Two Cheers For GATT

Policy Backgrounders | Trade

No. 135
Friday, November 25, 1994
by James Bovard


Serious Flaws in Clinton’s GATT Package

"Current U.S. dumping law has become a protectionist tool against imports."

Unfortunately, to buy congressional support for the GATT package the Clinton administration has made several protectionist deals. For example, the administration added new rules to the U.S. dumping section of the GATT-implementing legislation so the U.S. government could more easily convict foreign companies of unfair trade practices.

The new rules consist largely of making unequal comparisons between U.S. and foreign prices - thereby creating the appearance that foreign companies' prices in the United States are unfairly low. Clinton policymakers added this provision to the GATT legislation despite the stark evidence of the protectionist nature of existing U.S. dumping law. According to the Congressional Budget Office, current U.S. dumping law has become a protectionist tool that discriminates against imports.42

Worst of all, the administration appears ready to seize on fine print in the GATT to deny American consumers the imminent benefits of textile trade liberalization. Clinton administration policymakers have finagled numbers and exploited loopholes so that the U.S. government will continue protecting the domestic textile industry far longer than most experts expected when the GATT was signed. This will force American consumers to pay billions of dollars in higher clothing prices over the 10-year phase-in of the treaty.

"The administration proposes to revoke 10 years of binding rulings so as to suppress exports from Hong Kong and China."

In order to throttle textile imports, the Clinton administration has also manipulated the rules of origin. The administration essentially proposes to revoke 10 years of binding rulings by the U.S. Customs Service so as to suppress exports from Hong Kong and China. The new rule is intended to penalize companies that engage in multinational textile production - to make it a crime for nations to capitalize on their advantages. According to Clint Stack, a former U.S. government official and chief of International Development Systems, a Washington, D.C., textile consulting firm, "The new rule could adversely impact up to $6 billion in clothing imports a year."43


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