[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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