A little Q & A on what sounds like a fur ball

November 30, 1994|By ROGER SIMON

What is GATT?

The sound your cat makes when it coughs up a fur ball?

Come on, what's GATT?

The short answer is the General Agreement on Tariffs and Trade. But the long answer is that very few people really know what it is.

Why is that?

Because it's 22,000 pages long. And how many lawmakers and journalists do you think have actually read it? Especially since many of them have difficulty reading anything that can't fit on a cocktail napkin.

So what does it do?

It lowers tariffs 38 percent worldwide.

Really?

Naw. There are numerous loopholes and exceptions in the thing. Besides which, China, which occupies a big chunk of the world, is not even part of GATT.

What's a tariff?

OK, listen up. Let's say you make Lava lamps.

Oooh, those were really nifty.

Yes, they were. Anyway, you are an American company making them. You have to pay your employees at least the minimum wage, follow all sorts of occupational health and safety laws, make sure you don't harm the environment, etc., etc.

What's wrong with that?

Not a thing. Until one day a company in Burkina Faso starts making the lamps a lot cheaper and shipping them to the United States.

Where's Burkina Faso?

I'm not sure. I'm not even sure the people in Burkina Faso are sure. But it is a member of GATT.

OK, OK, so they start making lamps. So what? I'll bet America can make better ones.

But can America make cheaper ones? In Burkina Faso they don't have a minimum wage. And maybe they don't care a whole lot about occupational health or environmental safety. And so they make their lamps a lot cheaper and then dump them on the American market, driving you out of business.

That's not fair!

Which is what you tell our government. And it imposes a Glowing Lamp with Goop Inside Tariff. Which is a tax making foreign lamps more expensive in this country. And that way you can compete.

Yay!

Wait a second. Now let's say you want to sell your lamps in Guinea-Bissau.

Where?

Another member of GATT. And to protect its own lamp industry, Guinea-Bissau slaps a tariff on your lamps.

That's not fair!

What goes around comes around. Which is why free-traders believe that if all tariffs were dropped, the "invisible hand" of the market place would rule and everybody would prosper. Which is the reasoning behind GATT.

And is that true?

It depends. If you're an American software firm, free trade is great. You sell your stuff overseas with no tariffs. And because there is very little foreign competition, hardly anybody from overseas is going to try to sell cheaper software in America.

So who loses?

Well, if you're an American company making T-shirts or blouses or trousers, you may find it hard to compete with foreign countries selling their goods in America. Especially if those countries use prison or child labor to produce their garments and then sell them here for next to nothing.

America would never allow that!

You don't get it. GATT is about trade. It is not about justice or morality. In 1991, Mexico complained about the U.S. law that bans imported tuna caught in nets that also kill dolphins. And, under GATT, Mexico won. GATT is not about the environment or animal protection. It is about money. Which is why in all 22,000 pages there is not a single clause banning prison or child labor.

I'm not sure I like this.

Too late. President Clinton says GATT will add $1,700 to the average American family income over the next few years.

Can I have mine now?

Keep dreaming.

So is GATT good or bad?

Hard to say. If dollars for higher-income workers are the most important thing to you, it may be good. If you care about pollution, dolphins, or American workers in the textile and garment industry losing their jobs, it may be bad.

Who is against GATT?

Ross Perot, Pat Buchanan and Rush Limbaugh.

Which means?

Which means it can't be all bad.

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