Letter to Congressional Leaders on the General Agreement on Tariffs and Trade

Dear Mr. Speaker: (Dear Mr. President:)

I believe that we have created a unique opportunity to build an international trading system that will ensure the orderly and equitable expansion of world trade and contribute to the prosperity of the United States in coming generations. After seven long years the conclusion of the Uruguay Round of multilateral trade negotiations is at hand. The Round will result in the largest, most comprehensive set of trade agreements in history. With the conclusion of the Round, we will have successfully achieved the objectives that Congress set for the United States in the negotiations.

In accordance with section 1103(a)(1) of the Omnibus Trade and Competitiveness Act of 1988, as amended ("Act"), I am pleased to notify the House of Representatives and the Senate of my intent to enter into the trade agreements resulting from the Uruguay Round of multilateral trade negotiations under the auspices of the General Agreement on Tariffs and Trade. These agreements are listed and identified below and are more fully described in an attachment to this letter.

The United States can and must compete in the global economy. In many areas of economic activity we are already world leaders and we are taking measures at home to strengthen further our ability to compete. In section 1101 of the Act the Congress set as the first overall U.S. negotiating objectives for the Uruguay Round more open, equitable and reciprocal market access. I am particularly pleased to advise you that the Uruguay Round results will provide an unprecedented level of new market access opportunities for U.S. goods and services exports. In the attachment to this letter is a summary description of the agreements on market access for goods and services that we have achieved in the Round. Of special note are the number of areas where we and our major trading partners have each agreed to reduce tariffs on goods to zero. The schedules of commitments reflecting market access in services cover a wide range of service sectors that are of great interest to our exporting community.

The Agreement on Agriculture will achieve, as Congress directed, more open and fair conditions of trade in agricultural commodities by establishing specific commitments to reduce foreign export subsidies, tariffs and non-tariff barriers and internal supports.

The Agreement on Textiles and Clothing provides for trade in textiles and apparel to be fully integrated into the GATT for the first time. As a result, trade in textiles will be subject to the same disciplines as other sectors. This transition will take place gradually over an extended period. At the same time, the agreement provides an improved safeguards mechanism. It also requires apparel exporting countries to lower specific tariff and non-tariff barriers, providing new market opportunities for U.S. exporters of textile and apparel goods. The agreement contributes to the achievement of the U.S. negotiating objectives of expanding the coverage of the GATT while getting developing countries to provide reciprocal benefits.

In fulfillment of the second overall U.S. negotiating objective, the reduction or elimination of barriers and other trade-distorting policies and practices, the Uruguay Round package includes a number of agreements to reduce or eliminate non-tariff barriers to trade. These agreements, which are described in the attachment, address Safeguards, Antidumping, Subsidies and Countervailing Measures, Trade-Related Investment Measures, Import Licensing Procedures, Customs Valuation, Preshipment Inspection, Rules of Origin, Technical Barriers to Trade, and Sanitary and Phytosanitary Measures. The agreements strengthen existing GATT rules and, for the first time in the GATT, discipline non-tariff barriers in the areas of investment, rules of origin and preshipment inspection. The agreements preserve the ability of the United States to impose measures necessary to protect the health and safety of our citizens and our environment and to enforce vigorously our laws on unfair trade practices.

The Agreement on Government Procurement will provide new opportunities for U.S. exporters as a result of the decision to expand the coverage of the agreement to government procurement of services and construction; we will, however, only extend the full benefits of the agreement to those countries that provide satisfactory coverage of their own procurement. Negotiations on improvements in the Agreement on Trade in Civil Aircraft and on a Multilateral Steel Agreement are continuing. These agreements should provide for more effective disciplines and reduce or eliminate trade-distorting policies and practices in two industries of importance to our economy. I will fully consult with the Congress throughout these negotiations, and plan to enter into these agreements if the negotiations produce results that are acceptable to the United States.

As a result of the Agreement on Trade-Related Intellectual Property Rights (TRIPS) and the General Agreement on Trade in Services (GATS), we will now have for the first time internationally agreed rules covering areas of trade of enormous importance to the United States. These agreements represent a major step forward in establishing a more effective system of international trading disciplines and procedures. GATS contains legally enforceable provisions dealing with both cross-border trade and investment in services and sectoral annexes on financial services, labor movement, telecommunications and aviation services. More than 50 countries have submitted schedules of commitments on market access for services. The TRIPS agreement provides for the establishment of standards for the protection of a full range of intellectual property rights and for the enforcement of those standards both internationally and at the border.

The Uruguay Round has produced a number of other agreements that will create a more effective system of international trading disciplines and procedures.

The Understanding on Rules and Procedures Governing the Settlement of Disputes will provide for a more effective and expeditious dispute resolution mechanism and procedures which will enable better enforcement of United States rights. Congress identified the establishment of such a system as the first principal U.S. trade negotiating objective for the Round. The procedures complement U.S. laws for dealing with foreign unfair trade practices such as section 301 of the Trade Act of 1974.

The Agreement Establishing the World Trade Organization will facilitate the implementation of the trade agreements reached in the Uruguay Round by bringing them under one institutional umbrella, requiring full participation of all countries in the new trading system and providing a permanent forum to address new issues facing the international trading system. The WTO text recognizes the importance of protecting the environment while expanding world trade; negotiators have also agreed to develop a work program on trade and the environment and will recommend an appropriate institutional structure to carry out this work program. Creation of the WTO will contribute to the achievement of the second principal U.S. negotiating objective of improving the operation of the GATT and multilateral trade agreements.

The U.S. objective of improving the operation of the GATT is also furthered by a number of understandings, decisions and declarations regarding the GATT and its operations. The Trade Policy Review Mechanism will enhance surveillance of members' trade policies. The Understandings Concerning Interpretation of Specific Articles of the General Agreement on Tariffs and Trade 1994 (GATT 1994) concern the Interpretation of Articles II:1(b), XVII, XXIV, XXVIII and XXXV, and Balance-of-Payments Provisions. There is also an Understanding in Respect of Waivers of Obligations Under the General Agreement on Tariffs and Trade 1994.

The Ministerial Decisions and Declarations state the views and objectives of Uruguay Round participants on a number of issues relating to the operation of the global trading system, provide for the continuation of the improvements to the dispute settlement system that became effective in 1989 and deal with other matters concerning the dispute settlement system. The Ministerial Decisions and Declarations that are now proposed for adoption are described in the attachment. At this time, implementing legislation does not appear to be necessary for these instruments.

I will continue to consult closely with the Congress as we conclude the Round. There are a few areas of significance that we were unable to resolve at this time. In order to ensure more open, equitable and reciprocal market access, in certain agreements we have made U.S. obligations contingent on receiving satisfactory commitments from other countries, and we will continue to work to ensure that the best possible agreement for the United States is achieved. I will not enter into any agreement unless I am satisfied that U.S. interest are protected. With regard to entertainment issues, we were unable to overcome our differences with our major trading partners, and we agreed to disagree. We will continue to negotiate, however, and until we reach a satisfactory agreement, we think we can best advance the interests of our entertainment industry by reserving all our legal rights to respond to policies that discriminate in these areas.

In accordance with the procedures in the Act, the United States will not enter into the agreements outlined above until April 15, 1994. After the agreements have been signed, they will be submitted for Congressional approval, together with whatever legislation and administrative actions may be necessary or appropriate to implement the agreements in the United States. The agreements will not take effect with respect to the United States, and will have no domestic legal force, until the Congress has approved them and enacted any appropriate implementing legislation.

Sincerely,

WILLIAM J. CLINTON