US GATT Flap Reverberates around World Global Trade Pact Faces Uncertain Future amid New GOP Resistance in Washington

Article excerpt

IT was supposed to be so easy. Lawmakers, plump from their yams and stuffing, would return to work after Thanksgiving for one final housecleaning chore: to ratify a 124-nation pact to free up world trade. No fuss. No problems.

Instead, in the newly reconstituted world of Washington, the General Agreement on Tariffs and Trade (GATT) has become the first big test of power in the nation's capital - how much President Clinton has left and how much the soon-to-be GOP majority in Congress will hold.

Flush with their vaunted new status, some big-name Republicans are now either balking at the treaty or seeking to wring concessions from a wounded White House. On the outcome rides not only political prestige but millions of jobs and the shape of 21st-century trade practices between the United States and much of the rest of the world.

Mindful of the stakes, international supporters warn that failure to pass the treaty will erode world economic growth and US leadership abroad.

"Everything is riding on the US," Peter Sutherland, GATT's director general, told the Monitor.

GATT's scheduled transformation in January into the new World Trade Organization (WTO), the agency set up to oversee the pact, hinges on votes in the House of Representatives Nov. 29, and in the Senate Dec. 1.

Mr. Sutherland calculates that about one fourth of all GATT members have already signed onto the WTO. But rejection or postponement by the US, the world's biggest economy, will derail it.

A small army of environmentalists, workers-rights advocates, and partisan politicians continue to fight hard against GATT. The latest GOP attack has come from Senate majority leader-to-be Robert Dole (R) of Kansas, who threatens to scuttle the trade deal if the White House refuses to resurrect a capital-gains tax. Senator Dole and the White House may agree to a plan that would allow the US to withdraw from WTO if it improperly rules three times against the US.

Mr. Sutherland predicts staggering costs if the pact is not approved: The first 10 years of the WTO's existence are slated to boost world income by $510 billion - with more than $120 billion for the US and $160 billion for the European Union, the US's largest trading partner.

The White House promises big gains, given findings of the US Labor and Commerce Departments that $1 billion in exports generates 20,000 jobs. Both the Bush and Clinton administrations have pointed to exports as the key to the rebound from recession and joblessness.

Free trade has historically transcended party lines in the US. Ironically, this year's showdown includes protectionists from both parties who worry that unregulated, low-cost labor abroad will flood the US with cheap products and rob Americans of jobs. …


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