That isn’t what you’ve been hearing. Everyone from President Clinton to The Wall Street Journal editorial page has been hailing the General Agreement on Tariffs and Trade (GATT) as the biggest tax cut in history and a deal that will fatten the U.S. economy by at least $100 billion a year. The opponents seem to be a loony collection of odd bedfellows: Jesse Helms and Ernest Hollings, Ross Perot, some family farmers and small businessmen, Ralph Nader, some labor unions, and Rush Limbaugh. With enemies like that, how bad could it be?
Pretty bad. ““They’ve marketed this deal as a magic box with a free-trade label,’’ says one frustrated opponent. ““We’re supposed to buy the box and not look inside.''
For openers, we’d be joining the new World Trade Organization (WTO), a club with 123 members set up like the U.N. General Assembly: one country, one vote. Mauritius counts for as much as the United States. The European Union would have far more power. The developing nations could gang up on the First World. We’d also be buying into the club rules: when there’s a disagreement among members, we go to binding arbitration. The arbitrators will be appointed by the WTO. Their tribunals will be secret, closed to press and public. Documents submitted in evidence will not be made public. Decisions can be appealed, but also in secret. To reverse a final decision takes a unanimous vote of the WTO. If a ruling goes against us and we enforce our rules anyway, other countries are entitled to retaliate against U.S. exports. Ralph Nader warns that the WTO will be used to erase dozens of local, state and federal rules on the environment, consumer safety, labor standards, food labeling and even nuclear safety. Is this really a club you want to join?
The administration argues that this threat is a bogeyman – that we should trust our trade partners to act fairly, since nobody wants a trade war with the United States. But trust is usually bad advice, and, in any case, the United States isn’t an 800-pound gorilla in world trade anymore.
Clinton’s people also argue that if we don’t like the way the WTO behaves, we can always leave. Sen. Bob Dole, a key player, is said to be nearly reassured by that argument. But leaving a jetliner before takeoff is one thing; walking out halfway across the Atlantic is another. Does anybody really believe that once the WTO is a reality, any administration would choose to take it on?
The GATT agreement itself is a numbing 450 pages of technical jargon, and few people understand it. But William A. Lovett, a Tulane Law School professor who has studied the negotiations and testified against the pact, says the worst feature is the basic deal: U.S. negotiators gave up far too much for far too little. ““This thing has no flex for the U.S., but everybody else gets lots of flex,’’ he says. ““It’s criminal negligence – dumb, dumb, dumb.''
What benefits would we actually get from the new deal? The estimates are all over the lot. Clinton’s people say it will create $100 billion to $200 billion in annual economic growth. International economic groups estimate U.S. gains from $25 billion to $30 billion a year. Lovett thinks the U.S. economy would actually lose jobs and income. There’s no way to pin it down. But whatever we might gain, the cost is too high. This turkey needs killing.
