[Congressional Record Volume 140, Number 139 (Thursday, September 29, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 29, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                                  GATT

  Mr. GRAMM. Mr. President, I now want to turn to a discussion of GATT. 
I think we have had a lot of discussion about GATT. We only recently 
have received the President's bill. As I said, it is a 600-page bill. I 
think everybody is trying now to go through it and understand it.
  What I wish to do today is to try to talk about GATT in general. I 
wish to talk about some very real concerns I have about what the 
President has proposed, but I want to make it clear where I stand on 
the fundamental issue because I think we are coming down to the moment 
of truth on this issue. It is a very important issue. In fact, I think 
those familiar with my record know that there is no stronger supporter 
of trade in the Congress than I am.
  So let me first talk about GATT, the agreement, the procedure, what 
the President has done, what I object to, where we are, and where I 
come down on the issue.
  First of all, expanding trade is vitally important to the future of 
America. I oppose protectionism in all of its forms. I think it is 
absolutely outrageous that we still have a world where protectionism is 
practiced, where the well-being and living standards of the working 
people of countries all over the world are artificially depressed to 
benefit special interests that would lose from full and free 
competition.
  I take a back seat to no person in the Congress on the issue of 
supporting free trade.
  The GATT process is a very important process. It represents one of 
the great achievements of the postwar period. I give Ronald Reagan a 
lot of credit for winning the cold war, for rebuilding the fence, for 
recruiting and retaining the finest young men and women who have ever 
worn the uniform of our country, for leading America, for pressuring 
the Soviet Union in tearing down the Berlin Wall, for liberating 
Eastern Europe and transforming the Soviet Union. But the most 
important ingredient in building the post-World-War-II world, the most 
important ingredient in winning the cold war, was trade. Trade made it 
possible to rebuild Europe. Trade made it possible to rebuild the 
economy of Japan. Trade made the economic miracle in Korea and Taiwan 
possible, and the growing wealth machine that was created by world 
trade ultimately applied such immense pressure that it mutated 
communism in China and it collapsed the Soviet Union internally.
  GATT is a continuation of that process. As a continuation of that 
process it deserves our attention. I believe that the process itself 
deserves our support.
  One of the objections that I have--and it is a very strong, profound 
objection--is that when the Clinton administration came into office, 
one of the changes it made to the GATT proposal was, for the first 
time, to make it possible for nations under specific sanction of the 
GATT to engage in industrial policy.
  This was a new facet of the agreement reached by the Clinton 
administration. While the language in previous trade agreements had 
been either silent or vague, and I think painfully so, for the first 
time ever, under the agreement negotiated by the Clinton 
administration, it will be acceptable government policy under GATT for 
countries to engage in industrial policy. With GATT approval they can 
specifically set out a policy within the country to use government 
resources, government privilege, government favor to try to foster 
industries that are under political favor by the host country.
  I think that is a very bad mistake. I think it flies in the face of 
everything we know about economic development. I think it is counter to 
the overall objective of trade and competition and free enterprise, and 
I strongly oppose it.
  One of the things, however, that you have to condition yourself to in 
a democracy is that you lose elections. When the American people 
elected Bill Clinton, they in essence moved the country toward a 
greater role for Government in the economy. In the process, part of 
what they voted for, whether they knew it or not, was a movement toward 
having the government participate in an activity of choosing winners 
and losers in the economic process. I have no doubt about the fact that 
the country will be poorer and less free as a result of that policy.
  When it got down to the bottom line in looking at the industrial 
policy built into the GATT agreement, which provisions I adamantly 
oppose, and the overall GATT agreement, which will lower tariffs, which 
builds on our success in the postwar period, and which is, I believe, 
essential to expanding world trade and continuing the world wealth 
creation process in motion, I decided that this is one of these 
provisions you have to swallow hard and you have to accept.
  So while I am strongly opposed to the industrial policy section of 
GATT, it is far outweighed by the positive aspects of the GATT 
agreement. If I believed that we could put GATT on hold until 1997, 
when I hope and believe we are going to have a new President, and we 
could renegotiate GATT and take this industrial policy stuff out, I 
would do it.
  Let me tell you, however, that I am afraid that if we let Humpty 
Dumpty fall off this wall, we may not be able to get him back together 
again. And so while there would be gain in waiting for a new 
administration for a new GATT without this industrial policy provision, 
I think it is inherently dangerous to do it. I am afraid that we could 
have growth in protectionism in the world. This is one of these unhappy 
occasions where if you lose an election it makes a difference; it 
changes policy. But that is what democracy is about.
  Since the President has negotiated the GATT agreement, I would like 
to remind my colleagues that the GATT agreement was completed 9 months 
ago, over the last 9 months the President has been involved in a 
political process, trying to put together votes for GATT primarily by 
negotiating with members of one party, the Democratic Party.
  Under our trade agreement procedures that we follow in Congress, we 
have what is called fast track. To the average guy that means 
absolutely nothing. To the trade process and to Congress, however, it 
means a great deal. What it means is that we have found in the past 
that you cannot go out and negotiate a treaty on trade with another 
country, or in this case with 125 countries, then bring the agreement 
back to Congress with the prospect of Congress rewriting it. You just 
would not have any hope of negotiating trade agreements.
  So Congress reluctantly agreed to the process of the fast-track 
procedure, whereby the President's trade agreements were not subject to 
amendment. Congress had to accept them or reject them. It is a 
procedure that I support. I think there is no logical alternative to it 
if you want to expand world trade. Until the President submitted this 
GATT agreement, the procedure had been one where he submitted the 
agreement that had been reached internationally, and Congress either 
accepted it or rejected it. In each and every case we have accepted it.
  What the President has done on this agreement is that he has 
fundamentally changed the fast-track process. Quite frankly, Mr. 
President, I worry that President Clinton may well have killed the 
fast-track procedure with this bill, because this bill is full of 
provisions that have absolutely nothing to do with the GATT agreement. 
Whereas, the Congress passed the fast-track process to allow the 
President to get an up-or-down vote on his trade agreement, what we are 
seeing now is all kinds of provisions in this bill, which we cannot 
amend, that have absolutely nothing to do with the GATT agreement that 
was signed 9 months ago.
  Let me list some of these provisions.
  We have a textile and apparel provision having to do with the rules 
of origin, that has nothing to do with GATT, that is counter to the 
stated objective of GATT, and that has only one purpose. That purpose 
is to buy votes in the Congress, from people who fundamentally are 
against expanding trade, by changing the rules of origin in such a way 
as to restrict imports and make working families in America pay more 
for clothing. This provision has absolutely nothing to do with GATT.
  Mr. President, I am not opposed to the process of putting together 
bills and cutting deals. That is something that happens in Congress 
every day. I think some people are outraged by it, but I think it is a 
fact of life, and I am not criticizing the President for it.
  What I am criticizing the President for is that this textile 
protection provision has nothing to do with GATT, and it should never 
have been put into this bill under fast-track procedures. This is 
something we should have been able to debate, to have amended, and to 
have thrown out of the bill or modified if we wanted to do it. What the 
President has done, in my opinion, is that has jeopardized passage of 
another fast-track bill because he has put in provisions that have 
absolutely nothing to do with the GATT agreement.
  The President's bill extends the generalized system of preferences. 
This is not part of GATT. It has nothing to do with GATT. It is 
something that ought to be dealt with independently. The bill renews 
the Super 301 legislation, which is legislation whereby protectionist 
measures can be imposed if someone in the country claims that they are 
facing unfair trade practices. Mr. President, I am not wild about the 
Super 301 provisions, and I readily admit it. But the point is that 
these provisions have absolutely nothing to do with GATT.
  We have in this bill a reform of the Pension Benefit Guarantee 
Corporation. That has absolutely nothing to do with GATT.
  Mr. President, in order to pay for the GATT bill, since GATT loses 
revenues under the way we score bills--quite frankly I would like to 
change the way we score bills, because everybody knows that GATT will 
create jobs, that GATT will generate Federal revenues, and that the 
country will be a winner from the overall GATT agreement. I would like 
to see us change the way we score bills so we could look more 
realistically at things like GATT and at things like cutting the 
capital gains tax rate. But the current law of the land says that this 
bill loses money. And so under our budget process, the President had to 
come up with a way of paying for it.
  We spend $l.5 trillion a year in Federal outlays. In order to pay for 
this bill, the President had to come up with about $3 billion a year of 
cuts. He had to save $3 billion out of $l.5 trillion of annual outlays 
of the Federal Government.
  Republicans and many Democrats said to the President, ``Do not ask us 
to waive the Budget Act. Do not ask us to say that we are willing to 
look the other way and violate a budget agreement which has been one of 
the few impediments to runaway Government spending and has been one of 
the few things that has kept the budget from exploding in the last 2 
years.'' What did the President do? What the President did is basically 
come up with a series of gimmicks and tax increases because the 
President was unwilling, out of a $1.5 trillion budget, to find $3 
billion of spending that was less important than passing the GATT 
agreement.
  I have spent a considerable amount of time talking about it. Let me 
sum up where we are. The GATT agreement is far from perfect. I do not 
like the industrial policy parts of it. I do not like the abuse of the 
fast-track process. If I thought we could defeat this bill and hold the 
trade system as it is until we have a Republican in the White House and 
do it again and do it right, I would oppose this bill. But I am afraid 
that if we let Humpty-Dumpty fall off this wall, we are never going to 
get him put back together. So what I have decided about the GATT 
agreement itself, when you look at GATT as an overall agreement, the 
good in GATT far outweighs the bad in this proposal.
  Questions have been raised about national sovereignty. I do not know, 
Mr. President, who made up the term ``World Trade Organization.'' 
Whoever did has never run for sheriff in a small county in Texas or 
anywhere else, because that term is a term that just scares people to 
death. Most Americans hardly believe in national government. They 
certainly do not believe in world government. So this has created an 
outpouring of concern all over the country that somehow we are giving 
up national sovereignty as part of this agreement.
  What we are talking about here is the enforcement of agreements. If 
you have an international trade agreement, you have to have an 
organization that prevents people from cheating. For example, we 
entered into the free trade agreement with Mexico. That free trade 
agreement allowed us, for example, to shift livestock back and forth 
across the United States-Mexican border. If the Mexican Government 
comes in and says that we in the United States use growth hormones for 
our cattle and, therefore, to protect their people from those growth 
hormones, they have to restrict American cattle being sold in Mexico, 
we have to have somebody come in and look at their charge and make a 
determination as to whether they are violating the trade agreement or 
whether there is a legitimate concern. In this case, if they did that, 
they would clearly be violating the trade agreement. Under that 
agreement, we have a panel made up of Mexicans and citizens of the 
United States, and what they would do is look at this claim and decide 
whether it was within the limits of the free-trade agreement. That is 
what we have in GATT, a dispute resolution process. You cannot have an 
international trade agreement without such an enforcement process, just 
as you cannot engage in commerce without a system to enforce contracts, 
or in investment without a system of justice that would enforce 
property rights.

  Had others negotiated the agreement, would this World Trade 
Organization have been structured differently? Probably it would have. 
Would it have been called a World Trade Organization? Almost certainly 
not. But I do not see the great threat to national sovereignty here 
that others have talked about. I do not believe that that concern would 
justify defeating GATT.
  The bottom line is that we are not just voting on the GATT agreement. 
We are voting on many other provisions that have been added by this 
administration that have absolutely nothing to do with GATT. Some of 
these extraneous provisions have profound impacts on the trading 
system. Others cover everything from pensions to super 301 trade 
enforcement mechanisms, none of which have anything to do with GATT.
  We also are going to have to vote on waiving the Budget Act to bring 
the bill up. I am still looking at this bill. In the end, I will likely 
support GATT. But here is where we are. The administration has added so 
many bad things to the enabling legislation that they are forcing 
people like me to look at GATT and say, given all these other factors 
that have nothing to do with GATT that are tied into this bill, is it 
worth taking all of these rotten provisions in order to get the GATT 
agreement?
  I am not ready today to make that judgment, but I will say this: I 
know that we have a lot of negotiations underway. I know the 
distinguished chairman of the Commerce Committee has said that he is 
not going to bring the bill up until he has had the 45 days established 
by law. I do not have a dog in that fight. Quite frankly, I hope after 
the election that we will have a more Republican Senate and House. I 
hope at that time we will have more support for trade, and perhaps the 
President would not have to have so many rotten provisions in the bill 
to get it passed.
  But I want to make this point clear: It may be that with a big 
clothespin on my nose, I can overlook all these rotten provisions which 
the President has put into the enabling legislation, that have 
absolutely nothing to do with GATT. It may be in the end that GATT is 
so important to the future of free enterprise and economic growth and 
job creation in the world that I can overcome all of these problems in 
this bill. But if the President cuts one more deal and puts one more 
rotten provision into this enabling legislation, I am going to oppose 
GATT and I am going to fight it to beat it.
  So I hope the President is listening. I know he is trying to get 
Democratic votes. I know he is trying to cut deals with them. But at 
some point, the President is going to begin losing votes of people who 
believe in trade, people who support GATT. It is already a very heavy, 
smelly wagon that the President is asking us to pull. Put one more 
thing in this wagon, and I will not pull it; one more provision and I 
will certainly vote to sustain the budget point of order. I do not 
know, I have not gone through the whole agreement, and in the end I may 
not support it anyway. My inclination is to support it. But if the 
President adds one more deal, adds another provision, I hope he is 
getting votes for doing so because he is going to lose my vote,
  Mr. FORD. Will the distinguished Senator yield for a question?
  Mr. GRAMM. Certainly.
  Mr. FORD. You are talking about cutting deals or adding something to 
GATT. As I understand, the Finance Committee has already reported GATT 
out from their committee, and it is on the fast track and it is 
unamendable. So if it is unamendable, there are no other deals to be 
cut. Unless you withdraw it and take it back, I do not know how you do 
that. As I understood the Senator and as I understand the rules of the 
Senate and fast track, to which he has alluded already, there are no 
amendments.
  So, therefore, regarding the so-called arrangements that are 
accommodating Senators, as we have seen done around here for the last 
20 years, we always try to accommodate Senators and their States and 
particular problems. So I just wanted to be sure, and I think I am 
right.
  Mr. GRAMM. Let me reclaim my time. Let me go back to my point. There 
is no doubt about the fact that if the President allows the current 
GATT arrangement to stand, it is unamendable. But the point I am trying 
to make is this. Given the substantial roadblock from our colleague 
from South Carolina, the chairman of the Commerce Committee, there may 
be a temptation on the part of the White House to pull the GATT 
provision back to the White House, perhaps looking at withdrawing it 
and resubmitting it with some further change.
  I wanted to say, for the Record, that this bill is already laden with 
a lot of irrelevant provisions, that have nothing to do with GATT. If 
they add one more provision, I am going to oppose GATT. I am going to 
fight it hard on the point of order, and I am going to fight it on 
final passage. I want to be sure they understand that, if they are 
cutting more deals, engaging in more protectionism with the idea of 
getting another vote, there is at least one vote they are going to 
lose. I am hopeful that they are not going to withdraw the bill and 
start the process over.
  I say to the Senator from Kentucky that I do not believe they are 
going to. But I wanted to make it clear, because I know there are 
immense pressures, given the position that has been taken by the 
chairman of the Commerce Committee, and I know the President 
desperately wants this bill voted on this year. I just wanted to let 
the President know in advance, because when you believe in trade as 
strongly as I do, when you are talking about voting against GATT, it is 
a very serious matter.
  We have reached the point where the benefits of GATT relative to the 
cost of all of these add-on, extraneous provisions is getting smaller 
and smaller.
  Mr. FORD. Mr. President, this is interesting. I thought statutorily, 
once a bill is introduced, you do not withdraw it. Since it is 
introduced, I do not believe you can withdraw it. Your staff probably 
will give you the answer. But my knowledge of the rules and so forth is 
that you could not withdraw.
  Mr. GRAMM. Reclaiming my time, Mr. President. I have been around here 
long enough to know that ways can be found. For example, on the crime 
bill, after a conference report was reported, the House went back into 
conference on that bill. I am concerned that the administration is 
obviously in trouble on this bill, and their opposition is coming from 
people who oppose GATT because they do not support more trade. I 
support more trade.
  What I want to be absolutely certain of is that the administration 
understand that whatever they gain by doing more to restrict trade, to 
offset the objectivse of GATT, will cause them to lose people on the 
other side.
  I hope that our colleague from Kentucky is right and that there is no 
possibility the bill will be withdrawn and resubmitted. I do not know 
in parliamentary terms whether it could happen or not.
  I know that if people want to do something, and they are determined 
enough, and they are clever enough, under our rules they can almost 
always do it. Certainly, they could have a side deal dealing with 
another piece of legislation. There are many things that could be 
worked here.
  I am simply trying to say that as a person who wants to support GATT, 
I believe that the President is making it very, very hard for people 
like me to support a position which we are very much in favor of. It is 
already hard. It was hard when the President put industrial policy into 
GATT. It got harder when the President added a variety of different 
provisions to the enabling legislation that have absolutely nothing to 
do with GATT.
  I am saying that it is already a close call, and if we go any 
further, by any means, either by withdrawing this bill or by having a 
side deal where other bills would be passed as a part of the agreement, 
which happens all the time and could happen here, whatever the 
President gains in votes he is going to lose at least one vote. That is 
a simple point and that is my point.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Kentucky is recognized.
  Mr. FORD. Mr. President, this GATT treaty will not go to conference. 
It has already been to conference and the House and the Senate came 
together and then the passable treaty language was sent to the White 
House for them to consider and then send to us.
  So, one, I do not know of any statutory provisions that allow them to 
withdraw. It does not go to conference. What you see is what you get.
  I do not understand why the Senator from Texas wants to threaten us 
with the fact that if he gets something else in GATT he will not vote 
for it.
  I am sure he is aware of side deals. I do not know. I have not been 
able to culminate a side deal yet. But maybe he knows more about that 
than I do.
  But, one, there is no statutory provision for withdrawing the treaty.
  Two, it does not go to conference because it has already been there. 
So GATT is what you see is what you get. The Finance Committee has 
already met and they considered it. They have sent it out to the Senate 
floor. The rules here are the rules.
  Under fast track, every chairman who has something to do with GATT 
has the ability to have that bill assigned to his committee or go to 
his committee for consideration and has so many days to keep it there.
  Now, the time of persuasion is here. So we go from there.

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