Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 26, 1993 TAG: 9312300040
SECTION: EDITORIAL PAGE: B2 EDITION: METRO
SOURCE:
DATELINE: LENGTH: Medium
This month saw 117 nations agree to a hugely complex revision of international trade rules governing all kinds of commerce. The changes should give economic growth and prosperity a worldwide boost. Yet it is practically a miracle that, after seven years of belligerent bargaining, negotiators were able to pull off at the last moment this updating and reform of the General Agreement on Tariffs and Trade.
At least as significant as the positive effects likely to flow from the new GATT is the great possibility that the world has avoided disasters which might have resulted from failure to reach an agreement:
Trade recriminations might have led to retrenchment and retreat into hostile, regional trading blocs, fighting escalating trade wars. International political stability would deteriorate.
With multitudes of workers suffering displacement from the economy's globalization, industrialized nations - including the United States - might have been unable to resist siren calls for increased protectionism.
Without the promise of improved market access, developing nations and former communist countries - now trying to open up their economies and societies - might have slid back into centralized stultification.
There are legitimate gripes to raise about the agreement. In the rush to make a Dec. 15 deadline, some intractable issues were simply dropped - among them, France's insistence on protecting its film and TV industry from American culture shock. This issue still needs to be resolved. What's worse, many other trade barriers are left standing.
There are also legitimate gripes over how the agreement was achieved. Too many concessions to protectionism had to be accepted. The negotiating wore on far too long, past too many so-called deadlines. A better way to regularly update and improve GATT must be found.
Yet no one should lose sight of the importance of this watershed in international relations. Japan, to cite just one example, has agreed to open up its historically protected rice market. The United States and the Clinton administration have clearly come down on the side of international engagement and liberalized world trade, despite contrary pressures from Ross Perot, unionists, some environmentalists and others.
The new agreement cuts tariffs, and for the first time extends GATT to cover agriculture, financial services and patent and copyright protection. By one estimate, the resulting increase in commerce will add, over the next decade, $6 trillion in goods and services to the world economy.
By meeting the December deadline, GATT negotiators assured that Clinton's so-called "fast track" authority would remain in effect; that is, Congress must vote up or down on the agreement without adding treaty-wrecking amendments.
A good thing. The revised GATT, if far from the promised land of free trade, is still an important, incremental advance toward it - and an alternative much to be preferred over the consequences of no progress. Congress has cause aplenty to approve the pact in the new year.
by CNB