agriculture subsidies not covered under GATT.

The administration also promised to review discounts on license fees to three companies developing new wireless telephones and to seek a change from Congress if it decided the government was not receiving a fair price. Two of the companies are major media firms -- Cox Communications and the Washington Post Co. -- and had been prominently mentioned in anti-GATT ads.

The White House said it would not oppose legislation changing the term of U.S. patents from the period specified in GATT legislation.

Mr. Dole's actions on GATT were widely watched as an indication of how he would lead his Senate majority and deal with the Clinton White House as he prepares for a likely 1996 presidential race.

He was caught in strong political crosscurrents. Usually aligned with the pro-business wing of the GOP that avidly supports free trade, Mr. Dole came under fierce pressure from GATT opponents in his home state and elsewhere.

His new push for passage of GATT will cost Mr. Dole support among the backers of Texas billionaire Ross Perot, who has campaigned against the accord.

At an anti-GATT rally Tuesday night in Wichita, Kan., Mr. Perot promised to launch a third political party if Congress approves the pact.

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