General Agreement on Tariffs and Trade:

Uruguay Round Final Act Should Produce Overall U.S. Economic Gains (Volume 1)

GGD-94-83A: Published: Jul 29, 1994. Publicly Released: Jul 29, 1994.

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GAO reviewed the Uruguay Round of negotiations of the General Agreement on Tariffs and Trade (GATT), focusing on the: (1) negotiating objectives for the round; and (2) projected impact of the Final Act on the agreement.

GAO found that: (1) the act should produce overall economic gains for the United States and increase international trade, reduce tariffs, create stronger trade dispute settlement procedures, extend GATT principles, and strengthen GATT as an institution; (2) industry analysts believe that the act could increase U.S. national income by as much as $200 billion over a 10-year period; (3) the act may adversely affect certain sectors of the U.S. economy and dislocate up to 255,000 workers; (4) some industry organizations and domestic interest groups believe that the act could adversely affect U.S. interests because it establishes a World Trade Organization (WTO) in which the United States could be outvoted by other nations on important matters and subjected to stronger dispute settlement procedures that challenge U.S. laws and sovereignty; (5) it is difficult to predict how new WTO members will use the revised provisions for dispute settlement actions; (6) even if the United States becomes a member of WTO, it would still retain its trade laws and other domestic policies; (7) it is difficult to determine how foreign governments will employ the new subsidies agreement contained in the Final Act and how the agreement will impact U.S. firms; and (8) the United States must find ways to offset tariff revenue losses to maintain budget neutrality.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Congress passed legislation in August 1998, The Workforce Investment Act (Public Law 105-220), to overhaul and streamline worker adjustment assistance, as GAO recommended.

    Matter: If Congress approves legislation to implement the Final Act, it may wish to ensure that an effective worker adjustment assistance program is in place to facilitate the structural adjustment that would be needed in the workplace.

  2. Status: Closed - Implemented

    Comments: The Administration and Congress are attempting to agree on a package of budget offsets.

    Matter: In deciding whether to approve implementing legislation, Congress should consider ways to offset the projected tariff revenue losses to ensure deficit neutrality over the first 5 years as required by the Budget Enforcement Act.

 

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