Two Cheers For GATT
Table of Contents
Benefits of the GATT
"GATT represents a worldwide tax cut of nearly $750 billion."
The GATT represents a nearly $750 billion worldwide tax cut - by far the largest in history. This also is the broadest, most comprehensive trade agreement in history - equivalent to a one-third cut in tariff levels around the world. And the GATT establishes new rules for trade in services and intellectual property - areas in which the United States has a large comparative advantage. The GATT Secretariat estimates that, as a result of the GATT, world merchandise trade will be $755 billion higher in the year 2005 than it would have been and worldwide income will be more than $230 billion higher.16
The United States would benefit, along with other countries. Trade already is vital to our economy. Last year, the U.S. exported over $650 billion in goods and services - the equivalent of more than 10 percent of the gross national product. More than 10 million jobs are directly reliant on exports.17 Under GATT, economic activity would expand.
- The Institute for International Economics estimates that the GATT would result in a $30 billion tax cut for American consumers and an overall gain to the U.S. of $65 billion by the year 2000.18
- The Institute also estimates that the GATT would produce 10 times more benefits for the U.S. than will the North American Free Trade Agreement (NAFTA).
- The U.S. Department of the Treasury estimates that the GATT will add between $100 billion and $200 billion to this nation's annual income, or the equivalent of $1,700 per family per year.19
- And the GATT agreement will produce a least 250,000 new American jobs.20
"Many nations have lower average tariffs than the United States."
U.S. Trade Representative Mickey Kantor testified in June that the GATT will result in "the elimination of tariffs in major industrial markets and significantly reduced or eliminated tariffs in many developing markets, in the following areas: construction equipment, agricultural equipment, medical equipment, steel, beer, distilled spirits, pharmaceuticals, paper, toys and furniture." Kantor noted that the GATT will also result in "deep cuts ranging from 50 to 100 percent on important electronics items (semiconductors, computer parts, semiconductor manufacturing equipment) and on scientific equipment by major US trading partners."21 [See Table I.]
Obviously, the potential benefits of the GATT are great. This is why we must seriously consider the main points of the opposition to the agreement.