[Congressional Record Volume 140, Number 119 (Saturday, August 20, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 20, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                       GATT IMPORTANT TO AMERICA

  (Mr. KOLBE asked and was given permission to address the House for 1 
minute and to revise and extend his remarks and include extraneous 
material.)
  Mr. KOLBE. Mr. Speaker, one of the issues still on the agenda of the 
103d Congress that remains to be resolved is the implementing 
legislation for the Uruguay round of the GATT, or the General Agreement 
on Trade and Tariffs. While our focus, and the spotlight of the 
Nation's media has been on health care reform and crime fighting 
legislation, neither the significance of this legislation nor the 
difficulties confronting it should be underestimated.
  No one should doubt the importance of GATT. The United States 
increasingly depends on international trade to fuel our economic 
engine. Our exports continue to grow in absolute terms and as a 
percentage of our total gross domestic product.
  As to the difficulties confronting us, the editorial in yesterday's 
New York Times and another article in the Wall Street Journal of the 
same day, make abundantly clear the dangerous shoals of trade this 
administration is steering toward. The GATT agreement is supposed to 
nudge the world toward more open markets and, indeed, the agreement 
signed in Marrakesh, Morocco, last April accomplishes that. And yet, 
this administration persists in trying to undermine the significant 
accomplishments of GATT with implementing legislation that unilaterally 
reverses those agreements. I commend these two pieces to my colleagues 
and urge them to heed the warning bells of an impending grounding on 
the reef of protectionism.

                [From the New York Times, Aug. 19, 1994]

                 Mr. Clinton: Defend Your Trade Pledge

       The Clinton Administration fought for consumers when it 
     signed a trade accord in April with more than 100 other 
     countries in Marrakesh, Morocco. But it besmirched its record 
     when it sent Congress implementing legislation that 
     contradicted the Marrakesh accord in dozens of places. It was 
     as if the Commerce Department had decided to protect powerful 
     corporate friends in steel, textiles and cement rather than 
     consumers or the vast number of U.S. companies that need to 
     buy low-cost foreign goods.
       Then House and Senate committees took the Administration's 
     draft and made it worse. Conferees will meet soon to hammer 
     out final language--providing a chance to fix the wrongs.
       At issue are anti-dumping statutes, which require 
     foreigners to sell in the U.S. at fair prices; foreign 
     companies may not sell at prices either below what they 
     charge in their home country or below their cost of 
     production. But the U.S. and other countries manipulate anti-
     dumping laws to shut out imports that are not dumped. The 
     Marrakesh accord tries to limit this protectionist practice.
       The accord says that the U.S. must make a fair comparison 
     between prices here and abroad. But the Senate committee, at 
     the insistence of Ernest Hollings of South Carolina, proposes 
     a formula that, by treating profit differently here and 
     abroad, would artificially deflate the calculation of prices 
     some foreign businesses charge in the U.S.--and make 
     conviction for dumping near-certain.
       The accord also recognizes that production costs typically 
     decline for new companies during a break-in period; the U.S. 
     is supposed to calculate a foreign company's costs at the end 
     of the break-in period. But the Administration and 
     Congressional committees propose making such costs appear 
     high by using an earlier period.
       The Marrakesh accord allows countries to retaliate only if 
     domestic industry has been harmed. To show harm, the U.S. 
     would have to demonstrate substantial imports compared with 
     the size of domestic production. House and Senate committees, 
     with Administration support, propose to make U.S. production 
     look small--and dumping look harmful--by ignoring a 
     substantial part of U.S. output, known as captive production. 
     Captive production refers to goods made not for sale but for 
     use in other goods--a computer business's production of 
     semiconductors, for example.
       In Marrakesh, the Administration stood for open trade and 
     economic growth. At home, it proposed sizable doses of 
     protectionism. The conferees will now decide which version of 
     U.S. policy will be the final version.
                                  ____


             [From the Wall Street Journal, Aug. 19, 1994]

                             World Economy

                          (By Robert Keatley)

       Washington.--Congress has just about finished writing rules 
     to turn the latest global trade treaty into U.S. law. but 
     it's including some rules that will make it harder, not 
     easier, to buy and sell overseas--exactly the opposite of 
     what the overall agreement is supposed to do.
       Not by accident. The drafting process includes an intense 
     lobbying effort that pits those seeking extra protection for 
     their clients, such as ball-bearing markers Timken Co. and 
     Ingersoll-Rand Co's Torrington Co. unit, against those who 
     want fewer trade restrictions, such as bit-time exporters 
     Cargill Inc. and Caterpillar Inc. As often happens, the 
     protectionists win more than they lose.


                         pragmatism or retreat?

       Whether this necessary or desirable causes endless debate. 
     The Clinton administration says it's merely doing what must 
     be done to get the total trade package through a skeptical 
     Congress. But many economists and export-minded business 
     executives accuse it of retreating from its pro-trade 
     principles.
       ``The legislation reflects a balance'' between 
     protectionist and free trade extremes, contends Susan 
     Esserman, the assistant commerce secretary who tracks the 
     political process most closely. These clauses bear ``almost 
     no relationship anymore to economic reality,'' counters 
     Kimberly Ann Elliott, an economist who generally opposes 
     restrictions.


                      piling on antidumping rules

       Now Congress and the administration seem to be tilting the 
     system even further, and writing into law restrictions that 
     aren't in the GATT treaty. For example, one of perhaps 25 
     changes will require the government to make certain profit 
     assumptions when deciding whether foreign goods are sold here 
     at unfair prices. This procedure will make it harder for 
     foreigners to defend themselves, especially companies such as 
     Toyota Motor Corp. and Philips Electronics NV that sell 
     products to their own factories or distribution systems in 
     the U.S.
       The European Union has complained repeatedly about what a 
     Brussels official calls ``This toughening up of United States 
     antidumping law [based on] certain ideas put forward by 
     interest groups.'' One Washington lawyer with EU clients says 
     the law ``will punish those who have actually invested in the 
     U.S., exactly the ones the administration has tried to 
     encourage.''
       Washington contends that low export prices often reflect 
     exorbitant profits at home (in Japan, for example), where 
     outside competition is restricted. Mr. Kantor uses these 
     antidumping laws as weapons when trying to pry open such 
     closed markets. But critics say another result is that 40 
     nations have adopted similar rules, making U.S. companies, on 
     a global basis, the leading targets in dumping cases. Cargill 
     has five pending against it in Mexico alone.
       For the most part, these tougher clauses persist because 
     Congress responds when constituents complain, and the Clinton 
     administration compromises to speed along the trade package. 
     And there's no doubt these terms will help troubled U.S. 
     companies, while keeping lawyers and lobbyists busy for 
     years.
       But whether these special interests deserve such help, and 
     how much the economy will benefit, is less clear.
       The legislation concerns the pact completed last December 
     under the auspices of the General Agreement on Tariffs and 
     Trade. The disputes revolve around how much the U.S. is 
     revising original terms as it writes them into U.S. law. Most 
     arguments involve antidumping law, complex clauses that let 
     aggrieved companies seek penalties against foreign rivals who 
     sell goods at ``unfair,'' even ``predatory,'' prices. The 
     drafting process may be completed today, allowing a final 
     vote on the GATT agreement as soon as Congress can schedule 
     it.
       The whole topic is extremely complicated--and for most 
     people, extremely boring. But huge sums are at stake, for a 
     single legal phrase may determine how easily companies can 
     act against overseas competitors that don't seem to play 
     fair. Washington considers these rules essential tools for 
     taking retaliatory action when it believes other countries 
     aren't reducing trade barriers.
       Antidumping laws help ``keep industries properly 
     competitive,'' says Mickey Kantor, the chief U.S. trade 
     negotiator who says he's basically content with what Congress 
     is doing.
       Yet many aren't content. The nonpartisan Congressional 
     Budget Office says these rules--once intended to keep 
     unfairly low prices from driving competitors out of 
     business--are now more often used whenever companies feel 
     ``any injury'' from foreign rivals. Because there is no 
     similar protection from domestic competition, these laws 
     ``are biased against foreign exporters and against consumers 
     of foreign goods,'' the CBO concluded.

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