[Congressional Record Volume 140, Number 149 (Thursday, December 1, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: December 1, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
PIONEER PREFERENCE PROVISION
Mr. CAMPBELL. Mr. President, for a variety of reasons, I have been
very torn about my vote on this implementing legislation for Uruguay
round agreement of GATT.
I am in complete agreement, though, with the provision in this
agreement that addresses pioneer preferences granted to innovators in
personal communications systems technology by the FCC. Administration
officials, FCC officials, and company officials came up with a deal
that is fair, and that deal should hold regardless of whether this
legislation passes. Those who decry this provision as ``elitist'' or
worse simply do not understand the history and facts.
In 1992, the FCC awarded pioneer licenses to three PCS innovators.
One of the companies is Omnipoint Communications, Inc., a small
entrepreneurial company based in Colorado Springs. At that time, the
FCC did not charge anything for any spectrum license. In August 1993,
Congress enacted budget legislation requiring the FCC to auction off
spectrum licenses. Initially, the FCC excluded the PCS pioneers from
this requirement. But in August 1994, 2 years after naming the PCS
pioneers, the FCC ruled that the pioneers including Omnipoint would
have to pay for their licenses, up to 90 percent of average fees in
other large markets.
The pioneers promptly sued, arguing that the FCC had no authority to
retroactively impose such huge fees. Instead of fighting in court and
risking complete failure, the FCC crafted an agreement with the House
Committee on Energy and Commerce: PCS pioneers would pay fees at a rate
of 85 percent of average fees for the 20 next largest markets.
Even though this compromise will cost the PCS pioneers from $500
million to $1 billion in unanticipated fees, they accepted it rather
than waste time and resources in court--assuming that this was a done
deal and that they could get on with their development work. Now,
however, some people are calling this a ``giveaway,'' and some want to
revisit the issue next year and attempt to force the PCS companies to
fork over even more dollars.
It seems to me that the PCS companies, awarded pioneer preferences
and working constructively with Congress and the FCC, make this
agreement in good faith, and it ought to stand. It would be very unfair
to retroactively charge these companies more money. Already, the
uncertainty over this issue has hurt Omnipoint's ability to attract
investors.
By converting military technology to commercial applications,
Omnipoint is now the manufacturer of the only American noncellular PCS
radio frequency technology. If PCS is launched soon, Omnipoint is
likely to become a leading manufacturer of PCS equipment. This will
mean hundreds of jobs in my State. When coupled with spin-offs and
export opportunities, it also will mean hundreds of jobs for Americans
elsewhere in the country. If the deployment of PCS is delayed, many of
these opportunities will be lost to foreign competitors.
Whatever happens with this GATT legislation, I will continue to work
to support Omnipoint's efforts and to protect jobs in Colorado.
Mr. MATHEWS. Mr. President, in the final hours of this Congress we
have an opportunity to keep America on the course of economic growth
and trade expansion that have been the hallmarks of the Clinton
administration and the high point of bipartisan cooperation in this
body. With a single vote, we have the chance to increase jobs and
incomes for American families, open closed markets for American goods,
and bring American consumers a broader variety of lower priced
products. We have the chance to build upon the success of the North
American Free Trade Agreement, and to establish the United States as an
economy to contend with in a new world order. We should--and must--make
these possibilities into realities by voting to affirm the Uruguay
accord of the General Agreement on Tariffs and Trade.
Mr. President, the prospects from an affirmative vote are
overwhelming. Conservative estimates suggest that implementing GATT
will create 300,000 to 700,000 American jobs over 10 years. Over that
same period, we stand to increase our gross domestic product by upward
of 3 percent, an amount equal to somewhere between $32 billion and $50
billion. That translates into an average pay raise of $1,700 a year for
American families.
Beyond this, strengthened trade rules under the Uruguay GATT will
give American exporters the level playing field they have demanded and
deserved for far too long. GATT will implement more effective
mechanisms for resolving trade disputes, preserve our ability to
prosecute unfair trade practices, augment our ability to combat foreign
dumping, and enable us to take more effective action to assure that
product standards do not bar imports.
Little wonder, Mr. President, that support for this agreement has
come from businesses large and small, manufacturers and farmers,
companies that have long been exporters and companies that long have
wanted to be, companies with globally established products, and
companies that desperately need recourse against infringements of
intellectual property. These people know what is good for their
business, and we must listen to them if we are to do what is good for
the United States.
I know that there will be winners and losers under this accord. But
that is a fact of economic life which we need to face as a fact and
deal with realistically. Their experience should teach us that there is
no safe haven against change, and we are foolish to deny the spectrum
of American business a world of opportunities in their name.
I also find it significant that many of the loudest arguments of
resistance to NAFTA have been retreaded for GATT. In the few slim
months since we passed NAFTA, the evidence against those arguments has
mounted. The disasters they predicted have not materialized. That giant
sucking sound we were supposed to hear is nowhere to be heard.
You sure do not hear it in my native Tennessee. Tennessee sold more
than $6 billion in exports last year. Our exports more than doubled
between 1987 and 1993. Canada, Mexico, and Japan now are Tennessee's
No. 1, 2, and 3 export customers. They purchased nearly $2.5 billion
from Tennessee farms and factories in 1993--an increase of 175 percent
in sales to those nations over 5 years.
The only thing that keeps Tennessee companies from selling more goods
overseas and creating new jobs at home are foreign barriers to trade--
the kind of barriers that GATT removes. Through substantially expanded
and enforced trade rules, the Uruguay accord will be positive for
Tennessee and for America's Sunbelt.
Last year, Tennessee's top manufacturing sectors ranked by exports
were chemical products, transportation equipment, and industrial
machinery and computers. That jives with the Sun Belt as a whole, where
leading exports are electrical and electronic components, chemical
products, and transportation equipment. These are the very industries
that will have continued export and jobs growth because tariffs will be
reduced or eliminated by whopping percentages in Japan, South Korea,
and the European Community.
That goes for American farmers and farm products, too. American
farmers are the most efficient producers on the globe. But what keeps
them from being the most financially fertile producers is the kind of
foreign production subsidies, export subsidies, and import trade
barriers that GATT will reduce--especially in Europe. U.S. agricultural
exports stand to gain between $1.6 billion and $4.7 billion in the year
2000 and nearly $9 billion by 2005 as a result of this agreement.
Mr. President, we are just beginning to count the winners from this
accord, and one of those winners will be our trade deficit. In 6 to 10
years after we pass the Uruguay accord, the Economic Strategy Institute
projects an annual improvement of $13.5 billion and 25 billion in our
trade deficit, including an increase of $3 billion in annual U.S.
exports of services.
Another winner will be our budget deficit. We all know what we need
to do in order to waive the budgetary point of order because of the
$11.9 billion in lost revenues that GATT will claim. But is we do it,
GATT soon will more than pay for itself by increased economic gains
that offset tariff cuts.
Yet another winner is American ingenuity and innovation. The
International Trade Commission has estimated that foreigners' piracy of
U.S. copyrights costs American businesses between $43 billion and $61
billion every year and costs the American economy 750,000 jobs. The
Uruguay accord resolves key problems in copyright protection. U.S.
software producers, pharmaceutical companies, semiconductor
manufacturers, chemical producers, publishers, and entertainment
industries will be beneficiaries.
Just as the benefits of action are great, so are the costs of
inaction. Fast track authority expires at the end of this year. If we
open this measure to amendment, a 6-month delay in implementing GATT
could cost the United States $70 billion in lost production, 25,000
jobs, and $200 billion in the Nation's economic well-being. Vice
President Gore is right when he says that delay of GATT will mean the
death of GATT.
We must not let that happen. This accord is the culmination of
American postwar trade policy, the continuation of efforts we have made
with NAFTA and the Asia-Pacific Economic Cooperative, and the climax of
hard efforts by three U.S. administrations. And beyond all these
things, GATT is the future. Let us embrace all the possibilities that
future brings--face the future without fear, confident that American
workers and American businesses can compete and prosper. Let's vote
this agreement into law.
Mr. McCAIN. Mr. President, the vote before the Senate on the Uruguay
round of the General Agreement on Tariffs and Trade is more than a
indication of how well a Republican Congress and Democrat
administration can work together. I imagine that we will continue to
have very sharp disagreements on a variety of issues.
But trade has always been a special case. There has been, since the
end of the Second World War, a shared vision regarding our Nation's
trade policy. The bipartisan consensus on the benefits of free trade
has led to the successful conclusion of seven previous rounds of GATT
and a corresponding high level of prosperity both in the United States
abroad.
Far from simply signaling the level of collegiality the American
people can expect from the new Congress, today's vote will determine
whether free trade has a place in both parties' vision for America's
future. We will decide with this vote whether to take counsel from our
fears or our aspirations; whether we yield to unfounded fears of
competition or affirm our confidence in the ability of the American
worker.
The agreement before us is historic in its scope. It builds on
previous GATT rounds by cutting tariffs by over one-third and breaching
areas formally beyond the reach of international trading rules. It
seeks to make transparent the sort of barriers that have been used, in
lieu of high tariffs, to keep American products out of foreign markets.
Nations will have a greater burden to prove that regulations governing
such matters as licensing, inspection procedures, and production
methods are purely a matter of domestic politics and not intended to
protect national industries.
The GATT contains the first multilateral agreement to open up trade
in services, an increasingly important part of the American economy.
The U.S. service sector will have greater market access in the areas of
general business services, professional services, information and
computer services, health services, and environmental services, among
many other areas. Although our Nation remains the largest exporter in
terms of goods, and is the world's greatest industrial power, exports
in the area of services now add $180 billion to our economy annually.
Creating additional opportunities for these businesses is no small
accomplishment.
All together the GATT agreement will add $100 to $200 billion to the
U.S. economy annually when fully implemented and 1.4 million new jobs
over the next 10 years.
In the debate on GATT, we have heard the same old arguments from
opponents about these numbers: ``They're cooked.'' ``We'll lose more
jobs than we produce.'' ``Low wages in foreign countries make it
impossible for American companies to compete.''
During the NAFTA debate last year, Congress exhaustively considered
and rejected these claims. There is no need to go over the
counterarguments again. Let's just look at the facts. NAFTA has been in
effect for a year. United States exports to Mexico are up 17 percent
and growing. Increased trade with Mexico has already produced thousands
of new U.S. jobs, and with our exports growing at the current rate, it
will produce thousands more.
The gains from the GATT are goals that three successive
administrations, Democrat and Republican, have sought to achieve. The
Clinton administration deserves credit for bringing the negotiations to
a close, but as was the case with NAFTA, it will take Republicans to
put the agreement into law. Unfortunately, we will also put into law
provisions in the implementing legislation that could have been more
carefully crafted, or are simply unrelated to the GATT.
Many in my State, and I know many across the Nation, continue to be
concerned about U.S. sovereignty and the effect that our membership in
the World Trade Organization will have on our right to decide our own
laws and regulations. The implementing legislation states unequivocally
that ``no provision of any of the Uruguay Round Agreements, or the
application of any such provision to any person or circumstance, that
is inconsistent with any law of the United States shall have effect.''
The implementing legislation, however, is not clear with regard to
the course of action should the WTO demonstrate a pattern of unfair
decisions against the United States.
This is where the Republican leader's initiative to establish a WTO
Dispute Settlement Review Commission is important. As a nation that
demands our trading partners establish fair trading practices, we
should seek no unfair advantage abroad, nor should we seek to keep
competitive products out of our markets. However, we should not be in a
position where we are forced to comply with the decisions of the WTO
which go beyond our commitments under the GATT, or that are reached on
other than an objective basis.
If there is a demonstrated pattern of unfair decisions against the
United States, Senator Dole's proposal establishes a mechanism whereby
we can withdraw from the agreement--our right to set the terms of our
contracts with foreign governments being the ultimate expression of
national sovereignty.
In some provisions, the implementing legislation breaks with the
continuity of purpose over three administrations by encompassing issues
unrelated to the agreement.
In the case of patents, this tendency has created a perilous
situation for our Nation's inventors--historically one of our greatest
resources. The implementing legislation goes beyond any of the
commitments made in the Uruguay round to seek changes the
administration believes prudent in United States patent laws.
Signatories agreed that patents should run for 20 years. This is a
significant achievement for American companies which lose an estimated
$15 to $17 billion a year to various forms of piracy. In drafting the
implementing legislation, however, the administration has sought to
codify a 20-year protection from the date of filing. Because some
patents take as long as 10 years--and longer--to be approved, the
legislation threatens to weaken U.S. protection of patents. U.S.
patents are currently protected for a period of 17 years after they are
issued.
Senator Dole also sought to address this issue. He obtained
assurances that the White House would not oppose changing the terms of
the implementing legislation if Congress reviews the issue and decides
to guarantee the current period of 17 years. Many inventors believe
this is not quite enough. There is no guarantee either that Congress
will decide to change the law next year or even whether they will
review it. Despite the serious effort of the Republican leader, we
would have been better off had the administration simply waited until
next year to address the issue at all.
There are other areas of the implementing legislation where I believe
the administration exceeded the terms of the agreement, or delved into
completely unrelated areas, either for the sake of convenience or to
garner support. In addition to patents, the implementing legislation
contains unnecessary provisions relating to rules of origin on
textiles, African economic development and workers' rights.
In an effort, apparently, to gain the votes of members from textile
producing States, the administration changed the rules of origin on
imported textiles and apparel to prevent our competitors from spreading
the production process out among various countries. Because many
textile producers find it costly to produce goods wholly in one
country, the provision in the implementing legislation is sure to raise
the cost of production and the prices of imports.
Another provision resembling the sort of deals the President thought
necessary to gain congressional approval of NAFTA is the section
regarding workers rights. The President is required under section 131
to ``seek the establishment * * * in the WTO of a working party to
examine the relationship of internationally recognized worker rights''
to GATT obligations. One cannot help but speculate that this was
included in part to appease those disappointed over the
administration's failure to win fast-track authority for a new round of
trade talks focused on workers' rights.
Provisions such as these put traditional supporters of free trade in
a very difficult position. Aware that there are many shortcomings in
the legislation, we are forced to support it in order not to jeopardize
the overwhelming benefits of free trade. Unless the implementing
legislation is intolerably flawed, when it comes to a vote on a
historic worldwide reduction in tariffs, we have to weigh the virtues
of the agreement itself against our reservations about the implementing
legislation.
In the future, I hope we can avoid loading implementing legislation
with deals intended to pad the voting margin. Free trade can, and
should, stand on its own. Although the legislation before us today is a
far cry from the Christmas tree the NAFTA implementing bill became, the
extraneous provisions it does contain take away from the cause of free
trade. It is difficult to portray an affirmative vote for the agreement
as a vindication of the principles of Adam Smith, when opponents can
justly point to provisions in the implementing legislation with no
connections to the agreement.
The revenue measures contained in the implementing legislation create
similar complications for the agreement.
It is a simple matter of common sense that reducing tariffs and other
barriers to American products increases exports; greater exports mean
greater productivity; and greater productivity means more Federal
revenues. In fact, it has been estimated that for every dollar lost
because of lower tariff rates, the increased economic activity
resulting from the GATT will create $3 in new revenues.
Despite indications that the administration subscribes to this
truism, the implementing legislation contains a score of revenue
measures, at least one of which has opened the agreement to
considerable criticism. It seems to me that if anticipated Federal
revenues negate the need to offset a portion of the tariff losses
resulting from the GATT, they should negate the need to offset any
tariff losses.
Like other unrelated provisions, the revenue measures undermine the
case to be made for the agreement. Those of us who are perfectly
comfortable advocating free trade find ourselves defending measures
that have nothing at all to do with the GATT. The most visible of these
extraneous issues has been the deal struck over pioneer preferences. It
seems inappropriate that discussions on GATT, an agreement likely to
result in an average increase in income of $1,700 per family, would
focus on the issue of pioneer preferences. We should have the
opportunity to debate of pioneer preferences. We should have the
opportunity to debate the issue of pioneer preferences on its own
merits. It should not be settled in a manner which jeopardizes the most
comprehensive trade agreement in history.
All of the shortcomings of the implementing legislation aside, I will
support passage of the Uruguay round of GATT. The benefits it offers
American businesses, workers and consumers are simply too great to
forego. That America's advocacy of free trade is critical to our
continued prosperity and world leadership should be beyond dispute. It
is my sincere hope that free trade will remain at the center of both
parties' vision for America, and that we will demonstrate this
commitment, as the other House did yesterday, by approving the GATT.
Mr. LIEBERMAN. Mr. President, I rise in support of this legislation
to overhaul the GATT, the General Agreement on Tariffs and Trade by
implementing the Uruguay round agreements. This legislation is the end
of a long road that began in 1986--the result of thousands, quite
possibly millions, of hours of negotiations with our trading partners.
After 8 years of wrangling over the agreement, I am tempted to agree
with the observation of Lee Kuan Yew of Singapore that GATT actually
stands for the ``general agreement to talk and talk.'' Fortunately all
of that talk led to something that will have concrete benefits for this
country and for the world trading system as a whole.
The agreement reduces import duties with our major trading partners
by an average of 40 percent. Since import duties into the United States
are already quite low, one of the great benefits of this agreement for
the United States is to bring down the tariff and non-tariff barriers
that other countries have built, barriers that have made those markets
tough for American exporters to enter. And 40 percent is just an
average, in many cases, the drop in duties is much more dramatic. For
instance, under the Round Agreements the duty on getting paper products
into South Korea will go from 10.32 percent to 0 percent; the duty on
aerospace items into Japan will go from nearly 5 percent to 0 and the
duty on pharmaceuticals to the European Union will go from 5.89 percent
to 0.
Reducing the cost of exporting U.S. products has particular
importance for my home State of Connecticut. The dramatic rise in
exports has been one of the few bright spots in my State's economy over
the last decade. According to the Department of Commerce, Connecticut's
exports totaled over $10 billion in 1993. Those exports translate into
jobs and lots of them. Commerce's Hartford District Office says that a
conservative estimate of the number of Connecticut jobs linked either
directly or indirectly to exports is 176,800.
Smaller exporters are also uniquely poised to benefit from the GATT
since the agreement simplifies and standardizes customs procedures. The
reduction in paperwork and red tape will let small exporters spend more
time making sales to a wider range of customers and less time trying to
meet the paperwork requirements of each individual country. This is
particularly important in Connecticut where over 95 percent of our
exporters have fewer than 500 employees.
The reduced tariffs under the Uruguay round agreements will also mean
lower tariffs for American consumers. This cut in tariffs has been
described as one of the largest tax cuts in history. the U.S. Treasury
Department has conservatively estimated that the round will cut tariffs
worldwide by $744 billion over the next 10 years. Since tariffs are
largely passed on to consumers in the form of higher prices, consumers
can expect to share in lower prices as a result of these tariff
reductions.
In the area of intellectual property this agreement is historic; it
creates international standards for the protection and enforcement of
intellectual property rights for the first time. A July 18 letter from
seven former U.S. Trade Representatives rightly notes that,
One of our greatest, strengths as a nation is our
creativity. Our software, pharmaceuticals, films, and sound
recordings are sold around the globe, and export revenues
from products that depend on the protection of intellectual
property totaled $20 billion in 1992.
While I believe we should eventually go further in reducing trade
losses due to piracy and counterfeiting, I am convinced that the
agreement takes a sizable step forward in this area.
As anyone who has followed this issue knows, a tremendous amount of
time and energy has gone into debating the merits and pitfalls of the
World Trade Organization [WTO]. I understood and shared some of those
concerns about the WTO. But I have now concluded that most of those
concerns have been addressed. At present, GATT decisions are made in
much the same way that Parent-Teacher Associations and Kiwanis Clubs
across this country make their decisions-by consensus. The WTO
explicitly continues this practice of consensus. Since the U.S. is the
world's largest trader, it is clearly in everyone's best interest to
get our consent before any big decisions are made.
There has been understandable anxiety expressed about the WTO's
potential ability to overturn U.S. law. If the WTO had the power to
overturn our laws, I would not support the legislation before us today.
The decision to adopt, repeal or amend U.S. laws was ours under GATT
and remains ours under the WTO. To be sure, the WTO offers more than
lip service to GATT's dispute settlement procedures. This was done
largely at the insistence of the United States since some of our
trading partners had been taking advantage of our open market and
taking advantage of us in their markets. As the Chamber of Commerce
noted in testimony before the House Ways and Means Committee.
The Chamber has long been concerned with the inefficient
workings of both United States and multilateral dispute
settlement processes. Far too often, companies with
legitimate grievances against foreign trade practices have
had to wait years before their cases get resolved--by which
time those companies could very well end up out of business.
A Chamber survey found that unfair trade cases that went to the GATT
took 4.6 years on average to resolve. By streamlining that process,
organizations like the Chamber believe the WTO dispute settlement,
procedures are significant improvements over the status quo for
America's businesses and workers.
Even if a WTO dispute settlement panel finds that a country has not
lived up to its Uruguay round commitments, it is up to the countries in
dispute to decide how to resolve that dispute. One option that is not
available is overturning another country's laws. A defending country
might choose to make a change in its law or it may decide to offer some
type of compensation to the aggrieved country or the defending country
may choose to do nothing. In this case, the aggrieved country may
decide to suspend a trade benefit or take retaliatory action, mindful
of the fact that the consequences may be severe if they retaliate
against a major trading partner. As Secretary Bentsen has observed:
The dispute settlement system is not only fair, it also
plays to our strengths. Due to our enormous domestic market,
the United States has far more trade leverage than any other
country in the world. The new dispute settlement regime is
tailor-made for us to use. Most other countries simply do not
have the economic clout to make retaliation against us a
credible option.
I am grateful that because of concerns that have been raised about
the WTO by Senator Dole and others the administration has developed a
system which would allow the United States to leave the WTO if the
organization consistently rules against the United States. This should
bring a tremendous amount of comfort to those who are worried about the
potential breadth and depth of the WTO's powers.
As a former State attorney general, I've also paid particular
attention to what impact the World Trade Organization [WTO] would have
on State and local laws. After being contacted by the National
Association of Attorneys General [NAAG] I in turn asked Ambassador
Kantor to respond to concerns that had been raised about how the WTO
would impact State and local laws. A July 15 meeting between the U.S.
Trade Representative and the NAAG resulted in a July 27 follow-up
letter to Ambassador Kantor from the NAAG in which the NAAG expressed
satisfaction with USTR's efforts to accommodate their concerns. The
implementing package before us today ensures that State governments are
alerted to any important developments affecting State laws, allow
States and localities to formally participate in the defense of their
laws, and makes clear that States may maintain health, safety and
environmental standards that are higher than those of other States or
the Federal Government. I commend USTR for acting to address the
legitimate concerns that were raised by the States.
The last issue I would like to discuss is the budget waiver. Under
Senate rules, we are charged with paying for tariff cuts for 10 years
while the House is bound to paying for these for 5 years. Because of
various constraints, the House Ways and Means Committee and the Senate
Finance Committee came up with a 5-year package of tariff offsets. I am
disappointed that we are not able to vote on a package that meets the
10-year test. However, I will not vote against the budget waiver and
thereby prevent this important legislation from coming to the Senate
floor. If there is interest in ensuring that the second 5 years of this
agreement are paid for by passing a package of spending cuts in the
next Congress I will support that effort. During the last Congress I
joined with a bipartisan group of Senators in offering a package of $91
billion in spending cuts--elements of the package could pay the tariff
cuts in the second 5 years of this agreement if need be.
Mr. President, I hope that this chamber will approve this
implementing legislation. The agreement stands on its own merits. In
addition, I think a strong vote to approve this implementing
legislation is the right message to send about the Senate's ability to
grow our economy and protect and create jobs for American workers in a
bipartisan way. Begun under President Reagan, continued under President
Bush and completed under President Clinton, the agreement is proof that
administrations from both parties can work together in the best
interests of the United States.
Mr. DORGAN. Mr. President, I hope that today is the day that our
nation's economic reality finally replaces knee-jerk ideology and
business as usual in this body. Because if it does not, the loud scream
for change that we heard from voters three weeks ago will seem like a
quiet autumn breeze when compared with the roar and crash of outrage
that surely lies just ahead on the path that we are now headed.
We are here today to discuss the most important economic decision
this body has faced in many decades--and the least painful opportunity
that we are likely to face for many years to change our current ruinous
economic course.
The cynicism of the American people is nowhere more justified than
with the steady diet of broken promises and misleading information that
they are fed concerning the international economic forces that now
shape U.S. jobs, incomes, business profitability and government
revenues.
For some time, successive Presidents, many of my Senate colleagues,
respected academics and the media have talked exclusively about
expanding U.S. exports while they have ignored the far larger growth in
U.S. imports. They have spoken of only 40 percent of the trade story.
If we took the same blind approach in our budget debates and talked
only about the growth of federal revenue--ignoring federal spending and
our enormous budget deficits--would we trick the taxpayers into
thinking that government finance was in great shape and that more of
the same would be a terrific idea? I doubt it.
The U.S. position in international trade has collapsed since the mid
1970s. Our 1994 merchandise trade deficit (net exports) could reach a
world record $160 billion. While some claim that further world trade
liberalization would yield a $1 trillion tax cut, the reality since the
last (Tokyo) round of trade liberalization in 1979 has been a
cumulative U.S. merchandise deficit of $1.2 trillion; well over $1
trillion in all goods and services; and almost $1 trillion in
manufacturing alone.
Although still very poorly understood by most Americans, and by many
members of this body, global market forces and trade are no longer
merely esoteric and glamorous marginal aspects of our economy. This
year the U.S. will import $550 billion of foreign manufactured goods.
That is almost half of total U.S. manufacturing Gross Domestic Product.
We now have a net export deficit of over half a billion dollars each
day just in manufacturing trade. We have enormous deficits in most high
tech products of the future--including semiconductors. This has
tremendous effects on every aspect of our economy.
Just this week, the U.S. Department of Commerce announced our trade
deficit is reducing real Gross Domestic Product by $120.8 billion per
year. That figure is particularly important to today's discussion about
the budget waiver. Chronic U.S. trade losses are a constant, enormous
drain on federal revenues--amounting to a loss of perhaps $30 billion
in fiscal 1994 alone. And yet many GATT proponents want to ignore the
tidal wave of imports into the U.S.; ignore our trade deficits; and see
only our exports. Wearing self-imposed blinders, they would vote to
waive our hard-won budget agreements and insist that these chronic
trade losses somehow, magicly, add to federal revenue.
Does our experience with NAFTA and trade with Mexico support the idea
of expanding trade world-wide through a new GATT agreement? Let me say
that there has been much hyperbole about US-Mexico trade. The U.S. does
continue to have a trade surplus with Mexico and our exports are
growing. But U.S. imports from Mexico are growing faster than exports.
So the U.S. surplus fell by 72 percent from 1992 to 1993. Since NAFTA
went into effect, our surplus has fallen another 51 percent.
Since NAFTA, the U.S. deficit in electronics trade with Mexico has
doubled to $1.4 billion in just the first half of 1994, compared with
1993. Despite the export hype from the auto industry, since NAFTA, the
U.S. deficit with Mexico in autos and parts worsened in the first six
months of 1994 to a deficit of $1.1 billion.
Again, concerning global trade, while some promise hundreds of
thousands of new trade-related U.S. jobs, the reality is no net jobs in
internationally traded industries for over twenty years; all of the 44
million net jobs created over the past 20 years have come in non-traded
service sectors such as health care, local governments, retail sales
and building maintenance. If the U.S. Commerce Department's estimate is
correct--that each $1 billion in net exports equals 20,000 high wage
jobs--this year's $160 billion deficit alone would eliminate over 3
million such jobs.
In our flexible labor market, however, the major effect of our
chronic deficits is not always to terminate jobs, but to erode income
as workers and businesses give up wages and profits to hold on to their
jobs and markets. While some promise increased prosperity, the reality
is that real U.S. income growth has slowed dramatically from more than
4 percent per year 30 years ago to less than 1 percent today.
This is a very important point, Mr. President, because it is often
claimed that trade provides an enormous benefit to U.S. consumers. As I
have indicated, some claim that this current GATT agreement would
provide a $1 trillion tax cut. The reality, however, is that only those
who are independently wealthy enjoy net benefits, because the
purchasing power of workers and their families have been driven down
sharply by trade for a generation.
While some promise enhanced U.S. world leadership and status with
further trade liberalization, the reality is that in order to pay for
its massive and chronic trade deficits, the U.S. has plunged from being
the world's leading creditor and banker by far to the world's biggest
debtor by far. And the once strong U.S. dollar has collapsed in value;
it bought 360 Japanese Yen in 1970, 260 in 1985, and less than 100
today.
This collapse in both wages and the purchasing power of the dollar is
pricing more and more Americans out of foreign travel. In 1989, for the
first time in the post-World War II period, the U.S. became a net host
in world travel. Our services sector shows a trade surplus mostly
because of the travel sector--foreign people come to the U.S., but our
own citizens can no longer afford to travel abroad.
The end of the cold war and today's information technologies have
given us the same sort of primitive market condition for the global
economy that existed for many individual national economies 100 years
ago. The current directive for GATT and the World Trade Organization is
not some high-minded ``world government'' but a sort of world anti-
government. Its mandate is not to seek prosperity for workers, adequate
profits for business and a healthy environment for everyone. Instead,
its mandate is to assure that nothing interferes with raw market
forces, and the mandate will be carried out by a new, secretive world
bureaucracy.
I cannot stress enough how extremely naive and dangerous this is. We
must not approve these agreements.
The real issue, of course, is how to cope with a fundamentally new,
post-Cold War global economy in which our new information technologies
have radically transformed the way national economies work. Until we
face the fact that it costs a company $50,000 to $100,000 a year to
hire a first-rate softwear engineer in the U.S., but $5,000 to $10,000,
to hire the same talent in Bangalor, India or Moscow, we are not facing
the real world. And the unhappy consequences of avoiding this real
world are increasing every day.
Clearly, trade is vital in today's dynamic global economy. Yet this
strategy now serves perversely to bring down our personal income, our
levels of productivity, and standard of living, to lead our industries
off-shore, to cost America millions of jobs, and, in general, to make
this nation poorer.
The proposed Uruguay Round agreements are more of the same trade
policies that are already bleeding this nation. They are the wrong kind
of trade agreements and ought to be rejected. They ought not be
rejected in a close vote, but decisively, because they are agreements
that hurt America.
Mr. CRAIG. Mr. President, the GATT, or General Agreement on Tariffs
and Trade, is the regime under which we conduct international trade.
Here in the Senate we now have before us a very lengthy and
complicated document referred to as the Uruguay round agreement. This
agreement, negotiated over several administrations, will change the
GATT significantly, in both good and bad ways.
I supported fast-track authority, and in general support free and
fair trade.
I have expressed opposition to the Uruguay round agreement based
mainly on the establishment of the World Trade Organization. Also, as a
fiscal conservative, I have been strongly opposed to waiving the budget
agreement which would allow passage without covering the cost for the
full first 10 years of implementation.
In an effort to get a broad perspective on what Idahoans were
thinking about the Uruguay round agreement, I sent out a mailing to
business, agriculture and local community leaders. The limited response
was mixed, even within the business community.
In unsolicited mail and phone calls, the overwhelming majority have
been opposed to the World Trade Organization specifically and the
Uruguay round agreement in general.
GATT is expected to be generally good for agriculture. However, the
agreement has both good and bad components depending on the commodity.
Unfortunately the agreement is not good for some Idaho commodities such
as dairy, wheat, and sugar beets.
There has been a great deal of talk in the press about Senator Dole's
efforts in an attempt to strike a compromise agreement on the WTO
language. I commend Senator Dole for his efforts, but I am not
satisfied with the results of negotiations with the White House.
The President was only willing to work on legislation dealing with
this problem in the beginning of the next Congress. The administration
expressed a willingness to support legislation next year to establish a
WTO dispute Settlement Review Commission.
The Commission would consist of five Federal appellate judges,
appointed by the President in consultation with the leadership of both
houses and the chairman and ranking members of the Ways and Means, and
Finance Committees.
The Commission would then review all the final WTO dispute settlement
reports adverse to the United States to determine whether the panel
exceeded its authority or acted outside the scope of the agreement.
In addition, Mr. President, should the Commission issue an
affirmative determination a member from either the Senate or the House
of Representatives could introduce a joint resolution for the President
to have new dispute settlement rules negotiated, to address the
problems identified by the Commission.
The agreement allows for withdrawal from the WTO if their are three
affirmative determinations within a 5-year period. However, it requires
an act of Congress and Presidential approval.
While the agreement is filled with good intentions, I am not
confident that it provides the necessary safety-net to uphold U.S.
sovereignty. The problem with this sort of arrangement is that the WTO
dispute settlement panel may stay within the scope of authority in the
agreement, but still pose a problem or threat to our sovereignty.
In other words, the problem lies within the parameters that have been
set in the GATT agreement. Therefore, the issue of sovereignty remains
unresolved.
I have a number of concerns about a provision in the Uruguay round
agreement which would establish a new international entity, referred to
as the World Trade Organization [WTO].
The World Trade Organization is not a minor change to the structure
of the GATT. It creates an entity that is, to me, more than an
international organization. Rather, it is a regime with powers stronger
than those of the United Nations.
There is a fundamental problem with the WTO. It was created as a
supranational structure that would strengthen the enforcement of
trade disputes under the jurisdiction of the GATT. There have been
previous attempts to establish a supranational body to cover trade
relations and dispute settlements.
Mr. President, after World War II, representatives from the United
States and Great Britain designed a post-war economic system with three
pillars: the World Bank, the International Monetary Fund, and the
International Trade Organization [ITO].
The ITO was intended to be the administrating body covering the
General Agreement on Tariffs and Trade [GATT]. As I mentioned earlier,
Mr. President, the U.S. Congress rejected the ITO as a threat to U.S.
sovereignty.
The congress took that action despite warnings from the political
insiders that failure to join would impede economic recovery. Our
predecessors realized that the United States and our trading partners
did not need a bureaucracy to free trade.
The fear of granting broad authority over our trade rules to a mostly
foreign entity led to the repeated rejection by the Senate of ``The
International Trade Organization'' between 1947 and 1950 and a similar
body known as ``The Organization for Trade Cooperation'' in 1955.
The WTO must be dropped or dramatically reformed so that there is no
question about our sovereignty as a nation, and the sovereignty of
state governments.
Mr. President, when forming the United Nations, special care was
taken to ensure that the United States would have both veto power and a
permanent seat on the security council. However, it is apparent that no
such effort has been made with regard to the WTO.
In the WTO, the United States could be outvoted by a small coalition
of nations, regardless of the overall size of their populations, their
geographic sizes, their contribution to world trade, their funding
contribution to the WTO, or their commitment to fair trade and
democracy.
The WTO would initially consist of a diverse coalition of 117
nations. Each member nation of the WTO, including the United States,
would have one vote in resolving trade disputes under the auspices of
the two agreements--GATT and GATS.
The World Trade Organization would vote on amendments and
interpretation of GATT provisions.
Again, Mr. President, the United States would be only one in 117
votes. Therefore, we could easily be outvoted by third world countries
in the WTO, as often happens in the United Nations. Another point of
frustration is that we will be paying 20 percent of the WTO budget with
a voice behind only one vote.
Under the GATT as it currently exists, the United States has veto
power and can block a panel decision by denying the necessary consensus
to adopt a panel decision.
Consensus is also replaced in the WTO with the following guidelines:
A two-thirds vote to amend the WTO; a three-fourths vote to impose an
amendment on parties and to adopt an interpretation of WTO provisions.
Under the interstate and foreign commerce clauses of the Constitution,
States cannot discriminate against foreign businesses, including the
application of State tax law.
Therefore, under the GATT currently, the failure of a State to comply
with these provisions results in a United States court action allowing
the parties to receive fair and open redress of their complaints.
The dispute settlement mechanism included in the Uruguay round
agreement, on the other hand, would require such matters involving
State tax policy and foreign businesses to be brought before the WTO.
It is my understanding, Mr. President, that a WTO dispute settlement
panel can meet in secret and need not consider U.S. constitutional
standards, nor follow the constraints of U.S. jurisprudence. This is a
serious concern that needs clarification.
It is also my understanding that no individual U.S. State government
is guaranteed representation on a WTO dispute panel. And, the United
States cannot reject a WTO dispute panel mandate without facing foreign
retaliation and trade penalties enforced by the WTO.
This may be a ``worst case'' scenario, but if it is a scenario that
could occur under the WTO, then that provision in the Uruguay round
agreement must be changed.
Mr. President, I would like to take a moment to discuss efforts to
resolve the problems with the Uruguay round agreement and the WTO
language.
Earlier this year, Senator Thurmond offered an amendment which would
have been a nonbinding resolution, stating the sense of the Senate that
a joint Senate-administration commission should be convened to perform
a 90 day blue ribbon panel report on whether the WTO should be
considered as a treaty rather than an executive agreement.
It also requested further hearings both in Washington, DC, and in the
field, so that the ramifications of the WTO could be fully examined and
understood.
Mr. President, let me be clear, this amendment did not make the GATT
Agreement ``DOA'' [dead on arrival]. It simply reflected the importance
of the agreement and the need to understand fully the development of a
new international organization prior to our country's acceptance.
In short, it would have provided the kind of real solution I was
looking for to ensure U.S. sovereignty.
In addition to the amendment, I joined Senator Thurmond in sending a
letter to Senator Dole requesting the following:
1. Mandate that the bill be fully funded.
2. Extend, for 1 year only, fast track authority, restricted solely
to allow the introduction of new Uruguay round implementing language.
3. Include in the extension of fast track, requirements that the
agreement establishing the WTO be considered as a treaty requiring a
two-thirds approval in the Senate. The trade provisions of the Uruguay
round would need only a simple majority in both Houses for passage.
4. Remove the special interest provisions such as the $2 billion
discount of Federal licensing fees to three communications companies.
The intent of the letter was to allow ourselves the time necessary to
resolve problems surrounding the WTO with a view to removing barriers
from passage of the tariff reductions and other, positive components of
the Uruguay round agreement. Unfortunately, Senator Dole was not able
to accomplish these four goals in his discussions with the White House.
Before concluding, Mr. President, I would also like to take a moment
to add that I will be voting against waiving the Budget Act. The bill
violates the fiscal year 1994 budget resolution agreement and will be
adding $31 billion to our budget deficit.
As a fiscal conservative and long-term supporter of the balanced
budget amendment, I cannot support the circumvention of deficit
reduction plans.
Mr. President, any potential loss of U.S. sovereignty is not worth
risking. World trade has progressed well under the current GATT system
that is voluntary and requires unanimous consent for decisions.
International trade has grown dramatically since the beginning of the
GATT in 1948--the value of world trade has increased from about $60
billion to more than $3.7 trillion. The volume of world trade has
increased about sevenfold.
Trade in Idaho has tripled from $752 million in 1987 to $1.9 billion
last year. The increase for this year is anticipated to top $2 billion.
I do not argue against the value of international trade. It is
evident in the growth of Idaho's economy. However, I will argue that
the WTO is not necessary for this trend to continue.
After all, this growth has occurred under the current GATT rules,
without the WTO. I urge my colleagues to vote against the budget waiver
and against the GATT agreement.
Mr. SIMON. Mr. President, I have decided to vote for ratification of
the Uruguay Round of GATT and the budget waiver necessary under Senate
financing rules.
In some areas, such as worker rights and environmental protection,
the agreement fell short of the high ideals that the United States has
historically championed. These issues, in particular, concerned me as I
considered this wide-ranging document. I now will look to the
administration to pursue further multilateral agreements to achieve the
same parity in these areas that the Uruguay round brings to goods and
services.
In the end, however, the agreement is about trade, and about our
ability to compete in the world. As a leading export State, Illinois is
a strong competitor and will be one of the first to gain from this
agreement in new jobs and economic growth in our agricultural,
industrial and services trade. We will see similar benefits as a nation
from the leadership we are showing through this agreement.
There will be costs, and I do not vote to waive our tough budget
rules lightly. I am concerned that this not be taken as precedent for
widespread use of dynamic scoring. But we must be practical and realize
the economic benefits that will result in the long term from this
agreement.
The Uruguay round takes a further step toward a truly level playing
field for American products in the world. I do not see the WTO as a
threat to our sovereignty but as the common forum for global trade
issues. If we are to set our own destiny we must remain engaged with
the economies of the world, leading not by the bullying force of
protectionism and veto power but by the strength of our workforce.
The more open global marketplace of the Uruguay round will continue
to place a premium on worker skills and productivity. I hope that the
passage of the Uruguay round will refocus our efforts to improve our
Nation's educational systems to ensure that our workers remain the most
productive in the world.
Mr. GLENN. Mr. President, I will support the legislation to implement
the Uruguay round GATT agreement and hope that the full Senate will
pass this measure by a substantial and bipartisan majority.
The United States is the world's largest exporter; we have the most
productive workforce; and we have recently regained the distinction of
the world's most competitive economy. Exports have been critical to the
rebound in our economy, accounting for one half of U.S. economic growth
over the past 5 years. Further, as has been stated repeatedly, we are
already the world's most open market. Hence, competitive goods produced
in this country, and those who produce them, have much to gain from the
market-opening, tariff-reducing provisions of the new GATT agreement.
Like it or not, we are operating in a truly global economic
environment from which we could not, and should not, withdraw. In 1965
exports accounted for approximately 5 percent of U.S. GDP; they have
now risen to almost 12 percent. We cannot afford to ignore the
substantial contribution of exports to our economic well being. I have
often said that if we did not have GATT to set the parameters for trade
among nations, we would have to invent it, or something close to it.
I am not sure that this GATT is worthy of all the superlatives being
attributed to it. However, it is a solid and substantial step forward
toward the long standing U.S. goal of freer and fairer world trade--a
goal we have pursued since the origin of GATT in the aftermath of World
War II.
My State of Ohio has a substantial and growing stake in the export
market. We are the sixth largest exporting State. Our exports have
grown rapidly in the last several years, from $6.5 billion in 1987 to
$19.4 billion last year. One of every seven to eight jobs in Ohio's
manufacturing sector currently produces for the export market.
In this negotiating round, spanning three administrations, Republican
and Democratic, the United States made substantial progress toward
realization of most of our major objectives. The new GATT mandates a
reduction of worldwide tariffs by about one-third. That's a worldwide
total of nearly $750 billion of tariffs eliminated, of which the U.S.
share is $32 billion.
In addition to the reduction of tariffs--traditional barriers to
trade which earlier GATT agreements primarily focused on--the new GATT
makes significant progress in addressing another important U.S.
concern--non-tariff trade barriers. For example, the new agreement
requires all GATT parties to give greater protection to intellectual
property rights. Lax or nonexistent protection for such intellectual
property rights has proved a very effective non-tariff barrier to
research-and creativity-sensitive industries such as pharmaceuticals,
electronics, software and recorded entertainment, costing U.S.
companies billions of dollars a year.
The new GATT agreement more fully incorporates into the GATT system
major new sectors of world trade not previously covered or not fully
covered; for example services, textile products, and agriculture.
In agriculture, the new GATT agreement requires non-tariff trade
barriers, like quotas, to be converted to tariffs and then reduced.
Further reductions in tariffs on agricultural goods in the future will
be made easier by the requirement to quantify these non-tariff
barriers.
The reduction of agricultural trade barriers in this GATT agreement
is expected to result in increased agricultural exports by $5 to $14
billion over the next 5 years. U.S. farmers are the most productive in
the world, already producing substantially more than we can consume at
home. Presently, exports take about one-third of U.S. agricultural
production. For U.S. agriculture to prosper, it must aggressively
pursue markets abroad. This GATT provides an important tool to support
that effort.
The agreement brings all parties, developing and developed, into the
GATT system, with all the obligations and responsibilities that
membership entails. Previously, developing countries had been free to
opt out of certain GATT obligations.
Many critics of the new agreement have focused on the new World Trade
Organization and its alleged ability to overturn U.S. laws. Let me
reiterate, as clearly as I can, what has been repeatedly stated
throughout the debate on this question--the Congress, and only the
Congress, makes the laws of this country. A dispute resolution panel of
the new WTO could rule that a U.S. law is contrary to our obligations
under the GATT, but there is nothing self-enforcing about such a
ruling. Any decision to amend that law to conform to GATT would have to
be a U.S. initiative approved by both Houses of Congress and signed by
the President.
In addition it has been suggested that somehow the provisions for
decisionmaking and voting within the WTO create a tyranny of a majority
who oppose U.S. interests. Let us examine the facts. The WTO agreement
provides that the current GATT practice of decisionmaking by consensus
will ordinarily be followed. This process of consensus decisionmaking
is so well established within the current GATT that, it is my
understanding there has never been a formal vote taken in GATT since
the system was established after World War II. If consensus fails, then
a matter may be decided by a majority of votes.
However, major issues such as waivers of agreement obligations and
interpretations of most agreements will require a super majority of
three fourths. Amendments to agreements will require a two thirds
majority, with those affecting basic rights and obligations of Members
to take effect only for those Members that have accepted them. Further,
amendments to certain cornerstone GATT obligations will take effect
only if all WTO Members accept them.
I do not expect that the WTO will become a vehicle for attacking U.S.
trade and economic interests. Indeed, I fear a more reasonable
prediction is that an international organization with over 100 members
which operates by consensus will be greatly challenged to do anything
at all. Nevertheless, if experience proves contrary to my expectation,
the United States should not hesitate to exercise its right under the
agreement to withdraw, with 6 months notice.
As chairman of the Senate Governmental Affairs Committee, I would
like to say a word about subtitle E, which makes necessary changes in
U.S. law in order to implement agreements reached by the member nations
of the GATT Government Procurement Code. The primary objective of the
GATT Procurement Code is to ensure the establishment of Government
procurement systems based on the principles of transparency, openness,
and fairness.
Highlights of the revised code include a threshold of $182,000 for
waiver of buy national requirements for central Government purchases.
U.S. minority and small business setasides would not be affected, nor
would procurements necessary for national security. Government
construction contracts, with a $7 million threshold, and services will
be covered for the first time.
In addition the GATT implementation bill would extend the U.S.
procedure for responding to unfair Government procurement practices to
cover failure to adequately enforce antibribery and corruption laws in
the awarding of Government contracts.
The agreement will not impede the use of new information management
and other technologies to improve the efficiency of Government
procurement systems and is consistent with recently passed Government
procurement reform legislation.
Is this agreement everything we could have wanted? No, it is not. Is
there additional work to do? Yes, there is. Is this agreement a panacea
for our economic problems? No, it isn't. Can we afford to be complacent
about our productivity and competitiveness? No, we certainly cannot.
However, on balance, I believe that this new GATT agreement makes a
significant and positive contribution to furthering a freer and fairer
system of world trade. I am convinced that it will be good for the U.S.
economy--for producers and consumers alike. And I am confident that in
such a freer and fairer international trading environment, American
industry and American workers will prove very competitive.
Mr. NUNN. Mr. President, I rise today to support the GATT enabling
legislation. The economic benefits of this Agreement are, by now,
familiar to everyone in this chamber. The GATT Agreement is projected
by experts to: Increase U.S. national income by an additional $100-200
billion a year, and increase global income by as much as $5 trillion by
2005; reduce global tariffs by an average of one-third, producing a
global tax cut of $750 billion over the next ten years, the largest in
history; expand free trade rules to areas not previously covered by
GATT, such as agriculture and services; and protect intellectual
property rights through creation of the Agreement on Trade Related
Intellectual Property Rights (TRIPs).
The result of these changes will be the creation of between 300,000
and 700,000 new American jobs and an additional $1,700 in income for a
family of four by the year 2004.
Beyond the new opportunities GATT offers, its passage is vital to
ongoing American global leadership. The GATT signals our continued
commitment to free trade and competition, and to the conviction that
consumers--not governments--make the wisest economic decisions.
The Uruguay round is the seventh extension of the General Agreement
on Tariffs and Trade, and it represents the culmination of 8 years
begun during the Reagan Administration, continued throughout the Bush
Administration, and concluded by the Clinton Administration. The United
States was a founding member of the GATT in 1947, and we have been
steadfast proponents of economic development through the reduction and
ultimate elimination of trade barriers. The U.S. has been instrumental
in reducing global tariffs from almost 60 percent at the conclusion of
World War II to under 4 percent when the Uruguay round is fully
implemented.
This strategy has worked well for America and the world. In 1987
constant dollars, U.S. Gross Domestic Product has quadrupled from $1.3
billion to $4.3 billion since the creation of GATT. The increase in
trade during this same period represents a significant portion of this
growth. Although we are no longer alone at the top, the United States
remains the largest and most powerful economy in the world, and this
agreement will help raise living standards in our country and around
the world.
Mr. President, individuals fare best when they are allowed to do what
they do best. Economists call this concept ``comparative advantage,''
and it applies to nations as well as individuals. Because American
workers are the most productive in the world, the GATT Agreement
presents an unprecedented opportunity to utilize our advantages to
export more goods and services overseas. Since the United States
already has among the lowest tariffs in the world, the GATT's reduction
of foreign tariff and non-tariff barriers can be expected to benefit
American exports.
I believe GATT will prove to be beneficial for Georgians. For
example, the forest products industry in Georgia is a $13.2 billion
business, the largest in the State. The GATT Agreement includes the
``zero-for-zero'' agreement on wood and paper products. Paper products
are already Georgia's leading export to Mexico and the second leading
export to the rest of the world. As the forest products industry
continues moving South, I expect that its exports will be a critical
component in the region's continued economic growth.
Mr. President, Georgians are also proud of our poultry industry. Last
year, poultry income in Georgia reached $1.73 billion, exceeding, for
the first time, all other crop income combined. Poultry is one of the
best and least expensive protein sources in the world, and nobody
produces it more efficiently than Georgians. Under GATT, poultry
exports are projected to increase 32 percent by 2005. The developing
countries of Asia, South America, Eastern Europe, and Africa are
hungry, and we want to help feed them. The GATT will help those
economies grow, and will assure that as they do, their consumers have
the opportunity to buy Georgia poultry.
Mr. President, the textile and apparel industry is Georgia's largest
manufacturing sector and accounts for almost one-fifth of manufacturing
employment in the State. I understand the industry is divided on GATT,
but I would note that in Georgia, almost one-half of the industry is
comprised of carpet manufacturers and suppliers, which is already
benefiting from brisk overseas sales. According to the Department of
Commerce, exports from the 307 ZIP code, which encompasses Georgia's
``Carpet Crescent,'' grew 426 percent between 1987 and 1993, from
$75.102 million to $395.37 million. So the carpet industry is clearly
already benefiting from international markets. As for the rest of the
textile industry, I note that the leadership of the American Textile
Manufacturers Institute has endorsed the Agreement, and is especially
pleased that the Breaux-Cardin rules-of-origin requirement was retained
in the implementing legislation.
Georgia is also a leader in the production of industrial machinery,
chemical products, transportation and electric equipment. These four
industries accounted for more than $1.27 billion in Georgia's 1993
export sales in 1993, more than one-fifth of total exports. The same
four industries grew an average of 143.65 percent between 1987 and
1993.
I have mentioned just a few Georgia industries by way of example, so
let me address generally for a moment the importance of exports to
Georgia. In 1993, Georgia shipped $6.05 billion worth of goods to the
rest of the world. That's at 148.8 percent increase over 1987. Mr.
President, jobs supported by merchandise exports pay above average
wages (17 percent above average in 1990). The growth in these exports
provided new jobs for Georgians and an increasing standard of living.
GATT promises more of the same.
Some of my constituents have said to me, ``How can we possibly
compete with or sell to a country with $1 an hour wages?'' That's a
fair question, but it assumes that labor is the only component that
matters in trade. This is, of course, untrue. Transportation, energy,
education, and investment--in a word, productivity, all play a vital
role in manufacturing, and the United States offers the best total
package. That's why BMW and Mercedes Benz will soon begin manufacturing
automobiles in South Carolina and Alabama, and why YKK, Matsushita and
other foreign manufacturers have made Georgia seventh in the nation in
direct foreign investment, with 10 new manufacturing plants.
As a practical matter, Mr. President, we have no choice but to trade
with the rest of the world. The United States represents four percent
of the world's population and 22 percent of the world's economy. But
the United States, Western Europe and Japan are mature economies and
their growth potential is limited. If we close the door to the fast-
growing developing world, we are resigning ourselves to a declining
standard of living; and if we don't capitalize on opportunities in the
developing world, someone else will. But we cannot have it both ways.
We cannot demand that other countries open the door to the U.S. while
we shut the door on them.
Mr. President, a final word about the World Trade Organization (WTO).
I know some of my constituents are concerned about the implications of
the WTO's Dispute Settlement Board on U.S. sovereignty. I have studied
this issue closely, and based on my review, I do not believe it will
infringe on our sovereignty. The WTO cannot change U.S. law; only
Congress can. In any event, the ultimate recourse in any GATT dispute
is for the United States is to withdraw from GATT. I would certainly
support exercising that option if I though the GATT infringed upon our
sovereignty. I believe this Agreement protects U.S. interests while
increasing economic opportunities at home and abroad.
Mr. KOHL. Mr. President, I rise today in support of the GATT
implementing legislation. This is not perfect legislation or a perfect
trade agreement. But we are not here today to vote on a perfect trade
agreement. We are here to decide whether Wisconsin and the United
States will be part of the world economic market.
Both proponents and opponents of GATT are trying to answer that
question using the same criteria. What vote will lead to more jobs,
more economic prosperity and a better standard of living for the most
Americans?
For the people in my home State of Wisconsin, GATT and entrance into
a more open world market is the answer. We can try to preserve our
current standard of living by shutting out the rest of the world--and
that might work to preserve a few jobs in a few industries for a short
period of time. Or we can try to improve our future standard of living
by using the GATT to enter new world markets--and that gives us an
opportunity to create new jobs in many industries for the foreseeable
future. Choosing GATT is choosing the chance for a richer, better
future for our children.
The U.S. economy is increasingly dependant on the international
economy. In 1992, according to the Department of Commerce, over 7
million workers in the U.S. owed their jobs to merchandise exports and
an additional 3.5 million U.S. workers owed their jobs to U.S. service
exports. In 1993 in Wisconsin, exports totaled $5.8 billion, almost
double the level of exports in 1987. The days are gone in which the
rest of the world needed our business more than we needed theirs. Trade
is responsible for millions of current U.S. jobs and thousands of
Wisconsin jobs. It has created millions of U.S. jobs and thousands of
Wisconsin jobs. And expanding trade will create millions more.
The reductions in tariffs and trade barriers will stimulate economic
growth and enhance export opportunities for American business. One
study by the Economic Strategy Institute concludes that the agreement
would increase annual U.S. income between $100 billion and $200 billion
over ten years. It is also estimated that this agreement will generate
from 300,000 to 700,000 new jobs by 2004. American consumers will
benefit from lower prices and increased competition, which will lead to
higher quality, competitively-priced goods and services. Wisconsin's
leading manufactured exports include industrial machinery, scientific
and measuring instruments, and electric and electronic equipment. These
three industries together accounted for nearly 60 percent of the
state's total exports in 1993. Under this agreement, tariffs on these
products will be reduced by over 50 percent.
For all of these reasons, I believe moving toward free trade and U.S.
participation in the world market is the best choice, and that is why I
support GATT. But that does not mean I believe GATT is perfect. There
are some provisions of this massive agreement with which I take issue.
First of all, passing GATT requires waiving the Budget Act--something
I do not take lightly. The lower tariffs in GATT will lead to a loss of
tariff revenue for the United States of $10 billion over the next five
years and $26.6 billion over the next ten years. When GATT was first
released, I and several other Senators wrote to the President asking
him to develop implementing legislation that fully offset these revenue
losses. The Administration did subsequently develop a financing package
that is included in the implementing legislation before us. It reduces
the revenue loss to $1.7 billion in the first five years and $12
billion over ten years.
I would have preferred a full offset; I believe that is the more
responsible course. But I also believe that GATT will generate new
economic activity that will offset the revenue losses many times over.
It is proper that we do not count such revenue in our budget figures
because it is based on assumptions about economic growth that are not
100 percent certain. However, it is also proper that we waive the
budget rules to pass legislation that almost certainly will lead to a
healthier economy and a stronger government balance sheet. As Senator
Domenici pointed out earlier today, we allow our budget rules to be
waived by vote of the Senate exactly because there are some measures--
like GATT--that have positive economic and budgetary effects which are
not reflected by our current, conservative accounting.
Second, I have heard from some who are concerned about the effect
this agreement will have on the dairy industry, one of the largest
industries in my state. However, it must be noted that, in general,
GATT is good for agriculture. U.S. farmers can expect to gain new
export markets for products from feed grains to meat products to fruits
to vegetables.
However, it is no secret that dairy farmers are unhappy with this
Agreement. They are correct that U.S. negotiators did not place a high
enough priority on gaining new markets for U.S. dairy products. And the
mixed signals sent from U.S. dairy representatives in Geneva during the
GATT negotiations made it difficult for negotiators to set a clear
objective for dairy trade.
The question is, however, what do you do with that information?
Oppose the Agreement and all of its other benefits or attempt to bring
about appropriate changes in the GATT for dairy farmers. I have chosen
the latter course. I have worked with the Administration and our
trading partners to do everything possible to make this Agreement
better for the dairy farmers of this nation.
One of the biggest concerns of dairy farmers about this GATT
Agreement has been the large increases in cheddar cheese imports from
New Zealand and Australia. Since cheddar cheese acts as a commodity
cheese in this nation, increased imports of cheddar cheese have a
direct effect on milk prices paid to U.S. farmers. And milk prices are
already too low.
To soften the blow to U.S. dairy farmers, several of my colleagues
and I were able to work with Australia to achieve a mutually beneficial
agreement to adjust the type of cheese entering U.S. markets from that
nation. As a result of these efforts, Australia has agreed to swap half
of their cheddar cheese allocation for an equal allocation of specialty
cheeses, which do not directly effect milk prices.
Another priority for U.S. dairy trade has been access to the Canadian
market. While Canada has agreed to remove their import quotas on dairy
products imports, they have replaced them with high tariffs, in direct
conflict with the NAFTA and U.S.-Canada Free Trade Agreement. Although
this matter is still unresolved, Ambassador Kantor has assured me that
he will continue negotiation with Canada on this matter, and bring
formal NAFTA dispute action against Canada if necessary.
And finally, I have listened with concern to those who have argued
that the World Trade Organization established by this Agreement will
lead to weakening of the environmental laws of the United States.
Clearly, that would be counter to the purpose of GATT, which is to
further unite trading partners through reduced economic barriers. I
view a general trend of increased environmental standards worldwide to
be an appropriate corollary to the increased economic trade envisioned
by this GATT Agreement. As a nation's standard of living increases, so
also does that nation's ability to devote resources to environmental
goals.
Contrary to some accounts, the World Trade Organization has no
sovereignty over U.S. environmental laws. The WTO does, however, have
the authority to declare U.S. environmental laws GATT illegal, but only
if they are not scientifically based. If, as some suggest, the WTO
consistently rejects U.S. environmental laws as GATT illegal, the
United States retains the full right to withdraw from that body. But
for the United States to reject this GATT Agreement, would be to
discard our ability to be a force for environmental change worldwide.
It is my hope that the United States will be able to join with European
nations in using the power of the WTO to persuade other nations to
adopt more environmentally progressive laws.
Despite these reservations, I believe that the legislation before us
today is exactly the type of legislation we should hope to pass in the
104th Congress--bipartisan, practical, good for the nation as a whole.
Yes, it is full of compromises. Yes, I would have drafted some parts
differently. But, overall, GATT moves Wisconsin this nation into the
world market, into opportunities for a better standard of living, into
a prosperous and healthy future. It does so because it is not a
political document--it is a practical attempt to provide the most hope
and opportunity for the most Americans. That is good legislation. And
that is legislation worthy of our support.
Mr. KENNEDY. Mr. President, I support the General Agreement on
Tariffs and Trade. A year ago, there was extensive debate in Congress
and the Nation over whether the United States should enter into the
North American Free Trade Agreement with Canada and Mexico, our two
closest neighbors to the North and South. Today, the Senate will vote
on whether to enact legislation implementing a much more far-reaching
effort to reduce barriers to trade among more than a hundred nations
throughout the world.
As with NAFTA last year, GATT has provoked strong feelings on both
sides of the issue, especially with respect to its impact on the
workforce. In Massachusetts, I held a hearing and heard from a number
of witnesses who are deeply concerned that the long-term consequences
of GATT will be further pain and dislocation for working men and women
who have already been hard hit by the massive structural changes that
have transformed our economy over the last two decades.
There is one fundamental principle we can all agree on. The success
of our trade policies must be measured by the degree to which they
improve the living standards of the people and advance the well-being
of our society.
It is clear that many families have yet to experience the sense of
enhanced economic security that should come with an expanding economy.
Despite significant progress in the last 2 years in making up the
ground lost to the recession, reducing unemployment, creating new jobs,
holding inflation down and cutting the Federal deficit, there continues
to be a pervasive sense of unease among large numbers of working
families.
Many of them have been affected by the dislocations accompanying this
period of economic change--if not directly, then through the
experiences of relatives, neighbors, or friends. The prospect of
expanded trade and increased international competition in these
difficult times often means greater anxiety among these families for
their own jobs and for their families' futures.
One answer to this increasing global competition is more investment
in technology, infrastructure, and education and training. America must
not engage in a ``race to the bottom,'' where we are obliged to lower
our living standards to those of Third World nations. Instead, we must
compete on productivity, and that means investment, public and private.
I hope that many of my colleagues will be mindful of these needs. It
isn't enough just to expand trade. We must provide necessary
investments, while keeping our fiscal house in order. We must do more
to alleviate the fears that many working men and women now have, and
that have made passage of this agreement so controversial.
In recent years, we have been working hard in Massachusetts to
overcome the effects of the recession and to create new jobs and better
jobs for our workers. We have made substantial progress, especially in
areas such as telecommunications equipment, software, biotechnology,
construction, and other industries. Our primary goal is the retention
and creation of good jobs and good wages.
In Massachusetts, we are fortunate to have a number of industrial
sectors that will continue to grow and expand, as long as we continue
to focus on their needs, and invest in them. We must provide an
educated and skilled work-force, a quality living environment, and the
infrastructure necessary to keep our State economy strong. To do so, we
must maintain the competitive advantage that has made our State a place
where we can create good jobs for our workers.
I have supported the administration's efforts to negotiate GATT,
because I believe our economic strength depends on expanded trade. In
Massachusetts alone, exports increased almost 50 percent during the
depth of the recent recession. While many industrial sectors across the
State and country were downsizing, those that were able to take
advantage of export opportunities created 60,000 new jobs and more than
$3 billion in new economic activity.
GATT will help many sectors of the economy to grow even more rapidly.
Its broad provisions reducing tariff and nontariff barriers for large
numbers of products will open foreign markets at long last to countless
U.S. enterprises. Barriers that have long denied U.S. access to markets
in Europe, Asia, and other parts of the world will be removed.
The machine tool industry, which was founded in New England and has
recently begun to rebound, will have improved access to new world
markets. Our medical equipment, computer, and telecommunications
industries will be better able to compete in international markets.
GATT also increases the protections for intellectual property and
helps to combat intellectual piracy, a significant issue for high-
technology industries like computer software. More open access to
foreign government procurement contracts will allow U.S. industries to
compete for new business across the globe.
Our financial services sector did not gain the export opportunities
that we had hoped for, but the foundation for future negotiations has
been laid.
Overall, expanded world trade will help the economies of
Massachusetts and America. But no one disputes that there will be
losers. The textile and apparel industry, for example, will be faced
with the phase out of the Multi-Fiber Agreement, which sets the quotas
that have allowed the industry to remain competitive over the years.
We should provide effective assistance to such industries, helping
them to use more productive technologies and have a well-trained work
force. We should take some of the benefits from expanded trade, and use
them to assist those industries like textiles that have already been
hurt by global competition, and that will be harmed even more by GATT.
But the consequences of failing to pass GATT are much worse than the
damage that will be done by approving it. If Congress fails to pass
this agreement, it will weaken America's position in the world economy.
It will encourage other nations to continue with their own
protectionism and unfair trading practices that have blocked many
American industries from fair competition.
Like many of my colleagues, I wish that this agreement had higher
standards for labor and better environmental protections. But rejection
of GATT now will not advance these other worthwhile goals. If GATT
fails, the world trading system will be set back for years, if not
decades. In such a contentious atmosphere, it will be even more
difficult to make progress on the labor and environmental issues that
we care deeply about and that should be part of future trade
negotiations.
Additional concerns over GATT involve the World Trade Organization,
U.S. sovereignty, and our relations with other nations. In fact,
though, we will be in at least as strong a position under the new
organization as we were prior to GATT.
A more effective dispute resolution mechanism was one of America's
principal negotiating objectives under GATT. Under current procedures,
when the United States won favorable rulings against other nations'
unfair trade practices--which was the case more often than not--we had
no effective means of implementing those rulings.
Senator Dole and the administration have worked well together to
improve GATT on issues relating to the WTO. If the WTO truly threatens
U.S. sovereignty, we can withdraw from the agreement, and Congress will
now have an enhanced role in facilitating that withdrawal. I do not
anticipate such a scenario taking place, but the ability of the United
States to withdraw in these ways should reassure some of the critics.
For all of these reasons, and recognizing the agreement's flaws, I
urge the Senate to support GATT. The real challenge we face will be to
see that GATT fulfills our hopes, not our fears. Above all, we must
help the industries and workers hurt by this expansion of trade, and I
intend to do all I can in the months and years ahead to see that this
challenge is fully met.
Mr. McCONNELL. Mr. President, today the Senate will vote on history's
most ambitious world trade agreement. Since World War II, the world
economy has become increasingly interdependent and trade has played an
increasing role in political affairs. For the past seven years and
through three administrations, two Republican and one Democratic, the
U.S. has worked to expand free trade in the Uruguay round. Studies
indicate that the U.S. will receive a boost of over $100 billion
annually through expanded trade. I support the agreement, because it
mandates not just free trade, but fair trade for U.S. goods.
Mr. President, this agreement has been expanded to include coverage
for a number of new areas such as the trade in services, agriculture
and protection from piracy of intellectual property. This agreement
will also implement the largest tax cut in history. The across-the-
board reduction in tariff, subsidy, and quota levels will amount to a
$744 billion tax cut worldwide. ``Tariff'' is a fancy name for ``tax''
and these taxes are applied to both consumers and U.S. exports. These
added costs put U.S. exports at a distinct disadvantage.
Since GATT's inception in 1948, eight trade rounds have been
completed that have established rules of trade reducing tariff and non-
tariff barriers. As a result, world trade has steadily expanded.
In fact, between 1965 and 1990 merchandise trade has increased by a
whopping 439 percent. Currently, the U.S. is the leading world
exporter, with 11.6 percent of our Gross Domestic Product coming from
exports. As this figure increases, so will higher paying export-related
jobs.
This agreement achieves four major objectives. First, foreign markets
will open to U.S. producers through the reduction in tariff and non-
tariff barriers. I am especially pleased in this round we were able to
crack the protectionist foreign agriculture markets which to this point
have heavily subsidized their own agricultural interests.
Second, this agreement strengthens the procedures for dealing with
unfair trade. The new dispute settlement procedures will ensure that
nations engaged in unfair trade will be required to come to the table
in good faith to resolve trade disputes. This will eliminate the delays
and stalling tactics which foreign countries have used in blocking U.S.
entry into their markets.
Mr. President, the third objective this agreement achieves presents
the best opportunity for the U.S. to expand trade. This allows for the
establishment of rules of trade in services and the protection of
intellectual property.
This is the first multi-lateral and enforceable agreement to include
either provision. This is a tremendous achievement for the United
States. In 1991, services accounted for 62 percent of U.S. GDP,
employing 57 percent of U.S. workers. Currently, the U.S. maintains a
$55 billion surplus in this area.
With regard to intellectual property, U.S. corporations have lost
billions because there have been no trade protection against the piracy
of intellectual property. In 1987, a survey by the International Trade
Commission estimated that U.S. companies lose $23 billion annually due
to piracy of intellectual property. With the U.S. the undeniable leader
in intellectual property, such protection is critical to ensure future
innovation and prosperity.
A letter I received from the Software Publishing Association states
that this new trade protection will help American software producers
retain nearly $7.5 billion annually. Mr. President, this figure
represents an astounding 48 percent of the software market share.
Lastly, this agreement will reduce federal subsidies and instill some
discipline in international agriculture trade. For too long, U.S.
farmers have fought a losing battle to gain access to European and
Asian agriculture markets.
Prohibitive subsides and tariff barriers have stymied the growth of
our highly productive agriculture industry. Without a doubt, exports
are essential to continued market expansion. The U.S. Department of
Agriculture estimates that the Uruguay Round Agreement will increase
exports by $5 to $14 billion over the next five years.
What is more important for future agricultural trade expansion is the
discipline that the agreement applies to countries who might otherwise
choose to close markets and subsidize exports. This agreement has
important consequences for our large trading partners that are
currently outside of the GATT such as: China, Taiwan, and the nations
of the former Soviet Union.
This agreement enables countries to use GATT rules to challenge
unjustified health-related regulations that restrict trade, while
protecting every country's right to ensure food safety and animal and
plant health through policies based on scientific evidence. I am
confident that U.S. laws will prevail and set a higher standard for our
trading partners to meet. That is why the American Farm Bureau and the
Kentucky Farm Bureau both proudly support GATT.
I have heard from a number of organizations who have attempted to
deflect the debate away from the importance of free and fair trade to
other issues. Mr. President, we must not lose sight of what this
agreement is about. It is about expanding trade and providing access to
other markets that currently maintain barriers that deter the sale of
U.S. products. This will ensure our own economy will grow and create
new, higher-paying jobs.
Mr. President, I am not aware of any respected analysis which
estimates that this agreement would have an overall negative impact on
employment on the economy as a whole. Instead, GATT will reduce world
tariff rates by 34 percent on average, and entirely eliminate tariffs
in key exports such as pharmaceuticals, toys, medical equipment and
heavy industrial machinery.
This agreement will cut tariffs world-wide by $744 billion, and the
cuts borne by the U.S. represents only a small fraction of this total.
It is widely accepted by economists that a reduction in trade barriers
will stimulate trade.
The most recent and telling free trade success was the NAFTA
agreement implemented at the beginning of this year. NAFTA has sparked
the creation of more than 100,000 new jobs this year alone, and
contributed to a 21 percent increase in trade with Mexico in the first
nine months of the agreement. U.S. corporations are selling everything
from apples to X-rays because of NAFTA.
NAFTA, though it has proven to be a stunning success, pales in
comparison to the GATT which includes over one hundred countries. The
Department of Treasury estimates GATT will contribute to the creation
of an estimated 500,000 new U.S. jobs and over $100 billion in
increased economic activity per year. This economic boost will more
than offset the revenue lost in the last five years of this agreement.
There are some who claim that this agreement will serve our
sovereignty up to some higher world government. This is absolutely not
true. The World Trade Organization is a framework for resolving trade
disputes. The decision issued by a dispute resolution panel is not
self-enforcing and can't override U.S. domestic law. Only the U.S.
Congress can change U.S. law. In fact. Section 102 of the Agreement
states that ``no provision of any of the Uruguay Round Agreement, nor
the application of any such provision to any person or circumstance,
that is inconsistent with any law of the United States shall have
effect.'' As a Senator, I have sworn to uphold the Constitution and I
am confident this agreement does not pose any threat to U.S.
sovereignty.
Further, I am hardly alone in that view. The distinguished Judge
Robert Bork, as well as the highly conservative Heritage Foundation,
have both concluded the same thing.
This agreement, however, will establish the most effective and
binding dispute settlement procedures to ensure compliance and fair
trade. These procedures give the U.S. a stronger hand in bringing
unfair trading nations into arbitration and settlement in a timely
fashion. More importantly, it eliminates the ability of nations to veto
their penalty for unfair trade practices under the current GATT.
If, however, the gloom and doom scenarios of protectionists do come
true, the U.S. has the opportunity to withdraw from this executive
agreement and continue under the old regime.
As the leading free trade nation, the U.S. stands to benefit greatly
from this dispute resolution framework. Instead of looking at the glass
half empty, as many protectionist have, we can be confident that the
U.S. will have a mechanism for opening various unfairly protected
markets. If a nation is found guilty of unfair trading, the U.S. has
every opportunity to take unilateral action to even the playing field.
Obviously, losing a foothold in our market would be a significant
deterrent for any nation or industry.
Mr. President, I have wrestled with this decision for some time. I am
disappointed that President Clinton did not remain committed to the
passage of this agreement after it was signed early this year. The
``lame duck'' nature of this special session has fueled the mistrust of
the American people. Unfortunately, we are left with zero options.
Without the fast-track protection, which expires at the end of this
year, this agreement would be decorated like a christmas tree, with
special interests each putting their ornaments on it until it collapses
from the weight. This would harken back to the Smoot-Hawley Tariff bill
that led to the most proetectionist and failed trade regime the world
has ever seen.
Despite receiving the endorsement of Constitutional scholars,
academics, trade experts, consumer organizations, farm groups,
employees, business and state and local officials, we have had to fend
off assaults from the opponents of free trade and avowed
protectionists. for their own reasons, the opponents have a strong
desire to continue under the old system of high tariffs and record U.S.
trade deficits.
Mr. President, I find it difficult to understand why the opponents of
this agreement want to continue to pit U.S. exporters against our
trading partners with one hand tied behind our back.
I too believe we need to reduce our trade deficit, but the only way
that can happen is to expand our markets and sell more abroad. I find
it incredible that the GATT's opponents believe our trade deficit will
be reduced by the defeat of this bill.
For the long term benefit of the United States, we must focus on the
expansion and protection of our exports, which this agreement ensures.
This agreement will tear down longstanding trade barriers and create
new markets for U.S. goods. We must not forego this opportunity to
expand exports and create new jobs. I urge my colleagues to support a
winner, support GATT, and allow America to compete freely and fairly on
a more level playing field of trade.
With a new century only six years away, we must not turn the clock
back now. A great future lies ahead for us, and GATT will help make us
ready for it.
The PRESIDING OFFICER. Who yields time?
Mr. MOYNIHAN. I yield the remainder of our time to the distinguished
majority leader.
Mr. MITCHELL. Madam President, Members of the Senate, the Senate will
shortly vote on the Uruguay round of the General Agreement on Tariffs
and Trade. It is one of the most important votes of this Congress for
the future prosperity of our Nation.
This trade agreement, if approved, will bring enormous benefits to
our economy, our businesses, our workers.
Expanding international trade has been the engine of American
prosperity since the end of the Second World War. It has been the focus
of all of our past international trade policies.
Immediately after the war, the United States financed the
reconstruction of an international order based on stable, prosperous
democracies because we saw that our Nation's security would be best
preserved in such a world.
We succeeded to an unprecedented degree. The Marshall plan rebuilt
European industry and fired the engines of the so-called German
economic miracle.
In Japan, the introduction of democratic political institutions went
hand in hand with the grant of favorable trade access for Japan and
other devastated nations in the Pacific.
During that period, we undertook the defense of the free world in the
interests of Western security. While our trading partners rebuilt their
economies, we protected them against aggression.
But as our trading partners became our trading competitors, they
began to protect not only their favored, relatively free access to our
markets, but they began to protect their own markets against others,
including ourselves.
We have not insisted with sufficient vigor that our trading
competitors carry their own defense weight, but we will. We have asked
them to open their markets to our goods. The agreement now before us is
a huge step in that direction.
Immediately following the Second World War, the American economy
dominated the world. We had little competition. American production, as
a percentage of the world's economic production, was 37 percent. The
crippled economies of postwar Europe and Japan were struggling to get
on their feet. Former colonies in Pacific Asia and South Asia were just
beginning the process of economic development.
In the intervening 40 years, our economic growth has been solid. So
has the growth of our trading partners and our competitors.
Former colonies in Asia are growing faster than are the mature
economies. The American economy has kept pace, but in such a changed
world America's share of a hugely enlarged global economy was bound to
be smaller relative to others, as it is.
Today, the output of the 260 million people of the United States is
about 22 percent of the combined output of the other 5.5 billion people
in the world.
A lower relative share of world production means that we have to
compete both for developed and emerging markets throughout the world.
We cannot be satisfied any longer with simply selling American products
in America. This agreement will give us the tools to compete on a more
level playing field, to compete against competition, not against
artificial trade barriers.
The economic miracle of the postwar world is that with the expansion
of international trade, every participating nation's economy has grown.
Human well-being has reached more people at higher levels than ever
before in history. The leading beneficiary of that trend has been the
United States.
The future of our economy depends on our ability to respond to the
demands of the global marketplace. This agreement will define the
American role in the global economy and in world affairs well into the
21st century.
With the passage of this agreement, the Senate will affirm the
leadership role of the United States around the world. Rejection would
send a far different signal: That the United States fears the
challenges of the post-cold war global economy. Rejection of this
agreement would be a signal of American weakness.
We should not turn our backs on opportunities in new and growing
markets around the world. Our own economic security depends on our
willingness and our skill at adapting to a rapidly changing global
economy. American companies have adapted to the competitive
international marketplace by increasing productivity through new
manufacturing techniques and by streamlining production. The American
worker is the most productive worker in the world.
Let me repeat that for those who fear competition with other nations:
The American worker is the most productive worker in the world. But the
price of these productivity increases has often been the reduction of a
company's work force.
Automation and improved computer technologies have made many jobs
vanish as silicon chips now perform functions that once were performed
by human beings.
It is no wonder that many working Americans fear the fallout of
economic change. They have a right to be wary, for too often in the
past swift economic change has disrupted the lives of families and
whole communities, and too often, our Government has responded slowly,
begrudgingly, inadequately.
The government which wants to expand trade must recognize that it has
a reciprocal responsibility to the people most at risk from the effects
of trade expansion.
Those who favor the trade agreement, as I do, must acknowledge and
accept the responsibility to remember that there is more than one step
in our progress toward a more prosperous nation and world.
The first step is opening markets and freeing trade.
But the second and equally important step is to make certain that our
people do not disproportionately pay the costs that are part of every
significant economic change.
We must work together to prepare the U.S. economy for the challenges
of the 21st century. Our workers must be educated and trained so the
industries of the future will invest in this country and create new
jobs here. We must reduce the burden that health care costs place on
American businesses, which reduce their global competitiveness.
Like every one of my colleagues, every single Member of this Senate,
I have seen first hand the dislocations of families and communities
that occur when a production facility is moved offshore, or competition
from lower wage countries gives our consumers a better bargain. The
displaced workers should not be forced to pay the price of change.
But we must recognize also the benefits of change and harness them to
our advantage. In my home State of Maine, companies and their workers
have greatly benefited from expanded global trade.
In 1993, Maine exported more than $1 billion of merchandise to
foreign markets, almost 10 percent more than in the previous year.
Maine's sales to foreign markets grew more than three times the rate of
the domestic economy.
Our economic future depends on expanding international trade though
lower tariff and eliminating nontariff barriers. So does the economic
future of every other State in the Nation.
The North American Free-Trade Agreement, passed only last November,
has already produced tangible economic benefits in Maine.
In the first quarter of 1994, Maine's exports to Mexico increased 141
percent over the previous first quarter. The agreement before us today
will have an even greater positive impact, a much greater positive
impact, on economic growth on Maine and the Nation than did the North
American Free-Trade Agreement.
For example, this agreement will eliminate tariffs on paper and paper
products in European and Asian markets. The American paper industry has
estimated that this tariff elimination alone will produce a $2 billion
increase every year in American exports of paper and paper products.
The agreement lowers tariffs now levied against other Maine product,
including semiconductors, electronic components, wood and wood
products, blueberries and leather products. When those tariffs are cut,
Maine-produced goods will be less costly and more attractive to foreign
buyers, and Maine's exports will have a chance to grow. That is true
for the products of virtually every State in the Nation.
In addition to the tariff cuts, the agreement will establish new
rules to help eliminate foreign import barriers based on unjustified or
unreasonable local regulations. In the past, to cite one example,
foreign countries have restricted imports of American potatoes from
Maine and other States, and fish products through the use of unfair
sanitary and phytosanitary standards.
Under this agreement such standards will have to be based on science.
Since our regulations are now based on science and others are not, we
can only benefit from compelling other nations to adhere to the high
standards which we already observe. The agreement will not prevent the
United States or any other nation from adopting more stringent
standards but it will curtail their use as tools of protectionism.
These are only a few of the benefits that this agreement will produce
for the State of Maine and the Nation.
Here in the debate and across the country opponents of this agreement
have attacked it because it will not immediately produce impeccable
fairness in every aspect of every trade exchange among an international
community whose member nations vary enormously in wealth, resources,
manpower, and laws.
It has been attacked because the agreement itself does not eliminate
child labor practices in foreign nations. It has been attacked because
the United States currently has a balance of trade deficit, and the
agreement cannot guarantee that the U.S. trade deficit will be
eliminated in the future.
Of course, the reality is that the United States could never reach a
multilateral agreement that would by itself solve all of these
problems. But this world's nations, with all their differences in
wealth, resources and laws, are the only trading partners we have.
We do not trade with Mars. We do not trade with the Moon. We do not
trade with people and countries made in heaven. We trade with the
countries which exist on this Earth. And so we must negotiate with them
as we must trade with them.
No agreement of this scope could be perfect. This one is not. It
leaves open the potential of trade disputes in the future. That
potential can never be eliminated. Foreign agriculture subsidies were
not completely eliminated under this agreement, although they are
substantially reduced. The transition period for imposing the
intellectual property rules on developing nations is disappointingly
too long. And the concerns of the U.S. audio-visual industry were not
properly addressed in the services agreement.
But we should not measure this trade agreement against a perfect and
unrealizable ideal. We must weigh it against the current world trading
system, and the current rules. And by that comparison, this agreement
is a very good deal for America, and a very great improvement on the
current system.
Mr. President, I want to address that aspect of the debate which has
generated the most misinformation; that is, the role of the World Trade
Organization and its impact on the American sovereignty.
Let me make it clear and unmistakable. The Uruguay round agreement
will not undermine the U.S. sovereignty; will not undermine U.S.
sovereignty. The power to make and change American law will remain
where it is right now, right here with the U.S. Congress.
And section 102 of the implementing legislation plainly states, and I
quote its exact words: ``No provision of any of the Uruguay round
agreements, nor the application of any such provision to any person or
circumstance, that is inconsistent with any law of the United States
shall have effect.''
No provision, nor its application, that is inconsistent with any law
of the United States, shall have any effect.
That is a direct, unmistakable response to the allegations of a loss
of sovereignty.
Neither the World Trade Organization nor any dispute settlement panel
will have any authority to enjoin the enforcement of any United States
law or any State law, or to impose any monetary sanctions against the
United States. The dispute settlement panel will have the power only to
recommend that a member nation bring its laws into conformity with its
international obligations.
But that does not mean we must change our laws. If a dispute
settlement panel rules against us and says that a U.S. law is
inconsistent with GATT, we may offer to the complaining country
compensation, or we may make another agreement.
The decision-making rules of the World Trade Organization are
protective of American interests. For over 30 years, the GATT has
operated by consensus--in which any member nation can block action and
exercise an effective veto. There has not been a GATT wide vote on any
trade policy issue since 1959.
Article Nine of the Uruguay round agreement specifically codifies
this past GATT practice of operating by consensus.
If World Trade Organization members attempt to change the Uruguay
round agreement in the future, the rules provide that certain important
provisions, such as the most-favored-nation obligations, decisionmaking
rules, and the amendment rule, can be changed only--I repeat--only--
when all members of the World Trade Organization agree to the change.
That means that if any amendment is against American interests, we can
block it.
To allay concerns about the World Trade Organization, the President
has consulted with Secretary of the Treasury Bentsen, U.S. Trade
Representative Kantor, and Senator Dole. They have reached agreement,
an agreement which will create an exclusively American commission of
five retired judges who will review any adverse decision made by a
World Trade Organization dispute settlement panel. This American
commission will determine if such a panel decision is outside the scope
of the trade agreement or exceeds the panel's authority.
If the review commission makes three adverse determinations within 5
years, Congress will have the authority to approve a joint resolution
for U.S. withdrawal from the World Trade Organization.
The legislation will provide another procedure to withdraw from the
World Trade Organization. There is existing authority in the agreement
that allows any nation, including ours, to unilaterally withdraw from
the World Trade Organization after giving 6 months' notice. So let us
put it to rest once and for all. The World Trade Organization will not
undermine American sovereignty; it will enhance our economic interests.
On the budget issue--and that is the first vote we will have--we
should not be mistaken about the impact of this agreement. If it is
implemented, the agreement will lower, not increase, the Federal budget
deficit. The increased economic growth will generate more revenue for
the Treasury than it will lose from the tariff reductions.
The congressional budget rules are important, but we must now waive
those rules in this case because the agreement serves both the national
interests and promotes the goal of deficit reduction.
The potential dangers of this agreement have been much discussed and,
in my respectful view, much exaggerated. Meantime, the potential
benefits are much more real and realistically based.
Over time this agreement will reduce average merchandise tariffs by
more than one-third. In the world's developed economies, average
tariffs would decrease from 6.3 percent to 3.9 percent.
These lower tariffs will encourage economic growth in the United
States and around the world.
Economists estimate that when the agreement is fully implemented, the
American gross domestic product will increase between $100 billion and
$200 billion every year. That will produce hundreds of thousands of new
jobs for American workers.
My fellow Senators, we have come to the end of a long and vigorous
debate. Eight years ago, negotiations on this agreement began. Three
Presidents negotiated it. Their cumulative efforts reached a successful
conclusion almost a year ago. The world's trading nations signed the
accord on April 15 of this year, many months ago.
The administration and the Congress jointly drafted the implementing
legislation. It was introduced more than 2 months ago. The vote we are
about to cast, as we all know, was delayed for 2 months for even more
hearings.
The Senate has fully, exhaustively, carefully, debated and considered
this issue. Almost every provision in the agreement and the
implementing legislation has been thoroughly examined.
On Tuesday, the House of Representatives gave it an overwhelming
bipartisan endorsement by a vote of 288-146.
It is now the Senate's turn to act in the national interest. I urge
my colleagues to vote for this agreement. It is in the Nation's best
interest, and that must be our sole standard for voting on a measure of
this significance. Reasonable men and women in this Chamber can
disagree on how to define that interest. For myself, I say the Uruguay
round trade agreement is good for America. Let us pass it now.
The PRESIDENT pro tempore. The Senate will be in order.
Mr. MOYNIHAN. Mr. President, I yield the remainder of our time.
Mr. PACKWOOD. Mr. President, I yield the remainder of my time.
The PRESIDENT pro tempore. The question is on the motion to waive
titles 3 and 4 of the Congressional Budget Act of 1974, and section 23
of H. Con. Res. 218, the concurrent resolution on the budget for fiscal
year 1995, for the consideration of H.R. 5110. A vote of three-fifths
of the Senators duly chosen and sworn is required for the adoption of
the motion.
The yeas and nays have not been ordered.
Mr. MITCHELL. Mr. President, I ask for the yeas and nays.
The PRESIDENT pro tempore. Is the demand sustained? Obviously, the
demand is sustained.
The yeas and nays are ordered.
The clerk will call the roll, and the clerk will please repeat the
name of each Senator and the vote cast so that these may be audibly
heard by all people in the Chamber.
The assistant legislative clerk called the roll.
The PRESIDENT pro tempore. Are there any other Senators in the
Chamber who have not voted?
The yeas and nays resulted--yeas 68, nays 32, as follows:
[Rollcall Vote No. 328 Leg.]
YEAS--68
Akaka
Bennett
Biden
Bingaman
Bond
Boxer
Bradley
Breaux
Chafee
Coats
Cochran
Cohen
Conrad
Coverdell
D'Amato
Danforth
Daschle
DeConcini
Dodd
Dole
Domenici
Durenberger
Feinstein
Glenn
Gorton
Graham
Gramm
Grassley
Gregg
Hatch
Hatfield
Hutchison
Johnston
Kassebaum
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Levin
Lieberman
Lott
Lugar
Mack
Mathews
McCain
McConnell
Mikulski
Mitchell
Moseley-Braun
Moynihan
Murray
Nickles
Nunn
Packwood
Pell
Pryor
Riegle
Robb
Rockefeller
Roth
Sarbanes
Sasser
Simon
Simpson
Specter
Warner
Wofford
NAYS--32
Baucus
Brown
Bryan
Bumpers
Burns
Byrd
Campbell
Craig
Dorgan
Exon
Faircloth
Feingold
Ford
Harkin
Heflin
Helms
Hollings
Inhofe
Inouye
Jeffords
Kempthorne
Leahy
Metzenbaum
Murkowski
Pressler
Reid
Shelby
Smith
Stevens
Thurmond
Wallop
Wellstone
The PRESIDENT pro tempore. Under the rules, there will be no
demonstrations of approval or disapproval from the galleries.
On this vote, 68 Senators have voted in the affirmative, the nays are
32; three-fifths of the Senators duly chosen and sworn having voted in
the affirmative, the motion is agreed to and the point of order fails.
Mr. MITCHELL. Mr. President, I move to reconsider the vote by which
the motion was agreed to.
Mr. MOYNIHAN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDENT pro tempore. The clerk will read the bill for the third
time.
The bill (H.R. 5110) was ordered to a third reading, and was read the
third time.
Mr. MOYNIHAN. Mr. President, I ask that the yeas and nays be ordered
on the forthcoming vote.
The PRESIDENT pro tempore. Is the demand sustained? The demand is
obviously sustained.
The yeas and nays were ordered.
The PRESIDENT pro tempore. The bill having been read the third time,
the question is, Shall the bill pass? The yeas and nays have been
ordered, and the clerk will call the roll.
Before the clerk proceeds, the Senate will be in order and the clerk
will please repeat the names of Senators and state the vote that was
cast so that all within the hearing of the clerk may be able to
understand.
The clerk will call the roll.
The legislative clerk called the roll.
The PRESIDENT pro tempore. Are there any other Senators who wish to
change their votes?
The result was announced--yeas 76, nays 24, as follows:
The result was announced--yeas 76, nays 24, as follows:
[Rollcall Vote No. 329 Leg.]
YEAS--76
Akaka
Bennett
Biden
Bingaman
Bond
Boxer
Bradley
Breaux
Bumpers
Chafee
Coats
Cochran
Cohen
Conrad
Coverdell
D'Amato
Danforth
Daschle
DeConcini
Dodd
Dole
Domenici
Durenberger
Faircloth
Feinstein
Ford
Glenn
Gorton
Graham
Gramm
Grassley
Gregg
Harkin
Hatch
Hatfield
Hutchison
Inouye
Johnston
Kassebaum
Kennedy
Kerrey
Kerry
Kohl
Lautenberg
Levin
Lieberman
Lott
Lugar
Mack
Mathews
McCain
McConnell
Mikulski
Mitchell
Moseley-Braun
Moynihan
Murkowski
Murray
Nickles
Nunn
Packwood
Pell
Pressler
Pryor
Riegle
Robb
Rockefeller
Roth
Sarbanes
Sasser
Simon
Simpson
Specter
Wallop
Warner
Wofford
NAYS--24
Baucus
Brown
Bryan
Burns
Byrd
Campbell
Craig
Dorgan
Exon
Feingold
Heflin
Helms
Hollings
Inhofe
Jeffords
Kempthorne
Leahy
Metzenbaum
Reid
Shelby
Smith
Stevens
Thurmond
Wellstone
So the bill (H.R. 5110) was passed.
Mr. MITCHELL. Mr. President, I move to reconsider the vote by which
the bill was passed.
Mr. DOLE. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. LEAHY. May we have order, Mr. President?
Mr. MITCHELL. May we have order?
The PRESIDENT pro tempore. The Senate will be in order. The Chair
requests that all Senators please be in order.
The majority leader.
Mr. MITCHELL. Mr. President the vote to approve this treaty was
overwhelming and bipartisan. On the crucial motion to waive the Budget
Act, 68 Senators voted in favor, 32 opposed. Of 46 Republican Senators
voting, 31 voted in favor, 15 against. That is 67 percent in favor. Of
the 54 Democratic Senators voting, 37 voted for, 17 against. That is 69
percent in favor; 67 percent of Republicans; 69 percent of Democrats, a
total of 68 percent of the Senate voting in favor.
Many persons deserve credit for this result.
Mr. President, first I extend my congratulations to those who fought
a vigorous battle in opposition to this agreement here in the Senate on
high principle and with powerful arguments, led by the distinguished
Senator from South Carolina, Senator Hollings, the distinguished
Presiding Officer, the Senator from West Virginia, Senator Byrd, and
all of those. We respectfully reached different conclusions on how to
define the national interest, but we recognize and acknowledge that
every single Senator has voted in the national interest as he or she
sees it.
I foremost congratulate the President, who provided crucial
leadership on this important measure. He followed the path set by
President Reagan and President Bush when they began and continued the
negotiations, and President Clinton brought them to a successful
conclusion last year. He was greatly assisted by the powerful and very
effective work of the U.S. Ambassador for Trade, Mickey Kantor, a name
not well known to most Americans but as a result of whose efforts
Americans for generations to come will lead better lives.
Here in the Senate, of course, great credit goes to the distinguished
Republican leader, Senator Dole, who took an active role in working to
improve what he saw as deficiencies in the agreement, and his work
produced a better result. And our distinguished chairman and ranking
member of the Finance Committee, Senators Moynihan and Packwood who led
the debate with eloquence and fairness over these past 2 days. I thank
them for their work, and I thank all Senators who saw fit to support
the agreement, and I commend those who opposed it on principle.
____________________