WASHINGTON — Chances of congressional passage of the GATT Uruguay Round treaty got a boost Friday from House Minority Leader Newt Gingrich (R., Ga.), who said “a vast majority” of House Republicans would not require the administration to find ways to make up the tariff shortfall that would be created under the world-trade pact.
The tariff losses have been estimated at $13 billion over the first five years of the treaty.
By backing away from this legal budget requirement, Gingrich and House Republicans would remove a major stumbling block to passage of the treaty. The administration has been struggling for weeks to find a way to pay for the shortfall, and Office of Management and Budget director Leon Panetta is currently meeting with members of Congress to discuss funding options.
Gingrich also said he was satisfied that the administration would move to erase his concerns that the World Trade Organization, created under GATT, would not threaten U.S. sovereignty. The WTO would consists of more than 100 nations, each with only one vote on trade issues.
In questioning from Gingrich during a House Ways and Means Committee hearing Friday, U.S. Trade Representative Mickey Kantor said the administration would include in the implementing legislation, a provision that Congress must approve any change in U.S. trade law that might be required under the WTO.
Kantor also said that the federal government would defend any state law challenged by a U.S. trading partner in the WTO, and that the administration would agree to support a study to identify the industrial sectors that could be affected by the WTO and potential challenges to U.S. law.
GATT’s potential for passage would be significantly improved with solid backing from Gingrich, who was instrumental in soliciting Republican support last fall for the North American Free Trade Agreement.
Gingrich said Friday he was not ready to endorse the treaty but did say, “We are making progress.”
Gingrich expressed concerns about the sovereignty issue after a recent meeting with textile titan Roger Milliken, chairman of Milliken & Co.
Milliken has mounted an anti-GATT campaign based primarily on the argument that the one-vote one-nation mechanism of the WTO threatens U.S. sovereignty.
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Also at Friday’s hearing, Pat Choate, director of The Manufacturing Policy Project, a think tank here funded partially by Milliken, testified that already “other nations are identifying federal, state and local U.S. laws that supposedly are illegal trade barriers.”
“Under the WTO, this nation will be the defendant in hundreds, if not thousands, of trade disputes in which U.S. laws will be challenged. Whenever the U.S.loses, the only choices are to either change the laws, not enforce them, or pay WTO’s penalties.”