Specialties, Samples and Endorsements

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GATT Issues, cont'd.

In early October, the House voted to delay consideration of the agreement until it returned to Washington at the end of November. In the Senate, Max Baucus (D-Mont.) said, "NAFTA was difficult to pass. The GATT round is no big winner with the general public. The academics and the multinational corporations like it, but there is beginning to be a gulf between them and the public about whether this is helping people keep their jobs and pay their mortgages." Basically, Republican leaders forced the House vote to deny Clinton any legislative success before the November elections.

But now, many conservatives are coming out against the pact, and they are being joined by a polyglot mix of unions, populists, Perot followers and many others. In August, the opposition began building when a group of 130 people from every political niche signed a letter urging the President to delay debate on GATT until next year. Led by Ralph Nader, the signers included Gloria Steinem, Phyllis Schlafly, Pat Buchanan and Jerry Brown.

Trade unionists have fought the measure for many reasons, including its failure to embody any provision for worker rights or environmental protections, its lack of any effective program to assist dislocated workers, and its blow to the textile and apparel industries. At a UAW conference in late September, economist Stephen Brockman observed that labor standards have been a negotiating objective for 20 years in the U.S. Without them, he said (according to the AFL-CIO News), there will be intense pressure to lower, not raise, living standards.

Then came the Hollings action. The senator from South Carolina threatened to keep the bill implementing the treaty bottled up in the Commerce Committee, which he chairs, through November. "Everybody connected knew my position," said Hollings. "I am fully intent on killing this measure." For the Clinton administration, this meant the embarrassment of putting off debate until the end of November, with a vote scheduled for December 1.

The issues are still: protection for textiles, apparel and tobacco; the $12 billion required to fund GATT over the first five years, plus funding for the next five to make up for lost tariff revenues; and the labor-social-environmental issues. Textile magnate and staunch protectionist Roger Milliken has fought GATT tooth and nail. He also gave $255,000 to the PAC which Minority Leader Newt Gingrich (R-Ga.) runs. Gingrich has said he supports GATT but also has made clear objections against it. Other Republicans are joining the opposition.

The old bipartisan trade coalition is clearly dissolving, and the split isn’t occurring along party lines. The loser may well be the Clinton administration, which in this race may have backed the wrong horse.

The Positive Perspective for GATT
While the trade accord doesn’t deliver all it once promised, it will have far-reaching benefits to the U.S. in lowering trade barriers, creating new markets for our goods and new jobs for Americans. Opponents’ main objections to the agreement seem to center on the World Trade Organization (WTO) which can impose sanctions on any of 123 countries whose domestic laws it deems discriminatory to foreign trade. Theoretically, that means other countries could challenge our federal, state and local laws on labor, health, safety and the environment—laws which many hope to strengthen, not abrogate—and we would have to repeal the law or risk sanctions.

However, we can always refuse either alternative. If a nation levies trade sanctions against us, as they can now do without special permission, what would be the consequence? Republican economist Joe Cobb notes that "the worst outcome for a party that loses a dispute is equivalent to the situation that every country faces today." Most important, the WTO will insulate trade disputes from special interests and nationalist pressures. Says political commentator Robert Wright, "When we complain, say, about Japanese rice quotas, we would like our argument judged by some other than the politicians elected by Japanese farmers. And the Japanese would like our arguments judged by some other than us. Fair enough."

Since we are the largest trading nation in the world, we clearly have the most to gain. If GATT goes down, we will lose important protections against intellectual piracy (which are becoming ever more important), markets for telecommunications, insurance, entertainment, pharmaceuticals, aircraft and a wealth of other products and services.

But if the trade barriers do come down, how will the U.S. make up the $12-14 billion in lost revenue from duties over the first five years? The Congress will have to find this money—from taxes or spending cuts—to make up for this temporary shortfall. Expanded trade will eventually boost the economy by that much or more. Estimates by the Bush and Clinton administrations are that passage of GATT would bring in $100-200 billion for those engaged in overseas trade.

Paul Oliva, senior policy analyst for the California State World Trade Commission, said his agency’s recent study determined the state "would export an additional $10.1 billion in exports for 1995 to 2005 if GATT is ratified, leading to 244,000 new California jobs. . . . It’s going to put money in people’s pockets."

A Broad Perspective on the Negative Side
Looked at in one way, GATT is the ultimate economic issue: Its attempt to demolish "free trade" barriers foreshadows the final triumph of world capitalism. That is, passage of the agreement will enable international capital basically to control the economies of the world. And such a circumstance may very well cause our social and political problems to get worse, not better. GATT provides no means to address these, and in this country we may stand to lose a good deal more than we gain.

How so? Because GATT institutionalizes supranational government and the primacy of capital. Beyond the sovereignty questions raised about the World Trade Organization and its economic policies lies another, more troubling one. If the agreement is ratified, it will set in place a vast marketplace controlled by governmentally sanctioned economic forces. This will by its nature tend to ignore social, labor and environmental concerns because they will become impossible to affect, alter or enforce. In fact, these problems have already proven to be intractable to most governments. With GATT, they may be even more so.

As the international financier Sir James Goldsmith noted, global free trade has become "a sacred principle of modern economic theory, a sort of moral dogma." But the world economy has changed radically since David Ricardo formulated the free-trade gospel in the early 19th century, and politicians and economists are broadly failing in their effort to reassess what global free trade would actually do. Goldsmith, no shrinking violet, says, "I believe GATT and the theories on which it is based are flawed and that, if they are implemented, they will impoverish and destabilize the industrialized world while at the same time cruelly ravaging the Third World."

Third World populations will reach over 6.5 billion in 35 years. These people, most without regular employment, will work for a small fraction of workers’ wages in developed countries. Because of the rapid transfer now possible of technology as well as capital, most anything can be manufactured anywhere and sold anywhere. Developing countries attract capital through low wages, as we well know. The AFL-CIO claims that the absence of labor rights and standards represents yet another subsidy to capital. Ultimately, the result of GATT could be labor and social chaos, with workers forced to move constantly to follow either jobs or welfare. Capital and profit will reign supreme; there will be no significantly organized opposition.

Goldsmith argues that if you move agrarian people off the land into the cities, you create another class of the alienated, multiply their numbers and reduce them to dependency on public and private charity. The global corporations—those with access to an inexhaustible supply of cheap labor—will be the only beneficiaries. "But," says Sir James, "they will be like the winners in a poker game on the Titanic."

Conclusion
Because of its complexities and far-reaching contingencies, few people pretend to understand GATT and how it would transform our world. The agreement, however, has engendered fears among many, and they have been pressuring representatives of both parties in opposition to the pact. Still, as the Wall Street Journal says today (November 7), GATT is basically not an election issue—at least for most people.

What is clear is that labor is hardly motivated to back the Clinton agenda for free trade. That may well cause some erosion in Democratic support.

We have tried to present the case for GATT in terms of what the agreement actually proposes to do. The negative side largely concerns "side effects" of some of the agreement’s central propositions, and these no one can predict for certain.