[Congressional Record Volume 140, Number 148 (Wednesday, November 30, 1994)]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]

[Congressional Record: November 30, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

                      URUGUAY ROUND AGREEMENTS ACT

  The PRESIDENT pro tempore. Under the previous order, the Senate will 
now proceed to the consideration of H.R. 5110, which the clerk will 
  The legislative clerk read as follows:

       A bill (H.R. 5110) to approve and implement the trade 
     agreements concluded in the Uruguay round of multilateral 
     trade negotiations.

  The Senate proceeded to consider the bill.
  The PRESIDENT pro tempore. The Chair recognizes the majority leader.
  Mr. MITCHELL. Mr. President, and Members of the Senate, under the 
Senate rules there will now be 20 hours for debate on this agreement. I 
announced in October that I expect that we will complete 12 hours of 
debate today and the remainder tomorrow. I hope that any votes which 
occur with respect to this agreement will occur at the conclusion of 
those 20 hours of debate or at approximately 6 p.m. tomorrow.
  Under the rules, the majority leader has control of 10 hours of time 
and the minority leader 10 hours of time.
  Mr. President, I designate to control the 10 hours of the majority's 
time Senator Moynihan 5 hours in behalf of proponents of the 
legislation and Senator Hollings 5 hours in behalf of opponents of the 
  Mr. President, I now would like to address the Senate on the subject 
and I ask unanimous consent to use such portion of my leader time as is 
necessary for that purpose.
  The PRESIDENT pro tempore. Without objection, it is so ordered. The 
Senate will be in order.
  Mr. MITCHELL. Mr. President, I will make a detailed statement 
tomorrow just prior to the vote, but I wanted to begin this discussion 
by stating my strong support for the implementing legislation for the 
Uruguay round trade agreement. I urge the Senate to pass it.
  This historic agreement is essential to our economic future. It will 
open foreign markets to American goods and services. It will reduce 
protectionist foreign trade barriers. It will protect the intellectual 
property rights of American individuals and enterprises. It will expand 
export opportunities for our agricultural products.
  It will create new opportunities for American businesses and farmers 
to compete and sell more in foreign markets. It will benefit consumers 
by lowering tariffs that increase the purchase price of consumer goods.
  A prosperous international community is in the best national interest 
of the United States.
  That has been the goal of American policy throughout much of this 
century. Since the end of the Second World War, we have pursued that 
policy goal by working for a free, open, and fair international trading 
  Beginning in 1947, our Nation, together with 22 others, negotiated 
the General Agreement on Tariffs and Trade. Its purpose was to reduce 
tariff barriers and establish international trading rules. The General 
Agreement first entered into force in January 1948. It remains the only 
multilateral agreement governing international trade.
  Six subsequent rounds of trade negotiations have occurred since 1948, 
the last in 1979. These agreements lowered both tariffs and nontariff 
barriers, eliminated quotas and refined trade rules to respond to new 
products and trading patterns.
  Since 1948, the world trading nations have worked to further reduce 
tariff and nontariff barriers and to further refine the world trading 
rules. The Uruguay round agreement is simply a comprehensive 
improvement of the previous seven rounds of multilateral trade 
  Eight years ago, the negotiations on this agreement began in Punta 
del Este, Uruguay. For 7 years, three successive American Presidents, 
Presidents Reagan, Bush and Clinton have negotiated this trade 
  Congress has repeatedly supported these efforts by renewing fast 
track negotiating authority in 1988, 1991, and 1993 to allow our trade 
negotiators to conclude the agreement.
  Last December 15--almost 1 year ago--the negotiators concluded the 
agreement, and President Clinton notified Congress that he intended to 
enter into the Uruguay round agreement.
  There is no basis for a further delay in approving the implementing 
legislation until next year. The international trading system under the 
General Agreement on Tariffs and Trade took effect more than 46 years 
ago. A global trading system is not a new and untested concept: It has 
been an integral factor of our economic policy, working for our 
producers and exporters for almost five decades.
  Congress has reviewed the Uruguay round agreement thoroughly. There 
have been numerous congressional hearings and extensive reports on the 
meaning and impact of this agreement on the United States. Almost every 
aspect of this agreement has been carefully examined and debated.
  It is important that Congress approve this trade agreement this year 
so that American businesses can take advantage of the expanding 
opportunities in the international marketplace and American workers can 
enjoy the new jobs to be generated by expanded trade.
  A delay would undermine our economic self-interest.
  Economists estimate that when the Uruguay round agreement is fully 
implemented, the American gross domestic product will increase between 
$100 and $200 billion every year. That growth will produce hundreds of 
thousands of new jobs for American workers.
  But delaying the implementation of this trade agreement will, in the 
best case, cost both U.S. businesses and consumers billions of dollars 
in increased sales to foreign markets and higher prices on consumer 
goods. In the worst case, a delay in implementing this agreement will 
kill the agreement itself and undermine the future of the world trading 
  It is an agreement which our American self-interest dictates that we 
approve, and that we approve now. I urge my colleagues to vote for it.
  I thank my colleagues for their attention and, Mr. President, I would 
like now to yield to the distinguished chairman of the Senate Foreign 
Relations Committee, Senator Moynihan, who has so skillfully guided 
this legislation to this point.
  Mr. EXON. Will the majority leader yield for a question?
  Mr. MITCHELL. Yes, certainly.
  Mr. EXON. Mr. President, I ask this question. I think the answer will 
be that I will have to rely on the good offices of my colleague.
  Debate in the U.S. Senate is supposed to have something to do with 
the outcome of the final vote. That is not always the case, but we 
continue to think that debate is important in the Senate.
  Mr. MOYNIHAN. Frequently.
  Mr. EXON. What do we have to do, those of us who have not made up our 
minds whether we are opponents or proponents? Do we just have to rely 
on the good offices of the body to yield us whatever time we need 
before we make a commitment as to which way we are going to vote?
  Mr. MITCHELL. The answer is yes. But I will also say that I will be 
pleased to work with my colleague and with the distinguished managers--
who I am certain will be helpful and cooperative in that regard.
  Mr. HOLLINGS. Will the majority leader yield so I can announce?
  Mr. MITCHELL. Yes.
  Mr. HOLLINGS. Mr. President, in that we have been assigned 5 hours in 
the opposition on this side of the aisle, after talking with the 
different colleagues, the consensus, the thought was, that we would 
consume 3 hours today during the 12-hour period and 2 hours tomorrow. 
So, restricting us just to 3 hours, we have assigned momentarily--and I 
hope to keep to this but I do not have much time left: Senator Byrd, 25 
minutes; Senator Metzenbaum, 20; Senator Dorgan, 20; Senator Baucus, 
20; Senator Wellstone, 15; Senator Bryan, 15, Senator Heflin, 15; 
Senator Harry Reid, 15; and 25 minutes to myself to manage it. That 
consumes the time.
  If some come now and want some time today, we might have to pare back 
a few minutes or otherwise put them over to tomorrow.
  I thank the majority leader and distinguished chairman and ranking 
members on both sides for allowing me this moment. We are trying to 
give everybody time and deal it out equally.
  For those who have not made up their minds, they can listen. Thank 
  Mr. MITCHELL. I yield to my colleague from my time.
  Mr. EXON. I further inquire--I do not appreciate the last remarks, 
probably said in jest, by my friend and colleague from South Carolina, 
with whom I worked long and hard, and put in a lot of time on this. I 
would simply say that I recognize the pressures that are brought to 
bear on someone who controls time. That is why I brought up the 
suggestion. And, despite the feelings of the Senator from South 
Carolina, my distinguished friend, there are those of us who reserve 
the right to make up our minds during the debate.
  I know that is a revolutionary idea to place in the U.S. Senate, when 
generally we choose up sides and we have to come in here and beg for 
time unless we have committed to one side or the other.
  I would hope, Mr. President, that maybe some time could be yielded to 
the relatively few of us who reserve the right to make up our minds 
after debate. I think that the Senate is intended to run that way. But 
as we all know, it does not.
  I simply say that the rights of the minority have to be protected, 
the rights of those of us who have not yet made up our minds have to be 
protected, notwithstanding some of the arrogant views of those who have 
already made up their minds.
  Mr. MITCHELL. Mr. President, I will see that the Senator is 
  Mr. EXON. I thank the majority leader.
  The PRESIDENT pro tempore. Without objection the time will now begin 
  Who yields time? The Senator from New York [Mr. Moynihan].
  Mr. MOYNIHAN. Mr. President, I will yield myself 10 minutes to get 
our debate going and take the occasion to assure my friend from 
Nebraska that he will have time to speak and time to listen and 
participate. This is a deliberative process and it would please him to 
hear, I think--and I shall speak of it in just a moment--that one of 
the most distinguished and respected constitutional lawyers, professors 
of constitutional law in the United States, Laurence Tribe, who 
presented a brief basically in opposition to this legislation on the 
grounds that it should be a treaty, has now written to us to say he has 
thought it over and changed his mind.
  This is a deliberative process and new information, new argument 
brings new perspective. That is what we would hope to do.
  Mr. President, I ask unanimous consent that the letter by Professor 
Tribe concerning the present legislation before us be printed in the 
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                Harvard University Law School,

                                 Cambridge, MA, November 28, 1994.
     To Hon. George J. Mitchell; Hon. Robert Dole; Hon. Ernest F. 
         Hollings; Hon. Larry Pressler; Hon. Thomas S. Foley; Hon. 
         Newt Gingrich; Hon. Richard A. Gephardt; Ambassador 
         Michael Kantor; Assistant Attorney General Walter 
     From Laurence H. Tribe.
     Re treaty ratification of the GATT Uruguay round.
       I have read with care the thorough and thoughtful 
     memorandum of November 22, 1994, from Assistant Attorney 
     General Walter Dellinger to Ambassador Michael Kantor on the 
     question whether the Uruguay Round Agreements concluded under 
     the auspices of the General Agreement on Tariffs and Trade 
     (the ``GATT'') must be ratified as a treaty. A number of the 
     arguments advanced in this most recent memorandum require me 
     to give further consideration to the conclusions I have 
     previously expressed on the subject of the Uruguay Round 
     Agreements in letters and memoranda to President Clinton; 
     Assistant Attorney General Dellinger; Abner J. Mikva, Counsel 
     to the President; and Senators George J. Mitchell, Robert 
     Dole, and Robert C. Byrd; and in my testimony before the 
     Senate Commerce Committee on October 18, 1994. The newest 
     memorandum from Assistant Attorney General Dellinger offers a 
     level of analysis far superior to that previously set forth 
     by the Administration and is thus testimony to the 
     Administration's serious consideration of the constitutional 
     questions raised by the Uruguay Round Agreements and by the 
     manner of their approval. At the moment, candor compels me to 
     concede that reasonable minds may differ on the proper 
     resolution of the constitutional questions posed by the GATT. 
     In short, the issue is a close one. Although I continue to 
     believe that the constitutional concerns that I have 
     previously raised are deeply important, I cannot say with 
     certainty that my prior conclusions should necessarily be 
     adopted by others or are ones to which I will adhere in the 
     end after giving the matter the further thought that it 
       I do not mean to give my own views undue importance, but 
     the prospect that my earlier statements might have some 
     effect, however slight, in the debates in the House of 
     Representatives on November 29, 1994, and in the Senate on 
     December 1, 1994, would make it inappropriate for me not to 
     express this substantial caveat. Although I will be writing 
     again on the subject in a forthcoming article scheduled to 
     appear in the Harvard Law Review in the spring of 1995, that 
     analysis obviously will not come in time to be of any use in 
     the impending debate.
       I should perhaps explain that the strength with which I 
     previously expressed my negative conclusions on this subject 
     were in part a reaction to the weaknesses (as I continue to 
     perceive them) of the arguments previously marshaled on the 
     other side, both by the Administration and by scholars who 
     have come to its defense with constitutional arguments that 
     have struck me as both shallow and contrived. In my future 
     writing on the subject, I will be interested in exploring 
     what I regard to be the troublesome character of these 
     constitutional analyses, itself symptomatic of problems in 
     contemporary constitutional discourse. For now, however, 
     although it might be less embarrassing for me simply to say 
     nothing, I regard it as my responsibility, in light of 
     Assistant Attorney General Dellinger's recent forceful 
     analysis, to say that I believe the Clinton Administration 
     has based its position on the Uruguay Round Agreements on 
     constitutional arguments that are both powerful and 
     plausible. It would therefore be incorrect to quote or to 
     rely upon my earlier contrary views without adding this 
     important qualification.
       In closing, I reiterate the suggestion that I made to the 
     Senate Commerce Committee that the Senate give serious 
     thought to the constitutional role delegated to it by the 
     Treaty Clause of Article II. Although the GATT will likely be 
     approved on a ``fast track,'' the Senate constitutional role 
     in treaty ratification deserves further, sustained 

  Mr. PACKWOOD. Mr. President, may I just make a brief announcement?
  Mr. MOYNIHAN. Do, sir. I yield to my colleague.
  Mr. PACKWOOD. Mr. President, I will be managing the time on the 
Republican side, and we will be dividing the time evenly between those 
who support and those in opposition, so I will be allocating the time 
to both proponents and opponents on our side. I will do the best I can 
to allocate it fairly. But I would suggest this--and we have all seen 
this. But my hunch is that at about 3:30 or 4 o'clock tomorrow----
  Mr. MOYNIHAN. Tomorrow----
  Mr. PACKWOOD. All kinds of people are going to come and want time. 
The majority leader--or minority leader now, soon to be majority 
leader--Senator Dole, wants some time. I will want some time, closing 
time. For all of those who wish to speak, we would rather have them 
speak today rather than tomorrow, and as we get close to the end of 
time tomorrow it may be difficult to work everybody in.
  The PRESIDENT pro tempore. The Senator from New York has the floor.
  Mr. MOYNIHAN. I thank my friend, as I have frequently said, the once 
and future chairman. I did not think he would be future chairman in 
that early a future. And I expect around 11 o'clock we will be looking 
for colleagues who wish to comment and there you are.

                         Privilege of the Floor

  Mr. MOYNIHAN. Mr. President, I ask unanimous consent that Eileen 
Hill, from the staff of the Committee on Finance, have privilege of the 
floor during the consideration of this legislation. Miss Hill is a 
legislation fellow with the committee.
  The PRESIDENT pro tempore. Without objection, it is so ordered.
  Mr. MOYNIHAN. Mr. President, on July 8, 1916, in a speech on the 
House floor, Cordell Hull, then a young Congressman from Carthage, TN--
the same town from which our distinguished Vice President, presiding 
officer in exceptional circumstances comes--called for a permanent 
international trade congress.
  It was a hugely prescient idea. He understood that the inability of 
the European powers--the established ones--to accommodate the 
enormously increased economic importance of Germany had, in 
considerable measure, led to the First World War.
  He saw that trade was a source of conflict as far back as conflict is 
recorded and that it should be subject to the same kinds of rules and 
procedures internationally that we had established in our internal 
  Our Constitution is very careful to see that trade disputes, which 
are really the bulk of the litigation that takes place in our courts, 
are given validity across State boundaries and that the trading 
partners, knowing that whenever disputes arise, if litigated, the 
decisions will be held valid everywhere in the Union, are all the more 
disposed to entering such contracts. This is a point which Alexander 
Hamilton made in his Report on Manufacturers given to the Congress in 
  Hull saw the extension of this great understanding to a world market. 
That was the beginning of the century. Two vast wars and much turmoil 
in between bring us to the end of the century and to the completion of 
that vision. It reached its nadir in 1930 when, in the Smoot-Hawley 
Tariff Act of that year, we raised tariffs to an average of 60 percent 
in our country. Imports dropped by two-thirds; exports dropped by two-
thirds; the British went off free trade, establishing a colonial 
empire's imperial preference; the prosperity feared in Japan began. In 
1933, in a parliamentarily correct election, Adolf Hitler became 
chancellor. War was 6 years away--5. Not even that, Mr. President.
  (Mrs. FEINSTEIN assumed the chair.)
  Mr. MOYNIHAN. Madam President, in 1934, Cordell Hull began the 
reciprocal trade agreements program, an arrangement whereby the 
Executive could enter trade agreements and Congress would approve. It 
was a brilliantly innovative device, and every President, Madam 
President--whom we welcome back in glory--every President since has 
held to this proposal, this basic construct.
  It cannot be too much stated or stressed that the agreement before us 
today was proposed under President Ronald Reagan, to whom we send the 
great good wishes of the Senate on this first occasion that we have met 
since his announcement of his illness. It was largely negotiated by 
President Bush's representatives, notably Carla Hill, who has been 
indomitable in support of this measure, and it was concluded, as the 
majority leader observed, a year ago in Geneva. The formal signing took 
place in Marrakesh in Morocco this spring, but the work was done a year 
ago. It took a long time to do it, 3 years longer than expected, 
because more was done than in past trade agreements.
  Most important, we have brought agricultural interests into the GATT. 
I hope the Senator from Nebraska will take note of that, that 
agricultural products are now under the GATT. They have never been 
previously; it has been a manufactured goods affair. And the export 
subsidies which have so bedeviled our exports of agricultural goods are 
to be severely cut back, a concession finally made from the European 
Union, which is one of the reasons this bill comes to us 3 years later 
than originally expected.
  The bill provides protection for intellectual properties, our largest 
growth industries in this country, which have been bedeviled by 
widespread piracy, and it creates a WTO. This World Trade Organization 
is no more than a rather pale image of the International Trade 
Organization which was contemplated at the end of World War II. The 
Bretton Woods agreements of 1944 proposed the International Bank for 
Reconstruction and Development, which we know as the World Bank and the 
International Monetary Fund; they did not get to the details of an 
international trade organization, but they clearly anticipated that one 
would be proposed and adopted.
  President Truman did, indeed, propose that there be such an 
organization with many more powers than the WTO will have. It failed of 
adoption in the Congress. The House Foreign Affairs Committee never 
acted, principally due to opposition in the Senate Finance Committee, 
as the distinguished former chairman, future chairman knows.
  Madam President, there has been a great deal of talk about this new 
organization as if it is something very new and very large and 
threatening. May I make the simple point that the GATT, which began, in 
the absence of an ITO, as simply an informal arrangement--a British 
Treasury official, Eric Wyndham-White, whom I had the privilege to 
know, with just a small secretarial staff, ran it on a very informal 
basis--over 40 years, the staff of the General Agreement on Tariffs and 
Trade has reached 450 persons. The staff estimates that, with the new 
responsibilities that the World Trade Organization will devolve onto 
the GATT in consequence, the 450 would acquire 15 additional employees.
  Four hundred sixty-five persons in the WTO. Madam President, that is 
one-third the size of the Capitol Police force, scarcely a daunting 
prospect of world government. The dispute settlement decisions that 
were made in the GATT were arbitration decisions really, given 
agreements, given the rules. Over the last 40 years, there have been 
about four such cases a year that have come to be completed.
  Under the GATT arrangement, there was a veto, and, for example, 
Europeans on agricultural products were repeatedly saying, ``Well, yes, 
the panel decided the American exports were being unfairly 
discriminated against, but we even so will not accept it.''
  Madam President, I yield myself 5 additional minutes which I may not 
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. MOYNIHAN. Madam President, I simply make the point that we are 
not creating anything new in this World Trade Organization. We are 
simply codifying the practice of consensus, which has been the practice 
of the GATT.
  May I make the point that I wonder if my friend from Oregon knows: 
That there has not been a vote in the GATT for 35 years. Yes, this is 
not a litigious organization in that sense. When there is a dispute--
and contract disputes are the bread and butter of the American judicial 
system, and properly so--the parties concerned pick nonpartisan 
arbiters from other countries. They make their case and may live with 
the results. That is what a system of law is about.
  Finally, Madam President, it was the view earlier in a brief by 
Laurence Tribe, who is a professor of constitutional law at Harvard 
University Law School, that the WTO needed to be a treaty. That it 
should be a treaty sent to us by the President and decided here in the 
Senate, not at all in the House, even though the WTO is an article I 
issue. Commerce and revenue are its principal features. Until the 
income tax, our principal source of revenue was tariffs. They are 
  This is a tax cut before us. Treating this matter as a treaty would 
keep the House out of this and confine it to the Senate, contrary to 
the practice since 1934. Contrary to the repeated times, this Senate 
has confirmed and reconfirmed the propriety of reciprocal trade 
agreements and the approval of trade tariff schedules by legislation. 
Professor Tribe thought otherwise.
  Just yesterday, in a memorandum sent to the majority and minority 
leaders and the honorable chairman of the Commerce Committee, Senator 
Hollings, and others, Professor Tribe observed that he had read the 
memorandum from the Assistant Attorney General, Walter Dellinger, also 
a professor of constitutional law, and had been thinking about it. And 
on reflection, he writes, that the memorandum from Assistant Attorney 
General Dellinger offers a level of analysis far superior to that 
previously set forth, and thus is testimony to the administration's 
serious consideration of the constitutional questions raised. And then 
I quote:

       At the moment, candor compels me to concede that reasonable 
     minds may differ on the proper relation of constitutional 
     questions posed by the GATT. In short, the issue is a close 
     one although I continue to believe that the constitutional 
     concerns that I have previously raised are deeply important. 
     I cannot say with certainty that my prior conclusions should 
     necessarily be adopted by others, or that I will adhere to 
     them at the end after giving the matter further thought that 
     it deserves.

  In a word, Madam President, the brief in opposition has been 
withdrawn. I think that is a good spirit of open inquiry with which to 
begin this debate. The legality and constitutionality of our 
procedures, in place for two-thirds, or more than half a century, 60 
years, is not in question. The wisdom of our action is scarcely in 
doubt. Yesterday, by a 2-to-1 majority, the House approved this 
agreement. It now comes to us. It has been reported from the Committee 
on Finance 19 to 0. It is in the tradition of bipartisan trade policy. 
It is the largest trade agreement in history. It sets in place the 
institutional arrangements that will keep the peace after the long cold 
war, after the tormented 20th century.
  Madam President, I urge the adoption of this legislation.
  Mr. President, on July 8, 1916, in a speech on the House floor, 
Cordell Hull, then a Democratic Congressman from Tennessee, called for 
a ``permanent international trade congress'' to formulate agreements to 
dismantle destructive trade practices. Today, over 78 years later, it 
is with great honor that I, as chairman of the Committee on Finance, 
bring to the floor of the Senate legislation that will finally realize 
that vision.
  Mr. President, over the past several weeks, a number of persons have 
observed, quite accurately, I believe, that we are about to cast a vote 
of monumental importance--on a par with the historic and defining votes 
on the League of Nations and the Marshall plan. The legislation that we 
take up this morning will approve and implement the largest, most 
comprehensive trade agreement the international community has yet 
witnessed. If this Senate approves the Uruguay Round Agreements Act, as 
I fully expect it shall, that action will represent nothing less than 
the culmination of 60 years of American trade policymaking--
policymaking that began with Cordell Hull's Reciprocal Trade Agreements 
Program in 1934 and that has, ever since, been carried out in the best 
bipartisan traditions of this body.
  Mr. President, it was only 8 years ago, September 1986, in Punta del 
Este, Uruguay, that trade ministers from around the world gathered to 
launch the eighth round of multilateral trade negotiations under the 
auspices of the General Agreement on Tariffs and Trade--the GATT, a 
provisional arrangement that has served as a forum for trade agreements 
since 1948.
  The ministers' goals were ambitious--indeed, too ambitious for the 
timetable they contemplated. They sought to strengthen the rules 
governing international trade, to bring trade in agriculture, services, 
and textiles under the rules, to protect intellectual property and 
trade-related investment. Such far-reaching objectives could not be 
reached in 4 years, as they had planned. Not until December 1993, 
rather than 1990, was final agreement struck. But that agreement was 
one that largely achieved their objectives.
  Objectives, I must point out, that were both shared and guided by the 
Congress of the United States. The Congress laid down the United States 
objectives for the Uruguay round in the Omnibus Trade and 
Competitiveness Act of 1988, goals shared by the executive branch and 
sought by negotiators under three American Presidents, Republican and 
Democrat alike. I am pleased to report that, as a result of the 
endeavors of the administrations of Presidents Reagan, Bush, and 
Clinton, in close consultation with the Congress, the agreement before 
us today largely meets the standards set forth by the Congress 6 years 
ago. Not in total, we must acknowledge, as I suppose the objectives of 
other countries were likewise qualified in the give-and-take of 
negotiation. But met in large part.
  Optimistic reports on the economic impact of the Uruguay round 
abound. The GATT organization itself estimates that, in 10 years' time, 
U.S. gross domestic product [GDP] will increase by $122 billion 
annually as a result of this agreement. Our own Council of Economic 
Advisors estimates an annual increase in U.S. GDP of $100 to $200 
billion. Other studies suggest smaller increases, but it is notable 
that all economic analyses are positive--a singular event in the world 
of economists.
  The economic benefit of many aspects of the Uruguay round, such as 
improved intellectual property protection and rules for services trade, 
are difficult to quantify here and now. But its simplest aspect alone 
presents a compelling case--that is, the nearly $750 billion in tariff, 
meaning tax, cuts to be made worldwide. The largest tax cut in world 
history. A tax cut of $32 billion over 10 years on products imported 
into this country alone. And an average tax cut of 40 percent on the 
products we export to the rest of the world. I would ask my colleagues: 
What other economic measure could we consider with such far-reaching 
  Most importantly, the Uruguay round means jobs--300,000 to 700,000 
more American jobs once fully implemented. And these will be good jobs, 
for jobs engaged in producing exported goods typically pay 13 percent 
more than the average.
  Much will be made during this debate, I expect, of the decline in 
manufacturing jobs over the last decade, attributing such in large part 
to the failings of American trade policies. Indeed, employment in 
manufacturing has declined between 1979 and 1993--falling from 21 to 18 
million--even though employment in the nonagricultural sector of the 
economy has increased by almost 25 percent. But why, we must ask?
  In significant part because American companies have succeeded in 
becoming the most productive in the world. From 1979 to 1993, while 
manufacturing employment declined by 14 percent, productivity increased 
substantially so that industrial production in the manufacturing sector 
increased by 38 percent. The result--more output, fewer workers. 
Repeating our experience in agriculture, where the mechanization of 
production released thousands of workers from the field: in 1930, over 
21 percent of America's workers were engaged in agricultural 
production, but by 1993, less than 3 percent of the work force was 
employed in the farm, forest, or fishery sectors--and less than 1 
percent of the work force was employed as farmhands.

  In these circumstances, difficult as they may be for the workers 
affected, we should look upon trade not as the villain, but as an 
opportunity. Trade among countries should not be avoided; indeed, it 
cannot be avoided in an open society, any more than can be the effect 
of advancing communications or innovative technologies. If we approach 
trade as friend, rather than foe, we will find ways to sell more of our 
goods abroad, employing more rather than fewer Americans.
  In fact, the United States is in the best position among trading 
nations to take great advantage of the more open markets that come with 
the Uruguay round. For the United States today is at the height of its 
global competitiveness. Americans should note with some degree of 
satisfaction the recent report of the World Economic Forum which rates 
the United States as the world's most competitive nation. We have 
returned to the top ranking for the first time since 1985, Japan now a 
distant second.
  Of this fact I would remind those who have voiced concerns about the 
impact of this agreement on U.S. sovereignty. There are legitimate 
concerns here, which have been legitimately addressed. Again in a 
bipartisan fashion. But others who speak of a loss of sovereignty prey 
on the fears of American workers, uncertain about their future in a 
global economy. Let us remind American workers of their ability to 
think, create and innovate, not to fail or fall prey to outside forces 
beyond their control. That is not the kind of thinking by which 
American workers built the most competitive economy in the world. Nor 
is there reason to succumb to such thinking now.
  Rather, we must remember that our economy is the largest single 
market in the world, a market which others seek, recognizing its value. 
To those who fear that we will constantly be out-voted in the new World 
Trade Organization, established in the Uruguay round, I would say that 
there is little reason for concern. The WTO simply codifies the 
practice of consensus in the GATT and there has not been a vote in the 
GATT on a trade policy matter for 35 years. To those who suggest that 
the WTO will have the power to override our own governing of our 
market, I would say but one thing--look to the Constitution. We yet 
govern ourselves, with the authority to regulate commerce with foreign 
nations given to the Congress. And with the Congress also rests the 
authority to take the necessary and proper steps to carry out 
international agreements, as recognized by the Supreme Court in the 
seminal Missouri versus Holland decision--on a migratory bird 
convention, of all matters--in 1920.
  It is the Congress which, since the disaster of the Smoot-Hawley Act 
of 1930, has chosen with care the arrangements whereby U.S. trade 
policy is made. Having learned the lessons of Smoot-Hawley--the two-
thirds drop in trade that followed, worldwide depression, the rise of 
totalitarian regimes, and in the wake of such events, the Second World 
  In the aftermath of such, the Congress sought a better arrangement 
for trade policymaking in this country. Beginning with the Reciprocal 
Trade Agreements Program of 1934, the Congress has determined that the 
President should negotiate liberalizing trade agreements and the 
Congress should embody those agreements in legislation which it 
considers, debates, and votes on. In 1974, the Congress chose to create 
special procedural rules--we know them today as the fast track--to 
ensure that these trade liberalizing policies would continue.
  But these arrangements do not preclude the Congress from performing 
its constitutional duties of regulating foreign commerce. Indeed, the 
Congress has chosen these arrangements in the belief that they best 
serve our commercial interests. Likewise, mechanisms have been created 
with this implementing bill to ensure that the congressional voice is 
heard should the World Trade Organization not serve American interests. 
Congress will have the opportunity to demand withdrawal from this 
organization on 6 months' notice as permitted under the agreement 
  Indeed we should withdraw if the worst fears of the opponents are 
realized. If foreign governments pursue repeated, and unfounded, 
challenges to U.S. law. But that is not the likely scenario. The United 
States is not a protectionist country. And it is those countries which 
are so that must be concerned about the WTO, not the United States.
  We seem to forget that it was the United States, and the Congress in 
the 1988 Trade Act, that sought the strengthened rules that come with 
the World Trade Organization. Why? Because although we consistently 
have been more successful than the average in GATT litigation, we have 
too often been frustrated in our successes. During the period leading 
to the passage of the 1988 Trade Act, we won three GATT cases against 
the Europeans--on pasta, citrus, and canned fruit--only to be 
frustrated by their stalling tactics. The European Community blocked 
the adoption of those three panel reports, preventing formal GATT 
approval of the panel's decisions. And throughout 1988, the Europeans 
first blocked and then further delayed the establishment of a dispute 
settlement panel to hear a U.S. challenge to EC production subsidies on 
oilseeds. Four cases, all of great consequence to our agricultural 
community. Is it any wonder that the Congress, in 1988, urged our 
negotiators to achieve a more effective and expeditious dispute 
settlement system?
  Under the new WTO rules, these stalling tactics will not be allowed. 
And the United States, I might note, has nothing to fear from a tougher 
dispute settlement system. We have been victorious more often than most 
under the GATT, and there is every reason to expect that trend to 
continue. Under the GATT, we have prevailed in 70 of the 87 cases that 
we have brought. That is a remarkable success rate of roughly 80 
percent. When challenged, we have also prevailed more than most--in 55 
of the 75 cases brought against us, or nearly 75 percent of the time.
  Most important, we should keep in mind that, in the first 43 years of 
the GATT, there have only been 88 panel decisions. If we include the 
cases that did not culminate in panel decisions, that number grows to 
207. That averages to less than five cases a year. There is thus no 
grounds for fearing that hundreds of our laws will be challenged in the 
  Thus, the crucial fact to be remembered: It is the United States that 
stands to benefit most from the World Trade Organization's improved, 
and more effective, rules for settling disputes among trading partners.
  We are on the brink of realizing these benefits. This is not the 
International Trade Organization [ITO], established in the Habana 
Charter of March 1948, that the Congress turned its back on. The ITO 
was a more ambitious arrangement. It included, as the WTO does not, 
provisions on full employment and economic reconstruction, on 
technology transfer and access to capital, on private cartels and 
international commodity agreements.
  The ITO died at the hands of the Congress, due in no small part to 
the intense opposition of the Committee on Finance of that day. The 
business community joined in that opposition, ironically because of 
concerns that the ITO Charter fell too far short of their ideals of 
free trade. In the end, only one committee of Congress, the House 
Committee on Foreign Affairs, even held hearings on the Habana Charter. 
There were no votes. The ITO Charter simply withered in the face of 
intractable opposition.
  In contrast, the World Trade Organization of 1994 is a more modest 
arrangement than that envisioned by the Habana Charter. But its 
principal purpose is the same--to provide a sound institutional 
framework for the conduct of trade among nations. To provide a forum 
for resolving disputes that inevitably arise among people who trade 
together. In recognition that the prosperity of all depends upon the 
peaceful resolution of such conflicts and the continuing conduct of 
international trade. And in 1994, unlike in 1948, the Finance Committee 
and the business community join together in support of the World Trade 
  Let us not replicate our unfortunate experience with the 
International Trade Organization, over 40 years ago. Instead, let us 
emulate the bipartisan spirit that has developed over the past decade 
as we have ratified, with little or no dissent, four important 
conventions negotiated under the auspices of the International Labor 
Organization [ILO].
  Mr. President, I look forward to the coming debate, and I urge the 
Senate, once the debate is over, to act in that bipartisan spirit and 
approve the Uruguay Round Agreements Act.
  I see that my distinguished friend and chairman is on the floor. I 
see that he has teaching aides and other matters to bring before us. I 
look forward to them, and with great pleasure I yield the floor.
  The PRESIDING OFFICER. The Senator from Oregon [Mr. Packwood] is 
  Mr. PACKWOOD. Madam President, I thank the Chair.
  Madam President, during the next 2 days, I expect to speak often on 
this subject and I am not going to try to cover the entire gambit of 
the arguments for or to rebut all the arguments against the GATT 
agreement right now.
  I want to lay at rest, if I might, in my opening comments the 
particular issue of whether or not the United States can compete in the 
world, because the principal argument against the World Trade 
Organization really is that we cannot compete. We heard it in NAFTA. 
How can we compete against 50 cents an hour wages in Mexico? That is 
neither here nor there. If wages were the key, Bangladesh would be the 
industrial behemoth of the world, and we all would manufacture in 
Bangladesh and ship all over the world. There would be no industry in 
Japan, Britain, or the United States. It would all be in Bangladesh at 
5, 10, or 15 cents an hour, or at whatever their wages are. That is not 
true. It has not happened and will not happen.
  I think in retrospect, we may have made a terrible mistake in calling 
the successor to the GATT the World Trade Organization. GATT was a term 
no one understood, the General Agreement on Trade and Tariffs. The 
World Trade Organization sounds like something created by the 
Trilateral Commission to Subsume our Sovereignty. Indeed, it does not, 
and I am not going to address the issue of sovereignty in this opening 
comment. I want to address the issue of can America compete?
  So let us take a look at what is called the balance of trade, because 
the worst of the statistics are cited as an example of how we cannot 
  You have two major sectors in trade. One is called merchandise--cars, 
refrigerators, jet engines, VCR's, televisions, hard goods. It is 
called merchandise. The other is services--Visa, American Express, 
Master Card. They license the use of their cards around the world. The 
licensee pays to use the card and the money comes to the companies of 
the United States. That is dollars. That is dollars, just like if we 
sell a jet engine. That is services.
  In merchandise in 1993--we do not have the complete statistics yet in 
1994--we had a $116 billion deficit. In services in the same year, we 
had a $57 billion surplus. Net is a $59 billion deficit.
  I want to emphasize something. It is the services sector that is 
growing the fastest. This is a sector that is intensely dependent on 
rapid communication, computers, highly paid workers, educated workers. 
It is an area in which we dominate the world. So I want to round off 
the $59 billion to $60 billion. We have a $60 billion deficit which 
will be closing as the services begin to dominate more and more.
  But I want to comment on something on the merchandise deficit that we 
overlook. Again, there are the goods. As I said, we have a $116 billion 
deficit. $44 billion of that deficit is oil; oil that every time we 
hope we can find in the United States or in the Outer Continental Shelf 
or in Alaska, we have to fight tooth and nail to even look for, let 
alone take it out of the ground, because we run against environmental 
objections and others.
  Is the oil there? We do not know if the oil is there. Do we think it 
is? Yes. But if we want to avoid oil--and I checked with the South 
African Embassy this morning to see if they have changed since the new 
Government came in and most of the trade restrictions have been lifted. 
South Africa makes a significant amount of its own gasoline from coal.
  They have an abundant coal supply, and during the trade embargo when 
they could not get oil, they wanted to be self-dependent and they 
turned to their coal reserves and make almost all of the gasoline and 
oil that they use. So could we do the same thing? You bet. We have a 
400-year supply of coal in this country. We have a 200-year supply of 
oil shale. We can make all the oil we want in this country from coal or 
extract it from oil shale. There is a problem in that it is infinitely 
more expensive than imported oil.
  So if you are not worried about a cartel that can squeeze you--and 
twice they have squeezed America in 25 years. But cartels usually do 
not work over a long period of time. Producers cheat. If we wanted to 
eliminate $44 billion worth of trade deficit, we could do it. It would 
take an immense capital investment, and I am guessing that it would 
take 5 to 10 years to develop the plants. So we could eliminate $44 
billion of the deficit and produce all of the oil and petroleum in this 
country at an expense greater than importing it, but it would eliminate 
$44 billion of deficit.
  Second, cars. Oil is $44 billion of the deficit; cars are $43 
billion. I have been in this body long enough to remember when cars 
were not a problem. In the fifties, and even into the almost early 
1970's--1970, 1971--the only cars of any consequence that were imported 
in this country were big cars, such as Rolls Royces, or itsy-bitsy 
cars, like the Volkswagen Beetle. The Volkswagen Beetle had a very 
small, but loyal, segment of the market, but we always thought that 
people that drove Volkswagens were funny looking and they had beards 
and certainly real Americans would not want a car like that.
  Then a funny thing happened in the 1970's, maybe coincidental. The 
Japanese, in 1971, 1972, 1973, were producing good little cars at the 
small end of the market. And they were producing them at the same time 
the first Arab oil boycott hit. I remember the debate we had in the 
Senate on whether or not we should adopt mileage standards for cars. I 
remember the argument against it from the auto companies, which was 
twofold. One, they could not possibly produce the cars in less than 5 
or 7 years. It would take that long to retool. This is from an industry 
that went from cars to tanks in 6 months in World War II. They could 
not do it that soon. They said America did not want cars like that 
  Well, it turns out that America did want cars like that. It is 
amazing that America really liked cars that were well made, when given 
an option. In the 1970's, Japanese cars were better made and they got 
20 or 25 miles to the gallon. They get much more than that now. We 
bought them in droves. The Japanese were very smart. They initially 
concentrated on the low end of the market, inexpensive cars, not the 
high-end imports that you see now, but low end. They captured a 
significant segment of the automobile market in an area in which 
American manufacturers were not making cars, good high-mileage cars. 
Having captured that portion of the market--Lord, anybody knows it--in 
terms of product loyalty--they began to move up the scale to more 
expensive cars. People that have driven an inexpensive Toyota liked it, 
and now they buy a Lexus, which is an expensive car.
  To American manufacturer's credit, they are now starting to gain it 
back. It has taken 20 years to learn. We have learned now that it does 
not take 5 to 7 years to go into this development. We have now learned 
about our market, and we are succeeding in taking the market back. But 
those two items--cars, which we threw away, and oil, which we can 
eliminate if we wanted to--are the overwhelming part of our trade 
  So let us not get into the argument that America simply cannot 
compete. We are competing in cars, and we could compete in oil if we 
wanted, although it is expensive.
  I want to take some examples from my State, and I am going to take a 
low-wage example and a high-wage example and a medium-cost example. 
First, I have a chart behind me. Sabroso is in Medford, OR. Medford is 
a fair-sized town in Oregon, but it is not on a major railway. It is a 
company of about 150 employees. Sabroso makes fruit purees and 
concentrates for use in juices and baby foods. They are the largest 
supplier of the basic ingredient to the three principal baby food 
manufacturers in the United States--Heinz, Gerber, and I cannot 
remember the third one--in Medford, OR.
  In this plant, lots of employees are first-generation immigrants, and 
you find three or four different languages. The supervisors know the 
languages. You find that some of the supervisors are first-generation 
immigrants who speak two or three languages. Here is an example of a 
peach puree. This is the label on it. It is designed for sale in Arabic 
countries. Look at the next one. This is Spanish. Twenty-eight percent 
of their gross is from overseas sales out of Medford, OR. This is an 
industry that, in terms of its mass of employees, at the lower end of 
the wage scale, although it is highly capital intensive in terms of its 
equipment. Can they compete? You bet they can, from a mid-sized town in 
Oregon all over this world. They were tremendous supporters of NAFTA, 
and you can understand why. If you are making baby food and you are 
looking at a market that is young and exploding, all of that, they 
could not wait. They were strong supporters of NAFTA. Do not tell them 
you cannot compete. Let me give a second example.
  Another example is Intel, the largest manufacturer of computer chips 
in the United States. This is an 8-inch chip wafer made in Oregon. 
Intel is the largest private employer in Oregon. It was founded in 
1969. They are expanding one of their present plants in Oregon--a $700 
million expansion--and are putting in a new $1.2 billion plant not 20 
miles away from it, to make things like this. Why is this not made in 
Bangladesh? I will tell you why. The $1.2 billion plant is a high-end 
technical plant. These are not minimum-wage jobs. Why are they doing it 
in Oregon? I think they can do it in other States, but I am honored 
that they chose Oregon. There is a good education system and a good 
work ethic and people that understand mathematics on the production 
  I went through the current Intel plant on my last trip to Oregon and 
you can look at the clean room. Twenty years ago, it was just a white 
coat. Now these people are smocked in devices that look like they are 
from Star Wars. They are catching their breath in a pipe that runs 
through an oxidizer on their back as they walk around so that nothing 
gets in or out of this room. All it takes is a speck of dust on the 
wafer and it is ruined. Do you have to ask any more than to say I 
understand why they are not making it in Bangladesh? There is not a 
nondusty place there 9 months of the year, and the other 3 months it is 
under water. Tremendous employment, done here.
  Third, Denton plastics. Denton plastics is a plastic recycling 
company that is 11 years old. It only has a few score employees now. 
The plant has doubled its employment. It takes plastic trash--here a 
good example. They will take this--and I have been in their plant. It 
is an immense warehouse full of boxes of junk like this that they take, 
heat up, grind up and turn into little pellets like this.
  They are different colored pellets, if necessary, black color or 
white color, and sell them all over the world, which companies use all 
over the world.
  Here is the bag I was looking for which I want to use as an example. 
See the green on here, it is just a plastic sack. But in order to sell 
these, in order to make them into black or whatever color you want to 
make them into you have to have a uniform color. That is no problem. 
You kind of cut out the colored part and throw the rest in the hopper, 
grind it up, heat it up, and out comes the little pellets.
  It does not work that way. What you do is you got something like 
this. There must be 15 colors on here. They have invented a process 
that lets them take this, run it through their process, and somehow it 
bleaches it and all the colors come out uniform.
  Dennis Denton, the President of the company, sells in China. I have a 
yo-yo here that he sells in China. He has been to China and seen China 
try to duplicate it.
  What? Are you trying to compete with China? What are you doing in 
China, with cheap labor, tackling something like this; cutting out each 
color and putting them in different pots. All the yellow in this pot, 
all the green in that pot. No wonder they cannot beat him. He is paying 
wages that start at $6.50 or $7 an hour, and $8 or $9 an hour for high-
production people, and higher than that. These are not high-wage jobs, 
but they are not minimum-wage jobs. He says he will always stay one 
step ahead of the Chinese one way or the other. He is selling overseas 
  My last example is Freightliner. Freightliner makes big trucks. We 
have all seen them on the road. Thus, Freightliner is now the biggest 
manufacturer of big trucks in the United States. They own International 
Harvester, which they acquired a couple years ago. They have a plant in 
Oregon with 2,200 employees, a plant in North Carolina with about 2,300 
employees--Mount Holly.
  Both of those plants are unionized. North Carolina is the automobile 
workers. Oregon is the International Association of Machinists. The 
wages in the Portland plant, counting fringe benefits, are at the high 
end of production scale, about $25 an hour, $3 or $4 less for starting 
wage. But by any measure this is a high-wage employer.
  How can they compete, you ask? I will give you an example. At the 
moment Freightliner ships these trucks to Mexico in kit form, and they 
are assembled in Mexico. Part of it is the old domestic content law; 
part of it is the tariff, 20 percent.
  I talked to the president of the company yesterday. They are now 
shipping 10 kits a day out of their North Carolina plant to Mexico. He 
says as the tariffs come down, the line at which it is cheaper to do it 
here than Mexico crosses in about 1998, and from that point onward they 
are going to make all the trucks in final form here, send them down to 
Mexico for sale. They cannot wait for the opportunity to be able to do 
this all over the world. This is a company paying about the top of the 
scale in wages and competing anyplace in the Western Hemisphere.
  So can we do it? You bet we can. How on Earth, you say, can we stay 
ahead? And what Mr. Denton said at Denton Plastics is ``We can.'' He 
said ``I will invent something new when the Chinese have a bleaching 
machine like I have. I will be a step ahead.''
  This morning I was listening to WGMS. The announcer was saying, ``You 
know, today is the birthday of Winston Churchill and Mark Twain.'' And, 
he said, who was it that said, ``East is East and West is West and 
never the twain shall meet,'' leading you to guess Mark Twain. Of 
course, it was Rudyard Kipling.
  I thought to myself Kipling said it better than anyone else when he 
said it in a poem he called ``The Mary Gloster''--the name of a ship. 
The poem basically centers on an old man now, who was a coal scuttle on 
a ship as a boy of 14 and 15; worked his way up. By the time he was 16 
and 17, he was a mate; by the time he was 20, captain; and he finally 
had his own ship at 24. In his older age he was the shipping magnet of 
the world. The poem is in the form of interview, of how did you get 
there. Here are the lines.
     I didn't begin with askings,
     I took my job and I stuck;
     And I took the chances they wouldn't
     an' now they're calling it luck.

     And they ask me how I did it
     and I gave them the scripture text,
     ``You keep your light so shining
     a little in front 'o the next!''
     They copied all they could follow
     but they couldn't copy my mind,
     And I left 'em sweating and stealing
     a year and a half behind.

              (From the ``Mary Gloster''--Rudyard Kipling)

  We can compete. I thank the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Madam President, might I yield myself 3 minutes just to 
comment on the extraordinarily able presentation by my friend and 
colleague, the Senator from Oregon, and to make two points, if I may, 
with respect to issues that have been raised in this matter.
  In the course of the crisis in the 1970's when American automobiles 
might not have been as high or the right size, and oil prices were 
going up, we enacted in 1978 the so-called gas-guzzler tax, the 
corporate average fuel economy [CAFE] registration. The European union 
took us to arbitration, to the GATT panel, on that issue, saying it was 
designed to keep European imports out; it was nominally environmental, 
in fact, protectionist.
  On September 30, Mr. President, this year, a GATT panel said no, it 
was not; it was a legitimate environmental concern. We prevailed. And 
we will. Where the purpose is legitimate it will be so found. That has 
been our experience.
  Finally, sir, the most elemental of all products in the industrial 
age is steel. American steel fell behind. The Japanese, who were 
getting their technology from Austria, the coal from West Virginia, and 
iron ore from Australia, were underselling us. No more. We are the low-
cost producer in the world.
  This morning in the New York Times there is a story, ``Steelmakers' 
Quest for a Better Way,'' if I can just read the opening paragraph and 
one other.

       Even as it enjoys one of its biggest booms in decades, the 
     American steel industry is investing big money in 
     technologies to carry it through the inevitable next 

  And then this, sir.

       The price of steel today in real terms is the same as it 
     was in 1985, . . .

  That is what productivity is all about. That is what your plastics 
man in Denton, did the Senator say?
  Mr. PACKWOOD. Denton Plastics.
  Mr. MOYNIHAN. He is just going to keep productivity ahead and prices, 
relatively speaking, down.
  Our automobiles are back. Steel is back. Plastics are ahead. Intel is 
ahead of everything you ever heard of. We are the world's lowest cost 
producers. We are asking the Senate to let us trade worldwide.
  That is all, Madam President. I believe the facts are overwhelming.
  Mr. PACKWOOD. Mr. President, if the chairman will yield, perhaps the 
greatest example of all is agriculture.
  At the turn of the century we used to be able to feed seven people 
with one farmer. By the turn of the next century we will feed at least 
100 people with 1 farmer.
  You say how could a farmer possibly pay several hundred thousand 
dollars for a combine, thousands of dollars for a tractor beat someone 
with an ox and a plow. And we beat them in productivity. Agriculture is 
one of our largest successful balance of trade merchandise exports and 
we will get better and better and better as the markets and barriers 
are more open to us.
  I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  The Senator from South Carolina is recognized.
  Mr. HOLLINGS. Madam President, let me congratulate the distinguished 
Presiding Officer.
  The PRESIDING OFFICER. Thank you very much.
  Mr. HOLLINGS. I am glad to see her back.
  What happens, and let me put it to bed immediately, agriculture is 
the most protected, subsidized of all of America's produce. We all know 
it. We vote for the price support programs. We put in the Export-Import 
Bank to finance it. We put in export promotion programs, and everything 
else. I believe in those things, and they have been successful.
  Right to the point, on Intel and steel, steel, as the Senator reads 
from the New York Times, we use, coming out of the distinguished 
Finance chairman's committee, Super 301 and being able to threaten 
retaliation. We did not retaliate, but we threatened retaliation to 
open up the market. Then we got in so-called agreements, voluntary 
restraint agreements, on steel, on automobiles, yes, on semiconductors. 
Intel benefits from the managed trade that they say they are all 
  But under GATT, Madam President, I can tell you the European 
commission and the booklet on Japan in their particular findings 
already have found our voluntary restraint agreements are GATT illegal, 
our Super 301 is GATT illegal. And that, in and of itself, is enough to 
kill this particular agreement--should kill it.
  What disturbs this particular Senator is the attitude that somehow 
when they bring in trucks and those kinds of things, and technology, 
they assume the lack of intellect or experience on the other side. We 
know about exports. I can list down from Bosch and all the fuel 
injectors for the Toyotas and Mercedes. I can list our General Electric 
friends. I brought them in 35 years ago to make bulbs, light bulbs. 
Then they made cellular radios. And now they make what? Magnetic 
resonance images, health care, the most sophisticated instrumentality 
there is. And do you know what? We took the market. Florence, SC, took 
the market from Tokyo. We ship over half of what we produce in 
Florence, SC, to Tokyo. We know about exports and we know about 
  The Japanese have been dumping, dumping automobiles at less than 
  I had, as chairman of the Commerce Committee, lined up a couple years 
ago on the 1989 figure of a loss of $3.2 billion that the Japanese lost 
in selling cars in the United States of America, I had Ford and 
Chrysler ready to testify to start into dumping. General Motors 
chickened out. That is why we do not do it. The business leadership 
said, rather than spending for lawyers on dumping cases, we are just 
going to move on out. That is our problem.
  If you do not believe it continues about liking cars or not liking 
cars, here is Fortune Magazine, December 12. Read it. I cannot get the 
exact page on this one, but you can see.

       Japan Car Crash in North America.
       Bruised by the strong yen and the recession at home, the 
     Japanese have made a valiant effort to boost their car sales 
     in the United States this year. Valiant but expensive. While 
     sales are up 5.8 percent, Japanese auto makers will lose 
     $20.5 billion, up from $1.5 billion in 1993.

  They have been losing it. Theirs is market share. And that brings me 
right to the point. There are two different trading systems in this 
global competition. Do not say, ``We are competent. We can compete. We 
can compete.''
  We know that the American industrial worker is the most productive, 
our research is the best, our technology is the best. What is 
inadequate, downright dumb, is us, the Government, right here. That is 
what is not competing. Do not sell me off about we are against the 
American workers and all that and give me the patriotism.
  What happens is, there are two different systems entirely. We follow 
Adam Smith, David Ricardo, competitive advantage, free markets, open 
markets, open competition. The Japanese and all the countries in the 
Pacific rim follow the federalist Alexander Hamilton of closed markets. 
They measure the wealth of a country not by what it can buy, but by 
what it can produce. And their decisions are made as to whether or not 
it weakens the economy or strengthens the economy.
  And all of these Senators run around moaning and groaning about fair 
play and quit cheating and we want a fair trade and all those kinds of 
  There is no moral question of fairness or unfairness. It is a 
calculated, definitely successful method of trade.
  And not only are all the Pacific Rim countries following it, read the 
most recent issue of Business Week and you will find, Madam President, 
that Business Week says Eastern Europeans coming in from communism into 
capitalism are following not the American system but the Pacific rim 
system of design for market share. That is what it is--the strength of 
a country.
  And we are running around talking about the price of consumers. When 
the poor Senator says we have got 200 jobs for trucks in Oregon, we 
have got 300 jobs for trucks in North Carolina, he does not understand 
what he says, because he says we are the largest manufacture of that 
particular equipment. Well, it is the largest, 500 jobs. We are talking 
about jobs. Transportation equipment in the United States in the last 5 
years has lost 278,000 jobs. And that is why the Senator can stand on 
the floor and say the largest we have got has only got 300 jobs in 
North Carolina and 200 jobs in Oregon.
  Going to those particular two systems, what happens over the years. 
We failed to compete as a government intentionally. We sacrificed, if 
you please, our economy to keep the alliance together under the cold 
  And let us go immediately now to the Tokyo round and where we are at 
this particular time, because we heard all of these arguments under 
Ambassador Strauss in the previous administration in 1979, under 
President Carter.
  What is particularly annoying is that the leadership in this town, 
Republican and Democrat, fail to recognize reality and the real 
competition that they are in. That is the frustration of the American 
voter that you faced here just a couple of weeks ago and it continues. 
It is not over now.
  Oh, they can run around and take away from committees and they can 
run around and cut this and say we all are going to be subject to the 
same rules, but if we do not get this Government competitive on jobs, 
on creating an industrial backbone that we are fast draining off, we 
all should go down the tube. We do not have to pass term limits. They 
will limit you. You go in to bat in 2 years, 4 years from now, we all 
will see the result. They promised me the jobs.
  The actual figure, undisputed--and we had eight separate hearings in 
the Committee of Commerce, very few people were around, but they were 
covered by C-SPAN--we have lost 3.2 million jobs under what we got. Now 
here, instead of creating jobs, they talk about what is going to happen 
in the future.
  We heard that in 1979, that we were going to all burst out with all 
of these jobs. We have lost jobs. The average worker who has really got 
a job--a lot of people are back into part-time jobs and everything else 
of that kind, those are the only ones created--are making 20 percent 
  And what happens? This is a trade debate, the General Agreement on 
Tariffs and Trade. And what happens on trade? An average of a $100 
billion deficit. Not exports. Yes, exports might go up X percent, Y 
percent, G percent, 50 percent, 300 percent, but never, never more than 
imports. Imports are coming in faster.
  Yes, exports create jobs, but imports lose the jobs, and we are 
losing them at $100 billion a year. And, according to their own 
measure, every billion dollars represents 20,000 jobs. So we are losing 
2 million jobs a year. This year, 1994, that is a $150 to $160 billion 
trade deficit. That is 3 million jobs lost. And they continue to think 
they are leading. ``This is a wonderful moment in history. The allies 
will wonder whether we continue to lead.'' Continue to lead. That is 

  We are losing. The poor President goes out to the Far East a couple 
of weeks ago with a $150 billion hole in his pocket and a tin cup, 
begging the Japanese to finance the debt. Where do you think you get 
the debt? Right here. This is not competing, this particular Government 
here, that we are all part of. We are losing.
  The Japanese leaders--I have been in conferences with them. They are 
aghast, over the years, at our lack of competing here and enforcing our 
own dumping and trading laws. So after all those deficits in the 
balance of trade, by 1985 we had, yes--former Secretary of State Baker, 
he was Secretary of Treasury, and ran the White House--he devalued the 
dollar in 1985 with the Plaza Agreement and put the United States of 
America up for a half-price sale and the Japanese came running and 
bought up the Metro Goldwyn Mayer, all the studios out there in your 
back yard--the Plaza, Algonquin Hotel--bought up everything. They 
bought up the farms. We did not have to worry about shipping beef to 
the Japanese. They just bought up the farms and shipped back their own 
beef at half price. Come on.
  What has been going on is that we are in a disastrous decline --a 
disastrous decline. The headline just before the election said ``Rising 
Tide Fails to Lift.'' There is no rising tide. We are losing jobs. We 
have 40 million hungry in America. I wrote a book on hunger. It used to 
be 12 million. Now there are 40 million out there. How many homeless? 
Millions are homeless. How many on, heavens above, half the take-home 
  So they are all for the family. What breaks up the family? When you 
are only getting half, 20 percent, of what you were making, the wife 
has to go out and you get the latchkey children. So they think it is a 
moral thing, that we have to get the wives and the mothers to look 
after children more. It is economic decline. They look after the 
children trying to earn bread to put it on the table. Who is causing 
latchkey children? We are.
  In crime? They are all against crime--three strikes and you are out. 
Build more prisons. There are 64,000 textile jobs in the Bowery in New 
York, sewing jobs; there are 60,000 out there in Los Angeles, in Watts. 
They get $6.30 an hour and get all the requirements. We burden our 
system, business: Clean air, clean water, minimum wage, plant closing 
notice, parental leave, Social Security, Medicare/Medicaid, safe 
working place, safe machinery--on and on, up and up. Those jobs move to 
Mexico and now to the Pacific rim, all gone. And you have a little 
candidate running all around here with his blow-dry, hollering, 
``Enterprise zone, enterprise zone.'' We are taking, today, the 
enterprise out of the zone. That is what causes the crime, when we lose 
the jobs that we have there in the inner city: Newark, New York, Los 
Angeles, Chicago, Cleveland. Go around the country and find out what is 
happening. That is what the American people say: Get off your duffs and 
start competing here. Because this Tokyo round has been a disaster.
  Madam President, what has been the change? One, they talk about 
tariffs. Back in 1947, tariffs were nothing--absolutely nothing, 
relatively speaking. The average tariff in Japan is 2 percent. The 
average tariff here is 4 percent. Cut it 50 percent? That is not the 
case. It is nontariff barriers. That is why Ambassador Kantor went 
working all year long. He had this GATT agreement back in December. He 
has been working all year long to get an agreement with the Japanese, 
but he comes around and says, ``We will all work under the same 
rules.'' We are not going to all work under the same rules. We are not 
going to open up any markets.
  If they thought so, they put him on notice out there in Malaysia and 
Indonesia. The trade executive in Indonesia said we are not going along 
with it.

       Kuala Lumpur, Malaysia, today expressed its objection to 
     any efforts for enforcing trade liberalization. Minister of 
     International Trade and Industry, Ricardo Seed, said it is 
     mooting market liberalization. No OPEC member should push 
     another member to open its markets.

  So what did they do? They came away and said open them by the year 
2020, 25 years from now, and they hail that as, ``We have progress. We 
are opening up markets. We are creating jobs,'' when we are going down 
the tubes. We are killing every economic or job opportunity that you 
could possibly think of. That is one particular change.
  The other particular change is America's security is like on a three-
legged stool. We have the one leg, the values of the country--strong. 
Feeding the hungry in Somalia, building democracy in Haiti.
  The second leg, the military leg or power--unquestioned.
  The third leg is our economic strength. And if one is fractured or 
tips, the security tips, and that is the condition we are in. We are on 
the way, as England. Years back, they told England, ``Don't worry; 
instead of a nation of brawn, you will be a nation of brains. Instead 
of producing products, you will produce services and be a service 
economy. Instead of creating wealth, you will handle it and be a 
financial center.'' And England has gone to hell in a hand basket, 
economically. We can prove that. It came out in the hearings. We are on 
the same road, and I am trying to get us off that road, and not listen 
to these shibboleths about creating jobs and technology. We are losing 
all of the technology jobs.
  What we have now, with the fall of the wall, Madam President, the big 
change is that we have an opportunity to quit sacrificing the economy 
and refurbish that third leg of the stool, our economic strength. I 
hope we can go after this in a deliberate way and understand that it is 
not the rule of the jungle or anything else.
  We have a virtual veto under the present GATT. We lose our veto under 
this GATT. I have 50 witnesses and they cannot point to me where I have 
a veto and they have to go to it.
  I see now I am pretty well limited in my time. Let me yield to the 
distinguished Senator from Ohio and reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Ohio is recognized.
  Mr. METZENBAUM. Madam President, I rise in opposition to the passage 
of GATT, The General Agreement on Tariffs and Trade. Before I discuss 
my concerns with the agreement, let me frankly say I wish I could 
support the President on this matter, especially in light of recent 
events. I strongly believe the President has been misunderstood and 
unfairly maligned. He has done much to improve the direction of this 
country and deserves far more praise than he has received. But I am 
frank to say that I have many deep concerns about this agreement and I 
just cannot support it.
  Today, I want to focus on the impact of this agreement on children. 
Up to now, there has been virtually no discussion about this critical 
issue. I recently held a hearing of the Labor Subcommittee on 
International Child Labor Abuses and, frankly, I was deeply shocked by 
what I heard. Around the world today, as many as 200 million children 
are subjected--200 million children are subjected--to abusive labor 
practices in sweat shops, in mines, in factories, and in the fields. 
The more advanced and mobile our productive technology gets, the more 
easily it can be run by children in impoverished countries.
  Walk into a clothing store like the Gap, or The Limited. You will 
have a very hard time finding any garments made in the United States. I 
did that the other day, just to explore for myself. It is very 
difficult to find anything made in the United States. But you do find 
clothing made in low-wage countries such as Thailand, China, the 
Philippines, Brazil, Honduras, Korea, and so many other countries. In 
many of these countries, a substantial percentage of the apparel 
industry is comprised of children, and working conditions are 
horrendous. Child labor is also widely used in many other countries in 
the production of toys, in carpets, in jewelry, and in numerous other 
  I ask unanimous consent, Madam President, that a list of these 
countries be printed in the Record in full.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

            Countries With Documented Child Labor Violations

       Bangladesh--Childen make up an estimated 40 percent of 
     garment industry workers there, despite national laws that 
     prohibit employment of children under the age of 14.
       Brazil--1,300 children under the age of 14 work illegally 
     in the footwear industry, which exports $1.4 billion worth of 
     merchandise to the U.S.
       China--Children between the ages of 10 and 16 spend 14 
     hours a day working for foreign-owned companies
       Colombia--Children as young as 11 work in the fresh cut 
     flower industry where they are exposed to toxic substances 
     present during and after the spraying of pesticides.
       Cote D'Ivoire--Children as young as three years old work in 
     the gold mining industry
       Egypt--Children in the export-oriented leather industry 
     average 11.7 years of age and work an average of 12.8 hours a 
       India--India has the largest number of child workers in the 
     world: an estimated 100 million, including some as young as 
     five in the silk and fireworks industries.
       Indonesia--Children make up a portion of the export 
     industry workforce, for which they work an average of 7-13 
     hours a day, 7 days a week. They earn an average of $4 a week 
     for their work.
       Lesotho--Children under the age of 14 work in at least ten 
     different foreign owned factories that assemble garments 
     exported to the United States.
       Mexico--Many children under the age of 14 are found working 
     in the maquiladoras, which are affiliates of American-owned 
     companies that assemble goods for export.
       Morocco--Children as young as eleven work in leather 
     workshops, where they are exposed to toxic chemicals and work 
     with hazardous machinery.
       Nepal--Five year olds working 15 hours a day in Nepal's 
     carpet export industry earn approximately $25 for a carpet 
     that will retail in the U.S. for $4,000.
       Pakistan--Millions of children suffer under a system of 
     ``bonded labor'', a situation in which children pay off their 
     parents' debts through forced labor. It is estimated that 
     50,000 children in the bonded labor sector will die before 
     the age of 12 because of disease and malnutrition.
       The Philippines--Children work long hours in unhealthy and 
     crowded conditions and are paid less than one-third of the 
     minimum wage.
       Portugal--Children are paid 10 percent of an adult's wages 
     working in the garment industry that exports $60 million in 
     merchandise annually to the U.S.
       Tanzania--Children make up 30 percent of the workforce in 
     the sisal (rope and yarn) industry, which exports $2 million 
     in merchandise to the U.S.
       Thailand--Children working in the leather industry, which 
     exports products to the U.S., are given amphetamines to keep 
     up their strength during their 15 hour days.

     Source: By the Sweat and Toil of Children: The Use of Child 
     Labor in American Imports. U.S. Department of Labor, 1994.
  Mr. METZENBAUM. Global trade may bring great riches to multinational 
corporations and even to some developed nations, but for millions of 
children around the world it is an unmitigated disaster, bringing 
oppressive working conditions, rampant illiteracy, unbroken cycles of 
poverty, and an ever-widening gap between rich and poor.
  Incredibly, the GATT Treaty not only ignores this problem, it will 
encourage even more employers to exploit the children of the Third 
World in the manufacture of goods for the U.S. and other developed 
  I am a cosponsor of Senator Harkin's bill to ban the importation of 
goods made with child labor. But in a recent letter, U.S. Trade 
Representative Mickey Kantor informed me that GATT would actually make 
that bill illegal under the new World Trade Organization's rules. Now, 
Mickey Kantor is a longtime friend, one who has done superb work as the 
U.S. Trade Representative. But according to Mickey Kantor, under the 
GATT Treaty, ``the United States could not block the importation of a 
product made by child labor consistent with our obligations under the 
  How can we approve a treaty that not only ignores the problem of 
international child labor, but actually prevents us from doing anything 
about it in the future?
  I suspect that the American people, as well as most of my colleagues, 
have no idea of the scope or depth of this problem. So let me set forth 
some basic facts.

  We are talking about children--kids forced into slavery, subjected to 
torture and physical abuse, all in the name of free trade, to produce 
goods for U.S. markets. Instead of meeting this problem head on, GATT 
will only make it worse.
  Today, in many developing nations, millions of children are paid 
pennies an hour for their labor.
  Many of these children will die of disease, exhaustion, physical 
abuse, or starvation.
  Those who are lucky enough to survive the horrors of forced child 
labor will never lead a normal adult life.
  By working instead of going to school, child laborers are doomed to 
perpetuate the cycle of poverty.
  It is outrageous that these conditions exist, and we are talking 
about passing the GATT Treaty and not doing a damned thing about it. 
Even worse, they are doing nothing to address the problem. GATT will 
not help--it will simply hurt, by limiting our ability to address this 
problem in the future.
  Mickey Kantor further tells me that ``there will undoubtedly be cases 
where we will advise Congress that we oppose legislation because it is 
inconsistent with our international obligations.''
  I ask unanimous consent that the text of this letter be printed in 
the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    U.S. Trade Representative,

                                Washington, DC, November 22, 1994.
     Hon. Howard Metzenbaum,
     Chairman, Subcommittee on Labor, U.S. Senate, Washington, DC.
       Dear Chairman Metzenbaum: I am writing to respond to the 
     concerns you have expressed about trade and child labor, and 
     specifically to address the questions you have raised about 
     the impact of the Uruguay Round agreements on our ability to 
     ban imports made by child labor. I also want to take this 
     opportunity to explain the relationship between these 
     agreements and our laws on health, safety, and environmental 
       The Uruguay Round agreements, which will be administered by 
     the new World Trade Organization (WTO), reflect an 
     unprecedented degree of agreement by 128 nations about the 
     rules under which international trade should be conducted. 
     The Administration believes that they will benefit U.S. 
     companies, farmers, workers and consumers for years to come. 
     We did not, however, reach agreement on every issue of 
     importance to us, and the agreements do not establish any 
     international rules governing the importation of products 
     made by child labor.
       There has been no decision under the GATT addressing 
     whether a ban on the import of products made with child labor 
     would be consistent with GATT rules. Under the general 
     analysis that has developed under the GATT, the question 
     whether a product was made using child labor is a question 
     relating to the processes or production methods (PPMs) 
     associated with that product. There is currently a great deal 
     of discussion in the GATT about the ability of countries to 
     distinguish between products based on PPMs that do not have 
     an impact on the physical characteristics of the product. For 
     example, this is one of the areas the United States will be 
     pursuing in the Committee on Trade and Environment, since 
     PPMs may have important implications for the environmental 
     impact associated with a product.
       To date, several panel reports under the GATT have found in 
     general that, under the national treatment rules of Article 
     III, a nation cannot block importation of a product of GATT 
     contracting parties on the basis of an objection to the PPMs 
     involving that product that do not have an impact on the 
     physical characteristics of the product. Consequently, under 
     this line of reasoning the United States could not block the 
     importation of a product made by child labor consistent with 
     our obligations under the GATT, unless it fell within an 
     exception to the GATT rules. (For example, Article XX of the 
     GATT provides general exceptions to the GATT rules, 
     including exceptions for measures ``necessary to protect 
     human, animal, or plant life or health'' and for measures 
     ``relating to the products of prison labour.'')
       The Uruguay Round agreements changed neither Article III 
     nor Article XX of the current GATT, both of which are carried 
     over into the new GATT 1994. Accordingly, it should be 
     clearly stated that the rules for the treatment of products 
     made from child labor under the WTO are not different in this 
     sense from the rules under the existing GATT.
       Furthermore, while our ability to block the adoption of 
     panel reports will be restricted under the new dispute 
     settlement procedures, this will not in any way diminish our 
     right to enforce U.S. legislation. This means that if 
     Congress enacted legislation banning the import of products 
     made by child labor, and a dispute settlement panel were to 
     find that legislation to be inconsistent with GATT or WTO 
     rules, we would still have the sovereign right to retain that 
       At the same time, the Administration takes U.S. 
     international obligations seriously. Thus, there will 
     undoubtedly be cases where we will advise Congress that we 
     oppose legislation because it is inconsistent with our 
     international obligations. But there will certainly be 
     instances where Congress, in pursuit of a goal of overriding 
     importance, will legislate irrespective of our international 
     obligations. Under the WTO, Congress will remain free to do 
       We believe that the real issue is how to begin dealing with 
     the scourge of child labor generally. Toward that end the 
     Clinton Administration has taken a number of steps.
       First, we have launched a multilateral effort to 
     incorporate internationally recognized labor standards within 
     the rules of the global trading system. We are leading the 
     effort to build a consensus on enforcing standards that have 
     already been agreed to by a large number of countries. A 
     minimum age for the employment of children is one such 
       Recognizing the need for and desirability of such policies, 
     GATT Contracting Parties have agreed to discuss 
     intenrationally recognized labor standards in the Preparatory 
     Committee leading to the World Trade Organization. Despite 
     bipartisan support from three Presidents and the Congress, 
     this is the first time that we have achieved a breakthrough 
     of this kind in the GATT framework. In addition, the 
     Administration is contributing resources and expertise to the 
     International Labor Organization's program to eliminate child 
     labor around the world, thanks in large part to Congressional 
       Second, our law on the Generalized System of Preferences 
     (GSP) requires that beneficiary countries must have taken or 
     be taking steps to afford internationally recognized worker 
     rights, including a minimum age for the employment of 
     children. This is an overarching issue that affects a 
     country's entire eligibility for GSP. Pursuant to this 
     authority, the Administration formally reviewed worker rights 
     practices in more than 30 countries; child labor practices 
     were a particular issue in our GSP reviews of Bangladesh, 
     Pakistan and Thailand. In seeking to renew GSP next year, we 
     intend to consult closely with the Congress on the 
     application of this authority.
       Third, at Congressional urging, the Labor Department 
     recently completed the first-ever review of international 
     child labor practices. The report provides an overview of the 
     causes of child labor throughout the world and documents 
     child labor practices in 19 countries. It focuses 
     specifically on identifying any foreign industry and their 
     host countries that utilize child labor in the export of 
     manufactured products from industry or mining to the United 
     States. The Department will continue its investigation in the 
     coming year.
       Let me now discuss the relationship between the Uruguay 
     Round Agreements and U.S. food safety and environmental laws. 
     A more detailed discussion of these issues is contained in 
     the Statement of Administrative Action (SAA) and in the 
     ``Report on Environmental Issues'' that were submitted to the 
     Congress along with the Uruguay Round Agreements.

                          1. Food Safety Rules

       Our negotiators had strong environmental and food safety 
     laws fully in mind in concluding the Uruguay Round agreements 
     with our trading partners. As a result, the agreements 
     recognize the right of each government to protect human, 
     animal, and plant life and health, the environment, and 
     consumers and to set the level of protection for health, the 
     environment, and consumers--as well as the level of safety--
     that the government considers appropriate.
       Under the WTO, most food safety laws will be covered by the 
     ``Agreement on the Application of Sanitary and Phytosanitary 
     Measures'' (S&P Agreement). The Agreement will permit us to 
     continue to reject food imports that are not safe. Moreover, 
     it will not require the Federal Government or States to adopt 
     lower food safety standards.
       The S&P Agreement calls for food safety rules to be based 
     on ``scientific principles.'' That is important because many 
     countries reject our agricultural exports on non-scientific 
       As a general matter, the FDA and EPA (which participated 
     directly in the negotiations of the S&P Agreement), as well 
     as the States, base their food safety regulations on science. 
     Thus, meeting the basic requirement of the S&P Agreement 
     should pose no problem for U.S. food safety rules.
       It is worth noting that the rule in the Agreement requiring 
     a scientific basis applies to S&P measures. It does not apply 
     to the level of food safety that those measures are designed 
     to achieve. Each country and--in the case of the United 
     States each State--is free to establish the level of 
     protection it deems appropriate. That means, for example, 
     that the ``zero tolerance'' level for carcinogens mandated by 
     the Federal ``Delaney clauses'' are entirely consistent with 
     the Uruguay Round agreements. Furthermore, a government may 
     establish its levels of protection by any means available 
     under its law, including by referendum.
       While the S&P Agreement contains a general obligation to 
     use international standards, it produces the ability of 
     governments to use more stringent standards if they have a 
     ``scientific justification.'' The S&P Agreement makes 
     explicit that there is a scientific justification if the 
     government determines that the relevant international 
     standard does not provide the level of food safety that the 
     government determines to be appropriate. Far from undermining 
     U.S. laws, this language serves to make clear that no 
     ``downward harmonization'' is required for those laws.
       Under the S&P Agreement, food safety rules imposed by the 
     States will be subject to the same rules as those for Federal 
     restrictions. But the Agreement does not require that States 
     use the same food safety standards as the Federal Government.

                   2. environmental and health rules

       Most environmental and health-based product standards for 
     industrial and consumer goods will be covered by the 
     Agreement on Technical Barriers to Trade (TBT Agreement). The 
     new TBT Agreement carries forward, with some clarifying and 
     strengthening modifications, the provisions of the existing 
     GATT TBT Code, which entered into force for the United States 
     in 1980.
       The TBT Agreement recognizes that countries may set 
     standards for products in order to protect human life, 
     health, or safety or the environment. U.S. regulations 
     prescribing safety standards for infant clothing, or banning 
     the presence of PCBs in consumer products, are the types of 
     product-oriented measures covered by the TBT agreement. The 
     Agreement makes clear that the level of protection the 
     Federal Government or a State seeks to achieve through 
     standards of this kind is not subject to challenge.
       In general, our State and Federal clean air and clean water 
     laws and regulations are directed at controlling pollution 
     generated in industrial operations. Not only do these laws 
     generally not raise trade-related questions, they are 
     generally not even covered by the new TBT Agreement since 
     they do not set product standards. Where those laws do set 
     product standards, as for automobile emission controls, they 
     will be treated like the other product standards described 
     above. Both the S&P and TBT provisions of the Uruguay Round 
     agreements will allow each State to maintain stricter safety 
     standards than the Federal Government in order to achieve the 
     level of protection that the State considers appropriate.
       On the question of environmental standards, let me point 
     out that the recent GATT panel report on the European 
     Community's challenge to three U.S. automobile laws lays to 
     rest fears that WTO panels will interpret the GATT in a way 
     that challenges our ability to safeguard our environment. The 
     panel report on our Corporate Average Fuel Economy (CAFE) 
     rules, gas guzzler tax and luxury tax explicitly upheld the 
     sovereign power of governments to regulate their markets and 
     their environments. The panel report confirms the broad 
     discretion of governments to distinguish among products in 
     order to achieve legitimate domestic policy objectives, such 
     as progressive taxation, fuel conservation, clean air and 
     water, and responsible energy use.
       You have raised important questions concerning the Uruguay 
     Round agreements. I hope that you find these comments 
     informative and reassuring. Please let me know if you need 
     more information.
                                                   Michael Kantor.
  Mr. METZENBAUM. Mickey Kantor goes on to say Congress ``will remain 
free'' to pass legislation ``irrespective of our international 
obligations.'' What does that mean? Would such a law be valid? Would 
the President be obligated to veto it, or would it be invalidated by 
the WTO?
  I do not know. I do not know the answer. But my guess is and it is 
quite clear that we are not in a position to pass restrictive labor 
with respect to the importation of products made with child labor.
  I want to speak to my colleagues on a personal basis. How would you 
feel if your children were forced to forego their childhood to perform 
long hours of back-breaking work for little or no pay?
  Do not your children--and all the children of the world--have a right 
to be children, to be kids?
  Many Senators may be skeptical as to whether child labor conditions 
are really as bad as I have suggested. Do not take my word for it. Let 
me give you some real life examples from the Labor Subcommittee hearing 
I chaired this past September.
  Kailash Satyarthi of India has rescued thousands of children from 
forced labor. Today, India has the most child laborers in the world, 
100 million of them. In the carpet industry, children work on looms in 
damp, dark pits for less than a dollar a day. Kailash told us that many 
children are lured by promises of learning a trade, only to find 
themselves enslaved hundreds of miles from home. Some are sold by their 
parents for as little as $50; still others are ``bonded'' laborers who 
work to pay off a family debt. The backbreaking work causes spine 
deformities, skin and respiratory diseases. Children who make mistakes 
in their work are beaten and tortured. When children cut their fingers 
during weaving, some employers scrape sulfur into the child's wounds, 
and set the wounds on fire to prevent the child from bleeding on the 
carpet fibers. Some employers have even branded their child workers to 
indicate ownership.

  I am not making this up--it is true. It is outrageous. Just look at 
these pictures.
  This girl, too small even to spin the spindle, spent 14 hours a day 
spinning silk thread in Bangladesh. This child does not go to school, 
but instead works 14 hours a day in a silk thread mill in Magati, 
India. These bonded carpet workers are forced to work because of debts 
owed by their parents in Mirzapur District in India.
  What are we doing? How can we be indifferent? Does not the milk of 
human kindness run somewhere through our bodies? Instead of doing 
something about it, we are slamming the door and saying, ``We can't do 
anything about it in the future.''
  It is a travesty for us to pass GATT and not do anything about child 
labor. Have we no heart? As parents and grandparents, can't we realize 
that we have an obligation to exclude the products of child labor from 
our markets? GATT won't accomplish this--it will actually prevent us 
from taking such a step.
  Nazma Akther, a young Bangladeshi woman, also testified before our 
subcommittee. She went to work in a garment factory in Dhaka, 
Bangladesh, at the age of 11. Nazma worked an average of 70 hours a 
week, for about 3 cents an hour. That is right, 3 cents. According to 
press reports, some Bangladeshi children are burned with hot irons, 
scalded with boiling water or hung up by their hands if they work too 
slowly. Sixty percent of the Bangladesh garment industry's production 
is exported to the United States. There are other cases.
  Roberto Juimaraes also testified. He went to work full-time in the 
Brazilian shoe industry when he was 11. Roughly a third of the 
industry's workers are under 18, and many are under 14. Roberto and his 
coworkers earn as little as 35 cents an hour, and are exposed to toxic 
chemicals which cause ulcers, vision impairment, and nervous disorders. 
Most of the shoes from Brazil are exported, where? Of course, to the 
United States.
  The media and international human rights organizations have reported 
countless other examples. They include children in Peru who are taken 
deep into the jungle to pan for gold. Many die of malaria or other 
diseases; many others are killed by their employers to avoid payment of 
wages. True. Unbelievable, but true. They include children as young as 
3 in mines, in the African Nation of Ivory Coast. They include children 
in Thailand's leather industry who are fed amphetamines so they can 
work long hours, sometimes even 2 or 3 days, without sleep.

  These are appalling, tragic stories. But make no mistake about it, 
GATT completely ignores the problem of child labor, and will only make 
matters worse.
  In good conscience, we should not lower these trade barriers unless 
we first address these flagrant abuses of children's rights.
  But as I have already stated, we will effectively be precluded from 
addressing this problem if we adopt GATT.
  Do we not, as a civilized nation, believe that children should have a 
right to be children? That they should be free from exploitation?
  If we will not stand up for our children, what will we stand up for?
  Tragically, rather than making aggressive efforts to end child labor 
around the world, U.S. policymakers have historically been indifferent 
to the problem.
  Every year, American consumers unknowingly purchase billions of 
dollars' worth of goods manufactured by children. Let me show you an 
example. This is a Liz Claiborne sweater, which my staff purchased at a 
Hecht's department store here in Washington for $58. On the tag, Liz 
Claiborne tells you this was ``made in Honduras,'' but there is much 
more to the story.
  At the subcommittee hearing, I heard testimony from one of the young 
Honduran girls that made this sweater and thousands more like them. 
Lesly Solorzano is a beautiful, intelligent, and poised young girl, but 
she told a tragic story.
  These sweaters are made by girls as young as 13, for a paltry 38 
cents an hour, with no benefits. The girls work up to 80 hours a week.
  According to Lesly's testimony, the girls are sexually and physically 
abused on a regular basis by their superiors.
  But the label just says ``Made in Honduras.'' But if it said, ``Made 
in Honduras by young girls working long hours in terrible conditions 
for pennies an hour, and subjected to physical and sexual abuse,'' I 
doubt that many Americans would buy this sweater.
  In fact, according to the National Consumers League, 74 percent of 
its members would not buy a product if they knew it was manufactured by 
  Certainly, the multinational corporations that are involved in these 
production methods share some of the blame.
  Liz Claiborne has taken significant steps to remedy the problem we 
uncovered, and the company is to be applauded for its actions. But 
there are thousands of other multinational firms that have allowed 
these practices to continue.
  Has the Gap, Hecht's or any other department store raised a question 
as to how these products are being made and what kind of kids are being 
exploited to make them? Those stores can and should move forward to 
protect the children. But we have an obligation as legislators to do 
more. Instead what we are doing is slamming the door down and saying 
that we in Congress cannot do anything in the future about this.
  This is our chance to do something about the problem. We should make 
sure that American consumers can make informed decisions about the 
products that they buy. But instead of addressing the problem we are 
here debating how to bring even more products manufactured by children, 
by kids, into the United States. Incredibly, that is just what the GATT 
treaty would accomplish.
  So as this chart shows, 175 nations have recognized the right of 
children to be protected from economic exploitation--175 nations have 
signed the U.N. convention on the rights of the child but the United 
States is only one of a handful of nations that has not signed this 
convention. What are we waiting for? Mozambique has signed it, Moroco 
has signed it, Ghana has signed it, and Belgium has signed it. But not 
the United States. Instead, we are here talking about a GATT treaty 
which will make it even more difficult to protect the rights of 
  It is equally unacceptable that 46 nations have signed the ILO 
Convention which establishes a minimum employment age, but the United 
States has not. Why not? Our silence has been deafening. Our inaction 
is embarrassing.
  As a world leader, the United States should attack the problem of 
child labor aggressively, with a combination of sticks--such as trade 
sanctions and import bans--and carrots, such as technical assistance 
and aid for education.
  Most importantly, we must link free trade privileges to child labor 
  But the GATT treaty not only fails to do so, it will actually prevent 
us from addressing this problem in the future. It sends an unmistakable 
message to U.S. and foreign manufacturers: Go right ahead and exploit 
the world's children, and then bring the fruits of their labor to our 
markets, and we will meet you with open arms.
  GATT may be a boon for many of the world's multinational 
corporations, but for the world's children, GATT spells disaster.
  Madam President, I will have more to say about GATT during tomorrow's 
debate. I have many additional concerns about this agreement.
  But I am frank to say that GATT's impact on children or its failure 
to do anything about the problem of child labor in the world is reason 
enough to oppose it all by itself.
  Madam President, I reserve the remainder of my time.
  Mr. MOYNIHAN. Madam President, I ask unanimous consent that an 
article by Prof. Kaushik Basu of Cornell University be printed in the 
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the New York Times, Nov. 29, 1994]

                       The Poor Need Child Labor

                           (By Kaushik Basu)

       Something like 100 million children worldwide work as 
     laborers, 98 percent of them in poor countries. Many, if not 
     most, work for long hours and minuscule wages.
       This tragic phenomenon is being used as a club with which 
     to beat the General Agreement on Tariffs and Trade, which 
     Congress is considering this week. In a separate measure, 
     some lawmakers have proposed banning the importing of goods 
     produced using the labor of children under 15. GATT includes 
     no such restrictions, although it might take up the issue in 
     the future.
       But while the effort to ban child labor has the support of 
     many well-meaning people and groups, it is based on deeply 
     flawed premises.
       First, its inspiration is clearly protectionist. An early 
     version of the bill reads, ``Adult workers in the United 
     States and other developed countries should not have their 
     jobs imperiled by imports produced by child labor in 
     developing countries.'' (The current version, which is far 
     more polished, omits that sentence.)
       But even if the bill's sponsors are motivated solely by 
     concern for children, their logic does not stand up. To seek 
     the abolition of child labor is to claim that we are more 
     concerned about the well-being of the child than are the 
     child's parents. And while some parents in every country are 
     callous and abusive, it is patronizing in the extreme to 
     suppose that the cause of mass child labor is so many poor 
     countries is lack of parental concern.
       Few parents would send their children to work unless they 
     were driven to it by poverty and hunger. While child labor 
     should be illegal where it is aberrant, as it is in rich 
     countries, it needs a different antidote where it is a mass 
       In those countries, the right way to battle the problem is 
     to improve opportunities for the poor--to provide not just 
     free education, for example, but incentives (like free meals 
     in school) to make sure that the poor take advantage of it. 
     Such measures can be described as collaborative, since they 
     rely on choice--unlike a ban, which overrides individual 
       Of course, it can be argued that a U.S. ban on tainted 
     imports would compel third world governments to adopt 
     collaborative measures to minimize child labor. The current 
     version of the child labor bill does talk, if briefly, about 
     the need to support primary education, rehabilitation and 
     other efforts.
       But this provision is clearly an afterthought; it did not 
     appear in the earlier version, and there is no indication how 
     it would be carried out. More important, it puts too much 
     faith in governments' capacity to do what is best for 
       It is much more likely that a third world government with 
     chronic fiscal problems, when confronted by a ban on the 
     export of products made with child labor, will do exactly 
     what the U.S. bill proposes: ban child labor. And that would 
     be an unmitigated disaster for most families that send their 
     children to work.
       Some time ago in New Delhi, we had a 13-year-old girl, 
     Lalita, who came to work in our house mornings and evenings. 
     After a couple of weeks, in an effort to banish child labor 
     from our household, we gave her notice and offered to pay her 
     a little not to work.
       Lalita came back the next morning with her father. A 
     bedraggled man, he was a rickshaw puller. It was immediately 
     evident that he loved his child. He begged us to take her 
     back because the family would perish otherwise. We decided to 
     listen to him.
       I cannot hope to change the minds of those who seek a ban 
     on child labor simply to protect their own profits. But for 
     the larger number who support the bill out of a genuine 
     concern for the welfare of children, common sense dictates 
     that an outright prohibition is the wrong way to go. While we 
     must make every effort to make child labor unnecessary, we 
     must not ban it.
  Mr. MOYNIHAN. Madam President, I congratulate the Senator from Ohio, 
and I call to his attention the ILO, the International Labour 
Organisation convention concerning the minimum age for admission to 
employment, Convention Number 138. It is a happy but not coincidental 
circumstance that in 1934 when the reciprocal trade agreements program 
began the United States joined the International Labour Organisation. 
This was an undertaking which President Roosevelt felt he had an 
obligation he had inherited from Woodrow Wilson. The first meeting of 
the ILO took place just down Constitution Avenue in the Pan American 
Building, and in which we did join. We have been a member now for 60 
years, and we have finally begun ratifying ILO conventions, which are 
treaties and have the force of law.
  In the last 5 or 6 years we have ratified four. I have been the floor 
leader generally speaking, for example, on the most recent concerning 
the abolition of forced labor, in 1991. Senator Pell has been very 
supportive in the Committee on Foreign Relations. Of these four labor 
treaties, as they are interesting to call, with one exception all the 
votes were unanimous. For the one that was not it was 81 to 2.
  So I hope that we might take the vigorous statement of the Senator 
from Ohio and his challenge to address the Convention No. 138.
  I ask unanimous consent that the text of that Convention be placed in 
the Record also.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

Convention No. 138.--Convention Concerning Minimum Age for Admission to 

     \1\Date of coming into force: 19 June 1976.
       The General Conference of the International Labour 
       Having been convened at Geneva by the Governing Body of the 
     International Labour Office, and having met in its Fifty-
     eighth Session on 6 June 1973, and
       Having decided upon the adoption of certain proposals with 
     regard to minimum age for admission to employment, which is 
     the fourth item on the agenda of the session, and
       Noting the terms of the Minimum Age (Industry) Convention, 
     1919, the Minimum Age (Sea) Convention, 1920, the Minimum Age 
     (Agriculture) Convention, 1921, the Minimum Age (Trimmers and 
     Stokers) Convention, 1921, the Minimum Age (Non-Industrial 
     Employment) Convention, 1932, the Minimum Age (Sea) 
     Convention (Revised), 1936, the Minimum Age (Industry) 
     Convention (Revised), 1937, the Minimum Age (Non-Industrial 
     Employment) Convention (Revised), 1937, the Minimum Age 
     (Fishermen Convention, 1959, and the Minimum Age (Underground 
     Work) Convention, 1965, and
       Considering that the time has come to establish a general 
     instrument on the subject, which would gradually replace the 
     existing ones applicable to limited economic sectors, with a 
     view to achieving the total abolition of child labour, and
       Having determined that these proposals shall take the form 
     of an international Convention,

     adopts this twenty-sixth day of June of the year one thousand 
     nine hundred and seventy-three the following Convention, 
     which may be cited as the Minimum Age Convention, 1973:

                               article 1

       Each Member for which this Convention is in force 
     undertakes to pursue a national policy designed to ensure the 
     effective abolition of child labour and to raise 
     progressively the minimum age for admission to employment or 
     work to a level consistent with the fullest physical and 
     mental development of young persons.

                               article 2

       1. Each Member which ratifies this Convention shall 
     specify, in a declaration appended to its ratification, a 
     minimum age for admission to employment or work within its 
     territory and on means of transport registered in its 
     territory; subject to Articles 4 to 8 of this Convention, no 
     one under that age shall be admitted to employment or work in 
     any occupation.
       2. Each Member which has ratified this Convention may 
     subsequently notify the Director-General of the International 
     Labour Office, by further declarations, that it specifies a 
     minimum age higher than that previously specified.
       3. The minimum age specified in pursuance of paragraph 1 of 
     this Article shall not be less than the age of completion of 
     compulsory schooling and, in any case, shall not be less than 
     15 years.
       4. Notwithstanding the provisions of paragraph 3 of this 
     Article, a Member whose economy and educational facilities 
     are insufficiently developed may, after consultation with the 
     organisations of employers and workers concerned, where such 
     exist, initially specify a minimum age of 14 years.
       5. Each Member which has specified a minimum age of 14 
     years in pursuance of the provisions of the preceding 
     paragraph shall include in its reports on the application of 
     this Convention submitted under article 22 of the 
     Constitution of the International Labour Organisation a 
       (a) that its reason for doing so subsists; or
       (b) that it renounces its right to avail itself of the 
     provisions in question as from a stated date.

                               Article 3

       1. The minimum age for admission to any type of employment 
     or work which by its nature or the circumstances in which it 
     is carried out is likely to jeopardise the health, safety or 
     morals of young persons shall not be less than 18 years.
       2. The types of employment or work to which paragraph 1 of 
     this Article applies shall be determined by national laws or 
     regulations or by the competent authority, after consultation 
     with the organisations of employers and workers concerned, 
     where such exist.
       3. Notwithstanding the provisions of paragraph 1 of this 
     Article, national laws or regulations or the competent 
     authority may, after consultation with the organisations of 
     employers and workers concerned, where such exist, authorise 
     employment or work as from the age of 16 years on condition 
     that the health, safety and morals of the young persons 
     concerned are fully protected and that the young persons have 
     received adequate specific instruction or vocational training 
     in the relevant branch of activity.

                               Article 4

       1. In so far as necessary, the competent authority, after 
     consultation with the organisations of employers and workers 
     concerned, where such exist, may exclude from the application 
     of this Convention limited categories of employment or work 
     in respect of which special and substantial problems of 
     application arise.
       2. Each Member which ratifies this Convention shall list in 
     its first report on the application of the Convention 
     submitted under article 22 of the Constitution of the 
     International Labour Organisation any categories which may 
     have been excluded in pursuance of paragraph 1 of this 
     Article, giving the reasons for such exclusion, and shall 
     state in subsequent reports the position of its law and 
     practice in respect of the categories excluded and the extent 
     to which effect has been given or is proposed to be given to 
     the Convention in respect of such categories.
       3. Employment or work covered by Article 3 of this 
     Convention shall not be excluded from the application of the 
     Convention in pursuance of this Article.

                               article 5

       1. A Member whose economy and administrative facilities are 
     insufficiently developed may, after consultation with the 
     organizations of employers and workers concerned, where such 
     exist, initially limit the scope of application of this 
       2. Each Member which avails itself of the provisions of 
     paragraph 1 of this Article shall specify, in a declaration 
     appended to its ratification, the branches of economic 
     activity or types of undertakings to which it will apply the 
     provisions of the Convention.
       3. The provisions of the Convention shall be applicable as 
     a minimum to the following: mining and quarrying; 
     manufacturing; construction; electricity, gas and water; 
     sanitary services; transport, storage and communication; and 
     plantations and other agricultural undertakings mainly 
     producing for commercial purposes, but excluding family and 
     small-scale holdings producing for local consumption and not 
     regularly employing hired workers.
       4. Any Member which has limited the scope of application of 
     this Convention in pursuance of this Article--
       (a) shall indicate in its reports under article 22 of the 
     Constitution of the International Labour Organization the 
     general position as regards the employment or work of young 
     persons and children in the branches of activity which are 
     excluded from the scope of application of this Convention and 
     any progress which may have been made towards wider 
     application of the provisions of the Convention;
       (b) may at any time formally extend the scope of 
     application by a declaration addressed to the Director-
     General of the International Labour Office.

                               Article 6

       This Convention does not apply to work done by children and 
     young persons in schools for general, vocational or technical 
     education or in other training institutions, or to work done 
     by persons at least 14 years of age in undertakings, where 
     such work is carried out in accordance with conditions 
     prescribed by the competent authority, after consultation 
     with the organizations of employers and workers concerned, 
     where such exist, and is an integral part of--
       (a) a course of education or training for which a school or 
     training institution is primarily responsible;
       (b) a programme of training mainly or entirely in an 
     undertaking, which programme has been approved by the 
     competent authority; or
       (c) a programme of guidance or orientation designed to 
     facilitate the choice of an occupation or of a line of 

                               Article 7

       1. National laws or regulations may permit the employment 
     or work of persons 13 to 15 years of age on light work which 
       (a) not likely to be harmful to their health or 
     development; and
       (b) not such as to prejudice their attendance at school, 
     their participation in vocational orientation or training 
     programmes approved by the competent authority or their 
     capacity to benefit from the instruction received.
       2. National laws or regulations may also permit the 
     employment or work of persons who are at least 15 years of 
     age but have not yet completed their compulsory schooling on 
     work which meets the requirements set forth in sub-paragraphs 
     (a) and (b) of paragraph 1 of this Article.
       3. The competent authority shall determine the activities 
     in which employment or work may be permitted under paragraphs 
     1 and 2 of this Article and shall prescribe the number of 
     hours during which and the conditions in which such 
     employment or work may be undertaken.
       4. Notwithstanding the provisions of paragraphs 1 and 2 of 
     this Article, a Member which was availed itself of the 
     provisions of paragraph 4 of Article 2 may, for as long as it 
     continues to do so, substitute the ages 12 and 14 for the 
     ages 13 and 15 in paragraph 1 and the age 14 for the age 15 
     in paragraph 2 of this Article.

                               Article 8

       1. After consultation with the organizations of employers 
     and workers concerned, where such exist, the competent 
     authority may, be permits granted in individual cases, allow 
     exceptions to the prohibition of employment or work provided 
     for in Article 2 of this Convention, for such purposes as 
     participation in artistic performances.
       2. Permits so granted shall limit the number of hours 
     during which and prescribe the conditions in which employment 
     or work is allowed.

                               Article 9

       1. All necessary measures, including the provisions of 
     appropriate penalties, shall be taken by the competent 
     authority to ensure the effective enforcement of the 
     provisions of this Convention.
       2. National laws or regulations or the competent authority 
     shall define the persons responsible for compliance with the 
     provisions giving effect to the Convention.
       3. National laws or regulations or the competent authority 
     shall prescribe the registers or other documents which shall 
     be kept and made available by the employer; such registers or 
     documents shall contain the names and ages or dates of birth, 
     duly certified whenever possible, of persons whom he employs 
     or who work for him and who are less then 18 years of age.

                               Article 10

       1. This Convention revises, on the terms set forth in this 
     Article, the Minimum Age (Industry) Convention, 1919, the 
     Minimum Age (Sea) Convention, 1920, the Minimum Age 
     (Agriculture) Convention, 1921, the Minimum Age (Trimmers and 
     Stokers) Convention, 1921, the Minimum Age (Non-Industrial 
     Employment) Convention, 1932, the Minimum Age (Sea) 
     Convention (Revised), 1936, the Minimum Age (Industry) 
     Convention (Revised), 1937, the Minimum Age (Non-Industrial 
     Employment) Convention (Revised), 1937, the Minimum Age 
     (Fishermen) Convention, 1959, the Minimum Age (Underground 
     Work) Convention, 1965.
       2. The coming into force of this Convention shall not close 
     the Minimum Age (Sea) Convention (Revised), 1936, the Minimum 
     Age (Industry) Convention (Revised), 1937, the Minimum Age 
     (Non-Industrial Employment) Convention (Revised), 1937, the 
     Minimum Age (Fishermen) Convention, 1959, or the Minimum 
     Age (Underground Work) Convention, 1965, to further 
       3. The Minimum Age (Industry) Convention, 1919, the Minimum 
     Age (Sea) Convention, 1920, the Minimum Age (Agriculture) 
     Convention, 1921, and the Minimum Age (Trimmers and Stokers) 
     Convention, 1921, shall be closed to further ratification 
     when all the parties thereto have consented to such closing 
     by ratification of this Convention or by a declaration 
     communicated to the Director-General of the International 
     Labour Office.
       4. When the obligations of this Convention are accepted--
       (a) by a Member which is a party to the Minimum Age 
     (Industry) Convention (Revised), 1937, and a minimum age of 
     not less than 15 years is specified in pursuance of Article 2 
     of this Convention, this shall ipso jure involve the 
     immediate denunciation of that Convention,
       (b) in respect of non-industrial employment as defined in 
     the Minimum Age (Non-Industrial Employment) Convention, 1932, 
     by a Member which is a party to that Convention, this shall 
     ipso jure involve the immediate denunciation of that 
       (c) in respect of non-industrial employment as defined in 
     the Minimum Age (Non-Industrial Employment) Convention 
     (Revised), 1937, by a Member which is a party to that 
     Convention, and a minimum age of not less than 15 years is 
     specified in pursuance of Article 2 of this Convention, this 
     shall ipso jure involve the immediate denunciation of that 
       (d) in respect of maritime employment, by a Member which is 
     a party to the Minimum Age (Sea) Convention (Revised), 1936, 
     and a minimum age of not less than 15 years is specified in 
     pursuance of Article 2 of this Convention or the Member 
     specifies that Article 3 of this Convention applies to 
     maritime employment, this shall ipso jure involve the 
     immediate denunciation of that Convention,
       (e) in respect of employment in maritime fishing, by a 
     Member which is a party to the Minimum Age (Fishermen) 
     Convention, 1959, and a minimum age of not less than 15 years 
     is specified in pursuance of Article 2 of this Convention or 
     the Member specifies that Article 3 of this Convention 
     applies to employment in maritime fishing, this shall ipso 
     jure involve the immediate denunciation of that Convention,
       (f) by a Member which is a party to the Minimum Age 
     (Underground Work) Convention, 1965, and a minimum age of not 
     less than the age specified in pursuance of that Convention 
     is specified in pursuance of Article 2 of this Convention or 
     the Member specifies that such an age applies to employment 
     underground in mines in virtue of Article 3 of this 
     Convention, this shall ipso jure involve the immediate 
     denunciation of that Convention,

     if and when this Convention shall have come into force.
       5. Acceptance of the obligations of this Convention--
       (a) shall involve the denunciation of the Minimum Age 
     (Industry) Convention, 1919, in accordance with Article 12 
       (b) in respect of agriculture shall involve the 
     denunciation of the Minimum Age (Agriculture) Convention, 
     1921, in accordance with Article 9 thereof,
       (c) in respect of maritime employment shall involve the 
     denunciation of the Minimum Age (Sea) Convention, 1920, in 
     accordance with Article 10 thereof, and of the Minimum Age 
     (Trimmers and Stokers) Convention, 1921, in accordance with 
     Article 12 thereof,

     if and when this Convention shall have come into force.

       Articles 11-18: Standard final provisions.\1\

     \1\See Appendix I.
  Mr. MOYNIHAN. Madam President, I thank the Presiding Officer and 
welcome her back enthusiastically. And I yield 15 minutes to my 
eloquent and indomitable friend, the senior Senator from New Jersey.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized for 
15 minutes.
  Mr. BRADLEY. Madam President, I thank the distinguished chairman of 
the committee for yielding. I thank the distinguished Senator from Ohio 
for his comments. I agree fully with him on the need to ratify the 
convention on the rights of the child. I have been in this body and on 
this floor and sponsored resolutions for the last 5 years with the 
distinguished Senator from Indiana has a cosponsor, and it is 
bewildering to me why the administration would not ratify the 
convention on the rights of the child.
  I further agree with the Senator from Ohio in his call for the ILO 
agreement. I think it is long past due that we be a signatory to that 
agreement. I disagree with him strongly, however, on GATT. I rise in 
strong support of the Uruguay round agreement. I think this agreement 
is not only good for the United States. I think it is a requirement for 
continued American prosperity.
  Let me say that again because I think we are in danger of losing 
sight of the stakes in our vote. Approval of the Uruguay round 
agreement is a prerequisite to continued American prosperity. If we 
reject the agreement, opt out of the international trading system, we 
will consign ourselves to economic stagnation. We will deny ourselves 
export-led growth, competitive industries with more jobs, and an 
expanding tax base. We will in effect by voting no on GATT be putting a 
cap on prosperity.
  Madam President, in March 1985, actually for about the previous year, 
I was a member of a group that was established by the Secretary General 
of GATT. We met on a regular basis, and we were asked if we could to 
issue a report on what should be the goals of a new GATT round. I was 
the only American in that group. I was the only politician worldwide. 
There were 7 members from different regions of the world. We issued a 
report in March of 1985 with 15 recommendations for the upcoming GATT 
negotiations that became the Uruguay round.
  The most important of those recommendations were those increasing the 
transparency of trade policies; in other words, making what people do 
more obvious to everybody, bringing trade and textile services and 
agricultural products into the GATT because they had not been in the 
GATT or had special rules; reducing and controlling nontariff barriers, 
those things countries would do that would have the same effect of 
denying access to markets; tightening rules on subsidies, those things 
countries do under the guise of helping a particular area sector that 
in effect distorts trade; and improving GATT's dispute system, having 
some way to resolve disputes when one country says one thing and 
another says something else, pursuant to one set of rules.
  Madam President, subsequent to that report, the Omnibus Trade 
Competitiveness Act of 1988 set forth negotiating objectives for the 
Uruguay round. The law listed three overall trade negotiating 
objectives: First, more open, equitable and reciprocal market access. 
Second reduction and elimination of barriers and other trade-distorting 
policies and practices. Third, a more effective system of international 
trading disciplines and procedures.
  Madam President, these two documents establish what I think is sound 
criteria by which we can evaluate the Uruguay round. The final product, 
in my view, substantially meets the criteria that were laid out by the 
group in 1985 and by the U.S. Congress in the Omnibus Trade 
Competitiveness Act of 1988. First and foremost, this agreement opens 
markets. It lowers tariffs worldwide by $744 billion--$744 billion. It 
is the world's largest tax cut in history, reducing tariffs. On 
manufactured products, the average cut in tariffs is over one-third. If 
we were going to export a manufactured good to a country prior to this 
agreement and we were going to sell it in a country for $100, with the 
tariff it would be $133. Now we have cut that by a third. Because the 
United States entered the negotiations with low tariffs and because we 
are the world's greatest exporting nation, we gain the most from these 
across-the-board reductions. These are not reductions in this sector or 
that sector, but they are across the board, a one-third cut. Therefore, 
it is obvious that the country that is the biggest exporter will 
benefit the most, especially in the zero-for-zero sectors where tariffs 
will be eliminated entirely. In some sectors there will be no tariffs. 
The United States will have a tremendous advantage.
  The agreement further opens markets by restricting the use of 
nontariff barriers. It abolishes things like voluntary export 
restraints, where two governments get together and they say we could do 
this or that, but if you do that on your own, we will not make a big 
deal, so you do it on your own, and they wink at each other and trade 
is distorted and employment drops in export sectors. Well, they are 
gone. It also converts quotas into tariffs, which cannot be raised but 
can be negotiated down.
  What happens so often is a country says we do not have a tariff. No, 
but they have a quota, which is the same thing, because the price to 
the consumer is higher. But you say, no, there is a quota and we are 
going to make that a tariff so that the public can see what it costs 
them. You are paying more for your product, and we are changing the 
quota to the tariff so you can see how much more you are paying for 
your product.
  The result is to bring trade barriers under this agreement into the 
light of day, so consumers can understand why they pay too much for 
their goods. The best antidote to protectionism, in my view, is 
transparency. This agreement makes barriers more transparent. Everybody 
will be able to see who is doing what and why. It will not be in the 
dark of night, stuck in some bill and some bureaucracy. It will all be 
right there, and tariffs will be clear to everybody, and they will be 
  The Uruguay round agreement also brings important new sectors into 
the international economy under the global trading system. It phases 
out textile quotas, reduces agricultural subsidies and quotas, 
increases intellectual property protection, brings trade and services 
into the system. The result is that our productive industries will have 
greater opportunities to compete on the basis of merit, rather than on 
the basis of political influence.
  This was one of our most important objectives, as we thought about a 
new round. You cannot have a world economy where the fastest growing 
segment of the economy--services--is not included in any kind of trade 
agreement. It was not until this round. It will be included in this 
round. And then, of course, we have countries around the world that see 
an American movie or an American drug, or they see how it works, and 
they pirate the movie or the product and sell it in their country, and 
they pay nothing to the United States that invented the product and 
spent the billions of dollars necessary to invent the medicine or make 
the movie. Prior to this agreement, there was nothing you could do 
about piracy. Under this agreement, intellectual property is now 
included for the first time ever. It is an enormous advance.
  While it is unfortunately unrealistic to ban all subsidies 
altogether--I think we probably should ban all subsidies--but this 
agreement defines them more precisely and brings them into the WTO 
system. The agreement's dispute resolution mechanism provides recourse 
for those who feel they are injured by subsidies. Even more important 
over the long-term, the subsidies agreement will open Government 
subsidy policy to scrutiny by taxpayers. Once voters understand the 
cost of Government subsidy programs, they will put, I believe, pressure 
on their elected representatives to curb them.
  Finally, rules need enforcement. You cannot have a rule-based 
multilateral trading system unless you have some way to enforce the 
rules. We need only look at our endless trade rows with Japan for 
proof. One of the most important features of this agreement is that it 
strengthens the dispute settlement system. For the first time, no 
single country can block a panel report. In the past, the losing party 
could deny us our rights. We could win and they could say, ``I am 
sorry.'' Under the WTO procedure, that can no longer happen. Either the 
offending country will change its policy, or we can exact retaliation 
against other exports.
  This does not mean, however, that we have given the WTO sovereignty 
over U.S. law, as some have asserted. When we lose cases--and we will, 
although statistics show we lose less often than any other country--the 
result does not automatically change U.S. law. I will quote from the 
legislation so we understand this. This is what it says:

       No provision of any of the Uruguay round Agreements, nor 
     the application of any such provision to any person or 
     circumstance, that is inconsistent with any law of the United 
     States shall have effect.

  In other words, nothing that violates U.S. law will have any effect. 
The decision made will have no effect. Only the Congress of the United 
States can change American Federal law. That has been the case with 
GATT for 47 years, and it is the case now under the WTO. Nor can the 
WTO change State and local laws. Indeed, in the highly unlikely 
incidence that the Federal Government would want to sue to change the 
State and local law as a result of an adverse panel ruling, it will 
only be able to do so after a series of safeguards have been 
  I might note in this regard that in the nearly half century that the 
GATT has been in effect, the Federal Government has never sued to 
overturn State or local law because of an adverse GATT panel ruling--
not one time.
  Madam President, we have heard concerns expressed by our colleagues 
and our constituents that by strengthening the dispute settlement 
resolution system, we are putting ourselves at risk.
  Madam President, I think most Americans appreciate the value of 
playing by the rules, whether in trade or sports or politics or life. 
Given the competitiveness of our industries, we gain when the rules are 
fair and when the rules can be enforced.
  Indeed, take a look at what happened since 1947. We have been by far 
the largest user of the existing and continuing GATT panel system, 
having brought over a third of all the complaints from 1947 to 1993. 
The United States has brought over one-third of all the complaints from 
1947 to 1993. That is over twice as many as all of Europe has brought. 
Japan is barely even on the charts in terms of bringing cases.
  The United States wins in GATT more often than other countries do. As 
a complainant, as a country that says some other country has broken the 
rules, the United States achieved a positive result in 80 percent of 
the cases initiated, either because of a favorable panel ruling or a 
negotiated settlement. This is much better than the GATT average of 64 
  In other words, when we brought a case, we have won the case four out 
of five times. Overall the other countries of the world win the case 
about three out of five times.
  As a respondent, in other words, a country that is charged with 
violating the rules, we have defeated the charge 52 percent of the 
time, which is far above the average of about 23 percent.
  So what we have done when other countries have charged us under this 
system the people characterize as a disaster, is that we have defended 
ourselves effectively over half the time. The rest of the world is 
defending themselves effectively to charges that they are breaking the 
rules about 20 percent of the time.
  I do not think that this should surprise anyone, because we play by 
the rules, and it has always been in our interest that the rules be 
enforced. The Uruguay round's dispute resolution provisions simply make 
it more likely that the rules will be enforced.
  May I have an additional 5 minutes?
  Mr. MOYNIHAN. Madam President, I am happy to yield an additional 5 
minutes to the Senator.
  The PRESIDING OFFICER. Without objection, the Senator is recognized 
for an additional 5 minutes.
  Mr. BRADLEY. Madam President, let us get to the bottom line. The 
Uruguay Round Agreement will bring direct dollars-and-cents benefits to 
the American economy. The numbers bear repeating. For example, the 1994 
Economic Report of the President estimates that the aggregate increase 
in U.S. annual income after 10 years will be about $100 and $200 
billion, the equivalent of 1.5 or 3 percent of the whole income of the 
economy. That means that this agreement alone, on conservative 
estimates, is the equivalent of a free year of economic growth.
  The Treasury Department estimates that by the year 2004 the average 
family of four in the United States will be $1,700 richer every year 
because of this agreement. More jobs, higher income, more growth. How 
often are we able to put $1,700 in a family's bank account and reduce 
the budget deficit at the same time? Not very often. This agreement 
will do that.
  Madam President, exports are essential to economic growth. That is 
the lesson of the Asia-Pacific region, where first Japan, then the 
``Dragons,'' and now China are exporting their way to growth.
  It is also the lesson of our experience. Export growth has accounted 
for half of the total U.S. economic growth over the past 5 years. Half 
of all our growth comes from exports that are tied to jobs. This 
agreement, on conservative estimates, will increase our merchandise 
exports $150 billion per year, and our agricultural exports about $8.5 
billion per year by the year 2004. And that does not even count the 
boost in services exports that we will get because we are bringing 
services under the rules. That is a very conservative estimate as to 
what we will increase in exports.
  Economic growth means jobs. The Treasury Department estimates that 
the agreement will lead to 300,000 to 700,000 net new jobs after 10 
years. These will be high-paying jobs, since the jobs in the export 
sector pay over 10 percent more than average.
  Now, Mr. President, we are all Senators from States. We represent our 
States as well as thinking of the national interest. My State of New 
Jersey is going to be a major beneficiary of this GATT agreement. We 
exported 14.5 billion dollars' worth of merchandise last year. We have 
increased our exports since 1987 by 90 percent--90 percent increase in 
exports. The only thing increasing jobs in New Jersey in the last 5 
years, or since 1987, has been a boom in exports, New Jersey's 
manufacturing exports.
  People always say manufacturing is in danger. The manufacturing 
exports directly supported, in my State, about 200,000 jobs. The tariff 
reductions, intellectual property provisions, service rules, and other 
aspects of the Uruguay Round Agreement will flow through to New Jersey 
in the form of even greater export growth, more export jobs, not to 
mention reduced prices for New Jersey consumers. The Treasury 
Department estimates that New Jersey will be $5.4 billion richer every 
year, and that 18,000 more New Jerseyans will be employed as a result 
of this agreement.
  That is a pretty good deal. New Jersey and all America have benefited 
from a healthy international trading system. Indeed, measured by 
volume, America's exports have risen faster than those of any other G-7 
country, including Japan, over the past 5 years we have been talking 
of. That is because we have done more than any G-7 country to adapt our 
economy to the new world we face. We have made changes we are more 
  I ask for 3 more minutes.
  Mr. MOYNIHAN. Yes.
  The PRESIDING OFFICER (Mr. Dorgan). The Senator is recognized for 3 
additional minutes.
  Mr. BRADLEY. As a result, we have become once again the world's most 
competitive economy. According to the 1994 World Competitiveness 
Report, the United States is the most competitive economy. We should, 
on this evidence, pass this agreement and stride confidently into the 
  However, Mr. President, we will be casting at least two votes on this 
agreement, the agreement for it, and then the budget waiver. And it is 
not just a simple up-or-down majority vote, but we have a 60-vote point 
of order that we need to pass. Under the Senate paygo budget rule, any 
increase in spending or decrease in taxes will be offset by equal 
savings elsewhere for 10 years--10 years. Thus, under Senate rules we 
must make up the revenue lost because of this agreement's tariff 
reductions over 10 years--even though the legislation before us fully 
complies with the Budget Enforcement Act, and even though the revenue 
generated by the extra growth that this agreement will unleash, more 
than makes up for the lost tariff revenue. Because the legislation 
before us finances only the first 5 years it is subject to this 60-vote 
point of order.
  I take, personally, a back seat to no one in efforts to cut the 
budget. I have offered amendments to cut unnecessary spending. I have 
offered a line-item veto. I have introduced legislation that eliminates 
procedural obstacles preventing effective steps to cut appropriation 
levels. I have worked and will continue to work to bring our budget 
under control. But torpedoing the Uruguay round is not the way to cut 
the deficit.
  Indeed, a vote against the agreement on the budget point of order is, 
in fact, a vote against budget stringency. Why do I say that? If this 
agreement is killed for narrow technical reasons, we will pay with less 
growth, fewer jobs, and as a result, a higher budget deficit.
  The figures bear this out, whether it is the Joint Economic Committee 
Republican staff, DRI/McGraw Hill, or the International Institute of 
  Make no mistake, this vote on the budget point of order is a vote on 
the agreement. My colleagues cannot vote against the budget waiver 
hoping to then vote for the agreement, for if the first vote is lost, 
there will not be a second vote.
  But let us get back to the main and final point about this vote. What 
the Uruguay round does is position the United States to take advantage 
of its enhanced competitiveness in an expanding global market. And it 
positions us to take a bigger bite out of a bigger apple.
  The choice is clear. We should ratify this agreement.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from New 
  Mr. MOYNIHAN. Mr. President, may I simply congratulate the Senator 
from New Jersey for a comprehensive and convincing statement of the 
whole case. And, may I add, it was the good fortune of the Senate that 
he was asked to be a member of the GATT advisory panel in 1985. It 
  I yield the floor.
  Mr. PACKWOOD addressed the Chair.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Oregon.
  Mr. PACKWOOD. Mr. President, I yield 15 minutes to the Senator from 
  The PRESIDING OFFICER. The Senator from Washington [Mr. Gorton] is 
recognized for 15 minutes.
  Mr. GORTON. Mr. President, the debate over the General Agreement on 
Tariffs and Trade has been conducted at two highly distinct levels: The 
first, of course, is the desirability of freer trade among the nations 
of the world; the second, with respect to the impact of this agreement 
on the sovereignty of the United States, the ability of the United 
States to enforce its own laws domestically.
  With respect to the first of those two subjects, the desirability of 
freer international trade, I believe that the debate divides Americans 
into optimists and pessimists. The optimists see the United States as a 
highly competitive economy in which the great majority of its people 
will be benefited by a more open trading system around the world. The 
pessimists believe that the United States fundamentally is 
noncompetitive with less developed nations and, therefore, by even a 
modest greater opening of its own markets, that Americans will, by and 
large, suffer from a free trade regime.
  This is a question, of course, which is being argued on the basis of 
theories and comparative wage scales and cultural and social 
differences, and any such look into the future is obviously subject to 
  At the same time, it should seem obvious to all that we have such a 
long history in the world, both in eras during which trade restrictions 
were increased on the part of many countries and then most of the post-
World War II era in which in most nations trade barriers were reduced, 
so that we do not really need to argue from theory but can argue from 
history itself.
  I believe that every previous General Agreement on Tariffs and Trade 
and, for that matter, every previous regional or bilateral lowering of 
trade barriers has resulted in sharply increased prosperity. Obviously, 
reducing those barriers results in an increase in trade among all of 
the nations which are involved. But with only the most minor 
exceptions, the prosperity of the people of each of the participating 
parties to previous General Agreements on Tariff and Trade has 
increased. There are individual dislocations, there are sectorial 
dislocations, but when one takes the good of the people of a nation as 
a whole, it has been advanced by past agreements.
  I am confident, as a result, that when we ask ourselves the question, 
will the per capita income of Americans increase and increase 
measurably as a result of an approval of this General Agreement on 
Tariffs and Trade, that the answer to that question is yes. Will 
consumer choice increase as a result of this agreement? The answer is 
yes. In fact, reputable economists have estimated that the increase in 
per capita or per family income is well up into four digits on an 
annual basis.
  Just a year ago, we had a similar debate over the North American Free 
Trade Agreement involving only two other nations in addition to the 
United States. We heard many of the same counter arguments that we are 
listening to today, but in a relatively brief period of time of less 
than a year, trade between Mexico and the United States has increased 
sharply. Literally thousands of new jobs have been created in the 
United States of America as a result, and we have a somewhat more 
peaceful and prosperous immediate neighbor.
  Yet, many economists say that the impact of a General Agreement on 
Tariffs and Trade on the positive side of the scales of balance will be 
between 10 and 50 times greater than that of the North American Free 
Trade Agreement, an almost obvious truth due to the much, much larger 
number of nations that are involved in this particular agreement.
  What many forget is that we have a General Agreement on Tariffs and 
Trade today. We have had changes in the past in that General Agreement 
on Tariffs and Trade. And very few, if any Americans, would simply 
cancel everything that has been done in the international trade field 
during the course of the last 40 or 50 years and return us to our 
international trade policies of the 1930's.
  This agreement, of course, extends beyond subsidies on goods to 
reducing barriers with respect to subsidies, with respect to many 
services, which have never been covered by previous General Agreements 
on Tariffs and Trade, and with respect to intellectual property. So as 
we examine this agreement, simply from the perspective of whether or 
not international trade will increase as a result of its passage and 
whether or not that increase will benefit most Americans, the answer 
that history gives us reinforces the answer that theory gives us. 
Prosperity in this country and around the world will be increased, will 
be enhanced by the ratification of this agreement.
  The second level of debate, the debate over the sovereignty of this 
Nation, is in some respect more important, more visceral, more 
emotional, and more significant. No nation, the United States leading 
among them, wishes to give up a portion of its sovereignty to any 
international body much less an international body which is one country 
one vote.
  At the same time, it is the United States of America itself which has 
been frustrated by the lack of enforceability of decisions under the 
previous General Agreement on Tariffs and Trade. We are far more sinned 
against than sinning at the present time, and we have not been able to 
get nations which have violated the present agreement to agree to cease 
those violations, even when panels have determined that those 
violations are absolutely clear. And the World Trade Organization is 
designed and almost certainly, in effect, will amount to an 
organization which is more likely to have its decisions adhered to by 
nations against whom it rules than the present system does.
  That, however, is not at the essence of sovereignty. We lose 
sovereignty only if the World Trade Organization has either internal 
enforcement authority within the United States or, alternatively, our 
commitment to it is irrevocable. Neither of those propositions is true. 
We still can, as can all other countries, defy the edicts of the World 
Trade Organization. And the recourse of the Nation we have wronged in 
the eyes of the World Trade Organization is to impose trade sanctions 
against us--exactly what can happen today and does happen frequently 
today in the absence of a World Trade Organization.
  And, if one proposition has become increasingly clear as this issue 
has been debated during the course of the last 3 weeks, the United 
States obviously can withdraw from that organization, or from GATT, 
essentially at will. Under the agreement made between the distinguished 
senior Senator from Kansas, our leader, and the President, it will give 
to the Congress of the United States an ability to work in that field, 
as well as to the President of the United States. Our sovereignty is 
not implicated by the World Trade Organization.
  Could that World Trade Organization be better? Of course, it could. 
But we are faced in this connection with the ability to create a far 
freer and more open trade regime in the world, greatly to the 
prosperity of the people of the United States; an agreement which has 
been negotiated over the Presidencies of three different Presidents of 
the United States with different attitudes, getting the best deal they 
could possibly get. We cannot, in the Congress of the United States, 
unilaterally write a better deal. This is a good deal for the United 
States. It is a good deal for the world. It will contribute to our 
prosperity and it ought to be passed.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Hollings). The Senator from North Dakota.
  Mr. DORGAN. Mr. President, with the authority of the Presiding 
Officer, I yield myself 20 minutes.
  Mr. President, we are discussing here an extraordinary piece of 
economic policy for this country. And, as we begin this discussion, I 
thought it would be useful to present a chart that shows where we are. 
This chart shows our merchandise trade deficit in this country. The red 
lines going down represent red ink, trade deficits, a hemorrhaging in 
this country. This is an extraordinarily serious trade deficit that 
represents a serious problem for this country. All of this red means 
less income for our country, fewer jobs in America. All of this red 
means a failed trade policy in our country.
  With this as a backdrop--America as the largest debtor Nation in the 
world; a failed, collapsed trade policy resulting this year in the 
largest trade deficit in American history--we are told by the same 
bipartisan group of people who have hugged and embraced this trade 
policy now for 30 or 40 years: We want to do more of the same. Let us 
put a bigger engine in the same old vehicle.
  There is an old saying: When you find yourself in a hole, it is time 
to stop digging. The crowd that would have us pass GATT says that when 
you find yourself in a hole, let's pass out more shovels.
  This policy, which comes to the Senate as GATT, is a trade policy 
that is fundamentally hurting America. I am for free markets. I am for 
expanded trade. But that must be accompanied by a fresh, new admission 
price to our marketplaces. That admission price should say we will 
trade with anybody, as long as they pay a living wage, have working 
conditions that are fair and safe, and are not fouling the world's air 
and the water. There should be some minimum conditions that must be 
  We should not say let us simply have open markets and free trade and 
go ahead, you producers, and hire 12-year-olds working 12 hours a day, 
paid 12 cents an hour, and send the products of their labor into our 
marketplace to eliminate our jobs. That might satisfy some--certainly 
the large international businesses that profit from it--but it does not 
satisfy me and it does not satisfy this country's economic interests 
  Let me read some of the arguments of the proponents of this 
agreement. I hope those who support GATT and are urging us to pass it 
would listen to this.

       These agreements offer new opportunities for all Americans. 
     For American farmers, the agreements expand world markets for 
     American farm products. For American workers, the agreements 
     offer more jobs, higher income, and more effective responses 
     to unfair foreign competition.

  Oh, no, that is not the argument made today, Mr. President. That is 
the argument made in 1979 for the Tokyo round. The argument will be 
made today, in exactly the same language by many of the same people. So 
let us look at what the outcome was. Better for farmers? More jobs? 
Higher incomes for American workers? Oh, no. Following the Tokyo round, 
agricultural exports since 1980 are up just 5 percent, while 
agriculture imports since 1980 are up a whopping 32 percent.
  American workers seeing good times? No. A net loss of 3.3 million 
manufacturing jobs since 1979. Higher incomes? No. Sixty percent of 
American households now have lower income than they had a decade ago.
  Another argument: ``These agreements will result in lower prices, 
increased competition and greater prosperity for all the American 
people.'' An argument made today that also was made in 1979 about the 
Tokyo round.
  Where is the greater prosperity? Real hourly wages for U.S. 
production workers, which had grown 3 to 5 percent annually for many 
years, stopped growing in 1973 and have now declined to mid-1960's 
levels on a real-income basis.
  This new order, the new order that was promised in 1979, is identical 
to the promises we are hearing today: More jobs, more income.
  Nonsense. The record shows just the opposite happened.
  Let me share with my colleagues something very interesting that I 
read last evening. This comes from the Finance Committee from 1986. 
They are talking about the Tokyo round completed in 1979.

       The committee is concerned the Tokyo round of trade 
     negotiations and the legislative branch and executive 
     branch's actions to implement it have not had the effect of 
     improving the American standard of living intended.

  They go on to talk about the sea of red ink and the trade deficits. 
The Finance Committee itself said the Tokyo round did not work. Exactly 
the same arguments that were used to promote that trade agreement in 
1979 that we hear again today in connection to the Uruguay round.
  My point is that those arguments that drove the Tokyo round in 1979 
were wrong. They are demonstrably wrong. The facts show it. Our economy 
shows it. Lost jobs, lost incomes show it. Do these arguments have any 
credibility anymore?
  We had an election recently. The election was about change. Does 
anyone doubt that the election was about change? Yet this trade 
strategy is business as usual. You strip away all the brush here and 
what you find at the roots is one central fact: The largest 
international businesses in the world want to produce where it is cheap 
and sell back into our marketplace. That might be good for 
international business' profits, but it certainly is not good for the 
prospect of jobs and decent incomes for American families.
  Open markets? Sure. I believe in open markets. But I believe there is 
an admission price to those open markets. You have to pay a living 
wage. You have to care about worker safety. You have to care about the 
things that we fought for 50 years in this country to achieve that have 
made life better for Americans.
  And if you strip away all the nonsense, all the fractured statistics, 
all the charts and all the graphs, there is one central question we 
must ask ourselves: Is the standard of living for the American family 
improving or declining? In other words, will this agreement, which asks 
low-wage and low-skill Americans, who comprise nearly two-thirds of the 
work force, to compete against 2 or 3 billion low-skilled people in the 
world, many of whom are willing to work for 8 cents, 20 cents, or 80 
cents an hour--will it improve the standard of living in this country? 
The evidence is all around us. The answer is no.
  This is a strategy for larger corporate profits and a strategy for 
lower income for American workers and fewer jobs.
  Let me show one additional chart that illustrates the problem quite 
graphically, I think. The blue line shows productivity in America. 
Productivity has increased. The red line shows household incomes. 
Regrettably, they are moving in opposite directions. Why?
  The answer is that American workers cannot compete when those who 
head the multinational corporations get in an airplane and circle the 
globe to try to figure out where they can produce at the least cost to 
sell the products back into the best marketplace. And that is the 
disconnection we have with this trade agreement.
  I could talk about the World Trade Organization and other elements of 
GATT. It is absurd for anyone to argue that the creation of a World 
Trade Organization does not impinge on our sovereignty. Of course it 
does. That is precisely why it was created. Of course it does.
  I could talk about child-labor conditions: 200 million children 
working in the world--3-year-olds, 6-year-olds, 10- year-olds, 12-year-
olds. It would break your heart to hear the facts. Children making 
carpets, cutting knots with knives. There was testimony before the 
Senate about someone in those factories who sees burnt fingers and 
wonders why, and then discovers 12-year-old kids using knives to cut 
knots on silk rugs are cutting their fingertips, and those who employ 
them use match-stick powder to burn in those fingertips to create scars 
so they can keep those kids working. It breaks your heart to see the 
working conditions around the world. Should we compete with that? Of 
course not. Does this prevent competition in those circumstances? 
Regrettably, no.
  They chant ``free market,'' like a mantra. It is as if they are 
beating cymbals and chanting over and over again: ``Free market, free 
market, free market.''
  That is not what is important. Yes, let us have expanded 
opportunities. Yes, let us compete around the world. But let us make 
sure the rules are fair, and let us make sure the end result represents 
a better standard of living for American workers.
  That is, by far, the most important of all the measurements: What 
happens to the standard of living for those in this country who 
produce, who risk their capital to keep jobs in this country and for 
those who work for them, who want a living wage and want a safe 
workplace. That is what is important.
  I regret that this administration is supporting this GATT agreement 
because I feel so strongly it is bad for this country. President 
Clinton and Mickey Kantor are people who have had the guts to stand up 
to other nations in bilateral negotiations, such as those with Japan. 
They stood up and fought for us on grain problems with Canada. This 
administration has done things, when previous administrations had sat 
on their hands. I compliment this administration for that.
  When the winds of change out there suggest the American people do not 
like the direction we are moving, you would think that this would be 
the time to assess what is going wrong. Why are incomes declining in 
America, and what can we do about it?
  This kind of trade agreement, which asks American workers to compete 
against others around the world who are going to be paid 20 cents an 
hour, is a strategy for enhancing corporate profits and diminishing the 
importance of, and the ability to help families, that depend on 
American jobs.
  Instead of having thoughtless discussions about trade where we put 
people into two camps--the free-trade camp that sees over the horizon 
and are the know-all, see-all wise folks; and the ``isolationist 
xenophobic stooges'' who cannot see anything, and are protectionists 
who want to put a wall around the country--I hope one of these days we 
can do better than that. That is thoughtless sloganeering and nonsense.
  I do not want to put a wall around our country. I want goods to come 
into America and compete on a fair basis. The only caveat for me in the 
long term is that all of us should work toward establishing policies 
that will enhance the ability of American families and American people 
to find good work that pays good wages and enhances and improves their 
standard of living.
  Frankly, the evidence is all around us, littering the floor of the 
Senate and the House from past trade debates. This trade strategy is 
wrong and it should not take a sea of red ink, our worst trade deficit 
in history this year and the transformation of America from the largest 
creditor nation in the world to the largest debtor nation in the world, 
to convince us of that.
  Anyone who remains unconvinced has simply been reading the wrong 
information. My friend, Senator Brown, from across the aisle, I 
understand, had said he previously was inclined to support GATT. But 
then he courageously was the only Member of the U.S. Senate to accepted 
a challenge by Ralph Nader to take a test of knowledge about GATT. So 
my friend, Senator Brown from Colorado, apparently spent his 
Thanksgiving reading and studying GATT, and then took the test.
  I am pleased to say he upheld the honor of the Senate and passed that 
test and apparently won $1,000 to be given to charity. But I think he 
is going to tell us what he told some folks yesterday. Upon reading 
this document, he concluded it is not good policy for this country. 
This is not about us versus them. It is not about Republicans versus 
Democrats. This is about change versus more of the same. And more of 
the same will hurt this country badly.
  I hope the Senate will reject GATT and decide instead to expect, to 
demand, fundamental change in our trade strategy--not to close this 
country's borders, but to declare that there is an admission price to 
exercise the rights of the marketplace in a country like ours. And that 
admission price is that you must pay a living wage and play by the 
  Mr. President, I yield back my time.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, I yield 15 minutes to the Senator from 
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. BROWN. Thank you, Mr. President. I want to thank the 
distinguished future chairman of the Finance Committee for the time. 
Many Members have come to the floor and expressed concerns about GATT 
or approval for GATT. Others have talked about whether or not they 
favor free trade or open trade. I favor free trade. I favor open trade. 
I am for lowering tariffs and eliminating quotas. I am for expanding 
the world's trading market. But, if you believe as I do and study the 
agreement, instead of being for GATT, you will be very concerned about 
  Let me be quite specific because much of the debate has been bumper-
sticker debate, debate over whether you favor free trade or not, debate 
about whether U.S. sovereignty is infringed or not. These are not the 
issues. We must focus on the agreement itself. Let me be very specific.
  GATT sets up an ineffective court system that will replace our 
ability to litigate many of these trade questions in U.S. courts. The 
dispute settlement body will establish a series of panels to rule on 
trade disputes. Unlike U.S. courts, the proceedings of the panels will 
be conducted in secret. No conflict-of-interest rules exist to ensure 
impartial panelists. Decisions will be rendered anonymously by 
unaccountable bureaucrats and the appeals process will not be subject 
to outside review.
  Who in this Chamber believes we ought to have a court system that 
does not have the basic elements of procedural due process? GATT sets 
up a court system without procedural safeguards to ensure due process. 
In effect, it establishes a trade legislative body with the right to 
rule on implementation of its own laws, unlike in the United States 
where we separate these functions into separate branches of government.
  Please do not be mistaken, GATT's new WTO will legislate future trade 
policy. Does it force us to adopt their legislation? No, it does not. 
But can they influence and amend the agreements that we are involved 
in? Yes, they can.
  The problem is not that we have set up an international system for 
legislating in this area. The problem is that we have set up a 
legislative system without fair representation. Under the new rules 
established under the GATT, we will have one vote out of all the member 
countries, currently expected to be at least 123, yet we will pay the 
greatest share of the bills. Nearly 25 percent of the cost could fall 
upon U.S. shoulders, and yet we will have less than 1 percent of the 
control of how the money is spent. Is that a problem?
  Please look at the World Bank and the International Monetary Fund. 
During debate here in the Senate concerning more than a billion dollar 
increase in taxpayer funds to the World Bank, I challenged Members of 
this Senate to come forward and defend the way that the money of 
American taxpayers is spent. At the World Bank, according to articles 
published in prominent news sources, the average salary was $123,000 a 
year--that is right, you heard me correctly, an average salary; that 
includes janitors, service people, receptionists, nonskilled workers--
an average salary that is roughly equivalent to a U.S. salary of 
$176,000 a year because the $123,000 average is tax free. Why do 
salaries get that way? Because those who pay the bill and those who 
decide the staffing are not the same.
  Will that be a problem with the new GATT organization? Yes. It will 
create 50 new councils, committees, panels, and working groups. It is 
going to be a huge international bureaucracy. The United States will 
pay the bills and other countries will decide how it is run.
  Lastly, it is a one-sided agreement. Anyone who thinks we are getting 
into an agreement that expands free trade has not read the text of the 
agreement itself. Let me repeat that, because it is absolutely true and 
I hope Members will focus on it. Anyone who thinks this is an agreement 
that expands free trade has not read it.
  Why do I say that? It expands the openness of our markets but 
authorizes developing countries and the least developed countries to 
exempt themselves from those liberalizing effects, some for 5 years, 
some for 7 years, some for 8 years. The exemptions vary by agreement. 
But what this agreement does is open our market and allow the 
developing and least developed countries to keep theirs closed. Some 
will say, ``Hank. Wait a minute. In 5 or 8 years that market will open, 
or in 10 years the market will open, or in some areas in 12 years it 
will open.'' If they say that they have not looked closely at the way 
the WTO will operate. Most of these agreements provide authority for 
the WTO to amend them. Could they clear the necessary procedural 
hurdles to amend them?
  More than three-fourths of the votes in the WTO are in the Third 
World--more than three-fourths of the votes. Three-fourths is important 
because it is the majority needed to amend and interpret the 
agreements. With more than three-fourths of the votes in the WTO, the 
Third World's less developed countries can extend these exemptions ad 
infinitum. There is some language in the agreement that indicates that 
is a possibility.
  What is the bottom line? The bottom line is we set up a court system 
without due process. We set up a trade legislating body without fair 
representation. I do not know what you would consider fair. But let me 
tell you, I do not think you will consider WTO fair. We have 1 vote out 
of 123, and we are going to pay 25 percent of the cost with less than 1 
percent of the votes. In the United Nations at least we have a veto. In 
the IMF at least we have a weighted vote. In the WTO, we have no 
protection. We pay the bills and other members will determine the cost. 
It is completely a one-sided agreement.
  Let me be specific because those are serious charges and they are 
ones that Members ought to be concerned about. In the court system that 
they set up--again it is called the dispute settlement body--a panel is 
  The ministerial conference will elect the director general, and the 
general council will substitute for the ministerial conference when it 
is not in session. The director general will help recruit, hire and 
employ the secretariat. The Third World controls the selection of the 
director general. That is not speculation. If all signatories join, the 
Third World will have 83 percent of the vote. You tell me who is going 
to control the director general. With 83 percent of the vote the Third 
World is going to control the director general. The director general 
handles the hiring of the secretariat and the supervisors. When you 
have a question that has to be interpreted, a litigation, in effect a 
court hearing, it is the secretariat that is hired by the director 
general controlled by Third World country members that will decide upon 
the experts to make decisions and recommendations in a trade dispute. 
Will these experts be weighted in favor of the Third World countries? 
You bet your life they will be.
  From that pool of experts will be selected the three or more members 
that will be on the panel to settle the dispute. They decide it. Some 
will say that is OK. They have to be fair. Do they have to be fair? Do 
they have to have open hearings? No. They do not. They even render 
anonymous decisions.
  Mr. President, the heart of the WTO will be a court system that does 
provide procedural due process safeguards. I hope the Members who are 
in favor of this will come to the floor and tell us why we should not 
expect to have due process in these hearings. Before Members vote, I 
hope they will ask themselves the same question.
  We have talked about trade legislation. But let me simply mention 
this. The United States has one vote. The European Common Market has 
16. Does anybody here think that is fair? If they think that is fair 
and they are going to vote for it, please come down and tell me why the 
United States gets 1 vote and the European Common Market gets 16. I 
want to hear why and so do the American people. If you like the WTO, 
tell me why it is fair that 18 countries with populations of under 1 
million apiece will have more voting power than the United States and 
the European market combined.
  Let me repeat that. Eighteen countries with a population less than 
half the size of California are going to have more voting power than 
all of the United States and the European Common Market combined. If 
you think that is fair, come down to the floor and tell me why you 
think so. Anyone who thinks this is about fairness and a valid 
legislative body to settle trade disputes has not read the legislation.
  Mr. President, I have talked about it being a one-sided agreement. I 
want to be specific about that because I think that may be something 
that Members have not focused on. When I say it is a one-sided 
agreement, let me be specific. Some Members are from dairy States. I 
hope they will look at this. Under the GATT-WTO agreements, the 
European Union is allowed to spend $2.5 billion a year to subsidize the 
exports of 30 billion pounds of milk, $2.5 billion a year for EU 
subsidies for exported milk. Does the United States get to spend an 
equal amount or maybe a larger amount? No. Under the agreement we are 
limited to less than one-twentieth of the European Union's allocation.
  Anyone who thinks this is a fair, balanced, open market agreement has 
not read it. The fact is, the United States was outtraded. When we are 
allowed to use one-twentieth of the resources that the European 
Economic Community is allowed, I do not think it is fair. If somebody 
does, come down and say it. If somebody thinks having a 20-to-1 
advantage is fair, please come and talk about it. Go on the record, 
because it is not fair. It is not evenhanded, and it is not a good 
negotiation. Is that the only example? No.
  Take a look at the agreement on trade-related aspects of intellectual 
property rights. We ought to respect property rights. People are proud 
of this agreement because it expands free trade and protects property 
rights. Read the agreement. We have 1 year to bring our intellectual 
property standards into line with the accord; 1 year. Is that the same 
for every other nation? No. Developing countries have 10 years. The 
least developed countries have 12. Let me repeat it. We have 1 year. 
They have 10 years. For 10 years they can violate those agreements and 
get away with it. We have signed an accord that recognizes their right 
to do so. Is that fair? Does anybody think that is fair? Will the 
advocates of this measure come to the floor and tell me. Is it fair for 
us to have 1 year and them to have 10 to 12 years? But the disparities 
do not end here. Because after they get through with 12 years of 
cheating on our patents--cheating and stealing which we will recognize 
as their right--after they get through with 12 years of doing that, 
they have the right to come back and amend the rules to continue. We 
will not have enough votes to stop them.
  Let me follow up because it is important for Members to take a look 
at the exact specifics. In agriculture, if you are from an agriculture 
State, let us take a look at page 1366. Here is what you are going to 
find: Part 9, article 15: ``Special differential treatment.''

  Those are not my words. Those are the words out of the agreement.

       1. In keeping with the recognition that differential and 
     more favourable treatment for developing country Members is 
     an integral part of the negotiation, special and differential 
     treatment in respect of commitments shall be provided as set 
     out in the relevant provisions of this Agreement and embodied 
     in the Schedules of concessions and commitments.
       2. Developing country Members shall have the flexibility to 
     implement reduction commitments over a period of up to 10 
     years. Least-developed country Members shall not be required 
     to undertake reduction commitments.

  It is right there. That is not fair trade. That is not evenhanded 
trade. We were out-traded. We opened up our markets and let them keep 
them closed. Moreover, remember the exemptions that are here do not 
necessarily run out because those who benefit from them can then amend 
the rules.
  Page 1386, article 10, ``Special and Differential Treatment.''
  This is the sanitary and phytosanitary agreement. It is an important 
agreement. It is what many of our constituents see as important because 
they believe it will give them protection in other nations similar to 
those required here and will establish a fair standard for trade with 
foreign countries. Read what those fair standards are.
  Paragraph 3:

       With a view to ensuring that developing country members are 
     able to comply with the provisions of this agreement, the 
     committee is enabled to grant such countries upon request 
     specified time limited exemptions, in whole or in part, from 
     the obligations under this agreement taking into account 
     their financial and development needs.

  Has anybody read it? The people who think it is so great, do they 
understand it is going to apply to us and not necessarily to the 
countries we sell to? Have they asked themselves who has the power to 
extend these exemptions? It is a body of which 83 percent could be 
developing Third World countries. In the current GATT, there are only 
90 developing country members so far, well over three-fourths necessary 
for approval of rule changes and amendments. Is that out of line? Look 
at page 1438, Article 12, Special and Differential Treatment of 
Developing Country Members, 12-1:

       Members shall provide differential and more favorable 
     treatment to developing country members to this agreement 
     through the following provisions, as well as throughout the 
     relevant portions of other articles of the agreement.

  It says ``shall provide.'' That is under the technical barriers to 
trade. If you talk to Members who are advocates of this agreement, they 
will tell you how great this agreement is because the agreements on 
technical trade barriers are going to break down foreign trade barriers 
to our products.
  Read the Agreement on Trade-Related Investment Measures on page 1449, 
Mr. President. And I can go on. But if Members are voting for this 
because they like free trade and want to open up foreign markets and 
think this is a way to do it, please read it and look at the votes that 
are in the WTO. If anybody thinks this is fair, please come down and 
say so. I want to know why it is fair that Americans ought to subject 
their market to foreign trade without having the same access to other 
  Some of you may know America is a great inventive and creative 
country. Part of that is because of our patent procedures that protect 
our inventive creations. Under U.S. law, we currently have 17-years of 
patent protection from the time a patent is approved. But the 
implementing legislation will change it to 20 years from the time the 
patent application is filed. The net effect according to the U.S. 
biotechnology industry is that this legislation will reduce U.S. patent 
protection from 17 to 10 years because of the lengthy time required for 
patent approval. Who will that favor? Not the United States. A patent-
producing country, an invention-producing country, will be at an 
enormous disadvantage. When you look at Japan, who leases our patents, 
you can see this industry will have an enormous pickup because they 
will have to pay for that patent for a period of a decade less.
  Mr. President, I ask unanimous consent for 1 additional minute.
  Mr. PACKWOOD. I yield 1 additional minute to the Senator.
  Mr. BROWN. Mr. President, before Members cast a final vote, please 
read what others have said about it. Le Monde, an influential French 
newspaper, commented:

       A great power like the United States has now less power to 
     impose its views on other countries because it has agreed to 
     the following rules of the multilateral game.

  Mr. President, that is what the French have said. From the European 
Union, Sir Leon Brittan says this:

       A major trading power such as the United States now has 
     fewer levers with which to impose its views on other 
     countries because it has formally agreed to be more mindful 
     of the rules of the multilateral game. This has always been 
     an objective.

  The bottom line is this: We have pretty good leverage now. We have 
not done with it what we ought to. But this agreement has one big 
impact: It creates unfair trading rules and it changes the rules of the 
game so the United States loses its leverage and power to open up 
markets. If you favor free markets, as I do, and expanded trade, please 
read the agreement. I think you will find that rather than opening up 
the market, this cements the closure of some and creates loopholes for 
others. What it says to the rest of the world is that you can have 
access to our market without us having access to yours. That does not 
expand or help free trade, it hurts it.
  Mr. MOYNIHAN. Mr. President, may I say for the record--and if anyone 
disagrees, we can discuss it later--that the United States currently 
pays 14.6 percent of the GATT budget, that being our estimated portion 
of world trade. This year, the U.S. contribution is $8.8 million. 
Anticipating the establishment of the WTO, the President's budget for 
fiscal year 1995 will request $9.1 million. That is an increase of 
$300,000. I ask my friend from Oregon, when is the last time he has 
heard $300,000 debated on the Senate floor?
  Mr. PACKWOOD. I thought my good friend from New York misspoke himself 
when he said ``million.'' That is an asterisk in the budget.
  Mr. MOYNIHAN. That is true. I thank my friend.
  The most distinguished chairman of the Committee on Foreign Relations 
has asked for 10 minutes to address the Senate on this subject. I am 
honored to yield to Senator Pell.
  The PRESIDING OFFICER. The Senator from Rhode Island [Mr. Pell] is 
  Mr. PELL. Mr. President, I address the Senate today regarding the 
legislation implementing the international trade negotiations we know 
as the Uruguay round of GATT. Our actions here represent the 
culmination of over 8 years of work started by President Reagan, 
continued under President Bush, and reaching conclusion under President 
Clinton. The process has been long and tedious but the result well 
worth the effort. With the accomplishments of the Uruguay round, trade 
in the international arena will be freer of the artificial barriers 
which stifle economic interaction and opportunity, especially for the 
United States, the most powerful, dynamic, and diverse economy in the 
world. This means growth for all involved but especially for the 
American economy which historically has demonstrated and will continue 
to demonstrate its ability to compete and win in a marketplace free of 
trade restrictions.
  At the outset, let me state that I am a supporter of GATT. I firmly 
believe that the United States stands to benefit from liberalized trade 
in general and from the provisions of the Uruguay round in particular. 
We have the resources, the knowledge, the quality of labor, the 
infrastructure, the market, and the leverage to compete on an 
unparalleled basis with any country in the world. Lowering barriers to 
our products will mean that we will be able to gain access to new 
markets that were previously closed to us as well as pave the way for 
our developing and tapping the markets of the future.
  The benefits of GATT are broad. The Council of Economic Advisers has 
estimated that U.S. annual income will increase somewhere between $100 
billion to $200 billion over the next 10 years, an increase of 1.5 to 3 
percent of our gross domestic product. Conservative estimates of 
300,000 to 700,000 new jobs have been projected as a result of the 
Uruguay round. A global reduction in tariffs averaging 38 percent--or 
some $750 billion--will mean that consumers will see lower prices for 
the products they purchase. Enhanced protection of intellectual 
property and trademarks--crucial for American growth industries--will 
be put into place, protecting everything from computer software, to 
movies and records, to information and news services. Agriculture 
subsides and protectionism, long entrenched as unassailable in many 
countries throughout the world are finally being reduced. Service 
industries, such as banking and insurance, will be able to take the 
first steps toward global expansion. Clearly, the achievements of the 
Uruguay round present a golden opportunity for the world economy, and 
for the United States as its economic leader, to step forward into the 
reality of the modern marketplace.
  But the Uruguay round of GATT has not been without its detractors. 
Indeed, much has been said since it was signed by 123 countries in 
Marrakesh, Morocco last April. We still hear the cry today that we are 
moving too rapidly in approving this agreement and that more hearings 
are required and that the so-called fast track process used in 
considering GATT is unusual, tainted, and even unconstitutional. These 
arguments, forwarded by the opponents of GATT, simply do not hold up 
under scrutiny. Other detractors claim that the agreement threatens 
U.S. sovereignty and will bust the budget. These arguments likewise 
simply do not merit the concern that they are accorded.
  As I mentioned earlier, the Uruguay round has been in the works for 8 
years now, having begun in Punte del Este, Uruguay in 1986. Moreover, 
the Uruguay round is just an extension of an ongoing process of 
lowering world trade barriers that began in 1947 and has been through 
seven successive rounds of negotiations. In most cases, matters that 
could not be resolved in previous negotiation sessions are taken up in 
the next one. So to say that somehow we are considering something only 
a few months old is not accurate.
  Regarding the fast-track process under which we are considering GATT, 
this process has been used for years and indeed Congress specifically 
authorized its use for the Uruguay round. And while it has been termed 
``fast track'' that is somewhat of a misnomer. ``Fast track'' simply 
means that once legislation is submitted to Congress it cannot be 
amended or filibustered indefinitely. The reason for this is common 
sense. If amendments were allowed by any of the 535 members of 
Congress, the carefully crafted compromises reached in the extensive 
and contentious negotiations with 123 other countries would be 
unravelled in a minute. It is impossible to imagine the world community 
ever coming together to agree to meaningful trade reform if each 
legislator in every country had the ability to amend any portion of the 
entire agreement. Recognizing this, we have authorized the President to 
negotiate as best he can and if we do not like the results, we can 
reject them by a simple majority vote. That is precisely what we will 
have an opportunity to do when we vote on the Agreement at the 
conclusion of this debate.
  The concern about GATT's potential effect on U.S. sovereignty is one 
that warrants careful review and indeed this issue was considered in a 
hearing on this matter this summer before the Committee on Foreign 
Relations. During that hearing, we explored whether or not the World 
Trade Organization [WTO], as set up in the agreement to monitor 
international trade disputes, in any way posed a serious threat to the 
ability of the United States to make or carry out its domestic laws. As 
a result of the hearing, it is my own opinion, and the conclusion of 
the committee as well, that the WTO does not pose a serious threat to 
U.S. sovereignty.

  The WTO does not affect Congress's sole right to change U.S. law nor 
does it create a new powerful international organization. The WTO 
reaffirms current GATT practice of making decisions by consensus. In 
the rare instances that the WTO would vote, each country would have one 
vote, just as they do under the GATT today. The voting procedures in 
the WTO would actually strengthen the hand of the United States and 
weaken the power of smaller countries by requiring a higher majority 
for decisions than is currently required in the GATT. Even if every 
country voted against the United States, they could not affect the 
substantive rights and obligations of the United States which can only 
be changed with the express approval of the United States.
  Since that time, an even further safeguard against threats to U.S. 
sovereignty has been secured at the request of Senator Dole providing 
for a review panel of former U.S. appellate judges which would 
scrutinize WTO decisions to insure against U.S. bias. Whether or not 
this additional safeguard is completely necessary is uncertain but if 
it serves to alleviate any misgivings on the part of those in the 
United States that somehow our domestic laws are threatened, then it 
serves a good purpose. Nonetheless, I believe that there is now even 
further reason to be satisfied that the WTO does not significantly 
threaten U.S. sovereignty.
  Finally, the argument that GATT busts the budget by cutting tariff 
revenues is an interesting argument against the agreement, especially 
since it is being forwarded by those who often advocate the virtues of 
tax cuts, which is precisely what a tariff reduction is. But for those 
who are concerned, it is likely that the U.S. Treasury will be better 
off as a result of the agreement since it is estimated that the 
increased revenues that will result from the increased economic 
activity stemming from the agreement will far surpass the lost tariff 
  Nevertheless, to accommodate the concern for the lost tariff 
revenues, budget offsets have been found to make up for the reductions. 
I commend the Finance Committee for working to come up with the 
financing package to satisfy the requirements of the Budget Act and 
believe that this obstacle to the passage of GATT has been 
appropriately addressed.
  In the end, the debate on GATT has been long, contentious, and 
fraught with the familiar fears voiced in the last half century about 
liberalized trade. Those fears have proven to be unfounded and the 
benefits of freer trade have become apparent. Now, as the world moves 
inexorably toward greater connectedness and economic interdependence, 
we must likewise adapt the rules of world trade to reflect this 
reality. The achievements of the Uruguay round of GATT are significant 
steps toward during that end and it is an opportunity that we, as the 
world's economic leader, cannot afford to pass up.
  I commend the Reagan, Bush, and Clinton administrations for 
demonstrating great leadership and skill in negotiating this 
complicated and difficult agreement. As I recall, Secretary Christopher 
in his confirmation hearing pledged to make U.S. economic interests a 
forefront of U.S. foreign policy and I believe the Clinton 
administration has fulfilled that commitment in completing the Uruguay 
round negotiations, NAFTA and in promoting free trade in the Asia 
Pacific region. I also commend the majority leader, Senator Mitchell, 
and the chairman of the Finance Committee, Senator Moynihan for their 
leadership in developing the implementing legislation for GATT and 
seeing that this vitally important agreement did not fall by the 
wayside during this turbulent year of electoral politics.
  I urge the Senate to support passage of GATT and in the process 
complete the process began 8 years ago to secure the benefits of freer 
trade for the United States and the world.
  The PRESIDING OFFICER (Mr. Mathews). The Senator from New York.
  Mr. MOYNIHAN. Mr. President, may I express my personal appreciation 
to the distinguished chairman of the Committee on Foreign Relations for 
his generous remarks about the Finance Committee and to say, more 
importantly, his firm assertion that the issues of sovereignty have 
been addressed by the Committee on Foreign Relations, and the committee 
is satisfied, and the Senator is here to represent it, and that I think 
is an important fact in the debate.
  Mr. PELL. The Senator is correct. As he will recall, we had that 
hearing on this and we discussed it, and there is no question but that 
the committee as a whole approved it.
  Mr. MOYNIHAN. I thank the Chair.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. BROWN. Mr. President, I ask unanimous consent that a copy of the 
``GATT/World Trade Organization Challenge,'' of which I was the sole 
participant, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     GATT/World Trade Organization Challenge, Nov. 28, 1994--Sole 
                Challenger: Sen. Hank Brown of Colorado

       1. Q. Which political body shall determine the annual share 
     of the World Trade Organization's (WTO) operating expenses 
     owned by the United States?
       a. The House Ways & Means Committee.
       b. The Senate Finance Committee.
       c. The Office of Management and Budget.
       d. The General Council of the World Trade Organization.
       e. Other.
       A. The General Council of the World Trade Organization. 
     Article VII.
       2. Q. The world trade pact now before Congress is to be 
     administered by a new international body, the World Trade 
     Organization that will be located in Geneva, Switzerland. The 
     United States will have one vote in the WTO. Will the United 
     States also have:
       a. A veto as it does in the Security Counsel of the United 
       b. A weighted vote, as it does at the International 
     Monetary Fund and the World Bank?
       c. None of the above.
       A. None of the above. At the WTO, it is one-nation-one 
     vote, no veto. Article IX.
       3. Q. Under the WTO, tribunals comprised of three trade 
     experts drawn from a roster of practicing trade lawyers, 
     scholars and trade officials would hear challenges against 
     countries' laws as violating the WTO rules. Once these 
     panelists have ruled, their decisions are enforceable through 
     trade sanctions. Considering the sizable influence these 
     panelists will have one each WTO Member Nation's domestic 
     laws, what are the WTO conflict of interest provisions to 
     ensure there are not economic or other conflicts?
       A. There is no prohibition for panelists to be conducting 
     their private careers simultaneous to service on a GATT 
     tribunal. Annex 2, Article 8.
       4. The U.S. court system provides for certain due process 
     protections. For instance, all court documents are available 
     to the public and press, as are hearings on cases. The 
     procedural rules of the World Trade Organization prompted 50 
     newspaper publishers and heads of journalistic societies to 
     write a protest letter to President Clinton in September 
       When a U.S. law is challenged at the World Trade 
     Organization, which of the following groups from the United 
     States have the right to attend the deliberations or obtain 
     the documents of the Dispute Settlement Board?
       a. The U.S. media.
       b. The U.S. public.
       c. The affected U.S. companies.
       d. The affected U.S. workers.
       e. State Attorneys General.
       f. None of the above.
       A. None of the above. All deliberations shall be 
     confidential. Annex 2, Article 14.
       5. Q. The final decisions of the World Trade Organization's 
     dispute tribunals take effect automatically unless what 
     percentage of the WTO nations, that are members, reject the 
       A. One hundred percent, including the winning plaintiff 
     nation. Annex 2, Article 16.
       6. Q. The United States has long used access to its markets 
     to enforce a variety of human rights, national security, 
     environmental and health laws. For instance, we have banned 
     imports from countries that violate human rights or products 
     that are not safe. As well, under trade laws such as one 
     called Section 301, we prohibit a country from sending goods 
     to our markets on favorable terms if it does not open its 
     market to our goods. Under the WTO, could the U.S. continue 
     to use these unilateral trade measures against WTO member 
       A. No. Under Article 23 of the WTO's Dispute Settlement 
     Agreement, the U.S. must use the WTO's Geneva tribunals to 
     resolve matters with WTO member nations for all issues 
     covered by the WTO and all issues that touch on the 
     expectations of other members under the WTO even if there are 
     not specific WTO rules covering these matters. Annex 2, 
     Article 23.
       7. Q. Would the WTO require the United States to accept 
     imported food that does not conform to our existing 
       A. Yes. The WTO requires Members to accept imported food if 
     the exporting country shows that its different standards are 
     ``equivalent'' in meeting our domestic level of protection. 
     Unfortunately, the term equivalent is not defined and similar 
     provisions in the 1988 U.S.-Canada Free Trade Agreement 
     allowed circumvention of U.S. food safety standards, 
     including meat inspection. Agreement on the Application of 
     Sanitary and Phytosanitary Measures, Article 4.
       8. Q. Under the WTO Agreement on Technical Barriers to 
     Trade, all WTO Members are required to base their domestic 
     standards on international standards that are now complete or 
     whose completion is imminent. Technical standards refer to 
     any non-food product standard such as consumer product safety 
     standards, bans on hazardous substances such as asbestos and 
     environmental laws such as the Clean Air Act. the WTO would 
     allow countries to avoid the requirement of international 
     standards only for three reasons. That the international 
     standard does not provide sufficient consumer health or 
     safety or environmental protection is not one of the 
     exceptions. Please name three reasons.
       A. Fundamental technological problems.
       Fundamental climatic problems.
       Fundamental geographic problems. Agreement on Technical 
     Barriers to Trade, Article 2.
       9. Q. Under the current GATT, if a dispute panel rules 
     against a U.S. federal or state law, the decision of the 
     panel and any later decision to impose sanctions could only 
     be made if the United States agreed. Under the proposed WTO, 
     the de facto veto has been eliminated. Thus, should the WTO 
     rule against a U.S. law, the United States would have only 
     three options in response. What are those three options?
       A. a. Eliminate or alter the U.S. law to conform with the 
     tribunal's ruling.
       b. Pay compensation to the winning country.
       c. Face trade sanctions from the winning country. Annex 2, 
     Article 22.
       10. Q. The Clinton Administration has stated that the 
     United States would have no obligation under the World Trade 
     Organization to make U.S. laws meet WTO regulations. If the 
     United States joins the WTO, would have the legal obligation 
     to conform its law with the hundreds of pages of Uruguay 
     Round rules?
       A. Yes. The agreement's exact language is: ``Members shall 
     ensure conformity of their laws, regulations and 
     Administrative procedures'' with all of the annexed Uruguay 
     Round Agreements (i.e. all of the substantive rules.) Article 
       11. Q. The North American Free Trade Agreement (NAFTA) 
     clearly exempted actions to be taken under three major 
     environmental treaties: The Basel Convention on the Control 
     of Transboundary Movements of Hazardous Wastes and their 
     Disposal; the Montreal Protocol on Substances that Deplete 
     the Ozone Layer; and The United Nations Convention on 
     International Trade in Endangered Species of Wild Fauna and 
       Which of these environmental treaties are exempted under 
       A. None. Article XVI.
       12. Q. Is it true or false that a ban by any WTO member 
     nation on the trade of goods produced by prison labor and by 
     child labor are illegal under GATT/WTO?
       A. False. Only bans on trade of goods produced by prison 
     labor are illegal under GATT/WTO. Foreign trade of goods made 
     by child labor is GATT/WTO legal. The General Agreement on 
     Tariffs and Trade, which came into force on January 1, 1948, 
     allows contracting parties to bar imports of goods produced 
     with prison labor. (Includes amendments to original GATT 
     text.) Article XX (e). Article 16, 1, of the Uruguay Round of 
     GATT incorporates this and other provisions by reference.
  Mr. MOYNIHAN. Mr. President, I will suggest the absence of a quorum 
with the time to be equally divided and controlled.
  Mr. HOLLINGS. Mr. President, I will use some of our time.
  Mr. MOYNIHAN. Sure.
  Mr. President, the Senator from South Carolina has control of his own 
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. Mr. President, let me first thank the distinguished 
Senator from Colorado for the deliberate and very thorough approach 
that he used in analyzing this GATT agreement. It is a discombobulated, 
tricky mess.
  I am an old-time lawyer. That is how I made a living and am able to 
afford serving in the U.S. Senate. Business clients would come in and 
present a contract to you and say ``Hollings, what about this?'' I 
would have to analyze the good and the bad and then come up and help 
the client make a judgment.
  Now here what we have, as pointed out by the Senator from Colorado, 
Senator Brown, is the worst kind of contract that you could possibly 
imagine. People do not really believe that officials representing 
American interests can enter into such a contract.
  Let me tell you how we have been taken over. What happened is, Mr. 
President, we started at the end of World War II, the only 
manufacturer, the only industrial complex left standing after the war. 
Wisely, we determined to subsidize, lead, and support the development 
of capitalism in Europe and particularly in the Pacific rim.
  And in those days we had a number of aid programs, Public Law 480 in 
agriculture, and the tax breaks for industry.
  Industry resisted it at first, going abroad. They did not want to 
travel all the way to Japan--they did not speak the language--or travel 
to places like Korea, and certainly not to China or Taiwan and Hong 
Kong and Singapore and other countries. In Europe, the Marshall plan 
took root, fortunately, and no one regrets it. It was a visionary 
policy to rebuild the devastation wrought by war.
  But the fallout from this visionary foreign policy has become a 
disaster to our economic policy. I have the greatest respect for the 
chairman of the Foreign Relations Committee, but, this is not foreign 
policy anymore; this is economic policy. That is the problem. We cannot 
get that mindset changed.
  We cannot get it changed in the administration at the White House. We 
tried to with NAFTA. And we will go at length to show that, yes, that 
sucking sound is there and it has been muffled here because we do not 
have time for debate. But if they want to get into it, I would be 
delighted to give them the facts, the numbers, because we are losing to 
Mexico. We are losing jobs.
  But what has developed is what you might call a trade war. And, Mr. 
President, the enemy is not Japan. I have been in enough debates around 
here. Well, they say, ``Oh, you are just bashing Japan. You are just 
from a little textile State and you want to bash Japan.'' I do not bash 
Japan. I am bashing Washington. As the nationals found out that they 
could produce more economically by placing their production offshore, 
they became multinationals. How do they do it?
  They said that they had a hearing in the Foreign Relations Committee. 
We had eight hearings. And here is the booklet. I hope they will read 
this very pro and con balanced set of hearings, commended by all the 
colleagues who attended. It was shown there in the hearings that for a 
typical American industry 30 percent of its sales volume is taken up by 
labor costs, and, Mr. President, you can save 20 percent of that cost 
or volume of labor by moving your production offshore to the Pacific 
rim, or to any of these low-wage countries.
  Now, what has happened with the fall of the wall is that you have 4 
billion people coming into the capitalist work force, 4 billion workers 
making 2 to 3 percent of the American wage. You can get 50 Chinese for 
one American worker, you can get 27 Filipinos for one American worker, 
you can get 37 Indonesians for one American worker. And so you can go 
to any of these countries, and save 20 percent by moving offshore.
  If you have $500 million in sales, 20 percent savings means you could 
make or increase your before-tax profit 100 million bucks by getting 
out of the country, moving your production offshore. You can keep your 
regular sales force here in this country, the executive branch, and sit 
up there on the 50th floor of the Chase Building in New York and spin 
out all of this nonsense about free trade, free trade, free trade, free 
trade, while they are gutting the work force. The manufacturing base in 
the United States has gone, since 1987, from 26 percent of the work 
force to 16 percent.
  You can make $100 million by moving your production offshore or you 
can go broke by staying in the United States. That is the trade policy 
that this Government has. That is why I call the Government the enemy 
in this trade war. We have seen the enemy and it is us. It is common 
  In one of the finest news articles you have ever seen, Mr. 
President--it was just a few days before the election--the USA Today 
said: ``Americans in a Stoning Mood.'' And there was one sentence that 
summed it all up. It was a medical technician in New Hampshire who 
said, ``It used to be that you could work hard, keep your nose clean, 
and you could always count on your job. But today, you could lose your 
job at any time.''
  And the reason for it is us right here.
  So you start with a program of trying to bring about capitalism, 
which has worked 40 years ago, but now gobbles us up. Now that the 
nationals became multinationls, espoused free trade, knowing all along 
that they were moving out of the United States where they do not have 
to worry about Social Security and Medicare, clean air and clean water 
and safe working place and safe machinery, and plant closing notices 
and parental leave, and you do not have to worry about that Congress 
raising your cost of doing business. You can go to Taiwan, Hong Kong, 
Singapore, in Malaysia, in India--where you are protected from 
Congressional regulation.
  So if they come, these folks making big money, the multinationals, 
they go to their banks who are financing them and say, ``We must 
support free trade.''
  If you ever run for President, they will invite you to the council on 
foreign relations. And when you come at their invitation, what they 
will do is they want you to swear on the alter of free trade, almighty 
faith for ever and ever you are a free trader, you are a free trader. 
``Yes, I am for free trade; free trade.'' That is all they want. You 
can get their contributions, you can get their support. I have been 
there. I know what I am talking about.
  And so you have then the multinational corporations and the 
multinational banks. And then they finance all the consultants and the 
think tanks. And you can spew in any kind of statistical material you 
want to these economists and they will support free trade with paid 
studies. And that is the kind of statistical bunk we have to hear at 
every one of these GATT rounds about the thousands of jobs and $1700 a 
year we are going to make and everybody is going to get rich in 
  Mr. President, I feel like that boxer who was obviously losing. By 
the 10th round, he was staggering, barely able to stand. He fell back 
on his stool in the corner. And, of course, his second was patting him 
on the face. ``He hasn't put a glove on you. He hasn't put a glove on 
you.'' And he blinks and barely opens his eyes. He says, ``'Well, watch 
that referee, because somebody is knocking the hell out of me.''
  I mean, they are telling us we are getting rich, while we are losing 
jobs. Do not come around here and tell me they are interested in jobs, 
manufacturing and economic strength of America. They are debilitating 
and destroying it here today and tomorrow in the National Government. 
That is blind to what is occurring in the global marketplace.
  Because after they get the multinationals, the multinational banks, 
the consultants, the think tanks--and we have had them all come in and 
testify; we have had them at our hearings--then they go to the 
retailers. And that is a story that has already been told by the 
Senator from North Dakota and the Senator from Ohio. Compare prices of 
foreign-made and U.S.-made blouses. I have done it myself. Go down to 
Bloomingdale's: One made in the United States, one made in Taiwan--both 
$32. Go over to Herman's, get a catching glove: One made in Korea, one 
made in Michigan--both $42.

  When Nike moved offshore, the cost of shoes did not go down. The 
profits rose. That is what happened. They can take what is made in the 
United States and what is made more cheaply offshore and make a bigger 
profit. I remember one of the debates. I went down and got the annual 
report of the Washington Post, that crowd--they made $1 billion on 
advertising. I think this was about 1987 or 1989, and 80 percent of 
their profits, $800 million of that profit, was from retail 
advertising. ``Whose bread I eat, his song I sing.'' Do not tell me 
about this business crowd and something being free. There is nothing 
free in business. This is not foreign policy, this is business policy.
  The other governments and the competition have made it their business 
to play by business rules, and we sit around here with the golden rule. 
Do as we say: Free trade, free trade, free trade. We have been trying 
for 50 years, and you have seen the deficits in the balance of trade. 
Not ``exports, exports, exports.'' We have a deficit in exports; 
whereas our exports are totally overcome by imports. And then it came 
to mind, when the distinguished Senator from Colorado was pointing out 
how that agreement--how they could sell out, because all of these 
particular trade representatives go back downtown and represent the 
other side after leaving the Government. There are 68,000 lawyers, Mr. 
President, in Washington, DC. Yes, there are a few lawyers here in the 
Congress who can read contracts, thank heaven. But if you can find me 
one of those 68,000 lawyers downtown who is against GATT, I will jump 
off the Capitol Dome. Come on. They all have their hands in the till 
here. They do not care about jobs. They have clients. They are making a 
  How are they going to create jobs under this GATT? Here, not only are 
we opening our markets, we are exposing our basic laws to challenge. 
Suppose you do not like the Glass-Steagall Act. And it has really kept 
the integrity of banking since the 1930's, but you want to change that 
particular act. So all you do is get one of those Washington teams of 
lawyers to get a little small country and get together with some money, 
and that little small country petitions GATT, the World Trade 
Organization, to say that Glass-Steagall--governing the requirements on 
banking in the United States--is not the least trade restrictive way of 
regulating financing. And you can abolish your law. No, this 
implementing bill does not change the law, but they have a way to 
repeal it over in Geneva. You obey or you pay.
  Or you can get another group of lawyers to go after your investment 
laws. Suppose you had trouble with securities, the SEC, the Investment 
Act of 1940, and the requirements thereunder with regard to foreign 
investments. You can go down and get a bunch of Washington lawyers and 
get after that one, too. You can go after the environmental laws--and 
they have.
  The CAFE standards have been found, by GATT, as GATT illegal right 
this minute. But we vetoed it, virtually, because we do not have to go 
along. We virtually have a veto under the current GATT. The current 
GATT found GATT-illegal our tuna-dolphin law, our embargo against the 
Mexican tuna coming up where they do not obey the dolphin laws; they 
find it illegal, but we have vetoed it. Now we lose our veto.
  I was thinking of those lawyers. It just got me because I have to 
cover one other topic. I see some others here and we want to hear from 
  Mr. President, you have supporting the GATT the Washington 
newspapers, the think tanks, the Washington lawyers, the retailers, the 
multinational banks, the multinational corporations, and the Fortune 
500. And why has that ``GATT now'' crowd been running those ads? None 
other than Robert Reich, the Secretary of Labor, on page 95 of his 
book, ``The Work of Nations,'' says between 1975 and 1990, the Fortune 
500's have not created one net new job in the United States. And since 
that time--I have the record here--they have invested over $50 billion 
overseas. And, to bring it totally up to date, we have another 
particular page here out of the Business Week article where they talk 
about the spending binge being global. The spending binge.
  Here are all the poor working people who never heard of any spending 
binge. But I read from the November 14 Business Week. It says, ``As the 
global upturn widens, the investment spree among U.S. companies is 
spreading to their overseas operations.''
  Can these Senators listen? Not American investment. Oh, they are 
making money, all right. And they are investing it, all right. And they 
are investing it overseas.
  According to a recent Commerce Department survey, ``Foreign 
affiliates of the United States firms plan to hike their capital 
outlays by 8 percent this year to about $69 billion, the largest 
increase since 1990.''
  The last sentence of the Business Week article concludes: ``Capital 
expenditures by U.S. affiliates in Mexico are set to jump an eye-
popping 40 percent.''
  There you go; that is it. What are we talking about? We are talking 
about jobs. And we are getting the rich richer and we are getting the 
poor poorer. Why? Time Magazine had a cover article here, ``Boom for 
Whom?'' in late October. Sure, it is a boom for this crowd, the ``GATT 
now'' group, the Fortune 500 crowd, the newspaper editorial crowd, the 
multinational crowd, the multinational bank crowd, and the retailers 
returning all over the place trying to increase their profits.
  But there are a few of us lawyers here who can read contracts, as 
Senator Brown from Colorado has. And we know what is good for the 
country. I do not have to serve a corporation or individual--I serve 
them both. I can tell you categorically we have had an uphill fight. We 
had it in 1979. We had the same rhetoric as the Senator from North 
Dakota has pointed out, reading it to you. We have had our own Finance 
Committee in 1986 saying: ``The Tokyo round was a bust.'' It was not 
working. It did not give the economic boom and all that kind of stuff 
that they continue to talk about now. It is ruining the country. They 
want to take a bleeding wound and turn it into a hemorrhage. It will 
ruin the middle class. And that is my point.
  The crowd that came to Washington to support and prosper the middle 
class is destroying the middle class. That is exactly what this article 
says here, ``Boom for Whom?'' Regarding service jobs, it says: ``The 
people cannot lead a middle-class life in the service jobs that are 
left over.'' That is the state of America, and that is the point of the 
recent election. But voters are just as angry still at Republicans as 
they are at Democrats. It just was their time at bat. If they do not 
understand it, some on the other side of the aisle, we will get rid of 
them in 1996. I will borrow their TV ads, change the words around from 
Democrat to Republican, and we will run them out of town. Because we 
are both guilty. We have not faced reality. We have been selling the 
industrial and manufacturing and economic backbone of America down the 
tubes and we are destroying the middle class that supported this 
democracy. That is why we have the inner-city crime. That is why we 
have the latchkey children. That is why we have the drugs.
  The GATT proponents give all those statistics. The trouble with this 
crowd is that the statistics that they give measure activities, not the 
impact on the social order. When we had Hurricane Hugo, then we had to 
rebuild all the places down there in my back yard, and that increased 
the GNP--the carpenters, the timber, the materials, and the renovation. 
Likewise, you ironically get an increase in GNP when we have an 
explosion of health costs. We build more hospitals. The same thing when 
we get drugs, when we get crime. We build more prisons.
  The cost of drugs and crimes and natural disasters--floods and all--
is 7.5 percent of the GNP, if they want to give figures. That is just 
activity. It is not good activity, not favorable. What we have to do is 
assume the responsibility of not being number crunchers around here, 
and putting the people first and not the money first. That is the whole 
point here.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time? The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I have the honor to yield 10 minutes to 
the distinguished, formidable, and indomitable Senator from Maryland, 
Senator Mikulski.
  The PRESIDING OFFICER. The Senator from Maryland [Ms. Mikulski], is 
  Ms. MIKULSKI. Thank you very much, Mr. President. I thank the 
chairman of the Finance Committee for yielding time and congratulate 
him on his recent victory.
  Mr. President, I have spent my entire life trying to save jobs, save 
communities, and help people who are trying to help themselves. I have 
spoken many times on this floor about generating jobs, jobs in my own 
home State and jobs in the United States of America.
  For my own home State right now, the key to the future is export 
jobs, and that is why I have decided to vote for GATT. The old ways are 
not working. The world is changing and a new economy is about to be 
born. I do not want the United States of America to be left behind.
  As a member of the Appropriations Committee, I have been trying to do 
my part to make public investments, to generate jobs in aerospace, in 
high-speed ground transportation, in new environmental technologies 
that the world desperately needs. I have been a leader trying to urge 
our Government to work on core technologies, to focus on strategic 
research to lead to new ideas and new products.
  I want to see the United States of America win not only the Nobel 
Prizes but also win new markets. I want the United States of America to 
reap the rewards of those great new American ideas. For years, I have 
worked with my colleagues to protect American inventions against 
countries that deny adequate intellectual property rights. I want good 
American know-how protected and the jobs that it creates to stay right 
here in the United States of America.
  I want to see us develop new American products, restore our Yankee-
trader tradition and export those products around the world. We have 
done a great job exporting democracy and now I want us to export 
products that are made in the United States of America. The future of 
the United States of America does lie in high technology. Even so-
called low-technology manufacturing is now going high technology.
  But in order to develop export technologies, we need to have export 
markets, and GATT gives us the chance to do that. GATT will eliminate 
or drastically reduce foreign tariffs on leading products that Maryland 
does export. It means that my own State can sell more abroad and that 
it will also protect ideas and inventions that are being developed in 
the United States of America in the fields of life science, space and 
transportation technology, and in the environment. That means more jobs 
for us.
  In this debate, I have heard from the working people of Maryland. 
Some fear for their jobs and others believe that GATT will help them 
and their children have good jobs now and in the future. The working 
people of Maryland are on both sides of this debate, and I want to be 
clear. I hear them and I acknowledge what they are saying. I 
acknowledge their fears. I acknowledge their hopes. I acknowledge their 
dreams, and I also acknowledge the fact that they worry about their 
very lives being downsized.
  Make no mistake about it, I am a blue-collar Senator. My heart and 
soul lies with blue-collar America. I spent most of my life in a blue-
collar neighborhood. My mother and father owned a neighborhood grocery 
store. When Bethlehem Steel went on strike, my dad gave those workers 
credit. My career and public service is one of deep commitment to 
working-class people. And in the last decade, working people have faced 
the loss of jobs, lower wages and a reduced standard of living, and a 
shrinking manufacturing base, everything that the critics say. But 
voting against GATT will not save those jobs or bring those jobs back. 
If I thought that is what would be the solution, I would support it. 
But right now, we know that the world will either pass us by or we will 
be part of the new economic relationships.
  Much has been said about the loss of sovereignty. If we do not 
support GATT, all we are going to be is hollowed out as our jobs flee 
to other nations. The globalization of labor makes that a reality. 
Demography is destiny: 1.2 billion in China. So, therefore, we need to 
have relationships with these countries.
  I have just gotten back from an East Asian trip focusing on trade and 
national security, traveling on a bipartisan basis with John Glenn, Sam 
Nunn, Dave Pryor, Kit Bond, and Bill Cohen. It was clear--clear--that 
they want to do business with the United States of America, and why? 
Because we are the best of the best. That is why I believe that we can 
play a role and save manufacturing jobs if we support GATT.
  I have been listening to America's working people, and I know their 
fears personally. But I also know that the old ways are not working; 
that the current rules of international trade are holding America back. 
All America needs is a fair chance and a level playing field to compete 
  The Uruguay round is not perfect, and this implementing bill is not 
perfect. But the bottom line for me is that foreign tariffs will be cut 
by one-third for manufactured products, and also it will cut tariffs 
and reduce trade barriers for many of Maryland's top export industries. 
So Maryland will be able to export more, manufacture more, and create 
  What it does mean is that there will also be more jobs for the Port 
of Baltimore. It means more and more work out of our great American 
minds, world-class research and development, and those issues will not 
be stolen to reap profits for foreign countries.
  My State of Maryland is ready, willing, and able to compete for jobs. 
In 1989, one out of every six manufacturing jobs in Maryland was tied 
to exports. And in the early 1990's, Maryland's exports grew at twice 
the national average. This huge increase was led by a 65-percent rise 
in products manufactured in Maryland being exported and sold overseas. 
For Maryland, these exports mean jobs today, and it also means more 
products that Maryland can export, more products that Maryland can 
manufacture and, thus, more jobs in the State of Maryland.
  I believe that with this new century coming, we must engage, have 
constructive engagement with the rest of the world. We cannot close our 
doors or close our minds to the reality of what is happening. I believe 
that if we pass GATT, yes, it does present problems, but the problems 
will be far more significant and the world will truly pass us by if we 
do not vote for GATT.
  For those emerging nations, if we do not vote for GATT now, when they 
continue to become export trading nations as well--or import--they are 
going to hold it against us. They are going to say, ``Where were you in 
the 1990's when we could have all come together?''
  The issues today are less now of strategic alliances and more of 
economic alliances. Our President went to APEC. We now see EC. I voted 
against NAFTA, and yet based on what I am seeing now, NAFTA maybe was 
not as bad as I had anticipated.
  Now on the brink of this new day, I believe that we must seize the 
day and vote for GATT. So I am voting for GATT to generate more 
exports, to create more jobs in my own State of Maryland and in the 
United States of America, and I am voting for GATT because I believe 
America's future depends upon it.
  Mr. President, I yield the floor and any such time as I might have 
  Mr. MOYNIHAN. Mr. President, may I congratulate the Senator from 
Maryland on a powerful, persuasive case spoken from the point of view 
of those workers at Sparrows Point and those workers at Bethlehem 
Steel, those people in Maryland who earn income from exports. Just to 
give one quick example from a New York firm, George Fisher, the head of 
Kodak, who recently, apropos the Senator's tour of South Asia on trade 
matters, said: ``There are 4 billion people in the world who have never 
snapped a picture and we have plans for them.''
  I thank the Senator.
  Mr. President, I see our distinguished President pro tempore is here.
  Mr. PACKWOOD. I have talked with the distinguished President pro 
tempore, Mr. President, and he indicated to me that he would kindly 
allow Senator Burns to go first. So I yield 15 minutes to the Senator 
from Montana.
  The PRESIDING OFFICER. The Senator from Montana [Mr. Burns], is 
  Mr. BURNS. I thank the Chair. I thank my friend from Oregon.
  Mr. President, as we rise today to make note of our intentions on 
this important piece of legislation, of course, I am not real sure of 
the time that I have in this body. This is probably one of the toughest 
votes that I have ever had to deal with. So we do not take this vote 
very lightly because it does have ramifications and it will have great 
affect all the way around the world. We could take a look at the world 
economy. But yet it all boils down to what happens locally. How does it 
affect our States and the people who live in those States and what our 
own local situation is? So I guess, even though having great 
international implications, it still goes back to the speaker who was 
Speaker of the House from Massachusetts when Tip O'Neill said all 
politics--and of course, all situations--are local.
  I am a free trader, and have been in the private sector all my life. 
But we all were operating out of almost the same rule book, not 
entirely. When I look at this and see who is making the rules and those 
rules are coming from outside the framework in which we are going to 
have to operate, it brings up great questions.
  So I intend to vote no on the GATT agreement, and I also intend to 
vote against the budget waiver because I remember those of us who came 
off of campaign trails just not quite a month ago, and we said we were 
going to vote for less Government and more jobs. This is not one of 
those vehicles which lets us accomplish that end. The real debate boils 
down to winners and losers.
  This agreement by some has been called a win-win situation for 
Americans. Free trade is good policy for consumers in many industries 
that will benefit from new trade rules. But again when we go back, 
consumers will win because tariffs on imports will be lowered. I am not 
real sure, however, that those who import are willing to pass along 
those savings to the consumer. Nobody has shown me where they intend to 
do that. I think it is something--and I do not want to be 
antibusiness--where somebody gets a product and he can put it on the 
market, and the market is driven by supply and demand. But I am not 
real sure that the money saved in tariffs will be passed along to the 
consumer even in a competitive environment. I know whenever this 
Congress repealed the wool incentive, the wool incentive was financed. 
The incentive was given to our sheep producers of America, and was 
financed by tariffs collected on wool imported into this country.
  If we repealed part of that, we only repealed part of the law and 
that was the part when we give incentives to the sheepmen. We did not 
repeal the tariff because this Government kept the $120 million out of 
the $400 million that they collected in tariffs. This Government kept 
the $120 million for itself and diverted those funds into other funds 
for which the law in the first place was never intended.
  So will corporations take the same attitude? I do not know. We have 
known how to deal with tariffs. But sometimes I doubt if we really know 
how to deal with nontariff demand items. Tariffs and unfair subsidies 
in other countries will be cut allowing our agriculture maybe to be a 
winner. And I am not sure yet. But it looks good to many people.
  The United States is the largest exporter. It has already been said. 
Our GNP is tied to exports. We make and grow a lot of products. We sell 
computers, electronics, steel, automobiles, cattle, corn, and wheat. 
Our financial institutions and entertainment industry are second to 
none, and our economy thrives for the most part on exports. But nobody 
has talked about the losers in this deal, and they are out there. Not 
everybody will win. This free trade deal will not be fair for 
everybody. We have to slow down and take a look at who will be 
negatively affected in our own neighborhoods. Who will see the benefits 
of GATT? And when I see how this GATT will affect our daily lives with 
the people in my home State, I see the negatives of GATT fall 
disproportionately on States like Montana.
  I will give you a good reason for that. Let us look at the agreement 
and how it will affect our State. We are a rural State. We do not have 
big cities. We do not have a large manufacturing base. We are dependent 
on natural resource industries like agriculture, mining, timber. And, 
yes, we do have a very solid and new and thriving high-technology 
community that is just now getting off the ground.
  So I want to know how GATT is going to be worked for the working men 
and women of my State, the men and women who carry the lunchbox, who 
pull the shifts, and they are just not a faceless crowd out there. They 
are people, folks. They own homes. They would like to drive a new 
pickup every couple of years. They like to educate their kids. They 
want a part of the American dream too. They are not in the position to 
make the policy that will govern this, the guys who cut the timber, the 
guys that run the family farm, and the miners who provide our minerals, 
our trace minerals for, yes, American industry. They are the ones who 
stand to lose the most. They are the ones that are going to have to 
compete in the world market. They compete with the Third World worker 
who scratches for meager wages. I think it forces our workers to 
compete with developing countries. Montana workers will be in direct 
competition with the Argentine farmers, Chilean miners, and the 
Indonesian loggers. Those decisions are not even made by those miners 
or those loggers or those farmers. Those decisions will be made by the 
governments of those respective countries.
  So we cannot allow somebody else to pull the rug and make the 
decision who wins and who loses and pull the rug from our people here 
in the United States. Some folks would call that protectionist. I say 
it is trying in the best way in the world in a democracy in a free 
society to argue for my side and to sell my product. I do not want to 
be excluded by price alone.
  Agriculture was excluded in the GATT for the first time. That is good 
news for producers. But a closer look will tell us that the changes are 
not even across the board. The time schedule for cutting subsidies 
lowering the tariffs is different for developing countries than it is 
for developed countries. That is not a level playing field. America is 
lucky in that we are very lucky that we can feed ourselves, and we feed 
a lot of people around the world.
  We do not have to worry about food shortages in this country, and we 
should not trade away our food production in exchange for gains in the 
service industries and, again, this agreement is not fair.
  We have a longer border with Canada than any other State in the 
Union. I have seen firsthand how a free trade agreement really works, 
not just on paper, but in reality. We have had to deal with a dispute 
with Canada not on tariff problems but on nontariff barriers. Now we 
are told that GATT is not NAFTA, and I agree; it is bigger, with more 
members, more bureaucracy, more pages.
  So in Montana, our ranchers and grain growers are struggling to 
compete with Canadian imports coming over the border. It is not a 
question of efficiency. It is about nontariff barriers, such as tests 
for bluetongue, keeping our feeder cattle from going north of the 
border. I probably would have no problem--we have just one border 
crossing up at Sunburst, MT, where you have 250 loads of cattle a day, 
and these ain't bobtail loads, folks; these are semis, 250 loads a day 
coming across into this country. Yet, we cannot take advantage of a $6 
to an $8 per hundredweight market better than ours on feeder cattle 
going to the north to be fed in southern Alberta. Why? Not because of 
tariffs, but because of a nontariff barrier that they called for animal 
health reasons, and the principal thing called bluetongue.
  So with all of this, we see nontariff barriers going up. We can deal 
with and negotiate tariffs. But we have a hard time negotiating on the 
nontariff barriers. I have heard some say this helps us to deal even 
with the nontariff deals, because it will bring it into a situation. 
Montana was the largest buyer of Canadian wheat last year. We could not 
get them to the table. Had it been producer to producer, we probably 
would have worked it out. When a country such as Canada markets their 
wheat through a national wheat pool and we here market our commodity by 
individual farmers and they have to compete against the Canadian 
Government, this is not fair because that was a Government decision, 
not a producer decision. It was a Government decision.
  Let us talk a little about the WTO. It creates a bureaucracy of 
historic proportions to oversee international trade. Future WTO dispute 
settlements may intrude upon areas of policy previously outside of the 
scope of the U.S. multilateral trade relations. The bottom line is that 
the WTO could put our Federal and State laws at risk. There will be 
those of the legal community that say that is not a risk. Already, our 
State and Federal laws and regulations on the environment, product 
standards, testing, labeling, and certification have been identified as 
potential violations.
  The dispute settlement panel does not stand up under scrutiny. They 
will say that NAFTA and the Canadian Free-Trade Agreement is not a good 
example to compare it to, but we do not have anything else to compare 
it to. Anytime that you can dump all of your excess commodity on the 
market in less than 6 months, and it takes a year and a half to get 
people to the table, let me tell you, your market has been disrupted, 
eroded, and it cannot be put back together. In fact, it went so far on 
the Canadian border that we had farmers put their trucks around the 
elevators so they could not accept any more Canadian grain in Montana. 
It was a very volatile and hostile type of situation that existed just 
on the Canadian border in my State of Montana.
  There is a lot of power in the WTO, delegated to them by unelected 
and faceless bureaucrats, most of them put in place by foreigners.
  So when we lose a case, we have to follow the ruling. The same teeth 
that can be used to force our trading partners to follow the rules will 
be used against us, and I guess that is a fair statement if you really 
believe in what the WTO stands for. So we will be forced to pay the 
price, either through compliance, compensation, or retaliation.
  Does it seem fair to you, or anybody else, that we are going to pay 
25 percent of the cost of the WTO and we get less than 1 percent of the 
representation of the vote on that panel? I think we can negotiate a 
better deal. The European Economic Community has 17 votes within that 
union, and that union is being put together why? For a trading block, 
just like our North American Free-Trade Agreement. But under NAFTA, a 
trading block would have 3 votes. But 17 would be true with the 
European Economic Community.
  If you say each State or each part of the Union would have a vote, 
that would probably give us 50, and we could probably deal with 
something like that. I do not think that is exactly fair, either.
  Nobody knows for sure what will happen when the WTO is unleashed. But 
is it a risk we can take? Sure we can get out of it, like we can also 
get out of any of the international organizations we belong to. 
Unfortunately, we get sucked into these groups to never escape. The 
only certainty is that our portion of the tab always increases and the 
number of bureaucrats grows. Meanwhile, we do not have the influence in 
proportion to our trading size. The United States will have one vote 
and no veto. This is an unprecedented attempt to put us on the same 
level as every other member. This is just one more step in the 
direction of a world government.
  Another glaring problem is the implementing legislation and the 
financing provisions. This is not the place for surprises and sweet 
deals for special interests. And Congress and the President cannot 
ignore the budget rules by waiving the costs of implementing the deal. 
It has been called a tax cut for consumers. That is banking on 
retailers to cut prices to reflect the drop in tariffs. Short of that, 
it is a loss of revenue and an attempt to break the budget, putting 
American taxpayers on the short end of the stick.
  In conclusion, I do not support this trade agreement. After looking 
at it from every angle I am absolutely positive that this is not a fair 
trade agreement for everyone. I cannot ignore problems with the World 
Trade Organization, or flaws with the financing provisions and 
implementing legislation. And I look at the lessons Montana has learned 
from our previous trade agreement with Canada and Mexico which show 
that agreements that look good on paper, do not always work well in 
  I am a free-trader, but I cannot support a free trade agreement that 
is not fair. GATT is not fair.
  The PRESIDING OFFICER. Who yields time?
  Mr. MOYNIHAN. Mr. President, I do not know that the Senator from 
South Carolina is present. I know if he were, he would wish to yield 
time to the distinguished President pro tempore. I will take the 
prerogative of yielding such time as he may desire, the time to come 
from the Senator from South Carolina.
  The PRESIDING OFFICER (Mr. Graham). The Senator from West Virginia is 
recognized on the time of the Senator from South Carolina.
  Mr. BYRD. Mr. President, with great respect to the very distinguished 
chairman of the Finance Committee, and to the very able ranking member 
of the Finance Committee, I make these comments, and in the spirit of 
total friendship, admiration, and high regard. I am opposed to the 
executive agreement on the GATT Uruguay round, and I shall shortly 
raise a budget point of order against it, even though the waiver of the 
point of order will not be voted on until the very end of the running 
of time on tomorrow and just prior to the final vote.
  While I support efforts to reduce tariffs the world over, I believe 
that the Uruguay round is of such stature, such scope, and such 
permanence that it should have been considered as a treaty, requiring a 
supermajority vote in the United States Senate, rather than as an 
executive agreement requiring a mere majority in both Houses of 
  I do not take the position that it is constitutionally wrong or that 
it violates the Constitution not to have this far-reaching matter 
presented to the Senate in the form of a treaty, but as an executive 
  I do take the position that it should have been presented as a treaty 
because of its scope, its dignity, its stature, its far-reaching 
importance, and I realize that, more and more, we are getting away from 
the use of treaties in dealing with such vital matters and going more 
and more to the executive agreement instrument. I feel that, with each 
time this is done, it becomes easier on the next occasion to proceed by 
way of an executive agreement rather than by the instrument that is set 
forth in Article II, section 2 of the U.S. Constitution, the language 
dealing with the treaty process.
  Inevitably, over a period of time, the result of this growing trend 
will be a reading out or an amending, in effect, of the treaty process 
as set forth in the Constitution.
  The messenger in the third part of King Henry VI stated it well when 
he said:

     But Hercules himself must yield to odds;
     And many strokes, though with a little ax,
     Hew down and fell the hardest-timber'd oak.

  So, Mr. President, that hardest-timber'd oak of the treaty process as 
set forth in Article II, section 2 of the Constitution will eventually 
be hewed down and will have been felled by the many deviations from the 
use of that constitutional provision.
  In any event, action on the Uruguay agreement should be delayed until 
next year. The Members of a new Congress, not the lame-duck Members of 
the old Congress, should have the opportunity to fully study the 
agreement and make their decisions with more attention to the details 
of this far-reaching agreement.
  People of this country are entitled to render a verdict on the 
judgment of lame-duck Members as expressed by their votes on this 
matter. Those lame-duck Members, those who will have retired, those who 
will have been defeated at the polls--and I say this with the highest 
respect for any and all of those Members--they will have had a free 
ride; they will not have to answer for their vote to the judgment bar 
of the people at the next election.
  I regret that. I regret that this vital issue is to be decided in 
this Congress.
  I also regret the rape of the legislative process by the fast-track 
procedures which will govern the decision by the Senate on this 
agreement. ``Fast track'' should never be imposed on a matter which can 
be so destructive of Senate prerogatives, so destructive of States' 
rights, and so destructive of the sovereignty of the people of this 
  ``Fast track'' is nothing more than a quick shuffle designed to ram 
through this agreement without much scrutiny. Therefore, Mr. President, 
here we are at this late hour, faced with an upcoming vote on a matter 
about which we know little and under such restrictions as will limit 
debate and tie our legislative hands with respect to amendments, 
leaving us only with a choice of voting this important legislation up 
or down.

  The President is not to be blamed for this fast track. The Senate 
itself must bear the blame. It was the Senate that voted to bind 
itself, hands and feet, with cords of steel that shut out amendments. 
It was the Senate that voted to impose the gag rule upon itself and to 
limit free and open debate to a paltry 20 hours concerning a matter 
about which vote we may have ample decades during which to regret.
  I wrote to the President earlier this year and urged that he not 
present this agreement to the Senate this year, that he delay the 
presentation until next year so as to give Senators more time to 
consider, and so as to give the Members of the 104th Congress, who will 
be fully responsible under the new leadership in the Senate and in the 
House, to answer to the bar of judgment of the people come the next 
  The President wrote back and in a very nice way declined to follow my 
  It is my belief that the approval mechanism that ought to have been 
used, especially for the WTO portion of the GATT agreement, is the 
constitutional procedure for treaty ratification. In fact, the 
introductory note in the final text of the Uruguay agreement declares 
as follows: ``By signing this Final Act at the Marrakech Ministerial 
Meeting, the participants will establish the texts''--this is the final 
act from which I now read--``the participants will establish the texts 
set out in the Annexes, in accordance with international treaty 
  Hence, it is evident that the Uruguay Round's Final Act contemplated 
action thereon as a treaty.
  The new World Trade Organization would have the authority to set 
parameters reaching far beyond trade law. Thus, the ability of Congress 
and the ability of State legislatures to legislate in the best 
interests of the United States, and the States, respectively, will for 
the first time in our history be subjected to the review of secret 
panels comprised of citizens of other nations. Amazingly, the World 
Trade Organization can require that the United States and other members 
conform domestic laws to WTO rules.
  For example, laws imposing an asbestos ban would not be allowed 
unless they employ means that are the ``least trade restrictive'' 
alternatives. U.S. laws and State laws in many areas must comport first 
with the WTO's trade rules, or such laws can be challenged as an 
``illegal trade barrier'' by other countries. Federal and State laws 
dealing with toxics and hazardous waste, consumer protection, recycling 
and waste reduction, pesticides and food safety, energy conservation, 
wildlife protection, and natural resource and wilderness protection, 
would all be vulnerable to WTO challenge. The new GATT would prevent 
countries from rejecting products based on how they are made; for 
example, with child labor or with ozone depleting chemical processes.
  There is no doubt that State as well as Federal law would be 
affected. Article 3 of the agreement says so in plain language.
  All of this means that we can only maintain standards that are 
consistent with the terms of the agreement--and here it is, 2,000 pages 
of it--and they must be ``least trade restrictive,'' regardless of 
political feasibility. A wholesale circumvention of many of our 
domestic laws is, therefore, invited.
  Now I ask the question: Who shall be the umpire or referee when U.S., 
state, municipal, or local laws and regulations are challenged by other 
members of the World Trade Organization?
  Under the agreement, a Dispute Settlement Body [DSB] shall have the 
authority to establish panels.
  A standing Appellate Body shall hear appeals from panel cases. The 
functions of panels would be to examine any matter referred to the DSB 
by the complaining party and stand in judgment on claims against the 
U.S. by any GATT member.
  There is no outside appeal, no external standing review body. None. 
The proceedings of the appellate body shall be confidential and final.
  Where a dispute panel or the appellate body concludes that U.S. law, 
regulation or administrative procedure is inconsistent with a covered 
agreement, the WTO shall recommend that the member concerned bring the 
measure into conformity with the covered agreement.
  Mr. President, I am opposed to the prospect of creating a new 
international institution which is fundamentally antidemocratic closed 
to the parties unless they are invited and closed to the participation 
of the people of the world.
  Mr. President, the Long Parliament in England abolished the Star 
Chamber in 1641, which by means of secret trials and arbitrary 
judgments, had suppressed the opponents of Charles I, who later paid 
with his life on January 30, 1649. I should think that every Senator--
this Senator does--would object to this new type of Star Chamber which 
will be installed with the approval of the Uruguay agreements and which 
will, by arbitrary and secret meetings, render judgments and impose 
sanctions against members whose laws, regulations, and administrative 
procedures are not in conformity with the rules and regulations of the 
World Trade Organization.
  Beyond the delicate issue of the political accountability of foreign 
nationals ruling on the legality of U.S. laws lies perhaps even greater 
concern for states. Georgetown University Law Professor Robert 
Stumberg, in a report prepared for the Center for Policy Alternatives, 
has identified 90 statutes in California alone that are likely to be 
subject to WTO challenge.
  If a foreign nation wins a challenge to any United States law, state 
or federal, and the United States declines to revise or preempt the 
law, or otherwise deprive the law of its effect, the foreign country 
would be free to impose countervailing sanctions including fines 
against the particular offending U.S. industry or any other--not just 
the offending industry, but any other U.S. industry or sector.
  This could amount in effect to a secret foreign panel's levying taxes 
on the American people as a punishment for not altering U.S. law to a 
complaining party's liking. Think of that! Observe how we worry and 
scurry and wrangle in this body whenever a tax increase is even 
discussed, even mentioned, even whispered; and yet, here we are ready 
to roll over and grant a secret board, a secret body, a secret panel 
anonymous and secret powers to fine U.S. taxpayers if we do not rewrite 
U.S. law to suit the World Trade Organization. Talk about taxation 
without representation--and we once fought a revolution over that 
principle--here it is in spades!
  Mr. President, doubt not that the sanctions imposed by the WTO have 
teeth--and claws. What should be very plain to us here is that the new 
rules provide for cross-sectoral sanctions should the United States not 
make the change called for by the GATT dispute resolution panel. Thus, 
sanctions could be imposed on the telecommunications industry for 
failure to comply with a GATT ruling on fisheries or automobiles. This 
possibility of cross-sectoral retaliation is likely to pose enormous 
difficulties for states and likely to provide perverse incentives for 
foreign nations to seek sanctions strategically.
  If a state chose not to alter a measure found by the WTO to be GATT-
illegal, the U.S. Trade Representative could choose to bring an action 
against the state in a federal court, even if Congress had chosen to 
allow the state's measure to remain in effect and to accept trade 
sanctions on behalf of the entire nation rather than preempt the 
offending state law. So there we have it. So much for Federalism. So 
much for state rights. So much for state legislators and Governors. 
Just leave everything for the WTO and the exalted trade representative 
to decide.
  Thus, even a blind man can see that this agreement involves a 
substantial shift of control over each of the fifty states from 
Congress to the executive branch and to foreign nations.
  Mr. President, the Administration is quick to say that WTO dispute 
settlement panels will have no power to change U.S. laws and that only 
Congress can do that. Well, that is true. And every schoolboy and 
schoolgirl in this country knows that. We already know that.
  The administration seeks to tamp down the concerns of Members of 
Congress by saying, ``Well, the WTO will not have any power to change 
U.S. laws.''
  Of course it will not have the power to change U.S. laws. Every 
history book in this country worthy of the name will tell us that. I 
learned that 60 years ago. It is nothing new. But the effect of the 
sanctions that can be applied by the WTO will be strong enough leverage 
to force U.S. and State laws to be changed to bring them into 
conformity with the WTO rulings.
  This would put the domestic laws passed by a duly elected U.S. 
Congress and by elected state and local governments at risk to 
unelected, unaccountable, unsympathetic, foreign bureaucrats.
  The agreement presented for Senate approval includes provisions that 
are take it all or leave it. Article 16 provides that a member state 
cannot have any reservations to the WTO agreement. Swallow it whole. 
Further, future amendments to the agreement can be made by a majority 
of the GATT membership, without any further consideration by this body. 
The U.S. can vote against such amendments, which might be adverse to 
our interests, be out-voted, and we have no choice but to swallow them 
  So, Mr. President, here in my hand is the implementing legislation. 
You do not see what you get. You do not see what you get. We will have 
one opportunity tomorrow evening to vote up or down on this 
implementing legislation. After which, the 124 members of the World 
Trade Organization can vote to adopt amendments by a three-fourths 
majority, and in some instances by a two-thirds majority, and whether 
the United States likes it or not, it can be outvoted, as it is so 
often outvoted in the United Nations by the same nations that will be 
in the WTO.

  And so, Senators, once we pass this bill, that is it. We have had it. 
We have had our chance and that is all. But then these agreements, 
2,000 pages of them, can be amended by a three-fourths vote in the WTO. 
And we can like it or we can lump it. We can get out of the WTO. But if 
we remain in, we are going to live by those amendments which are not 
included in this document.
  So we ought to remember that. It is the last word for us until after 
the passage of the first 5 years. But this is the last word for now. 
That is it. Then turn it over to the WTO to interpret and to amend. And 
how many votes do we have? One. A country of 260 million people with 
one vote, and 18 of the other members of this WTO will each have a 
million people or less. And the vote of each member, large or small, 
will be equal to the vote of the United States. So, you are not buying 
exactly what you see here. You are seeing the tip of the iceberg in 
this document of 2,000 pages, but that can be changed and will be--long 
after we have cast our vote tomorrow evening--changed by the amendment 
process set forth in the agreement.
  The Senate is the only body that represents the States qua States, 
and it is the only body in which every State, from the smallest to the 
largest, is guaranteed equal representation. It is the only national 
body in which all members are politically accountable to all the voters 
in their respective states. We should not vote for this kettle of brew 
which will diminish the sovereignty of the states we represent.
  The distinguished minority leader has expressed concern and 
reservations about the provisions of this agreement. He has made 
attempt to secure an agreement from the President to fix the potential 
damage and excesses that can be brought by the World Trade 
Organization, upon the U.S., our laws, and regulations in many fields. 
I have conferred with Mr. Dole about this proposed fix--which can only 
be passed by the next Congress, and I must reluctantly conclude that 
the World Trade Organization cannot be fixed by the Dole proposal.

  Mr. Dole has proposed legislation which would establish a new 
American Commission to monitor the decisions of the Dispute Settlement 
Panels in the WTO. If the Commission found over the course of 5 years 
that the WTO dispute settlement tribunals have violated the appropriate 
standards of review, any Senator could introduce a privileged 
resolution calling on the President to withdraw from the World Trade 
  First, Mr. President, how will the Commission get the full record of 
the Dispute Settlement Bodies when the U.S. is committed in this 
agreement and committed by virtue of our adoption of this implementing 
legislation--committed to keeping the deliberations of such bodies 
  The documents, the deliberations, what is said in these panels, will 
be secret. And even the complaining party and the offending party will 
not be able to appear before those boards in the decisionmaking process 
unless they are invited.
  So there is the fundamental question, I say, to those who are looking 
to the Dole proposition as cover. There is the fundamental question of 
the secret records and the Star Chamber proceedings that will frustrate 
the five judges on the commission that the minority leader wants to 
  Now, Mr. President, we have in the specifics of the procedures and 
standards established by the GATT for the World Trade Organization the 
elevation of trade as the top priority over all other values. If 
environmental laws get in the way of trade, they must fall. If consumer 
protection gets in the way, if standards of innumerable kinds, get in 
the way of trade, they go. Humane methods of trapping tuna, in order to 
protect dolphins go out the window. Flipper loses. Rigid pesticide 
controls which make products more expensive are GATT illegal. Out they 
go. Child labor laws restricting trade are illegal. Who cares? Only 
trade matters.

  What happens when our laws are declared a violation of GATT? The 
Administration would like us to accept the proposition that no U.S. 
laws are wiped out here, and technically they are not. What will happen 
is that other member nations, perhaps prodded, or even dominated by one 
or a group of multinational corporations, will bring a complaint 
against the U.S. before the WTO, and a Dispute Panel could rule in 
secret against a U.S. law, as being GATT illegal. The room for 
pernicious manufactured claims should be obvious to all of us. This 
puts great pressure on us to change our laws.
  Now, the question is what remedy does the proposal of Mr. Dole's 
offer for this situation.
  After three determinations by the Commission under the standards set 
forth in the minority leader's agreement a resolution can be introduced 
with a privileged status, calling for the President to withdraw from 
the WTO. How hard will that be? Both Houses of Congress must pass the 
resolution and then be able to muster a two-thirds majority to override 
a Presidential veto. As my colleagues well know, this is a very 
difficult undertaking, and we would be faced with all the arguments 
about how wonderful free trade is on balance, despite a raft of adverse 
decisions. What is the likelihood that this fix is really a fix? When 
is a fix not a fix? When it is not a fix. It will be nearly impossible 
to get out of the organization, and so this high improbability of using 
the so-called fix should not dominate the vote on the agreement which 
this implementing legislation approves. If the WTO agreement is flawed, 
and I say it is very seriously flawed, then we ought not get into it in 
the first place.
  Senators with ambitious ideas about health, environmental, labor, 
food labeling, or other standards would be well advised to check the 
standards of international bodies approved by the WTO before bothering 
to introduce legislation. One could imagine that rubber stamps embossed 
with the words ``GATT illegal'' will become popular in the White House.
  So, Mr. President, the minority leader's proposal is well-intended, 
but in effect it is a fig leaf, a giant fig leaf pasted onto a 
Tyranosaurous about to ransack its way around decades of statutes and 
standards on a multitude of policy matters.
  I do not have the agreement just in front of me. I had it. Here it 
  It is the fix. The Federal commission of five judges will be 
appointed and they will determine whether or not the proceedings in 
back of a decision imposing sanctions on the Federal Government or upon 
State governments or upon municipalities in this country or the local 
governments--they will decide whether or not the proceedings have been 
fair, whether or not they have been adopted according to proper 
procedure. But how are they going to get the documents? How are they 
going to get the materials from the panels, from the disputes board, 
from the appellate body within the WTO? Those proceedings are to be 
kept secret and anyone who says anything in those proceedings is to 
remain anonymous. The statements are to be anonymous.
  How is this Federal commission, this new commission of five judges, 
to be able to make its decisions when it has no way of reaching into 
the panel, the secret panel, no way of reaching into the dispute 
settlement board, no way of reaching into the appellate body in the WTO 
and extracting those documents, those secret records upon which to make 
a judgment? This is a fig leaf.
  And then, after 5 years, if the reports that are sent up by the 
President indicate that some of the decisions have not been fair, any 
member, they tell us, any member can offer a resolution. And we are 
promised that those resolutions will be expedited in the procedures in 
the House and Senate. But that legislation is to be put off until next 
year. But everybody here knows the barriers that one has to run when it 
comes to getting a resolution adopted.
  First it has to go to committees. There is no assurance the committee 
will report it out unless those expedited proceedings mandate such. 
Then it has to pass both bodies of Congress. Then it has to go to the 
President's desk and he can veto it. So where does it leave us?
  Mr. President, Benjamin Franklin told the story of how, upon his 
seventh birthday, many of his friends gave him several copper 
pennies. And so off to the shop that sold children's toys he went, and 
on the way, he heard a friend blowing a whistle which he had bought. 
Franklin so liked the sound of this whistle that he went into the shop 
and voluntarily plunked down all of his pennies for a whistle. He then 
went around his house blowing it proudly, while his brothers and 
sisters and cousins were all irritated by it and impressed upon him the 
fact that he had paid too much for his whistle. They told him that he 
paid four times the value of the whistle and listed to him all of the 
other things that he could have bought instead. Ben was so vexed that 
he broke out in tears. The reflection of his folly gave him more 
chagrin than the whistle gave him pleasure.

  Franklin later said that he had learned a lesson by this experience. 
The lesson was that he had paid too much for his whistle.
  I say to the distinguished minority leader and others who have 
concocted this massive fig leaf that they have paid too much for their 
whistle, and those Senators who are depending upon the covering of that 
fig leaf to shield them from the ire of the voters come the next 
election or at some future election will learn that they too, have paid 
too much for their whistle.
  The people on November the 8th sent us a message. They said that they 
are tired of the arrogance of power that abounds in this city. They 
told us that they want to be a part of the decisionmaking process. Here 
we are about to decide on legislation of extreme significance--not only 
in matters of employment, jobs and basic pocketbook issues that affect 
every American, but also concerning the bedrock, fundamental 
sovereignty of our Federal and State Governments. And to add insult to 
the injury, the decision is being made by a lame duck Congress.
  Why do we not ever get it in this town? An agreement that should 
consume weeks of debate is going to be implemented with only 20 hours 
of discussion. This is not just another ordinary trade agreement. What 
is the rush? If the American people are outraged over the arrogance and 
the posturing of their elected officials, we have only to look at the 
present situation to understand why.
  We rail against budget deficits. Yet, here we are about to waive the 
Budget Act to increase the deficit so that the GATT agreement can go 
forward. In a few months, we will hear the sound and fury of those in 
this body and the other body crying for a balanced budget amendment: 
Give us a balanced budget amendment to the Constitution, they will say, 
let us all remember the Budget Act waiver vote as we craft our lofty 
speeches for that coming debate.
  Mr. President, do the American people buy this fig leaf? Do the 
American people buy this whistle? Let us take a look at a poll 
conducted by Daniel Yankelovich on November 23 through 27.
  Question: The American public and GATT. Do you favor or oppose 
passing GATT?
  Fifty-one percent oppose; 33 percent favor; 16 percent not sure.
  Second question: Budget waiver. If GATT were enacted, it would 
increase the Federal budget deficit. Current law requires revenue 
increases to offset those losses. The Senate can waive that law with 60 
votes. Is it appropriate or inappropriate for Congress to waive the 
law--that will be done tomorrow night--to waive the law so that GATT 
can be enacted?
  Sixty-seven percent of the people answered inappropriate; 20 percent 
answered that it is appropriate; 13 percent, not sure.
  The next question: Some people argue that GATT should be voted upon 
by the new Congress that was elected in November and not the old 
Congress which includes about 100 Members who were defeated or are 
retiring. Who should vote on GATT, the 103d Congress or the 104th?
  Sixty-three percent say the new Congress; 29 percent say the old 
Congress; 8 percent not sure.
  Fourth question: WTO, World Trade Organization, and U.S. law. Do you 
think the World Trade Organization should be able to override the laws 
of member nations, such as the United States?

  Seventy-two percent said no; 17 percent said yes; 11 percent said not 
  So here we are on this chart--the American people--here is how they 
feel about it. They think this question should be put off until the 
104th Congress.
  We owe it to the American people to put this decision off until the 
newly-elected Congress is in place. We owe it to the American people to 
more carefully study this mammoth bill and ponder its consequences. We 
ought to heed the people's election message that was spoken to us in 
the loudest, and most profound way, rather than be so presumptuous as 
to turn a deaf ear to their collective voices?
  In closing, Mr. President, let us review for a brief few seconds a 
few words from the Book of Genesis. God created Adam and Eve and put 
them in a garden of bliss and happiness--eternal happiness. He 
instructed them not to eat of the tree of knowledge of good and evil 
or, he said, ``you will surely die.'' But the serpent got to the woman 
and said, ``You will not surely die.'' Adam and Eve ate of the tree of 
the knowledge of good and evil, and then they saw that they had sinned.
  What did they do? They sewed together fig leaves and created for 
themselves aprons. And then in the cool of the day, they heard the 
voice of the Lord God walking in the garden, and they hid among the 
other trees of the garden. And God said: ``Adam, where art thou? Adam, 
where art thou?''
  Mr. President, the people who are reflected on this chart are saying, 
``Senator, where art thou? Where art thou on the budget waiver? Where 
art thou?''
  And in the days to come, they will say, ``Where wert thou? Where were 
you? Where were you when you voted to make Uncle Sam cry uncle to GATT? 
Where were you when this monstrous bill was passed after only 20 hours 
of debate without an amendment? Where were you when this new world 
organization was given the power to force changes in State and Federal 
law? Where were you on this legislation that will shift millions of 
additional jobs overseas to the developing countries, that will cause 
multinationals to go overseas more and more and more? Where were you 
when you had the opportunity to say no? Where were you when you voted 
to increase the budget deficit by $14.5 billion? Where were you, 
Senator?'' Where were you? Where were you? And you, and you, and you?
  Mr. President, my vote will be to delay this matter until next year. 
How do I do it? I vote against the budget waiver, and thus sustain this 
point of order. It is a legitimate point of order, and it is in 
accordance with the agreement that we reached at the budget summit in 
1990 when we said that such decreases in revenues should be offset.
  I will make the point of order and do make it now, that the pending 
bill, H.R. 5110 violates section 23 of House Concurrent Resolution 218, 
the concurrent resolution on the budget for fiscal year 1995.
  I thank Mr. Hollings. I thank Mr. Moynihan and Mr. Packwood.
  And I thank the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, thanking the distinguished President pro 
tempore for his thoughtful, gracious remarks as ever, even so, pursuant 
to section 904 of the Congressional Budget Act of 1974, I move to waive 
titles III and IV of the Congressional Budget Act, and I further move 
to waive section 23 of House Concurrent Resolution 218, the concurrent 
resolution on the budget for fiscal year 1995 as permitted by 
subsection 3 of that provision.
  The PRESIDING OFFICER. Pursuant to title 19 U.S.C. section 2191(g)23, 
debate on the motion to waive the Budget Act, further consideration of 
H.R. 5110 is limited to 1 hour to be equally divided and controlled by 
the Senator who made the motion and the majority manager of the bill. 
In the event the majority manager supports the motion, the time in 
opposition to the motion is controlled by the minority leader or his 

                           Order of Procedure

  Mr. MOYNIHAN. Mr. President, in respect to that specific matter, 
since the vote on the budget waiver will not occur until the expiration 
of the 20 hours of debate, and acknowledging that Senators may discuss 
the waiver at any time and may wish to do so during this debate, I ask 
unanimous consent that the 1 hour of debate allocated for consideration 
of the motion by the distinguished President pro tempore to waive be 
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. MOYNIHAN. I thank the Chair.
  The PRESIDING OFFICER. Who yields time?
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. PACKWOOD. Mr. President, I yield 8 minutes to the Senator from 
South Carolina.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. THURMOND. Mr. President, I rise today to support the motion made 
by my good friend from West Virginia, Senator Robert Byrd, that this 
bill violates the concurrent resolution on the budget for fiscal years 
1995 through 1999.
  The legislation that is currently before the Senate, H.R. 5110, the 
Uruguay Round Agreements Act, has many weaknesses. One of the most 
severe problems with this agreement relates to its funding. As we know, 
the Budget Enforcement Act of 1990 created the pay-as-you-go budgeting 
system, requiring that direct spending or revenue legislation not add 
to the deficit. This budgeting procedure was implemented to help our 
country to balance its budget and reduce our national debt. The 
concurrent resolution on the budget contains an enforcement provision 
to the pay-as-you-go system. Unfortunately, GATT violates pay-as-you-go 
  Estimates by the Congressional Budget Office indicate that the 
passage of GATT will result in $43 billion in lost revenues. According 
to an analysis of this bill by the Joint Committee on Taxation, revenue 
offsets total less than $12 billion. A $31 billion shortfall results, 
not covered by budget cuts or revenue increases, thus adding to the 
budget deficit and our national debt.
  Mr. President, the $12 billion in revenues that are included in the 
funding mechanisms of this bill are basically gimmicks and tricks. 
Funding proposals totaling over $3.5 billion relate to compliance and 
timing. However, such provisions do not add to total revenues, only 
change when the revenues are collected. We are asked to pay for GATT by 
requiring newborn infants to have a Social Security card to reduce tax 
fraud; eliminating the 4 percent minimum interest rate on savings 
bonds; and instituting voluntary withholding of taxes on unemployment 
compensation and other Federal payments to individuals.
  Another funding provision concerns the Pension Benefit Guaranty 
Corporation. The implementing legislation contains an extensive 106-
page rewrite of Federal law governing pension plan funding and 
benefits. The Retirement Protection Act has not been given adequate 
consideration by any Senate committee not by the full Senate. The 
inclusion of such a comprehensive measure in trade legislation, subject 
to fast track limitations, is inappropriate.
  Mr. President, waiving the budget rules for any purpose is a serious 
proposition given the huge deficits and debt of our government. In the 
103d Congress, budget waivers have been proposed 35 times. In only four 
instances has the Senate passed such a waiver. I urge the Senate to not 
add to the deficit with this vote. There is sufficient time to properly 
budget for GATT in the next budget resolution, if that is the will of 
the Congress. I will not vote to waive the budget enforcement 
provisions and encourage my colleagues take that position.
  Finally, Mr. President, the legislation addresses an area of great 
concern to many Americans. The Pioneer Preferences licenses provision 
is included in the GATT implementing legislation. This section sells 
the rights for cellular telephone licenses at a reduced rate. It has 
been estimated that the Federal Government could sell these licenses 
for $2 billion more than provided for in this legislation. Why is 
Congress being asked to waive the budget when $2 billion more could 
have been raised to help pay for GATT. This provision should not be 
included in this trade bill.
  Mr. President, regardless to one's position on the merits of the 
trade provisions of this bill, there is adequate reason to not support 
the legislation based on the fiscal provisions of the measure. The 
American people spoke loud and clear in the last election. They want a 
smaller government and a government that stays within its budget. The 
consideration of this bill, at this time, under the budget arrangement 
is contrary to the expectation of the citizens of this Nation. Let us 
begin now to say not to further deficits and increased debt. Let us 
stand firm on the principle some have supported throughout this 
Congress. The enforcement provisions of the Budget Act and the budget 
resolution should not be disregarded. Again, I urge my colleagues to 
vote no on the waiver of the budget point of order.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER. The Senator from South Carolina.
  Mr. HOLLINGS. I yield 15 minutes to the distinguished Senator from 
  The PRESIDING OFFICER. The Senator from Nebraska is recognized for 15 
  Mr. EXON. I thank my friend and colleague, the chairman of the 
Commerce Committee, Senator Hollings. I would like to ask certain 
questions. Unfortunately, Senator Moynihan has had to leave the floor. 
There may be others on the floor who could answer these questions. Some 
of my concerns were best highlighted by the excellent remarks and 
presentation made by the President pro tempore of the Senate, our 
distinguished colleague from West Virginia, Senator Byrd. I want to 
compliment him on his usual excellent presentation. He went right to 
the heart of the problem. I have not made up my mind for sure how I am 
going to vote on several of the votes that are going to take place. But 
I do want to compliment him for bringing up one of the many concerns 
that I have about the new World Trade Organization that we are going to 
be asked to vote on, and certainly aside from everything else a key 
vote obviously will be a vote on the waiver of the budget requirement 
that he properly within his rights brought up, with regard to the 
breaking of the budget on the approval, if that is what the Senate body 
as a whole is to do.
  I would like, though, to ask Senator Byrd about some of the testimony 
that was received--and I have a record of it here--in the Commerce 
Committee, initiated by Senator Hollings, and of which I was pleased to 
be a part. There were several questions of the balanced panels that 
were brought before that committee for the pros and cons on the matter. 
I, too, asked several questions of several witnesses over and over 
again on a whole series of matters, and I came to the conclusion that 
was so well brought out by Senator Byrd in talking about the figleaf 
that has been advanced with regard to if we do not like what we are 
into with this, we can relatively easily get out. In fact, we made it 
so easy that we have set up a meaningless panel to help us get out, and 
the panel absolutely would do nothing.
  I saw in the Washington Post this morning a story, and there was a 
statement in the story that was not attributed to anybody, just a 
reporter's view, where it said Senator Dole had worked out an 
arrangement whereby we could pull out of the treaty. Well, the 
arrangement that has been worked out has already been in the treaty, or 
the agreement, whatever you wish to call it. I simply point out that 
when the matter was sent over by the administration, there was a 
provision that is in the treaty that any nation, within 6 months' 
notice, can withdraw from the treaty. So I think that the figleaf or 
window dressing--call it what you wish--is not something that anybody 
can stand behind by saying the sovereignty issue has therefore been 
settled, it is over and done with, there is no problem. It is phony and 
it should not be given any serious consideration. But I recognize if 
somebody wants an excuse, at least it is an excuse but not a very good 
  One of the things that I think the Senator from West Virginia did not 
bring up that I would like to mention, in the testimony--and I may be 
getting into this a little further, and maybe the chairman of the 
Commerce Committee will also--time and time again, witnesses, when 
pressed on the situation as to how do we get out--I think the bottom 
line of summation of what we heard was you are not going to get out. 
Once you are in, you are in. So either now you make the decision as to 
whether you think it is right that you go in and, if so, right or 
wrong, we are in. If we do not go in, we do not have to worry about 
getting out. I think we should not finesse that. I think we should lay 
it right out on the line.
  One of the other things I think about--let us assume that 3 or 4 
years from now, after all of these procedures, after we go through the 
song and dance of having retired Federal judges making determinations 
and recommendations, and say that was sent to the floor of the U.S. 
Senate and it was passed to pull out, then it could be vetoed by the 
President, as Senator Byrd has very well pointed out. And then we would 
have to override the veto. Even if all of that were to be done, can you 
imagine the dilemma we would be in as a nation? Could you imagine the 
hue and cry of the many corporate giants in the United States and not 
so large corporate giants that know full well that they are going to 
foreign countries to make substantial investments that they would hope 
and probably would receive a return on if we are a part of the new 
World Trade Organization? Can you imagine the hue and cry that would go 
up? We would have many companies in the United States that would come 
to the Congress of the United States and say, ``What are you doing?'' 
If you do go through these procedures, if you do finally pull out, as 
Senator Byrd pointed out very eloquently--the art of the impossible, if 
it were accomplished--these companies would say, ``You are going to 
bankrupt our company. You are going to pull us out of the World Trade 
Organization after, because of the strengths of it, we have gone over 
and established plants in these other countries, and now you are going 
to, for all practical purposes, make our substantial investments in 
plants and equipment null and void because you have pulled out of the 
  I simply say that maybe that is not a salient point. I say that this 
is one more proof positive that it is a lot easier to get into this 
agreement, and we may well be going into it. But it is going to be 
extremely difficult--the art of the impossible would be tried and tried 
over and again on something like this. So I think none of my colleagues 
should be lulled into the conclusion--and they have the right to vote 
however they want, and there are some good reasons, I might add, why we 
should go into this agreement, and I may address that later. But let us 
not be fooled. Let us be forewarned.
  I simply would like to amplify the other excellent point that the 
Senator from West Virginia made, the sovereignty issue. I believe the 
sovereignty issue probably is one that my constituents are very much 
concerned about. I would say, Mr. President, from my view, that the 
constituents in Nebraska are probably pretty equally divided on this 
issue. It is not an easy call as to what we should do. I have told all 
of them that I will be asking questions, and I will be making 
statements, and I will be involved in this process. I have studied it a 
lot and I have spent as much time, I guess, as anyone, with the 
possible exception of my friend, Senator Hollings, in committees that 
have studied this, and I have listened to experts.
  One of the experts I listened to with great interest, though, on this 
sovereignty issue that first brought it home fully to me--although I 
had some concerns about it--was Professor Tribe, who testified in front 
of the committee. I inquired of him in some detail about the World 
Trade Organization, the three-member secret tribunal that would make 
the final decision on whether or not sanctions could be imposed against 
the United States. He clarified it when we were talking about the one-
man/one-vote principle.
  Let me emphasize this once again so there is no misunderstanding. 
While I have been assured by many people in knowledgeable positions 
that we should not worry about this sovereignty issue, that it is 
something that should not concern anyone, the facts of the matter are 
very clear that under the World Trade Organization, we are taking and 
removing all of the protection we have had under the GATT agreements up 
until now by going into this new World Trade Organization. Certainly, I 
think it is true, as the defense says, in this: Look, it explicitly 
says in this agreement that no laws of the United States or any of the 
States of the United States can be changed. That is true. But let me 
give an example of what I think is not fully understood. Let us say, 
for the sake of discussion, that the State of Nebraska had a widget 
manufacturing company that was very important to the economy of our 
State, and let us suppose that the State of Nebraska had laws 
preventing the importation of widgets into Nebraska for strictly 
parochial reasons; let us suppose, for example, that Bangladesh could 
make widgets cheaper than we could because they have about one-seventh 
to one-tenth the labor costs that our widget manufacturer in Nebraska 
would have.
  So, no, I do not believe that Bangladesh can change the law of 
Nebraska. But certainly under the World Trade Organization, unless I 
could be corrected by other people, Bangladesh could bring an action 
that the Nebraska law is in violation of the World Trade Organization. 
They could not make Nebraska change the law, but if it could not be 
worked out by negotiations and if it cannot be worked out by 
negotiations it is explicitly spelled out in this agreement that there 
would be a three-member panel that would meet in secret, as Senator 
Byrd has said. They would make a determination. If they decided with 
Bangladesh, then the only way that the United States could overturn 
that is not by one-man, one-vote and a 50 percent of the 113 or 130 
nations that would be part of the World Trade Organization. The United 
States could make an appeal that the 3-man tribunal was wrong, but to 
overturn the 3-man tribunal you have to have a unanimous vote of all of 
the nations involved, whether they are 113 or 127 or 131, including 
Bangladesh who brought the charge in the first place. They would have 
to vote against their own interests which is another way of saying that 
let us not be too sure that everything is just hunky-dory and there 
would not be any problems on down the line.
  In this regard, I asked Lawrence Tribe the question as to how he 
viewed this. This was his answer published on page 327, Committee of 
Commerce hearings, S. 2467, GATT implementation legislation:

       Professor Tribe. Senator, I think there is a mistaken 
     premise in your question that I really want to be as clear 
     about as I can, and I think the chairman may have stumbled 
     onto the same issue.
       Yes, it is true that under article 9, paragraph 1 of the 
     WTO agreement, there is the one-person-one-vote approach in 
     certain circumstances, and I think the question you raise is 
     a very good one. Does that give enough protection to us? Is 
     it unusual?
       But what perhaps you have not focused on is that when it 
     comes to decisions by WTO panels that find that one of our 
     laws, either an act of Congress or a law of a State, is 
     illegal under one of the GATT agreements, that decision is 
     treated differently, and not in a way that gives the United 
     States more voice. It is less than one-country-one-vote in 
     this sense.
       That is, I think you all have this fat volume that was 
     distributed a couple of days ago, and just for your 
     convenience, I will tell you that what I am quoting from 
     appears on page 1,670. It is in article 22, paragraph 6 of 
     the dispute settlement understanding. Though it is buried in 
     fine print, it is going to make a huge difference in the 
     future of this country. It makes very clear that the trade 
     sanctions that are to be imposed within 30 days of a certain 
     period of time will be imposed unless the DSB--that is, the 
     decision body decides by consensus to reject the request for 
     sanctions. Then it explains that consensus means unanimity.
       So, that means that if 113 countries say, we think that was 
     outrageous to find Nevada or California or South Dakota or 
     Alaska or the United States of America guilty in these 
     circumstances, the fact that there are votes the other way 
     prevents the sanctions from being lifted. That is not one-
     person-one-vote. That is much worse, and that is the way this 
       With respect to sanctions imposed upon an offending State 
     or country, the only way that one can reverse the decision to 
     sanction is to get unanimity. Now, I do not know how long the 
     U.S. Trade Representative thinks people will not focus on 
     that, but I sure hope they do now.

  I simply say that there is time remaining if anyone would like to use 
time. I would like to have someone if they could assure me that what 
the understandings of Senator Byrd, the understandings of Professor 
Tribe and others have and the concerns that they have about the loss of 
sovereignty under that three-man secret tribunal whether or not there 
is some explanation for that that I have missed.
  The PRESIDING OFFICER (Mrs. Murray). The time of the Senator from 
Nebraska has expired.
  Who yields time? The Senator from Oregon.
  Mr. PACKWOOD. Madam President, I will use a moment before yielding to 
the Senator from Utah to answer one question of the Senator from 
  As to panels involved in the trade dispute, if Germany wants to sue 
us or we want to sue Germany, the panels are picked by the parties 
involved in the dispute and every side can veto any panelist. The 
parties have to agreed on a panelist.
  You get into an argument as to whether or not they are meeting in 
secret. This is not some secret tribunal whose panelists are imposed 
upon us or imposed upon anybody else. We agree to them or not agree to 
  I yield 10 minutes to the Senator from Utah.
  The PRESIDING OFFICER. The Senator from Utah is recognized 10 
  Mr. HATCH. Madam President, I find it ironic that we are gathered 
together in a special lameduck session here in the Senate to debate the 
implementation of a trade agreement that has languished in obscurity to 
the average Member of Congress and the average citizen of this country 
for the better part of a decade.
  What is it about trade agreements that garners so little interest 
until Congress is poised to vote on whether to ratify them?
  It was just over a year ago when the Senate was preparing to take a 
vote on another piece of trade legislation, the North American Free-
Trade Agreement [NAFTA]. As you will recall, Mr. President, it was not 
until long after President Bush had signed the NAFTA and Congress was 
preparing to take a vote for final passage that it arose out of 
relative obscurity to become the number one agenda item for a wide 
variety of interest groups and individuals even to the extent that 
those on both sides of the agreement were running ads on television.
  Interestingly, as is the case with the Uruguay round agreement, the 
NAFTA could trace its origins back to the Reagan administration when 
the idea of a Mexican Free-Trade Agreement, tailored after its 
predecessor the Canadian Free-Trade Agreement, was floated and initial 
discussions got underway.
  While working closely with the administration to craft an acceptable 
bill that will implement the terms of the Uruguay round agreement, I 
recalled those issues that have been the most controversial over the 
last several months and that threaten to delay passage of the Uruguay 
round legislation before the end of the 103d Congress are largely the 
same as those that threatened to delay and defeat NAFTA last year. I 
would submit that we might learn something now if we look at what has 
happened since we passed NAFTA, especially in light of some of the 
grave predictions that were made during its debate. In fact, not only 
have those grave predictions of NAFTA opponents failed to materialize, 
but the immediate results of NAFTA have been as good or better than 
what many of us would have expected. I encourage my colleagues to bear 
these results in mind as we debate many of the same points that were 
raised during last year's NAFTA debate.

  Therefore, Madam President, in the interest of time, I will enumerate 
the positive results of NAFTA during the first half of 1994 along with 
some elaborative comments on the points I will make today in the Record 
upon the completion of my statement.
  In an effort to clear the air of misleading information regarding the 
Uruguay round and its impact on the United States in economic and 
constitutional terms, I would now like to briefly address some specific 
points that have been raised by opponents of the Uruguay round.
  First, Uruguay round opponents claim that the agreement will further 
increase the budget deficit by $31 billion above the $11 billion that 
is offset by the implementing legislation. This figure is derived from 
the CBO estimating what the tariff reductions will be over a 10-year 
period. However, there is no way to confirm the accuracy of this 
figure, especially when you consider that this projection is 10 years 
in the future. More importantly, this figure does not take into account 
the dynamic effects of tariff reductions on market access and economic 
  I believe that the approach taken by the administration of offsetting 
the Uruguay round was a reasonable one, given the political realities. 
Certainly, no one, including me, is totally happy with the financing 
provisions; but, as we all know, politics is the art of compromise for 
the greater good.
  Second, Uruguay round opponents cite billions of dollars in giveaways 
to media giants including the Washington Post. Madam President, I am 
certainly not here to defend the Washington Post--it is certainly 
perfectly capable of defending itself--but I refer you and the rest of 
our Senate colleagues to a detailed, cogent, and truthful explanation 
of this complicated issue as drafted jointly by the majority and 
minority committee staffs of the House Committee on Energy and 
Commerce. At this time, I ask unanimous consent to have this document 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

 Questions and Answers About the Pioneer Preference Provisions of H.R. 

       1. Why are these provisions included in the GATT bill in 
     the first place? What do these provisions have to do with 
       You're right, they don't have anything to do with trade. 
     However, under the ``pay-as-you-go'' requirements of the 
     deficit reduction laws, any bill that increases spending or 
     decreases revenues has to be accompanied by provisions to 
     neutralize the effect on the deficit. Since the GATT 
     agreement reduces tariffs, thereby reducing revenues to the 
     Government, Congress is required under law to include 
     provisions that offset the otherwise negative effect these 
     tariff reductions would have on the deficit. The pioneer 
     preference provision would generate at least $500 million, 
     and probably much more.
       The alternative--offsetting the revenue loss by increasing 
     trade-related revenues--would require that other tariffs be 
       2. What is a pioneer preference?
       The Federal Commuunications Commission (FCC) established 
     the ``pioneer preference'' policy, by rule, nearly four years 
     ago. This policy offered the guarantee of an FCC license to 
     entrepreneurs who successfully developed important new 
     communications services and technologies.
       There is substantial evidence to indicate that the 
     ``reward'' of the license has proven to be sufficiently 
     attractive to encourage hundreds of companies, small and 
     large, to seek innovations worthy of the pioneer grant. The 
     ``reward'' has also encouraged financial institutions to 
     invest in the innovators seeking the pioneer grant. To obtain 
     a pioneer's preference, companies have to risk more than just 
     time and money; they also have to put proprietary design 
     details into the public domain. This public disclosure, while 
     a significant competitive risk, fosters the rapid development 
     and deployment of new technologies which is at the very core 
     of the purpose of the pioneers preference policy.
       The public has already benefitted from the pioneers 
     program. Innovations in the areas of low earth satellites, 
     wireless cable, and narrowband personal communications 
     services (PCS) services have led to the granting of pioneer 
     awards, and the advancement of new services and technologies 
     in these areas. The narrowband PCS auction raised over $650 
     million for the U.S. Treasury.
       3. Is pioneer preference unique to PCS?
       This FCC policy is not unique to PCS services. For example, 
     pioneer preferences have been awarded for other 
     telecommunications services. The first pioneer's preference 
     was awarded to Volunteers in Technical Assistance (VITA), a 
     non-profit company, for being the first to develop and 
     demonstrate the feasibility of using a low-earth orbit 
     satellite system on VHF/UHF frequencies for civilian digital 
     message communication purposes. The second award was made to 
     Mobile Telecommunications Technologies Corporation (MTEL) 
     for developing and testing an innovative new 900 MHz 
     narrowband PCS technology that will increase spectrum 
       4. The Federal Communications Commission's order requires 
     the pioneers to pay 90 percent of the average bid in the top 
     10 markets. Isn't Congress undercutting the FCC's decision by 
     giving the pioneers a better deal than the FCC?
       No, for several reasons.
       First, the FCC has no explicit authority to require a 
     licensee to pay a fee in return for the license. In its 
     decision, the Commission claimed that it has implicit 
     authority contained in the general provisions of section 4(i) 
     of the Communications Act:
       ``The Commission may perform any and all acts, make such 
     rules and regulations, and issue such orders, not 
     inconsistent with this Act, as may be necessary in the 
     execution of its functions.''
       While it is risky to predict the outcome of litigation, 
     there is a very strong likelihood that when a court rules on 
     whether or not the Commission can require a licensee to make 
     a payment, the Commission's order is going to be reversed. In 
     that case, the taxpayers will get nothing.
       Second, the Commission's order does not permit the payment 
     of the fee over time, and does not require the payment of 
     interest charges. Because these provisions are included in 
     the GATT bill, the pioneers will actually pay more utilizing 
     the GATT formula than they would if the Commission's formula 
     is upheld in court.
       5. Is this a ``backroom deal'' or did Congress consider 
     this in a deliberate fashion?
       The pioneer preference issue has been thoroughly examined 
     over the past several months by at least three Committees in 
     the House. The Subcommittees on Telecommunications and 
     Finance and Oversight and Investigations in the Energy and 
     Commerce Committee; the Budget Committee and the 
     Appropriations Committee have all examined and/or held 
     hearings on the issue.
       On December 23, 1993, the Federal Communications Commission 
     awarded the pioneer preference to three companies for 
     personal communications services licenses. Under the 
     Commission's decision, the three companies would be permitted 
     to apply to licenses while no competing applications would be 
     accepted by the FCC. The Commission also decided that 
     licenses would be awarded for free to the pioneer companies.
       Last May, the Energy and Commerce Committee's Subcommittee 
     on Oversight and Investigations initiated an inquiry into 
     allegations of irregularities in the Commission's decision 
     making process, and whether the contributions of the 
     recipients justified granting a PCS license under this 
     process instead of the auctions that will govern the award 
     of all other PCS licenses. Questions concerning the FCC's 
     process also where raised at the FCC's Appropriation 
     hearing. To remedy the problems the Oversight and 
     Investigations Subcommittee discovered in the Commission's 
     program, Chairman Dingell and Ranking Minority Member 
     Moorhead, Subcommittee Chairman Markey, along with 
     Chairman Sabo introduced H.R. 4700 on June 30. This bill 
     required that the pioneer recipients pay 90% of the market 
     value of the license instead of receiving them for free.
       On August 9, 1994, the FCC revised its policy to require 
     the pioneers to pay an amount comparable to that in the 
     legislation. The Energy and Commerce Committee remained 
     concerned, however, that the Communications Act does not give 
     the FCC explicit authority to compel a licensee to pay the 
     Government in return for a license. It was the Committee's 
     opinion that the FCC decision would likely be overturned in 
       Around this time, the Administration began negotiating with 
     the House and Senate and arrived at the 85% payment 
     requirement now contained in Title VIII of the GATT 
     legislation. On September 28, 1994 the Energy and Commerce 
     Committee marked up the GATT legislation. Title VIII was 
     discussed at the markup. On September 29, 1994, the Budget 
     Committee held a hearing on the pioneer preference issue.
       6. Critics claim that the pioneers preference amounts to a 
     ``billion dollar giveaway.'' Is this allegation supportable?
       No. This claim is wildly inflated and based on 
     insupportable assumptions. Everyone agrees that the three 
     service areas in question have a total population of 55 
     million. The Office of Management and Budget (OMB) and the 
     Congressional Budget Office (CBO) have determined that the 
     value of a license per person should be calculated at $24 per 
     capita. (While densely populated urban areas obviously have a 
     greater per capita value, the pioneers' licenses awarded also 
     include large, sparely populated rural areas where the value 
     is much below this figure). Thus, based on this $24 figure, 
     the total potential revenue in an auction without any 
     discount or preference would be $1.32 billion. The preference 
     set out in the GATT legislation requires the pioneer to pay 
     based on a formula of 85 percent of the average per capit 
     cost in the top twenty markets awarded through PCS auctions. 
     By averaging the top twenty markets, the formula avoids any 
     anomalies created by looking solely at the price paid for the 
     other license awarded in the pioneers region. (This issue is 
     discussed in greater detail in Question #7 and 9.)
       Thus, the pioneers are likely to pay $1.12 billion, under 
     this OMB and CBO endorsed model. The ``benefit'' to the three 
     companies, collectively, is $200 million. Based on 
     information provided by the three pioneer preference winners, 
     their investment to date is roughly $100 million. 
     Consequently, the net award is closer to $100 million. And, 
     as noted above, the entrepreneurial efforts, risk, and 
     ``sweat'' equity of these three companies, which the FCC 
     deemed worthy of the pioneer's award, will result in the more 
     rapid deployment of the next generation of cellular, PCS 
       7. On what basis were these three companies awarded a 
     preference for a broadband PCS license?
       Last December, the FCC awarded a pioneer preference to 
     three PCS applicants, out of more than 100 applicants. In so 
     doing, the FCC guaranteed each of these companies the 
     opportunity to file an application for a license without 
     giving other companies the opportunity to file a competing 
     application. The preference is for one of two licenses to be 
     granted in each of the three markets. If the pioneer fails to 
     build out and operate the system throughout the service area, 
     the FCC may revoke the license. The FCC awarded these 
     preferences based on its determination that their unique 
     contribution to the development of broadband PCS services and 
     technology justified the grant. The three companies which 
     were awarded a preference are:
       American Personal Communications: APC, which is 70 percent 
     owned by the Washington Post, was awarded its pioneer 
     preference principally through two, interrelated 
     developments. First, APC provided the Commission with a study 
     demonstrating that the 1850-1990 MHz band had a sufficient 
     amount of usable spectrum to initiate PCS service without 
     relocating the many microwave operations already licensed 
     there. As the Commission acknowledges, that study focused 
     attention on the 1850-1990 MHz band by demonstrating that a 
     significant technical hurdle to using this spectrum--the 
     existing microwave users--could be overcome.
       APC's second significant contribution--its FAST 
     technology--is related to the first development. Because the 
     Commission agreed with APC that the 1950-1990 MHz band would 
     be appropriate for PCS service, an efficient technology was 
     needed to allow sharing that spectrum with existing microwave 
     licensees. The FCC determined that FAST meets that need. The 
     technology uses measurements of microwave transmissions at 
     PCS base stations to determine frequencies that can be used 
     for PCS communications without interfering with microwave 
     incumbents. Without this technology, either microwave 
     incumbents would have to be relocated before PCS could begin 
     (a time-consuming and expensive process), or the spectrum 
     that is now being auctioned would be useless for PCS (which 
     would mean little or no auction revenue).
       Cox Enterprises: Cox was the first cable company to apply 
     for an experimental PCS license proposing the use of cable 
     television plant to achieve spectrum efficiency, and 
     centralized modulation and distributed antennas to achieve 
     cost efficiencies. Cox was the first company to demonstrate 
     the technical feasibility of these ideas by testing them on 
     live cable, developing a cable/PCS interface (the Cable 
     Microcell Integrator or CMI), demonstrating centralized 
     modulation, and demonstrating a 2 GHz cell-to-cell handoff 
     with cable connected microcells. These efforts demonstrated 
     that existing networks can be used as part of the PCS 
       Omnipoint: The FCC granted Omnipoint its pioneer's 
     preference for its significant accomplishment in developing 
     PCS equipment--specially, its design, development, 
     miniaturization, and deployment of the first 1850-2200 MHz 
     handheld phone. Ominpoint developed this PCS equipment based 
     on a unique implementation of spread spectrum technology; it 
     documented the feasibility of its system; and it demonstrated 
     the system in operation. The technical feasibility of 
     Omnipoint's system was also tested and documented by more 
     parties than any other PCS system and has been independently 
     verified to be capable of coexisting with incumbent microwave 
     users in 1850-1990 MHz spectrum band, thus minimizing the 
     number of microwave licensees that must relocate.
       8. Why are the markets in which the pioneers received their 
     licenses excluded from the formula? Won't this result in a 
     windfall to companies like the Washington Post and Cox 
       First, all predictions about the behavior of bidders at 
     spectrum auctions are entirely speculative. We have little 
     experience on which to base predictions. Earlier this year, 
     when the only auction that is comparable to the PCS auction 
     was held, bidders paid a total of $678 million for 10 
     licenses that Government economists thought were of so little 
     value they didn't even bother to estimate how much was going 
     to be raised.
       Second, while attempting to predict the behavior of bidders 
     is at best speculative, we do know this: the bidding on 
     licenses in markets where pioneers have been awarded another 
     license at a discount is going to be different than the 
     bidding in markets where there is no pioneer license.
       For instance, a case can be made that the winning bid for 
     the remaining license is going to be higher than it otherwise 
     should be, because the supply of licenses available for 
     bidding has been reduced by 50 percent. Since the supply has 
     been reduced, the price is likely to be artificially 
       If the pioneers are required to pay an amount equal to 85 
     percent of that artificially inflated price, they could well 
     end up paying more for the license than they would if they 
     simply bid for it at the auction.
       On the other hand, giving the pioneers a discount--either 
     of 100 percent, as originally proposed by the FCC, or 15 
     percent, as contained in the GATT legislation--will confer a 
     competitive advantage of some magnitude on the pioneer. That 
     could have the effect of reducing the amount competitors are 
     willing to pay, and reduce the amount of the winning bid.
       The short answer is this: we know that the bidding in 
     markets where there is a pioneer is going to be different. 
     What we don't know is whether the difference is going to 
     result in higher or lower bids. In order to reduce the risk 
     created by this uncertainty--to the Government and to the 
     pioneers--those markets have been excluded from the formula.
       9. The GATT legislation requires the pioneers to pay 
     according to a formula that is based on the top twenty 
     markets, which ignores the fact that two of the pioneer 
     licenses are the two biggest cities in the country. Doesn't 
     this create a windfall for the pioneers, because the New York 
     and Los Angeles markets are very concentrated and highly 
       We don't think so. Given the speculative nature of 
     attempting to predict the behavior of bidders at auction, a 
     definitive response is impossible to predict. However, there 
     are several reasons to conclude that there will not be any 
     windfall to these companies.
       First, the serve areas--known as Metropolitan Trading Areas 
     (MTAs) are huge. Sure, the New York MTA includes Manhattan--
     but it also includes North Hero. Vermont, and Elmira, New 
     York. The Southern California MTA includes Los Angeles and 
     San Diego--but also includes Kingman, Arizona and Beatty, 
     Nevada. And the FCC's rules require that the pioneers offer 
     the same services in these remote areas as they do in 
     downtown New York or Los Angeles. If the licenses were 
     limited to the urban areas, there might be some basis for 
     this claim. But as the size of the service territory 
     increases to include vast rural areas and small towns, the 
     differences between the various MTAs disappear.
       Second, the allegation that there is a substantial 
     difference in the values of the very largest markets and 
     other large markets is not borne out by an examination of the 
     existing cellular marketplace. Recent transactions involving 
     the sale of cellular systems do not reveal any price 
     distinction, on a per capita basis, between the very largest 
     cities and other large cities.
       Finally, our limited experience with auctions indicates 
     that when the bidding for the most desirable licenses gets to 
     be too expensive for some of the bidders, they simply drop 
     out of the bidding for those licenses and bid up the prices 
     of the next tier of licenses. To the extent that there is a 
     distinction between the very largest MTAs and other large 
     MTAs (and we don't anticipate that there will be), this 
     behavior will have the effect of drawing up the prices being 
     paid for all MTA licenses.

  Mr. HATCH. Madam President, the issue of pioneer preferences as part 
of the funding mechanism of the Uruguay round has been held up by 
opponents of the agreement as a back room deal cut by large 
telecommunications businesses for their benefit. On the contrary, the 
provision contained in the implementing legislation that requires three 
telecommunications pioneers to pay 85 percent of the average PCS bid in 
the largest 20 markets in the country was worked out between 
Republicans and Democrats in both Houses of Congress and will 
potentially save the pioneers $200 million collectively.
  However, what is not mentioned by Uruguay round opponents is the fact 
that before this issue was ever considered for funding offsets for the 
Uruguay round, the FCC was originally prepared to offer these pioneers 
PCS licenses for free under the pioneer preference provisions of the 
Communications Act of 1934.
  Third, the loss of U.S. sovereignty resulting from membership in the 
World Trade Organization has been debated extensively by many 
individuals, groups, and constitutional scholars--all with conflicting 
views. So, Madam President, how do we resolve this difference of 
opinion? I have spent considerable time reviewing this aspect of the 
Uruguay round agreement.

  I believe we must put the issue in context, and the context is found 
in the last 47 years of U.S. membership in the GATT. We must ask 
ourselves what our relationships have been with not only the GATT 
itself but to other GATT-member countries and how these relationships 
have affected U.S. laws and the ability we have as a nation and 
Congress to conduct the affairs of our Nation.
  The fact is that never has any GATT obligation been imposed upon the 
U.S. resulting in a change in U.S. law that has not been approved by 
Congress. Never. Claiming that this practice will change with the WTO 
directly contradicts statutory language found in title I, section 102, 
of the implementing bill of the Uruguay round which states clearly that 
``No provision of any of the Uruguay round agreements, nor the 
application of any such provision to any person or circumstance, that 
is inconsistent with any law of the United States shall have effect.'' 
Madam President, I do not believe we can be any more clear when it 
comes to where the Uruguay round and the WTO stand in relation to our 
  Fourth, claims have been made regarding voting procedures in the 
proposed WTO. Again, Madam President, we must look to the context of 
the GATT for the past 47 years of making decisions regarding operating 
rules, procedures, and amendments to GATT. The fact is that GATT has 
determined its administrative course by consensus. This process will 
not change under the WTO. This means that WTO decisions will be made on 
a consensus basis, not according to majority voting blocks. If and when 
voting procedures are invoked, member countries will not be held 
accountable to amendments to WTO rules and procedures that they do not 
  Fifth, Uruguay round opponents have also repeatedly advocated 
considering the Uruguay round as a treaty, requiring a supermajority of 
two-thirds of the Senate, instead of as an executive agreement to be 
passed by a simple majority by both Houses of Congress. Quite frankly, 
Madam President, the distinction between whether international 
agreements should be considered as treaties or as executive agreements 
is quite dubious.

  In fact, Prof. Louis Henkin, who is considered by many to be the 
premier expert on constitutional foreign affairs issues, has stated 
that this debate is juridically a political question and thus 
  Presidents have repeatedly submitted international agreements to both 
Houses of Congress, and the House and Senate have repeatedly joined 
together in exercising their article I powers to approve a wide range 
of important international agreements, ranging from Bretton Woods to 
SALT I to NAFTA. Moreover, to exclude the House from consideration of 
legislation that has such significant revenue impacts would be a 
serious mistake in my view.
  Sixth, one issue that is important to everyone in this body--no 
matter which side of the aisle or argument he happens to be on--is 
jobs. Opponents of the Uruguay round make the claim that jobs now and 
for the future will be lost if we pass this agreement. But, Madam 
President, I believe we must look at how jobs are created. Jobs are 
created by capital investment resulting from increased demand, which 
spurs economic growth.
  This demand has been generated largely by consumers around the world 
who want the best goods and services at the lowest possible prices. 
Foreign countries like Japan began meeting that demand decades ago by 
improving quality and reducing costs. As a result, U.S. jobs were lost 
while U.S. manufacturers adjusted to the increased competition. Now, in 
many industries, U.S. products are in high demand all over the world. 
Unfortunately, the costs, both tariff and nontariff, associated with 
accessing these markets has made exporting expensive, thus encouraging 
U.S. firms to shift their manufacturing bases overseas.
  Fortunately, due in part to efforts by the United States to reduce 
these market access barriers and create fair trading rules, U.S. and 
foreign firms have begun to take advantage of the labor efficiency 
gains found in the United States. This is evidenced by the growth of 
our export sector in recent years--the fastest growing sector in the 
U.S. economy. Rejecting the Uruguay round now will only set back this 
positive trend that I believe will create more high-paying jobs 
for Americans in the future by creating incentives to invest more in 
their own skills and education because of the opportunities opened by 
increased access to overseas markets.

  Seventh, there are fears held by Uruguay round opponents that 
ratifying the agreement will threaten our food safety and environmental 
laws. Madam President, historically GATT was established on two 
fundamental principles: First, to liberalize trade; and second, to 
institute a system of minimal standards and rules to enhance the 
benefits of liberalized trade.
  Inherent in the principle of establishing a set of minimal standards 
to which all member countries agree to adhere does not prohibit 
countries from setting higher standards as long as long as it can be 
proven that the standards are scientifically based and there is no 
discrimination between foreign and domestic entities.
  A recent example of this principle was exhibited by a challenge to 
our gas guzzler law and the Corporate Average Fuel Efficiency Act by 
German auto manufacturers. The claim made by the German companies was 
that these laws were an unreasonable barrier to trade. However, the 
challenge was rejected by a GATT dispute resolution panel citing that 
these statutes were nondiscriminatory and therefore not a barrier to 
trade. I ask unanimous consent to have printed in the Record an 
overview of that panel decision provided by the U.S. Trade 
Representative's office.
  There being no objection, the material was ordered to be printed in 
the Record as follows:

         Executive Office of the President, Office of the U.S. 
           Trade Representative,
                                Washington, DC, September 30 1994.

          u.s. fuel conservation measures upheld by gatt panel

       Ruling in an important trade dispute with the European 
     Union, a GATT panel in Geneva found in favor of the United 
     States today on key provisions of U.S. laws regulating auto 
     fuel economy and luxury taxes.
       The GATT panel, which the European Union asked last year to 
     review the three U.S. automobile laws, found that the core 
     provisions of the three laws are consistent with GATT rules. 
     Two of the measures at issue, the Corporate Average Fuel 
     Economy (CAFE) requirements and the ``gas guzzler'' tax, are 
     central components of the U.S. automobile fuel conservation 
     policy that emerged in response to the 1973-74 OPEC oil 
     embargo. The third measure is the luxury tax on cars over 
     $30,000, enacted in 1990.
       U.S. Trade Representative Mickey Kantor welcomed the 
     panel's report. ``The panel has emphatically rejected the 
     European claim that trade-neutral legislation intended to 
     further energy conservation goals and protect the environment 
     could be attacked because Chrysler, Ford and GM invested and 
     complied with the laws while Mercedes and BMW chose not to, 
     and had to pay penalties.''
       ``The panel's finding also confirms that GATT's trade rules 
     can be compatible with our laws that conserve natural 
     resources and protect the environment,'' Kantor noted. ``This 
     decision is a recognition that our government--and those of 
     other countries--have latitude to legislate and regulate in 
     these crucial areas as long as they are not discriminating 
     between domestic and imported products.''
       ``I would expect the panel's report to help steer the 
     debate when GATT countries take up trade and environment 
     issues under the new World Trade Organization,'' he said.
       The panel rejected EU complaints that the CAFE 
     requirements, the gas guzzler tax, and the luxury tax 
     discriminated against cars manufactured by Mercedes, BMW and 
     other European luxury car makers. Those manufacturers have 
     paid a large share of penalties and taxes under these laws.
       The panel report broke new ground in crucial respects:
       It found for the first time that the general exception 
     under the GATT for conservation measures could excuse a 
     country's law that was otherwise inconsistent with the GATT.
       It recognized for the first time that, in reviewing a non-
     discriminatory measure of a country, it is not relevant 
     whether other, more economically efficient alternatives might 
     be available to achieve the government's legitimate policy 
       It laid to rest the concern that governments were obligated 
     to select the ``least trade restrictive'' conservation 
     measure. A measure is consistent as long as it clearly serves 
     the purpose of energy conservation or environmental 
     protection, and does not arbitrarily or unjustifiably 
     discriminate between domestic and imported products.
       The panel agreed with EU complaints on one technical 
     issue--the CAFE accounting rules that establish separate 
     ``domestic'' and ``import'' fleets for determining overall 
     fuel economy. Because these rules do not have any actual 
     economic impact on EU auto manufacturers, and therefore no 
     trade damage results from this requirement, Ambassador Kantor 
     said that the United States does not intend to make any 
     changes in the CAFE rules.
       Copies of the panel's report are available in the USTR 
     public reading room.

  Mr. HATCH. Finally, Madam President, after all the arguments that 
have been made by Uruguay round opponents on the substance of the 
agreement, they question the wisdom of considering this document during 
a lame duck session, claiming that nonreturning Members are not 
accountable to voters and that we should not be hasty in taking a vote 
on this document.
  However, Mr. President, the Uruguay round agreement has been worked 
out over an 8-year period, which began during the Reagan 
administration. There have been several delays since 1986, and there 
have been several Congresses involved in crafting improvements to the 
agreement. There comes a point at which further delay only hurts our 
economy because it cannot take advantage of the benefits that will 
surely accrue from the agreement, such as tariff cuts, increased market 
access, and protection of intellectual property, just to name a few.
  Furthermore, if dynamic economic projections are correct, the 
increased economic activity resulting from the agreement will help to 
reduce our budget deficit. Thus, each month we delay hampers us from 
reducing our budget sooner and costs the United States, in terms of 
increased gross domestic product [GDP], about $1.25 billion and 4,000 
new jobs.
  The Uruguay round is simply a sequential step along the trade-
liberalizing policy path that the United States has been engaged in for 
more than half a century. The time has come to cast our vote on the 
economic future of our Nation. There will be plenty of opportunities in 
the next Congress and in Congresses that follow to continue improving 
our trade laws without defeating this important agreement that has been 
carefully negotiated by three administrations and five Congresses.
  It is time to move ahead. I encourage my colleagues to support this 
  Let us look for a moment at the results of NAFTA since its 

                               IN GENERAL

  United States exports to Mexico and Canada during the first half of 
this year were up 17 and 10 percent, respectively.
  The United States trade surplus with Mexico has increased to a record 
level of $2.1 billion during the first 6 months of this year.
  Exports to Canada and Mexico, so far this year, are responsible for 
more than 52 percent of overall United States export growth.
  United States exports to Mexico are running at an annualized rate of 
$48.9 billion, up more than $7.3 billion from the 1993 level.
  Keep in mind, Mr. President, Mexico is currently our third largest 
export market for consumer goods, behind Canada and Japan. This means 
that Mexicans are buying United States products. And it will not be 
long before Mexico surpasses Japan as our second largest export market 
for consumer goods.


  From January to May of this year--
  United States auto exports to Mexico exceeded the total number of 
exports during all of 1993--an increase of approximately 600 percent.
  In my home State of Utah, WordPerfect has attributed significant 
sales increases in Mexico to better intellectual property protection 
afforded under NAFTA.
  Primary metal exports to Mexico from Utah have increased almost 3,000 
percent from 1993 levels during the same period.
  Industrial machinery and computer equipment exports from Utah to 
Mexico have increased almost 500 percent over 1993 levels during the 
same period.
  And Utah chemical exports to Mexico have increased over 250 percent 
during the first quarter of 1994.
  In addition, despite the job loss predictions that were prevalent 
during the NAFTA debate last year, the Department of Labor has reported 
that fewer than 5,000 applications for assistance were made at the 
NAFTA Adjustment Assistance Program during the first half of this year.
  Yes, imports from Mexico and Canada have also increased, but is not 
that what the objective of the agreement was--to create a more open 
market where goods and services could flow more freely? We want to 
provide American consumers with the widest array of choices.
  Moreover, can we expect our trading partners to agree to do business 
with us without realizing some mutual benefits? We must remember that 
the fundamental reason the United States pursues more liberal economic 
relationships is that on a level playing field we can out-compete 
  But, Mr. President, we are not here to discuss NAFTA. We are here to 
discuss the Uruguay round. And the reason I raise NAFTA at this time is 
to draw attention to the fact that we have all expressed concerns 
pertaining to specific sections of the Uruguay Round Agreement and the 
implementing language, just as we did a year ago during the NAFTA 
implementing process.
  As you will recall, we argued heavily over funding for the NAFTA, 
labor and environment issues as they related to our NAFTA trade 
objectives, and the potential threat that NAFTA posed to our national 
sovereignty. Ironically, these are the same issues that both the House 
and Senate are struggling over during this current debate on the 
Uruguay round. Therefore, Mr. President, I encourage all of my 
colleagues to consider the historical lessons that we have learned from 
NAFTA and not to lose focus on what we have the opportunity to do for 
our economy now.

  Our problem has been that many countries have yet to match our system 
of openness, a system that has served us well for the better part of 
200 years. But we still struggle with trying to encourage other 
countries to adopt our same philosophy of openness where the benefits 
outweigh the drawbacks.
  Therefore, we must continue to ask ourselves whether we would rather 
raise our level of protection and nontransparency to that of our 
trading partners, refusing to afford them any benefits of our markets 
until they adhere to our terms, or try to raise other nations' 
standards to our level of market access, low tariffs, and transparent 
trade laws, which will exploit more fully the advantages we have in 
economic efficiency and ingenuity, not to mention the benefits that 
accrue to U.S. consumers in an economy where there is more competition 
and more choice.
  In other words, do we take a leadership role in world economics by 
seizing the day and controlling our own economic destiny; or, do we 
wait for others to hopefully act in a way that is beneficial to us? It 
seems to me that we have consistently and successfully chosen the 
leadership role.
  But before the Senate determines the fate of the Uruguay Round 
Agreement, I would like to address a few of the key issues that 
surround this debate, because I am concerned that there is a lot of 
misinformation being spread about the Uruguay round, the General 
Agreement on Tariffs and Trade [GATT], and the World Trade Organization 
  First, let me bring up the issue of sovereignty. As I said, this is 
not a new concern when it comes to entering into trade agreements. I 
have heard it said that the WTO will have the new-founded ability to 
force the United States to change Federal and State laws that inhibit 
trade or are ``GATT inconsistent.'' In light of these criticisms, I 
have given serious consideration to this aspect of the Uruguay round.
  In order to understand the WTO, it is imperative to understand 
exactly what the GATT is. The original GATT was ratified in 1948 by 23 
nations including the United States. The original agreement was the 
culmination of a post-World War II effort to prevent the return of the 
troublesome protectionist trade measures of the 1930's. Since that 
time, there have been eight subsequent GATT negotiating rounds that 
have expanded upon the original agreement, the latest round of which is 
the Uruguay round. Of course, the charter establishing the WTO is part 
of the Uruguay round text.
  The fundamental assumption that GATT espouses is that reduced trade 
barriers enhance economic well-being among participating nations. 
Therefore, GATT was established with two objectives in mind: First, to 
liberalize trade; and second, to institute a system of minimal 
standards and rules to enhance the benefits of liberalized trade.
  To use an analogy, just as individual freedoms within a political 
system create greater potential for citizens of the system to maximize 
the benefits of life and liberty, greater freedom within an economic 
system maximizes potential for members to obtain economic benefits, 
that is, higher standards of living. Therefore, the United States has 
always been a leader in promoting agreements such as GATT.
  However, allowing more freedom within a political system without a 
commensurate system for fair and credible law and order creates chaos, 
inequality, and eventually, repression. Likewise, a more open 
economic structure without a system of fair rules and a credible 
dispute settlement mechanism only creates a situation wherein members 
may exploit others to their economic detriment. Unfortunately for the 
United States, as the world's most open economy and its largest 
exporter, we are at a severe disadvantage without such a system that 
seeks trade liberalization while employing a legitimate dispute 
settlement mechanism. The alternative to such a system is to become 
isolated and subject to the arbitrary market entry rules of each 
individual nation.

  In 1988, Congress recognized the need for a tougher international 
trade dispute settlement mechanism because the United States has been 
the plaintiff in dispute settlement cases brought to GATT many more 
times that we have been the defendant, and we have won many more cases 
than we have lost.
  Unfortunately, under the current GATT, a country that receives a 
negative panel decision can choose to block the adoption of the ruling 
or bog it down through procedural measures until the issue died without 
any resolution. Thus, in the Omnibus Trade Act of 1988, Congress 
spelled out several objectives with regard to trade. One of the 
objectives was to create stronger, more timely dispute settlement 
  The proposed WTO seeks to accomplish the 1988 congressional objective 
and is the result of a systematic expansion of the traditional GATT, 
not a completely new and powerful body that will ride roughshod over 
U.S. law. On the contrary, the WTO is simply an attempt to strengthen 
the enforcement of international trade obligations to which the United 
States has been committed since 1948.
  Therefore, contrary to what has been characterized as a serious 
digression from traditional U.S. trade policy, the WTO will provide a 
framework and a forum to work out trade disputes and to resolve 
economic differences. Moreover, if Congress votes to ratify U.S. 
membership in the WTO, the subordination of U.S. international 
obligations to the Constitution and Congress' ability to make laws will 
not change.
  In fact, Judge Robert H. Bork stated in a May 26, 1994, letter to 
Trade Representative Mickey Kantor that:

       * * * no treaty or international agreement can bind the 
     United States if it does not wish to be bound * * * Congress 
     should be reluctant to renege on an agreement except in 
     serious cases, but that is a matter of international comity 
     and not a loss of sovereignty.

  Therefore, as one who is a student of constitutional matters, I am 
satisfied that the WTO will not threaten U.S. or State sovereignty any 
more than it has been threatened under the current GATT system.
  Second, I have heard dismay expressed over what the Uruguay Round 
will actually do for our economy, as if negotiating with other nations 
to break down trade barriers around the world is somehow a dangerous 
policy that will only lead to economic woes for the United States. Mr. 
President, these are the same types of fear-promoting predictions that 
we heard last year during the NAFTA debate and which have not 
  The world is a very different place than it was at the conclusion of 
World War II. We are seeing myriad new and emerging markets, which were 
virtually closed before and which are creating new challenges and 
opportunities for the United States. Many of these emerging markets 
operate under differing economic principles and conditions. GATT and 
the Uruguay Round provide an opportunity for greater U.S. access to 
these markets.
  In turn, boosting the economic conditions of many less-developed 
countries through trade not only expands market opportunity and 
customer base for developed countries like the United States, but also 
helps to promote free enterprise economic reforms within these 
countries--not an insignificant fringe benefit of free trade.

  At the same time, we expose these markets to our transparent trading 
regime and our principles of nondiscriminatory trade policy and justice 
system, which protects things such as intellectual property. Only 
through exposure to our way of doing business will countries begin to 
change unfair trade practices and reduce trade barriers. GATT provides 
a forum for this progress to take place, and the Uruguay Round provides 
yet another step along the trade policy path that the United States has 
been pursuing since World War II.
  At the risk of boring my colleagues with statistics, it is important 
to understand exactly what we are talking about in terms of the 
potential benefits to our economy that the Uruguay Round will afford.
  Currently, trade represents more than 10 percent of our annual gross 
domestic product [GDP], which now exceeds $6 trillion. This means that 
we are exporting over $600 billion of goods and services. Jobs that are 
attributed to trade account for approximately 9 percent of our total 
workforce, or approximately 12 million people of a total of about 119 
million workers in the United States. These figures have steadily grown 
since 1947, when the United States first entered into GATT and the 
gross national product [GNP] was at approximately $234 billion, with 
trade accounting for about 8 percent of that figure.
  It is clear and indisputable that trade contributes significantly to 
our economy. We can't ignore this fact. Trade is now a larger portion 
of our economy in an environment of increased competition--competition 
which did not exist in 1947. I believe that without strict adherence to 
a post-World War II trade policy of expansion and liberalization, of 
which our membership in GATT has been a key component, we would be much 
worse off economically than opponents of our trade policy claim that we 
are today.
  Another strength of the implementing language before us is the 
improvement it makes in our existing system of patent protection. It 
alters the term of patent protection from its current length of 17 
years from date of issuance to the new standard of 20 years from date 
of application. Because the average time to process a patent 
application is 18 months, in most situations inventors will receive a 
longer term of patent protection under this provision. Also, by 
focusing on the date of application rather than the date of issuance, 
the disruptive tactics of some who have sought to manipulate the patent 
system through the use of so-called ``submarine'' patents will come to 
an end.
  I am aware, Mr. President, of the controversy that is associated with 
this issue. Unfortunately, it is a factual dispute to which the 
conflicting parties are in nearly complete disagreement. Some say this 
change in our patent law will disadvantage small inventors; some say it 
will instead benefit them. Only time will tell. But I have given 
assurances to the many small inventors in my home State of Utah--and 
throughout the Nation--that I will be vigilant in watching this issue. 
And I will not hesitate to sponsor private relief or other legislation 
that might be required to restore to any inventor who is disadvantaged 
by this change in the law to the full 17 years of protection available 
under current law. But it would be inappropriate for Congress to act 
further until there are actual, demonstrated instances of inventors 
being disadvantaged--through no fault of their own--by this change in 
the law.
  In short, the clear benefits of this amendment to our patent law 
should not be forestalled because of the specter of theoretical cases 
that might arise in the future. Should those cases actually arise, the 
Patents Subcommittee, where I have served as ranking member for 8 
years, stands ready to act and to act quickly.
  Finally, Mr. President, I would like to address the issue of funding 
for the Uruguay Round. There has been a great deal of debate concerning 
the financing of the Uruguay Round. Because of the budget rules that 
Congress has established and the fact that this legislation is being 
considered under the fast track procedure, we find ourselves in a very 
interesting and somewhat difficult position as to passing this 
implementing legislation.
  Because the Uruguay Round will lower tariffs that the Treasury will 
collect on imported goods, there will be a loss of revenue that 
otherwise would be collected. Thus, under the current methods of 
estimating the revenue effects of legislation, and according to the 
budget rules, this implementing legislation will require an offset to 
prevent it from increasing the budget deficit. It is important to note 
that the budget rules in the Senate now require that these losses be 
offset over both a 5-year and a 10-year period. Failure to provide 
adequate offsets leaves the legislation open to budget points of order, 
which can only be overcome by a vote of 60 Senators.

  However, Mr. President, as you and our colleagues know, the budget 
rules of the Senate do not always reflect the economic reality of the 
world. We have seen many examples that amply demonstrate that the fact 
that estimated revenue effects of various bills are sometimes woefully 
inadequate. In the case of the Uruguay round, it is already evident to 
almost every economist in the Nation that the overall economic impact 
of the agreement will not result in a loss of revenue to the Treasury. 
People on both sides of the political aisle agree that the economic 
benefits to the United States of increased trade as a result of the 
agreement will far outweigh the tariff revenue lost due to the lower 
  By opening up new trading opportunities to U.S. businesses, up to 
500,000 more jobs will be created in the country. This will result in a 
great deal of new economic activity throughout the Nation and a large 
increase in our gross domestic product. All of this new business will 
swell the receipt of payroll and income tax revenue to the Treasury, 
which will far more than offset the amount of revenue loss resulting 
from the reduction in tariffs.
  Unfortunately, the new revenue coming in to the Treasury because of 
the increased economic activity and new jobs is not taken into account 
by the Congressional Budget Office, Joint Committee on Taxation, and 
Office of Management and Budget for purposes of deciding how the budget 
rules will apply to this legislation. Thus, we find ourselves in the 
strange position of facing budget points of order unless this 
implementing legislation is paid for by tax increases or entitlement 
spending cuts.
  This situation put the Clinton administration in a predicament--
having to come up with a package of tax increases and spending cuts to 
pay for the agreement to avoid having to waive the budget rules. As we 
all know, Mr. President, it is never much fun having to propose tax 
hikes or spending cuts, especially when most experts agree that they 
really aren't needed. This predicament was further complicated by the 
new budget rule in the Senate that requires the first 10 years of the 
agreement to be offset, instead of only the first 5 years. In terms of 
dollars, this requirement means that the value of the offsets has 
increased from an estimated $11.5 billion required to offset the first 
5 years to an estimated $40 billion to offset the full 10 years.

  The administration was forced to make a difficult decision--whether 
to propose to fully offset the estimated cost over the 10 years, and 
totally avoid the budget points of order, or to offset less than the 
full amount and face potentially fatal budget points of order from 
opponents of the Uruguay round. To fully offset the agreement would 
have required $40 billion of tax increases and/or spending cuts, which 
could also have killed the deal. Not offsetting the estimated revenue 
loss at all would have opened the administration up to criticism from 
various factions that a full budget waiver irresponsibly increases the 
budget deficit, or at the least, sets a bad precedent. We must keep in 
mind, Mr. President, that once the implementing legislation was 
delivered to the Congress, it could not be amended. Thus, the 
administration had to get it right the first time.
  The administration chose a middle-of-the-road course. It decided to 
try to offset the 5 year cost of the agreement, but also decided that 
to come up with adequate offsets to pay for the 10 year cost would have 
been counterproductive. Thus, the administration set itself on a course 
to find about $12 billion worth of tax increases and spending cuts. As 
we all know, Mr. President, this decision has left the implementing 
legislation subject to budget points of order. Thus, in reality, it 
will take 60 affirmative votes to pass this deal tomorrow.
  I don't know of anyone who is entirely happy with the package of 
offsets that the administration ultimately included in this 
implementing legislation. There is much to criticize. To start with, I 
am of the opinion that we didn't need to fund the agreement at all. 
When it is obvious to almost every economist that the dynamic economic 
effects of implementing the agreement will bring in far more revenue 
than is lost by the tariff reductions, why shouldn't we simply waive 
the budget rules and pass the bill? I realize that my viewpoint would 
probably not carry the day in the Senate and that an unfinanced GATT 
would not have the votes to pass. Thus, even though I personally do not 
like the idea of having to raise taxes to pay for an agreement that in 
reality needs no funding, I am willing to go along with the offsets 
that this package includes, for two reasons.

  First, many of the revenue increases in the financing package are 
innocuous. Almost $4 billion of the revenue raised in the package comes 
from compliance initiatives and accelerating the receipt of taxes. 
These are not tax increases, Mr. President. They meet the technical 
definition of budget offsets, but they are not harmful tax increases. 
Another almost $1 billion is raised through the reform of the Pension 
Benefit Guarantee Corporation [PBGC]. While I am not thrilled that this 
reform package did not go through the usual legislative process, I am 
generally satisfied with the result.
  Second, to the extent that the financing package does contain 
obnoxious and harmful provisions, and there are some, I believe we can 
justify them by the tremendous benefits the Nation receives by 
ratifying the Uruguay round. As I mentioned, I do not believe that 
anyone's taxes should be raised to pay for an agreement that, in 
reality, doesn't need to be paid for. Therefore, for example, I am not 
happy that 4-percent floor on savings bond yields has been eliminated. 
This provision only raises $122 million, but could damage the 
attractiveness of U.S. savings bonds. I am also not pleased that the 
interest rate that the Internal Revenue Service will pay corporate 
taxpayers on refunds over $10,000 would be lowered. This seems unfair 
to me, especially considering the fact that interest paid by 
corporations to the IRS on amounts due would stay the same. Although 
these are not traditional tax increases, they nevertheless take money 
from the pockets of taxpayers and put it into the Treasury.
  Although the financing package is not perfect, the administration is 
to be commended for its willingness to work with the Finance Committee 
in settling on the final package of revenue increases. Many of the 
earlier proposals, which were much more harmful to taxpayers, were 
removed after objections were raised by various Members of Congress. 
For the most part, our concerns were considered and changes were made.

  All in all, Mr. President, I believe that the approach taken by the 
administration if offsetting the Uruguay round was a reasonable one, 
given the political realities. I do not believe that anyone is totally 
happy with the financing provisions, but, as we all know, politics is 
the art of compromise. I will vote to waive the budget point of order.
  In conclusion, Mr. President, the Uruguay round is not a perfect 
agreement that is going to solve all of our trade problems, of which we 
have many. However, we must look at what our strengths are and move 
forward. The Uruguay round is a sequential step in the effort to do 
just that.
  We cannot afford to deny ourselves the benefits of an agreement that 
will add $100-$200 billion to our economy over the next 5 years; that 
will, for the first time add provisions protecting intellectual 
property--the United States loses billions of dollars a year in 
intellectual property violations by other countries; that will 
significantly reduce allowable subsidy, tariff, and internal support 
levels for agricultural products of our trading partners, which could 
yield as much as an $8.5 billion increase in agricultural income over 
the next 10 years; and that will potentially create 500,000 jobs due to 
the increase in economic activity generated by the Uruguay round.
  The facts are that the United States is the largest market in the 
world, we have the lowest average tariff rates in the world, and we are 
the world's largest single exporting country. For these reasons, it is 
in our interest to gain access to foreign export markets and to 
strengthen the credibility of a dispute settlement process. We 
accomplish these objectives by reducing current barriers to these 
markets and creating a stronger administrative body to ensure 
enforcement of the rules. The Uruguay round seeks to reduce these 
barriers, and the WTO provides the forum for a more credible dispute 
settlement process.
  By reducing these barriers, we provide more opportunities for 
Americans to produce goods and services to export throughout the world. 
By creating more exporting opportunities, we create more jobs. More 
jobs create more earnings, which create more consumer spending and 
private investment, creating even more jobs. These activities also 
create more revenues which help to reduce the Federal budget deficit.
  I support the objectives of the Uruguay round because they are good 
for our economy. Without a strong economy, then I believe that we do 
face the possibility of losing some of our sovereignty as a nation and 
a people.
  The PRESIDING OFFICER. Who yields time?
  Mr. ROCKEFELLER addressed the Chair.
  The PRESIDING OFFICER. The Senator from West Virginia.
  Mr. ROCKEFELLER. Madam President, I ask unanimous consent that the 
junior Senator from West Virginia by yielded such time as he may 
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. ROCKEFELLER. Madam President, it is up to the Senate to seize 
this historic opportunity. The trade agreement now before the United 
States Senate for approval represents the culmination of nearly 50 
years of efforts designed to open global markets that have unfolded 
since the end of World War II. These moves towards a more free, a more 
fair, and a more open trading system have been led at every turn by the 
United States.
  With this agreement, known as the Uruguay Round, we will join 123 
other countries in adopting and improving rules of international trade 
in ways that are in the direct and vital interest of Americans. That is 
the basic reason that I will vote in favor of the legislation before us 
to implement the Uruguay Round Trade Agreement, better known as the 
  Madam President, the people of my state of West Virginia and the rest 
of the country are hearing from numerous critics who urge the defeat of 
this agreement. They are correct in saying the GATT is not perfect. But 
that argument completely misses the point. With this agreement, 
American companies and workers will see barriers to our products come 
down. Our industries will have more access to more markets around the 
world, and that is essential to creating better jobs for more of our 
people. At a time when Americans are understandably frustrated about 
stagnating wages, this is precisely when we need to make and sell more 
products for export. With this trade accord, it's predicted that real 
income for families in the United States will go up by more than 
$1,000. That kind of economic progress is what West Virginians and our 
fellow Americans are asking their leaders to help bring about.
  In considering this trade agreement, we are making a choice. 
Defeating it will mean keeping current practices and policies in place, 
like the tariffs that shut out American products and the toleration of 
foreign companies pirating and copying our inventions, our patents, our 
intellectual property. Adopting this agreement, on the other hand, will 
make the playing field more accessible, more fair, and more beneficial 
for Americans.
  The reality of the international market place is something we not 
only have to deal with, it is something that Americans must take 
advantage of. We do not have a choice about the nature of the 
marketplace and the economy that Americans now have to deal with. That 
is, unless we want to go back to Smoot-Hawley and effectively close our 
markets, which back then deepened the Depression and could cause the 
same results now. The world is now America's marketplace and where our 
economic destiny and more importantly, our economic opportunities lie.

  I did not approach the Uruguay Round as either a doctrinaire free 
trader or a die-hard protectionist.
  From the beginning, I saw the talks as a chance to win the best 
possible deal for America and my state of West Virginia.
  From the beginning, I also supported the founding goals of the 
Uruguay Round--to open markets; to standardize more of the trading 
rules that all 124 participating countries would then pledge to follow; 
and to enforce the newly developed or improved rules so together we do 
more to deter unfair trade.
  Through the seven years of the Uruguay Round talks, our trade 
negotiators have pursued these goals. In the broadest sense, the effort 
has been about building a more healthy global economy, while charting a 
stronger economic future for this country.
  But untold numbers of hours and pages have been devoted over these 
years to hammering out the nitty-gritty details of our trade laws, and 
thinking through the impact of hundreds, if not thousands, of small 
changes in those laws.
  That's where I have tried to hover over the process, and play a role 
in affecting the outcome. I have spent a great deal of time working on 
this Agreement, trying to fix what was not coming out well at various 
stages of the talks, and fighting for what I saw as essential for the 
people of West Virginia and the nation.
  And let me be clear, my decision to support this agreement was not a 
foregone conclusion. Until our trade negotiators worked out the final, 
crucial deals, and until the Congressional committees worked out the 
final version of the legislation before us, I was not prepared to sign 
  My constituents know that I voted against the NAFTA because I did not 
think it was in the best interest of the people of West Virginia. As I 
said at the time, and still believe today, the idea of effectively 
merging the economy of the United States with a country so far behind 
us in economic development as Mexico still is, was a threat to the 
workers of West Virginia that I was not willing to accept at the time. 
I also said at the time, that as Mexico only accounted for 2 percent of 
West Virginia's total exports, I was not convinced that passage of the 
NAFTA was going to mean much in terms of job creation in West Virginia 
either. And the jury is still out on the NAFTA. Perhaps in a few years 
we will find that some of the worst fears were unfounded--I certainly 
hope so.

  But the Uruguay Round of the GATT is not a free trade agreement like 
the NAFTA. From West Virginia's perspective, the Uruguay Round is 
essentially about establishing rules to ensure trade is conducted more 
fairly, with the promise of lower tariffs in countries that represent 
the most of our state's export markets. Tariffs act like walls that 
prevent American goods and services from being sold in countries as 
different in size and development as New Zealand is from Brazil. The 
Uruguay Round will lower tariffs and open markets around the world to 
West Virginia products. At the same time, it will offer greater 
protection for things like intellectual property, which is vital to the 
chemical industry, West Virginia's largest manufacturing employer.
  The Uruguay Round represents the eighth round of negotiations since 
the GATT was formed in 1948 to establish basic principles and 
guidelines of world trade. The United States has always been at the 
forefront of promoting free and fair trade. The question before the 
Senate is essentially whether to update the rules by which countries 
across the globe interact economically.
  The world has changed in incredible ways since 1948. Communism is no 
longer a threat, and new economies across the world are emerging as 
important trading partners of the United States. More significantly, 
the global economy itself has been transformed in ways our post-World 
War II leaders never could have envisioned.
  Undreamed advances in transportation, communications, and information 
technology has made the global economy a daily and permanent reality. 
Simple transactions, like shipping fresh flowers or produce halfway 
around the world, are now routine when twenty years ago they were 
logistically impossible. Complex transactions that move billions of 
dollars or other currencies are completed with a few keystrokes. 
Business deals can be negotiated with trading partners on the other 
side of town or on the other side of the world via teleconference and 
  On a macroeconomic level, globalization and expansion have led to 
unprecedented growth and creation of national wealth. But back home on 
Main Street, that growth and wealth still hasn't flowed or trickled to 
where they make a positive difference in enough lives. What's good for 
Wall Street or Dow Jones doesn't always put food directly on the table 
back in Moundsville. In fact, for the working men and women of West 
Virginia and people across the country who are struggling to pay the 
rent and save for their kids' education, they have felt greater 
insecurity about their personal economic situation. Globalization has 
opened markets all over the world, but it has also exposed our 
industries to foreign competition, not all of it fair or market-based.

  As a result, our people have benefitted as consumers, but we have not 
done as well as producers. West Virginians tell me they are concerned 
about their jobs, their ability to build a better life than their 
parents, their health and retirement benefits. The opponents of this 
trade agreement have tried to stir up these fears, but I think they are 
doing the American people a real disservice.
  These anxieties are not misplaced, but killing the GATT is no 
solution or even an antidote. In fact, it could be more like poison. 
The simple truth is that we cannot stop the globalization of our 
economy, and, even if we could, I do not believe it would be in our 
interest to do so. Export-related jobs are, on average, better paying 
jobs, and free trade has always spurred economic growth. Our objective 
must be fair trade in this changing world and reality.
  That's why I have focused my energy on making changes to those parts 
of the law that deal with unfair trading practices that hurt West 
Virginia companies and workers. Industries like chemicals, steel, ball 
bearings, pipe and tube manufactures, glass and chinaware, and other 
traditional industries are particularly vulnerable to unfair trade 
practices, and my duty to the people of West Virginia is to see that 
opening the trading system does not lead to the sacrifice of American 
  Even before the Uruguay Round negotiations were concluded, I went to 
Geneva to fight to preserve U.S. laws that enable our industries and 
workers to defend themselves against unfair and market-distorting 
foreign competition. I insisted that the Administration seek a trade 
agreement that achieves consistent and fair rules among all the 
participating countries.
  In this process, I worked closely with West Virginia industries on 
issues that affect jobs in our state. In my view, the final text is a 
much better agreement than the initial draft text, but it was still far 
from perfect. It left a number of important questions about how to 
implement the Agreement--which are answered in the bill we are 
considering today.
  Answering those questions has taken a great deal of effort. We faced 
opposition from special interest groups that seem to care more about 
importing goods from other countries into the United States than 
preserving our own domestic industries. In the end, we fended off many 
of the worst threats by crafting a reasonable approach that will 
ultimately achieve more open and fair trade.

  Madam President, following my statement, I would like to insert into 
the Record a list of specific issues that I addressed during 
consideration of this legislation. Throughout this process, my 
priorities were clearly defined by what was important to West Virginia 
workers and the companies that compete in the global marketplace, 
industries as diverse as steel is from fiber optics.
  My list expanded and contracted over the last year. Some smaller 
items that I addressed early on were resolved last spring, while others 
needed constant attention throughout the summer, such as the work I did 
on protecting intellectual property rights and captive production.
  Overall, I am very pleased with the progress made. We won some large 
victories and some small victories for domestic industry. Overall, 
roughly 14 of the 16 items I addressed turned out well. Those are 
victories for West Virginia companies and their workers that will help 
them compete in the highly predatory realities of the global market 
place, and they are solid reasons why this legislation should be 
  Overall, we toughened our dumping laws, defined illegal subsidies, 
and took measures to improve our trade laws across the board. This is 
just about the best trade bill we could have come up with for American 
industry and American workers. While it takes steps to promote open 
trade, it makes sure that trade is done fairly and in the best interest 
of Americans, not foreign special interests.
  The GATT agreement will increase trade among the United States and 
all of our trading partners, and I believe that West Virginia will 
benefit as markets for our exports open and become reliable. That 
should translate into more jobs and higher wages for West Virginians.
  Overall, it is estimated that trade liberalization resulting from the 
Uruguay Round will add $100 to $200 billion to America's GNP within ten 
years. And every $1 billion in exports means approximately 20,000 
American jobs.
  A key, key point is that export-related jobs tend to be higher-paying 
jobs. Again, Americans are understandably upset over their stagnating 
wages. There are a number of reasons for this, and one is that rising 
health care costs have quietly eaten into employers' ability to pay 
their workers more.
  But there are also a number of areas where we must act to build a 
better standard of living for American families, and one key way is to 
expand our export markets and sales.
  In 1993 alone, West Virginia recorded exports of $754 million, an 
increase of almost $100 million since 1987. That figure should grow 
considerably. Just a few of the West Virginia industries that the 
Commerce Department expects will benefit directly from this trade 
agreement are the chemical industry, household glassware and pottery, 
and wood products which are all listed as potential ``winners.''
  Overall, the chemical industry represents 35 percent of West 
Virginia's manufacturing output, and employs 20 percent of the state's 
manufacturing workers--16,800 people. Add to this the other industries 
in West Virginia that rely on the chemical industry for their inputs, 
and we're talking about 127,000 workers in West Virginia who rely at 
least in part on a strong chemical industry.
  And as I said, in addition to chemicals, the Commerce Department 
picks wood products and household glassware and pottery as potential 
big GATT winners. Foreign duty reductions of up to 69 percent will 
significantly improve access for U.S. household glassware and pottery 
products in world markets; this is especially true in Europe, East Asia 
and South America. And reductions in our own tariffs will be staged 
over a 5- or 10-year period so our companies can adjust.
  As to wood products, on average we can expect reductions of about 23 
percent. But more importantly, Japan, which is our largest export 
market will be reducing their tariffs by an average of 52 percent. And 
Europe will be reducing theirs by about 40 percent.
  These types of foreign tariff reductions should translate into 
greater job security for workers in those fields and in other areas 
where West Virginia businesses compete around the world.
  In addition, the tariff cuts that will promote access to our market 
should be looked at for what they will mean to American consumers--a 
tax cut. A tariff on goods coming into the United States, even with our 
lower tariff levels, is still essentially a sort of sales tax. We will 
be reducing these tariffs--or you could say cutting taxes--by $11 
billion over the next 5 years and $20 billion over the subsequent 5 
years. The Treasury Department estimates that 80 percent of those 
tariff reductions will be received by American consumers and businesses 
in the form of lower prices for foreign made consumer goods or 
products. This is the kind of progressive tax cut that will benefit 
America's working families, unlike a capital gains cut which would 
primarily reward wealthy investors.

  Now, Madam President, before I conclude, let me also address some of 
the concerns surrounding the dispute settlement procedures in the new 
World Trade Organization [WTO]. While I have taken the concerns people 
have about sovereignty very seriously--I have sworn to uphold the 
Constitution and would never support any measure that infringed on that 
obligation--in this instance, I agree with Ambassador Kantor that most 
of the concerns raised by GATT opponents about sovereignty are 
exaggerated. This is one of the areas where I think the agreement's 
opponents have really skewed the facts. That does not mean that the 
dispute settlement procedures in the WTO are perfect. We can and should 
be diligent in making sure that the WTO is fair, and that America's 
best interests are served by maintaining membership in the 
  It is abundantly clear that the WTO cannot, by itself, change U.S. 
law, although it can object to a U.S. law if it does not comply with 
internationally agreed upon trade rules, and it can ask us to change 
our laws. Only the U.S. Congress can make or change laws in the United 
States. To be even more precise, section 102(a)(1) of the legislation 
implementing the Uruguay round says:

       No provision of any of the Uruguay Round Agreements, nor 
     the application of any such provision to any person or 
     circumstance, that is inconsistent with any law of the United 
     States shall have effect.

  This is followed by the additional note that:

       Nothing in this Act shall be construed to amend or modify 
     any law of the United States, including any law relating to 
     the protection of human, animal, or plant life or health, the 
     protection of the environment or worker safety, or to limit 
     any authority conferred under any law of the United States, 
     including section 301 of the Trade Act of 1974 [this is the 
     provision which allows us to enforce U.S. rights and 
     retaliate against unfair trading practices], unless 
     specifically provided for in this Act.

  This legislation could not be more specific about the primacy of U.S. 
law. If a WTO panel finds that a U.S. law violates the agreement, then 
we can either change our law to comply with the rules, or we can decide 
not to. In that case, the country that claims we violated the rules can 
impose a trade sanction against the United States. Essentially, this is 
the same as the way things work now.
  Under the current GATT, the United States wins more cases than it 
loses, and considering that we were the driving force behind the 
Uruguay round, and the principal shaper of the Agreement, that trend is 
expected to continue. However, there are often unintended consequences 
to actions taken involving so many entities, and that is why I believe 
that the establishment of a Dispute Settlement Review Commission--
worked out between the administration and Senator Dole--is a good idea. 
This Commission will consist of five Federal appellate judges appointed 
by the President in consultation with Congress. The Commission will 
review all final, i.e., adopted, WTO dispute settlement reports where 
the final report is adverse to the United States.
  If the Commission determines that the WTO overstepped its authority 
or ruled in some other sort of arbitrary, unfair manner that infringed 
on United States rights or obligations, then we can initially seek a 
way to make sure the problem doesn't recur, or if this happens three 
times in any 5-year period then we can get out of the WTO altogether. 
Again, this agreement is clear on that, all it takes is 6 months notice 
for us to get out of the WTO.
  Article XV of the Uruguay round agreement says:

       Any Member may withdraw from this Agreement. Such 
     withdrawal shall apply both to this Agreement and the 
     Multilateral Trade Agreements and shall take effect upon the 
     expiration of six months from the date on which written 
     notice of withdrawal is received by the Director-General of 
     the WTO.

  So we are not locked in to the WTO if it doesn't work. We have 
established a review mechanism that will oversee the workings of the 
WTO, and overall American sovereignty is clearly preserved.
  In conclusion, let me say again that I support this bill, not just 
because it is good for American businesses--which it certainly is. And 
not just because it is good for most Americans--which it is. A very 
central reason is my belief that the passage of the Uruguay round is in 
the best long-term interest of the people of my State of West Virginia. 
The changes that will be made in our trade laws are just about the best 
possible outcome for America's industries. Markets that we have sought 
for two generations will open up to American and West Virginia 
products. Intellectual property rights will finally be protected. 
Tariffs, taxes, will come down, and our economy will be given a blast-
off into the next century.
  But we can't let our guard down, and we also can't put on blinders. 
The world is changing and we have to change with it. The question is 
therefore, how do we do that in a way that is in the long-term best 
interest of the working people of America? One immediate answer is by 
approving this trade agreement and passing the legislation before us.

  In the coming years, I also think we have to continue to look at the 
whole universe of international trade. What globalization means to the 
world, the United States, and more importantly, to the workers of West 
Virginia and our nation. How do we provide security at home while the 
engine of economic growth vaults forward? And what about the broader 
question of ``what is a national economy for''? Is it intended to 
create capital? To create wealth? Or can it be looked at as an element 
in our social contract guaranteeing a degree of personal security and 
economic stability for working Americans?
  Those are just some of the questions we must ask and try to answer in 
the coming years, but what's before us today is a trade bill. This 
won't be the first trade agreement we have passed in this country, and 
it certainly won't be the last. It is obviously one of the most 
important pieces of legislation we have considered in some time, and I 
believe it is in our nation's best interest to pass it. Madam 
President, this is not a question of ``should we move forward?'' That 
will happen with or without us. It is a question of how do we give some 
direction to the way we move forward. That is what passage of the 
Uruguay Round of the GATT will mean. It provides a base for us to work 
from as the globalization of our economy takes place. It provides rules 
and structures to both open the world to our products and make everyone 
compete with the same playbook.
  With this trade agreement, we have a chance to spur the growth and 
economic benefits that can make a real difference in the lives of hard-
working West Virginians and Americans. I feel an obligation to approve 
this major step, and hope to see enough of this body reach the same 
  Madam President, I congratulate this Administration and its 
predecessors for investing leadership and hard work into this important 
effort on behalf of the United States. Ambassador Kantor and his team 
have earned special commendation. Chairman Moynihan proved his 
commitment to economic progress by steering the work on the 
implementing legislation through the Senate Finance Committee, helped 
at a critical stage by Senator Packwood. I also want to single out Ken 
Levinson of my own staff, for his talented labors in assisting me to 
serve West Virginians and the country's interests in every possible 

explanation of specific provisions of the implementing legislation for 
                   the uruguay round trade agreement

                            issue breakdown

  1. Captive Production: This provision was one of my chief efforts to 
improve the ability of domestic steel companies to make the case that 
dumped imports are harming them.
  2. Intellectual Property Rights/Section 337: I authored the provision 
in the bill that will make it easier to enforce our intellectual 
property rights--patents and trademarks--against infringing imports. 
This is important to preserve the effectiveness of our trade laws for 
high tech companies like Corning.
  3. Fair Comparison: This issue will affect all industries that 
compete with dumped imports. It changes the way we measure the cost of 
a product in the United States versus the cost of a product in its home 
market or another market. There is a lot of detail to this, and the 
provision as it came out of the Finance Committee was better than what 
made it into the final bill, but if this is done right it should be 
``fair'' and effective for all concerned.
  4. Duty absorption/Sunset: This partly deals with the problem of 
importers who don't pay enough duty because the related foreign company 
they buy from covers the cost of the duty--``absorbs'' it--which 
offsets the effect of our trade laws. This is not as good as the ``duty 
as a cost'' provision, which would have doubled the absorbed duty, but 
it is a step in the right direction. The steel industry was very 
interested in dealing with absorption of duties by related parties.
  5. Circumvention/Diversion: For the first time, this bill addresses 
the problem of importers who try to get around our trade laws by 
importing a product from a third country. The example everyone uses 
would be if Korean televisions were assembled in Mexico to get around 
our dumping laws. This provision should help prevent that kind of 

  6. Anti-competitive practices: The bill maintains our ability to use 
our leverage to open markets that are closed to our products (Section 
301, and Super 301); to battle things like Japanese keiretsus that 
unfairly block American products from being sold in Japan. Just this 
Fall we cited Japanese practices in auto parts under Section 301. These 
are valuable tools for increasing American exports worldwide.
  7. Causation: This is another ``small'' provision that could have a 
big impact. The Administration agreed with me that dumped imports need 
only be A cause of injury to a domestic industry, not the cause of 
injury. This makes it much more likely the ITC (International Trade 
Commission) will vote to find injury when it exists.
  7A. The Administration agreed with me that improvements in the 
condition of an industry after posting the initial bonding rate should 
not be taken into consideration when making a final determination. This 
preserves the intention and integrity of our dumping laws.
  8. Standing: We won an important concession when it was agreed that 
if a domestic producer opposes a dumping petition brought against a 
company that is related to the domestic producer, then their opposition 
should not be counted. This is only reasonable. For example, if Sony 
USA objects to a dumping case being brought against Sony Japan, their 
opposition should not be considered--they're not an objective party.
  9. Subsidies: For the first time, international trade laws recognize 
that only certain kinds of government assistance are allowed. This is a 
huge step. The implementing legislation also ensures our ability to 
retaliate against harmful subsidy practices. In the future I hope we 
even more strictly limit the ability of foreign governments to 
subsidize weak industries. Overall, this is a big step in the right 
  10. Negligibility/De minimis: This relates to the question of when 
the ITC can add imports from different countries together in order to 
decide if the domestic industry has been injured. From our point of 
view, the more they add together, the easier it is to find injury--and 
the more accurate too. Under the bill, if imports from a country are 
less than 3 percent of the market, then they are considered 
insignificant, but if you add up negligible imports from a number of 
sources and they add up to more than 7 percent, then they are counted. 
I advocated this ``bright line'' standard and it made it into the bill.

  11. Averaging: This is another tool we have in our dumping laws to 
make sure we account for variations in price of imported goods if they 
sell for one price in one place, but another price in another place, or 
at another time. The way we determine what the price really is, is 
vital for determining if it is being undersold in a particular market. 
The methodology that the Administration is going to use in 
``averaging'' prices is what I advocated.
  12. GSP (Generalized System of Preferences): GSP is the program we 
have in our trade laws that allows some leniency in our trade laws for 
goods from developing countries. Generally, this is a pretty good 
program, but they only went half way on one of the changes I wanted in 
it: To permanently exempt from this provision import sensitive 
commercial chinaware, glass, and glassware. Instead of making the 
exemption permanent, they extended exemptions to 3 years instead of 
having to apply for them yearly. This is a half victory, and since we 
renewed GSP for only 1 year, we can have at it again next year.
  13. Suspension of the duty on ODI: In 1993, on behalf of Miles Inc., 
who employ 1,400 people in New Martinsville, I introduced legislation 
to eliminate the duty on ODI (Octadecyl Isocyanate), a chemical that is 
used to make the sticky surface of Post-It note pads. This was then 
included in the legislation implementing the Uruguay round.
  Following is a description of two proposals that I opposed and that 
were fortunately omitted from the bill:
  14. Economies in Transition (EIT): This would have created a real 
loophole in our laws that would have made it easier for countries like 
Russia to dump goods into the United States. There might be sound 
foreign policy reasons for helping the Russian economy, but this 
particular program would have hit domestic industries like steel and 
other metals particularly hard, because countries like Russia can make 
those products cheaply. I fought against this idea, and it didn't make 
it into the bill.
  15. Short (or No) Supply: This was another attempt by importers to 
get around our legitimate trade laws. I fought hard against this, and 
I'm pleased that it was soundly defeated.
  16. Start-up: When we are trying to decide if an importer is selling 
below his cost of production, we have to figure out what his actual 
costs are. Part of that is what costs are included in starting a 
production line (known as ``start-up''). There are some good things in 
this, but I am concerned that ``variable costs''--materials you have to 
buy, hourly labor, etc.--are allowed to be included in the calculation 
of what are considered legitimate precompetitive costs.
  The above might sound like Greek to people who haven't specialized in 
trade issues, but for those of us who have worked on the Uruguay round 
for years, they are the bread and butter of our trade laws. As I said, 
some of these issues take up but a few lines of text in the bill, but 
they can make a real difference to an American company that is harmed 
by predatory foreign trade practices. Of the 16 issues that I addressed 
in the process of negotiating the Uruguay Round and writing this 
legislation, 14 of them came out in a way that benefits domestic 
industries and their workers in West Virginia and across the United 
  Mr. PACKWOOD. Madam President, I am shortly going to yield to the 
Senator from North Carolina.
  When the Senator from West Virginia referred to small companies, I 
have the same situation in Oregon. We hear ``multinational, 
multinational, multinational'' all the time. One company in Oregon, a 
husband and wife and a third person, have invented an insert to use 
after a tracheotomy. They have a patent, a worldwide patent, and they 
are selling these things all over the world. Three people.
  Another company, which I doubt has a score of employees at the 
outside, has found a process for freezing baked potatoes after they are 
baked, and they are selling them all over the world. These are 
individual entrepreneurs who have found a niche and they found that the 
world is ready for them, assuming there is an opportunity.
  I yield 15 minutes to the Senator from North Carolina.
  Mr. HELMS. I thank the Chair and the distinguished Senator from 
  Madam President, I think it was exactly 22 days ago that the American 
people went to the polls and voted for less government, lower taxes, 
and an end to backroom deals. Clearly, the American people were 
demanding--and they are entitled to it--fundamental changes in 
  Here we are 3 weeks and 1 day later, and what is the Senate's 
response? It is business as usual, with a lame duck Congress preparing 
to approve a treaty that is not being considered as a treaty, with 
legislative language that pitifully few Senators have even bothered to 
or had time to read. As a matter of fact, Senator Hank Brown of 
Colorado is one of the few to step forward and announce that he had 
indeed read the entire agreement.
  Several of us asked the President to delay the vote on the GATT trade 
agreement until early next year, like the middle of January, so that it 
could be carefully considered by the new Congress. The vote on this 
GATT agreement should be delayed, but it will not be, obviously.
  Madam President, we have a 22,000-page world trade agreement --a 
treaty, if you please--poised on a so-called ``legislative fast track'' 
with only 20 hours of debate allowed, with no amendments in order and 
motions in order. This raises several legitimate questions like: What 
is the President afraid of? What is it in this agreement that could not 
withstand just a little bit of sunlight? The hearings in the Foreign 
Relations Committee lasted 3 or 4 hours. The number of witnesses was 
limited. What is the necessity of pushing this trade agreement despite 
the will of the people?
  I have in hand a Yankelovich poll of yesterday, and this pollster is 
widely respected. Sometimes he comes forth with findings that I do not 
agree with, and sometimes it is the other way. But yesterday his poll 
showed that by large margins the American people oppose the General 
Agreement on Tariffs and Trade. Most Americans surveyed think that the 
current lame duck Congress should not vote on GATT. They oppose waiving 
the Senate budget rules to approve GATT, and they think that GATT 
should not be able to override the U.S. laws. By a 5 to 1 margin, 
Republicans think that it is inappropriate for the lame duck Congress 
to vote on GATT.
  The Yankelovich pollsters contacted 1,000 American adults and found 
that 63 percent of Americans want the next Congress, the 104th Congress 
to vote on GATT--not this lame duck Congress that is meeting today. 
Furthermore, 67 percent of Americans think that the U.S. Senate should 
not waive its budget rules to pass the GATT; 57 percent of Americans 
think that GATT will bring about a loss of American jobs; 51 percent of 
Americans indicated opposition to GATT, with only 33 percent in favor 
of it.
  Madam President, this proposed World Trade Organization that is 
created is being called by many Americans ``the United Nations of world 
trade without a veto for the United States.'' Madam President, all of 
us want to expand world trade and eliminate foreign trade barriers. 
But, speaking for myself, I am for world trade all right, but I am flat 
out against world government.
  And I believe this is what we are marching toward, and I believe that 
the vast majority of Americans feel the same way about it.
  Madam President, it is a fact that this agreement will add billions 
of dollars to the Federal deficit. The Senate is about to ignore the 
law, to ignore the Constitution, to ignore the budget rules and vote to 
increase the deficit. That is not an appropriate thing for the Senate 
to do.
  I commend the able Senator from West Virginia, Senator Robert C. 
Byrd, the President pro tempore of the Senate, for his decision to 
raise a point of order.
  I had the honor of serving with another remarkable Senator, a great 
constitutional scholar, named Sam Ervin. One of Senator Ervin's 
greatest apprehensions was the danger that international agreements so 
often pose to the national sovereignty of the United States. Senator 
Ervin used to say the United States has never lost a war nor won a 
treaty, but that was before American military forces were sent to 
Vietnam to fight a war that they were not allowed to win.
  In any case, this new trade agreement should have been submitted to 
the Senate as a treaty and considered as a treaty under the 
Constitution of the United States.
  The United States joined the United Nations by treaty. The United 
States joined NATO by treaty. The Congressional Research Service 
concluded that pursuing the position that treaties and Executive 
agreements are ``interchangeable'' could result in ``reading out of the 
Constitution the treaty process'' entirely, and that is a quote from 
the Congressional Research Service.
  Madam President, I reiterate that very few Senators have even glanced 
at this trade agreement, let alone read it, let alone studied its 
implications. As I said earlier, Senator Hank Brown of Colorado did, 
and he expressed astonishment at what he found. The able Senator from 
Colorado concluded that he could not vote for this GATT agreement.
  Small wonder, because under the World Trade Organization, the United 
States has precisely one vote out of 123. And since the United States 
will have only one vote, it is a certainty that the United States will 
be outvoted by Third World countries, just as is the case in the United 
Nations where 83 countries vote regularly against the United States. 
The United States is likely to be outvoted by such countries as Uganda, 
Ghana, Chad, Zimbabwe, Cameroon, Bangladesh, Cyprus, the Maldives, and 
  Madam President, in the United Nations, the United States does have 
veto power in the United Nations, but the United States will not have 
it under this agreement.
  Madam President, the American taxpayers, once again, will fund an 
international bureaucracy that is in no way accountable to the American 
taxpayer. It is a bureaucracy that will grow and grow and grow just as 
other bureaucracies of international character have grown and grown and 
grown. Just consider, for example, the World Bank. In 1951 it employed 
400 people. In 1994, the World Bank bureaucracy exceeded 6,300 people.
  Once again, let me emphasize that the United States will no longer be 
able to veto bad decisions from this international agency, the WTO. If 
we can use the WTO against Japan and France to cut down their laws, 
foreign countries can use it to cut down United States laws. We cannot 
have it both ways. Either it works or it does not.
  Finally, Madam President, this agreement will harm workers in many 
small businesses in North Carolina and indeed throughout the country. 
Apparel and textile employees will be particularly hard hit. There is 
no way that U.S. workers can compete with Communist Chinese slave labor 
or with child labor anywhere in the world, especially in the Third 
World countries, who are paid 50 cents an hour for their labor.
  I think the Senate should support the point of order and postpone 
consideration of this agreement until early next year and let the next 
Congress, not this lame duck Congress, do the job of examining it 
carefully. And by all means there should be separate votes in any case 
on the World Trade Organization itself. There ought to be two issues, 
the agreement and the World Trade Organization.
  I thank the Senator for yielding to me, and I yield the floor.
  The PRESIDING OFFICER (Mr. Wellstone). Who yields time?
  Mr. HOLLINGS. Mr. President, I yield 20 minutes to the distinguished 
Senator from Montana.
  The PRESIDING OFFICER. The Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I thank the distinguished Senator from 
South Carolina.
  Mr. President, I rise, with great regret, in opposition to this bill, 
and I will explain why.
  When we opened the Uruguay round in the fall of 1986, we Americans 
hoped to bring trade in services and farm products under the GATT, cut 
agricultural export subsidies, require GATT members to protect 
intellectual property rights, continue cutting tariffs and opening 
markets on a fair, reciprocal basis, and approve dispute settlement 
while protecting American interests, particularly our rights as 
American citizens.
  Those were ambitious goals, the right goals, and the Uruguay round, I 
think, is an agreement which, although all of us worked for and 
although it meets many of those goals, it does not meet enough of them 
and we should not vote for it today.
  I believe that we have not met the last and most important goal, that 
is, preserving U.S. sovereignty, and we are not assuring that the 
middle-income American receives enough of the benefits that the large 
companies under this agreement themselves will reap.
  That is why I cannot support this. And I urge the Senate to reject it 
today, come back next spring after we have negotiated with other 
countries--we have been on this, after all, for 8 years; a few more 
months is not going to make a big difference--and address these 
fundamental problems and solve them.
  I believe the World Trade Organization this bill creates has two 
problems. I do not think it makes sense to give the United States, the 
world's largest economy, the largest importer and the largest exporter, 
no more voice in major WTO decisions than any other country. It just 
does not stack up. It is unfair. It is wrong.
  I also fear that the dispute settlement process threatens one of the 
most important rights of citizens, that is, the right to due process in 
American courts.
  Let me begin with the positive. The United States is already the top 
exporting country in the world, exporting $464 billion in goods and 
$180 billion in services last year. Together, our exports of 
manufactured goods and farm products support 9.3 million jobs, one job 
in every 12 across the country.
  We are also the world's most open economy.
  So here, as in every one of our other trade agreements, we reduce our 
barriers by less than other countries reduce theirs.
  The Uruguay round cuts tariffs by an average of 33 percent around the 
world. That means America cuts tariffs 1\1/2\ cents on the dollar. The 
foreign countries, on the average, cut by 4 cents on the dollar and 
Japan cuts 2\1/2\ cents and Europe about the same, India 15 cents, and 
Brazil 11\1/2\ cents, and so on around the world.
  Then consider intellectual property--the copyrights, patents and 
trademarks which make our artists and inventors get the benefit of 
their creative work. Today we Americans lose tens of billions of 
dollars to intellectual property piracy. We suffer because not just a 
few but dozens of countries let individuals, companies, and mafia 
organizations skip the creative work of writing a book, recording a 
song, shooting a film or writing software and avoid expensive research 
and development and essentially rip us off.
  Under this agreement, they will adopt our high intellectual property 
standards and because of that we will be better able than ever before 
to fight pirates and rip off artists around the world.
  Then take agriculture. Europe will cut export subsidies by 21 
percent. That should open wheat and barley markets around the world to 
American farmers, and by binding tariffs, this agreement blocks others 
from discriminating against us.
  China, for example, retaliated for a textile dispute in 1985 by 
refusing to buy Montana wheat. When China eventually joins the GATT, 
that will stop for good.
  Equally important is something this agreement does not do. It does 
not weaken our domestic trade lawsuits. We preserve our right to use 
Section 301 antidumping and countervailing duty laws and keep fighting 
theft of intellectual property through Special 301.
  And we update our laws to cover such critical issues as exclusive 
Japanese business practices. So the economics, in terms of overall 
total GDP, may be on the side of the bill. It will increase total 
aggregate GDP in this country and other countries around the world. But 
there is a deeper, more fundamental issue involved.
  No trade agreement, no matter how good a deal it is, is worth 
sacrificing our basic rights as American citizens. I am afraid the new 
World Trade Organization this bill creates will do just that. And that 
risk is too great. And that is why I will vote against this bill.
  I must say, Mr. President, this is not an easy decision. I have 
supported fast track legislation on the last major trade bill. I 
supported the Canadian Free Trade Agreement and I supported NAFTA 
because I thought they were good for America.
  Mr. President, for 8 years I supported the Uruguay round with 
confidence that the changes in dispute settlement would not intrude 
upon our fundamental rights. But an event just 3 months ago shook that 
confidence. I will not go into great detail, but essentially we reached 
agreement with Canada during the CFTA negotiations to settle subsidy 
disputes through our countervailing duty laws with dispute panels 
available to Canada only to make sure the laws were properly used. 
Although I received assurances from constitutional lawyers, trade 
experts, the Reagan administration, and everybody else that the 
Canadian dispute settlement panels would work strictly in accord with 
American, the fact is, that is not what happened. Our members on the 
panel played fair. The Canadian members did not play fair.
  Here is a statement of Judge Malcolm Wilkey, a U.S. panelist, who 

       The panel started, of course, by giving us the litany of 
     standard review of administrative agency action as enunciated 
     in the United States law, all thoroughly familiar. The panel 
     then proceeded to violate almost every one of those canons of 
     review of agency action.

  Why? Because we played fair and the Canadian members did not play 
fair. It is a system that is flawed.
  What about the WTO? Will that be any better? I have tried to persuade 
myself that the problem that occurred with Canada cannot happen with 
the WTO. I debated the issue with my staff, with experts and friends. I 
studied this with great care. The problem is, the more I have studied 
it, the more my worries grew, the more problems I had, and the more I 
reached the conclusion that not only these kinds of problems but 
probably many more problems will occur under WTO.
  It has been mentioned often that WTO provides that we will not be 
able to veto any of the panel's decisions. Presently, we can. And that 
is why we have not worried too much about the membership of the present 
  Currently, each country in the GATT gets one vote. We have not 
worried about that standard because any country could veto an 
egregious, unfair decision by a GATT panel.
  Now, the laws have changed. The stakes are much higher. And that is 
why it is so important that we look much more closely at the 
composition, the standards of review, the selection process, and the 
procedures under this new WTO. This body has not done that. And I 
submit the more one looks at it, the more one sees flaws.
  Mr. President, it is outrageous. The United States of America has one 
vote and every other country also has one vote. It is an outrage. 
Nobody, and I say nobody, can stand here on the Senate floor and defend 
that. Nobody. Nobody.
  What about the World Bank? The World Bank vote is weighted according 
to the size of the country, as it should be. What about the 
International Monetary Fund? It, too, its composition, its voting 
powers are weighted according to the size of the country, as it should 
  What about the United Nations? Sure, we have a General Assembly, but 
we also have a Security Council. That is fair. That is the way it 
should be.
  This agreement does not do that. This agreement is totally contrary 
to the basic precepts of American civil process. We should go back to 
the drawing board and make some changes. It is clear other countries 
want this agreement. It is clear the United States wants this 
agreement. And we know, Mr. President, where people want an agreement, 
they can find a way to reach an agreement. There are a lot of ways to 
skin a cat. We can get this done.
  I hear all of these horror stories that if this is not approved, the 
world is going to come to an end, a cataclysmic response, Smoot-Hawley. 
You hear all these horror stories.
  Mr. President, it is all baloney. It is untrue. What is going to 
happen if we reject this? Do you know what is going to happen? Big 
headlines in the paper, big stories on the evening news. How long is 
that going to last? Maybe a day, maybe 2. A lot of scrambling around.
  We want to address the trends in trade in this world. Other countries 
want to address the trends in trade in the world. We will find a way, a 
more realistic way that more realistically reflects the powers and the 
strengths of countries to get a better solution. That is what is going 
to happen.
  Overall, we have been working on this thing for 8 years--8 full 
years. This agreement does not have to go into effect until July. What 
is wrong with going back and renegotiating for a few more months? I ask 
you, what is wrong with that? Nothing. Nothing is wrong with trying to 
get a little bit better agreement. Not because we are trying to achieve 
perfection; but because we are trying to do what is right.
  There is one other point, Mr. President. I heard a lot of comments on 
the floor of this body today saying, well, gee, the world has become 
more global, with faxes and modems and computers and program trading 
and advances in technology. We have to get with it. We have to adopt 
this because if we do not, the world is going to pass us by.
  That is not true. It is true the world is changing. The world is 
changing dramatically. Different people, different organizations, 
different countries are doing different deals within the country and 
around the world. Capital travels at the speed of light. It does not 
respect national boundaries. Investors go to where they can get the 
greatest investment.
  That is what is happening. The world is incredibly competitive. As a 
result, it is not only American companies, it is not only Japanese 
companies, it is not only European companies, it is other countries' 
companies that are downsizing. They are laying people off. In many 
respects, they have to become ``more efficient,'' to be more 
technological. That is happening. And it is going to happen with or 
without a trade agreement.
  But what else is happening? What is happening is the major companies, 
those in position to take advantage of this new world order, are 
getting the benefits. That is fine. They should get benefits. I 
strongly believe in competition. I strongly believe someone should go 
out and try to make a better product more efficient. That is fine.
  But what also is happening? The average middle-income American is not 
getting in on the deal. He is not getting the benefits.
  We have to find a way, Mr. President, when we pass trade agreements, 
that not only the companies--and they should get higher profits, their 
officers should get higher incomes--but the working stiff, the guy who 
is working in the plant, the average middle-income American, sees his 
income increase. And we all know, according to statistics, the exact 
opposite has happened. As trade has increased, as GDP has increased as 
a consequence of trade, average middle-income Americans have seen their 
incomes decline.
  I am not standing up here and saying it is an exact quid pro quo. I 
am not standing up here and saying this is an exact correlation and 
totally causal. I am not saying that. But I am saying there is some 
cause, some relation; there is something going on here that we 
Americans, as we pass this big trade agreement, are not dealing with.
  I have been over to Geneva. I have been to Brussels. I have been part 
of these trade negotiations. Who is there? It is the major companies, 
the multinational companies. The big economists and the big bankers. 
That is fine. They should be trying to do a better job for themselves.
  But who is not there? Who is not there is the average middle-income 
American, the average middle-income Montanan, West Virginian, 
Oregonian. They are not there and they are not being represented and 
they are not part of these agreements.
  Mr. President, I have what I call workdays. One day a month I work at 
some job in Montana. I show up at 8 in the morning with my sack lunch. 
I am there to work. Not to watch but to work. I have worked in saw 
mills, worked in mines, waited tables, hospitals, helped Alzheimer's 
patients, day care centers, Meals On Wheels--I love it. It is great. 
And I tease people at home by saying one day a month I do an honest 
day's work. It is very educational.
  My workday a few weeks ago, just preceding the election, was in 
Lewistown, MT. I worked in a bottling plant. It is called Big Springs 
Bottling Plant. They bottle spring water. I worked all day there 
putting bottles on assembly lines and I was working with a forklift 
operator. His name was Rick.
  Rick turned to me and said, ``Max, my father said anybody who carries 
a lunch bucket ought to vote Democratic. But I don't vote Democratic 
  I said, ``Why?''
  He said, ``I don't know, it just seems to me''--and he is a typical 
fork lift operator, in his fifties, has a mustache; typical American, 
typical Montanan. He says, ``I don't know, it just seems to me that 
Democrats kind of have forgotten people like me. They have forgotten 
the average guy. They are more concerned about gays in the military, 
about foreign aid, about welfare,'' and he probably could have said 
about these trade agreements. That is, benefits for other people--the 
wealthiest people, or some of the most unfortunate people--but not 
enough about him.
  I say that passage of this agreement today as it stands now with its 
current provisions is another example of--I do not say Democrats, I do 
not say Republicans, I am just saying all of us, who represent the 
average American--forgetting Rick again. But saying no to this 
agreement is saying we can make it better, to better reflect what he is 
grappling with, what he is trying to cope with, where his rights are 
better protected as an American citizen. Figuring out some way to get 
more of the benefits to the average middle-income American is something 
I think he would like us to do.
  I have said many times it is a hard thing for me to do because I 
generally support trade agreements. But I am also saying just because 
somebody supports a trade agreement does not mean all trade agreements 
are good. There is a lot that is good in this agreement. But there is a 
lot that is not good. I am not trying to achieve perfection. Perfection 
can be the enemy of the good. But I am saying that the WTO dispute 
system is set up in a way that is not fair to Americans. I am also 
saying we have an obligation as Members of this Senate to try to find a 
way, a better way to make sure more benefits go to average middle-
income Americans.
  I have been struck by the debate here this afternoon. But the major 
point I think has not been engaged. It is like two ships passing in the 
night. More free trade may be better for America, but we should better 
help the little guy. We should spend more time trying to figure out how 
the benefits of trade agreements get down to the average middle-income 
  With that, Mr. President, I yield the floor and thank the Senator 
from South Carolina.
  Mr. HOLLINGS. I thank the distinguished Senator from Montana. It is a 
very understanding statement. As the chairman of our trade subcommittee 
of finance, it is a very, very significant statement.
  It is my colleague's turn?
  Mr. BREAUX. If the Senator wants to alternate, if that is all right, 
I inquire of the Senator from Virginia how much time does he wish?
  Mr. ROBB. I would say to the Senator from Louisiana, about 10 to 12 
minutes max.
  Mr. BREAUX. I yield whatever time he may consume to the Senator from 
  The PRESIDING OFFICER. The Senator from Virginia is recognized.
  Mr. ROBB. Mr. President, I thank you and I thank the Senator from 
Louisiana for yielding time.
  Mr. President, in a perfect world there would be no tariffs or 
restrictions on trade whatsoever--and foreign governments would not 
subsidize their domestic industries to give them an unfair advantage on 
price competition. GATT does not bring us a perfect world, but it does 
move us in the right direction.
  GATT combats protectionism abroad and spurns it at home. Rejecting 
the most comprehensive trade accord in history would tell Americans 
that we could not cope with change and that we did not have confidence 
in America's ability to compete in a world economy. I think that is 
precisely the wrong message to be sending, and it reminds me of dark 
days in America over 60 years ago.'
  Mr. President, there was a time in our history when we made the 
mistake of looking inward, isolating ourselves from the world, and 
ignoring what the global economy had to offer. Republican Herbert 
Hoover was President and the 1930 Smoot-Hawely Tariff Act was the law 
of the land. In his economics primer, Nobel Economic Laureate Paul 
Samuelson notes that ``economists--who are supposed to agree on almost 
nothing--were unanimously opposed to the extreme tariff rate in the 
Smoot-Hawely Act.''
  Mr. President, Senator Smoot and Representative Hawley had it wrong 
then--supporting a wall of tariffs around America--and we should have 
the wisdom not to repeat those mistakes. This country should lead the 
world economy by example. Free, unencumbered trade is in our interest. 
Tariffs impede U.S. economic growth, reduce our standard of living, and 
prevent our job base from growing.
  GATT reduces the tariffs other countries impose on U.S. manufactured 
goods and services and it will reduce the cost to U.S. consumers of 
goods manufactured abroad--and in so doing will create an estimated 
500,000 jobs over a 10 year period, while increasing America's income 
by an average of about $1,700 per family. GATT's fundamental 
accomplishment is basic and real: It provides Americans new economic 
opportunity, a vital chance to improve their livelihoods, and new 
horizons abroad to build something from nothing.
  In particular, Virginia businesses large and small have demonstrated 
their ability to compete in the far corners of the globe, and our 
overall trade policy, it seems to me, should reflect an effort to 
assist, not inhibit, U.S. exporters. These companies are seeking 
greater market access, lower tariffs, and less foreign government 
intervention abroad. GATT makes breakthroughs in all three areas.

  Mr. President, Virginia companies are increasingly dependent on 
export markets abroad. The Commonwealth of Virginia recorded 
merchandise exports in 1993 of $8.2 billion, a 160 percent jump 
achieved over just the last 6 years. Virginians stand to make 
tremendous economic gains from GATT given tariff elimination on paper 
products and reductions on furniture and wood products by the European 
Community, which is the State's largest export market. The same goes 
for Virginia produced industrial machinery, tobacco, electronic 
equipment, renewable energy technology, fish and fish products, 
chemical products, and high technology exports. Virginia is ready to 
seize additional market share abroad, and GATT serves as the linchpin 
for easing if not eliminating outright foreign protectionist barriers.
  Mr. President, the effect on one Virginia industry perhaps 
crystallizes the debate over GATT better than any other. Our 
Commonwealth exported $856 million in transportation equipment in 1993, 
second only to tobacco in net dollar terms. As a result of the Uruguay 
Round, tariffs on transportation equipment will be reduced anywhere 
from 40 percent to 80 percent worldwide.
  Virginia companies and Virginia workers stand to benefit from GATT 
immediately. Amadas Industries, based on Suffolk, employs 160 
Virginians to build peanut harvesting machinery and other kinds of 
agricultural equipment. It estimates that GATT will pump exports as 
much as 50 percent in the next 3 to 5 years, particularly to Asia and 
South America. The Marine Development Corporation in Mechanicsville, 
the Sonix company in Springfield, the Hampton Roads Maritime 
Association and the Mobil Oil corporation join dozens of other 
industries, companies, organizations, and people in Virginia rallying 
for GATT. And I hear their voices loud and clear.
  But are there elements of the agreement we ought to be concerned 
about? Absolutely. 22,500 pages of new trade rules do not come without 
problems. A range of opposition voices has observed that this trade 
deal vests far too much power in the World Trade Organization, which 
will have the authority to dole out penalties for trade violating 
nations through a complicated system of panel adjudication.
  Under the WTO, the three nation member panels that will hear and 
judge trade complaints from one nation about another will meet in 
secret. Hypothetically, the panel could rule against the United States 
in a particular case, and only a limited appeal could be made to the 
broader GATT membership. Failing at that level, the United States would 
have no choice but to change the policy, regulation or law in effect or 
else the nation initiating the trade complain could return to the GATT 
membership to invoke appropriate penalties.
  Given these arguments, I will support legislation next year that 
establishes a WTO Dispute Settlement Review Commission consisting of 
five appellate judges who will, according to the Administration, 
``review all final WTO dispute settlement reports adverse to the United 
States.'' Acting as a fail-safe mechanism, the Commission's judgments 
could signal Congress to initiate a procedure allowing the U.S. to exit 
the WTO in short order.
  The Administration has worked hard to resolve other problems as well. 
For example, provisions in the legislation relate to an auction of 
spectrum for personal communications systems. Three pioneers in the PCS 
industry have been awarded licenses to encourage their participation in 
this innovative environment. Originally, these companies were slated to 
receive the licenses for free. But while we should encourage innovation 
and improved technology, we should not do so at an unreasonable expense 
to the American taxpayer. The compromise rewards the innovation of 
these companies by allowing them to purchase spectrum at 85 percent of 
market value. The agreement reflects a reasonable balance between 
stimulating advances in technology while ensuring that taxpayers are 
fairly compensated. The resolution of this matter in the legislation 
will make PCS services available for the first time in Virginia, giving 
our consumers greater choice and lower prices in purchasing wireless 
  But should these limited arguments about GATT, particularly the ones 
about circumscribing sovereignty, cause us to reject the whole package? 
Not at all, Mr. President. In fact, we would be foregoing a $750 
billion global tax cut by voting GATT down, as well as causing a 
significant blow to our leadership in the world today.
  Finally, Mr. President, as we move to adjust to the international 
economic order through GATT, we have a responsibility to assist those 
Americans currently working in industries that are unable to meet the 
competition abroad. They deserve our support through retraining 
assistance and other means as they face a transition from one job to 
  Mr. President, I will conclude by quoting from a November 22 
editorial from the Roanoke Times & World News which paints a 
discouraging picture of a world without GATT that I happen to share: 
``If GATT goes down, so will stock in America as a leader in 
liberalizing trade rules. If international support for the agreement 
collapses, protectionism would surge, commerce would contract, and the 
likelihood of trade wars would loom large. Congress should approve GATT 
on its merits, and for the good of the country.''
  Mr. President, I will vote for the GATT implementing legislation, and 
I will vote to waive the budget point of order.
  I thank the Chair, I thank the Senator from Louisiana, and I yield 
the floor.
  Mr. HEFLIN addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. HOLLINGS. Mr. President, I yield 20 minutes to the distinguished 
Senator from Alabama.
  The PRESIDING OFFICER. The Senator from Alabama is recognized.
  Mr. HEFLIN. Mr. President, I ask unanimous consent that at the 
conclusion of my remarks, there be printed in the Record a letter from 
Carol E. Johnson of Madison, AL. I think that she has written me a very 
excellent letter pertaining to the GATT. I do not agree with all of the 
statements that she makes in regard to the letter, but I think overall 
it is one of the best documents that I have seen pertaining to GATT and 
I ask that it be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. HEFLIN. Mr. President, I also ask unanimous consent that at the 
conclusion of my remarks there be printed in the Record an article by 
Anna Quindlen, who is a columnist for the New York Times, which is 
entitled ``Out of the Hands of Babes.'' I ask that it be printed in the 
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 2.)
  Mr. HEFLIN. Mr. President, the fundamental question we must answer 
with this historic vote is: Will the best interests of the United 
States and our citizens be served by joining GATT and the World Trade 
Organization? When we clear away all the politics and pontification, 
facts and figures, television ads and radio sound bites, pros and cons, 
does this agreement result in a net win or net loss for the American 
  In my judgment, passage of the Uruguay round will ultimately result 
in a new loss for America, and should not be approved until significant 
changes are made. Despite the fast-track authorization, we shouldn't be 
forced to hurry this massive agreement through a lame duck session with 
inadequate consideration, deliberation, or debate. Most importantly, 
this agreement should not be approved for the sake and appearance of 
free trade at all costs. I fear GATT will lead to a ``hocus-pocus trade 
trap'' that will be difficult to escape.
  At a time when we are finally beginning to deal with our massive 
budget deficits, it would be unwise to put our stamp of approval on an 
agreement that even its supporters say will increase the deficit in the 
short-term. Reduced tariffs will necessarily result in a loss of 
revenue, not all of which is offset by the GATT implementing 
  Arguments that GATT's passage will increase revenues and reduce 
deficits remind me of the same arguments that were made regarding 
supply-side tax cuts in 1981, when income taxes were reduced 
approximately 30 percent over a 3-year period. Instead, we saw our 
deficits soar.
  I was strongly opposed to NAFTA because it would create relocation 
incentives which would cause severe job losses in this country, 
particularly in labor-intensive manufacturing industries. The major 
relocation incentive is cheap labor. GATT will allow products to come 
into this country from low-wage paying countries--6 to 10 times lower 
than American wages. It will be difficult, if not impossible, for such 
labor-intensive manufacturing firms to compete with Mexican- or Asian-
made products. This means that more and more American industries will 
move to Mexico or to other low-wage countries. Let me illustrate with a 
specific labor-intensive industry that provides a tremendous number of 
jobs in the United States, particularly in the Southeast. I'm talking 
about the textile and wearing apparel industries.
  GATT does away with multifiber arrangements, which are the sets of 
international agreements that have regulated the textile and apparel 
trade for the last 30 years. Cheaper labor caused the relocation of the 
wearing apparel industry from New England and New York to the Southeast 
several decades ago. Now, with the phase out of the multifiber 
agreements, we will see an exodus of these jobs to nearby countries 
like Mexico. The resulting competition from abroad under GATT will 
provide a powerful additional incentive to relocate.

  In Alabama, there are over 100,000 jobs in the textile industry, 
which make up approximately 35 to 40 percent of all its manufacturing 
jobs. Most of these jobs are in the cut and sew wearing apparel 
operations. Recently, I went to an area of my State hit by severe 
unemployment and visited a sewing company whose employees were almost 
entirely women. Their wages were based on an incentive basis--a piece 
basis--but they were relatively substantial. These are the kind of 
hard-working people who will be hurt by companies such as this 
relocating to take advantage of lower wages and standards elsewhere.
  What nation has had the best trade policy with respect to its 
citizens over the last 30 years? If we stop and think the obvious 
answer is Japan. And what has been its policy? Japan has taken care of 
certain industries, and should serve as an example of a country that 
has prospered through its trade policies. We can and should operate 
according to free-trade principles, but this should not preclude us 
from adopting certain needed protection measures that would be helpful 
to our economic well-being as we look to the 21st century. I believe 
the United States would have a much better trade policy if we followed 
many of Japan's historic practices.
  Moreover, we will not be able to eliminate some of the most 
adversarial trade practices through the GATT system. The nontariff 
barriers they use, the extended financing possible in the cartels of 
Japan, China, and Europe will not be eliminated under mechanisms 
provided by WTO.
  I was in England a couple of years ago, where I met with the Minister 
at that time who formulated economic policy, Mr. Lamont. He had just 
announced the day before that he was lowering interest rates. He had 
also called for a 40-percent income tax depreciation deduction in the 
first year for all new equipment and buildings. It was, basically, 
similar to our investment tax credit.
  I went on to ask Mr. Lamont if that would not spur England's economy, 
since it was comparable to a 12- to 15- percent investment tax credit 
in the United States. I was surprised when he replied that the 
reduction would not have much effect since England had ceased to be a 
manufacturing country, with only 15 percent of its jobs in the 
manufacturing sector. Many members of the European common market have 
lost their manufacturing jobs to low-wage countries. Look at the 
unemployment rates of the major European nations: The average 
unemployment rate is in the neighborhood of 11 to 16 percent.
  I opposed NAFTA because I was convinced that labor-intensive 
industries would move to Mexico, where there are many incentives to 
relocate, such as an extremely low-minimum wage, few OSHA standards, 
practically no workman's compensation programs, weak unemployment 
compensation programs, and lax clean air regulations. Under GATT, 
another relocation incentive will be added due to the increased 
competition in the textile and wearing apparel industries from Pacific 
Rim countries like Malaysia, Taiwan, and Hong Kong who will be able to 
sell in United States markets. To remain competitive, our companies 
will be forced to go to Mexico or other low-wage countries. Many will 
relocate, and jobs will be lost. GATT will be like rubbing salt into 
the wounds already suffered by American workers from NAFTA's passage.
  The Uruguay round establishes a powerful new bureaucracy in Geneva, 
Switzerland known as the World Trade Organization [WTO], one of whose 
functions will be to adjudicate trade disputes between member nations 
who are signatories to the new world trading pact. The provisions of 
GATT notwithstanding, I have come to the conclusion that the WTO is not 
in the best sovereign interests of the United States or its citizens.
  The WTO will operate much like the United Nations, except it will do 
so in the area of international trade. It will have the power to 
establish, administer, and enforce global trade rules and will be 
governed by a ministerial conference, where each nation will have only 
one vote.
  Approximately 124 nations could belong to the WTO, and my research 
reveals that it will be dominated by less-developed nations, much like 
the U.N. General Assembly is heavily weighted toward such countries. 
Under the new WTO, each nation, no matter how large or small, will have 
one vote. The WTO agreement does not have a weighted voting arrangement 
based on a country's financial contribution to the organization.
  Conspicuously absent is the ability of any nation to cast a veto 
vote, which is distinctly different from the parallel situation at the 
United Nations where the security council provides a forum for a veto 
vote. This ``one vote per country/no veto'' policy will clearly put the 
United States at a voting disadvantage in the ministerial conference, 
which is analogous to the U.N. General Assembly.
  When a country finds itself in a dispute with another WTO member, a 
dispute settlement body [DCB] will administer all dispute proceedings 
including establishing panels which hear disputes, adopting panel and 
appellate decisions, monitoring the implementation of these decisions, 
and authorizing retaliatory measures. The panels, which hear initial 
disputes, will consist of three or five citizens of nondisputing 
countries and appeals panels will consist of seven citizens of 
nondisputing countries. The decisions of these panelists can be 
rejected by the disputing parties only for compelling reasons which is 
a term not well-defined under this GATT Agreement.

  Where a panel makes a finding that a country's laws or regulations--
Federal or State, as the case might be--are inconsistent with the GATT 
Agreement, the panel will recommend that the losing party ``bring the 
measure into conformity with that agreement.'' A losing party cannot 
veto a panel decision as it currently can under existing GATT 
  A party which loses a decision can choose to ignore it, but the WTO 
could impose fines or allow the winning party to retaliate. There is no 
question in my mind, if the United States were to lose a decision, 
there would be great pressure on our country to bring a violative law 
or regulation into compliance with our obligations under GATT.
  It is true that panel decisions will have no direct legal effect on 
Federal or State laws and regulations--only Congress and the executive 
branch can change laws and regulations. However, the decisions of these 
foreign panels will, if we are on the losing side, have an indirect 
effect on our sovereign laws and regulations. Whether direct or 
indirect the ultimate result is the same.
  In reviewing the agreement which establishes the WTO, I looked at the 
``miscellaneous provisions'' section and found the following language: 
``Each member shall ensure the conformity of its laws, regulations and 
administrative procedures with its obligation as provided in the 
annexed agreements.''
  Thus, by joining the WTO, the United States under this provision 
agrees to change its laws, regulations, and administrative procedures 
to conform to the obligations of the new trading agreement. It is the 
WTO who will give the final say as to whether these obligations have 
been met.
  Does the cumulative effect of the dispute settlement procedures of 
the WTO have, at the least, ``de minimus'' implications on U.S. 
sovereignty? I think the short answer is ``yes.'' Remember, if a WTO 
panel or appellate body decision goes against the United States, the 
United States could decide to ignore a panel decision. However, the WTO 
could then impose fines or allow the aggrieved party to retaliate 
against the United States. Under current GATT policy, this cannot 
happen. This new arrangement could infringe on sovereign U.S. 
  There is no doubt in my mind that at the ministerial level, the ``one 
vote per nation'' rule will substantially increase power among the 
smaller, less-developed nations. Over 18 member nations with 
populations of less than 1 million people will have the same weighted 
vote as the United States, Canada, Germany, Japan, and the other major 
trading partners. It should be pointed out that developing nations will 
constitute 83 percent of the votes of the WTO. Further, each nation of 
the European Union will have one vote, and history has shown that trade 
relations with our European allies have not always been smooth.

  GATT will also put State laws at risk. If a State law is successfully 
challenged by a member nation, the United States cannot simply veto the 
adverse ruling as it has done in the past. Under the new GATT rules, 
the executive branch must force the State to change or repeal its 
offending law or the United States will be subject to economic 
sanctions. True, this GATT cannot make us change our laws if we don't 
choose to, but the penalty for ignoring an adverse ruling could be very 
expensive. That is the point of the sanctions provision. It is intended 
to make it too expensive for us to ignore an adverse ruling.
  The deck is stacked against the United States in light of the fact 
that we will have no veto power in the ministerial conference should 
the Third World or the European Union choose to try and kick us around 
in the World Trade Organization. We can no longer veto a panel decision 
in a trade dispute proceeding further eroding our sovereign interests.
  Article XI will also allow the lesser developed nations to exempt 
themselves from many market-opening requirements due to their status. 
Article XI states as follows: ``The least developed countries 
recognized as such by the United Nations will only be required to 
undertake commitments and concessions to the extent consistent with 
their individual development, financial, and trade needs or their 
administrative and institutional capabilities.'' This is a loophole of 
monumental proportions for developing nations that will put us at a 
huge disadvantage in terms of trade.
  Another issue which has been raised in connection to the WTO is 
whether joining might force the United States to lower standards 
adopted by the Federal and State governments in their consumer, 
environmental, and work safety laws. Again, one only has to look at the 
textual language of the ``miscellaneous provisions'' section, which 
states: ``Each member shall ensure the conformity of its laws, 
regulation, and administrative procedures with its obligation as 
provided in the annexed agreements.''
  The WTO will be the forum where member nations can challenge 
consumer, environmental, and worker safety laws as ``unfair trade 
barriers'' because such laws containing higher standards can and do 
often restrict trade. If our laws are more stringent than say those of 
Malaysia, Singapore, or Taiwan, the United States could find itself 
frequently under attack in the WTO. A panel decision declaring U.S. 
laws to be ``unfair trade barriers'' will put the United States in a 
bind to change those laws, or face potentially heavy fines, or if we 
choose to ignore a panel decision, subject the United States to 
retaliatory retribution from the complaining party.

  Remember, under the current GATT structure, we can veto a panel 
decision. U.S. sovereignty is not threatened. I believe our sovereignty 
will be threatened under this new system of the WTO. We should reject 
membership in the WTO until changes are made regarding voting 
procedures and sovereignty provisions are dramatically altered to 
protect the interests of the United States and the American people.
  Regardless of how one feels about the World Trade Organization and 
the issues of sovereignty it raises, we should all be disturbed at the 
procedure under which this agreement is being debated and considered. 
In my judgment, WTO membership should be considered as treaty 
  According to Laurence H. Tribe, Constitutional Law Professor at 
Harvard, ``If there is any category of international agreement or 
accord that must surely be submitted to the Senate for approval under 
the usually rigorous two-thirds rule of the treaty clause, that 
category must include agreements like the Uruguay round, which 
represents not merely a traditional trade agreement but a significant 
restructuring of the power alignment between the national government 
and the States.''
  ``It's hard to imagine what kind of agreement must be regarded as a 
treaty, and subjected to State ratification as such through the Senate, 
if the Uruguay round not be so regarded. However inconvenient, the 
structural safeguard of the constitution must not be ignored.''
  Article II, section 2, clause 2 of the U.S. Constitution says that 
the power to make treaties is expressly conditioned on the requirement 
that ``two-thirds of the Senators present concur.'' If America's 
membership in the WTO doesn't require a treaty vote, what does?
  The United States joined the United Nations by treaty. We joined NATO 
by treaty. And when the United States rejected the International Trade 
Organization, the 1947 version of WTO, it rejected such membership as a 
treaty. Every other democratic country is considering the WTO as a 
  The issue of ``downward harmonization'' of laws is also of grave 
concern to me. Under GATT, almost any of our critical food safety or 
environmental laws can be challenged by another country. In the past, 
the Marine Mammal Protection Act, which protects dolphins from needless 
slaughter by the tuna industry, and our CAFE standards, which are in 
place to promote cleaner and healthier air, have been challenged. Other 
countries have also targeted the U.S. new, clearer nutritional labels 
and California's strict limits on lead in wine as ``barriers to 

  Under GATT, pressure will be great to scale back our laws so that 
they are in harmony with weaker international standards, thereby 
creating a ``lowest common denominator'' approach to trade legislation 
and a significant relaxation of important social safeguards.
  Membership in WTO would also undermine our food safety, consumer 
safety, and environmental protections by limiting the goals the United 
States may pursue in its standard, for instance by restricting what 
issues would be considered ``legitimate'' grounds for regulation; by 
limiting the means the United States may use to promote GATT-allowable 
health, safety, and environmental goals with the requirement that such 
means be ``least trade restrictive,'' regardless of political 
feasibility; by requiring the United States to accept imports that do 
not meet our standards, where they satisfy different, but 
``equivalent,'' standards. This requirement invites wholesale 
circumvention of U.S. law; and by specific statutory changes in the 
GATT implementing legislation to existing U.S. standards for poultry 
and meat imports.
  According to William Lovett, professor of law and economics at Tulane 
University Law School, even the gains for U.S. agriculture are weak and 
largely illusory. He writes that ``great hopes for U.S. gains in 
agriculture exports were raised by U.S. Trade Representative Clayton 
Yeuter in the mid-1980's when the Uruguay round was launched. The 
cairns group--14 other agricultural exporting countries--were hopeful, 
too. But European Community resistance was very strong, and the 
resulting Blair House accords, December 1992, into the GATT 1994 deal 
provided only modest gains. The EC conceded only a 21-percent reduction 
in key agricultural subsidies over 6 years. No surprise,'' Lovett 
continues, ``the majority of EC countries have very powerful farm 
  In addition, the GATT 1994 deal provided strong preferences for 
developing country agriculture, their exports, and broad freedom for 
LDC farm subsidies. For these reason, U.S. agriculture is a substantial 
net loser under the GATT 1994 deal.'' Also, section 22 is abolished, 
but concessions were given in tariffication.
  There are also concerns surrounding the agreement reached between the 
administration and Senator Dole last week with regard to the appeals 
process and the ability of the U.S. to withdraw from WTO. According to 
that agreement, the administration will support legislation next year 
to establish a WTO dispute settlement review commission. The Commission 
would consist of 5 senior Federal appellate judges, appointed by the 
President in consultation with the leadership of both Houses and 
chairmen and ranking Members of the Ways and Means and Finance 

  This panel will review all final WTO dispute settlement reports 
adverse to the United States to determine whether the WTO panel 
exceeded its authority or acted outside the scope of the agreement. 
Following the issuance of any affirmative determination by the 
Commission, any Member of each House would be able to introduce a joint 
resolution calling on the President to negotiate new dispute settlement 
rules that would address and correct the problem identified by the 
  If there are 3 affirmative determinations in any 5-year period, any 
Member of each House may introduce a joint resolution to disapprove 
U.S. participation in the WTO. If the resolution is enacted by Congress 
and signed by the President, the United States would commence 
withdrawal from the WTO Agreement. This is a good provision that 
improves the appellate process within WTO, but it leaves some questions 
  What happens if we have a pure free-trade President who vetos the 
joint resolution? Can we count on the review commission to be 
sufficiently knowledgeable on trade issues to make the proper 
recommendation to Congress? There is a great reluctance on the part of 
constructionist judges to become involved in proposing legislation. 
Besides, the proceedings under the WTO are secret and confidential. I 
am concerned that there is enough vagueness and uncertainty regarding 
the appeals process that it will ultimately work to our disadvantage. 
Under the current GATT rules, any member nation can withdraw with 6 
months notice, at the discretion of its head of state. Even under the 
new agreement with Senator Dole, the new GATT provisions make 
withdrawal more time-consuming, arduous, and elusive.
  The bottom line is that American workers, U.S. trade, manufacturing, 
and industrial interests are not well served by the 1994 Uruguay round 
deal as presently before us. All the issues and provisions I have 
outlined here--the revenue loss, the loss of jobs, the inability to 
sufficiently combat unfair trade practices, the operations of the WTO, 
the weakening of our laws, the losses in agriculture, and others--
together justify rejection of the proposed 1994 GATT and its proposed 
world trade organization.
  I don't oppose free trade. I am for free trade. I am for a version of 
GATT. But I do not favor free trade if it means sacrificing trade 
policies that serve our best interests. Furthermore, no trade agreement 
must even threaten our sovereignty or reduce our standards to the 
lowest common denominator. Our decision should be clear: The Uruguay 
round before us does not serve our best interests, and should be 

                               Exhibit 1

                                   Madison, AL, November 21, 1994.
     Hon. Senator Howell Heflin,
     Tuscumbia, AL
       Dear Senator Heflin: I vote in all elections, as does my 
     husband. I am a taxpaying contributing member of society, and 
     my chief concern is the pending GATT/WTO bill. While I am 
     certainly in favor of expanding export and import 
     opportunities for the U.S., it appears that doing this under 
     the stipulation of GATT would spiral our nation into economic 
     disaster. This bill promotes a Rousseaunian utopian 
     globalism, lessens America's self-determination for a host of 
     vital issues, and moreover, places unprecedented and 
     burgeoning national debt--adding $31 Billion!!!--on all 
     taxpaying American citizens (excluding, of course, the money 
     aristocracy who are able to insulate themselves by becoming 
     trans-national citizens). I strongly urge you to allow 
     yourselves more time to carefully study possible 
     ramifications yet unanticipated. It is abominable that due to 
     fast track status, you are not even engaging in a formal 
     debate process. No one as yet fully understands this bill and 
     its effects. If the WTO is going to supersede any U.S. laws 
     that contravene it, why is it a matter for Congress to decide 
     by a majority vote? Shouldn't it be subjected to the treaty 
     process, requiring approval by two-thirds of the Senate? 
     Since the intense negotiation of GATT under three 
     presidential administrations has had every involvement in 
     getting and spending, would not the House of Representatives 
     be the rightful evaluators of its own handiwork? Since we, 
     the United States have been the primary plaintiff in the 
     trade wars of the past generation of grievances against 
     Japan, France, Italy, Germany, and China, what reasoning 
     person would think that the proposed multi-national 
     parliamentary decision-rendering process is going to benefit 
     America consistently? At very least extend your time-frame to 
     the second-quarter of 1995 before the vote must be rendered. 
     I find Newt Gingrich's recent declaration of being deeply 
     committed to its passage revolting and I am outraged that he 
     touts the weak explanation that it is only partisan 
     opposition tactics by democrat Senator Hollings to derail 
     this bill. Why aren't you bringing forth this issue to a 
     public debate forum for all Americans to be given an 
     opportunity to appreciate its merits?
       Please work to ensure that colleagues of the 1993/94 
     Congress who are now voted out and may be taking a corporate 
     lobbyist job which poses conflict of interest, face 
     retribution if they do not decline to vote on this issue. I 
     have supported you by my vote in the past. I consider the 
     proposed GATT/WTO to be a defining one and will only continue 
     to support those politicians who have the best interests of 
     their constituents in mind and this bill in my opinion 
     certainly does not seem to be in our best interest! I and 
     other constituents will be screaming about the many GATT-
     induced stresses to come if it is passed. As one of your 
     constituents, I implore you to vote NO on GATT/WTO, and if 
     you don't, we will be mad as hell at the polls next time.
       Firstly, how will we pay for it? (I have studied the 
     September 14 published breakdown of items both the Senate and 
     House have agreed to in their proposed funding--which only 
     amounts to just $5.7 million out of the total $43 billion to 
     be lost in decreased tariff revenues--even on a five-year 
     payment schedule!) Furthermore, with >$600 billion of our 
     national debt being owned by foreign interests, how does this 
     agreement provide US infrastructure with which we will 
     eventually pay this debt? The following is a brief outline of 
     GATT/WTO's seemingly inevitable alarming ramifications:
       Prosperous nations produce actual widgets--so much of U.S. 
     domestic production has ceased or is increasingly in 
     jeopardy. I have read gripping accounts of this phenomena in 
     the summaries of a scholarly work Magaziner and Patinkin 
     produced in The Silent War (1989, Random House, New York). 
     One finds a litany of justification for governments 
     fostering--not undermining--a highly-technical and well-
     educated labor force, and consequently, a higher-caliber base 
     citizenry. An ever-rising percentage of the U.S. economic pie 
     belongs to service-oriented jobs--which certainly proved 
     economically unsound for the United Kingdom over the last 
     several decades. National wealth is best created with raw 
     materials manufactured into complex products. Included in 
     U.S. export figures is the sum value of disassembled-
     assembled American factories exported! I submit to you, 
     sir, that face-value representation does indeed not tell 
     of the more accurate reality of the trade deficit. 
     Furthermore, the chief product among our exports to Mexico 
     is not indicative of a highly-skilled labor force and 
     industry fashioning raw materials into technical, high-
     performance devices, but rather, it is pet food! Did you 
     and your colleagues know this?
       Our former military superiority is now dangerously 
     subjugated to foreign production and ownership of its high 
     technology components. (I cite the study done revealing the 
     incident of grossly-delayed availability of vital Japanese-
     owned components for high-tech equipment used in the Gulf 
     Storm campaign.) This was discussed in a C-SPAN program in 
     the post-campaign `lessons learned' evaluations. Somewhere 
     within these first two points clearly belongs also the 
     argument in favor of strong protection for intellectual 
     property rights--which the current GATT sorely lacks.
       Our national wealth is pouring out of our own economic 
     system ($1.4 Trillion trade deficit since 1988 Uruguay Round, 
     nearly order of magnitude rates at which this deficit has 
     climbed annually--please feel free to substantiate any 
     dispute in your response.) Many third world nations have 
     different foresight and fiscal policies to guard their own 
     abilities to generate capital and thereby increasingly create 
     national wealth which remains in their country.
       The Cargolux jumbo jet now doubling its shipment frequency 
     between Huntsville and Luxembourg carrying by business 
     activity percent to Alabama (not from Alabama): North 
     America, 27%; Asia, 23%; Europe, 23%; Central & South 
     America, 15%; Africa, 11%; and Australia, 1%. It would be 
     interesting to see disclosed the nature of any goods 
     presumably produced in Alabama being exported; and also just 
     how much of its weight or wealth--whichever the term 
     `business activity' used in the article represents. This 
     question reflects The Huntsville Times, September 11, 1994 
     article, ``Global Growth.'' The author has not responded to 
     my three inquiries. I am concerned about the compositional 
     product of U.S. exports, so that advanced technology in a 
     widely-based labor pool has been utilized to produce 
     commodities, not the export products such as the $2.00 trees 
     that comprise our allegedly satisfactory trade balance 
     figures wherein minimal human skill has been involved in its 
     ``production.'' I hear and read a lot of empty rhetoric about 
     desired policies to foster the growth of labor skills both in 
     the Southeast and nationally. If you share this vision, where 
     is the muscle behind any intent to implement upgrading a 
     labor force to any great significance? Will the alleged new 
     jobs to be created consist primarily of distribution and 
     retail industry jobs that will service the alleged plethora 
     of consumers who will presumably have an increased share of 
     the wealth available for discretionary spending? There is a 
     fundamental flaw in allowing consumer-driven ideology to 
     rule: Such a consumer-driven economy is counter-productive to 
     the manifestations of the quality of life our culture has 
     provided under the increasingly obsolete notion of a labor-
     standard-protected work force in many of the targeted 
     producing foreign countries. Besides, the latest glowing 
     figures pronouncing such a healthy economy always measure the 
     consumer index perspective--not that of production!
       Trans-national companies answer to NO ONE--it is self-
     evident that they will enjoy frightful impunity of any 
     legislative policies that the GATT/WTO agenda would hope to 
     enforce. They will thereby definitely not bring about a more 
     humanitarian, rising tide elevation of worker conditions and 
     fair practices. Free and fair trade, a mantra being used to 
     bring about a new world order to the demise of Americans' 
     personal freedom and living standards as we know them today.
       My basic liberty to buy food and other products deemed safe 
     by our FDA is already shrouded in unknown foreign growers or 
     production sources with inevitably inferior growing or 
     assembly standards regarding pesticides, existing soil 
     contaminants, substandard components (compositional screws 
     that readily break), etc. The many countries part of GATT/WTO 
     would of course attempt to declare our FDA and National 
     Product Safety Commission standards too restrictive and 
     unfair: the penalties inflicted on the U.S. are heavy and 
     far-reaching according to the GATT/WTO document, exacting 
     fines permanently `. . . until the unfair practice is 
     corrected.' And further pertinent to inflicting 
     substandard health and safety practices, what about the 
     future regulation of now foreign-owned or pending for sale 
     American properties that could potentially be used as 
     toxic dumping sites for global radioactive waste? It is my 
     understanding that the US taxpayer would bear severe 
     penalties for refusal to comply!
       Huntsville's Dunlop Corporation plant, now owned by the 
     Japanese, provides more than 1,500 jobs to employees who on 
     average earn $16.55. They watch their benefits dwindling with 
     each dispute--this past September narrowly escaping closure. 
     Could we expect to see Mexicans imported to fill those Dunlop 
     slots the next time an irreconcilable dispute arises? Public 
     dole-provided career counseling will not create 1,500 
     positions for those workers to fill. I'd like to see some 
     economic data of the rate at which such factories American, 
     and foreign-owned with American employees, are succumbing to 
     foreign labor practices. (Did you also know that huge 
     corporate profit figures from going to offshore manufacturing 
     are included in export figures as well?) I'd like to see 
     explicit data from Alabama State reports of the types of jobs 
     which are said to be created from all this positive NAFTA 
     spin-off. It is clear that PACs who desire the currently-
     proposed GATT legislation are trying to ultimately promote 
     lower-cost labor for little benefit to U.S. worker-displaced 
     citizenry (the bulk of their ``customers'') as a whole. How 
     will congressional elected officials answer to the apparent 
     failure to nurture a vital technically skilled labor force, 
     and the extraordinary negative social and economic 
     consequences that will continue to ensue?
       NAFTA's passage hugely-increased illicit drug traffic 
     volume from Central America . . . . One can easily project 
     what will happen under GATT.
       Please feel free to offer us a detailed, within budget 
     solution to the rampant unemployment we are already 
     suffering. Insiders at our local Alabama unemployment office 
     declare that it is a blatant manipulation of figures which is 
     creating the myth of a rebounding economy. Namely, unemployed 
     persons not successful in getting a job after six months are 
     simply dropped from the rolls and are therefore not counted 
     as unemployed. I don't need to expound upon the intangible 
     (or tangible, depending upon one's perspective) effects such 
     as family and community deterioration under financial duress, 
     rising crime, and ripple effects to all other associated 
     businesses in unhealthy economic times. I do, however, expect 
     Congress to address these realities, for they are universal 
     concerns of increasing numbers of Americans--except perhaps 
     the small percentage of powerful groups whose interests lie 
     foremostly in immediate cheap labor.
       We and our community of working middle-class parents are 
     increasingly stressed about our abilities to offer an optimal 
     upbringing for children who hopefully will be able to obtain 
     a quality high-skill oriented education. The cost of higher 
     education is obviously an issue as inflation rages on. It 
     will really be an awful issue when GATT-induced inflation 
     removes this dream even further from us. As you know, since 
     the days you enjoyed in your parents' lifetime, the tax (and 
     ``fees'') levied were the negligible 8% of total 
     income--quite different from the 60% we struggle 
     under today. We watch the trends of rising numbers of random 
     crimes, company layoffs, the absurd GATT notion of an 
     American consumer-driven economy in a global economy when 
     jobs and net incomes are evaporating, grossly inadequate 
     public school systems with their poor academic performance 
     standards, and their lack of discipline and instruction void 
     of any values. We stay concerned that people like us are not 
     too far removed from crumbling under bleak financial 
     pressures. We and many families we know have already 
     eliminated from our budgets the vacation extras, dining-out 
     expenses, many other discretionary entertainment or household 
     expenses, and even more retail purchases (I consistently go 
     the second-hand shop or garage sale route for complete 
     clothing and educational toy needs--at least 95% of all such 
     purchases), and some acquaintances have completely eliminated 
     savings for retirement provisions. Footing this GATT/WTO bill 
     will wreak financial havoc. While you're at it, for your 
     information, look at some industry statistics of just how 
     well these second-hand institutions are faring and 
     flourishing! And then figure out just how much money American 
     consumers and displaced workers will be spending on the flood 
     of imports to the U.S. (or the pitiful few pennies of 
     savings on the influx of foreign-manufactured goods passed 
     on to the consumer enclosed in a `Made in the U.S.A.' 
       To further endorse this bill or worse, vote to pass it, is 
     foolish and deceptive unless you are remarkably well informed 
     (Can you look into your crystal ball with no trepidation and 
     in good conscience if this is passed?) You and your 
     constituents should have promoted better public access to 
     more detailed information of its specific nature and 
     ramifications. It is certainly egregious that status-quo 
     media are grossly neglecting to cover this issue, and 
     scantily offer slanted glamorizing views (5 favorable 
     articles to 1 negative article by analysis cited in an early 
     October Congressional committee hearing, despite renouncing 
     negative challenge on the part of numerous congressional 
     committee participants) on GATT/WTO legislation (e.g. 
     Washington Post and its covert pork payoffs for licensing 
     fees). To implement such a pervasive agreement at a time of 
     already perilous domestic manufacturing woes is 
     irresponsible: I implore you to vote to delay passing this 
     agreement as it is now and plan to more carefully evaluate 
     and rewrite it, work to deem it treaty status or implement 
     whatever framework it would take to give the U.S. more voting 
     power as disputes arise. I might remind you that your 
     position exists due to the taxes my family and I pay to 
     employ you (albeit we watch with great disgust the increasing 
     percent financing of public officials' campaigns by way of 
     PACs and wonder to what extent a pro GATT vote represents the 
     myopic interests of multi-national CEOs). I am college-
     degreed, learned a foreign language, studied abroad six 
     years, and formed my views from an international perspective 
     but also as a patriotic American. The current debate 
     surrounding GATT/WTO will hugely define institutions of the 
     next century as we continue well on the road in this post 
     Cold War Era. I'm trying very not to be overly trade 
     projectionist, and fundamentally firmly believe that global 
     trade is a good thing, and that free and fair enterprise is 
     best--if that and self determination in a post Cold War Era 
     that has evolved into a Trade War Era are not mutually 
     incompatible. Even though NAFTA is insignificant compared to 
     GATT, it, however, is the only model we can look to for 
     projecting the ensuing effects of an implemented GATT. . . . 
     It indeed appears to be catastrophic. Please be honest when 
     you interpret the resultant findings thus far, and convince 
     the taxpayers otherwise if that is the case.
       Again, as one of you constituents, I implore you to vote no 
     on GATT/WTO.
                                                 Carol E. Johnson.
       P.S. By the way, because I so highly value the C-SPAN 
     information I regularly enjoy, and would like to see that my 
     tax dollars support this network if the cable companies' 
     public service broadcasts of congressional hearings and other 
     pertinent events were ever to be threatened. It is one way I 
     experience a sense of empowerment of what our public servants 
     do in Washington. A C-SPAN journalist round of media pundits 
     recently predicted it will eventually be discontinued due to 
     lack of revenues generated--such as the ever-expanding 
     shopping channels generate! If C-SPAN is discontinued, I will 
     be outraged at the default message that what goes on in 
     Washington is rendered deliberately less accessible to the 
     rest of the nation.

                               Exhibit 2

                       Out of the Hands of Babes

                 [From the Times Daily, Nov. 26, 1994]

                           (By Anna Quindlen)

       Would you buy a rug if you knew that it had been woven in 
     India by 10-year-olds beaten if they didn't work fast enough? 
     Would you wear a shirt if it had been sewn by a 9-year-old 
     locked into a factory in Bangladesh until production quotas 
     for the day had been met?
       Would you eat sardines if the cans had been filled by 12-
     year-old Filipino children sold into bonded servitude?
       The General Agreement on Tariffs and Trade, known as GATT, 
     is the most sweeping free-trade pact in history. But like 
     many agreements among different nations with different 
     agendas, much has been lost in the translation. One of the 
     losses in the GATT negotiations was the right of children not 
     to be exploited, overworked and underpaid as a source of 
     cheap labor around the world.
       From the children who make carpets in India, sometimes 16 
     hours a day, seven days a week, to those who sew in 
     Bangladesh for as little as five cents an hour, the 
     International Labor Organization estimates that there may be 
     as many as 200 million child laborers worldwide. Some are 
     working in sweatshops that contract to make American goods.
       In testimony before the Senate earlier this year, a 15-
     year-old from Honduras told of girls working up to 80 hours a 
     week at a factory manufacturing Liz Claiborne sweaters.
       Child labor is the dirty little secret of foreign imports. 
     Sen. Tom Harkin, who wants to outlaw U.S. imports of all 
     products made by children under age 15, says the problem is 
     that Americans don't know that some of what they buy, 
     including toys for their own kids, has been manufactured by 
     children working the kind of hours, under the kind of 
     conditions, that many still associate with the darkest days 
     of the Industrial Revolution.
       ``You give me any cross-section of 100 Americans,'' says 
     the senator, ``people from any income level, any area of the 
     country, and I think the reaction would be overwhelmingly 
     against buying the products.''
       Harkin is a voice crying in the wilderness, and the 
     wilderness is the guided thicket of free trade.
       Harkin's bill to keep products made with child labor out of 
     the United States would probably be a violation of GATT, 
     which provides only for those restrictions spelled out in the 
     trade pact.
       During various GATT negotiations, developing countries 
     successfully argued against child labor provisions, insisting 
     that children have always worked in their cultures, that to 
     try to interfere with child labor is protectionist and 
     punitive when a child may be the only wage-earner in a 
     desperately poor family.
       But the tradition of children helping on small farms and 
     the innovation of locking them into a hotbox of a factory for 
     14 hours a day are worlds apart.The reason they may be the 
     only wage-earner in some areas is because adult workers have 
     been laid off in favor of children, who are infinitely more 
     exploitable and provide bigger profits for prosperous factory 
     owners. And nations that really want to compete in a global 
     economy will educate their kids, not work them half to death 
     before they've even reached puberty.
       After the bad publicity of the Senate hearings, Liz 
     Claiborne announced that it was ditching the Honduran 
     contractor, then decided instead it would ``work with the 
     facility'' to ``meet our human rights standards.''
       A few American companies have been ahead of the curve; Levi 
     Strauss and Reebok, for instance, had already demanded that 
     their contractors overseas hire only workers over age 14. In 
     India a consortium of carpet makers has started an industry 
     campaign that tags those products made without child labor.
       That's the least Americans deserve, some assurance that 
     what they buy has not been manufactured by kids.
       Amid attempts to protect elephants from ivory poachers and 
     dolphins from tuna nets, the rights of children go remarkably 
     unremarked. ``This is the last vestige of slavery sanctioned 
     in the world today,'' said Harkin.
       If GATT passes, an opportunity to end these children's 
     servitude will have been shunted aside for the alleged 
     bonanza of free trade. But consumers can vote with their 
     credit cards only if products are labeled.
       At the very least the slogan ``Not Manufactured with Child 
     Labor'' should shame those companies not in a position to 
     affix it to their products.
  Mr. CHAFEE. Mr. President, I yield 15 minutes to the distinguished 
Senator from Oklahoma.
  Mr. INHOFE. I thank the Senator very much for yielding. Let me 
respectfully say to the distinguished Senator from Alabama that I agree 
with many of his conclusions, however, for different reasons. I might 
also respectfully suggest a second viewpoint that our rising deficits 
were due not to the reduction in the income tax rates but instead to a 
Congress that spends too much money.
  Mr. President, our Nation's decision on the GATT agreement is too 
important to be decided by a lame duck Congress. The GATT accord, along 
with implementing legislation, will affect economic and foreign policy 
not just for another year or another 2 or 3 years, but for decades to 
come. We should postpone this vote until next year and let the newly-
elected Congress, the Congress which by definition is closer to the 
people, make this decision. This is what the people want. This is what 
common sense dictates.
  There is a point that really has not been addressed here. If we are 
serious about ending public cynicism in Government, we should stop the 
practice of railroading through complicated legislation which few, if 
any, read and probably fewer understand. We can begin by taking the 
time to allow the new Congress to carefully consider all the 
ramifications of the GATT agreement.
  I do not mean to be presumptuous, Mr. President, but as the newest 
Member of this body, I am in a unique position. I come here with the 
winds of public opinion behind me. The public clearly does not have a 
formed consensus on GATT because many questions are still to be 
answered. I think the general public does have an opinion on free 
trade, and I agree with that opinion, as I am a free trader. But they 
have not been convinced that this GATT legislation is the best way to 
serve this cause. What the public wants is an end to the power plays, 
the back room deals, and an end to business as usual, where legislation 
is passed sight unseen on the basis of pleasing labels, fancy photo 
ops, and soothing speeches. The crime bill is a good recent example. I 
was serving in the other body when that came up for consideration. It 
was August 21, on a Sunday afternoon, and this bill that was 2 inches 
thick had been printed only for 2 hours and it passed and there was not 
one Member of Congress that had read that bill, and I suspect the same 
thing was true over here.
  The public wants major decisions like this to be made on the basis of 
substance. They know that the devil is in the details. They expect 
their representatives to exercise judgment based not just on labels but 
on fine print as well. These were critical underlying issues in the 
election campaign just concluded. I know this because I just concluded 
a very active, aggressive, assertive and challenging race. The people 
want open Government; the people want decisions to be made outside of 
institutional barriers, institutional protections that protect the 
people here, and let the people at home know exactly what is going on. 
We had such an institutional problem in the other body, which we 
corrected, and it is something that has had a major impact on the 
elections of November 8. We truly had a wakeup call on November 8. I 
think we need to be listening to that wakeup call.
  Mr. President, we need more time to consider the GATT details and 
make that judgment. Again, it should be voted on by the newly-elected 
Congress which has been out there on the firing line talking not to 
bureaucrats, not to the insiders, but to real people.
  The process by which this GATT legislation was brought before this 
body raises many questions. The administration was given fast-track 
authority to submit an unamendable bill with two implicit 
understandings. First, it was understood that the implementing bill 
would contain only what was required by the GATT agreement. Second, it 
was understood that Congress would have a full 45 days to consider the 
bill. What actually happened? The administration did not submit this 
bill until very shortly before the Congress' scheduled adjournment in 
October. In fact, it was less than 10 days before, not 45 days. 
Fortunately, that power play was rejected, forcing this lame duck 
session. But the question is: Why did they want to rush the bill 
through so fast? Are they afraid of more detailed scrutiny? It sounds 
to me like the pork barrel crime bill. In fact, the administration 
produced a much broader bill containing many provisions not directly 
required by the GATT agreement.
  These are among the provisions that have caused the most concern.
  For example, as recently reported, two major media companies, the 
Washington Post and the Atlanta Constitution, would receive special 
benefits worth hundreds of millions of dollars as a result of the bill. 
According to the Wall Street Journal a provision in the bill grants a 
special discount to the Post and the Constitution on license fees owed 
the Federal Government under the so-called pioneer preferences in the 
telecommunications section.
  This provision is totally nongermane to the GATT agreement and it has 
nothing to do with free trade.
  Another much more serious example is the provision that changes the 
rules relating to patents and intellectual property rights.
  I know something about property rights. I came back from a very 
aggressive campaign, as I mentioned before, and when I talked to 
farmers throughout America, they are as threatened, as farmers, about 
the 1995 farm bill and all the price supports and these things as they 
are to what is happening to property rights, the fact the bureaucracy 
is taking away the value of these rights. Yes, these are property 
rights but not intellectual property rights. They are all the same and 
equally protected by the 14th amendment, or should be.
  Do the new rules protect our people and private property rights? They 
are taken for granted. The administration says yes, and inventors and 
others concerned about the issue say no.
  In fact, I had my first visitors as the newest Member of this body. 
They came yesterday, and they are from Oklahoma. They were inventors, 
and they came in very much concerned that the changes in this bill will 
have the effect of undermining the rights to intellectual property 
affecting billions of dollars in our ability to effectively compete in 
the high-tech environment of the future.
  They asked me, what do these patent changes have to do with enhancing 
free trade anyway? What is in the GATT agreement itself that requires 
these changes?
  I cannot answer them. I do not know. I do not have the answer to 
that. I believe there are serious problems with legislation and those 
provisions which are not required by GATT. Some are little more than 
apparent payoffs and sweetheart deals. Others are more sinister and may 
serve to enrich multinational corporations at the expense of the 
American people. But the bottom line is this: The train is going too 
fast. Let us slow it down, weed out the sweetheart deals and debate 
this in the new Congress with Representatives and Senators who are 
accountable to the people. I do not think that is too much to ask.
  The PRESIDING OFFICER (Mr. Bingaman). Who yields time?
  Mr. MOYNIHAN. Mr. President, the distinguished and newly victorious 
Senator from California would like 15 minutes, and I am happy to yield.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. FEINSTEIN. Mr. President, thank you very much, and I thank the 
distinguished Senator from New York for this opportunity.
  Mr. President, I believe that GATT is a win for this nation. I 
believe it is a win for manufacturing and agriculture, and I believe it 
is a win for the State of California.
  Tomorrow Congress has the chance to pass the equivalent of one of the 
largest tax cuts in history. Many people do not realize this. GATT, the 
General Agreement on Tariffs and Trade, reduces what are known as 
border taxes, or tariffs, and they reduce them worldwide by one-third. 
This amounts to a global tax or tariff cut of $744 billion.

                       GATT and the U.S. Economy

  What does this mean for the U.S. economy? The economic benefits for 
U.S. workers, consumers and businesses are many.
  One, producers will benefit from cuts in foreign tariffs. They will 
be able to sell more of their products abroad because these products 
will no longer face a whole panoply of high tariffs, quotas, hidden and 
not so hidden restrictions that they encounter in many countries today.
  Two, despite having the lowest tariffs in the world, America still 
has tariffs, and these will go down under GATT. So, many consumers will 
benefit because of lower prices on imports which lower the costs of the 
products they buy.
  Three, the GATT agreement will increase the U.S. gross domestic 
product by $150 billion when fully implemented. So, what we produce in 
services and products today will increase by $150 billion over 10 
  Four, GATT will open markets, foreign markets, that have been 
effectively closed to U.S. exporters, such as rice, beef, citrus, 
oilseeds, pharmaceuticals and construction equipment.
  Five, GATT will protect those who innovate and take risks by 
protecting their patents and copyrights abroad.
  And, finally, GATT ensures that all 125 member countries obey the 
same trade rules, even if they have not signed agreements from previous 
rounds. This eliminates the tortuous ``free rider" problem, where a 
nation gets the benefits but does not play by the same rules of open 

                    GATT and the California Economy

  Let me talk about GATT and California because no State stands to 
benefit more from this accord than California.
  Today California accounts for 15 percent of U.S. exports, and the 
jobs and economic activity these exports create have grown 
significantly over the past few years.
  Nearly $70 billion worth of California goods were exported abroad 
last year. That is an increase of 46 percent from just 5 years ago.
  The manufacture, production, and transportation of California exports 
accounts for 1.8 million jobs in the State today, nearly 13 percent of 
California's total employment.
  California's economic future is directly tied to increased foreign 
trade. In 1987, the last year for which data are available, California 
had 22,265 exporting establishments. In fact, we led the Nation in the 
number of business establishments that export.
  California's strong export-based economy demonstrates that it will 
gain disproportionately from enactment of this trade agreement. If GATT 
is rejected, it would cost literally hundreds of thousands of jobs in 
  I would like to take a moment to read from an analysis by John O. 
Wilson, Chief Economist for Bank of America, on the GATT agreement, and 
I quote:

       If it is not ratified, what would the absence of a GATT 
     accord have on trade development? Specifically for 
     California, we could anticipate the following developments:
       (1) an increase in tariff and non-tariff barriers to 
     California exports to Asia, Latin America, and Europe;
       (2) a reduction in California exports to those regions, and 
     particularly to Japan, China, Germany, and France;
       (3) little impact on trade with Canada and Mexico which 
     would still be controlled by the [North American Free Trade 
     Agreement]; and,
       (4) an immediate loss of 173,000 jobs in California (in 
     1995) growing to a loss of 252,000 jobs by 2000. This would 
     increase the unemployment rate by a full one percent.

  This is not my analysis; this is an economist's analysis.
  Let us take a brief look at how some of California's major industries 
will most likely be affected by GATT.


  In 1993, California's agricultural production amounted to almost $20 
billion. In that year, we exported $1.4 billion in agricultural 
products. Hence, almost 50 percent of what is produced in California is 
exported, that is how big it is.
  The GATT agreement will continue this growth by reducing agricultural 
tariffs by 36 percent over 6 years, increasing market access for 
agricultural exports and reducing anticompetitive agricultural 
subsidies by foreign nations. Some even think we can reduce our 
subsidies to American agricultural crops because they will no longer be 
  I want to highlight a few examples from the California Farm Bureau of 
how California agriculture will benefit.
  Our No. 1 export commodity is beef. The GATT agreement will increase 
California's beef exports by 10 to 14 percent. The reduction in Japan's 
beef tariffs will be cut from 50 percent to 38.5 percent. This is a 
huge reduction, and will result in the export of more California beef 
to Japan.
  The GATT will permanently open Japan's market to California rice by 
establishing an import quota of 379,000 tons of rice in 1995. This 
amount will be increased, almost doubled, to 758,000 tons in the year 
2000. This market, as you know, was initially opened in 1993 because 
Japan was unable to supply its own people with rice that year. But the 
market has tightened again. So clearly, under GATT, Japan's market will 
be opened once and for all for California rice.
  Almonds are another example of expected export growth under GATT. 
California produces up to 70 percent of the world's supply of almonds. 
A reduction in the tariff on almonds, particularly in the European 
Union, should result in increased sales and increased U.S. jobs. Blue 
Diamond expects its growers will benefit immensely from the $21 million 
reduction in almond tariffs to Europe.
  The GATT agreement will also increase export sales of California 
wine. One of California's largest wine customers, Japan, will reduce 
its wine tariff from 21.3 percent to 15 percent. Furthermore, the GATT 
will require the European community to substantially reduce its export 
wine subsidies.
  Tariffs for citrus are greatly reduced. Let me provide some examples. 
The European Union's tariffs for orange juice--that is pure 
concentrate--will be reduced from 19 percent to 12.1 percent. In Japan, 
tariffs for oranges are down from 40 percent to 32 percent, and 
grapefruit tariffs are down 10 percent.
  In Korea, tariffs will drop for lemons, limes, and grapefruit by 40 
percent. In Thailand, tariffs will drop for sweet oranges and 
grapefruits by 50 percent. Think of the markets that then open for our 
  In summary, for agriculture in California, GATT could mean 112,000 
new jobs, $10 billion to $30 billion in related economic activity, and 
an export boost of $5 billion to $14 billion. For the Nation, GATT 
could mean a net gain in U.S. jobs of 300,000 to 700,000 over 10 years, 
according to Citibank.
  Let me talk for a moment about sanitary and phytosanitary policy. 
This is a dull series of words for something that has become very 
  Exporters of California agricultural products have found that, as 
tariffs and quotas are reduced, sanitary and phytosanitary barriers are 
erected. For example, Mexico did this with plums. They just stopped 
plums at the border and they said they had phytosanitary conditions and 
the plums could not be sold in Mexico. Therefore, they could not be 
returned because they would rot. And so they used phytosanitary 
concerns as an actual barrier to exports from this country.
  The GATT agreement establishes necessary rules and disciplines to 
prevent the use of both sanitary and phytosanitary regulations as 
disguised trade barriers by recognizing only scientifically sound 


  Let me speak for a moment about industrial machinery, computers, and 
electronic equipment. California's biggest exports consist of 
industrial machinery, computers, and electronic equipment. These 
categories alone accounted for nearly half the State's exports last 
year. When it comes to computer parts, the European Union will reduce 
its tariffs by a whopping 87 percent. Korea would lower its tariffs by 
40 percent and Japan would eliminate its tariffs altogether. Reduced 
tariffs will increase sales of exports of these products and increase 
job opportunities here at home.

                         Intellectual property.

  The GATT agreement does something else. It guarantees the protection 
of copyrights, patents, trademarks, industrial designs, and 
semiconductors. American businesses lose an estimated $60 billion a 
year--$60 billion--from piracy of intellectual property. People take 
great risk as entrepreneurs, get a patent, feel they are protected, 
export abroad, and then find out their patent is meaningless.


  Let me speak on the environment. I recognize the concerns raised by 
some regarding environmental protection. I have great respect for my 
friends in the environmental community. I was proud to work with them 
in the last 2 years to help enact the California Desert Protection Act.
  While the U.S. negotiators were successful in achieving some measure 
of environmental protection, environmental groups advocated for more. 
As a consequence, the GATT agreement calls for the establishment of an 
environmental agenda to deal with unresolved environmental issues in 
the future.
  Some have stated the GATT would require the United States to lower 
its environmental standards to those of developing countries, or to an 
internationally harmonized level. The GATT agreement makes it clear 
that the United States can maintain environmental standards which are 
stricter than international standards if, one, the United States 
decides that the international standards are not sufficient to achieve 
its appropriate level of protection; and, two, the standard can be 
justified on scientific principles. These rules work in our favor 
because they will allow us to challenge blatantly protectionist ``food 
safety'' claims that have been routinely used to bar the sale of our 
products abroad.
  The recent GATT panel decision rejecting a challenge to the United 
States fuel economy laws demonstrates that the United States can have 
stricter environmental standards than other countries and still be in 
compliance with GATT. This case showed that the United States can enact 
laws that further energy conservation goals and protect the 
  I ask unanimous consent to have printed in the Record a letter from 
me to Ambassador Kantor in June, and his answer, on three other 
environmental concerns.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                                  U.S. Senate,

                                    Washington, DC, June 23, 1994.
     Hon. Michael Kantor,
     U.S. Trade Representative,
     Washington, DC.
       Dear Ambassador Kantor: Some serious concerns have been 
     raised by members of the environmental laws in California. As 
     you know, the European Union has published a target list of 
     U.S. environmental laws it believes it can successfully 
     challenge as illegal barriers to trade, if the Uruguay Round 
     agreement is adopted.
       The European Union's ``Report of United States barriers to 
     Trade and Investment'' targets specific California laws as 
     well as federal laws that are important to California. Those 
     laws include:

  The Safe Drinking Water and Toxic Enforcement Act (Proposition 65).

       This law requires warning labels on all products containing 
     substances known to cause cancer or reproductive harm. The 
     Europeans contend that this law ``imposes stricter California 
     standards in place of federal standards.'' They also object 
     to requirements imposed by the California Attorney General 
     under Proposition 65 to participate in the financing of a $1 
     million lead safety information campaign for consumers.

                            Glass Recycling

       California requires recycled material to be used in 
     imported and domestic glass food and beverage containers. The 
     minimum percentage is scheduled to rise from 15 percent in 
     1992 to 55 percent in 2002. This law applies to all glass 
     containers produced or sold in California and thus affects 
     European Union exports to California. The Europeans object to 
     the law because it imposes requirements and therefore 
     restrictions on their imports.

                              Lead in Wine

       California recently set tolerance levels for lead in wine 
     that are higher than the federal standard. The European Union 
     opposes states being allowed to set higher than federal 
       These are the specific California laws that the European 
     Union has identified for GATT action. Many other California 
     and U.S. environmental and food safety laws also appear to be 
     vulnerable to GATT challenges.
       I would appreciate your views regarding whether these laws 
     would be endangered if the GATT implementation bill is passed 
     by Congress. Are these laws violations of GATT? If they are, 
     could California be required by the federal government to 
     change them?
       This is a very important matter. I would like to give you 
     the opportunity to separate fact from fiction in this debate. 
     I look forward to hearing from you on this important matter.
                                                 Dianne Feinstein,
                                                      U.S. Senate.

                                        U.S. Trade Representative,

                            Executive Office of the President,

                                    Washington, DC, July 27, 1994.
     Hon. Dianne Feinstein,
     U.S. Senate, Washington, DC.
       Dear Senator Feinstein: Thank you for your letter of June 
     23, 1994, concerning the impact of the Uruguay Round 
     Agreement on environmental laws in California. I welcome the 
     opportunity ``to separate fact from fiction in this debate.'' 
     I will address each of the points in your letter in turn.
       The Uruguay Round Agreement is good for the United States, 
     and the State of California, because it will generate 
     economic growth and good jobs. I suspect that some of the 
     opposition to the Uruguay Round Agreement may in fact reflect 
     a more fundamental apprehension about economic growth. We do 
     not share this apprehension. We want instead to promote 
     responsible economic growth, and believe firmly that trade 
     can and does play an important role in growing the U.S. 
       As you state in your letter, some serious concerns have 
     been raised by members of the environmental community 
     regarding the potential impact of the Uruguay Round Agreement 
     on environmental laws in California. I want to assure you 
     that these concerns are unfounded. One important point to 
     keep in mind is that while most environmental organizations 
     are concerned about trade, many are working with us to make 
     the trading system more compatible with environmental and 
     conservation measures. Unfortunately, a few groups have 
     chosen to take the alarmist path, frequently making claims 
     based on misinformation and highly exaggerated speculation.
       The European Union's Report on U.S. Trade Barriers is, as 
     you mention, cited by certain environmental groups as proof 
     that specific California laws are being targeted by our 
     trading partners and that these laws can be successfully 
     challenged under the General Agreement on Tariffs and Trade 
     (GATT). This misreads the EU's report and is completely 
     speculative. The European Union has been preparing its annual 
     report for years. If they really thought they had good cases 
     under the GATT, they could have filed them long ago.
       This year's report, like previous ones, is basically a 
     political document in which the EU points to laws and 
     policies in the United States that they would like to see 
     changed. It does not claim that each U.S. or state law cited 
     is inconsistent with the GATT. Nor is it a legal treatise; it 
     should not be seen as carrying any legal weight in 
     interpreting the GATT even in the relatively few instances 
     where the report actually does suggest an alleged GATT 
       In general, we find nothing in the EU's report that is 
     persuasive with respect to any of the measures referred to in 
     your letter. Any challenge by the EU is completely 
     speculative at this point in time. Needless to say, the 
     United States has never proposed that any changes to these 
     laws were needed in order to conform them to U.S. obligations 
     under the GATT, nor is the Administration proposing any 
     changes to any of these laws in order to implement the new 
     Uruguay Round Agreement.
       Let me now discuss briefly each of the measures mentioned 
     in your letter:
       Proposition 65. The EU's report does not even hint at a 
     GATT inconsistency with respect to Proposition 65. We would 
     note that the law is not discriminatory, and States have the 
     right to establish their own requirements to protect against 
     cancer or reproductive harm.
       Glass Recycling. The EU claims this law is not in 
     conformity with the GATT because ``any environmental damage 
     caused in California by the import of glass containers is in 
     no way related to the amount of recycled glass used when the 
     product was manufactured in a third country.'' However, the 
     EU's ``jurisdictional'' approach has already been discredited 
     once in the GATT when they tried to convince a dispute 
     settlement panel to adopt it. Furthermore, the EU ignores the 
     fact that the governments negotiating the Uruguay Round 
     Agreement have recognized that this is an area needing 
     additional work under the new World Trade Organization, so 
     they are trying to prejudge the results of that work.
       Lead in Wine. The EU does not even claim that this measure 
     is inconsistent with the GATT. Lead is recognized as posing a 
     health hazard which our laws are addressing in a 
     nondiscriminatory way.
       Consequently, among the three laws you cite, the EU 
     actually claims that only one is inconsistent with the GATT, 
     and they have not pointed to anything in the GATT to support 
     their claim. This is particularly ironic since many European 
     countries have their own recycling requirements as part of 
     their programs to deal with solid waste problems.
       On a more general level, we have a system that mediates 
     against discrimination, the core objective of many of the 
     disciplines of the GATT. On the other hand, the same cannot 
     be said with as much confidence about all other countries. 
     And this underlines the importance of having international 
     rules: we want a level playing field which can be used to 
     root out discrimination while fully preserving the right of 
     governments to protect the environment and the health and 
     safety of their citizens.
       The Uruguay Round Agreement takes important steps in the 
     right direction. Of course, it is not perfect. Environmental 
     considerations have only become a trade issue in recent 
     years. However, I think we should all be encouraged by the 
     fact that we were able to persuade all of our trading 
     partners to launch an important new work program within the 
     WTO to find ways to ensure greater compatibility between the 
     evolution of the trading system and environmental measures. 
     We are committed to this project and are working closely with 
     our environmental community to make sure it addresses their 
       Thank you again for giving me the opportunity to correct 
     some of the misimpressions created by some groups to derail 
     the Uruguay Round Agreement.
                                                   Michael Kantor.
  Mrs. FEINSTEIN. Thank you, Mr. President.


  Let me touch on what is perhaps the most emotional element of this 
debate, and that is the argument the GATT in some way, shape, or form 
harm's America's sovereignty. Many have raised questions concerning 
whether the World Trade Organization, WTO, could undermine this 
sovereignty. In my opinion, much rhetoric and misinformation have 
clouded the facts about the WTO.
  Earlier today, Senator Bradley pointed out that America wins 80 
percent of the decisions made by GATT. What he did not say was that 
many panel decisions are blocked by the losing nations under the 
present dispute settlement procedure, so they never go into effect, or 
they are delayed. So America's victories mean little.
  Under the new procedure, a country cannot block a panel decision. 
This, more times than not, works in favor of the United States.
  Even if a GATT panel finds that a country has not lived up to its 
commitments, all the panel can do is recommend that the country begin 
observing its obligations. The defending country may choose to change 
its law, it may decide to offer trade compensation, such as lower 
tariffs. At worst, if a negotiated resolution is not reached, the 
country that lodged the complaint may respond by suspending trade 
concessions equal to the injured amount.
  GATT panel decisions cannot change United States law. Section 102(a) 
of the GATT bill makes it clear that, ``no provision of the Uruguay 
round agreement, nor the application of any such provision to any 
person or circumstance, that is inconsistent with any law of the United 
States, shall have effect .''
  Congress passed legislation in 1988 establishing our objectives for 
this round of the GATT talks. Principal among those objectives was 
strengthening the dispute settlement process. The United States has 
been frustrated in international trade disputes because, while we have 
maintained the world's most open market, panel decisions we have won 
against illegal foreign trade practices have been blocked by the losing 
  While the United States interests are fully protected, the World 
Trade Organization agreement permits the United States to withdraw from 
the organization with 6 months notice.
  Further mechanisms have been put in place to quell concerns about 
U.S. sovereignty. Section 125 of the GATT will allow Congress to review 
its membership in the WTO every 5 years. At that time, Congress will 
have the opportunity, if it wishes, to cast a vote to pull out of the 
  Next year, Senator Dole will propose legislation that would allow 
Congress to vote to withdraw from the WTO if the United States is on 
the losing side of three WTO decisions within a 5-year period.

                             budget waiver

  Congress has made great strides in reducing the growth of the Federal 
deficit. The budget deficit for fiscal year 1994 was $203 billion--
approximately $100 billion less than it otherwise would have been if we 
did not enact the Budget Reconciliation Act in 1993.
  Tariff reductions in the GATT bill require approximately $11.9 
billion in offsets over 5 years. This bill includes $10.3 in deficit 
reduction measures and $1.6 billion in previously enacted budget 
savings, known as pay-go balances.
  Because the Congressional Budget Act does not allow pay-go balances 
to be used as an offset, the budget point of order must be waived by 60 
votes. And we will face that tomorrow.
  I believe that there is precedent for using pay-go balances to offset 
revenue measures. It was used five times in the Bush administration, 
most recently with the Emergency Unemployment Extension Compensation 
Act of 1992.


  There is no disagreement among mainstream economists that the GATT 
trade agreement will increase U.S. exports and job opportunities in the 
United States.
  To be sure, GATT is not perfect. Some of the protections are phased 
in over too long a period, and some of the tariff cuts and protections 
are not as extensive as they might be. In particular, I would like to 
have altered the European Union's cultural exemption provisions to 
create freer trade in movies, television programs and recordings. I 
also would have phased out the multi-fiber agreement differently. 
Nonetheless, there is no question that this agreement is still a win-
win for the United States, and especially for California.
  Trade agreements always seem difficult to understand, even mind 
numbing. Not only does this agreement help large industry, it also 
assists small businesses. I would like to give two small business 
examples of how GATT will help two small businesses in the State of 
  One is a company called Applause, a Los Angeles area distributor of 
children's toys and gifts. They told me that lower tariffs will allow 
them to increase their sales by 12 percent to other countries. The 
upshot? They plan to hire 150 to 275 workers in California.
  A second company, Blue Leaf Design, in Monterey, manufactures outdoor 
recreational equipment. This company has been hesitant to market 
overseas because of the lack of patent protection. Under the new 
agreement that would change. Consequently, the company expects to 
triple its sales and double its work force over the next 10 years. So, 
not only are larger businesses benefiting, but small ones are as well.
  Mr. President, in summary I would like to indicate my strong support 
for the passage of the General Agreement on Tariffs and Trade.
  I thank the President, I thank the Senator from New York.
  The PRESIDING OFFICER. Senator from New York is recognized.
  Mr. MOYNIHAN. Mr. President, may I thank, might the Senate thank the 
Senator from California, for a wide ranging and concrete description of 
what we have here. Just to help, for the record, sanitary refers to 
animals; phytosanitary, to plants. The Senator mentioned rice. We have 
three large rice producing States. I bet California produces some, but 
certainly Louisiana, Arkansas, and Texas do.
  On the front page of today's Washington Times there is a large 
photograph from Seoul, Korea. It says, ``Fired Up Farmers. South Korean 
farmers demonstrate in downtown Seoul yesterday against the GATT 
provisions opening rice markets.''
  This is a pattern we see all over the world. One of the great 
innovations, and after so much effort in this GATT agreement, is that 
agricultural products are finally involved.
  A year ago I was in Geneva, going around in the last week of the 
negotiations, making points at various ministries. All that time, the 
streets of cities all over France were blocked by farmers saying what 
do you mean, American food products can come here?
  The answer is yes, now. And about time, too.
  Well done.
  I thank my colleague very much, and yield the floor.
  The PRESIDING OFFICER (Mr. Exon). The Senator from Rhode Island is 
  Mr. CHAFEE. Mr. President, by any measurement, the trade legislation 
we are considering today represents a monumental achievement. After 
seven years work, the U.S. and 122 other nations have reached an 
agreement on new international trading rules.
  These rules cover subjects that previous agreements failed to cover: 
for example, agriculture and textiles. Likewise, for the first time, 
the rules have been expanded to deal not only with tangible goods, but 
with services and with intellectual property.
  The Uruguay Round takes its place as the eighth--and most far-
reaching--of the consecutive negotiating ``Rounds'' that have occurred 
in the nearly 50 years since the establishment of the original GATT in 
1947. Begun in Uruguay, under the Reagan Administration, continued in 
the Bush Administration, and concluded by the Clinton Administration, 
the Uruguay Round Agreements represent seven years of exceedingly 
arduous negotiation. The negotiations had their share of highs and 
lows, and at times seemed dangerously close to breaking down 
altogether. But they did not; and that they did not is a testament to 
the skill and patience of our trade negotiators and to the commitment 
of these three Presidents. I want to salute Presidents Reagan, Bush, 
and Clinton, and U.S. Trade Representatives Yeutter, Hills, and Kantor, 
for what may be called, without hyperbole, a truly unprecedented and 
historic agreement.

                      impact on the united states

  What will the Uruguay Round mean to the United States, which exports 
some $660 billion (more than 10 percent of our GDP!) in goods and 
services annually? How will it affect our consumers, our manufacturers, 
and our economy?
  As I think the endorsement of the Uruguay Round Agreements by the 
organization Consumers Union demonstrates, American consumers and their 
families can expect to see benefits of increased choice and lower 
prices. Consumers Union says that the Agreement ``will eliminate or 
reduce a variety of costly barriers that artificially increase consumer 
prices and reduce consumer choice.'' With the Agreements in place, 
goods that we purchase every week will be more varied, more plentiful, 
and more affordable. Indeed, the Department of Treasury estimates that 
the Uruguay Round, once implemented, every year will bring an 
additional $1,700 in benefits to each American family of four. That is 
good news indeed. Mr. President, I ask unanimous consent that the 
letter from the Consumers Union be printed in the Record.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See exhibit 1.)
  Mr. CHAFEE. Manufacturers will see their market access increased as 
global tariffs are slashed by one-third (or $744 billion); and many of 
these tariff cuts come in areas in which the U.S. is particularly 
competitive--such as scientific and medical equipment, chemicals, and 
electric machinery.
  U.S. service providers--and here I mean telecommunications, financial 
services, and professional services--will reap new benefits from the 
Round. Rules regarding services are set forth in the Agreements, and 
these will serve as a framework for further liberalization. Clearly, 
more remains to be done in the area of services, as not all the U.S. 
negotiating objectives were achieved. But as the President's Advisory 
Committee on Trade Policy and Negotiations noted, the new agreement is 
an important achievement because it includes services in the world 
trading system for the first time and has resulted in some substantial 
market access offers. Moreover, the Services Agreement itself provides 
for continued negotiation in basic telecommunications, financial 
services, and maritime transport.
  Intellectual property--such as computer software, film, television 
programs, pharmaceutical formulas, semiconductor and jewelry designs--
all of these product areas where the U.S. stands virtually unrivalled 
will gain new protections under the intellectual property Agreement.
  How will the Uruguay Round affect our economy overall? We will see 
more trade, more sales--and more well-paying jobs. Our products will be 
sold more easily and less expensively all over the world. The GATT 
Secretariat has projected that the Uruguay Round Agreements will add 
some $127 billion annually to the U.S. economy. Our own Council of 
Economic Advisors has estimated that the Uruguay Round, once 
implemented, will add from $100-200 billion to the U.S. economy each 
year. I think these phenomenal figures speak for themselves.

                     impact on the textile industry

  What about the U.S. textile industry? We in Rhode Island have a long 
history in textiles, and the industry continues to be an important 
contributor to the Rhode Island economy. It has not been easy, as we 
have faced serious competition not only from overseas, but from 
southern states. But this experience has toughened our industry; and 
today, we make a high-quality, top-notch product that can and does 
compete against products from anywhere else.
  There is no question that the Uruguay Round Agreement on Textiles and 
Clothing will bring about significant changes in the industry here at 
home (and indeed, worldwide). Under the Agreement, the Multi-Fiber 
Arrangement--the formal name for the international quotas now in place 
on textiles and textile products--will be phased out over a ten-year 
period, and no new quotas will be allowed. Once that period is over, 
textile products will be fully integrated into the world trading system 
and will be treated no differently from other goods.
  The quota phase-out will be a change. But U.S. industry has been 
preparing for this eventuality since the Uruguay Round negotiations 
started in 1986, at which time it was made clear that textiles were to 
be brought into the trading system. And, to ensure that the transition 
period progresses smoothly, with as much predictability as possible, I 
offered a series of amendments to the implementing bill. These 
amendments, now part of the bill before us, helped win the support of 
major textile associations--including the American Textile 
Manufacturers Institute and the Northern Textile Association--for the 
legislation before us today.
  I believe that the U.S. and Rhode Island textile industry can 
withstand foreign competition, and can continue to produce and sell 
quality product. We will need to continue to pursue greater market 
access overseas. I am confident that our negotiators will do so, and 
indeed, I am gratified by their recent success with Pakistan.

                    the multilateral trading system

  Let us pause for a moment and consider the importance of the world 
trading system.
  The U.S. has been a participant in formal global trading agreements 
for the past 47 years. After the disastrous tariff policies of the 
1930s, we joined with 22 other nations in 1947 to draft the original 
General Agreement on Tariffs and Trade. We helped found the GATT 
because we--and the other 22 original ``Contracting Parties'' to the 
GATT--believed that expanding trade would cause all those participating 
to prosper and grow. [And it has: the rising tide has lifted all of our 
  The United States government has believed that there is more to be 
gained than lost by setting up international rules for trading among 
nations. The 1947 GATT not only established tariff concessions, but 
also a basic set of principles meant to guide how trade was to be 
conducted. And we--the most powerful economy in the world then, as 
now--made the decision that participating in trade under a set of 
rules, brought more benefit to us than competing without rules in the 
law-of-the-jungle situation. Thus we entered into this ``contract'' 
with our trading partners; and we, like they, have reaped the benefits 
of this mutual contract ever since.
  The Uruguay Round Agreements that will be implemented by the 
legislation before us stand as a reaffirmation of our belief in the 
value of the global trading system and its rules of play. And, as 
history has shown us. these expanded rules will promote the free flow 
of trade, and thus prosperity.
  I want to emphasize that our participation in the world trading 
system is best described as a contract: the United States, a sovereign 
nation, agrees to abide by certain rules and guidelines, rules that we, 
in fact helped draft. But we remain a sovereign nation which has the 
right to withdraw from the contract at any point in time should we find 
that the contract is no longer beneficial. The GATT is not a world 
government that holds absolute power over members, but rather a 
voluntary association made up of sovereign members; indeed, GATT 
members are known as ``Contracting Parties!''

                      the world trade organization

  That leads me directly to a topic that has received an overwhelming 
amount of attention in recent months: the creation of the World Trade 
Organization (WTO).
  First and foremost, let me emphasize that the WTO is not some brand 
new organization that suddenly has appeared on the scene. Rather, the 
WTO is a formal--and yes, more effective--version of what we already 
have is place in Geneva. The WTO will replace the ad hoc organization 
that has administered the GATT rules since 1947. It is not a super-
government bent on controlling sovereign nations; the WTO's sole job is 
to administer the global trade rules--just like its predecessor. It 
cannot make changes in nations' domestic laws.

  This is particularly true for the United States. When the Uruguay 
Round Agreements go into effect, they will not nullify U.S. law. Only 
Congress has the power to change U.S. law. Indeed, as the Senator from 
California mentioned, the first substantive line (Section 102) of the 
legislation before us explicitly states that no provision of the 
Agreements that is inconsistent with U.S. law shall have effect.
  Thanks to the new Dispute Settlement Understanding, the WTO will be 
better able to referee international trade disputes and bring about 
their resolution.
  This is an objective for which we in the United States have been 
pushing for years--and indeed, in 1988 Congress explicitly directed 
USTR to negotiate more effective and expeditious dispute settlement 
mechanisms. Why? Because we, as a nation who often brought trade 
problems to the international forum, were perennially frustrated with 
the procedures that allowed for endless delay and no finality. The 
Europeans limited our soybean exports with complete impunity. The 
Japanese kept our beef out without cause. The French banned our fish 
exports out-of-the-blue. In each of these cases, the U.S. was 
frustrated by an inability to resolved these cases through the 
multilateral system because the GATT dispute settlement mechanisms were 
too weak.
  But now, we will be able to win effective relief. Let me take an 
example that strikes close to home for most of us in New England. Last 
March, after French fishermen rioted and burned down a town hall, the 
French government suddenly--and for the flimsiest of reasons--banned 
imports of foreign fish. This hit us in Rhode Island pretty hard. There 
was nothing wrong with the fish whatsoever--it was clear that the 
French took this action solely to appease their fishermen. Under the 
old GATT dispute resolution, it would have taken years before a 
decision was reached. But under the new system, the U.S. will be able 
to take the French to dispute resolution immediately (with expedited 
procedures for perishable products), avoid unfair delays, and win a 
decision that would force the French to cease and desist, or else face 
retaliation on their fish products (or ``cross retaliation'' on their 
wines). If you want fair trade--this is it!
  Now, some will say: But this powerful system will be used against the 
U.S.! After all, what is good for the goose is good for the gander. 
Granted--but look at the record. Who has the most open market in the 
world? The U.S. Whom has history shown to be more often a plaintiff 
than a defendant in Geneva? The U.S. Who has an impressive record in 
winning complaints in Geneva? The U.S. It is safe to say that stronger 
dispute settlement plays to our advantage.
  Some say: in the WTO every nation--including tiny nations--will have 
a vote, and they will outvote the U.S. every time. However, this 
argument ignores the way the system works. Under the WTO--just like its 
predecessor--each nation technically will have one vote. But does that 
not mean we will be outvoted. Why?
  (1) Because the WTO is directed to operate by consensus first and 
foremost; (2) Because unlike the United Nations, there rarely is a vote 
taken in the GATT. (In fact the last substantive vote was in 1959, 35 
years ago. And (3) Because due to its size and impact on the world 
economy, the U.S. plays a leading role in world trade matters, and its 
view often carries the day.
  The WTO is an integral part of the Uruguay Round Agreements. A nation 
may not choose to join, say, the Agreement on Agriculture but not the 
WTO. It is a package deal: join the WTO and gain all the benefits of 
the updated GATT--or don't join and get nothing. As must every other 
signatory nation, the U.S. must sign onto all the Agreements, including 
the WTO, or forget the benefits of the Round altogether.
  What if, however, at the end of the day the new WTO and Dispute 
Settlement procedures just are not beneficial to the United States? 
Simple: we get out. The Uruguay Round Agreements themselves allow any 
nation to get out of the package upon a mere 6 months' notice. 
Moreover, the implementing legislation explicitly calls for a review of 
the WTO every five years, and if Congress so decides, it can vote to 
take the U.S. out. And Senator Dole has worked with the Administration 
on a plan to ensure that should WTO panels exceed their authority, 
Congress can remove the U.S. from the WTO. It could not be any clearer: 
if we don't like it, we can leave it.


  I believe we will find that the Uruguay Round will bring to this 
nation great benefits that will increase our prosperity. I believe that 
this Round will take its place in history as one of the most important 
global agreements--both in terms of its size and in terms of its 
impact--ever fashioned. And it is our leadership that has brought it 
this far.
  More than 30 countries already have given it their stamp of approval, 
with 50 others expected to do so shortly. The European Union and Japan 
are watching us closely to see what action we take. The future 
stability and growth of the global trading system is in our hands. 
Without the U.S., there will be no such trading system. A YES vote 
advances our nation's and the world's prosperity. I shall vote for the 
budget waiver and for approval of the Uruguay Round and urge my 
colleagues to do likewise.

                               Exhibit 7

                                                  Consumers Union,

                                Publisher of Consumer Reports,

                               Washington, DC, September 28, 1994.
     Hon. John H. Chafee,
     U.S. Senate, Washington, DC.
       Dear Senator Chafee: In the next few days, you will vote on 
     legislation that would approve and implement the GATT Uruguay 
     Round Agreement. Consumers Union urges you to vote ``YES''.
       Through increased competition and economic expansion, this 
     agreement will benefit American consumers. We urge the 
     Congress to approve the Agreement this year, so that on 
     January 1, 1995, consumers can begin to realize its benefits.
       The Agreement is a crucial first step in the continuing 
     effort to make the rules of world trade more consumer 
     friendly. It will eliminate or reduce a variety of barriers 
     that artificially increase consumer prices and reduce 
     consumer choice. While additional improvements to the world's 
     trading rules are needed and must follow the implementation 
     of the Uruguay Round, the first step, implementation, is 
     needed now.
       Consumers Union has reviewed the issues relating to 
     protection of U.S. health, safety and environmental 
     standards. We believe that the Agreement is appropriately 
     written to protect these standards.
       Your ``yes'' vote to ratify the GATT Uruguay Round 
     Agreement will be a ``yes'' vote for consumers.
                                                  Mark Silbergeld,
                                      Director, Washington Office.

  Mr. SPECTER addressed the Chair.
  The PRESIDING OFFICER. Who yields time?
  Mr. SPECTER. Mr. President, I ask for 20 minutes from the 
distinguished Senator from Rhode Island.
  Mr. CHAFEE. That will be fine.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized 
for 20 minutes.
  Mr. STEVENS. Will the Senator yield to me for just a moment?
  Mr. SPECTER. Yes.

                         Privilege of the Floor

  Mr. STEVENS. Mr. President, I ask unanimous consent that an intern 
working on my staff at the present time, Dana Quam, be admitted for 
floor privileges.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, I support the General Agreement on 
Tariffs and Trade, commonly known as GATT, because I am convinced that 
it will help the American worker by creating many high-paying jobs, 
that it will help the American consumer by bringing in locally priced 
goods, and because it will be beneficial generally worldwide. History 
favors free trade. In the long run, elimination of tariffs and trade 
restrictions promotes commerce and leads to a higher standard of living 
for all involved. The rising tide lifts all the boats.
  In an era when so many say that the next generation will have a 
lesser standard of living than the past generation, I think it is 
incumbent on government to do everything we can to promote trade and to 
promote a higher standard of living.
  It is my view, Mr. President, that the American worker can compete 
very well in worldwide markets notwithstanding any restrictions which 
may be imposed on the United States in terms of wages, in terms of 
environmental controls or whatever additional impediments there may be 
because of the competitive force of the American worker.
  So I am confident that in the long run we will be able to compete 
very, very effectively providing there is reciprocity. And when we 
lower tariffs and lower trade barriers, it is in effect a tax break and 
a tax reduction for the American consumer.
  The issue has been raised repeatedly about the question of loss of 
sovereignty. I take a position second to none, Mr. President, on 
insisting that American national sovereignty be maintained. But there 
is no realistic issue about loss of American sovereignty in the so-
called GATT agreement. The basic protection on this critical issue is 
our right to withdraw at any time from GATT on 6 months' notice.
  The concern about potential unfairness to the United States is one 
which I share. I have long urged, on legislation which I have 
introduced in the course of the past decade, that there be a private 
right of action to guarantee that U.S. industry would not be unfairly 
impacted by subsidies or by dumping. And the arrangements which have 
been worked out, with the leadership of the distinguished Senator from 
Kansas, Senator Dole, I think, go a long way in guaranteeing that if 
there is any unfairness to American industry or to the American worker, 
it would be rectified by having a panel of Federal judges who will 
review the decisions of the World Trade Organization to be sure that 
there is no unfairness. This kind of review, which is in effect 
appellate review, I think, is a very, very excellent remedy to 
guarantee against unfairness to the United States. There are a series 
of standards set out that if the World Trade Organization has three 
decisions, according to the panel of United States judges, which are 
unfair, arbitrary or capricious, or by misconduct, or by other 
standards which are set forth explicitly, then a resolution of 
withdrawal can be brought in the Congress of the United States and can 
lead to immediate notification of the intention of the United States to 
withdraw which will protect our interests if in fact we are treated 
unfairly by the World Trade Organization.
  There is no doubt, Mr. President, about the complexity of the pending 
agreement and about the many provisions which will have to be 
experienced to really understand exactly how they will work out. But 
that happens any time any law is enacted in the United States or any 
complex provisions are put into place to govern conduct in trade or 
criminal law or from any sort of change in regulations governing our 
conduct. If we find as a matter of trial and correction that it does 
not work out, there can be a modification, or if it is onerous, we can 
withdraw from the entire arrangement.
  A question has been raised about the proceedings as to due process 
and whether the decisions of the World Trade Organization will really 
be fair. I think that this concern has been allayed by a number of 
comments from Senators who have spoken to the fact that so much of what 
is done in GATT is done by consensus. When you talk about due process 
of law, we ought to note that in the United States there has been a 
lengthy development as to what is due process in our own courts, and 
those standards are changing with many, many modifications as to what 
constitutes due process of law. Here again, I think in due course, if 
we find that the procedures are insufficient, they can be changed; or 
again, if they become very onerous or are deemed unfair to the United 
States in the careful procedures worked out, we can withdraw from GATT.
  As I view the current trade restrictions in the trade laws, I have 
expressed on the floor of this Senate many times my dissatisfaction 
with the way the International Trade Commission works when there is 
some basic unfairness alleged by an American company, which injures an 
American company or American workers; and when a complaint is taken 
under current law to the International Trade Commission, it takes a 
long period of time before there is a decision. There has been no 
injunctive relief stopping the unfair trade practice. When the decision 
is handed down, the damages are prospective only, meaning it applies 
only to the future; so that if an American company or American workers 
are injured, it is just too bad as to what happened in the past. If 
under some circumstances there is a surge or an increase in imports as 
a result of the complaint filed by an American company, there can be 
some remedy for past conduct. But in decisions which frequently take 
more than a year, that remedy is limited to a few months, so what we 
have at the present time under the International Trade Commission 
hardly compensates for existing unfair trade practices.
  With the new arrangements under GATT, we find that many items will be 
covered which have not been covered up to the present time, such as 
intellectual property, services, and agriculture. Agriculture is the 
leading industry in Pennsylvania, as it is a major industry in the 
United States. GATT offers unique opportunities for increased exports 
for the American farmer.
  The steel industry which has been very hard hit by unfair imports, by 
subsidies from foreign governments, and from dumping, is an industry 
which will be very materially assisted by GATT, according to the 
leading executives of the steel industry in Pennsylvania.
  In supporting GATT, I express my concern about the impact in the 
short run on the loss of jobs. That is a concern which I have had 
during the course of the 14 years which I have been in the U.S. Senate. 
When the American work force, especially the work force in a State like 
Pennsylvania, has been so badly damaged by unfair imports and by 
dislocations in the work force, to the extent that this occurs, I think 
we will have to take action in the U.S. Congress to make sure that 
there is adequate compensation for workers who are injured in the short 
  The industrial organizations have been very, very strong in their 
support of GATT. In a State like Pennsylvania, with very strong labor 
interests, I have had some constituent objections, but some of the 
labor groups think in the long run GATT will provide more jobs. That is 
certainly my conclusion. So that looking on GATT as a whole, I think it 
offers a really great promise for the future. It is by no means a 
certainty, but there are escape clauses and escape valves, so that if 
the U.S. is not treated fairly, or if it does not work out for the 
benefit of the U.S., we have ample opportunity to protect U.S. 
interests by withdrawing.
  With respect to the waiver of the Budget Act, Mr. President, I 
propose to support that. The Congressional Budget Office, I think, too 
often in making the estimates for revenue loss does only for the very 
short run. I believe that in the longrun GATT will provide very, very 
substantial increases in revenue to the U.S. Treasury because of the 
increased trade, increased wages, higher paying jobs, leading to 
greater revenues.
  Mr. President, I have sought recognition during this debate of the 
Uruguay Round of the General Agreement on Tariffs and Trade, commonly 
known as GATT, because in my view we are looking at a tremendous 
opportunity--not frequently seen in my 14 years here in the Senate--to 
create many, many high-wage jobs in this country as a direct result of 
reduced tariffs and trade barriers that have impaired the ability of 
U.S. companies to effectively sell their products abroad. While 
concerns exist with certain aspects of the Agreement, I believe on 
balance we should pass the GATT.
  The GATT promises to cut tariffs on average by one-third on 
manufactured products and will eliminate tariffs in ten sectors that 
the United States is particularly competitive. For the first time, it 
will cover intellectual property, services, and agriculture--all of 
which are major exporting sectors of the U.S. economy. According to the 
General Accounting Office the GATT is projected to produce $100 to $200 
billion a year in added income by 2004. The GATT also promises 
important export opportunities for U.S. concerns as it will remove many 
trade barriers that they currently face. This opening of new markets 
for U.S. industries competing overseas like, agriculture, steel, glass, 
chemicals, and pharmaceuticals will, in my judgment, increase jobs 
significantly in this country.
  My home State of Pennsylvania, like the United States as a whole, is 
vitally dependent on foreign trade for its economic health. 
Pennsylvania's trade with countries all around the globe is worth 
billions of dollars. According to the International Trade 
Administration, in 1993 Pennsylvania was ranked 10th out of all 50 
States in exports. In 1992, Pennsylvania's 10.6 billion dollars' worth 
of exports was comparable to the entire gross domestic product of 
countries like Cameroon, Ecuador, and Tunisia. According to the 
International Trade Administration, some of the Pennsylvania sectors 
that will benefit from the implementation of the GATT are: steel mill 
products, industrial and analytical instruments, computer equipment, 
construction machinery, household glassware and pottery, and 
  There is strong constituent support in my State for GATT. There will 
be new high paying jobs for many people from increased export 
opportunities and additional revenues according to data supplied to me 
from many key Pennsylvania companies including Armstrong World 
Industries, Bethlehem Steel, Hershey Foods, Rohm & Haas, Unisys 
Corporation, and U.S. Steel.
  The employees of Grove Worldwide which is based in Shady Grove, PA, 
and manufactures construction equipment, sent me pages of petitions 
urging me to vote for the GATT. PPG Industries, wrote with their 
comments in support of the legislation. For them, the GATT will provide 
guidelines for the protection of intellectual property, trade in 
chemicals and will open markets, besides being a tremendous benefit to 
consumers. Warner Lambert, in Lititz, PA, stated similar reasons for 
supporting the GATT.

  According to Mr. Jim Unruh, chairman and CEO of Unisys Corp. in Blue 
Bell, PA, U.S. computer industry exports to the European Union exceeded 
$10 billion in 1993. Under the GATT, the European Union, which is the 
largest market for U.S. computer exports, will reduce tariffs by nearly 
80 percent. While difficult to quantify, it seems clear that industry 
revenues will increase as a result of reduced tariffs. Mr. Unruh goes 
on to inform me that requirements to set up local assembly or research 
facilities as a precondition to doing business in certain markets will 
be reduced or eliminated under GATT thereby increasing U.S. job 
opportunities. U.S. Steel, based in Pittsburgh, urges me to support the 
agreement because it, and I quote, ``will assist domestic manufacturing 
in its ability to compete internationally.'' In addition to that, 
numerous employees of the steel industry have recently written to me 
urging me to vote for GATT. They recognize the benefits of lower 
tariffs which leads to a better trading environment, fostering economic 
growth and good jobs.
  The support for this agreement continues: General Electric, which has 
a significant presence in my State, informs me that almost 40 percent 
of their total revenue comes from international activity. The GATT 
would assist them in opening global markets and level the playing field 
in European trade. Miles, Inc., which employs 1,700 in Pennsylvania and 
plays a vital role in the Pittsburgh economy, urges me to support the 
GATT because it would protect their copyrights and patents, and lower 
the costs on almost all their raw materials. Procter & Gamble, which 
also has several facilities in my State, estimates that more than 
10,000 jobs will be created for Procter & Gamble and their suppliers in 
the United States over the next 10 years.
  Again and again, the message is the same: It is important to pass the 
GATT so that U.S. businesses can remain competitive worldwide.
  As was the case during our consideration of NAFTA--the North American 
Free-Trade Agreement--in the first session of this Congress, my main 
worry in supporting GATT is the potential loss of jobs in the short 
run. No one can question my consistent support of the interests of 
working men and women be it supporting increases of minimum wage, 
extending unemployment benefits, expanding job training or increasing 
funding for displaced workers. In balancing the short term job loss 
with the anticipated long-term job gains, however, my sense is that we 
should proceed with GATT and make sure that the Federal Government 
takes all appropriate steps to assist workers displaced by the effects 
of GATT.
  While it is clear that this agreement is not perfect, I know of no 
trade agreement that is. There are those that urge us to reject this 
agreement, however, there is no guarantee that doing so will net a 
better agreement. Many businesses and industries have had to accept 
compromises, but they believe that this agreement is the best one that 
can be secured. The United States is a global trading partner and 
leader. Delaying passage of this agreement will likely send a dangerous 
message to the world marketplace. In my view, it is unwise to delay or 
prevent passage when we stand to gain so much in terms of jobs and 
increased revenues.
  Legitimate concerns regarding U.S. sovereignty and fairness have been 
raised about the new World Trade Organization, the new international 
agency authorized under the GATT to enforce the provisions of the 
agreement. But I believe that we can deal with these. We in Congress 
must and will closely monitor the actions of the World Trade 
Organization as it concerns our interests.
  In this regard, it is important to note that there are several checks 
on the ability of member countries to negate the U.S. influence within 
the WTO. First, member countries are expected to continue the GATT 
tradition and practice of reaching a decision by consensus. In fact, 
article IX of the World Trade Organization Agreement makes it clear 
that the practice of consensus is the primary means by which WTO 
members will seek to make decisions.
  Second, within the legal framework of the agreement, voting 
safeguards are included in the event that a WTO vote should be 
required. These include unanimity in certain instances and super-
majority in others. Moreover, super-majority votes will apply only to 
those countries voting in favor of them. Under this framework, 
therefore, it seems that the WTO cannot force the United States to do 
something that is against its national interest. Nor can it overturn 
our laws; that remains the sole jurisdiction of our legislative bodies, 
both State and Federal.
  This is particularly important as it concerns our antidumping and 
countervailing duty laws and other trade laws such as Super 301 that 
allow us to redress unfair trading practices. I have constantly fought 
any weakening of these trade laws and in fact have sought to strengthen 
them. When the so-called Dunkel draft of the GATT was made available in 
December 1991, I wrote to then U.S. Trade Representative Carla Hills 
strongly objecting to it because it would weaken U.S. trade laws with 
regard to dumping and subsidized imports. In my extensive travels 
through Pennsylvania's 67 counties, I have seen the problems of 
Pennsylvania's working men and women including the injury caused by 
dumping and subsidized imports which violate the principles of free 
trade--which means cost of production plus a reasonable profit, free of 
foreign governmental subsidies, or dumping. Additionally, since 1982, I 
have sponsored and pushed legislation which would create a private 
right of action in the Federal courts to enjoin dumped an subsidized 
imports and to compensate workers and companies which have sustained 
serious damages from such imports. As I have frequently stated, there 
is nothing like the vigor of private plaintiffs when it comes to the 
enforcement of our trade laws. Fortunately under the GATT implementing 
language, our antidumping and countervailing duty laws remain intact 
and the President still has the Super 301 powers at his disposal.

  Third, an additional safeguard is the option to withdraw from the WTO 
on 6 months notice as determined by the President or, importantly, by 
the Congress, in the event of three adverse WTO decisions within a 5-
year period as was recently agreed to by the administration.
  It should be mentioned that in other areas the United States would 
benefit from the WTO. The WTO would provide oversight functions and 
would subject member nations to GATT disciplines and rules of conduct. 
We will also benefit from a better written set of principles for 
dispute resolution which have been noticeably absent in the past, and 
has caused harm to the United States.
  There is also concern regarding the deficit and waiving the budget 
rules in favor of the GATT. While there is no doubt that this agreement 
will reduce tariff rates and subsequent revenue, I think it is 
important to look at the long-term benefits of the agreement.
  As former U.S. Trade Representative Carla Hills pointed out in her 
November 22, 1994, Washington Post op-ed such benefits are 
extraordinary. Citing economic projections, she states the GATT will 
give us nearly $1 trillion in new economic growth in the next 10 years. 
Unfortunately, the budget rules do not allow us to take that estimate 
into consideration. While we must fund future revenue losses, we cannot 
use future benefits to account for them.
  As an economic fiscal conservative, I, too, believe that the 
Government must live within its means. But there are times when the 
needs of the country are such that we must spend a little to get a lot. 
And I believe that this is one of those rare instances when a waiver is 
in our best interest. Waiving the budget rules for the GATT is a wise 
investment. By providing a more open trading environment for U.S. 
businesses, we gain business growth which leads to greater revenue and 
the creation of more jobs and better opportunities in the long run.
  In sum, Mr. President, this agreement is about jobs and the long-term 
economic growth of the United States. More and more, jobs in this 
country are dependent on the international economy. We have a 
responsibility to strengthen those positions and expand the 
opportunities for American economic growth. This agreement is also 
about strengthening bonds and enhancing global peace and security by 
bringing the economies of the world closer together. With this 
agreement, the United States will be sending the message that we will 
continue our commitment to global economic partnerships in the post-
Cold War era. For these reasons, I urge my colleagues to support this 
  Mr. HOLLINGS. Mr. President, I understand, having talked to our 
distinguished chairman on this side, that I have just a few minutes 
remaining, in order to reserve the 2 hours for tomorrow. I understand 
that is their intent also.
  With that understanding, I can make a few comments; is that correct?
  Mr. MOYNIHAN. That is correct, sir.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that an article 
by Lars-Erik Nelson, ``The Victims of Free Trade,'' be printed in the 
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Nov. 26, 1994]

                       The Victims of Free Trade

       For its next disaster, the Clinton administration is making 
     another one of those blunders that make ordinary Americans 
     wonder, ``Whose side are these guys on?''
       In blind devotion to a perpetually disappointing economic 
     theory, President Clinton and his aides are fighting for 
     swift passage of the GATT, the general agreement on tariffs 
     and trade. Sure, free trade will cost us some jobs in the 
     short run, its advocates admit. But Vice President Al Gore 
     promises that the GATT will be the biggest tax cut in history 
     and ``will lower prices for consumers.''
       Has it not dawned on these folks that America's most 
     burning problem is not that consumer prices are too high? It 
     is that our cities--once the joy of human civilization--are 
     ever more dangerous slums, filled with the unskilled and 
     unemployable victims of what economists celebrate as 
       America has not yet solved the social upheaval of the Great 
     Migration of southern farm workers to the North, yet it is 
     ready to dislocate millions more of its workers in the name 
     of economic efficiency.
       ``The economists never want to talk about the social costs 
     of free trade,'' complains a Senate Democratic source. 
     ``Urban decay is by far the most important problem in the 
       It is particularly mindless for the Clinton administration 
     to press for the GATT now. Its own welfare reform plan--and a 
     far more Draconian one being pushed by Republicans--would 
     force welfare recipients into the job market at the same time 
     that GATT would kill the kind of low-wage, industrial jobs--
     in the garment industry, for example--that traditionally are 
     the first step up the job ladder.
       To the economists, these are ``bad jobs,'' better shipped 
     to low-wage countries. But if you're trying to end welfare, 
     there is no such thing as a bad job. Any job is better than 
     perpetuating welfare handouts, generation after generation.
       Second, previous trade agreements have come with the 
     promise of aid to workers who lose out. The new Republican-
     controlled Congress, however, regards such programs, 
     especially those aimed at inner cities, as ``pork-barrel 
     spending.'' The Republicans would far sooner spend $3 billion 
     for prisons to hold the dislocated than $3 billion for job 
       Resisting free trade is a tricky business. You find 
     yourself on the same side as the paranoid yahoos who opposed 
     fluoridation of water 40 years ago--and for the same 
     reason: They saw the whole thing as an international 
     conspiracy to deprive Americans of their freedom.
       But for millions of Americans, free trade has not lived up 
     to its promise. We are the freest-trading country in the 
     world, and our incomes have stagnated for the past 20 years. 
     once-secure employees live in dread of being laid off in the 
     name of ``global competition.''
       And the argument that free trade creates even better jobs 
     for those who educate themselves is belied by the unending 
     stream of middle-management layoffs and the spectacle of 
     college graduates managing all-night grocery stores.
       Yet the economists keep foisting their theory on the 
     Clinton administration. ``No proposition enjoys greater 
     unanimity among economists than the idea that free-trade 
     will, on net, be a win-win situation,'' says Rob Shapiro, a 
     non-dogmatic economist at the Progressive Policy Institute.
       ``At the same time, we are seeing something we have never 
     seen before--relatively backward countries producing advanced 
     products. Koreans and Mexicans producing automobiles. We have 
     figured out how to export our high-tech factories to low-wage 
     countries--and we have not figured out how to deal with the 
       This is why, Shapiro says, economists close their eyes to 
     the social costs of free trade. ``They don't know how to deal 
     with the problem--but they can't give up the economics of 
     free trade,'' he says. ``The fact is, there are significant 
     social costs.''
       With the economists--and politicians--ducking the question, 
     it has been left to a maverick Anglo-French businessman, Sir 
     James Goldsmith, to raise the alarm about free trade's 
     downside. In a current book, ``The Trap,'' he makes this 
     simple argument:
       ``The real cost to consumers of cheaper goods will be that 
     they will lose their jobs, get paid less for their work and 
     have to face higher taxes to cover the social cost of 
     increased unemployment * * *. As unemployment rises and 
     poverty increases, towns and cities will grow even more 
     unstable. So the benefits of cheap imported products will be 
     heavily outweighed by the social and economic costs. * * *.''
       Yes, I like my VCR. But it wasn't worth losing Brooklyn.

  Mr. HOLLINGS. Mr. President, I ask unanimous consent that a list of 
the organizations in opposition to GATT be printed in the Record at 
this point.
  There being no objection, the list was ordered to be printed in the 
Record, as follows:
  For more information on these issues:


       Friends of the Earth (202) 783-7400
       Greenpeace (202) 462-1177
       National Wildlife Federation (202) 797-6800
       Sierra Club (202) 547-1141


       AFL-CIO Trade Task Force (202) 637-5000
       Amalgamated Clothing and Textile Workers Union (ACTWU) 
     (202) 628-0214
       International Brotherhood of Teamsters (202) 624-6800
       International Ladies Garment Workers Union (202) 347-7417
       International Union of Electronic, Electrical, Salaried, 
     Machine and Furniture Workers (IUE) (202) 296-1200


       The American Cause (703) 827-9200
       Coalition for Americas (202) 546-3003
       The Eagle Forum (202) 544-0353
       U.S. Business and Industrial Council (202) 628-2211


       Citizen Action (202) 775-1580
       Citizens Trade Campaign (202) 879-4297
       Government Accountability Project (202) 408-0034
       National Rainbow Coalition (202) 728-1180
       Ross Perot's United We Stand America (214) 450-8803


       American Corngrowers Association (202) 835-0330
       Institute for Agriculture and Trade Policy (612) 379-5980
       National Family Farm Coalition (202) 543-5675
       National Farmers Union (202) 554-1600
       Rural Coalition (703) 534-1845


       Community Nutrition Institute (202) 462-4700
       Public Citizen (202) 546-4996
       Public Interest Research Group (PIRG) (202) 546-9707
       National Consumers League (202) 639-8140

                       Humane and Animal welfare

       Animal Welfare Institute (202) 337-2332
       American Humane Association (202) 543-7780
       American Society for the Prevention of Cruelty to Animals 
     (ASPCA) (202) 232-5020
       Humane Society of the United States (202) 452-1100
       American Humane Association, Animal Protection Institute, 
     Center for International Environmental Law, Community 
     Nutrition Institute, Defenders of Wildlife, Earth Island 
     Institute, EarthKind, Environmental and Energy Study 
     Institute, Friends of the Earth, and Fund for Animals.
       Greenpeace, Humane Society of the United States, Human 
     Society International, International Fund for Animal Welfare, 
     National Wildlife Federation, Sierra Club, Society for Animal 
     Protective Legislation, US PIRG, World Society for the 
     Protection of Animals, and World Wildlife Fund.


       Ban Waste Coalition and West Valley Coalition--Phil Klasky, 
       Bob Benson, Professor, Loyola University Law School*
       California Citizen Action--Daniel Lambe, Director
       California Communities Against Toxics--Stormy Williams, 
       California Network for a New Economy--Carol Webb, Labor 
       Center for Community Action and Environmental Justice--
     Penny Newman, Director
       Center on Race, Poverty and the Environment--Luke Cole, 
       Citizens for a Better Environment--Mike Belliveau, 
     Executive Director
       Citizens for the Chuckawalla Valley--Donna Charpied, 
       Citizens Clearinghouse for Hazardous Waste--Annamarie 
     Stenberg, Director
       Clean Water Action--Bruce Lee Livingston, California 
       Community Alliance with Family Farmers--Thomas Haller, 
     Executive Director
       Concerned Residents of Commerce--Anthony Thorpe, Director
       Concerned Citizens of Pico Rivera--Ophelia Rodriguez, 
       Concerned Citizens of South Central Los Angeles--Kathleen 
     Allen, Coordinator
       Contra Costa County Central Labor Council--Steve Robeiti, 
     Executive Secretary-Treasurer
       Desert Citizens Against Pollution--Jane Williams, Director
       Desert Environmental Response Team--Ray Kirkham, Director
       Earth Island Institute--Dave Phillips, Co-Executive 
       Eddie Wong, Regional Director, Rainbow Coalition*
       Environmental Coalition of UCLA
       Greenpeace--David Chatfield, Regional Director
       International Ladies Garment Workers Union Pacific Coast 
     Division--Katie Quan, Manager
       Jobs and the Environment Campaign--Jon Mayer, California 
       Labor/Community Strategy Center--Eric Mann
       L.A. Rainforest Action Project--Atosa Soltani, Director
       Mendocino Environmental Center--Gary and Betty Bail, Co-
       Mothers of East Los Angeles/Santa Isabel--Juan Gutierrez, 
       Northern California Interfaith Council on Economic 
     Justice--Sydney Brown, President
       Northern California Labor Council for Latin American 
     Advancement--Frank Martin del Campo, President
       Pacific Advocates--Patricia Schifferle
       People for Clean Air and Water of Kettleman City, CA--Mary 
     Lou Mares, President
       Peninsula Peace and Justice Center--Paul George, Director
       Pesticide Action Network--Monica Moore, Program Director
       Rainforest Action Network--Randall Hayes, Executive 
       Robert McAfee Brown, Professor Emeritus, Pacific School of 
       Sacramento Valley Toxics Campaign--Mark Fleming, Executive 
       Sam Schuchal, Executive Director, California League of 
     Conservation Voters*
       San Diego Environmental Health Coalition--Diane Takvorian, 
     Executive Director
       Sheldon Plotkin, Coordinator, Southern California 
     Federation of Scientists
       Sierra Club Southern California--Larry Freilich, Director
       Sierra Club--Carl Pope, Executive Director
       Sierra Club--Barbara Boyle, Regional Director
       Sonoma County Conservation Action--Mark Green
       South Bay Labor Council--Amy Dean, Business Manager
       San Mateo Central Labor Council--Art Pulaski, Business 
       Southwest Witness for Peace--Lynne Halpin, Grassroots 
       Southern Kern Residents Against Pollution
       Student Environmental Action Coalition--Abdi Soltani, 
       Ted Smith, Executive Director, Silicon Valley Toxics 
       Urban Habitat Program--Carl Anthony, Executive Director


       American Friends Service Committee
       Connecticut Citizen Action Group
       Connecticut Occupational and Safety Hazards
       Connecticut State Federation of Teachers
       Environmentalists to Elect Legislators (ELECT)
       Greenpeace New Haven
       International Association of Machinists
       Labor Party Advocates
       Legislative Education Action Program
       New England Health Care Workers, 1199
       Sierra Club
       United Auto Workers
       United We Stand
       We the People


       AFL-CIO Region V
       Amalgamated Clothing and Textile Workers Union
       Communication Workers of America
       ECO Action
       Georgia Citizen Action
       Georgia State Employees Union
       Graphics Communications International Union
       International Brotherhood of Electrical Workers
       International Ladies Garment Workers Union
       Public Citizen
       Sierra Club
       Southern Organizing Committee for Economic and Social 
       United Food and Commercial Workers Union


       African American Citizen Coalition of Regional Development 
       Amalgamated Clothing and Textile Organization of Retirees 
       Amalgamated Clothing and Textile Workers Union--Chicago and 
     Central States Joint Board
       American Federation of State, County and Municipal 
     Employees Council 31
       American Friends Service Committee Great Lakes Region
       American Income Life Insurance Company
       Bensenville Senior Citizens Club
       Broken Arrow
       Diocese of Joliet Peace and Social Justice Ministry
       Chicago Federation of Labor
       Chicago Greens
       Chicago Journeyman Plumbers Local 130
       Chicago Recycling Coalition
       Chicago Senior Senate
       Coalition of Labor Union Women-Chicago Chapter
       Colombia J/Human Rights Committee
       Congregation of Alexian Brothers, Elk Grove Village
       Congregation of Sisters of Saint Francis of Mary 
     Immaculate, Joliet, Illinois
       Democratic Socialists of America-Illinois
       Diocese of Joliet Peace and Social Justice Ministry
       Federation for Industrial Retention and Renewal
       Greater Chicago Council of Senior Citizens
       Holy Cross/Immaculate Heart of Mary Parish Social Action 
       Illinois Public Action
       Illinois State Council of Carpenters
       Illinois State Council of Machinists
       Illinois State Council of Senior Citizens
       Illinois Stewardship Alliance
       Independent Voters of Illinois/Independent Precinct 
     Organization (IVI-IPO)
       International Association of Machinists Automobile 
     Mechanics Local 701
       International Association of Machinists Retirees Local 1487
       International Association of Machinists Retirees Local 353
       International Association of Machinists Local 113
       International Brotherhood of Teamsters Local 706
       International Brotherhood of Teamsters Local 743
       International Brotherhood of Teamsters Local 714
       International Ladies Garment Workers Union--Midwest Region
       Joliet Franciscan Sisters
       Lake Michigan Federation
       Metro Seniors in Action
       Midwest Center for Labor Research
       Monsignor John Egan, DePaul University*
       Motion Picture Projectionists, Operators and Video 
     Technicians Local 110
       National Coalition of American Nuns
       National Farmers Organization
       Nigaragua Solidarity Committee
       Our Lady of the Ridge Parish Family
       Palos Hills Seniors
       Peoria Environmental Action Committee for the Earth
       Prairie Preservation Society of Ogle County
       Regional Association of Concerned Environmentalists
       Samuel Levin Retirement Centre
       Samuel S. Epstien, MD, Chairman Cancer Prevention Committee 
     University of Illinois at Chicago School of Public Health
       Save our Jobs Committee--Chicago
       Schools Sisters of St. Francis
       Service Employees International Union Illinois Council
       Service Employees International Union Local 46
       Service Employees International Union Local 73
       Sheet Metal Workers Local 115
       Sierra Club
       SOAR Steelworkers Retirees
       St. Nicholas of Tolentine Church, Chicago
       St. Pius V Parish
       The Womens Office--Sisters of Charity, BVM
       Thorium Action Group
       United Auto Workers Union Region 4
       United Auto Workers Retirees Local 59
       United Auto Workers Retirees Local 152
       United Auto Workers Retirees Local 588
       United Food and Commercial Workers Union Local 546
       United Food and Commercial Workers Local 881 Retirees
       University Professional of Illinois Local 4100 IFT, AFT
       U.S. Guatemala Labor Education Project
       Viet Nam Veterans Against the War
       Wellington Avenue United Church of Christ Outreach 
       Women for Economic Justice
       Women for Economic Security
       Women for Guatemala
       8th Day Center for Justice


       Catholic Rural Lie, Sioux City Diocese
       Iowa Citizen Action Network
       Iowa Family Farm Coalition
       Iowa Farmers Union
       Iowa Federation of Labor
       Iowa Peace Network
       Iowa National Farmers Organization
       PrairieFire Rural Action
       Rick Avery, United Auto Workers Local 997, Newton, Iowa*
       Margaret Vernon, Des Moines Presbytery*
       Jay Howe, Rural Caucus, Greenfield, Iowa*
       Fr. John Cain, Coalition to Preserve the Family Farm*


       American Friends Service Committee
       Boston Committee in Solidarity with the People of El 
       Boston Mobilization for Survival
       Central America Solidarity Association
       Citizen Action of Massachusetts
       Citizens for Participation in Political Action
       Clean Water Action
       Communications Workers of America, District One
       Community Church of Boston
       Democratic Socialists of America (Boston)
       Gay and Lesbian Labor Activist Network
       Grassroots International
       Greater Roxbury Workers' Association
       International Brotherhood of Teamsters Local 122
       International Brotherhood of Teamsters Local 504
       IUE Local 201
       Jobs and Environment Campaign
       Jobs with Justice
       Lawrence Grassroots Initiative
       Merrimac Valley Greens
       Massachusetts Public Interest Research Group (PIRG)
       Massachusetts Senior Action Council
       Massachusetts Teachers Association
       Massachusetts Toxics Campaign
       Neighbor to Neighbor
       Service Employees International Union Local 285
       Service Employees International Union Local 509
       United Electrical, Radio and Machine Workers, District 
     Council Two
       United Electrical, Radio and Machine Workers Local 204
       United Electrical, Radio and Machine Workers Local 262
       United Electrical, Radio and Machine Workers Local 271
       United Steel Workers of America Local 12003 (Gas workers)
       Western Massachusetts Coalition for Occupational Safety and 
       Women's Action Coalition


       Amalgamated Clothing and Textile Workers Northern District 
     Joint Board
       American Federation of Television and Radio Artists--Twin 
     Cities Local
       American Federation of Grain Millers Local 118
       American Federation of Grain Millers Local 264
       American Federation of State County and Municipal Workers
       Carpenter Local 1644
       Catholic/Lutheran Northwestern Minnesota Rural Life 
       Central Minnesota AFL-CIO Trades and Labor Assembly
       Clean Water Action Alliance
       Communications Workers of America Local 7200
       Communist Party of Minnesota
       Duluth AFL-CIO Central Body
       Fair Trade Campaign
       Guatemala Solidarity Committee
       Institute for Agriculture and Trade Policy
       International Association of Machinists Lodge 459
       International Association of Machinists Air Transport 
     District 143
       International Association of Machinists Airline Local 1833
       International Brotherhood of Teamsters Local 792
       International Union of Electrical Workers Local 1140
       International Woodworkers of America Local III-33
       Justlife, Minnesota
       League of Rural Voters
       Millrights and Machinery Erectors Local 548
       Minneapolis Central Labor Union Council
       Minnesota Coalition of Labor Union Women
       Minnesota Farmers Union
       Minnesota Green Party
       Minnesota Safe Food Link
       Minnesota Women's Political Alliance
       Minnesotans for Safe Food
       National Organization of Women--Minnesota Chapter
       Oil, Chemical and Atomic Workers Local 6-662
       Oil, Chemical and Atomic Workers Local 6-75
       Oil, Chemical and Atomic Workers Local 6-418
       Oil, Chemical and Atomic Workers Local 6-409
       Red Wing Area AFL-CIO Council
       Resource Center of the Americas
       St. Croix Valley Central Labor Union
       St. Joan of Arc Catholic Church Peace and Justice Committee
       St. Paul Trades and Labor Assembly
       The Working Group on Economic Dislocation
       United Church of Christ, Minnesota Conference
       United Electrical, Radio and Machine Workers Local 1139
       United Paperworkers International Union Local 264
       United Steel Workers of America District 33
       United Steel Workers of America Local 7263
       Veterans for Peace, Minnesota Chapter
       Women Against Military Madness
       Women Religious for Justice


       Jesus People Against Pollution, Marion County
       Chisholm Community Improvement Project, Lincoln County
       Tallahatchie County Union for Progress
       MS Environmental Networking Group
       Southern Echo
       MS Association of Cooperatives
       Federation of Southern Cooperatives (Regional)


       Alternative Energy Resources Organization
       International Brotherhood of Teamsters Local 2
       International Brotherhood of Teamsters Local 190
       Montana Audobon Society
       Montana Farmers Union
       Northern Plains Resource Council
       Operating Engineers Local 400

                               New Jersey

       New Jersey Environmental Federation
       Chemical Workers Association
       Burlington Central Labor Council
       Mercer Central Labor Council
       South Jersey Work On Waste
       Coalition of Union Retirees Organization
       New Jersey Citizen Action

                                New York

       Albany Public School Teachers Association
       Albany Typographical Union
       ACCESS/Attorney--Peter Hill, Oneonta
       Amalgamated Clothing and Textile Workers Union, Glove 
     Cities Area District, NY-NJ Regional Joint Board
       American Lung Association of New York State
       Americans Removing Injustice, Suppression and Exploitation 
       Animal Rights Action
       Babylon Environmental Education Seminar
       Capital District Labor and Religion Coalition
       Central New York Labor Agency
       Citizen Action of New York
       Citizens Against Radioactive Dumping
       Citizens' Environmental Coalition
       Citizens of Wyoming County
       Coalition on West Valley Nuclear Wastes
       Communication Workers of America Local 14164/Tri County 
     Labor Council--Elsa McDonald, Business Agent
       Communication Workers of America Local 1118
       Communication Workers of America Local 1127
       Cornerstone Project for Sustainable Agriculture
       Don't Waste Connecticut
       Don't Waste New York
       Earth Island Institute
       Environmental Research Foundation
       Farmworker Legal Services of New York
       Five Towns Forum
       Fort Crailo Neighborhood Association
       Great Neck SANE/ Peace Action
       Huntington Peace Center
       Industrial Workers of the World
       Injured Workers of New York
       International Association of Machinists and Aerospace 
     Workers--William Sparro, Business Rep., Elmira
       International Association of Machinists and Aerospace 
     Workers District 58
       International Brotherhood of Electrical Workers/Binghamton
       Long Island Alliance for Peaceful Alternatives
       Long Island Progressive Coalition
       Marxist Forum of Great Neck
       Nassau Democratic Socialists of America
       New York Coalition for Alternatives to Pesticides
       New York State Grange
       New York State Greens
       New York State Labor and Environment Network
       New York State Sustainable Agriculture Working Group
       Oil, Chemical and Atomic Workers International Union
       Protect a Clean Environment (PACE)
       Radioactive Waste Campaign
       Rainbow Alliance for a Clean Environment
       Research and Education Project of Long Island
       Rural Opportunities, Inc., Safety and Health Unit
       Scenic Hudson, Inc.
       Security and Law Enforcement Employees Council 82, American 
     Federation of State, County and Municipal Employees, AFL-CIO
       Service Employees International Union Local 200D
       Sierra Club Atlantic Chapter
       South Shore Citizens for Survival
       Syracuse Peace Council
       Syracuse Real Food Coop--Larry Rutledge, President
       Transport Workers Union Local 100
       United Auto Workers Local 624
       United Auto Workers Local 1686
       United Electrical, Radio and Machine Workers of America
       United Paperworkers International Union Region II
       United Steelworkers of America
       United We Stand America--Vincent Stark, Gilbertsville
       United We Stand America--Vincent Stark, Gilbertsville
       United We Stand America--James A. Zuch, Syracuse
       Work and Environment Initiative


       Oklahoma Organic Association--Gordon Graham, President
       Oklahoma Toxics Campaign--Earl Hatley, Director
       Sierra Club--Mike Arnett, Regional Chair Oklahoma City


       Amalgamated Clothing and Textile Workers Union
       Central America Task Force
       Central Oregon Forest Issues Committee
       Committee in Solidarity with the Central American People
       Friends of British Columbia Forests
       International Association of Machinists and Aerospace 
       International Chemical Workers Union, Local 109
       Labor-Environment Solidarity Network
       Kalmiopsis Audubon Society
       Native Forest Council
       Northwest Coalition for Alternatives to Pesticides
       Northwest Environmental Advocates
       Northwest Farmers Union
       Northwest Oregon Local Council
       Oil, Chemical and Atomic Workers International Union
       Oregon AFL-CIO
       Oregon Grassroots
       Oregon League of Conservation Voters
       Oregon Natural Desert Association
       Oregon Natural Resources Council
       Oregon Peaceworks
       Oregon Tilth
       Oregon Wildlife Federation
       Pacific Party
       Portland Central American Solidarity Committee
       Portland Jobs with Justice
       Portland Peace Works
       Portland Rainbow Coalition
       Sierra Club, Oregon Chapter
       United Consumers of Oregon
       United Steelworkers of America District 38
       Women's International League for Peace and Freedom
       Woodworkers Division, International Association of 


       Food & Water, Inc.
       International Brotherhood of Teamsters
       Peace and Justice Coalition
       Rural Vermont
       Sierra Club
       United Electrical, Radio, and Machine Workers of America
       Vermont Jobs with Justice Coalition
       Vermont Natural Organic Farmers Association
       Vermont Public Interest Research Group
       Vermont State Labor Council, AFL-CIO


       Friends of the Earth
       Northwest Office
       Northwest Sierra Club
       Washington Toxics Coalition
       Washington State Rainbow Coalition
       Washington Biotechnology Action Council


       Allied Council of Senior Citizens of Wisconsin
       Amalgamated Clothing and Textile Workers Union Wisconsin 
       A.O. Smith Steelworkers DALU Local 19806
       Citizens for Fairness to U.S. & Mexico Workers
       HONOR, Inc.--Honor Our Neighbors Original Rights
       International Ladies Garment Workers Union District 3
       Jobs with Peace
       League of Rural Voters
       Milwaukee County Labor Council
       United Electrical, Radio, and Machine Workers of America. 
       University of Wisconsin Greens
       University of Wisconsin at Milwaukee Latino Student 
       University of Wisconsin at Milwaukee Student Association
       United Paperworkers International Union Local 7232
       Wisconsin Citizen Action
       Wisconsin Family Farm Defense Fund
       Wisconsin Farmers Union
       Wisconsin Farmland Conservancy
       Wisconsin Greens
       Wisconsin Injured Workers Vocational Rehabilitation Center
       Wisconsin Milk Marketing Cooperative
       Wisconsin Public Interest Research Group (WISPIRG)
       Wisconsin Sierra Club
       Wisconsin United We stand America
       Wisconsin for Peace

     *Organization listed for identification purposes only.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that an article 
by Edward Luttwak in the Sunday Washington Post, ``Will Success Spoil 
America?'' be printed in the Record at this point.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Nov. 27, 1994]

Will Success Spoil America?--Why the Pols Don't Get Our Real Crisis of 

                         (By Edward N. Luttwak)

       Having tried George Bush, who showed himself blithely 
     unaware of the very existence of the problem, and having 
     tried Bill Clinton, who spoke as if he knew all about it but 
     failed to act, the American electorate has now given a two-
     year opportunity to the congressional Republicans to show 
     that they can understand the problem and also come up with 
     valid remedies.
       The problem in question is the unprecedented sense of 
     personal economic insecurity that has rather suddenly become 
     the central phenomenon of life in America, not only for the 
     notoriously endangered species of corporate middle managers, 
     prime targets of today's fashionable ``downsizing'' and 
     ``reengineering,'' but for virtually all working Americans 
     except tenured civil servants--whose security is duly 
       Individual Americans who are neither economists nor 
     statisticians do not focus on the economy's overall rate of 
     growth, but rather on the security of their own jobs. Hence 
     the vigorous recovery that provoked the Federal Reserve's 
     anti-inflationary crusade cannot assuage personal fears. And 
     the source of these fears is obvious: The once highly 
     regulated and internationally dominant U.S. economic system 
     has given way to a far more dynamic but also much more 
     unstable turbo-charged capitalism open to the world's 
     competition, in which no single firm, no particular industry 
     and certainly no job or self-employment niche can be secure 
     any longer. However tiny its effect, the General Agreement on 
     Tariffs and Trade (GATT) Treaty now before this lame-duck 
     Democratic Congress, can only add to those worries.
       There is nothing new about the ``creative destruction'' of 
     free competition. Only if outdated economic structures and 
     obsolete working methods are first swept away, freeing up 
     their human and material resources, can more efficient 
     structures and methods arise in their place. What is new is 
     only a matter of degree, a mere acceleration in the pace of 
     structural change at any given rate of economic growth. But 
     that, as it turns out, is quite enough to make all the 
       The rise and decline of skills, firms and entire industries 
     is now quite rapid even when there is zero growth, becoming 
     that much faster when the economy does grow. In the process, 
     the most enterprising or most fortunate individuals are 
     offered more opportunities for rapid enrichment than ever 
     before, and even tiny firms can aspire to fabulous growth. 
     (Microsoft, born 1975, is the classic example). At the same 
     time, however, the great majority of individuals has 
     experienced not only unprecedented job upheavals, but also an 
     absolute 20-year decline in personal earnings.
       Republicans of the ``family values'' persuasion should have 
     been the first to recognize that more disruptive change has 
     been inflicted on working lives and entire industries than 
     the connective tissue of many families and communities has 
     been able to withstand. As it is, only a few paleo-
     conservatives of Pat Buchanan's persuasion have recognized 
     the far-from-mysterious economy-society connection. Hence in 
     the standard two-part Republican political speech, Part I 
     still celebrates the virtues of dynamic economic growth, 
     propelled by technological progress, deregulation and free 
     trade, while Part II mourns the decline of the family and 
     community ``values'' eroded precisely by the constant 
     dislocations caused by our turbo-charged economy.
       So far, the blatant contradiction at the very core of what 
     has become mainstream Republican ideology (``family values'' 
     and dynamic economic growth) has gone mostly unremarked. And 
     in any case it is not the Democratic Party as it now defines 
     itself that can benefit from the Republican contradiction. 
     Americans who work and earn but who fear for their economic 
     future cannot benefit from what the Democrats have to offer: 
     more taxes, more redistribution and more favors for any group 
     that can claim victim status.
       Both political parties promise more growth through the 
     magic of an unfettered economy. But what most working 
     Americans now seem to want is not the possibility of better 
     jobs or higher incomes through growth, (because they have 
     seen that it need not increase their earnings) but rather 
     security for the jobs and income they already have.
       A vast segment of the political spectrum is thus left 
     vacant by the mainstream Republican contradiction on the one 
     hand, and by mainstream Democratic ``assistentialism'' on the 
     other. That was the space briefly occupied during the 1992 
     election year by the caprices of Ross Perot, who burdened his 
     core message of personal economic security with strange 
     preoccupations. And that is the space that the Republicans 
     will leave vacant for another third-party candidate if they 
     do not address the problem of personal economic security by 
       Perhaps the most obvious cause of accelerated structure 
     change is the retreat of government regulatory controls. 
     (Actually the totality of regulations continue to increase, 
     but commercial as opposed to health, environmental and anti-
     discriminatory regulation has certainly diminished, and 
     continues to do so.) With that, competition and efficiency 
     both increase and once secure enterprises must face the full 
     perils of the market.
       The airline industry is the exemplary case. When still 
     highly regulated, the moderately inefficient airlines were 
     consistently profitable, commonly offering lifetime jobs for 
     all their employees. While their profits were not 
     spectacular, they earned enough to pay both rank-and-file and 
     management employees rather well, and to serve as a stable 
     and rich customer base for the aircraft industry.
       Today's deregulated industry by contrast, consists largely 
     of airlines perpetually within sight of bankruptcy, which 
     they try to avert by extreme cost-cutting (service standards 
     have notoriously collapsed) and desperate marketing 
     maneuvers. Almost all have imposed serious wage reductions, 
     layoffs or both. By contrast, almost all now pay much, much 
     more to their top managers. And all surviving airlines offer 
     such low domestic fares that, unlike the days of regulation, 
     even Americans with ample free time and/or low income now 
     habitually travel by air.
       Airline deregulation has also destabilized the aircraft 
     industry. Domestic airlines fly more aircraft than before, 
     but tend to keep them until they are worn out. Lockheed has 
     stopped manufacturing airliners altogether; McDonnell Douglas 
     is too weak financially to develop any new airlines on its 
     own (and seeks Asian risk-sharing partners at the price of 
     sharing its key technologies); and Boeing's future is secure 
     only because of sales to foreign airlines--most of which are 
     still highly regulated.
       Overall, airline regulation served the interests of 
     Americans-as-producers, at the expense of Americans-as-
     consumers. Now it is the other way around. From a strictly 
     economic point of view, the greater efficiency brought about 
     by cut-throat competition may justify all. But from a social 
     point of view there is no such compensation.
       With its stable, well-paid jobs the regulated airline 
     industry of the past obviously contributed to family and 
     social stability. By contrast, today's chaotically unstable 
     airlines are very disruptive for families and communities, as 
     they rapidly expand or drastically shrink over a matter of 
     months or even weeks, as they shift hubs and maintenance 
     bases, each time hiring and firing employees in their 
     constant maneuvering for market survival. It would be a nice 
     bit of sociological research to calculate the number of 
     divorces and problem children caused by deregulation-induced 
     economic stresses on the families of airline employees.
       Partly because there are no such statistics, we are 
     accustomed to simply ignore the non-economic consequences of 
     de-regulation, not just in the airline industry but in all 
     industries. Yet it is intuitively obvious that social losses 
     must outweigh economic gains in many cases.
       Another obvious cause of accelerated structural change in 
     the U.S. economy is the rather sudden computerization of 
     office work. After being long delayed, the increased 
     efficiencies that electronic computation, data storage, 
     reproduction and internal communication machines were 
     supposed to achieve bit by bit, finally arrived in bulk 
     during the 1980s. Partly because even senior managers can now 
     work these machines; partly because junior managers are 
     increasingly compelled to use those machines in place of 
     clerical help; and partly because ``local-area networks'' 
     allow managers at the next level up literally to oversee the 
     work that their subordinates are doing or not doing--for all 
     these reasons the computerization of office-work has suddenly 
     become a near-universal reality. With that, white-collar 
     workers too are now exposed to the mass firings and 
     diminishing employment prospects that have long been the lot 
     of blue-collar workers in mature industries.
       Management consultants prattle about ``re-engineering the 
     corporation,'' but the very real economies that Wall Street 
     anticipates by bidding up the shares, thereby enriching top 
     executives with stock options, come not from the background 
     music of management-consulting jargon but rather from the 
     firing of telephone-answering secretaries replaced by voice-
     mail systems,of letter-writing secretaries replaced by word-
     processing and fax-boards, and of filing secretaries replaced 
     by electronic memories, with the resulting elimination of 
     their clerical supervisors, and the middle managers who used 
     to supervise those supervisors.
       That is why businesses whose revenues and profits are 
     increasing nicely in the present recovery are nevertheless 
     not adding white-collar or middle management positions; why 
     businesses whose revenues and profits are stable are 
     eliminating quite a few of those positions; and why 
     businesses in decline are drastically reducing both white 
     collar and management positions.
       To be sure, technological progress also allows many new 
     jobs to emerge, often very good ones. Unfortunately, as the 
     continuing decline in the average hourly earnings of all 
     employed Americans proves beyond a doubt, the loss of a great 
     many so-so white collar jobs continues to outweigh increases 
     in exciting new-technology jobs. A recent highly optimistic 
     column by Robert J. Samuelson inadvertently showed why the 
     totality of new jobs is not a satisfactory replacement for 
     the old white collar jobs that have been lost.
       The Samuelson list included such classic new-tech companies 
     as Intel, Microsoft, Apple Computer and Genentech. Simple 
     arithmetic, though, showed that all the companies in the list 
     employed a grand total of 62,500 people--only 500 more than 
     Home Depot alone, a retail chain that offers mostly low-paid 
     and part-time jobs.
       That indeed is the true destination of most fired white-
     collar workers; lower-status jobs in retail sales or other 
     cheap services, with diminished earnings, smaller fringe 
     benefits, and scant if any job security. (Since the table was 
     published there have been mass firings at Apple). It is 
     interesting to note that the table also included Nike, which 
     manufactures mostly outside the United States, and Southwest 
     Airlines, a non-union company that pays the lowest wages in 
     the industry, forcing competing airlines to do the same in 
     each regional market it moves into.
       Once again, as with deregulation, structural changes 
     induced by the arrival of new technologies are undoubtedly 
     increasing the total efficiency of the U.S. economy. The 
     trouble is that they are enriching only the architects of 
     change and those who can invest in their ventures, while 
     impoverishing a net majority of all working Americans.
       The most blatantly obvious (if not most important) cause of 
     structural change is the so-called ``globalization'' of the 
     U.S. economy. Negotiated trade agreements, including the new 
     GATT Treaty have been only one factor in increasing the 
     exposure of the economy to the competitive pressures and 
     opportunities of the global marketplace. Other factors 
     include cheap and instant telecommunications that ease the 
     formation of new commercial relationships; the diminishing 
     incidence of transport costs and the hammering down of once 
     diverse consumer preferences into uniformity by trans-
     national mass media imagery and advertising.
       Globalization means that U.S. sales of goods or services 
     can expand far beyond the limits of the domestic market--and 
     of course that the U.S. production of many kinds of goods and 
     services, and the related employment, can be displaced at any 
     time by cheaper production from someplace else in the world. 
     True, globalization as such does not determine U.S. wage 
     levels. Even the U.S. worker who happens to be competing 
     head-on with an Indian counterpart is paid according to the 
     supply and demand for his skills in the U.S. labor market, 
     and not the Indian market. But life for the vast number of 
     Americans who now participate in the global economy, 
     wittingly or unwittingly, is full of exciting surprises and 
     catastrophic downfalls.
       Viewed in the very narrow national-accounting perspective 
     of all our globalization debates, whether NAFTA last year or 
     the GATT Treaty now, any increase in the combined income of 
     all Americans--no matter how unevenly distributed--fully 
     justifies going ahead to globalize some more. On that there 
     seems to be a perfect consensus between mainstream Democrats 
     and mainstream Republicans. Both take it for granted that 
     globalization has increased and can continue to increase the 
     country's total GNP (true), that it must therefore increase 
     the income of all Americans or at least most of them (false), 
     and that because protectionism is always bad for U.S. 
     consumers (true), it must always be bad for the country 
       What is missing is anything resembling a social 
     perspective. In fact it is simply taken for granted that 
     economic efficiency must never be compromised in the 
     slightest to suit the needs of society. That would make 
     perfect sense if the United States were a very poor country 
     with a perfectly peaceful and tranquil society. As it is, the 
     United States has much more wealth than social tranquility 
     and would benefit much more from economic stability than from 
     further economic growth, inevitably achieved by disruptive 
     structural changes of one kind or another.
       If one does take into account the psychological and 
     practical need of families and communities for a reasonable 
     degree of stability, very different criteria apply to 
     globalization as well as to deregulation.
       Those are the very criteria that have shaped Japan's 
     protracted resistance to the globalization of its own 
     economy, as well as to deregulation. U.S. trade negotiators 
     are forever arguing the merits of free markets, but the 
     overall purpose of Japan's many overt and covert trade 
     barriers and domestic regulations is precisely to protect 
     Japanese society from the disruptive effects of any 
     competition, foreign or domestic. Small shopkeepers are 
     protected by a Large-Scale Retail Law that greatly restricts 
     the spread of chain stores, supermarkets and department 
     stores. Craftsmen threatened by cheaper imports are protected 
     by unwritten customs house conspiracies as well as overt 
     barriers. And many industries, including low-tech paper and 
     plywood, have their own informal protective arrangements, 
     while high-tech industries are officially assisted as well as 
     protected. As a result, Japanese-as-consumers must pay very 
     high prices, but Japanese-as-producers enjoy all the benefits 
     of personal economic security.
       American visitors immediately notice the tranquility of 
     Japanese crowds, and the conspicuous absence of the free-
     floating anger that has become a sinister feature of American 
     life, and a deadly one at time. They must attribute all this 
     calm to the homogeneity of Japan's population, or its 
     ancestral discipline. But they would be wrong: Before its all 
     powerful bureaucracy stabilized Japan's economy with its 
     regulations and protectionism, the country witnessed a great 
     many very violent strikes, any number of political 
     assassinations and frequent mass demonstrations that often 
     degenerated into outright street fighting.
       To be sure, the Japanese system sacrifices economic 
     efficiency at every turn, and the consumer pays the price 
     every time. It is a fact that the actual Japanese standard of 
     living is on average much lower than the American, even 
     though average Japanese money incomes are now substantially 
       But that is a very incomplete truth, for it only includes 
     purely material factors, overlooking society-wide 
     considerations that count for much more--even in purely 
     monetary terms.
       When I drive into a gas station in Japan, three or four 
     clearly underemployed young men leap into action to wash and 
     wipe the leadlights and windows as well as the windscreen, 
     check tire pressures and all the different oils, in addition 
     to dispensing the fuel. For that excellent service, I have to 
     pay a very high price for the gasoline. The Japanese 
     bureaucracy, determined to protect those low-end jobs for 
     youths who lack the talent for better employment, as well as 
     small gas stations in rural areas, flatly prohibits self-
     service gas pumps, and in any case forces all gas stations to 
     compete by offering lavish service because fuel prices are 
     fixed by the government and price-cutting is banned.
       Back in America, I fill my own tank much more cheaply from 
     a self-service pump, but there also three or four young men 
     are waiting--sometimes in person but certainly by 
     implication. But because they are not employed by the gas 
     station, or by anybody else, I do not have to pay their wages 
     through government-imposed high prices for my gas. That is 
     where U.S.-style economic analysis stops: Japanese consumers 
     are being exploited, while the free market provides American 
     consumers with cheap gas.
       But in reality, I still have to pay for those young men who 
     are not employed by the gas station. My car insurance rates 
     are higher because of their vandalism and thefts, my taxes 
     must be higher to pay for police, court and prison costs and 
     even a little by way of welfare benefits. If I am very 
     unlucky, I may have to pay in blood. In a recent article on a 
     Washington youth who killed a Korean immigrant at the age of 
     17, while absent from a psychiatric clinic where he had been 
     sent for killing a taxi driver at the age of 15, it was 
     parenthetically noted that more than $100,000 had been spent 
     on his psychiatric treatment; his 30-year prison term will 
     cost another $750,000 or so.
       Not counting two deaths and his trial costs, the cost of 
     not employing that one youth would pay for at least 37,777 
     gallons of gasoline--even at very high Japanese prices. 
     American free-market gasoline is thus very expensively cheap, 
     as compared to Japan's employment-generating, cheaply 
     expensive gasoline.
       There is no assurance of course that those young men whom I 
     see loitering would actually take gas station jobs if any 
     were available for them. But what is certain is that in Japan 
     the government acts to ensure that there are job openings for 
     youths incapable of more demanding employment, while in the 
     United States, nothing must stand in the way of free-market 
     efficiency, very narrowly defined to exclude any and all 
     social consequences.
       As it happens, in Japan even the bureaucracy is now 
     beginning to discuss deregulation. But the currently 
     victorious Republicans might still benefit from glancing over 
     at the Japanese model. As of now, we have not only unemployed 
     youths but also a great many small-town shop-keepers facing 
     the relentless spread of Wal-Mart and its ilk; textile 
     workers imminently threatened by imports and employees 
     everywhere caged with corporate tigers out to fire them if 
     they possibly can.
       If the Republicans too only offer more economic growth and 
     yet more social disruption, by 1996 the electorate will be 
     ready to try out whatever third party comes along--or lacking 
     that it may even vote for the Democrats if only to show its 
     displeasure once again.

  Mr. HOLLINGS. Mr. President, I ask unanimous consent that a letter 
from Public Citizen to Ambassador Kantor be printed in the Record.
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                                   August 3, 1994.
     Hon. Michael Kantor,
     600 17th Street N.W.,
     Washington, DC.
       Dear Ambassador Kantor: Critics and supporters of the 
     Uruguay Round GATT agreements agree that they are far-
     reaching in their impact. The decision about whether the 
     agreements should be approved in their present form and 
     whether the United States should enter the World Trade 
     Organization (WTO) should be made carefully and cautiously, 
     after full and informed debate and discussion among the 
     American people.
       As the negotiator and prime supporter of the trade pact, 
     you wish to emphasize what you believe to be the positive 
     features of the agreements and the WTO. As a government 
     official, however, you have an obligation also to honestly 
     and reasonably report on--and at least acknowledge--
     ambiguities or drawbacks contained in the agreements you are 
       As the debate over the WTO and the new GATT has proceeded, 
     you and your deputies have increasingly slighted this public 
     official duty. Your response to detailed criticisms or 
     carefully expressed concerns has been to dismiss the critics 
     as ill-informed or to answer them with misleading statements, 
     distortions and deceptions.
       The purpose of this letter is to rebut, for the public 
     record, a number of your long list of erroneous statements, 
     and to urge you to reconsider your approach to the WTO-GATT 
     debate and to give the American people a decent interval of 
     time to digest the WTO-GATT proposal.
       Erroneous Statement Number 1: The World Trade Organization 
     is not much different than the existing GATT, thus fears 
     about sovereignty are misplaced.\1\
     Footnotes at end of letter.
       Correction: The existing GATT is an international business 
     contract between nations (like NAFTA) who are called 
     contracting parties. Congressional approval of the Uruguay 
     Round would make the United States a member of a permanent 
     new global trade agency, the World Trade Organization (WTO). 
     The WTO would: maintain an international ``legal 
     personality'' akin to the United Nations;\2\ possess on-going 
     rule making capacity;\3\ and operate a binding dispute 
     resolution system whose decisions would be enforced with 
     trade sanctions and fines.\4\
       The creation of a new standing organization has great 
     significance. As a contractual arrangement rather than an 
     independent actor, GATT has owed its political legitimacy to 
     the consent of the GATT contracting parties. GATT has been 
     cautious in taking actions without express authorization, 
     and, because signatories to GATT did not cede any power to a 
     standing organization, has operated almost exclusively by 
       A vote for the Uruguay Round would dramatically alter both 
     the political and legal status of the GATT/WTO. Reflecting 
     the WTO's legal status and enhanced political authority, 
     important decisions under the WTO regime would be made by 
     one-country, one-vote voting.\5\
       Unlike GATT, the World Trade Organization includes an 
     affirmative international obligation to ``ensure the 
     conformity of [a country's] laws, regulations and 
     administrative procedures'' with the WTO rules.\6\ In its 
     April 1994 report on U.S. laws that allegedly violate the WTO 
     mandate, the European Union lays out the U.S. obligation 
     clearly: ``The comprehensive multilateral dispute settlement 
     mechanism which has been agreed upon in the framework of the 
     World Trade Organization will ... oblige [countries] to bring 
     their domestic legislation into conformity with all of the 
     Uruguay Round agreements.\7\
       Erroneous Statement Number 2: The WTO will operate by 
     consensus; ``[in] fact, Article IX of the WTO Agreement 
     codifies what was merely a custom in the GATT. It makes 
     consensus the governing principle for WTO for decision-
       Correction: The Administration has regularly cited only a 
     portion of the relevant WTO agreement provision on decision-
     making. Administration officials refer to the first sentence 
     of Article IX-1 of the Agreement Establishing the WTO. ``The 
     WTO shall continue the practice of decision-making by 
     consensus followed under the GATT,...'' But Administration 
     officials consistently fail, in Congressional testimony and 
     otherwise, to cite the next sentence, which reads, ``Except 
     as otherwise provided, where a decision cannot be arrived 
     at by consensus, the matter at issue shall be decided by 
     voting--each member of the WTO shall have one vote.''\9\
       Important decisions that would be made by majority and 
     supermajority voting, instead of consensus, include: 
     decisions to amend the WTO rules;\10\ interpretations of the 
     WTO rules;\11\ decisions to allow additional countries to 
     become WTO Members;\12\ and decisions to start new 
     negotiations and implement the results of such 
     negotiations.\13\ Decisions to adopt the ruling of WTO 
     dispute resolution panels would be taken by reverse 
     consensus, requiring all countries to agree not to adopt a 
     panel ruling.\14\
       Indeed, rather than consensus decision-making being the 
     rule under the proposed WTO, it is the specifically cited 
     exception, and is only specifically cited in the WTO 
     Agreement in the context of amendments to five specific WTO 
     or GATT articles.\15\
       Erroneous Statement Number 3: Under the WTO, no substantive 
     change in the rights and obligations of the United States can 
     occur under any of its provisions unless the United States 
     agrees to it.\16\
       Correction: USTR's claim that no decisions affecting U.S. 
     ``rights and obligations'' under the WTO can be taken without 
     its agreement is clearly undermined by the provisions on 
     initiating and implementing new negotiations by a majority 
     vote of the Ministerial Conference.\17\ However, even under 
     Article X of the Agreement Establishing the WTO, which 
     provides special procedures for amending provisions that 
     would alter a WTO Member's rights and obligations, the 
     decision about whether a proposed amendment does alter such 
     rights and obligations is taken by a three-fourths vote.\18\ 
     If a three-fourths majority agrees that such rights and 
     obligations are not affected, then amendments can be voted by 
     a two-thirds majority with the results binding on all 
     Members.\19\ Even if three-fourths of the WTO Members decide 
     that a proposed amendment does alter rights and obligations 
     and the amendment is adopted by a two-thirds vote and only 
     applies to the members voting for it, a three-fourths vote of 
     the WTO Members can decide whether the Members who do not 
     accept the amendment shall still be allowed to remain 
       Erroneous Statement Number 4: The existing GATT provides 
     for majority voting, thus the Uruguay Round is ``much more 
     protective of U.S. sovereignty'' by moving decision-making 
     from majority to supermajority voting.\21\
       Correction: Because the International Trade Organization 
     (ITO) proposed in 1947 was not approved by the U.S. Senate, 
     GATT has never had the political legitimacy to activate its 
     voting rules. GATT virtually never operated by any voting. 
     The last GATT vote was in 1959. In fact, as USTR regularly 
     emphasizes in other contexts, GATT decisions are made by 
     consensus. Thus, the real change with the establishment of 
     the WTO is the switch from consensus decision-making to one-
     nation, one-vote voting.
       This change effectively eliminates the veto the United 
     States has enjoyed as a sovereignty safeguard under the 
     existing GATT. Under the WTO, the United States would not 
     maintain the effective veto now provided by consensus 
     decision-making in dispute resolution and other decisions 
     under the current GATT.
       In the context of dispute resolution, the United States 
     would specifically lose a veto which it has had available 
     under the existing GATT and used to stop the 1991 tuna-
     dolphin ruling. The WTO's proposed dispute settlement process 
     would be unique among international organizations in 
     requiring consensus to stop action rather than consensus to 
     commit a sovereign nation to international action. The 
     rulings of the WTO's dispute resolution tribunals would be 
     automatically adopted 60 days after publication, unless every 
     WTO Member, including the victorious plaintiff nation, 
     opposes adoption.\22\ (An internal appeal is provided with a 
     similar negative veto which would be required to stop 
     adoption for its ruling.\23\) Similarly, if the United Stats 
     refused or failed to repeal or revise a law held to be an 
     illegal trade barrier, after a set number of days, the WTO 
     would automatically authorize trade sanctions unless every 
     WTO Member including the complaining nation opposed 
       In non-dispute resolution contexts, there is no veto 
     because there is no consensus decision-making either, except 
     for five WTO or GATT articles specifically listed under 
     Article X-2 of the Agreement Establishing the WTO for which 
     consensus is required to approve an amendment.
       In sum, not only does the United States lose the veto it 
     now has under the current requirement of consensus to adopt a 
     panel ruling and consensus to authorize sanctions, it would 
     now (after an unfavorable WTO tribunal ruling) have to build 
     a unanimous consensus just to stop WTO action against it.
       Erroneous Statement Number 5: Congress maintains full 
     control over the passage, maintenance and repeal of U.S. laws 
     under the World Trade Organization's regime.\25\ ``A WTO 
     dispute settlement panel recommendation has no effect on U.S. 
       Correction: While it is true that only Congress can 
     establish, alter or repeal a federal law, WTO tribunals would 
     have the authority to determine the WTO-legality of U.S. laws 
     and to exert enormous pressure on the United States to alter 
     laws found ``WTO-illegal.'' The WTO could force Congress into 
     making a cruel choice: either alter or repeal a law 
     determined to be WTO-illegal or face perpetual trade 
     sanctions against any U.S. industry the winning country 
     chooses.\27\ Moreover, the threat of such challenges and the 
     ensuring no-win dilemma would have a chilling effect on 
     Congress, deterring the legislature from passing laws that 
     are claimed by opponents in the United States and in other 
     WTO nations to be WTO-illegal; and the threats would also 
     have a chilling effect on proposals by both agencies and 
     citizen groups.
       Erroneous Statement Number 6: Countries won't follow 
     through in using WTO-authorized sanctions against the United 
     States because the United States is the largest trading 
     nation in the world and other countries would be reluctant to 
     run the risk of closing themselves off from U.S. markets.\28\
       Correction: Logically, the administration cannot have it 
     both ways. The WTO cannot be a big stick to open markets when 
     wielded by the United States, yet a limp reed when held by 
     others over the United States. Either no WTO Members--
     including the United States--will use the powerful new 
     dispute resolution mechanism, or the United States and other 
     countries will use it.
       The WTO--with its automatic imposition of perpetual fines 
     or perpetual cross-sector retaliatory sanctions in cases 
     where a domestic law that if found to be WTO-illegal is not 
     altered or eliminated--would give foreign countries enormous 
     leverage over the United States. Moreover, unlike NAFTA, the 
     WTO member countries would include two major trading powers: 
     Japan and the European Union. Both have threatened trade 
     measures against the United States when displeased by U.S. 
     trade behavior before, as has Canada. Under the WTO, these 
     countries would be authorized to take such actions against 
     the United States with full approval and support of a global 
     agency and its Members.
       Finally, it is peculiarly reprehensible to state, as the 
     Administration prepares to enter the United States into a 
     powerful new international organization with a vast array of 
     attendant obligations, that the United States does not intend 
     to respect its international commitments.
       Erroneous Statement Number 7: WTO dispute settlement panels 
     do not have the power to make ``decisions'' or impose 
     solutions. Panels will issue reports containing their views 
     on the dispute and a recommendation to the dispute 
       Correction: The actual language of the Dispute Settlement 
     Understanding paints quite a different picture. It reads, 
     ``Within sixty days of issuance of a panel report to the 
     Members, the report shall be adopted at a DSB (Dispute 
     Settlement Body) meeting unless one of the parties to the 
     dispute formally notifies the DSB of its decision to appeal 
     or the DSB decides by consensus not to adopt the 
     report.''\30\ Appeals are limited to a review of the 
     application of GATT rules to the facts and must be completed 
     in 60 days.\31\ ``An appellate report shall be adopted by the 
     DSB and unconditionally accepted by the parties to the 
     dispute unless the DSB decides by consensus not to adopt the 
     appellate report within thirty days following its issuance to 
     the Members.''\32\ ``Where a Panel or Appellate Body 
     concludes that a measure is inconsistent with a covered 
     agreement, it shall recommend that the Member concerned bring 
     the measure into conformity with that Agreement''.\33\ 
     ``Compensation and the suspension of concessions or other 
     obligations are temporary measures available in the event 
     that the recommendations and rulings are not implemented 
     within a reasonable period of time.''\34\
       In summary, once a three-person tribunal rules and its 
     decision is approved by the internal WTO appellate body (if 
     an appeals is even taken), the decision is final, unless all 
     members of the WTO arrive at a consensus to reject the 
     tribunal decision. Then a country must change its law or face 
       Erroneous Statement Number 8: The United States can 
     maintain any food safety or environmental standard as long as 
     it based on science.\37\
       Correction: ``Based on science'' is only one of a series of 
     tests in the Uruguay Round food standards that U.S. food laws 
     must pass to avoid being labelled an unfair trade barrier 
     that must be eliminated.\38\ In fact, even supporters of the 
     Uruguay Round have admitted to the National Journal that many 
     U.S. laws would not meet some of the proposed WTO 
       The most worrisoms tests are those specifying the means a 
     country may use to obtain even a WTO-legal objective. Two 
     such ``means'' tests are the ``least trade restrictive'' 
     means test and a rule prohibiting countries from 
     distinguishing products on the basis of how they were 
     produced. (For instance, protecting dolphins by 
     distinguishing between fishing techniques that are dolphin 
     safe and those that kill large numbers of dolphins.)
       Under the least trade restrictive rule, a U.S. law would 
     fail to pass WTO muster--no matter how acceptable the law's 
     goal might be in WTO terms--if the means used to accomplish 
     that goal is not the least trade restrictive.\40\ Congress 
     would have to repeal or alter any law found to have failed 
     this test by a WTO tribunal, or the United States would face 
     perpetual fines or trade sanctions. Indeed, in our February 
     1993 meeting, you acknowledged your own concern about the 
     ``least trade restrictive'' test, which you said you were 
     able to limit somewhat in NAFTA.
       As for the prohibition on distinction based on ``process 
     standards,'' in early 1993, you expressed dismay to a large 
     gathering of environmental and consumer representatives about 
     the application of this rule to the U.S. Marine Mammal 
     Protection Act in the successful 1991 Mexican challenge of 
     that U.S. law. As applied in the GATT tuna-dolphin cases, 
     this rule required the United States to treat tuna caught 
     with methods that result in high dolphin-kill rates and that 
     caught with dolphin-safe methods the same. Applied in another 
     context, it could require the United States to treat goods 
     made with ozone-depleting processes and those made with other 
     methods in the same fashion if the goods were physically the 
       The least trade restrictive means test and process-
     distinction tests have been the basis of the two recent GATT 
     challenges to U.S. environmental laws, and that was before 
     those rules were specifically enumerated in the test, as they 
     are in the Uruguay Round proposal. In the tuna-dolphin 
     challenge, the United States lost the case because it 
     distinguished on the basis of process--not because of any 
     purported failure to base the law on science. In the European 
     Union challenge to the U.S. CAFE and gas guzzler fuel 
     efficiency standards (a challenge which the United States has 
     been widely predicted to lose), the challenging parties 
     agreed that the U.S. goal of fuel efficiency is allowable and 
     do not question the scientific justification of the goal or 
     the scientific efficacy of the United States means to achieve 
     it; the dispute is over the political issue of how the goal 
     should be achieved, including whether it is through minimum 
     automobile miles-per-gallon standards or a carbon tax.
       Finally, as an aside, it important to note that the ``based 
     on science'' test itself is neither as simple or objective as 
     you imply. Application of the test will be made by the secret 
     WTO tribunals, whose members are trade experts, not 
     scientists or even lawyers or officials with a background in 
     consumer, environmental or related matters. This method 
     itself, especially the secrecy, is quite an unscientific 
     way to proceed.
       Erroneous Statement Number 9: The Uruguay Round rules do 
     not require downward harmonization.\41\
       Correction: While harmonization is required in both the 
     food and technical standards chapters,\42\ it is not 
     specifically labelled as upwards or downwards harmonization. 
     However, the rules that make up those chapters will result in 
     downward harmonization of strong U.S. standards.
       First, under the WTO's two standards chapters, a domestic 
     law can be found to be a trade barrier because it is stronger 
     than international standards, but not because it is too weak. 
     Only laws that are stronger than named international 
     standards will be subject to a battery of tests in order to 
     establish that they are not illegal trade barriers that must 
     be eliminated. Meanwhile, with the exception of prison 
     labor,\43\ no country's law can be attacked as WTO-illegal 
     because it provides too weak protection to the environment or 
     to consumer or worker safety and health.
       Second, both the food and technical standards texts require 
     countries to base their standards on specified international 
     standards. Standards issued by several of the international 
     standard-setting bodies are weaker than current U.S. domestic 
     laws and regulations require. For technical standards--all 
     non-food standards such as product safety or environmental 
     rules ``where technical regulations are required and relevant 
     international standards exist or their completion is 
     imminent. Members shall use them, or the relevant parts of 
     them, as a basis for their technical regulations, except when 
     such international standards * * * would be an ineffective or 
     inappropriate means for the fulfillment of the legitimate 
     objectives pursued, for instance because of fundamental 
     climatic or geographical factors or fundamental technological 
     problems.''\44\ In the food area, domestic standards also 
     must be ``based on'' the named international food standards 
     of the Codex Alimentarius Commission.\45\ According to the 
     General Accounting Office (GAO), the United States 
     established more health protective pesticide standards in 66 
     percent of the cases where the comparison could be made.\46\
       Erroneous Statement Number 10: It is unlikely that there 
     will be many challenges brought under the Uruguay Round 
     agreements against U.S. Laws.\47\
       Correction: Although the United States has often been a 
     plaintiff in past GATT challenges, that will change under the 
     WTO. The Uruguay Round would expand trade disciplines beyond 
     the traditional trade matters in which the United States is 
     situated to be a plaintiff and into non-tariff issues--namely 
     the many standards setting environmental, health, labor and 
     other requirements for products sold in the United States. In 
     these areas, the United States is likely to be a defendant 
     because of its more advanced health and safety protections. 
     Moreover, the change to binding GATT dispute resolution (that 
     would require a country to change laws found to be GATT-
     illegal, or accept sanctions or pay fines) from a system with 
     largely advisory dispute resolution (a panel suggested a 
     course of action that a country had to agree to) will in 
     itself stimulate more cases. The long lists published in 1994 
     by the European Union, Canada, and Japan of laws they and 
     their motivated domestic corporate interests consider to 
     violate the new rules illustrate the magnitude of the risk to 
     domestic U.S. federal and state laws and standards.
       Erroneous Statement Number 11: It is very unlikely that 
     there will be many challenges brought under the Uruguay Round 
     agreements against state laws.\48\
       Correction: In addition to the general incentives the 
     Uruguay Round presents to foreign countries to challenge many 
     U.S. laws, the proposed new substantive trade rules--such as 
     those requiring consistency of level of risk--provide many 
     new tools for challenges of state laws merely because they 
     are different than federal laws.\49\ While the European 
     Union, Canada and Japan have published lists of laws they 
     consider to violate GATT in previous years, this year's 
     reports, which are based on the proposed new Uruguay Round 
     rules, contain extensive new lists of state environmental, 
     health, tax and other laws.
       The European Union's ``Report on United States Barriers to 
     Trade and Investment, 1994'' goes so far as to attack the 
     U.S. federalist system, and the diversity of rules and 
     standards it encourages, as a trade barrier in itself. 
     ``There are more than 2,700 State and municipal authorities 
     in the United States which require particular safety 
     certifications for products sold or installed within their 
     jurisdiction,'' the EU report complains. And it alleges, 
     ``Even if, in general, not intentionally discriminatory, the 
     complexity of U.S. regulatory systems in this domain 
     [technical regulations regarding consumer, health, safety and 
     environmental protection] can represent a very important 
     structural impediment to market access'' (emphasis in 
       Erroneous Statement Number 12: GATT rules will fully 
     protect the right of any state to impose stringent health or 
     environmental standards, including those more protective than 
     federal standards.\51\
       Correction: GATT's two standards chapters both directly 
     threaten strong state environmental and consumer laws. For 
     instance, the Technical Barriers chapter requires domestic 
     standards to be based on international standards that are 
     complete or near completion unless there are fundamental 
     climatic, geographic or technological reasons not to use 
     them.\52\ That a state believes such international standards 
     do not provide sufficient health or environmental protection 
     is not a WTO-legitimate justification for departing from the 
     international standard, much less a federal standard. The 
     food standards contained in the Sanitary and Phytosanitary 
     chapter specifically require domestic laws to avoid 
     distinctions in the level of protection provided. ``With the 
     objective of achieving consistency in the application of the 
     concept of appropriate level of sanitary and phytosanitary 
     protection . . . each member shall avoid arbitrary or 
     unjustifiable distinctions in the levels it considers to be 
     appropriate in different situations . . .''\53\ Although 
     these rules also apply to federal law, as noted by the 
     Attorneys General, state laws are especially at risk because 
     of the very difference between federal and state standards 
     that is the cornerstone of federalism. The WTO does not 
     provide a federalism exception for such differences, nor does 
     it limit the definitions of ``arbitrary'' or 
     ``unjustifiable'' to allow differences between federal and 
     state decision-makers facing the same data and risks in 
     making different political decisions about how much risk to 
       In our nation's history, the very absence of an 
     international uniformity straitjacket (and the allowance for 
     state diversity, within the limits of not arbitrarily 
     burdening interstate commerce) has freed our country to lead 
     the world rather than follow a lower common denominator.
       Erroneous Statement Number 13: The unilateral trade 
     measures of Section 301 remain usable under GATT.\54\
       Correction: As virtually all commentators outside of the 
     U.S. Trade Representative's office agree, the unilateral 
     action provisions of Section 301 and its hybrids will not 
     survive the WTO's Dispute Resolution Article 23. The 
     Congressional Research Service's American Legal Division 
     issued an opinion memo to Representative Cardiss Collins 
     about Section 301 being effectively gutted by Article 23's 
     ban on ``unilateralism.'' Representative Richard Gephardt's 
     office, having admitted that Section 301 would be 
     unenforceable under the new rules for most uses, has tried 
     unsuccessfully to find alternatives to trade sanctions to 
     enforce some sort of unilateral trade measure. With regard to 
     Section 301 and other U.S. unilateral measures, the 
     government of Japan has written, ``The United States' 
     attitude of pursuing market opening in bilateral negotiations 
     backed by the threat of sanctions is not compatible with the 
     multilateral trade system of the GATT/WTO.''\55\ The European 
     Union has also objected to the U.S. use of Section 301, as 
     well as other unilateral trade measures, including those 
     contained in environmental laws.\56\
       With the debate over the WTO and the new GATT clouded by 
     these and other erroneous USTR statements, it is difficult 
     for citizens, the media or Representatives and Senators to 
     make a reasoned assessment of the WTO-GATT proposals.
       It is not too late to provide Congress and the American 
     people with a full assessment of the impact on our democracy 
     and standards of domestic justice posed by the WTO and the 
     new GATT. Deferring the Congressional consideration of the 
     WTO and the new GATT until next year would give the American 
     democratic process a chance to work properly.
                                        Ralph Nader, Lori Wallach.


     \1\Written testimony of USTR Mickey Kantor before the Senate 
     Commerce Committee, June 16, 1994; written testimony of 
     Deputy USTR Rufus Yerxa before the Senate Foreign Relations 
     Committee, June 14, 1994.
     \2\Agreement Establishing the WTO, Article VIII-1 (to which 
     treaty practice under the Vienna Convention would apply, 
     according to Note to the Final Act Embodying the Results of 
     the Uruguay Round of the Multilateral Trade Negotiations).
     \3\Id, Article III-2; Agreement on Sanitary and Phytosanitary 
     Measures, Articles 38-39 (establishing a Committee on 
     Sanitary and Phytosanitary Measures, etc.).
     \4\Dispute Settlement Understanding, Article 22.
     \5\Agreement Establishing the WTO, Article IX-1 (describing 
     voting procedures for amendments); Article III-2 (providing 
     for anew negotiations upon simple majority voting of the 
     ``Ministerial Conference'' of all WTO Members).
     \6\Id. Article XVI-4.
     \7\Services of the European Commission, Report on United 
     States Barriers to Trade and Investment, p. 7.
     \8\USTR Fact Sheet, U.S. Sovereignty Under the World Trade 
     Agreement; Debunking the Myths, 1994; See also oral testimony 
     of Deputy USTR Rufus Yerxa before the Senate Foreign 
     Relations Committee, June 14, 1994, as transcribed by Federal 
     News Service.
     \9\Agreement Establishing the WTO, Article IX-1.
     \10\Id. Article X (providing for assorted two-thirds and 
     three-fourths supermajority voting rules).
     \11\Id. Article IX-2 (providing for interpretations on three-
     fourths vote).
     \12\Id. Article XII (providing for two-thirds votes on 
     \13\Id Article III-2 (providing for simple majority voting of 
     the Ministerial Conference).
     \14\Dispute Settlement Understanding,  16.4 (for panel 
     rulings) and  17.14 (for appellate reports).
     \15\Agreement Establishing the WTO, Article X-2.
     \16\Oral testimony of Deputy USTR Rufus Yerxa before the 
     Senate Foreign Relations Committee, June 14, 1994, as 
     transcribed by Federal News Service; Oral testimony of USTR 
     Mickey Kantor before the Senate Commerce Committee, June 16, 
     1994, June 14, 1994, as transcribed by the Federal News 
     Service; USTR Fact Sheet, U.S. Sovereignty Under the World 
     Trade Agreement; Debunking the Myths, 1994 (``The WTO 
     Amendment provisions in Article X state that any substantive 
     amendment takes effect for a member only if the country 
     consent to it.'').
     \17\Agreement Establishing the WTO, Article III-2.
     \18\Id. Article X-1.
     \19\Id.Article X-4.
     \20\Id. Article X-3.
     \21\Oral Testimony of USTR Mickey Kantor before the Ways and 
     Means Committee, June 10, 1994, as transcribed by the Federal 
     News Service (``In many cases, decisions under the GATT could 
     be made by a majority vote''). See also written testimony of 
     USTR Mickey Kantor before the Senate Commerce Committee, June 
     16, 1994.
     \22\Dispute Settlement Understanding,  16.4.
     \23\Id.  17.
     \24\Id.  22.6.
     \25\This assertion has been made throughout testimony and 
     other public statements. See e.g. written testimony of USTR 
     Mickey Kantor before the House Ways and Means Committee, June 
     10, 1994; and written testimony of Deputy USTR Rufus Yerxa 
     before the Senate foreign relations, June 14, 1994.
     \26\Memo to Congress, Nancy A. LeaMond, Assistant USTR for 
     Congressional Affairs, July 19, 1994.
     \27\Dispute Settlement Understanding, Article 22.
     \28\Oral testimony of USTR Mickey Kantor before the House 
     Ways and Means Committee, June 10, 1994, as transcribed by 
     the Federal News Service, answering a question asked by 
     Representative Newt Gingrich.
     \29\USTR Fact Sheet, U.S. sovereignty Under the World Trade 
     Organization: Debunking the Myths, 1994.
     \30\Dispute Settlement Understanding, 16.4.
     \31\Id. 17.6, 17.5.
     \32\Id. 17.14.
     \33\Id. 19.1.
     \34\Id. 22.1.
     \37\USTR Fact Sheet, Questions and Answers for the State 
     Attorneys General, 1994.
     \38\Agreement on Sanitary and Phytosanitary Measures.
     \39\National Journal, July 16, 1994, p. 1686.
     \40\Agreement on Technical Barriers to Trade, Article 2.2.
     \41\Written testimony of USTR Mickey Kantor before the Senate 
     Commerce Committee, June 16, 1994.
     \42\Agreement on Sanitary and Phytosanitary Measures, Article 
     9-13; Agreement on Technical Barriers to Trade, Articles 2.4 
     and 2.6.
     \43\GATT, Article XX-e.
     \44\Agreement on Technical Barriers to Trade, Article 2.4.
     \45\Agreement on Sanitary and Phytosanitary Standards, 
     Article 9.
     \46\General Accounting Office, International Food Safety: 
     Comparison of U.S. and Codex Pesticide Standards, August, 
     1991, p.28.
     \47\Oral testimony of USTR Mickey Kantor before the Senate 
     Commerce Committee, June 16, 1994, as transcribed by Federal 
     News Service.
     \48\USTR Fact Sheet, Questions and Answers for State 
     Attorneys General, July 1994.
     \49\Agreement on Sanitary and Phytosanitary Measures, Article 
     \50\Services of the European Commission, Report on United 
     States Barriers to Trade and Investment, 1994, p.55.
     \51\USTR Fact Sheet, Questions and Answers for State 
     Attorneys General, July 1994.
     \52\Agreement on Technical Barriers to Trade, Article 2.4.
     \53\Agreement on Sanitary and Phytosanitary Measures, Article 
     \54\Written testimony of USTR Mickey Kantor before the House 
     Ways and Means Committee June 10, 1994; Written testimony of 
     Rufus Yerxa before the Senate Foreign Relations Committee, 
     June 14, 1994. See also, Memo to Congress, Nancy A. LeaMond, 
     Assistant USTR for Congressional Affairs, July 19, 1994.
     \55\Government of Japan, 1994 Report on Unfair Trade Policies 
     by Major Trading Partners, 1994, p.259.
     \56\Services of the European Commission, Report on the United 
     States Barriers to Trade and Investment, 1994, p.7 (``[T]he 
     new World Trade Organization will restrain the Contracting 
     Parties from further having to resort to unilateral 
     determinations in trade disputes, ``and will oblige them to 
     bring their domestic legislation in conformity with all of 
     the Uruguay Round Agreements.'' The report then labels United 
     States efforts to renew Super 301 as ``contrary to this.'').
  Mr. HOLLINGS. Mr. President, the comment was made--I cannot keep up 
with all the comments but right to the point--by my distinguished 
colleague from Pennsylvania about the reservations and the laws, and we 
continually hear that, specifically, we do not have a veto. We have the 
virtual veto now, but under the GATT agreement we lose that veto. And 
working against our interests we have from bitter experience in the 
United Nations time and again had to use that veto. Were it not for the 
veto, there would be no country of Israel. Everyone in this U.S. 
Congress understands the wonderful emanation here of a nation-state, 
Israel, in the Mideast never would have occurred had we not had that 
veto. And a world power like the United States has to act like a world 
power and use that veto because 90 percent of those in the 117 
membership of GATT have voted against us as small countries and have 
voted against us over 50 percent, the majority of the times.
  The best of allies, France and Mexico, have voted against us in the 
United Nations 79.9 percent of the time.
  With respect to textiles, because we heard from the distinguished 
Senator from Rhode Island, let me just go right to the point. I ask 
unanimous consent that an article ``Japan Moves to Protect its 
Textiles'' be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

                [From the Herald Tribune, Nov. 23, 1994]

                  Japan Moves to Protect Its Textiles

       Tokyo.--Japan, flooded with cheap textiles mainly from 
     other Asian nations, is poised to write rules that would let 
     it restrict imports if there were evidence of damage to its 
     domestic industry, government officials said Tuesday.
       Japan's textile industry has been seeking import curbs 
     under the Multi-Fiber Arrangement, an international agreement 
     that permits nations to restrict imports if they disrupt 
     their domestic textile industries.
       The guidelines, drawn up by the Ministry of International 
     Trade and Industry, will take effect Dec. 5.
       Cotton textile imports rose to a high of 804 million square 
     meters (961 million square yards) in 1993, up 21.4 percent 
     from a year earlier.
       Ryutaro Hashimoto, the minister of international trade and 
     industry, said the guidelines would help clarify how 
     safeguards for textiles operate. ``Talking only about import 
     restrictions is misleading. The guidelines are denying 
     comprehensive and semipermanent restrictions,'' he said.
       Trade ministry officials have said that Japan was sending 
     missions to Pakistan in November and December to investigate 
     dumping charges and probably would come up with a final 
     decision by February.
       The Japan Spinners' Association and Japan Cotton and Stable 
     Fiber Weavers' Association have asked for curbs on imports of 
     poplin and broad textiles from China and Indonesia.
       Under the guidelines, if the Trade and Industry Ministry 
     felt action was necessary, it would start investigations 
     within two months after a claim was made by the textile 
     industry and conclude them within a year.
       If Tokyo decided emergency trade restrictions were needed, 
     a study group would examine each case before a final decision 
     by the minister. Japan would then start talks with the 
     country whose imports were deemed damaging to the domestic 
     industry. If the two sides failed to reach an accord, the 
     ministry would then use emergency trade restrictions.

  Mr. HOLLINGS. That is dated here the 23d of this month, just last 
week. Here in Japan moving where we are moving here not to integrate 
the textile industry, as the expression was used, but to eliminate it.
  Mr. President, I ask unanimous consent that ``The Impact of 
Eliminating the Multi-Fiber Arrangement on the U.S. Economy'' by the 
Wharton Economic Finance Group be printed in the Record at this 
particular point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   The Impact of Eliminating the Multi-Fiber Arrangement on the U.S. 

          Isolating the Textile and Apparel Components of GATT

       In manufacturing, the expenditure-induced impacts on 
     durable goods amount to $2.55 billion 1982 dollars or 0.1 
     percent of the average 1993-2002 baseline output forecast. 
     The change is durable goods output reflects both reduced 
     spending for automobiles, appliances, furniture, and so on, 
     as well as lower investment demand for machinery and 
     equipment to produce these goods as business respond to lower 
     demand for their products. The expenditure-induced impacts on 
     nondurables production is $2.72 billion 1982 dollars, or 0.2 
     percent of the baseline output forecast.
       The impacts accrued in manufacturing have counterparts in 
     other sectors of the economy. A reduction of $.014 billion 
     1982 dollars is observed in construction, reflecting reduced 
     demand in both the residential and nonresidential sectors, 
     while the impact on the regulated industries will be $0.75 
       Likewise, the continual declines in income generated by 
     this process leads to lower wholesale and retail activity. 
     Sales margins are reduced $1.44 billion 1982 dollars in the 
     wholesale and retail trade sector. This represents 0.14 
     percent of the ten-year average baseline output from 1993-

                           impact on manhours

       Because the level of employment and manhours in most 
     industries is generally a function of their output, the 
     impact on manhours closely mirrors output effects, unless 
     other inputs have substantially higher costs per unit. These 
     effects are summarized in Table 4B.
       In the direct and indirect industries, on average 179 
     million manhours are lost in the manufacturing sectors due to 
     the proposed new trade policy. The vast majority of these 
     manhours, 172 million hours, are in the nondurables sector. 
     The durable industries are impacted by 6.2 million hours on 
       In the nonmanufacturing sectors, 17 million manhours are 
     lost on average in the regulated industries, or 0.12 percent 
     of the average baseline manhours over the next ten years. In 
     wholesale and retail trade 24 million manhours or 0.05 
     percent of the baseline average are lost. Finally, in the 
     service sectors 17 million hours, or 0.04 percent, are lost 
     an average due to increases in textile and apparel imports.
       The expenditure-induced employment impacts likewise reflect 
     the induced gross output impact. For example, within 
     manufacturing, 68 million hours of work are lost on average 
     due to the assumed trade policy changes. Of these, 32 million 
     hours are lost in durable goods industries, and 68 million 
     hours are lost in nondurable goods industries. Also 14 
     million manhours are lost on average in the regulated 
     industries. 53 million hours in wholesale and retail trade, 
     and 23 million hours in the narrowly-defined service sector 
     between 1993 and 2002.

                          impact on employment

       As might be expected, the employment impact of the new 
     proposed trade policy on the textile and apparel sectors is 
     severe. Table 4.5 shows the direct and indirect impact on 
     employment for all of the two digit SIC industries, and Table 
     4.6 summarizes the induced impact. The WEFA Group baseline 
     (with MFA) forecasts a job loss of 392.000 in the textile and 
     apparel industries during the 1993-2002 period, based on 
     expected productivity increases as well as the domestic 
     industries' competitive disadvantages.
       Under the new proposed policy (GATT) the employment 
     declines will be much more severe. The direct and indirect 
     impact on the textile and apparel industries is estimates to 
     be job loss of 647,000, and the induced effect is an 
     additional 98,000, during 1993-2002.
       Under the new proposed policy (GATT) the direct and 
     indirect impact on total establishment employment is 
     estimated at 970,000, including 210,000 jobs lost in the non-
     manufacturing sectors. The induced impact is estimated to be 
     an additional 420,000 job loss in total, of which 150,000 is 
     in the non-manufacturing sectors.
       The WEFA Group employed the Industrial Analysis Service 
     Model to trace and measure the impact of the proposed new 
     trade policy for textile and apparel on industrial output and 
     manhours for the period 1993-2002. This model uses a 
     combination of input/output and statistical techniques to 
     estimate the impact of the new trade assumptions on textile 
     and apparel manufacturers and all related industries.
       In input/output analysis, the production of a commodity 
     like apparel starts a chain reaction of transactions through 
     the economy. Demand for apparel prompts its manufacture, and 
     this production in turn generates a need for inputs, such as 
     fabrics, buttons, paper, advertising and trade services. 
     These are referred to as direct industries. These suppliers 
     to the apparel core sectors will in turn need inputs for 
     their own production. For example, in order to meet demand 
     coming from the apparel industry, textile manufacturers will 
     require inputs of cotton, synthetic fibers, electricity, and 
     so on. Likewise, the second-round suppliers to the apparel 
     industry will require inputs for their production processes, 
     with the cycle continuing. The sum of all these transactions 
     are referred to as indirect supplier contributions. In 
     addition, the income earned by employees in these industries, 
     as production and sales transactions occur, will in turn be 
     spent on goods and services, creating additional demand and 
     production requirements throughout the economy. This is the 
     familiar income multiplier concept, referred to as 
     ``expenditure-induced'' impacts.

                          impact on production

       Direct requirements by the textile and apparel 
     manufacturers are those inputs purchased by these two 
     industries for the final production of textile and apparel 
     products. These industries demand materials (referred to as 
     intermediate demand) and add value to produce their own 
       An examination of the direct and indirect impact of the 
     proposed trade policy (Table 4A) shows that the linkages of 
     the textile and apparel industries are diverse, with almost 
     every U.S. industry affected to some degree. Due to the 
     concentration of textile and apparel inputs in nondurable 
     goods, the nondurable industries are impacted the most. On 
     average over the next ten years the total impact on these 
     industries amount to $10.64 billion 1982 dollars or 0.34 
     percent of baseline output. Sectors which are significantly 
     affected are chemicals ($1.64 billion 1982 dollars or 0.8 
     percent of the baseline), paper ($0.52 billion 1982 dollars 
     or 0.45 percent), and miscellaneous manufacturing ($0.08 
     billion 1982 dollars 0.25 percent). Agriculture and regulated 
     industries show large impacts in percentage terms from 
     baseline levels despite small dollar figures. The direct and 
     indirect impact to the agriculture sector is $0.3 billion in 
     real terms, or 0.18 percent of the actual on average between 
     1993-2002. Regulated industries, which consist of electric 
     utilities, transportation services, and telecommunications 
     services, are also affected by the assumed change in trade 
     policy. Around $0.97 billion 1982 dollars or 0.11 percent of 
     the baseline output result from the indirect feedbacks from 
     the assumed changes in trade policy. Around $0.97 billion 
     1982 dollars or 0.11 percent of the baseline output result 
     from the indirect feedbacks from the assumed changes in trade 
     in the textile and apparel industries.
       When the induced spending effects generated by the change 
     in textile and apparel trade are considered, further impacts 
     associated with the proposed new trade policy are implied for 
     U.S. industries. Our methodology allows prices to respond to 
     demand changes, and at the same time income is reduced due to 
     employment loses. These two phenomena have offsetting 
     influences on demand and supply.
       Induced impacts reflect lower income for employees in the 
     textile and apparel industries, which in turn cause reduced 
     spending on a wide array of goods and services. New cars, 
     furniture, clothing, food, vacations, housing, and other 
     goods and services are all affected. As can be seen from 
     Table 4A, the expenditure--induced impacts are quite apparent 
     in virtually every industry.

  Mr. HOLLINGS. Then, Mr. President, with respect to the industries 
that the Senator from California said we are going to pick up business 
in Europe. Not at all. I remember our former colleague and then later 
Vice President Mondale talking and trying to get domestic content. I 
tried to include domestic content in the telecommunications bill.
  We got a rough letter from Ambassador Kantor that it was GATT 
illegal. So I read from the exact release in the Journal of Commerce on 
February 7, 1989, to the European Commission Monday announced tough 
local content rules covering import of integrated circuits that will 
force leading Japanese and U.S. chip suppliers to build expensive new 
plants in the communities to ensure free market access.
  Mr. President, the electronics industry has already moved there, so 
has the IBM downsized as the nice expression for firing 60,000 last 
year. They have already moved to Europe, and everything else, to get 
the benefit of the European subsidies and the European protection. GATT 
does not change that entry provision in there, and go right to the New 
York Times here in July ``U.S. Corporations Expanding Abroad at a 
Quicker Pace.'' I ask unanimous consent that this be printed in the 
  There being no objection, the article was ordered to be printed in 
the Record.

                [From the New York Times, July 25, 1994]

          U.S. Corporations Expanding Abroad at a Quicker Pace

                          (By Louis Uchitelle)

       American companies are once again rapidly expanding their 
     operations abroad--demonstrating that no matter what the 
     incentives for keeping business in the United States, the 
     urge to spread factories, offices, stores and jobs overseas 
     is irresistible.
       The surge in these investments and the jobs they create 
     overseas comes just when exports should be climbing more 
     rapidly than investment abroad. A weak dollar and falling 
     labor costs have made American products increasingly 
     competitive. Yet overseas investment is rising at twice the 
     rate of exports. And for each dollar earned from exports, 
     American companies take in nearly $2 from the sale of what 
     they produce abroad.
       ``If you are going to be really important in the world 
     market, you are going to grow by producing in many countries, 
     and not by exporting, which has its limits,'' said Robert E. 
     Lipsey, an expert on overseas investment at the National 
     Bureau of Economic Research. ``There are circumstances where 
     this might not be the case, but by and large that is the 
       The issue, of course, is jobs, and who will hold them. 
     American companies employ 5.4 million people abroad, 80 
     percent of them in manufacturing, and the hot issue in the 
     late 1980's, during a similar surge in overseas investment, 
     was this: Why can't the goods and services that these foreign 
     workers produce be supplied from the United States? Why must 
     companies migrate abroad, shedding some of their national 
     identity and loyalty?
       Now that debate is likely to revive, although perhaps with 
     less intensity. American investment overseas remains 
     concentrated in manufacturing, particularly in Europe, Canada 
     and Japan, but manufacturing was an area of more rapid growth 
     in the 1980's than it is today. This time companies like Wal-
     Mart and Morgan Stanley & Company are leaders--and that tones 
     down the job issue.
       Opening a factory in Europe or Mexico or East Asia often 
     suggests that one in the United States may be closed. Wal-
     Mart's new retail investments in Canada, Brazil and Mexico, 
     on the other hand, or Morgan Stanley's eight offices in East 
     Asia do not suggest cutbacks at home.
       ``What we are sending abroad, apart from money, is our 
     skill and experience as investment bankers, and you really 
     have to be on site to do this sort of thing,'' said Stephen 
     S. Roach, a senior economist at Morgan Stanley, in a 
     telephone interview from Hong Kong, where he was helping his 
     local colleagues advise the Chinese Government on the 
     privatization of an airline.
       Morgan Stanley employs 410 people in Hong Kong, and expects 
     to increase that to 500 by year's end, Mr. Roach said. Most 
     of the firm's Asia offices, including two in China, have 
     opened since the late 1980's.
       The new surge in investment, in all types of businesses, 
     showed up in recently released Commerce Department data. This 
     investment by American companies in overseas operations rose 
     last year to $716.2 billion, when measured as the cost of 
     replacing the buildings and equipment. The 7.2 percent 
     increase, coming after two years of much less growth, matched 
     some of the better years of the 1980's. In the first quarter 
     of 1994, investment increased even more quickly.

                       manufacturing lags behind

       But while manufacturing still dominates the numbers, 
     representing nearly 40 percent of the total, manufacturing 
     investment rose by only 7 percent last year. Outlays for 
     retail, finance and the like went up by twice that percentage 
     or more.
       ``It is our belief that, with trade barriers coming down, 
     the world is going to be one great big marketplace, and he 
     who gets there first does the best,'' said Donald Shinkel, a 
     spokesman at Wal-Mart, which had no stores overseas in the 
       The investment surge, after two years of relatively little 
     growth, coincides with incipient recoveries in Europe and 
     Japan after periods of recession. As business has picked up, 
     sales and profits have risen at American operations abroad, 
     making more money available for investment. These reinvested 
     profits accounted for more than half the outlays last year, 
     the Commerce Department reports.
       Booming economies in East Asia, particularly China, 
     Singapore and Hong Kong, also drew investment, and so did 
     nearly every Western Hemisphere country, with Canada, Mexico, 
     Argentina and Bermuda among the leaders--Bermuda being an 
     offshore haven for American banking and insurance companies, 
     while Canada, Mexico and Argentina attracted mainly 
     manufacturing investment.
       But the European nations and Japan attracted the biggest 
     share of the manufacturing investment. They almost always do, 
     although they are industrial countries with stronger 
     currencies and higher average labor costs than in the United 
       American manufacturing companies engage in three types of 
     overseas investment, and the one involving the industrial 
     countries is perhaps the most difficult to justify--given 
     that exporting from the United States can be less expensive, 
     said Raymond Vernon, an economist at the Kennedy School of 
     Government at Harvard University.
       Still this investment does not draw the greatest criticism, 
     which has been reserved for companies that relocate labor-
     intensive operations, like auto assembly, or apparel 
     manufacturing, or the assembly of some electronics products, 
     to low-wage countries like Mexico or Thailand. ``The United 
     States is simply not the lowest-cost producer in the world, 
     and moving abroad to these countries is inevitable,'' Mr. 
     Vernon said.
       Then there are the Wal-Marts and Morgan Stanleys trying to 
     penetrate new markets in the only way possible, by putting a 
     store or an investment house on site. Since these companies 
     do not hold back operations at home to expand abroad, their 
     tactics are seldom criticized.
       Finally there are the situations in which a company can 
     export its product inexpensively enough, particularly when 
     the dollar is weak, but chooses instead to manufacture 
     abroad, mainly for ``insurance,'' as Mr. Vernon puts it. Of 
     course, foreign companies, particularly the Japanese, adopt 
     the same strategy for the United States, establishing many 
     factories here that create jobs for Americans. But they 
     employ 4.9 million Americans, which is 500,000 fewer than the 
     American corporate payroll abroad.
       Jobs are also created in the United States when American 
     companies, investing abroad, export parts or machinery to 
     help make their products overseas. But this ``American 
     content'' makes up only 9 percent, on average, of the 
     merchandise produced, the Commerce Department says. The rest 
     is obtained overseas.
       The Gillette Company embraces the strategy of manufacturing 
     abroad rather than exporting, generating jobs overseas rather 
     than in the United States. That has happened most recently in 
     the case of Gillette's new Sensor XL razor blade cartridge.
       The cartridge, simple for consumers to use, is difficult to 
     manufacture, involving 10 welds with high-technology laser 
     machines. Production started nearly two years ago at 
     Gillette's main plant, in Boston, but all the output was 
     exported to Europe. We introduced the product in Europe 
     because razor blade sales there are greater than in the 
     United States,'' said Thomas Skelly, a Gillette senior vice 
       The new Sensor model is to be sold in the United States 
     starting this year. But rather than expand the Boston 
     operation to handle the additional production--and add jobs, 
     perhaps--Gillette is adding the extra capacity to its Berlin 
     plant, a high-technology factory that will take over the 
     European market.

                       Currency Issues Discounted

       Cost is not the issue; blades are small and not difficult 
     to ship, and the weak dollar gives the United States an 
     advantage--but one that Mr. Skelly, and other corporate 
     executives, dismiss as insignificant. ``In the long run, 
     these currency fluctuations, up and down, don't mean a whit 
     in the decision where to manufacture,'' he said.
       Over the years, Gillette has put 62 factories in 28 
     countries and each tries to operate as if it were a regional 
     company, adjusting as quickly as possible to local 
     competitors. Being close to a market is a priority, promising 
     better returns than exporting from the United States, Mr. 
     Skelly says.
       ``We are also concerned about having only one place where a 
     product is made,'' he said. ``There could be an explosion, or 
     labor problems.'' If the Boston workers struck, for example, 
     Gillette would supply the Sensor XL to Europe and the United 
     States from the Berlin plant, and vice versa.
       The upshot of this approach is that Gillette employs 2,300 
     people in the manufacture of razors and blades in the United 
     States and 7,700--more than three times as many--abroad.
       Some of those workers are making blades at Gillette plants 
     in Poland, Russia and China, where production costs are less 
     than in the United States. But that is not the case in 
     Germany. ``You could ship the blades from here, but you set 
     up there for insurance,'' Mr. Vernon said. ``And the 
     justifications for this approach are not so clear cut.''

  Mr. HOLLINGS. It reads:

       American companies are once again rapidly expanding their 
     operations abroad--demonstrating that no matter what the 
     incentives for keeping business in the United States, the 
     urge to spread factories, offices, stores and jobs overseas 
     is irresistible.

  The entire article, of course, is included. But down at the bottom it 
says the Gillette Company, a typical example, embraces the strategy of 
manufacturing abroad rather than exporting, generating jobs overseas 
rather than in the United States.
  The cartridge--talking about the Sensor XL razor blade cartridge--is 
made at the main plant in Boston. Now if we have to strike we have the 
exact language in here. We just get it from the overseas plant.

       The upshot of this approach is that Gillette employs 2,300 
     people in the manufacture of razors and blades in the United 
     States and 7,700--more than 3 times as many--abroad.
       Some of these workers are making blades at Gillette plants 
     in Poland, Russia, and China . . . But that is not the case 
     in Germany. ``You could ship the blades from here, but you 
     set up there for insurance.''

  But, Mr. President, it uses that expression that if they went and 
tried to strike that would be gone.
  Then, Mr. President, I want everyone to really hear this one because 
we have the article that appeared in the Washington Post and the Roll 
Call. Mr. President, I ask unanimous consent that whatever--I know we 
cannot have the picture of Smoot and Hawley --but whatever account of 
this ad be printed in the Record.
  There being no objection, the ad was ordered to be printed in the 
Record, as follows:

              Remember These Fellas When You Vote on GATT

       Remember these fellas? Senator Smoot & Congressman Hawley? 
     They're the people who tried to put a wall up around America.
       It was 1931. The country faced economic uncertainty. Fear 
     was everywhere.
       Congress' reaction? Protectionism. The Smoot-Hawley Act.
       The Members of Congress who supported that bill attached 
     their names to one of the most infamous--and destructive--
     pieces of legislation ever passed by the United States 
       Now, it's 1994. The country faces economic uncertainty.
       What will Congress do?
       With GATT, Congress has an historic opportunity to open 
     foreign markets to American products and services and reject 
     protectionism. A vote for GATT will add billions to the U.S. 
     economy and create new high-paying American jobs.
       GATT gives us the largest global tax cut in history, stops 
     foreign countries from cheating on trade and makes over 120 
     nations play by the same rules we do.
       So, when you vote on GATT, keep these two fellas in mind.
       And remember: History has not been kind to those in 
     Congress who embrace protectionism.

  Mr. HOLLINGS. Mr. President, ``Vote America's Future. Vote GATT''

       Remember these fellas? Senator Smoot and Congressman 
     Hawley? They are the people who tried to put a wall up around 
       It was 1931. Blah, blah, on and on.

  False. It was 1930. It was in June 1930. The crash occurred in 
October 29, and in June 1930 Smoot-Hawley was passed after the crash. 
And the distinguished colleague from Pennsylvania, the late Senator 
John Heinz, in ``The Myth of Smoot-Hawley'' contained in the 
Congressional Record of May 9, 1983, and I ask unanimous that this 
speech by the former John Heinz be printed in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                        The Myth of Smoot-Hawley

       Mr. Heinz. Mr. President, every time someone in the 
     administration or the Congress gives a speech about a more 
     aggressive trade policy or the need to confront our trading 
     partners with their subsidies, barriers to imports and other 
     unfair practices, others, often in the academic community or 
     in the Congress immediately react with speeches on the return 
     of Smoot-Hawley and the dark days of blatant protectionism. 
     ``Smoot-Hawley,'' for those uninitiated in this arcane field, 
     is the Tariff Act of 1930 (Public Law 71-361) which among 
     other things imposed significant increases on a large number 
     of items in the Tariff Schedules. The act has also been, for 
     a number of years, the basis of our countervailing duty law 
     and a number of other provisions relating to unfair trade 
     practices, a fact that tends to be ignored when people talk 
     about the evils of Smoot-Hawley.
       A return to Smoot-Hawley, of course, is intended to mean a 
     return to depression, unemployment, poverty, misery, and even 
     war, all of which, apparently were directly caused by this 
     awful piece of legislation. Smoot-Hawley has thus become a 
     code word for protectionism, and in turn a code word for 
     depression and major economic disaster. Those who sometimes 
     wonder at the ability of Congress to change the country's 
     direction through legislation must marvel at the sea change 
     in our economy apparently wrought by this single bill in 
       Historians and economists, who usually view these things 
     objectively, realize that the truth is a good deal more 
     complicated, that the causes of the Depression were far 
     deeper, and that the link between high tariffs and economic 
     disaster is much more tenuous than is implied by this 
     simplistic linkage. Now, however, someone has dared to 
     explode this myth publicly through an economic analysis of 
     the actual tariff increases in the act and their effects in 
     the early years of the Depression. The study points out that 
     the increases in question affected only 231 million dollars' 
     worth of products in the second half of 1930, significantly 
     less than 1 percent of world trade; that in 1930-32 duty-free 
     imports into the United States dropped at virtually the same 
     percentage rate as dutiable imports; and that a 13.5 percent 
     drop in GNP in 1930 can hardly be blamed on a single piece of 
     legislation that was not even enacted until midyear.
       This, of course, is not to suggest that high tariffs are 
     good or that Smoot-Hawley was a wise piece of legislation. It 
     was not. But it was also clearly not responsible for all the 
     ills of the 1930's that are habitually blamed on it by those 
     who fancy themselves defenders of free trade. While I believe 
     this study does have some policy implications, which I may 
     want to discuss at some future time, one of the most useful 
     things it may do is help us all clean up our rhetoric and 
     reflect a more sophisticated--and accurate--view of economic 
       Mr. President, I ask that the study, by Don Bedell of 
     Bedell Associates, be printed in the Record.
       The study follows:

                                            Bedell Associates,

                                  Palm Desert, Calif., April 1983.

   Tariffs Miscast as Villain in Bearing Blame for Great Depression--
                        Smoot/Hawley Exonerated

                         (By Donald W. Bedell)

             smoot/hawley, depression and world revolution

       It has recently become fashionable for media reporters, 
     editorial writers here and abroad, economists, Members of 
     Congress, members of foreign governments, UN organizations 
     and a wide variety of scholars to express the conviction that 
     the United States, by the single act of causing the Tariff 
     Act of 1930 to become law (Public Law 361 of the 71st 
     Congress) plunged the world into an economic depression, 
     may well have prolonged it, led to Hitler and World War 
       Smott/Hawley lifted import tariffs into the U.S. for a 
     cross section of products beginning mid-year 1930, or more 
     than 8 months following: the 1929 financial collapse. Many 
     observers are tempted simply to repeat ``free trade'' 
     economic doctrine by claiming that this relatively 
     insignificant statute contained an inherent trigger mechanism 
     which upset a nearly functioning world trading system based 
     squarely on the theory of comparative economics, and which 
     propelled the world into a cataclysm of unmeasurable 
       We believe that sound policy development in international 
     trade must be based solidly on facts as opposed to 
     suspicions, political or national bias, or ``off-the-cuff'' 
     impressions 50 to 60 years later of how certain events may 
     have occurred.
       When pertinent economic, statistical and trade data are 
     carefully examined will they show, on the basis of 
     preponderance of fact, that passage of the Act did in fact 
     trigger or prolong the Great Depression of the Thirties, that 
     it had nothing to do with the Great Depression, or that it 
     represented a minor response of a desperate nation to a giant 
     world-wide economic collapse already underway?
       It should be recalled that by the time Smoot/Hawley was 
     passed 6 months had elapsed of 1930 and 8 months had gone by 
     since the economic collapse in October, 1920. Manufacturing 
     plants were already absorbing losses, agriculture surpluses 
     began to accumulate, the specter of homes being foreclosed 
     appeared, and unemployment showed ominous signs of a 
     precipitous rise.
       The country was stunned, as was the rest of the world. All 
     nations sought very elusive solutions. Even by 1932, and the 
     Roosevelt election, improvisation and experiment described 
     government response and the technique of the New Deal, in the 
     words of Arthur Schlesinger, Jr. in a New York Times article 
     on April 10, 1983. President Roosevelt himself is quoted in 
     the article as saying in the 1932 campaign. ``It is common 
     sense to take a method and try it. If it fails, admit it 
     frankly and try another. But above all try something.''
       The facts are that, rightly or wrongly, there were no major 
     Roosevelt Administration initiatives regarding foreign trade 
     until well into his Administration; thus clearly suggesting 
     that initiatives in that sector were not thought to be any 
     more important than the Hoover Administration thought them. 
     However, when all the numbers are examined we believe neither 
     President Hoover nor President Roosevelt can be faulted for 
     placing international trade's role in world economy near the 
     end of a long list of sectors of the economy that had caused 
     chaos and suffering and therefore needed major corrective 
       How important was international trade to the U.S.? How 
     important was U.S. trade to its partners in the Twenties and 
       In 1919, 86% of U.S. Imports were duty free, or $2.9 
     Billion of a total of $4.3 Billion. Exports amounted to $5.2 
     Billion in that year making a total trade number of $9.6 
     Billion or about 14% of the world's total. See Chart I below.

             CHART I.--U.S. GROSS NATIONAL PRODUCT, 1929-33             
                      [Dollar amounts in billions]                      
                               1929     1930     1931     1932     1933 
GNP........................   $103.4    $29.5    $75.3    $56.8    $55.4
U.S. international trade...     $9.5     $6.8     $4.5     $2.9     $3.2
U.S. international trade                                                
 percent of GNP............      1.3      7.6      5.9      5.1   \1\5.6
\1\Series U.S. Department of Commerce of the United States, Bureau of   
  Economic Analysis.                                                    

       Using the numbers in that same Chart I it can be seen that 
     U.S. imports amounted to $4.3 Billion or just slightly above 
     12% of total world trade. When account is taken of the fact 
     that only 33%, or $1.5 Billion, of U.S. imports was in the 
     Dutiable category, the entire impact of Smoot/Hawley has to 
     be focused on the $1.5 Billion number which is barely 1.5% of 
     U.S. GNP and 4% of world imports.
       What was the impact? In dollars Dutiable imports fell by 
     $462 Million, or from $2.5 Billion to $1.0 Billion, during 
     1930. It's difficult to determine how much of that small 
     number occurred in the second half of 1930 but the 
     probability is that it was less than 50%. In any case, the 
     total impact of Smoot/Hawley in 1930 was limited to a 
     ``damage'' number of $231 Million; spread over several 
     hundred products and several hundred countries!
       A further analysis of imports into the U.S. discloses that 
     all European countries accounted for 30% or $1.3 Billion in 
     1929 divided as follows: U.K. at $330 Million or 7\1/2\%, 
     France at $171 Million or 3.9%, Germany at $255 Million or 
     5.9%, and some 15 other nations accounting for $578 Million 
     or 13.1% for an average of 1%.
       These numbers suggest that U.S. imports were spread broadly 
     over a great array of products and countries, so that any 
     tariff action would by definition have only a quite modest 
     impact in any given year or could be projected to have any 
     important cumulative effect.
       This same phenomenon is apparent for Asian countries which 
     accounted for 29% of U.S. imports divided as follows: China 
     at 3.8%, Japan at $432 Million and 9.8%, and with some 20 
     other countries sharing in 15% or less than 1% on average.
       Australia's share was 1.3% and all African countries sold 
     2.5% of U.S. imports.
       Western Hemisphere countries provided some 37% of U.S. 
     imports with Canada at 11.4%, Cuba at 4.7%, Mexico at 2.7%, 
     Brazil at 4.7% and all others accounting for 13.3% or about 
     1% each.
       The conclusion appears inescapable on the basis of these 
     numbers: a potential adverse impact of $231 Million spread 
     over the great array of imported products which were Dutiable 
     in 1929 could not realistically have had any measureable 
     impact on America's trading partners.
       Meanwhile, the Gross National Product (GNP) in the United 
     States had dropped an unprecedented 13.5% in 1930 alone, from 
     $103.4 Billion in 1929 to $89 Billion by the end of 1930. It 
     is unrealistic to expect that a shift in U.S. international 
     imports of just 1.6% of U.S. GNP in 1930 for example ($231 
     Million on $14.4 Billion) could be viewed as establishing a 
     ``precedent'' for America's trading partners to follow, or 
     represented a ``model'' to follow.
       Even more to the point an impact of just 1.6% could not 
     reasonably be expected to have any measurable effect on the 
     economic health of America's trading partners.
       Note should be taken of the claim by those who repeat the 
     Smoot/Hawley ``villain'' theory that it set off a ``chain'' 
     reaction around the world. While there is some eivdence that 
     certain of America's trading partners retaliated against the 
     U.S. there can be no reliance placed on the assertion that 
     those same trading partners retalliated against each other 
     by way of showing anger and frustration with the U.S. 
     Self-Interest alone would dictate otherwise, common sense 
     would intercede on the side of avoidance of ``shooting 
     oneself in the foot,'' and the facts disclose that world 
     trade declined by 18% by the end of 1930 while U.S. trade 
     declined by some 10% more or 28%. U.S. foreign trade 
     continued to decline by 10% more through 1931, or 53% 
     versus 43% for worldwide trade, but U.S. share of world 
     trade declined by only 18% from 14% to 11.3% by the end of 
       Reference was made earlier to the Duty Free category of 
     U.S. imports. What is especially significant about those 
     import numbers is the fact that they dropped in dollars by an 
     almost identical percentage as did Dutiable goods through 
     1931 and beyond: Duty Free imports declined by 29% in 1930 
     versus 27% for Dutiable goods, and by the end of 1931 the 
     numbers were 52% versus 51% respectively.
       The only rational explanation for this phenomenon is that 
     Americans were buying less and prices were falling. No basis 
     exists for any claim that Smoot/Hawley had a distinctively 
     devastating effect on imports beyond and separate from the 
     economic impact of the economic collapse in 1929.
       Based on the numbers examined so far, Smoot/Hawley is 
     clearly a mis-cast villian. Further, the numbers suggest the 
     clear possibility that when compared to the enormity of the 
     developing international economic crisis Smoot/Hawley had 
     only a minimal impact and international trade was a victim of 
     the Great Depression.
       This possibility will become clear when the course of the 
     Gross National Produce (GNP) during 1929-1933 is examined and 
     when price behavior world-wide is reviewed, and when 
     particular Tariff Schedules of Manufacturers outlined in the 
     legislation are analyzed.
       Before getting to that point another curious aspect of the 
     ``villian'' theory is worthy of note. Without careful 
     recollection it is tempting to view a period of our history 
     some 50-60 years ago in terms of our present world. Such a 
     superficial view not only makes no contribution to 
     constructive policy-making. It overlooks several vital 
     considerations which characterized the Twenties and Thirties:
       1. The international trading system of the Twenties bears 
     no relation to the interdependent world of the Eighties 
     commercially, industrially and financially in size or 
       2. No effective international organization existed, similar 
     to the General Agreement for Tariffs and Trade (GATT) for 
     example for resolution of disputes. There were no trade 
     ``leaders'' among the world's nations in part because most 
     merchantile nations felt more comfortable without dispute 
     settlement bodies.
       3. Except for a few critical products foreign trade was not 
     generally viewed in the ``economic-critical'' context as 
     currently in the U.S. As indicated earlier either President 
     Hoover nor President Roosevelt viewed foreign trade as 
     crucial to the economy in general or recovery in particular.
       4. U.S. foreign trade was reintively as an amorphous 
     phenomenon quite unlike the highly structured system of the 
     Eighties; characterized largely then by ``caveat empton'' and 
     a broadly laissez-faire philosophy generally unacceptable 
       These characteristics, together with the fact that 60 
     percent of U.S. imports were Duty Free in 1929 and beyond, 
     placed overall international trade for Americans in the 
     Twenties and Thirties on a very low level of priority 
     especially against the backdrop of world-wide depression. 
     Americans in the Twenties and Thirties could no more 
     visualize the world of the Eighties than we in the 
     Eighties can legitimately hold them responsible for 
     failure by viewing their world in other than the most 
     pragmatic and realistic way given those circumstances.
       For those Americans then, and for us now, the numbers 
     remain the same. On the basis of sheer order of magnitude of 
     the numbers illustrated so far, the ``villian'' theory often 
     attributed to Smoot/Hawley is an incorrect reading of history 
     and a mis-understanding of the basic and incontrovertible law 
     of cause and effect.
       It should also now be recalled that, despite heroic efforts 
     by U.S. policy-makers its GNP continued to slump year-by-year 
     and reached a total of just $55.4 billion in 1933 for a total 
     decline from 1929 levels of 46 percent. The financial 
     collapse of October, 1929 had indeed left its mark.
       By 1933 the 1929 collapse had prompted formation in the 
     U.S. of the Reconstruction Finance Corporation, Federal Home 
     Loan Bank Board, brought in a Democrat President with a 
     program to take control of banking, provide credit to 
     property owners and corporations in financial difficulties, 
     relief to farmers, regulation a stimulation of business, new 
     labor laws and social security legislation.\3\
     \3\Beard, Charles and Mary, New Basic History of the United 
       So concerned were American citizens about domestic economic 
     affairs, including the Roosevelt Administration and the 
     Congress, that scant attention was paid to the solitary 
     figure of Secretary of State Cordell Hull. He, alone among 
     the Cabinet, was convinced that international trade had 
     material relevance to lifting the country back from 
     depression. His efforts to liberalize trade in general and to 
     find markets abroad for U.S. products in particular from 
     among representatives of economically stricken Europe, Asia 
     and Latin America were abruptly ended by the President and 
     the 1933 London Economic Conference collapsed without result.
       The Secretary did manage to make modest contributions to 
     eventual trade recovery through the Most Favored Nation (MFN) 
     concept. But it would be left for the United States at the 
     end of World War II to undertake an economic and political 
     role of leadership in the world; a role which in the Twenties 
     and Thirties Americans in and out of government felt no need 
     to assume, and did not assume. Evidence that conditions in 
     the trade world would have been better, or even different, 
     had the U.S. attempted some leadership role can not 
     responsibly be assembled. Changing the course of past history 
     has always been less fruitful than applying perceptively 
     history's lessons.
       The most frequently used numbers thrown out about Smoot/
     Hawley's impact by those who believe in the ``villain'' 
     theory are those which clearly establish that U.S. dollar 
     decline in foreign trade plummeted by 66 percent by the end 
     of 1933 from 1929 levels, $9.6 billion to $3.2 billion 
       Much is made of the co-incidence that world-wide trade also 
     sank about 66 percent for the period. Chart II summarizes the 

            CHART II.--UNITED STATES AND WORLD TRADE, 1929-33           
                      [In billions of U.S. dollars]                     
                               1929     1930     1931     1932     1933 
United States:                                                          
    Exports................      5.2      3.8      2.4      1.6      1.7
    Imports................      4.4      3.0      2.1      1.3      1.5
    Exports................     33.0    *26.5     18.9     12.9     11.7
    Imports................     35.0     29.1     20.8     14.0    *12.5
*Series U Department of Commerce of the United States, League of        
  Nations, and International Monetary Fund.                             

       The inference is that since Smoot/Hawley was the first 
     ``protectionist'' legislation of the Twenties, and the end of 
     1933 saw an equal drop in trade that Smoot/Hawley must have 
     caused it. Even the data already presented suggest the 
     relative irrelevance of the tariff-raising act on a strictly 
     trade numbers basis. When we examine the role of a world-wide 
     price decline in the trade figures for almost every product 
     made or commodity grown the ``villain'' Smoot/Hawley's impact 
     will not be measurable.
       It may be relevant to note here that the world's trading 
     ``system'' paid as little attention to America's revival of 
     foreign trade beginning in 1934 as it did to American trade 
     policy in the early Thirties. From 1934 through 1939 U.S. 
     foreign trade rose in dollars by 80% compared to world-wide 
     growth of 15%. Imports grew by 68% and exports climbed by a 
     stunning 93%. U.S. GNP by 1939 had developed to $91 Billion, 
     to within 88% of its 1929 level.
       Perhaps this suggests that America's trading partners were 
     more vulnerable to an economic collapse and thus much less 
     resilient than was the U.S. In any case the international 
     trade decline beginning as a result of the 1929 economic 
     collapse, and the subsequent return by the U.S. beginning in 
     1934 appear clearly to have been wholly unrelated to Smoot/
       As we begin to analyze certain specific Schedules appearing 
     in the Tariff Act of 1930 it should be noted that sharp 
     erosion of prices world-wide caused dollar volumes in trade 
     statistics to drop rather more than unit volume thus 
     emphasizing the decline value. In addition, it must be 
     remembered that as the Great Depression wore on, people 
     simply bought less of everything increasing further price 
     pressure downward. All this wholly apart from Smoot/Hawley.
       When considering specific Schedules, No. 5 which includes 
     Sugar, Molasses, and Manufactures Of, maple sugar cane, 
     sirups, adonite, dulcite, galactose, inulin, lactose and 
     sugar candy. Between 1929 and 1933 import volume into the 
     U.S. declined by about 40% in dollars. In price on a world 
     basis producers suffered a stunning 60% drop. Volume of sugar 
     imports declined by only 42% into the U.S. in tons. All these 
     changes lend no credibility to the ``villain'' theory unless 
     one assumes, erroneously, that the world price of sugar was 
     so delicately balanced that a 28% drop in sugar imports by 
     tons into the U.S. in 1930 destroyed the price structure and 
     that the decline was caused by tariffs and not at least 
     shared by decreased purchases by consumers in the U.S. and 
     around the world.
       Schedule 4 describes Wood and Manufactures Of, timber hewn, 
     maple, brier root, cedar from Spain, wood veneer, hubs for 
     wheels, casks, boxes, reed and rattan, toothpicks, porch 
     furniture, blinds and clothespins among a great variety of 
     product categories. Dollar imports into the U.S. slipped by 
     52% from 1929 to 1933. By applying our own GNP as a 
     reasonable index of prices both at home and overseas, unit 
     volume decreased only 6% since GNP had dropped by 46% in 
     1933. The world-wide price decline did not help profitability 
     of wood product makers, but to tie that modest decline in 
     volume to a law affecting only 6\1/2\% of U.S. imports in 
     1929 puts great stress on credibility, in terms of harm 
     done to any one country or group of countries.
       Schedule 9. Cotton Manufactures, a decline of 54% in 
     dollars is registered for the period, against a drop of 46% 
     in price as reflected in the GNP number. One the assumption 
     that U.S. GNP constituted a rough comparison to world prices, 
     and the fact that U.S. imports of these products was 
     infinitesimal. Smoot/Hawley was irrelevant. Further, the 
     price of raw cotton in the world plunged 50% from 1929 to 
     1933. U.S. growers had to suffer the consequences of that low 
     price but the price itself was set by world market prices, 
     and was totally unaffected by any tariff action by the U.S.
       Schedual 12 deals with Silk Manufactures, a category which 
     decreased by some 60% in dollars. While the decrease amounted 
     to 14% more than the GNP drop, volume of product remained 
     nearly the same during the period. Assigning responsibility 
     to Smoot/Hawley for this very large decrease in price 
     beginning in 1930 stretches credibility beyond the breaking 
       Several additional examples of price behavior are relevant.
       One is Schedule 2 products which include brick and tile. 
     Another is Schedule 3 iron and steel products. One 
     outstanding casualty of the financial collapse in October, 
     1929 was the Gross Private Investment number. From $16.2 
     Billion annually in 1939 by 1933 it has fallen by 91% to just 
     $1.4 Billion. No tariff policy, in all candor, could have so 
     devastated an industry as did the economic collapse of 1929. 
     For all intents and purposes construction came to a halt and 
     markets for glass, brick and steel products with it.
       Another example of price degradation world-wide completely 
     unrelated to tariff policy is Petroleum products. By 1933 
     these products had decreased in world price by 82% but Smoot/
     Hawley had no Petroleum Schedule. The world market place set 
     the price.
       Another example of price erosion in world market is 
     contained in the history of exported cotton goods from the 
     United States. Between 1929 and 1933 the volume of exported 
     goods actually increased by 13.5% while the dollar value 
     dropped 48%. This result was wholly unrelated to the tariff 
     policy of any country.
       While these examples do not include all Schedules of Smoot/
     Hawley they clearly suggest that overwhelming economic and 
     financial forces were at work affecting supply and demand and 
     hence on prices of all products and commodities and that 
     these forces simply obscured any measurable impact the Tariff 
     Act of 1930 might possibly have had under conditions of 
     several years earlier.
       To assert otherwise puts on those proponents of the Smoot/
     Hawley ``villian'' theory a formidable challenge to explain 
     the following questions:
       1. What was the nature of the ``trigger'' mechanism in the 
     Act that set off the alleged domino phenomenon in 1930 that 
     began or prolonged the Great Depression when implementation 
     of the Act did not begin until mid-year?
       2. In what ways was the size and nature of U.S. foreign 
     trade in 1929 so significant and critical to the world 
     economy's health that a less than 4% swing in U.S. imports 
     could be termed a crushing and devastating blow?
       3. On the basis of what economic theory can the Act be said 
     to have caused the GNP drop of an astounding drop of 13.5% in 
     1930 when the Act was only passed in mid-1930? Did the entire 
     decline take place in the second half of 1930? Did world-
     wide trade begin its decline of some $13 Billion only in 
     the second half of 1930?
       3. Does the fact that duty free imports into the U.S. 
     dropped in 1930 and 1931 and in 1932 at the same percentage 
     rate as dutiable imports support the view that Smoot/Hawley 
     was the cause of the decline in U.S. imports?
       4. Is the fact that world wide trade declined less rapidly 
     than did U.S. foreign trade prove the assertion that American 
     trading partners retaliated against each other as well as 
     against the U.S. because and subsequently held the U.S. 
     accountable for starting an international trade war?
       5. Was the international trading system of the Twenties so 
     delicately balanced that a single hastily drawn tariff 
     increase bill affecting just $231 Million of dutiable 
     products in the second half of 1930 began a chain reaction 
     that scuttled the entire system? Percentage-wise $231 Million 
     is but 0.65% of all of 1929 world-wide trade and just half 
     that of world-wide imports:
       The preponderance of history and facts of economic life in 
     the international area make an affirmative response by the 
     ``villain'' proponents an intolerable burden.
       It must be said that the U.S. does offer a tempting target 
     for Americans who incessantly cry ``mea culpa'' over all the 
     world's problems, and for many among our trading partners to 
     explain their problems in terms of perceived American 
     inability to solve those problems.
       In the world of the Eighties U.S. has indeed very serious 
     and perhaps grave responsibility to assume leadership in 
     international trade and finance, and in politics as well.
       On the record, the United States has met that challenge 
     beginning shortly after World War II.
       The U.S. role in structuring the United Nations, the 
     General Agreement on Tariffs and Trade (GATT), the 
     International Monetary Fund, the Bretton Woods and Dumbarton 
     Oaks Conferences on monetary policy, the World Bank and 
     various Regional Development Banks, for example, is a record 
     unparalleled in the history of mankind.
       But in the Twenties and Thirties there was no acknowledged 
     leader in international affairs. On the contrary, evidence 
     abounds that most nations preferred the centuries-old 
     patterns of international trade which emphasized pure 
     competition free from interference by any effective 
     international supervisory body such as GATT.
       Even in the Eighties examples abound of trading nations 
     succumbing to nationalistic tendencies and ignoring signed 
     trade agreements. Yet the United States continues as the 
     bulwark in trade liberalization proposals within the GATT. It 
     does so not because it could not defend itself against any 
     kind of retaliation in a worst case scenario but because no 
     other nation is strong enough to support them successfully 
     without the United States.
       The basic rules of GATT are primarily for all those 
     countries who can't protect themselves in the world of the 
     Eighties and beyond without rule of conduct and discipline.
       The attempt to assign responsibility to the U.S. in the 
     Thirties for passing the Smoot/Hawley tariff act and thus set 
     off a chain reaction of international depression and war is 
     on the basis of a preponderance of fact, a serious mis-
     reading of history, a repeat of the basic concept of cause 
     and effect and a disregard for the principle of proportion of 
       It may constitute a fascinating theory for political 
     mischief-making but it is a cruel hoax on all those 
     responsible for developing new and imaginative measures 
     designed to liberalize international trade.
       Such constructive development and growth is severely 
     impeded by perpetuating what is no more than a symbolic 
     economic myth.
       Nothing is less worthwhile than attempting to re-write 
     history, not learning from it. Nothing is more worthwhile 
     than making careful and perceptive and objective analysis in 
     the hope that it may lead to an improved and liberalized 
     international trading system.

  Mr. HOLLINGS. It affected less than 1.5 percent of our GNP. It 
affects now world trade 18 percent of our GNP and only affected one-
third of the trade. The other two-thirds lost just as much rather than 
unaffected part and then goes on that under our friend Cordell Hull and 
reciprocal free trade we got into a positive balance in 1933. That is a 
bum rap this wall where you can ship capital around the world on a 
satellite technology and a computer clip. That is why they are all 
moving. They give me that wall argument and Smoot and Hawley. We have 
heard enough of it. I wanted to make sure we answered these particular 
arguments and then we reserve our 2 hours for tomorrow. And I thank the 
distinguished chairman, Senator Moynihan, for his courtesy.
  Mr. MOYNIHAN. Yes. Mr. President, we are aware of some pressure of 
time. The distinguished Senator from South Carolina has the better part 
of 2 hours remaining and that will be for his disposition tomorrow.
  Mr. HOLLINGS. Very good. I thank the Senator.
  Mr. MOYNIHAN. The Senator from Alaska has to leave, we know.
  The Senator from Washington is next. And I yield 10 minutes to the 
Senator from Washington. And then I believe the Senator from Wyoming 
will take whatever time he wants.
  I yield to the distinguished Senator from Washington.
  Mrs. MURRAY. Thank you.
  Mr. President, I rise today in full support of the implementing 
legislation to the Uruguay round of the GATT.
  Two years ago, I first came to our Nation's Capital and to this 
Capitol Building.
  Two years ago, I vowed that I would look at every piece of 
legislation that came before this body from the perspective of average 
  And, I promised I would speak with the voice of common people. People 
who worry about educating their kids, taking care of their parents, 
paying their mortgage, and balancing their checkbooks.
  Mr. President, from the first vote I cast in the 103d Congress on the 
Family and Medical Leave Act to this one on the GATT, I have not lost 
that vision.
  That's why I can say this bill is important to average Americans like 
the members of my family.
  Mr. President, this bill is vital because this bill means more secure 
and well-paying jobs.
  The importance of trade is understood by families in my home State 
from Seattle to Spokane. My friends and neighbors understand that 
international commerce is the lifeblood of our economy.
  Per capita, my home State is America's largest exporter. One in five 
jobs in Washington is directly linked to trade.
  Our State is home to the Nation's largest exporting company--the 
Boeing Co.
  Ours is the State of the Nation's most cutting-edge, innovative 
industries of the future--software and biotechnology.
  Washington State sends the fruits of our labors--our precious apples 
and pears and wheat--to every corner of the globe.
  We in the State of Washington know that expanding trade means more 
goods jobs. It means more manufacturing jobs. More high-technology 
jobs. More jobs at our Pacific Coast ports and more jobs in the 
orchards and farmlands of our Inland Empire.
  And, these family-wage jobs provide the economic stability and 
economic diversity the citizens of the State of Washington have worked 
so hard to achieve.
  I have heard from many people in my trade-dependent state who 
understand how important this vote is to their lives.
  They know the global tax breaks in the GATT will save each American 
family about $110 per year.
  They know if we walk away from this deal which took more than 7 years 
to negotiate and more than 120 countries to sign, Boeing will have a 
more difficult time selling airplanes.
  That our most innovative companies, like Microsoft and Nintendo, will 
lose billions of dollars to foreign copyright privates.
  That our apples--finally just reaching Japanese shores--will be 
turned away. And, our wheat will sit in silos.
  And, worst of all, if we walk away, we will return to those dark days 
of the recession with long unemployment lines. And, declining family 
  Mr. President, I have heard some of the arguments against this bill. 
They are based more in misunderstanding of this agreement than they are 
in solid economic analysis. I know how easy it is to score debating 
points on issues like this. And, how easy it is to blow things out of 
proportion, to scare rather than to educate.
  I know how this works, because I understand the fear of economic 
  Mr. President, you have heard me say this before. The highest paying 
job I had before I came here paid $23,000 per year. I am one of those 
people who has spent years working hard and playing by the rules. And, 
still being a pink slip away from economic disaster.
  I know what all working families want--we want to get out of the 
system what we put into it.
  And, Mr. President, this is exactly what the GATT does. It gives us 
an fair return for our hard work. It encourages and protects our 
  It makes not only our country but all countries work better for 
average Americans.
  It gives our workers a step up against the unfair and high tariffs we 
have had imposed on us for decades.
  It levels the economic playing field, and it makes the world live up 
to our rules. It opens foreign markets as wide as this great American 
market is to foreign products.
  And, it is a great deal for consumers. It is the largest global tax 
cut in the history of civilization.
  I have heard the arguments against the GATT. I share some of the 
concerns of the opponents. But, I believe that economic growth and 
expanded trade can exist and even encourage environmental protection.
  I believe we can conclude a trade agreement and work toward improving 
the quality of life of workers around the world.
  I believe that we can pass this agreement and follow the hard work of 
my good friend, Senator Harkin, to end the horrendous practices of some 
of our trading partners in child and slave labor.
  I say to these opponents, we cannot influence our trading partners by 
imposing trade sanctions. We cannot make other countries live up to our 
standards by ignoring them.
  And, I say to my colleagues on the other side of this issue--once 
again, we have a choice. We can face the challenges of the 21st century 
and the international marketplace. Or, we can look backward, become 
isolationist, and turn inward.
  History will record what we do here. We are at a crossroads. For the 
first time in the history of civilization, we have before us an 
agreement which covers trade in services, a comprehensive agreement on 
subsidies, trade-related aspects of intellectual property and foreign 
  This agreement is good for America. It is good for America's future 
  And it is a good example of what I hope will be a new era in American 
  I support the compromise President Clinton reached with Senator Dole 
last week. They worked together in the best bipartisan way to clear up 
some misunderstandings about sovereignty. They have illuminated for us 
the best work of three administrations.
  More than 120 countries agreed to a set of rules regarding trade. 
And, we should, too.
  I urge my fellow colleagues to swiftly pass this bill.
  I thank the Chair and I yield back my time.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. May I congratulate the Senator from Washington on her 
very thoughtful comments.
  And might I particularly draw attention to her comment that she is 
concerned, as are other Senators, about the problems of child labor in 
the world, and properly so, in the world where population expansion has 
been so demonic. But we will never be able to engage those countries if 
we cut off trade with them. She is absolutely right in that regard, and 
importantly so, and I want to thank her for her remarks.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. WALLOP. Mr. President, I yield 10 minutes to the Senator from 
  The PRESIDING OFFICER (Mr. Moynihan). The Senator from Alaska.
  Mr. STEVENS. Mr. President, I thank the manager of the bill.
  While I support the concept of the General Agreement on Tariffs and 
Trade, I cannot support the bill that is before the Senate.
  I have three basic reasons. I believe that the creation of the World 
Trade Organization, as contained in the agreement and as would be 
approved by this bill, infringes upon our sovereignty, not only of our 
Nation but of our individual States.
  Second, I believe that the procedure under which we are considering 
this bill once again violates the Constitution of the United States. 
Mr. President, I am compelled to say I think that in the last election 
the public was telling us that we have a Constitution we should live up 
to. We raise our hands and say we will support the Constitution. Then 
we, once again, bring a trade agreement before this body under a 
procedure which is unconstitutional--the fast track procedure.
  The third reason I cannot support this agreement is that it requires 
a waiver of the Budget Act. I do not believe we should vote to waive 
the Budget Act in order to approve the General Agreement on Tariffs and 
Trade. Particularly not with our current Federal budget deficits.
  Mr. President, as one who supports the concept of free trade, I find 
it very difficult, to come before the Senate and oppose the approval of 
a trade agreement because of the procedures that have been followed. I 
did that with regard to the North American Free Trade Agreement last 
November. During the debate on the NAFTA agreement, I raised on the 
Senate floor two constitutional points of order, two issues that affect 
the rights of States and particularly the rights of small States.
  The first issue related to the Senate's constitutional duty under 
article II, section 2, clause 2 of the Constitution to ``advise and 
consent'' to treaties negotiated by the President. Once again, we have 
here before us now an executive agreement. It is an executive agreement 
merely because the President designated it as such, notwithstanding the 
fact that it is clearly one of the items that should have been within 
the treaty clause of the Constitution. The President does have some 
discretion to choose the type of instrument he will use, but I do 
believe he must respect the confines of the instrument he chooses as he 
puts before the Congress a particular new type of foreign agreement for 
approval by the Congress.
  The Constitution specifically refers to treaties, compacts, and 
agreements as some of the choices that are available to the President. 
But there are some parameters, I feel, that should be confining upon 
any President as he exercises that discretion to choose the type of 
agreement he will use.
  This agreement clearly is a treaty, in my judgment. We had a 
distinguished representative of Harvard Law School come before the 
Commerce Committee who set forth why it is that. I regret to say he has 
recanted his position at the last minute, as he started to count votes 
because of the circumstance that he does support GATT, but he opposes 
the process.
  I believe that we should stand by the Constitution, rather than just 
count votes, and the GATT Agreement should be submitted to the Senate 
as a treaty because of the World Trade Organization concept that is 
created by it. The WTO concept deals with issues of sovereignty. It 
deals with the powers of government that particularly affect this 
country and our system of government. I believe that the GATT Agreement 
should be submitted to the Senate as a treaty because the World Trade 
Organization Council and the dispute resolution mechanism diminish the 
sovereignty of the individual states. I do not understand why we should 
create a new World Trade Organization that will take part of the 
sovereignty--diminish the sovereignty of our States and our Nation--
through a trade agreement and not a treaty.
  The second constitutional issue is one that I raised last November--
the fast track procedure which prohibits amendments to the implementing 
legislation is unconstitutional. The fast track procedure applies to 
the bill that is before us now. It limits the amount of debate on the 
bill and prohibits amendments to it. I believe that is 
unconstitutional. I spelled out to the Senate, last November, this same 
issue. There is no reason for me to raise it again, because I know I 
will lose again, because the same people are here who voted on it 
before. Maybe another Congress at a later date will realize that we 
ought to start protecting the Constitution.
  Members of the Senate have the Constitutional right under article I, 
section 7 to offer amendments to revenue bills. It says:

       All bills for raising revenue shall originate in the House 
     of Representatives; but the Senate may propose or concur with 
     amendments as on other bills.

  GATT is a revenue measure. It originated in the House of 
Representatives. Yet, I am prohibited now by this procedure from 
offering amendments to protect my State. And the last time I presented 
an amendment during the NAFTA debate, the Chair ruled that my amendment 
was out of order and the Chair's ruling was sustained.
  Critics of my amendment point to article 1, section 5, clause 2 of 
the Constitution which provides that ``Each House may determine the 
Rules of its proceedings'', arguing that the Members of the Senate 
agreed to limit our own rights to offer amendments. I disagree with 
that argument. The Constitution annotated--published by the 
Congressional Research Service and sold to the public as an official 
Government document--says:

       In the exercise of their constitutional power to determine 
     their rules of proceedings, the Houses of Congress may not 
     ignore constitutional restraints or violate fundamental 
     rights, and there should be a reasonable relation between the 
     mode or method to be attained.

  In Powell versus McCormick, the Supreme Court held that the 
qualifications of Members are enumerated in the Constitution and 
neither House of Congress may impose additional qualifications through 
its own rules.
  When we first contemplated the fast track procedure we believed we 
were restricting our rights for very narrow purposes. Section 
151(b)(1)(C) of the Trade Act of 1974 provides that the implementing 
bill will only contain provisions ``necessary and appropriate'' to 
implement the trade agreement. The implementing legislation we are 
currently considering contains at least 29 sections that are not 
essential to implementing the trade agreement. They are only needed to 
meet the Budget Act and not the trade agreement. The inclusion of 
nonessential provisions in a trade agreement that is not amendable--
even to strike the offending provisions--is an abuse of process. This 
is the type of abuse of process that led the Senate to adopt the Byrd 
Rule regarding the consideration of reconciliation bills. The Byrd Rule 
states that if the budget effect is incidental to the nonbudgetary 
impact then the provision is non germane and subject to a motion to 
strike. I believe that there should be a similar type of rule which 
would, at the very least, allow Members to strike provisions which are 
not ``necessary and appropriate'' to implement the trade agreement.
  It is unfortunate, I think, that we can get to the point where, under 
a fast track procedure, we deny the rights of representatives of small 
States. And they are the people that are being hurt, Mr. President, by 
this bill. I mention in particular the double E savings bond provision 
that is in the revenue portion of this bill.
  The bill before us includes not only provisions required to implement 
the trade agreement but also provisions to comply with the Budget Act. 
I do not believe that we ever contemplated we would have Budget Act 
provisions in a bill that came before us under the fast track that we 
would not be able to amend.
  One of these provisions is the double E savings bond provision which 
is going to penalize people who use deductions from their salaries to 
buy savings bonds. It raises a very small amount, about $122 million 
over 5 years, compared to the billions that are required to offset the 
revenue loss from the tariff reductions in this bill. This provision 
was put in here--I say this respectfully--by the members of the Finance 
Committee, and the Ways and Means Committee. A very small portion of 
the Congress made this provision a part of the GATT deal. And, the 
people who are going to pay for it are the people who purchase savings 
bonds, quite often for their retirement or children's education. Many 
of these individuals purchase the savings bonds through a deduction 
plan from their paychecks. The $122 million savings that is included in 
this bill will come about because someone redeeming a savings bond 
could forfeit up to six months of interest. Currently interest is 
credited every month, but under this provision the Treasury Department 
will exercise its administrative discretion to credit interest every 
six months instead. This is wrong and this provision should be subject 
to amendment here on the floor.
  I believe that denying us the right to offer amendments to deal with 
these types of revenue provisions clearly violates the Constitution.
  There is one other issue I am constrained to mention. I was the 
author of the spectrum auction concept. For years I argued that the 
people who were acquiring new licenses for spectrum, through the FCC, 
should not get them through a lottery, but they should bid for them. 
The licenses had extreme value.
  People laughed at that. The first time that CBO looked at this issue 
they said that my bill would probably raise about $250 million. It is 
now in the budget for about $14 billion. And part of the provisions we 
put in there provided for a pioneer preference provision to give 
preference to people who develop new technologies but did not have the 
financing capability to utilize those technologies because they would 
be competing against the enormous financial entities of 
telecommunications industry in this country for those licenses.
  As a consequence of the fast track procedure which prohibits 
amendments, included in this bill is a pioneer preference provision 
that says, ``Oh, by the way, those people have to pay about 85 percent 
of the average paid by other people in spectrum auctions.'' Which, Mr. 
President, was not what was intended at all. Strangely, we have people 
holding the spectrum under the pioneer preference auctions that are 
part of the largest financial organizations in the country. They are 
not small people who developed new technologies that need a boost to 
get licenses for less than cost or--as a matter of fact, we wanted them 
to get them free. But under the circumstances of this bill, I find 
again a revenue provision that is included which I cannot, even as the 
author of spectrum auction concept, offer an amendment to knock it out 
of the implementing legislation. The pioneer preference provision 
should not be in this bill at all.
  I have the feeling that those of us from the small States are the 
ones who are really harmed by this bill.
  In addition to these constitutional issues, I have been concerned 
that the GATT will adversely affect Alaska and 16 other States that use 
the unitary tax method. If the Uruguay round agreement is adopted, 
Alaska could be in jeopardy of losing approximately $200 million in 
revenue annually from its unitary tax on oil producers. The other 
States that rely on this method of taxation include Arizona, 
California, Colorado, Connecticut, the District of Columbia, Illinois, 
Indiana, Iowa, Kansas, Massachusetts, New Hampshire, New Jersey, New 
York, Ohio, Rhode Island and West Virginia.
  The Supreme Court of the United States recently upheld the right of 
Alaska and other States to use a unitary tax. However, the European 
Commission has already identified in its 1994 ``Report on United States 
Barriers to Trade and Investment'' the unitary tax as an unfair trade 
practice. In response the Administration negotiated an exception to the 
General Agreements on Trade in Services which is designed to protect 
the State's ability to use unitary taxes. In addition, the USTR 
submitted reservations in Geneva on June 29, 1994. I submitted along 
with Senator Dorgan a letter to the U.S. Trade Representative on 
November 14 requesting a report on the status of the reservations. I 
would like to submit for the Record a copy of the response to that 
  There being no objection, the letter was ordered to be printed in the 
Record, as follows:

                                    The U.S. Trade Representative,

                            Executive Office of the President,

                                Washington, DC, November 30, 1994.
     Hon. Ted Stevens,
     U.S. Senate,
     Washington, DC.
       Dear Ted: Thank you for your letter of November 14, 1994, 
     regarding the status of the reservation we filed in June 
     exempting state and local tax measures from certain 
     requirements of the General Agreement on Trade in Services 
     (GATS). Specifically, you asked me to let you know the status 
     of negotiations relating to our reservation and whether it 
     will be included in the final agreement.
       The reservation will be an integral part of the GATS--the 
     Uruguay Round agreement that governs services trade. The 
     reservation will limit the requirement for our states and 
     localities to provide ``national treatment'' under their tax 
     and subsidy regimes to services firms from other GATS 
     countries. One effect of the reservation--as well as of an 
     exception written into GATS Article XIV(d)--is to protect 
     state unitary tax regimes, such as Alaska's, from successful 
     challenge under the new World Trade Organization (WTO).
       The reservation will go into effect at the same time as the 
     GATS. Its status does not depend on concurrence from other 
     GATS countries.
       Since we filed our state and local tax and subsidy 
     reservations, various other GATS members have indicated that 
     they may insist on similar reservations for their own sub-
     central government units. A number of governments have 
     suggested, alternatively, that the GATS should exclude 
     entirely sub-central government tax measures of the kind 
     covered by our reservation. That would allow all countries to 
     enjoy the kind of protection now provided to U.S. states and 
     localities under our reservation.
       Although I cannot say whether the GATS countries will agree 
     to such an exclusion, I can you assure that, either way, the 
     state and local tax and subsidy measures covered by our 
     reservation will be fully protected from challenge under the 
                                                   Michael Kantor.
  Mr. STEVENS. I understand that Senator Murkowski sent a letter to 
Ambassador Kantor and received a response which assures him that even 
if Alaska's unitary tax were found to treat foreign service suppliers 
less favorably than domestic suppliers, it would be protected from 
challenge by a GATT panel due to the exception and reservations. 
However, I would like to state for the record that I am not completely 
convinced that the ongoing discussions with other countries regarding 
our tax reservations will adequately protect Alaska's right to use the 
unitary tax method. I do not believe that the letter that has been 
delivered here by the Trade Representative answers the question, for 
those of us who want to protect the unitary tax from this GATT and its 
interpretation by the European Commission following the adoption of 
this GATT proposal.
  Even if the States are protected on this tax issue, there are many 
other State laws which do not have reservations or have not been 
excepted from the agreement which will be subject to challenge by WTO. 
I am concerned that the ability of WTO to challenge State laws will 
compromise the rights of States to operate as sovereign and independent 
States. I would like to submit for the record a copy of an article 
which appeared in ``Inside U.S. Trade on December 18, 1992.'' This 
article states that in its last days, the Bush administration proposed 
that the concept of a WTO--then known as the MTO: Multilateral Trade 
Organization--be dropped from the Uruguay round of GATT. It is my 
belief that the Bush administration took this action because it saw the 
need to separate world trade from world government. I agree with that 
separation. While I generally support free trade, I cannot support this 
concept of world government.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

  U.S. Calls for Eliminating Proposed Multilateral Trade Organization

       The U.S. is seeking to scrap the proposed Multilateral 
     Trade Organization in the Uruguay Round and replace it with a 
     looser organizational structure headed by a trade committee 
     of ministers. The proposals are contained in a paper given to 
     trading partners last week, which elaborates on recent 
     remarks made by a senior trade official that the U.S. does 
     not support the creation of the MTO (Inside U.S. Trade, Dec. 
     11, p 1).
       Informed sources said that the U.S. proposed dropping the 
     MTO largely out of fear that the voting procedures could have 
     allowed small countries to dominate the new organization by 
     ``interpreting'' the agreement in ways harmful to U.S. 
     interests. But some other delegations criticized the U.S., 
     saying that such concerns could easily have been addressed 
     through established negotiating channels, and that the U.S. 
     has not spelled out clearly its problems with the current 
     proposal. They charge that the U.S. has backed away from the 
     MTO as a result of pressure by Congress, and by some 
     environmental and consumer groups who have opposed the 
     proposed organization.
       The U.S. proposal, reprinted below, was denounced by a 
     number of countries, including Canada and the European 
     Community, at a Dec. 10 meeting of the heads of the 
     delegations in Geneva, according to informed sources.
       Sources in Geneva said that the negotiations on the MTO 
     have come to a halt as a result of the U.S. proposal, and 
     that the issue must be worked out by chief negotiators, and 
     by Arthur Dunkel, director-general of the General Agreement 
     on Tariffs & Trade. Other delegations say they are still 
     waiting for the U.S. to table language detailing the changes 
     it is seeking, but the outline of the proposal lays out 
     generally what the U.S. envisions. The new ``post-Uruguay 
     Round system structure'' proposed by the U.S. would be 
     directed by a ministerial trade committee, which would meet 
     every two years to oversee the operation of the trade 
     agreements and to provide a forum for negotiating further 
     agreements. A General Council, composed of national 
     representatives, would perform the same functions between 
       The U.S. proposal would, however, still require countries 
     to agree to abide by all the provisions of the GATT, as well 
     as the proposed General Agreement on Trade in Services 
     (GATS), the agreement on Trade-Related Intellectual Property 
     (TRIPs), and the GATT codes on procurement, import licensing, 
     standards, customs valuation and civil aircraft. The 
     Administration insists that the proposal would still achieve 
     the same ends as the MTO without creating a formal 
       While the structure proposed by the U.S. is similar to that 
     contained in the MTO proposal, the MTO would have been an 
     organization with an independent legal standing, along the 
     liens of the World Bank and the International Monetary Fund. 
     The U.S. proposal would not create such an organization. And 
     sources also said that U.S. proposal currently lacks any 
     definition of the powers and functions of the ministerial 
     committees and the councils, and does not spell out such 
     issues as how votes will take place and how amendments to 
     the agreements will be made.
       The proposal would also deal with Administration fears that 
     the U.S. will be dominated by smaller countries under a 
     system of one-country, one-vote decision-making. The U.S. 
     proposal calls for negotiating partners to ``reaffirm 
     existing GATT practice with respect to decision-making by 
     consensus. ``Informed sources said this would delete two 
     provisions opposed by the U.S.: first, the language in the 
     draft of the proposed MTO that would allow a majority of 
     countries in the Ministerial Conference of the General 
     Council to ``interpret the provisions of the agreement''; and 
     secondly the proposal that amendments to the agreements which 
     are adopted by a two-thirds majority would be binding on all 
     MTO members. Under current GATT consensus procedures, 
     countries are only bound by those amendments to which they 
     explicitly consent. But sources critical of the U.S. idea 
     said that the MTO proposal had already incorporated the GATT 
     consensus procedures, and would not represent a significant 
     shift from current practice.
       Once source in Geneva said that the U.S. proposal had 
     ``hijacked'' the process that the Secretariat of the GATT had 
     hoped to initiate to resolve outstanding substantive issues 
     on the MTO and the dispute settlement system. This process of 
     setting up a special working group was intended to deal with 
     a handful of contentious issues that have been unresolved 
     since the so-called Track 3 negotiations on legal drafting 
     were suspended last May. The new working group was supposed 
     to deal with three MTO issues: the amending procedure, 
     waivers from the agreement, and the procedures for non-
     application of the agreement (Inside U.S. Trade, Dec. 4, 
       Sources said that the Track 3 negotiations have come to a 
     halt, and many negotiators are expected to leave Geneva today 
     (Dec. 18).
       The MTO was originally proposed formally by Canada and by 
     the European Community in late 1991, and was intended to 
     provide a permanent institutional structure for overseeing 
     the world trading system. The new institution was aimed in 
     part at dealing with the problem of ``free riders,'' by 
     forcing countries to sign onto all the new agreements 
     emerging from the Uruguay Round, as well as the existing 
     codes of the GATT. It was also intended to implement the 
     single integrated dispute settlement system, which would have 
     allowed countries to ``cross-retaliate'' by taking trade 
     actions in one sector if its interest were impaired by 
     trading partners in another. Both principles are supported by 
     the U.S.
       More than 300 environmental and consumer groups from around 
     the world spoke out against the proposed MTO last week, and a 
     Nov. 17 statement by groups from 30 countries called for 
     scrapping the MTO. The statement charges that the MTO would 
     ``override national policies and possibly other international 
     agreements,'' and would contribute to environmental 
     degradation (see related story). In addition, the National 
     Wildlife Federation said that the Administration should 
     remove the MTO from the draft Uruguay Round agreement and put 
     on the same timetable as negotiations to reform the 
     provisions of the GATT (see separate story).
       One informed source in Geneva, however, said that the U.S. 
     proposal could actually weaken the provisions on the 
     environment. While it has been generally accepted that a 
     trade and environment committee will be created within the 
     MTO, the source said that the EC and Canada had both favored 
     including language on the importance of environmental 
     protection and sustainable development in the body of the MTO 
     test itself. The U.S. proposal, however, would restrict this 
     environmental paragraph to a non-binding preamble to the 
     proposed ministerial decision, the source said.

           U.S. Proposal on MTO--Ministerial Decision Outline

       Define scope of multilateral trading system under one 
     umbrella: the four annexes to latest draft MTO agreement.
       Agree to convene ministerial meetings every two years to 
     oversee the operation of these agreements, further their 
     objectives and provide a forum for negotiation of further 
     trade agreements.
       Establish council of representatives to perform these 
     functions in the intervals between ministerial meetings.
       Establish 3 subsidiary councils; Goods, Services, TRIPs.
       Establish Dispute Settlement Body to administer the 
     integrated dispute settlement procedures in Annex 2 and a 
     TFRM in accordance with Annex 3.
       Establish standing subsidiary bodies of the general 
     council: Balance-of-Payments Committee, Budget and Finance 
     Committee, Committee on Trade and Development. Committee on 
     Trade and Environment.
       Designate Secretariat to support all the agreements in the 
     four annexes.
       Reaffirm existing GATT practice with respect to budget and 
       Reaffirm existing GATT practice with respect to decision-
     making by consensus.
       Provide that by adopting this Decision, Ministers agree to 
     submit, as appropriate, the annexed instruments for approval 
     and implementation in accordance with relevant domestic 
       Adopt test of protocol to be accepted upon domestic 

  Mr. STEVENS. My third reason for opposing the GATT is because it 
would bust the Federal budget. The Congressional Budget Office recently 
estimated that the agreement would contribute to the Federal budget 
deficit $1.6 billion in the first 5 years and up to an additional $16.5 
over the next 5 years. With a Federal debt of $4.6 trillion and $202 
billion budget deficit this year, I cannot in good conscience support 
this agreement.
  I say, in sheer frustration, that I do not know where this Congress 
is going. Why can't we live up to the Constitution? Why can't we read 
the Constitution again, and proceed according to the Constitution?
  Again I state my good friend in the Chair will recall the discussion 
we had during the debate on NAFTA. I am still waiting for the hearing, 
from the Finance Committee, to give us a chance to determine the future 
of fast track concepts. I for one will oppose fast tracks as long as I 
am in the Senate, until we get an understanding of how we are going to 
protect the Constitution as we consider bills under the fast track 
  I thank my good friend for his courtesy.
  The PRESIDING OFFICER. The time has expired.
  The Senator from Wyoming.
  Mr. WALLOP. Mr. President, I yield myself 10 minutes.
  The PRESIDING OFFICER. The Senator from Wyoming is recognized for 10 
  Mr. WALLOP. Mr. President, free trade means the freedom of private 
parties to make choices about how to order their lives and how to spend 
the money they earn. Restricting trade burdens the exercise of this 
liberty. When governments restrict the freedoms of individuals to make 
such choices, they are regulating the disposition of private property. 
Whatever the arguably beneficial effects of trade laws, this is their 
actual function: government interference in private transactions.
  Free trade agreements, therefore, should get governments out of the 
way of private choices, businesses, and transactions. Free trade 
agreements should deregulate international trade, give bureaucrats less 
control over how, where, and when exporters and importers can do 
business with consumers in foreign nations, and streamline our outdated 
and largely protectionist trade laws. Regulations are as harmful to 
international trade as they are to the domestic economy, and in both 
cases, they must be scaled back to stimulate private economic activity 
and allow private parties to enjoy the fruits of their labor and 
investments. Free trade agreements should encourage other nations to 
scale back informal or formal government controls over private economic 
  I believe in free trade. I don't think any Member could argue with my 
record of support for free trade. Thus, despite its flaws, GATT reduces 
tariffs, the most obvious barriers to free trade, and institutes a 
standard set of rules for international trade which should permanently 
alter the entrenched protectionist policies of many foreign countries.
  But what we are voting on today is not simply whether to make trade 
freer through the GATT. We are not voting on the GATT agreement signed 
in Morocco in April. We are voting on the implementing legislation 
which the administration and the staffs of the Finance and Ways and 
Means Committees drafted to integrate the substance of the GATT 
Agreements into current U.S. trade law. Not only does the implementing 
legislation not integrate the GATT faithfully, it became an excuse to 
strengthen the protectionist biases in current U.S. law.
  Let me give a few examples, examples of a few of the items which I 
hope the next Congress will examine closely and strip from U.S. law. 
First, according to the plain language of the GATT, there must be a 
fair comparison between the prices of foreign goods imported into the 
United States, and the prices of those goods in the exporting country. 
The current legislation perverts this language to allow average prices 
in the foreign market to be compared with individual transaction prices 
in the United States. The relevant provision effectively requires every 
sale of a foreign good in the United States to turn a profit or face 
duties over and above any tariffs already imposed. This is economic 
  Second, a related provision allows a deduction of profits from the 
U.S. price when comparing those prices to prices in foreign markets. In 
other words, the more competitive imports are, the more certain it is 
that the ever vigilant Department of Commerce will find that they are 
dumped. Again, this is economic nonsense, and exalts the narrow 
interests of protected U.S. industries above the broad interests of the 
American consumer. Both of these provisions were unnecessary. We are 
now forced to vote on barely decipherable legalese which either 
obscures or contravenes what we negotiated with over 100 other nations.
  Third, as part of the expansion of the definition of subsidy in the 
implementing legislation, there is a provision which states that, if a 
formerly government-controlled foreign company is privatized, its goods 
will still be subject to U.S. countervailing duties, again over and 
above duties which may already exist. This is a terrible incentive to 
provide to the emerging market economies of the world. What sort of 
message are we sending? In the context of a free trade agreement, the 
U.S. Congress tells nations transforming from centrally planned 
economies to private sector driven economies that their exports can 
never escape the effects of prior subsidies in the eyes of U.S. laws. 
This is both bad economics and bad foreign policy. Such a provision is 
especially ridiculous because GATT itself creates categories of 
subsidies immune from countervailing duties. Percentages of research 
and development, environmental compliance, and aid to ``disadvantaged 
regions,'' whatever that means, are by the GATT language OK to 
subsidize. Mr. President, we as a nation cannot afford to subsidize 
industries whether such subsidies are GATT legal or not. I know that 
Senator Danforth and I agree that legitimizing subsidies on a national 
scale amounts to sanctioning a national industrial policy, which is and 
has always been a bad idea. The Government cannot pick winners; it only 
makes losers out of potential winners by transferring the money of 
working Americans to inefficient industries. American business and the 
American people want Government out of the way and out of their 
pockets. We cannot use a free trade agreement built on similar 
principles to defraud taxpayers. I can only hope that the 
administration will heed the language and intent of the amendments 
which Senator Danforth and I offered to address these concerns.
  Closing this point, let me make one thing clear. Earlier this month, 
Secretary of Labor Robert Reich decried tax credits for corporations as 
``corporate welfare.'' Secretary Reich, wake up. Subsidies are 
corporate welfare. Antidumping laws which penalize efficient, 
competitive foreign products are corporate welfare for domestic 
industries. Tax credits, which mean that the Federal Government takes 
away less of the money which a business has earned, are not welfare. 
The money which a business and its employees have earned is theirs, Mr. 
Reich, not the Government's to bestow upon them.

  To further demonstrate that the implementing legislation is contrary 
to the language and spirit of the GATT, I want to point out provisions 
which were not included in this legislation. The administration fought 
tooth and nail during the committee markup to defeat an amendment which 
would simply have granted U.S. importers of specialized foreign 
products temporary exemptions from antidumping and countervailing 
duties in cases where no domestic supply exists. Clearly, if no one in 
the United States makes a given product, no one would be inconvenienced 
by the import of that product without duties, which can average over 50 
percent of the value of the good. Why should an American consumer or an 
American industry which needs such a product pay such duties? What or 
who is being protected by such a blind application of the trade laws? 
There are no benefits. Yet the Department of Commerce and the 
International Trade Commission saw the amendment which would have 
addressed this illogical situation as a threat to their imprudent 
stewardship of the restrictive trade laws. Industries protected from 
foreign competition by Commerce's favoritism in the application of 
antidumping laws also felt threatened by the amendment, and helped to 
defeat the amendment during the committee markups. These industries 
argued that the amendment would destroy incentives for domestic 
industries to produce the desired products. Again, bad economics. If 
sufficient incentives existed for domestic industries to produce the 
product, they would already be doing so. Because such incentives do not 
exist, American consumers who need the product must import it, and 
under current law, they are penalized for doing so. Protected 
industries were not swayed by the language in the amendment which gave 
domestic industries first crack at producing any desired product before 
any remission of duties took place. They and their allies in the 
administration simply rejected out of hand any language which suggested 
that American consumers ought not to be penalized for importing 
specific goods, in small quantities, when there is no domestic 
  The administration would have us believe that they are committed to 
free trade. I for one am not surprised that their actions diverge so 
clearly from their rhetoric when less government management of trade is 
advocated. And the amendment to which I just spoke was but one example. 
The Caribbean Interim Trade Program, originally proposed for inclusion 
in the GATT, would have expanded the now $22 billion United States-
Caribbean trading relationship. It would have accelerated these 
nations' accession to GATT, necessitated protection of intellectual 
property rights, and stimulated bilateral investment treaties. The 
United States, including my own State of Wyoming, has run a trade 
surplus with the Caribbean Basin for 8 years. Yet it too, was left out 
of this implementing legislation due to lukewarm support from the 
administration and the same advocates of protectionism who were 
responsible for the other anti-GATT inclusions and omissions about 
which I have spoken.
  On the whole, the implementing legislation reflects bad policy turned 
into bad law by bad leadership from the administration. If any Senator 
votes against this agreement, the reasons I have detailed above would 
amply support his or her decision.
  But as every Senator knows, we are rarely asked to vote on perfect 
legislation. Far from perfect, this remains a historic vote. As my last 
vote in the Senate, I judge this legislation against the one thing that 
has underscored every vote I have cast in this body--liberty. The 
biggest reason to support GATT is to expand individual liberty. When 
governments regulate and restrict the way that millions of private 
citizens choose to do business and with whom they do business, they are 
restricting freedom, restricting liberty. Restrictions in the name of 
protection are without merit; government cannot protect citizens from 
the risks of free commerce without denying them the rewards. But when 
governments reduce barriers to trade, they increase the ability of each 
and every consumer to make choices. Thus my vote for GATT, despite the 
many problems in this implementing legislation, is simply that a vote 
for the ability of peoples around the world to engage in commerce more 
freely, with greater liberty.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Chair notes that this will be the last 
vote that the Senator from Wyoming will cast, and if anyone could 
characterize a career as having been devoted to liberty, none would be 
more exemplary than his.
  Does the Senator from North Dakota seek recognition?
  Mr. CONRAD. Mr. President, I do seek recognition, and I would grant 
myself such time as I might consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. I thank the Chair.
  Mr. President, I will vote for GATT. I will vote for it because I 
believe it is in the best interest of the State of North Dakota and of 
our Nation. The reason is simple: The United States has the most open 
market in the world, and this agreement will force other countries to 
open their markets to us. The United States is the largest exporting 
nation in the world, and the agreement will provide the largest tax cut 
on our goods in world history. The $740 billion in tariff cuts will 
mean $700 billion in cuts by other countries while we reduce our own 
tariffs by only $40 billion. Clearly, that is in our interest.
  The United States is the most competitive nation in the world, 
according to a recent analysis by the World Economic Forum. Opening 
other countries' markets to us will allow us to sell them more and 
create additional jobs for us. Clearly, that is in our interest.
  North Dakota exports much of what we produce. This agreement will 
provide new opportunities for sales of our agricultural products, 
including wheat, cattle and hogs. Projections from the respected Food 
and Agricultural Policy Research Institute indicate that by the year 
2001, the average North Dakota wheat farmer will realize $3,300 a year 
in increased income as a result of this trade pact. But the agreement 
does not just benefit agriculture. It will increase our sales of farm 
machinery, computer software and many other products we produce. 
Clearly, that is in our interest.
  Mr. President, as you know, I have opposed trade agreements in the 
past, such as the Canadian Free Trade Agreement and the North American 
Free Trade Agreement. I opposed them because I did not think they were 
in North Dakota's interest. But I believe this agreement is 
dramatically different. Those agreements contained provisions that 
stacked the deck against our producers. This agreement starts to level 
the playing field. It is certainly true that other countries have 
played us for suckers on trade in the past. They have taken advantage 
of our relatively open markets while keeping their markets closed to 
us. This agreement starts to open their markets and make them play by 
the same rules that we have followed for years.
  These changes are projected to add $100 to $200 billion each year to 
our economy when fully implemented. That translates into an extra 
$1,200 a year for every American worker.
  According to the U.S. Treasury Department, it means $60 billion in 
deficit reduction over the next 10 years, without a tax increase. For 
those concerned with the loss of jobs, I believe this agreement will 
produce many more and better jobs than those we might lose as a result 
of this pact.
  The U.S. Treasury Department projects that the agreement will result 
in a net increase of 500,000 jobs in the next 10 years. Mr. President, 
that is nearly as many people as reside in the State that I represent.
  For those concerned with our sovereignty, I share their concerns. I 
do not think we should erode our sovereignty, and I would not support 
this agreement if I thought it would. After examining this issue 
closely, I do not think the agreement will interfere with our sovereign 
rights as a nation. But if the World Trade Organization proves to 
infringe on our sovereignty, we have the clear right to withdraw at any 
time on 6 months' notice. Further, every 5 years, we can vote in the 
Congress on whether or not to continue in the World Trade Organization. 
This vote cannot be filibustered. It will be a straight up-or-down vote 
on withdrawing.
  We would be less than frank if we did not admit that this agreement 
is far from perfect. It will not solve all of our trade problems. We 
recognize that. Japan's unfair trade practices are only partially 
addressed. They will remain a serious problem that we must address in 
negotiations between the two countries. China, which remains outside of 
the General Agreement on Tariffs and Trade, will no doubt continue its 
unfair trade practices. We will have to aggressively address its trade 
abuses as China seeks to re-enter the GATT and join the World Trade 
  Finally, this GATT agreement does not address the major problem of 
unfair competition from countries that use child labor, pay their 
workers abysmal wages or force them to work under terrible conditions. 
This is a serious failing of the agreement. American workers should not 
be expected to compete with foreign workers who are not accorded fair 
working conditions.
  But rejecting the GATT agreement will do nothing to change these 
circumstances. They exist today. Rejecting the GATT agreement will only 
retard economic progress in developing countries and slow progress on 
these issues.
  Whatever the outcome of this debate, we must aggressively pursue a 
commitment from all of our trading partners to raise labor standards 
and wages if they expect continued access to our markets.
  Although this agreement does not solve all our problems, it moves the 
123 nations that are signatories in the right direction. It deserves 
our support.
  The fact is that the world is changing. We must choose whether we 
attempt to cling to the past or bend the future to our best interests. 
I believe it is hopeless to try to prevent the changes that are already 
occurring in every corner of the world. Instead we must seek to make 
those changes work for us.
  This GATT does that. I will support it.
  I thank my colleague. I especially thank our chairman and the 
Presiding Officer for his courtesy.
  I yield the floor.
  The PRESIDING OFFICER. I thank the Senator.
  Who yields time?
  Mr. WALLOP. Mr. President, I yield myself but 1 minute.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. WALLOP. Mr. President, I feel very strongly as well about the 
Budget Act, though I will support GATT. As I told the chairman when we 
were in committee, those of us who have voted against waiving it over 
the course of time could scarcely be expected to waive it now without 
being accused of either falsely supporting it or politically supporting 
it in the past. I regret to say that. But once that hurdle is cleared, 
I will be happy to add my support to the treaty.
  Mr. President, I suggest the absence of a quorum with the time being 
equally divided.
  The PRESIDING OFFICER (Mr. Conrad). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. WALLOP. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. WALLOP. Mr. President, I yield to the Senator from Alabama 15 
  The PRESIDING OFFICER. The Senator from Alabama is recognized for 15 
  Mr. SHELBY. Mr. President, I rise today not to reject free and fair 
trade, but to oppose the unwise ceding of our national sovereignty, 
irresponsible budgeting, and backdoor legislative tactics. Mr. 
President, if the Senate fails to pass the pending legislation 
implementing the Uruguay round of the General Agreement on Tariffs and 
Trade, this body will not be rejecting the principles of free trade. 
Neither I nor the vast majority of my colleagues and constituents 
believe that American businesses and their employees cannot compete 
with any foreign enterprise on a level international trading field.
  Few would argue that eliminating international trade barriers to our 
products and services is not a healthy and productive endeavor. It is. 
I am convinced that if the current enabling legislation contained 
nothing more than measures adjusting certain tariff duties and was 
adequately financed that there would be little concern on the part of 
most Americans to this agreement.
  However, a cloud of mistrust, suspicion, and outright hostility on 
the part of many ordinary Americans has surrounded this legislation 
since its delivery from the White House to Congress.
  This tension and exasperation is only heightened by the fact that a 
largely repudiated Congress is considering the measure only weeks after 
an historic election in a lameduck session.
  Having reviewed the voluminous document to which this legislation 
would bind this Nation and the implementing legislation itself, I can 
draw no conclusion other than that this Congress and our trade 
negotiators should go back to the drawing board and create a trade 
agreement instead of a document promoting world government and fiscal 
  The legislation before the Senate is hastily crafted, largely 
unstudied, and unpredictable in its effects.
  Mr. President, each Member of this body is sworn to uphold and defend 
the Constitution of this great Nation. As such, our highest obligation 
is to preserve the sovereignty of this country and the powers of its 
elected bodies to write the laws that govern our people.
  Yet, this document, before the Senate tonight would require the 
United States to join a World Trade Organization that would have the 
power to order the Federal, State and local governments to alter laws 
relating to trade, labor, industrial or any other policy that a panel 
of three international bureaucrats meeting in secret might find 
offensive to their interpretation of the GATT agreement.
  Decisions by such dispute panels can only be overturned by unanimous 
vote of the GATT membership--a membership that will be composed not of 
the major industrialized nations of the world but of countries that 
simply agree to move toward more open markets. Think about it.
  Given the U.S. track record in the General Assembly of the United 
Nations, it is far from assured and less than encouraging that trade 
disputes will be adjudicated in our favor.
  Should WTO dispute panels rule against the U.S. when its domestic 
laws are challenged, we will be subject to international sanctions if 
we choose not to comply by altering our laws to fit the WTO's wishes.
  The thought of an underdeveloped and undemocratic nation passing 
judgment on the laws of the largest free market and most democratic 
nation in the world is simply offensive to most Americans.
  Yet, the White House's trade negotiators can give us no reassurance 
that the worst case scenario involving membership in the WTO will not 
come to pass.
  When it is pointed out to trade negotiators that WTO membership 
requires a member ``to ensure the conformity of its laws, regulations, 
and administrative procedures with its obligations as provided in the 
annexed agreements,'' and that the WTO will interpret and enforce this 
conformity they respond not with concrete assurances. Instead, trade 
negotiators express wishful thinking that it just will not happen. A 
hope and a prayer is simply not sufficient grounding for a decision 
that could affect the sovereignty of our governing institutions.
  In addition, Mr. President, the American people most assuredly voted 
on November 8 for fiscal responsibility and I believe restraint.
  Yet, only 3 weeks after that historic election, approval of this 
document mandates that we vote to waive the requirements of our budget 
law and add another $15 billion to our national debt over the next 10 
  In the haste to pass this legislation, the administration has failed 
to provide over half of the funding to pay for lost tariff revenues. In 
addition, one of the few revenue raisers in this bill would finance 
GATT on the backs of the elderly and the working Americans by reducing 
the rate of return on ordinary savings bonds. Just think about it.
  This legislation does not pass the straight-face test. We cannot 
seriously, I believe, talk about fiscal responsibility in the weeks 
leading up to the last election, and within a month vote to pass 
another budget-straining piece of legislation and still wonder why 
voters are cynical and mistrustful of this Congress.
  Finally, as it has repeatedly in the past 2 years, the administration 
has inevitably succumbed to the temptation to load a large piece of 
legislation up with prizes and cutouts for some of its friends. For 
example, some of the worst among these cutouts is section 801 of title 
8 of the bill that would give, some people think, between $1 billion 
and $2 billion in Federal fee relief to the Washington Post and to the 
Atlanta Constitution for exclusive and lucrative telecommunications 
  Mr. President, I have no idea, and I challenge my colleagues to 
explain to me what this provision has to do with international trade. 
Given that this legislation could cede our national sovereignty to an 
international body, that it busts the budget and contains extraneous 
materials, we should hardly be surprised that so many Americans are so 
passionately against this agreement.
  Mr. President, proponents will argue that this debate should be about 
free trade. Indeed, I agree that it should be. And if it were, I could 
easily support the agreement. But, Mr. President, there are more 
important issues at stake in this debate than the lowering of trade 
barriers. This agreement has become a post-Thanksgiving turkey to be 
swallowed by a lame duck Congress.
  There is simply too great an atmosphere of distrust and confusion in 
the minds of the American people and too little knowledge on the part 
of the Congress to pass this legislation.
  I believe that we should come back next year with new legislation 
that guarantees our continued sovereignty, pays for this agreement, and 
is free of extraneous material. I ask my colleagues to vote no on this 
agreement at this time.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I am happy to yield 15 minutes to the 
distinguished Senator from New Jersey, who returns in welcomed triumph 
to this Chamber.
  Mr. LAUTENBERG. I thank the distinguished chairman of the Finance 
  Mr. President, I take this opportunity to present my views on the 
GATT agreement, the General Agreement on Tariffs and Trade currently 
before the Senate. It is a culmination of more than 50 years of 
developing international trade relationships and practices. It has been 
the subject of specific negotiations for almost a decade. We will soon 
decide whether the United States will support this document which our 
Government has been instrumental in developing.
  I have approached my decision on GATT by asking questions about our 
future, about the direction our economy is taking, about the best way 
to improve our prospects, and the best way to provide opportunities for 
the workers, the families, and the children in my State.
  As the Presiding Officer knows, I come from the business community in 
New Jersey. My corporate experience led me to deal with corporations of 
all types, all different businesses, and I got to know the industrial 
makeup of our State. It pains me, Mr. President, to see the decline in 
various parts of the manufacturing sector in our State and throughout 
this country.
  Therefore, after much review, a lot of questions, a lot of time spent 
in dealing with staff and with people from the trade office, I have 
decided that supporting GATT is the best way to build a better economic 
future for the people of New Jersey and for our Nation.
  Historically, America offered those who were willing to work a real 
opportunity to get ahead. Low-skilled workers could make a week's pay. 
They found a way to care for their families. They could help their 
children get an education and move up the economic ladder and get a 
piece of the American dream.
  But in the last few decades, we have seen declines in American 
industrial employment. Manufacturing jobs at decent wages are harder to 
find. Too many industries are fading away. Too many firms are 
shrinking. The people who used to start in manufacturing plants now end 
up in the low-wage service jobs, without fringe benefits, without job 
security, without health insurance, and without a secure future.
  These developments have been difficult for our country. They have 
created unprecedented anxiety even as we pull out of a recession, 
unemployment is going down, and the economy is growing. But still, too 
many American workers fear that they will never have the kind of income 
and job security they need to fully participate in the American dream. 
These economic trends result from many factors, and I would like to 
identify just three.
  First, new technologies have made our economy more competitive and 
productive; but they have also allowed companies to reduce their work 
force even as their profits grow.
  Second, as developing nations move to share free markets, we face a 
new challenge. We have to compete with companies who pay their workers 
a 10th, or a 20th, or even a smaller fraction of American wages. And 
those companies operate with little regard to the health and safety of 
their workers or the well-being of the environment.
  Third, our own economic development in the international marketplace 
has in some ways pitted sectors of our economy against one another. 
Whenever we try to protect less competitive economic sectors, other 
nations retaliate against our new and growing industries seeking niches 
in their marketplace.
  GATT or no GATT, our society must face and deal with these difficult 
decisions. America's future depends on a highly skilled work force, 
top-notch job training, and technological innovation. I do not want to 
see a single job lost in this country, especially not to competition 
from workers in low-wage, exploitive economies. But with or without 
GATT, we do face that competition. There is no way to ignore it. So 
what we have to do is respond to it.
  GATT, though not perfect, is a reasonable response. It will increase 
economic growth, create new jobs, and provide our workers and their 
children with the opportunities they deserve. Today, as we prepare to 
vote on this historic agreement, I have tried to look into the future a 
little and make a decision that will contribute to the most stable, 
prosperous society that we can have. I believe that approval of GATT 
will provide us with that opportunity.
  This legislation amounts to the largest single tax cut in the history 
of the world. As tariffs decline, so should prices, and all consumers, 
Americans and others, will benefit.
  GATT provides the kind of intellectual property protection that we 
need to compete in the global economy. More markets will be open to our 
products, and fewer of our ideas will be pirated or counterfeited. GATT 
goes a long way toward securing our economic future and addressing our 
concerns. It establishes a level playing field in those areas where our 
economy is growing--pharmaceuticals, communications, and other high-
tech industries. And in sectors that will suffer, like textiles, it 
attempts to cushion the blow by phasing in the new rules and giving 
people time to adjust to them.

  The benefits of GATT will spur growth in American industry, both 
large and small.
  In my State of New Jersey, exports have increased 90 percent since 
1987. There are 6,900 companies in New Jersey that sell their products 
outside the United States. Of these companies, 6,100 of them, 6,100 out 
of 6,900, have fewer than 100 employees. Unlike the giant firms that 
continue to downsize, these are the firms that led New Jersey's 
economic recovery. These are the firms that will continue to increase 
employment if they can increase sales. And GATT encourages them to do 
just that.
  Real economic growth, the kind that creates jobs as well as profits, 
requires us to support the small companies that have always been the 
bread and butter of American business.
  The Treasury Department estimates that GATT will create 18,000 new 
jobs in New Jersey alone, many of them in small high-tech companies. 
These are good, well-paying jobs, the kind that let people enter or 
remain in the middle class and build a future rather than being forced 
to work harder for less money.
  Throughout this debate, I have been particularly concerned with the 
issues of job loss, child labor, and sovereignty. I had a lengthy 
conversation this morning with U.S. Trade Representative Mickey Kantor, 
and we discussed these concerns.
  Obviously, we can find flaws in the agreement in these areas. And 
even after my discussion with Ambassador Kantor, I am concerned about 
our ability to prohibit abuses of child labor. But I do recognize that 
this is an issue that we can continue to pursue. GATT is not the last 
word on trade issues. We will continue to fight child labor and other 
human rights abuses.
  While GATT does not solve the problem, it does not prevent us from 
solving it. We have other ways to make our case and protect our laws, 
including GSP renewal and section 301, and I intend to pursue our goals 
in this manner. In addition to these trade-related remedies, we can 
also use our military and foreign aid programs to deter practices that 
we oppose.
  Mr. President, I recognize that many fear that GATT will undermine 
U.S. sovereignty. If I believed that was the case, I would not support 
it. Nor would four former Presidents. Nor would a majority of Members 
of the House of Representatives.
  Specific concerns about our rights under GATT have been addressed in 
the implementing legislation. We have reaffirmed the simple fact that 
no rule in GATT, no decision by the WTO, will require that the United 
States to modify any of our domestic laws. And even Senator Dole, the 
current Republican leader, who was so skeptical about this point, has 
been reassured by the administration's commitment to support future 
legislation that will allow us to withdraw from the agreement if WTO 
decisions are arbitrary.
  Mr. President, with or without GATT, we have an obligation to retrain 
displaced workers. We have a moral responsibility to them. And we must 
work in a bipartisan way to ensure that they are not forgotten.
  I believe that if we work together and work hard we can compete 
successfully in the global economy. I think this agreement will allow 
us to do so more effectively. I have faith in the American worker and 
American industry. And I am confident that with a level playing field 
we can create an export surplus, improve our economy and build a more 
prosperous America for future generations.
  My distinguished colleague, Senator Bradley, who has had long 
experience as a Member of the Finance Committee and working with trade 
issues, came to a conclusion after a deep review of what benefits there 
might be and what kind of problems would follow. He came to a very 
thoughtful conclusion that he is going to support GATT.
  I am pleased that he and I view this the same way, that this is the 
better way to support America's opportunities in the future, and I am 
happy to register my support for it.
  With that, Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Kerrey). Who yields time?
  Mr. MOYNIHAN. Mr. President, may I just for a moment thank the 
Senator from New Jersey for his statement and emphasize his 
observation. This is a historic decision. The Senate will not make a 
more important vote in this decade and his statement is very important 
in seeing to its success.
  Mr. President, I yield the floor. I see the Senator from Iowa I 
believe is managing time on the other side.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I will yield what time I might consume 
to the Senator from Indiana.
  The PRESIDING OFFICER. The Senator from Indiana is recognized.
  Mr. COATS. Mr. President, I rise this evening to speak in favor of 
the General Agreement on Tariffs and Trade. I have concluded that this 
agreement will not only benefit our Nation's economy, it will also 
benefit the world's economy, and in particular, it will benefit the 
economy of my home State of Indiana.
  The State of Indiana is consistently ranked among the top exporting 
States in the Nation. We continue to lead the country in the production 
of steel. We are one of the Nation's premier agricultural States. We 
are in the top five auto manufacturing States. And Indiana has been a 
leader of pharmaceutical and medical devices manufacture, all products 
that will significantly benefit from expanded world trade.
  I will speak in a moment about the larger benefits of GATT to the 
American economy and why I believe this historic free trade agreement 
is a step, and an important step, that our country should take.
  But first let me speak specifically about how the GATT will affect 
the State of Indiana.
  I want to be very specific about why I believe this agreement is good 
for the State of Indiana. Productive workers, making products and 
providing services that are in demand around the world, need expanding 
markets or they simply will lose their jobs. It is that simple and that 
  Free, fair, and open trade is crucial to Indiana because exports are 
the lifeblood of Indiana's economy. One of every six Hoosier 
manufacturing jobs is due to exports. Were those products not exported 
around the world, one of six Hoosiers would be out of work.
  One-third of our farm production travels overseas. One- third of our 
acreage would be idle and one-third of our agricultural workers would 
be out of a job were those agricultural products not shipped overseas.
  Over 155,000 Hoosiers owe their jobs directly to the export of 
manufactured goods. We have seen in the State of Indiana a 126-percent 
increase in merchandise exports just since 1987. We ranked 14th overall 
in the value of export sales just last year alone.
  We exported $1.3 billion worth of agricultural commodities in this 
last year, an amount that is estimated to increase by $240 million 
through passage of GATT. University of Purdue economists are predicting 
today that the passage of GATT will inject $63 million into the Hoosier 
farm economy each year and will cause farm income to rise 1.5 percent.
  There has been a crucial fact missing from this GATT debate, and it 
is central to the American way of life and to the promise that the 
American economy holds for our workers. That is a fact that we should 
never forget and a fact that I think is determinative in this debate. 
The American worker is the best in the world in terms of productivity. 
We can compete with any country anytime, anywhere. America's overall 
productivity is 30 percent higher than that of the Japanese worker. Our 
manufacturing productivity is 28 percent higher. These are astounding 
figures when compared to one of the most dynamic economies in the 
world, West or East.
  But GATT, which is certainly a global agreement, has a major local 
impact on where it is we live and where we work and where we raise our 
  So, once again, I return to Indiana. In Gary, our U.S. Steel plant 
uses only 2.7 man-hours to produce a ton of steel, compared with an 
average of 5.4 man-hours in Japan and 5.6 in Germany.
  Let us compete and the American worker can do great things. To opt 
out of GATT would be to opt out of a dynamism that is the future not 
only of the American economy but of the world economy. We must 
recognize this reality. We must recognize this truth, this fact that is 
changing the way that America works, is changing the way the world 
works. If we do not meet this challenge, if we do not compete 
successfully to meet this change, we will see declining productivity, 
we will see declining opportunity, we will see declining job 
opportunity for American workers. But if we do meet the challenge, as 
we are accomplishing in our manufacturing and service industries today, 
if we do meet that, America will see a continued rise in our standard 
of living and in employment opportunities in this country.
  As the world's largest economy, the United States stands to gain more 
than any other country from increased commerce that could be generated 
and will be generated, I believe, by a new global trade pact. GATT is 
projected to add $100 billion a year to our gross domestic product just 
in the next decade. That growth may well represent over a half million 
new jobs for America's workers.
  The North American Free Trade Agreement, a benchmark which we can 
look to which was approved just last year after a tough battle here in 
the Congress, provides a lesson on the merits of open trade. During the 
first 6 months of NAFTA, U.S. exports to Canada surged 29 percent and 
exports to Mexico jumped by 17 percent.
  My home State newspaper, the Indianapolis News, said this in a recent 

       Trade has become the prime engine of economic growth in 
     America, which is the world's leading exporter and importer. 
     U.S. workers, who are the most productive in the world, will 
     see more jobs created by GATT.

  Mr. President, this agreement, as has been stated on this floor, is 
not a perfect agreement. It is a negotiated agreement over a decade of 
time among more than 100 nations. There had to be some give and take. 
There are portions of it that all of us would like to modify. However, 
we should not let the perfect be the enemy of the good.
  I believe it is a good agreement. I believe it is an agreement that 
is in the best interest of the Nation and in the best interest of the 
State that I represent.
  The changes incorporated by Senator Dole in an agreement with the 
President are important changes. They address some of the fundamental 
questions that have been raised and important questions that have been 
raised by many of our citizens. Those agreements, I believe, 
satisfactorily address the concerns that many of us had when the 
initial agreement was presented to us by the administration.
  I commend the minority leader, Senator Dole, for his efforts in 
working with the administration to address these concerns and 
incorporate these changes that will allow us to go forward and support 
this agreement.
  America is today presented, Mr. President, with a historic prospect. 
I hope my colleagues will join me in supporting this treaty.
  Mr. President, I thank the Senator from Iowa. I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I am happy to yield 20 minutes to the 
distinguished Senator from California, Senator Boxer.
  The PRESIDING OFFICER. The Senator from California is recognized.
  Mrs. BOXER. Mr. President, GATT is important for my home State of 
California and I hope it will pass the Senate today.
  The GATT Agreement will expand California exports, create jobs, and 
strengthen my State's economic recovery.
  The GATT Agreement will tear down foreign barriers on California-made 
goods from computers, semiconductors, electronics, pharmaceuticals, and 
medical devices to construction equipment, steel, chemicals, and wood 
  The GATT Agreement will provide greater protection for California's 
world-class software and pharmaceuticals and music recordings and 
television shows. The strength of California's economy--and the promise 
of our future--are the great ideas of our inventors and entrepreneurs. 
Too often, these ideas are stolen and sold by pirates in markets 
abroad--in fact, in 1992 alone, U.S. companies lost between $15 billion 
and $17 billion from piracy. With the GATT Agreement, we will have more 
effective tools to attack these pirates.
  The GATT Agreement will also expand California's farm exports and 
create jobs in the agriculture sector, especially for growers of rice, 
grapes, almonds, walnuts, tree fruit, and vegetables.
  The GATT Agreement may mean as much as $10.1 billion in new 
California exports in the first 10 years. According to the California 
Institute, California stands to gain as many as 200,000 jobs from 
increased exports of manufactured products alone. And, exports of 
services and agricultural products will generate another 44,000 jobs 
for Californians.
  Yes, GATT will be good for California.
  But, let me say: I know this agreement is not perfect. It does not do 
enough to open markets for our entertainment industry, and 
telecommunications companies, and our aircraft makers.
  I also recognize that many are concerned that our strong Federal and 
State environmental, health and safety laws could be vulnerable under 
new GATT rules. I understand these concerns and I have thought about 
them very carefully.
  But, let me say: I do not believe that this GATT Agreement will 
threaten those laws. GATT rules or GATT panel decisions do not have the 
force of law. Not a single environmental, health, or safety law--at the 
Federal or the State level--can be changed without action by the 
Federal or the State Governments. Yes, our trading partners could 
challenge our laws, but no--our trading partners cannot change our 
  I have received specific assurances from U.S. Trade Representative 
Mickey Kantor on this very issue. Ambassador Kantor has assured me 

       California's strong environmental and consumer protection 
     laws cannot be overturned by WTO rules or dispute settlement 

  Ambassador Kantor points out that section 102(a)(1) of the GATT 
implementing legislation states explicitly that no provision of the 
GATT agreement ``that is inconsistent with any law of the United States 
shall have effect.''
  I also want to say to GATT critics: GATT is not NAFTA. GATT is about 
creating a more level playing field for American exports around the 
world. The GATT Agreement creates trading rules that 123 nations will 
agree to live by--and many of these nations have a standard-of-living 
that is the same or above that of the United States. In contrast, NAFTA 
created a special trading relationship with one country--a low-wage 
developing economy.
  The GATT is not NAFTA because, under the GATT, Congress has the power 
to say: ``We want out.'' The GATT implementing legislation provides an 
expedited procedure for Congress to revoke its approval of the GATT 
Agreement; NAFTA did not provide this kind of mechanism for Congress to 
end U.S. participation in the trade arrangement.
  GATT is not perfect. But, GATT will be good for California and GATT 
will be good for the economic health and growth of our entire Nation. 
GATT--or no-GATT--our industries and our workers already compete in a 
global marketplace. Our industries and our workers face competition--
not only within our country--but also with industries and workers on 
the other side of the globe.
  GATT--or no-GATT--this is economic reality. Trade--in all parts of 
the world and in all sectors of our economy--is expanding rapidly. GATT 
is an opportunity to see that this trade is fair.
  The GATT agreement creates rules that all nations will have to play 
by--creating a better and more fair climate for U.S. industries and 
workers who must compete in this global marketplace.
  This Nation--and especially California--has always been ready to look 
forward and face new challenges. Competition in the global marketplace 
is among the biggest of these challenges. But, we are ready--ready with 
the best, most productive workers and bold new ideas. We are ready with 
industries that produce what the world wants to buy.
  Since my youth I wondered what it would be like to have a world that 
was no longer divided between the Soviet Union and the United States of 
America. I wondered what changes would come with the end of the cold 
  When I became a Member of Congress in 1983 that dream seemed very far 
off. The United States and the Soviet Union had missiles pointed at 
each other; children had nuclear nightmares; stories appeared that the 
Government had an underground maze as a place to survive a nuclear 
attack; every year more and more deadly missiles with multiple warheads 
were built with precious tax dollars.
  Then the physical walls came down in Europe. The Gorbachevs and the 
Walesas and the Havels changed the world. Communism collapsed of its 
own weight and, although the world is certainly volatile, complicated 
and dangerous, it is no longer divided between two nuclear armed camps.
  You might wonder what all that has to do with GATT. What does all 
that have to do with the General Agreement on Tariffs and Trade? To me, 
it has everything to do with it.
  The challenge for America now that we have won the cold war, is to 
continue to be the leader in the world. Yes, we will always be the most 
powerful. Today, we spend 500 percent more on the military than all of 
our potential enemies combined. We will always have a powerful 
military. But being a leader also means engaging in the world 
diplomatically and economically. And when we engage in the world 
economically, we have the opportunity to do so much for our Nation 
because we will influence people all over the world and we will help 
people all over the world.
  When we have the chance to make lives better for the people of the 
world with our abundant food, our pharmaceuticals, our computers, our 
services, our know-how, our country will gain influence and friends 
among the people of the world.
  I look at GATT as a major part of the peace dividend. The countries 
that have signed the GATT Agreement include many who were once behind 
the walls of communism and other countries that now feel free to join 
the world economic system because the cold war is over.
  So in the large sense: I see world trade as one answer to avoiding 
conflict and isolation. The more countries that are involved the 
  From the standpoint of the direct benefit to our Nation I think the 
answer is clear: the most productive nation in the world should not 
shrink from engaging in the world's commerce, it should 
enthusiastically accept the challenge and win the competition.
  Right now we are the world's most competitive economy. In fact, the 
World Economic Forum in Geneva in its ``1994 World Competitiveness 
Report'' ranked the United States the world's most competitive economy 
for the first time since 1985--above Japan, above Europe, above all the 
nations in Asia. The United States was the world's No. 1 exporter of 
goods and services last year. The American workforce is the most 
productive in the world--the productivity of workers in France is 91 
percent of the United States level, in Germany it is 86 percent of the 
United States level, and workers in Japan are at 73 percent of the 
productivity of American workers.
  We have been tested. We have had our fiscal nightmares 
like the S&L scandal which came about because of greed. For a while in 
the 1980's we didn't seem to value productivity, only wealth. But we 
saw our country moving backwards and we saw our Nation building up debt 
and we turned it around. It hasn't been easy.
  I remember when President Bush had a dinner in Japan and he got sick 
and that became a symbol of our economic weakness. We tried to tell the 
nations of the world what to do with their economies but they wouldn't 
listen to us because we weren't leading by example. But, now we are. We 
have reduced the deficit 3 years in a row; we will have the fewest 
Federal employees since John Kennedy and we are productive and creating 
jobs. President Clinton deserves credit for this, although he rarely 
gets it. We are getting our economic house in order. This is the right 
moment for us to step up to GATT and lead the world.
  Change isn't easy. The opponents of GATT speak to our fears. They 
talk about lost jobs to imports. But they don't speak of new jobs from 
exports, exports all over the world, exports to new and growing and 
exciting marketplaces all over the world.
  Yes, there will be a World Trade Organization with the authority to 
judge if the rules are being followed. But, if this organization steps 
over their bounds and begins to encroach on our sovereignty we can pull 
out. That is a real safety net and one which this Senator would not 
hesitate to use if necessary.
  Looking out to the future we need to ask ourselves where will the 
customers come from to buy American goods. In America, of course. But 
beyond America. Too many times we have been stopped by tariffs and 
barriers. With GATT that will end and I believe in America's ingenuity 
and skill. We will sell our products and people will come back for more 
and there will be more jobs.
  There is one world now. And that world looks to America. Whenever I 
travel I am so taken with the world's fascination with our Nation, with 
its interest in our Nation. America's TV is all over the world. 
America's music is all over the world. America's blue jeans are all 
over the world; America's hamburgers are all over the world. All of our 
products should be all over the world. We will dominate in trade 
because of our productivity, because of our ingenuity and because we 
are a free people, free to be creative. But we need rules, and GATT 
will give us fair rules.
  We have a tremendous opportunity with the GATT, in this shrinking 
world to expand the reach of the American people through trade.
  That is the future I believe is best for my State and for my country. 
It is the future that is best for the working men and women of this 
country, whom I care deeply about. I hope and trust that a strong 
majority of my colleagues see it that way.
  The PRESIDING OFFICER. Who yields time? The Senator from New York.
  Mr. MOYNIHAN. Mr. President, may I congratulate the Senator from 
California for a thoughtful, comprehensive and spirited statement about 
this subject: Step up to the GATT and get on with the future; we are 
the most competitive economic power on Earth; we were not leading by 
example, we now do; now is the time to go on.
  I think that is exactly the spirit in which you end up this decade 
and this century.
  The PRESIDING OFFICER. The Senator from Oregon is recognized.
  Mr. MOYNIHAN. I yield the floor.
  Mr. PACKWOOD. Mr. President, waiting for another speaker I might 
allocate some time for myself.
  I want to talk a bit about this argument as to whether or not this 
loses money--we passed GATT and it loses money--because it is very 
critical that those who are viewing this understand the difference 
between static revenue estimates and what we call behavioral or dynamic 
revenue estimates.
  A static estimate, Mr. President, is this: You presume no change in 
behavior. If you have a 25-percent tax rate on all the people in this 
country and that produces $1,000, you raise it to 50 percent and you 
get $2,000. Raise it to 100 percent, you get $4,000. I suppose if you 
raise it to 200 percent, you get $8,000. That is a static revenue 
  I, at one time, asked the Joint Tax Committee, which is the 
professional group that advises us, if they could do an estimate of how 
much money we could raise at a 100-percent level of taxation. And they 
said, well, they really could not do that exactly, but they could tell 
us how much money there was that was untaxed over $100,000 and how much 
we could apparently raise if we taxed it all. So their estimate 
indicated that in the first year at 100 percent rate of taxation, we 
would raise something, as I recall, let us say $120 billion, the second 
year $140 billion, and the third year--they do these 5-year estimates. 
Each year it kept going up.
  So I said, ``You mean to tell me that if we have a 100 percent rate 
of taxation for 5 years in a row, the revenues will go up every year?''
  And they said, ``Well, we presume no change in behavior.''
  I said, ``You mean to say at 100 percent rate of taxation you think 
people will keep working?''
  Then they did say they thought if the taxpayer thought there was no 
hope of getting out from under and no way to defer this income tax past 
5 years, no way to avoid the tax, that they would expect a significant 
downturn in activity and a downturn in Federal revenue.
  Well, that is static revenue projecting and, of course, behavior 
changes. You tax somebody 100 percent and most people will not work 
very much if they have to give it all to the Government. You lower the 
taxes to 90 percent, some people might work; you keep 10 percent. That 
would be a behavioral change, dynamic change. You lower the tax rates a 
bit, lower it to 80 percent, maybe more people would work.
  Now, of course, everybody can see the undertow that is coming. This 
leads to the theory of supply-side economics: You cut the taxes and cut 
the taxes and more revenue comes in. Dr. Laffer was right in his theory 
of the Laffer curve. He tried to say there is a point on a parabola 
that is the optimum level of taxation that raises the most money. And 
if anyone knows where that exactly is, that person should be in the 
stock market rather than attempting to predict taxation. Well, that is 
dynamic or behavior prediction. You change the rates, people's behavior 
  In the revenue projections that we are doing on this bill, we are 
projecting revenues on a static basis because our rules require that. 
So we are saying, if the present tariffs raise a million dollars and we 
lower the present tariffs, we are going to lose money. It does not 
presume any increase in trade. It does not presume any increase in 
activity that would raise money from other sources.
  Now here is the interesting difference. There is not a respectable 
economist that I know of from the far left to the far right that says 
this bill loses money. The Congressional Budget Office has had to 
predict that it loses money because they have to predict on this static 
basis. The Office of Management and Budget will say if we must predict 
on a static basis, it loses money. But they will both say unofficially, 
``We don't think it loses money.''
  Why are people afraid of those kinds of predictions? It is 
understandable why we are hesitant to get into dynamic predictions, but 
I want to emphasize again, to the best of my knowledge not a single 
respectable economist from the left to the right says this bill loses 
  The reason we are hesitant to use this form of revenue estimating 
normally is that every zealot group that believes in a cause is 
convinced that if we will spend money on their cause now, it will save 
money in the future. Come in and spend $5 billion on juvenile crime 
prevention now and it will save us $30 billion on prisons 20 years from 
now. Spend more money on education now, people have more education if 
they go to college instead of high school, they make more money, they 
will pay more taxes, we will get more money back than we spend. 
Everybody says that. And the zealots believe it. There are programs 
where I believe that.
  But the trouble is, there is no one who believes in a program who 
thinks that program is going to lose money. So we have to have some 
middle ground of attempting to dispassionately, bipartisanly attempt to 
estimate what is going to happen if you change tax rates. And here, 
because we are going to get into this again on capital gains this year, 
I want to talk about the capital gains tax.
  Three years ago, President Bush proposed a capital gains tax cut. The 
Treasury Department predicted that over 5 years, the cut would produce 
about $12 billion in revenues. The Joint Tax Committee, the 
professional group that advises the House and the Senate, predicted 
that over the same 5 years, it would lose about $12 billion and this 
became a cause bell between those who wanted it and those who did not. 
Those who did not said this is a boondoggle for the rich and the poor 
will have to pay for it. Those who wanted it said this is going to give 
us $12 billion we can spend on the poor.
  The irony is the Joint Tax Committee and the Treasury Department were 
not very far apart. Both of them were attempting to estimate on a 
behavioral basis. The base of transactions upon which they were basing 
their estimate was trillions of dollars--trillions. Twelve billion 
dollars, plus or minus, was so close to being almost the same 
prediction, well within the margin of error, that we should not have 
been hassling, but philosophy swept us up in the argument. It was a 
very, very close estimate between Treasury and Joint Tax.
  Here would be the difference in guessing, but magnify this a million 
times over. Let us say that the capital gains tax is $10 a transaction. 
Let us say a $10 stock transaction, and you had 100 transactions last 
year. A thousand dollars in taxes come in.
  Now somebody says, ``Let's cut the tax to $5 a transaction and we 
will raise money.'' But if you are going to cut it to $5 a transaction, 
then instead of 100 transactions, you have to have 200 transactions to 
get the same thousand dollars.
  In essence, what Treasury and the Joint Tax Committee did when they 
were estimating is that Treasury said, we think at $5 you will get 210 
transactions; the Joint Tax Committee says we think at $5 you will get 
190 transactions, and that was the difference in their revenue 
estimates and it is the difference between two estimates as to 
behavior. A static estimate would have been if you cut it to $5, you 
get $500. No change, no difference in transactions.
  I want to emphasize again that in our dealings here, the estimates of 
revenue loss are based on the assumption that no matter how you lower 
the tariffs, there is going to be no difference in the quantity and 
quality and cost of the goods that come in. It would be the same number 
of goods regardless of whether there is a tariff or no tariff, 
regardless of whether there are barriers at the border that keep it 
from coming in or not. That simply is not realistic, and no one I know 
says it is realistic.
  So I hope we can put this boogeyman to bed that what we are trying to 
do costs money. It does not. Because of our arcane budget rules, we 
have to score it that way, but it does not lose money.
  Now I want to talk about one other situation, and this is a little 
more difficult to talk about. There are winners and losers in any kind 
of trade arrangement.
  Let us say the United States and Germany are negotiating trade 
agreements, just the United States and Germany. And we say to Germany, 
``We think you are not allowing us to sell our telecommunications 
equipment in your country fairly.
  You have an unfair barrier or tariff and we cannot sell our 
telecommunication equipment fairly. Germany says we think you have an 
unfair barrier to our pharmaceuticals and we cannot sell our 
pharmaceuticals in our country fairly. So we work out a deal with 
Germany. We say if you will lower your telecommunication barriers we 
will lower our pharmaceutical barriers. The Telecommunication 
Manufacturing Equipment Association of Germany, if there is such a 
thing, does not like that arrangement and probably the Pharmaceutical 
Manufacturers Association in this country does not like that 
arrangement. There is a give and a take.
  But what it means is that German consumers will be able to buy at 
least telecommunications equipment cheaper and probably better because 
there will be more variety and more competition. And, conversely, you 
have a greater option of pharmaceutical options in this country. The 
consumers benefit in both countries. The industries that are affected 
do not like it, understandably. Most of these industries are decent, 
  I really am using a wrong example of pharmaceuticals because they are 
one of the leading edges in the world. They produce in this country a 
tremendous surplus balance of trade. And one of the great things they 
get out of this agreement is their intellectual property protection. So 
their drugs cannot be copied, stolen, or manufactured elsewhere and 
they get paid nothing for them. I do not mean to in anyway say this 
industry is slacking. They are tremendous from our standpoint.
  But almost every industry is convinced that it cannot stand 
competition. You see the world through your eyes. I mean you grow up. 
Here is the forest as you live in it. It is hard for you to step back 
and see anything but trees.
  So there is a give and a take. One of the gives I fear to say may be 
the apparel industry. I remember once the chairman of the Finance 
Committee, Senator Moynihan, saying we have not yet learned how to 
automate the making of a man's suit. Not the textile industry. That is 
very capital intensive. Their exports as a matter of fact are going up. 
Japan is instructive on this.
  I think I heard earlier somebody saying go out and try to find a 
garment that says ``made in U.S.'' You will see that it is made in 
Bangladesh, Singapore, India, Hong Kong--none made in United States. 
Thirty years ago Japan was in the top 5 in the export of apparel, and 
also the largest exporter of textiles. Today, Japan is not even listed 
in the top 25 of apparel exporters. Maybe, but it is difficult to go to 
any clothing store in this country and find a garment that says ``made 
in Japan.'' They nearly got out of the business. They realized they 
could not compete in a heavy hand labor business with Bangladesh. But 
they did not get out of the textile business. That is capital. That is 
machines. That is immense investment in highly-skilled, technical, 
well-paid workers. They are still in the top 10 in the export of 
textiles in the world.
  If we are going to sell Boeing 747's, and American pharmaceuticals, 
and General Electric nuclear reactors around the world, the world has 
to have dollars to buy those things and in order to have dollars they 
have to sell us something to get dollars so they can buy what we can 
make best.
  I used the example earlier. It is not all necessarily advanced high 
technology. I used the example earlier of a company on the outskirts of 
Portland, OR, called Denton Plastics. They are in the business of 
recycling garbage plastic, the kind of plastic you get when you come 
from the dry cleaners or the plastic or the paper at the grocery store, 
those kinds of things. They recycle the plastic wrappers you find on a 
frozen food package with all the colored carrots, beans, and all those 
different colors on the packages. They only have 40 employees.
  How often have we heard on the floor the multinational corporations 
who are going--they have 40 employees. It is 11 years old. Mr. Denton 
is still the principal owner of the company. They take all of this 
garbage plastic and somehow squeeze it, heat it, and crush it.
  Here I have an example. Here is the kind of bag that they take. It is 
a normal bag you would get. Here is the kind of wrapper that you might 
find on a frozen food package. They take all of this and they crush it 
up, heat it up, and out comes these little black plastic pellets which 
they then sell to China and Thailand and Korea who in turn make yo-yo's 
out of them and sell them back to us. This came from this.
  I talked with Mr. Denton not an hour and a half ago. I said to him, 
``How on Earth can you compete with China in your kind of a business?'' 
He has been to China several times. He sells in China where this yo-yo 
comes from. He said what the Chinese do is they have something like 
this. They will take a pair of scissors and they cut by hand the color 
out of it because they do not have the process for taking all of this, 
wadding it up and throwing it in the big heated vat. Then they will 
even take something like that and try to cut it into different colors 
by hand.
  I said to him, ``Mr. Denton, how much is your floor labor costs?'' 
And I mean on the floor, not as research and development, and not Mr. 
Denton's salary. He is not going to move to Beijing. His R&D is not 
much. ``How much are your floor labor costs?'' He said, ``Just a 
minute. Let me check.'' I could hear him looking: 10 percent. It is not 
worth moving to China when your labor costs are 10 percent. That is not 
the key to your competitiveness around the world.
  That is how you can compete with a company that pays whatever we have 
heard today, 3 cents an hour, 30 cents an hour, $3 a month, whatever. 
The labor costs are de minimis. Go to any of our major electronics 
  Intel is an immense operation in Oregon. They are just about--they 
have already made their announcement--ready to put in a new $1.2 
billion plant in addition to, not 20 miles away, a $700 million 
expansion on a plant they already have. They are the biggest single 
private employer. Their company was founded in 1969. I asked them. 
``What are your floor labor costs?'' They are 6 percent, or 7 percent. 
This is a highly capital intensive company; 6 or 7 percent. The only 
reason they are overseas--if they have to go overseas--to manufacture--
is to be in the market to overcome trade restrictions in that market.
  Those are the kinds of things that this GATT Agreement breaks down. 
Intel is not investing close to $2 billion in Bangladesh or Singapore 
or Malaysia. They are investing it in Oregon; Oregon, U.S.A. Oregon is 
a high tax State, comparatively speaking. We have no sales tax in 
Oregon. So we have a very high property tax and a very high income tax 
and a high corporate income tax. With all of that, they can compete 
throughout the world manufacturing in what is allegedly a high-cost 
  We cannot compete in everything. There are some things other 
countries can do better than we can, but there are not many things that 
they can do better that involve intellectual property. In films, 
Hollywood dominates the world; television, New York dominates the 
world. We have two kinds of merchandise figures. One is basically 
industrial things: refrigerators, cars, airplanes. We call that 
merchandise. The other is services, credit cards, insurance. Take Visa. 
Take Master Card. Take American Express.
  They license the use of their card all over the world, and the 
licensee pays dollars to the American company. That is services. We 
have an immense surplus in trade in this country in services, and it is 
getting bigger and bigger as the world becomes more service oriented in 
comparison to its manufacturing base, and I mean the whole world's 
manufacturing base. But that is all of the service industries dependent 
upon quick and accurate communications. They do not have immense 
machinery like a shipbuilding facility. It is small and quick. Can we 
compete? You bet.
  So as we consider this bill, remember just these few points: This 
bill does not cost money by anybody's rational scoring that I know that 
lives in this world, right or left, conservative or liberal. Two, if we 
are going to trade in this world, we are going to have to buy some 
things from other countries so that they have some money to buy things 
from us. And the things that we want to do and the lessons we should 
have learned are the kinds of lessons that Japan taught us some years 
ago. There are certain industries that you can justify keeping, and 
others you cannot. One I did not mention--and it is not so much a 
competitive thing--is aluminum. Japan, almost 20 years ago now, got out 
of the aluminum business. They are an energy-poor country. They have no 
coal, no oil, no natural gas of any consequence, no great rivers to dam 
up for electricity. Of course, the reduction of aluminum is an 
immensely electric-consuming, energy-consuming industry. Japan just 
said, ``We are getting out.'' My hunch is they probably had a little 
base of aluminum workers, probably unionized, that did not like it. 
Japan said they had better things to do with their money.
  In 1969, 1970, maybe 1971, I was a young Senator here, and Oregon was 
trying to sell beef in Japan. We were having a dickens of a time coming 
in. We are much more successful in their market recently. A young 
economic attache in the Japanese Embassy came to my office, and I 
thought he was both wise and perceptive in explaining why he had no 
intention of letting us in. He said, ``Mr. Senator, your States, this 
country, the United States, produces very good beef. I am convinced 
that if we opened up our market to your beef, you could probably find 
$500 million to $1 billion in sales in your beef, and that is $500 
million to $1 billion we need for oil and not beef. We cannot afford to 
spend it on beef. We raise a little beef ourselves, but frankly we need 
it for oil.'' That was a rational answer, I thought. You only have so 
much money. But we have crashed their market in beef, and in a good 
many other products now.
  So, Mr. President, I hope, as we continue to debate this tonight, and 
then into tomorrow, that we will remember this does not cost money. 
This bill produces money, except under our arcane method of scoring. 
There are winners and losers but, on balance, America is the winner for 
this reason: On average, tariffs and other restrictions are higher in 
countries around the world where we try to sell our products than they 
are in this country where other countries try to sell their products.
  At the moment, the present world trading system disadvantages us. 
This bill that we are now considering attempts to bring down tariffs 
significantly, but it is as if we are starting with the world here; 
zero is here and the world is here and we are here, and what we are 
trying to do is this, come down, get them both down to zero eventually. 
We do not even make it in full with this agreement. But it gives us a 
better opportunity for trading throughout the world than we have now, 
and that, if no other reason, is a justifiable reason to vote for this 
  I thank the Chair.
  Mr. MOYNIHAN. Mr. President, I thank the soon-to-be chairman of the 
Committee on Finance for a very thoughtful and precise statement. This 
legislation will not lose any money. But if we are going to talk 
economics for a bit, I wonder if I could add just a 4-minute statement 
about what economists have come to call the ``trade cycle'' in 
particular activities, which is that when it is typical for a product 
in the United States to be developed here, then to be exported to 
foreign countries. Then it begins to be manufactured in foreign 
countries, and then it begins to be exported back here. That is a 
perfectly normal cycle. There are good economic reasons for it and it 
makes perfect sense, as long as by the time the exports of our original 
product get back here, we are making something new. And we are, as the 
Senator has said.
  We are the most competitive Nation on Earth in intellectual 
properties, and that being the case, yes, it can be a little disturbing 
to see familiar American products arriving with strange foreign names. 
Daniel Boorstin, our distinguished former Librarian of Congress 
Emeritus, in his book on the Americans, described how one of the ways 
these people from all over God's Earth got together and became a 
nationality was in part by the Model-T Ford, and other artifacts we 
manufactured here, which were very distinctly American, and we all knew 
about them, and that is why we knew about each other. Well, when that 
Ford equivalent starts being called a Nissan something, you start 
saying what is going on in our country, when in fact it is something 
that is very normal.
  We have begun exporting computer chips, and the day will come when 
they come back and Intel will have something else. So there will be a 
new Intel. These are unsettling things, but nothing has equaled the 
growth in the wealth of nations--and this Nation in particular--than 
the growth in trade since the reciprocal trade agreement of 1934. That 
process began with Cordell Hull. Four years earlier, under Smoot-
Hawley, we got tariffs to the level of 60 percent, and our exports 
dropped two-thirds in 2 years. We have a historic moment here at the 
close of the century, and it is looking good.
  May I ask a question of the soon-to-be chairman? You are feeling good 
about this agreement, are you not?
  Mr. PACKWOOD. I am feeling wonderful about this agreement.
  Mr. MOYNIHAN. Mr. President, do you hear that? We feel wonderful.
  Mr. PACKWOOD. Is that the question?
  Mr. MOYNIHAN. That is the question. I think it appears there are no 
further speakers desiring to speak on our side.
  Mr. President, I suggest the absence of a quorum, the time to be 
divided equally between Senator Packwood and myself.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. PACKWOOD. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. PACKWOOD. Mr. President, I yield to the Senator from Missouri 
such time as he might want.
  The PRESIDING OFFICER. The senior and distinguished Senator from the 
State of Missouri is recognized.
  Mr. DANFORTH. Mr. President, I thank the Chair and I thank my friend 
from Oregon.
  Mr. President, I strongly support the GATT agreement and strongly 
support the enabling legislation that is now before us in the Senate.
  There is no doubt in my mind that if the United States is going to 
face the future, we have to compete with the rest of the world. We 
cannot as a nation pretend that the world does not exist. We cannot as 
a nation crawl into a hole and hope that somehow the world will pass us 
by, because if we do crawl into a hole, the world will indeed pass us 
by and relative to the rest of the world America will get poorer and 
poorer. So the concept of an international marketplace is one that in 
my opinion we are committed to and must be committed to as a nation.
  Many people point out the fact that in international trade today the 
rules are not applied fairly to the United States. Many people have 
said that they believe that Americans can compete with any country in 
the world provided that the playing field is level, provided that the 
rules are fair.
  But, Mr. President, in today's world the rules as they are applied 
are not fair, and one of the key examples of that is the series of 
problems that American soybean farmers have had with competition from 
subsidized oilseeds in Europe.
  On two different occasions a GATT case has been brought and on two 
different occasions the GATT case has been won by American soybean 
farmers and on two different occasions there has been no result from 
winning those contests.
  A lot of people have commented about the World Trade Organization as 
though it is somehow a threat to the United States. But the fact of the 
matter is that the World Trade Organization would make it possible for 
once to have enforceable rules of international trade. The problem in 
world trade has not been that the United States does not comply with 
the rules. We do comply. We have a long history of negotiating trade 
agreements and then abiding by those trade agreements because that is 
the kind of country we are, but other countries do not necessarily 
abide by agreements or play by the rules.
  And what happened in the two oilseed cases that were brought by 
American soybean farmers is that we won those cases and then the 
European Community said simply: We do not care whether you won or not. 
We are not going to do anything about it.
  So the present state of affairs is that we have an unworkable system. 
We have a system that does not act to the advantage of American 
farmers. It does not necessarily act to the advantage of Americans 
because other countries can abide by the rules when they want to or 
forget the rules when they want to and we cannot do anything about it.
  One of the great accomplishments of this trade agreement is that it 
does provide for better enforcement than we have today, and better 
enforcement is something that is going to be to the advantage of the 
American people.
  Now, some have said, well, how about the budget? Does not this forgo 
certain revenues? And it does forgo certain revenues, tariff revenues 
by the United States. But, Mr. President, I believe that is a technical 
argument rather than a real argument because the fact of the matter is 
that by expanding international trade, we will create somewhere between 
300,000 and 700,000 new jobs for the American people, and there is no 
way that we can create 300,000 to 700,000 new jobs for the American 
people without simultaneously creating more revenue for the Government. 
It is not a revenue accomplished by the tax increase. In fact, it is a 
revenue increase that is accomplished by the largest international tax 
cut in history, but the effect of it is to stimulate economic activity, 
create more jobs, create more American jobs, more good American jobs, 
and with those additional jobs comes more income, more revenue to the 
Federal Government, more spending by people, a ripple effect throughout 
the economy and better opportunities for all of us, including a better 
situation for the budget deficit.
  So the argument that somehow this has a negative effect on the budget 
is flatly wrong.
  I would like to just make one other point, Mr. President. It is 
something that I think all of us understand. There is a natural fear by 
a lot of us of the unknown; a fear that when we enter the future, when 
we enter new challenges as a country we are going to be hurt. There is 
a comfort in the status quo. There is a comfort level in not having 
change. There is a comfort level in not having to compete as a country. 
And I understand that. If you compete, maybe somebody else will do 
better than you do. Would not it be better if we have no competition?
  But, I do not think that this land of ours is the land of the timid. 
I do not think that it is the land of the fearful. I do not believe 
that the American people deep in their hearts really think that America 
just is not good enough to keep up with other countries of the world.
  I think that most Americans feel that, given the opportunity, we can 
compete with any country, anywhere. Given fair rules, we can compete 
and we can win that competition with anybody. And that is what trade 
legislation and that is what trade agreements are all about. It is to 
create the possibility of real competition, not slanted competition, 
unfair competition, but real competition so that the American people 
will have the opportunity to sell what we produce on international 
  This trade agreement, for the first time in history, limits 
agricultural subsidies. We wish that the limits would have been more 
stringent than they are. But for the first time there are some limits 
on agricultural subsidies and the agricultural subsidies of 
particularly the European Community have acted to the detriment of our 
country. This agreement establishes trading rules for intellectual 
property rights and for trade and services. These are two areas where 
the United States clearly has a competitive advantage over the rest of 
the world. Intellectual property, that is trademarks, patents, the 
inventiveness of the American people. It is a terrible situation when 
American effort and American ingenuity creates a new patent which is 
promptly stolen in another part of the world.
  This covers intellectual property. It covers trade and services. And 
there is no doubt in my mind that in doing so this is to the advantage 
of Americans and of American jobs.
  So, Mr. President, I am very supportive of this GATT agreement.
  I want to pay a special compliment to the U.S. Trade Representative, 
Ambassador Mickey Kantor, and to his associates at the U.S. Trade 
Representative's office. I have, over the past year, noted certain 
problems that I had with the agreement as it was negotiated; problems 
relating to whether or not governments are going to get in the business 
of subsidizing especially high-tech industries and problems of whether 
or not we would open up future rounds of trade negotiations which tied 
trade policy to extraneous matters, even desirable extraneous matters, 
including labor standards and the environment. Those problems have been 
worked out to my satisfaction.
  I want to express my appreciation to Ambassador Kantor for his 
willingness to work with interested Senators in addressing these very 
thorny questions.
  But all in all, Mr. President, this is a really magnificent 
accomplishment, an outstanding trade agreement, and one which will 
greatly benefit the people of our country.
  Mrs. KASSEBAUM. Mr. President, I rise today in support of legislation 
to implement the Uruguay round agreement of the General Agreement on 
Tariffs and Trade [GATT]. After months of study, questioning, and 
debate--both in Congress and in Kansas--I am convinced that this trade 
agreement is vital to our nation's economic future.
  For half a century, the world's trading powers have recognized that 
everyone benefits from having basic rules of the road for international 
trade. That is why we have participated in the GATT system since its 
inception in 1947. The issue before us today is not whether to have an 
international system of trading rules but whether we can improve the 
rules that already exist.
  I believe that we can.
  The Uruguay round agreement--which resulted from 7 years of hard 
negotiation by the past three U.S. administrations--is not perfect. But 
in many key areas, it marks a significant improvement over the system 
now in place.
  For the first time, this agreement will afford the protection of law 
to our farmers and agribusinesses who rely on overseas markets. It will 
help protect our rapidly growing industries that trade in copyrights 
and patents. It will offer the first protection in history to our 
businesses that sell services overseas.
  The agreement will cut tariffs and help reduce Government 
interference in the free market around the world. It will make deep 
cuts in taxes on imported goods, and consumers will be the winners. 
Tariffs worldwide will fall by roughly one-third. And, companies in the 
United States--which already have less tariff protection than many of 
their competitors abroad--will come out ahead.
  For example, I was contacted by Flexel, Inc., a cellophane 
manufacturer with more than 300 good jobs at its plant in Tecumseh, KS. 
More than half of Flexel's product is sold overseas, but today the deck 
is stacked against this small American manufacturer. The U.S. tariff on 
imported cellophane from Flexel's competitors in Europe is 5 percent; 
the European Union tariff on U.S. cellophane is 13 percent. The GATT 
agreement will level the playing field, lowering the European tariff to 
match our own.
  As the critics point out, certain U.S. tariff barriers will have to 
come down in return. But it is clear that, overall, our domestic 
employers will gain far more than we concede. Consider, for instance, 
overall industrial tariffs. Under this agreement, we will reduce ours 
by 1.6 percent. By contrast, India will cut its industrial tariffs by 
15.0 percent. Japan by 2.5 percent. The Europeans by 2.3 percent.
  I believe we are winners with this agreement. However, many 
thoughtful people genuinely do not. I am deeply disappointed at the 
failure of the GATT's supporters to take the case to the people and to 
lay out clearly and precisely the arguments in favor of this agreement. 
I also have been disappointed by the unwillingness of many people on 
both sides of this debate to listen to the arguments of those who 
disagree--and to respect their sincerity.
  Many Kansans worry about the role of the new World Trade Organization 
[WTO] and its potential to affect American sovereignty. They do not 
want an economic United Nations where the world's largest economic 
power has no more influence than any other country.
  I share those concerns, and I have raised them with numerous trade 
experts, both in and out of Government. The WTO system has no 
relationship to the United Nations--indeed, the member countries have 
explicitly rejected any ties to the U.N.
  Most of the changes that WTO will make in the existing GATT system 
are aimed at fixing problems that long have disadvantaged the United 
  For example, under the current system, decisions of the panels that 
settle trade disputes cannot be enforced by the country that prevails. 
And they are frequently ignored by the country that loses. Because the 
United States brings and wins far more challenges than any other 
country, we need a system that lets us enforce the rules. And that is 
precisely what we got in this WTO agreement.
  For half a century, we have been members of a world trade 
organization known as the GATT Secretariat. This debate should focus on 
how the new WTO will differ from the existing organization that it 
  The new WTO will strengthen the procedural protections that the 
United States--and other countries--have in defending their trading 
rights. I believe we must get past the generalities and look at the 
details of how this WTO will work:
  The current GATT can amend the trade agreements in ways that do not 
alter members' rights or obligations with only a \2/3\ vote of the 
members--under WTO, a \3/4\ vote would be required to get to an 
amending vote, and no amendment would bind any country that votes 
  The GATT can change the agreements in ways that alter members' rights 
and obligations by a \2/3\ vote--under WTO, a \3/4\ vote is required.
  The current GATT can expel by majority vote a member who refuses to 
accept changes in trade rules--under WTO, a \3/4\ vote is required.
  The current GATT can interpret the substantive trade agreements by a 
simple majority vote--under WTO, a \3/4\ vote will be required, and 
protections are included to ensure that amendments masquerading as 
``interpretations'' are not permitted.
  The current GATT permits a majority of members to decide to take 
trade actions not specified in the agreements as long as those actions 
facilitate the operation and objectives of the GATT--the WTO eliminates 
this broad freelance provision.
  The current GATT makes trade decisions only by consensus of all 
members, but that requirement is customary rather than required--the 
WTO mandates that decisions must be by consensus.
  The current GATT establishes ad hoc panels to settle trade disputes 
among nations, and their rulings are final--the WTO adds a new 
opportunity to appeal panel decisions.
  I was further reassured by the protective agreement worked out 
recently by Senator Dole, which ensures added review of WTO judgments 
against the United States. If a panel of American judges finds that WTO 
panel decisions are arbitrary and capricious, we can expedite our 
withdrawal from the organization. The bottom line is simple: Only 
Congress can change U.S. laws, and nothing in this agreement cedes even 
one bit of that national sovereignty. That is why conservative Judge 
Robert Bork, who has studied the agreement, concluded that the 
sovereignty issue is a scarecrow.
  Many also have expressed concern about the budget implications of 
reduced tariff revenues. But in the end, the budget argument does more 
to illustrate the shortcomings of the bizarre congressional budget 
rules than any shortcoming in the GATT agreement. The requirement--
unique to the Senate--that legislation be revenue neutral for 10 years 
after enactment is simply unrealistic. It is impossible to predict with 
any semblance of certainty what legislation passed today will mean to 
the Treasury in 10 years. Remember: Ten years ago, it was predicted 
that the Gramm-Rudman-Hollings legislation would have balanced the 
budget by now. The budget argument is, at best uncertain.
  This vote is about new markets, less Government regulation of the 
marketplace, lower consumer prices and expanded American businesses and 
workforces. I will vote for the Uruguay round agreement because it is 
in our interest.
  But the vote also is about leadership and our ability to shape, 
rather than follow, world events. Eight years ago, we led the world in 
calling for this agreement. Our trading partners now are watching to 
see whether the United States, the world's largest economic power, will 
turn its back on free trade.
  We must not underestimate the importance of this vote.
  I, for one, believe we must lead.