The GATT: Menace or Ally?

By French, Hilary F. | World Watch, September-October 1993 | Go to article overview

The GATT: Menace or Ally?


French, Hilary F., World Watch


The world's free-trade interests seem bent on expanding their commercial powers even if that means jeopardizing any conflicting environmental laws. Can these powers be turned to the Earth's advantage?

From Embassy Row to Capitol Hill in Washingon, D.C., it suddenly seemed as though they were everywhere: in the fall of 1991, posters began popping up around the city showing a "GATTzilla" monster with a dolphin in one hand and a can of pesticides in the other, crushing the U.S. Capitol under its foot. The caption: "What you don't know can hurt you." The posters were soon followed by a series of full-page advertisements in major newspapers around the country signed by a coalition of environmental and consumer groups warning that the General Agreement on Tariffs and Trade (GATT), the international agreement that stipulates world trade rules and arbitrates disputes over its terms, posed little-known but grave environmental threats. The ads called for a grassroots campaign to turn back efforts to expand GATT's powers through the Uruguay Round of negotiations, which had been underway since 1986 and was thought at the time to be nearing completion. (More than two years later, the Uruguay Round is still going around, though predictions are once again rife that a deal is near.)

How could an arcane international agreement to reduce trade barriers among more than 100 countries harm the environment? In a number of ways, according to the advertisements. Most fundamentally, the anti-GATT activists worried that environmental laws would be found to violate world trade rules - and would be overturned. The fear was aroused by a GATT dispute panel ruling that provisions of the U.S. Marine Mammal Protection Act violated the GATT, and it has been further excited by a rash of recent environmental trade disputes. For instance, Austria was recently forced to abandon plans to introduce a 70 percent tax on tropical timber, as well as a requirement that tropical timber be labeled as such, when the Association of Southeast Asian Nations (ASEAN) complained that the law violated GATT. In two ongoing disputes, the United States is charging that a levy imposed by the Canadian province of Ontario on non-refillable alcoholic beverage containers is a disguised trade barrier, and the European Community has formally challenged two U.S. automobile taxes intended to promote fuel efficiency - the Corporate Average Fuel Economy Law and the gas-guzzler tax.

The GATT-alarm ads painted a global conspiracy theory, according to which opponents of U.S. laws on environmental, health, and consumer safety legislation who had tried and failed to roll back decades of progress through the democratic process were now aiming to achieve their goals through the back door of the secretive, corporate-controlled GATT proceedings.

The international trade community was taken aback by this "demonization" of the GATT, which many viewed as a key to the relative prosperity enjoyed by nations in the post-war era - a triumph of efforts to protect the collectivc good over the selfish goals of "protectionist" special interests. Since its creation in 1947, the GATT has indeed been remarkably successful on its own terms. Over the course of seven different negotiating rounds, tariffs have been cut in industrial countries from an average of 40 percent in 1947 to 5 percent in 1990.

The characterization of GATT as an imposing monster bore a certain irony, since many countries look to the multilateral trading system embodied by GATT as a means of protecting their interests against efforts by economic powerhouses, especially the United States, to unilaterally impose their will on the world. Developing countries viewed the environmental campaign against the GATT with particular alarm, both as part of what they saw as an unfortunate tendency on the part of Northern Greens to care more about whales and dolphins than about people, and as a cover for more sinister efforts to keep Third World goods out of northern markets. …

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