Overcoming deal-threatening snags in the final hours, 117 nations approved a monumental world trade agreement Wednesday that will slash import taxes around the globe, open markets for food and consumer goods and extend protections to the growing business of international financial services.
The new General Agreement on Tariffs and Trade, or GATT, is one of the most far-reaching economic pacts ever. It cuts tariffs - taxes charged by a country on imported goods - by an average of 40 percent, bringing down the price of a wide range of products from aircraft to yarn.
The pact also smashes export barriers on everything from computer chips to potato chips and expands for the first time the rules of world trade to cover agricultural products and the rapidly expanding services sector.
"The results will mean more trade, more investment, more jobs and larger income growth for all," said Peter Sutherland, director general of GATT and the driving force behind the final months of tense negotiation. "Economic operators across the globe will benefit; producers and consumers, investors and traders everywhere will gain."
Cheers erupted as Sutherland banged his gavel "to conclude the Uruguay Round as a success after seven long years."
The endorsement of GATT followed years of negotiations, missed deadlines and wars of words. It was clinched virtually overnight after the United States and European Community resolved their differences Tuesday.
"Today the world has chosen openness and cooperation instead of uncertainty and conflict," Sutherland said. "I am convinced that today will be seen as a defining moment in modern economic and political history."
But the 400-page agreement still faces contentious legislative battles before it can take effect on July 1, 1995. It must be formally signed in Morocco in April; in the United States, Congress cannot begin debating the measure before April 15, at the earliest.
President Bill Clinton called the pact an early Christmas gift that "cements our position of leadership in the new global economy."
"This agreement did not accomplish everything we wanted . . . but today's GATT accord does meet the test of a good agreement," he said.
Two key members of Congress, Senate Finance Committee Chairman Daniel P. Moynihan of New York and House Ways and Means Committee Chairman Dan Rostenkowski of Illinois, also welcomed the conclusion of the negotiations.
"Our job now is to determine whether the agreement serves the best economic interests of the United States and, further, how to `pay for' the resultant loss of tariff revenue," Moynihan said.
Rostenkowski, a Democrat from Illinois, said the effort of the U.S. negotiating team "was an investment that will pay off in the creation of a larger and healthier international economy in the years ahead."
The agreement will establish a new World Trade Organization with tougher enforcement powers to succeed the General Agreement on Tariffs and Trade agency, based in Geneva. …