[Congressional Record Volume 140, Number 56 (Tuesday, May 10, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: May 10, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                 GENERAL AGREEMENT ON TARIFFS AND TRADE

  Mr. PRESSLER. Mr. President, the United States recently agreed to a 
GATT agreement, a General Agreement on Tariffs and Trade. Generally 
speaking, I am a freetrader, provided that our products are treated 
fairly in trade with other countries and provided, if we let their 
products into our country, ours are treated equally.
  GATT sounds like a good deal upon first hearing about it, because it 
is supposed to be the trade agreement of the 1990's. It has about 120 
nations in this trade agreement. I think that Mickey Kantor took some 
good first steps, but then rushed to an agreement.
  The GATT agreement that was agreed to, that will be coming to the 
Senate not as a treaty, I might say, but for enabling legislation, is 
not a good agreement, in my opinion. I am struggling with it. I may 
have to vote against the enabling legislation.
  Let me give a little background. The GATT agreement creates a world 
trade organization of 120-some nations, of which the United States only 
has one vote. There is no safety valve such as in the United Nations 
where the five Security Council nations can veto almost anything. That 
means that the United States will be on the same basis as a lot of 
little, tiny countries, as Rwanda or Uganda, for example. We will have 
only one vote of 125, even though we are the world's largest trading 
partner.
  There will also be a so-called environmental council which will have 
similar powers over the United States. I am very concerned that this 
world trade organization will outvote the United States and impose 
tariffs and trading conditions on us that are very unfavorable.
  The Third World countries may very well place unfair trading 
conditions on the United States. The Third World countries may well 
join with Japan and three or four other countries and gang up on us.
  So I am very worried about this. I am also worried that GATT has not 
come here as a treaty. Many years ago when I finished law school, I 
went to work in the State Department in the legal adviser's office and 
worked on GATT matters, both in Washington and in Vienna. It seemed to 
me that GATT was a fair organization in those days, but I am very 
concerned that this GATT agreement is not coming here as a treaty. I 
think the Clinton administration was so eager to show progress that 
they left intellectual property out, they left several other things out 
in order to rush to an agreement, and the United States will suffer a 
great deal.
  What does this mean? It means that by the Clinton administration's 
own admission, there will be about a $15 billion shortfall in our 
tariffs in the first 5 years; that is, we are going to be giving other 
countries at least $15 billion in our trade. That means our small 
businessmen, our farmers and others are going to be taxed to support 
the continuing subsidization that is occurring in European Airbus 
construction, for example, and in European agricultural.
  Mr. President, we have reduced our agricultural subsidies in the 
United States in the last two farm bills, and we have a third farm bill 
coming up. We do our farm bill on a 5-year program. We have reduced in 
each of those 5 years--now 10 years nearly--our subsidies, and we are 
prepared to reduce them more, but France and Germany will not go along 
with it.
  Let me say, England has done a good job. Australia and New Zealand 
have done a good job. But the Europeans not only subsidize their 
domestic farm production, but they subsidize their exports; that is, 
they use as much farm products as they need in their country and dump 
the rest on the world market just below the United States reserve 
price.
  The same thing is done with Airbus. I just read that I believe our 
friends in Canada bought a whole bunch of Airbus planes instead of 
Boeing planes built in Washington State. How can Airbus in Europe build 
it cheaper? Because there is a consortium of four countries that 
heavily subsidize the exports of Airbus planes, those that are sold 
outside the Common Market.
  So this is not fair trade, this is not fair to the American worker, 
it is not fair to the American farmer, it is not fair to the American 
small businessman. But that is what the Clinton administration agreed 
to in the GATT talks in Morocco recently. That is what Mickey Kantor 
signed off on and the top members of the administration.
  It amazes me that more people are not up in arms about the so-called 
GATT agreement. It amazes me that this thing is so quiet because all it 
takes is 51 votes in the Senate in enabling legislation to bring it 
into play.
  Today, the Wall Street Journal ran a wonderful article called ``White 
House Seeks $12 Billion Package to Pay for Tariff Losses Under GATT.'' 
It goes on to say the tax increases that might make up this GATT, but 
again it is just paper figures. Then, finally, it admits that probably 
they will try to put it off budget and add it to the Federal deficit, 
which is the latest trick in budgeting in Washington, DC.
  Where would the money come from if these are some of the proposals 
being discussed by the Clinton administration?
  First of all, ``$4.8 billion of losses through a 4 percent revenue 
tax on radio and television stations and others for use of the radio 
spectrum.'' I serve on the telecommunications committee, and I happen 
to remember that the Clinton administration has proposed that same $4.8 
billion be used to help pay for some of the immigration costs in one 
plan. In another plan, it is going to be used to help pay the cost of 
running the Federal Communications Commission. So this is smoke and 
mirrors. This money has been spent twice already on paper.
  Then it goes on to say that ``$3.1 billion by cutting agricultural 
export subsidies by $1.6 billion and farm subsidy payments by the 
remainder.''
  We are already doing that in our 5-year farm bill, so that, again, is 
smoke and mirrors, and if we cut our export subsidies, we are allowing 
the Europeans to continue their export subsidies.
  ``$1.5 billion by reauthorizing Superfund hazard waste cleanup tax on 
chemical companies,'' and so forth. That already has been allocated 
elsewhere.
  ``$1.3 billion for changing inventory accounting,'' which would 
largely hit retailers.
  These are all substantial tax increases being proposed, incidentally.
  ``$600 million from a gambling tax that would exempt State 
lotteries.''
  They were going to have the gambling tax a while ago, backed off, and 
now are proposing it again.
  ``$500 million tax on parking space fringe benefits; $500 million for 
requiring companies to file taxes quarterly rather than annually under 
section 936 which governs the tax treatment of companies in Puerto 
Rico; $200 million from taxing two more chemicals under ozone depletion 
rules. But it goes on to admit that they probably will not do any of 
that; that they will just add it on to the deficit.

  So what I am saying is not only is GATT a bad deal because we are 
turning our sovereignty over to a 120-nation group that will out vote 
the United States in the future--not the first year or two, because we 
have the first year or two set, but down the road.
  In addition to that, it is going to cost this country billions of 
dollars in losses because we are giving away so many tariff 
concessions. We are going to add it to our Federal deficit. That is 
very bad for our country. It will be a harsh tax on our working class 
people, a harsh tax on small businessmen, and a harsh tax on the 
American middle class.
  This is a trade agreement to which the Senate should not agree. We 
must wake up in this body as to what is really going on with the GATT 
agreement, and I hope America wakes up because nobody is paying much 
attention to it. Today's article is one of the first I have seen in an 
in-depth analysis of how bad this GATT agreement is.
  Mr. President, I ask unanimous consent to have printed in the 
Congressional Record this article entitled, ``White House Seeks $12 
Billion Package To Pay for Tariff Losses Under GATT.''
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

              [From the Wall Street Journal, May 10, 1994]

 White House Seeks $12 Billion Package To Pay for Tariff Losses Under 
                                  Gatt

                             (By Bob Davis)

       Washington--The Clinton administration is proposing to pay 
     for the world trade pact with more than $12 billion in tax 
     increases and spending cuts that demonstrate how politically 
     difficult it will be to push the agreement through Congress.
       The five-year revenue package under discussion with 
     lawmakers crosses so many powerful groups--such as 
     broadcasting, agriculture and retailing--that some trade 
     veterans don't believe the administration intends to go 
     forward with it. Instead, the exercise would pressure 
     Congress to approve a waiver from federal budget laws that 
     require offsetting funds for new programs that increase the 
     deficit.
       U.S. Trade Representative Mickey Kantor yesterday said, 
     however, that the administration won't seek a waiver to make 
     up for the $14 billion in estimated lost tariffs over the 
     first five years of the world trade pact. He called the 
     administration's effort ``serious'' and said that officials 
     are negotiating with lawmakers over the contents of a final 
     revenue package.
       Mr. Kantor did say that the administration would seek a 
     waiver for the second half of a 10-year period called for by 
     Senate rules. The tariff loss over 10 years is estimated at 
     $40 billion. Such a waiver would require 60 votes in the 
     Senate.
       Treasury Secretary Lloyd Bentsen told a group of reporters 
     that he has been fielding inquiries from finance ministers 
     about whether Congress will approve the pact, which was 
     negotiated under the auspices of the General Agreement on 
     Tariffs and Trade. Passage is ``no cinch by any means,'' he 
     said, because of lawmakers' concerns about funding and 
     whether the pact would diminish U.S. sovereignty.
       Among the proposals being discussed by congressional and 
     administration officials are:
       $.48 billion through a 4% revenue tax on radio and 
     television stations and other for the use of radio spectrum.
       $3.1 billion by cutting agricultural export subsidies by 
     $1.6 billion, and farm subsidy payments by the remainder--
     much of which is required by the trade pact.
       $1.5 billion by reauthorizing a Superfund hazardous-waste 
     cleanup tax on chemical companies, and using part of a 
     surplus that has accumulated.
       $1.3 billion from changing inventory accounting, which 
     would largely hit retailers.
       $600 million from a gambling tax that would exempt state 
     lotteries.
       $500 million tax on parking-space fringe benefits.
       $500 million from requiring companies to file taxes 
     quarterly, rather than annually, under Section 936, which 
     governs the tax treatment of companies in Puerto Rico.
       And $200 million from taxing two more chemicals, under 
     ozone-depletion rules.
       Mr. Kantor cautioned that the list is just ``the first part 
     of a whole menu of items'' and no final decisions have been 
     made. In the fight over the North American Free Trade 
     Agreement, for instance, a number of controversial funding 
     proposals were ultimately dropped. However, the 
     administration is considering adding a number of proposals to 
     the GATT legislation--including reducing tariffs for 
     Caribbean nations to NAFTA levels--which could require 
     another $1 billion in additional revenue.
       Already, word of the proposals has kicked up powerful 
     opposition. Seventeen senators wrote to President Clinton 
     last month expressing ``strong concern'' over agriculture-
     related spending cuts. House Energy and Commerce Committee 
     Chairman John Dingell (D., Mich.) protested to White House 
     Budget Director Leon Panetta over the broadcasting and 
     Superfund taxes. ``I cannot give you any assurances 
     whatsoever that a majority of members of the committee will 
     be able to support funding mechanisms that have no 
     relationship whatsoever'' to the trade pact, Mr. Dingell 
     wrote.
       Administration officials said there is some link, however. 
     Pharmaceutical, chemical, retail, and agricultural companies 
     benefit greatly from tariff cuts, they argue, and should help 
     pay for the pact.
       The administration's effort to find a way to pay for the 
     revenues that would be lost from the GATT agreement 
     intensified after President Clinton said publicly two weeks 
     ago that he wants to win congressional approval this year. 
     Mr. Panetta has asked his staff to be more ``innovative'' in 
     the search for spending-cut-proposals and the Treasury has 
     been looking for ways to raise revenues by toughening or 
     altering enforcement of existing taxes.

  Mr. PRESSLER. Mr. President, I yield the floor.
  Mr. PELL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Rhode Island.

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