By Alonzo L. McDonald. Alonzo L. McDonald is chairman and chief executive of Avenir Group Inc., a. private investment group. He was the ambassador heading the Us delegation that completed the Tokyo Round of Gatt talks.
The Christian Science Monitor
BURNT out by health care, distracted by Haiti, and worried about next year's election, Congress is in danger of losing interest in passing the Uruguay Round of the General Agreement on Tariffs and Trade (GATT), one of the most beneficial trade agreements the United States has ever negotiated. Failure to pass this agreement before Congress's expected adjournment Oct. 7 could be a serious blow - not just to US world leadership, but to American businesses, workers, and consumers.
Postponing action on the Uruguay Round gives its opponents a chance to mobilize. Such a postponement would be an expensive blunder. For make no mistake, the Uruguay Round agreement is good for the US.
The US has once again regained its place as the world's largest exporter, and US exports now count for a postwar high of 11.6 percent of gross domestic product. Roughly 10 million American jobs (and 1 in 6 manufacturing jobs) are related to exports, and these jobs pay wages 12 percent to 17 percent above average.
The US economy increasingly is export-driven, and the president's Council of Economic Advisers has predicted that when fully in force, the agreement will add an additional $100 billion to $200 billion a year in output and income to the US economy. We cannot afford to forgo this growth and reinforcement of our international position.
A recent report on the pact by the Committee for Economic Development, a public-policy research organization in Washington, D.C., argues that international agreements such as the Uruguay Round have economic effects similar to those of technological advances. By opening markets and enabling us to deploy our resources more efficiently, these agreements, like technology gains, result in more output from available supplies of labor, capital, and materials.
The Uruguay Round accord will advance the ability of the US to trade in a number of significant ways:
* Access to new markets: The treaty reduces global tariffs by more than one-third. If it is enacted, American exporters will enjoy cheaper entry into major foreign markets on products ranging from fish to advanced manufactured goods. Tariff cuts of more than 50 percent have been made by our major trading partners on semiconductors, computers, and other key electronics industries in which the US has a strong competitive position.
The agricultural part of the agreement will open new opportunities for US farmers. And the once heavily protected textile trade will be subject to the same rules as other economic sectors, thus opening new markets for US textile and specialty-apparel exporters and bringing lower prices to American consumers.
* A boon to the service sector: The US is the world's leading exporter of commercial services. Our exports of educational services exceed those of corn, and our exports of financial services those of wheat. The General Agreement on Trade in Services (recognized for the first time in this pact) would begin to allow US service companies to operate abroad on the same basis as host-country companies. …