SHOWDOWN SET FOR FRIDAY ON GATT RULE-OF-ORIGIN

Byline: JOYCE BARRETT

WASHINGTON--The real tug of war over whether the GATT Uruguay Round implementing bill should include a rule-of-origin change for apparel or broader trade benefits for Caribbean countries is to begin Friday morning.
That's when members of the House Ways and Means Committee and the Senate Finance panel finally start reconciling their two versions. However, their compromise version is not expected to emerge until next month.
The House panel, after a wrap-up meeting Wednesday on its proposals, carries to the conference a broad measure that includes: a one-year granting of free trade benefits--similar to those given Mexico in the North American Free Trade Agreement--to Caribbean Basin Initiative countries; a change in the rule of origin for apparel, and an extension of fast-track negotiating authority for future free trade agreements.
The Senate committee rejected all of these, and so it will be up to the House conferees, which include members of the Trade Subcommittee, along with Rep. Sander Levin (D., Mich.) and ranking Republican on the committee Bill Archer of Texas, to persuade the Senate to accept them.
The Senate bill includes one item not in the House plan--an elimination of an inventory tax deduction popular with retailers. Archer, along with members of House Republican leadership, convinced the Clinton administration that the inventory tax should not be touched in the House version.
The House-Senate conference will devise the final congressional recommendation on the GATT implementing bill. The administration is expected to accept the recommendation and then formally submit it to Congress for approval.
Rep. Robert Matsui (D., Calif.), chairman of the House Trade panel, said because of the contentiousness of the rule-of-origin proposal and CBI parity, they likely wouldn't be discussed until September.
Meanwhile, Rep. Ben Cardin (D., Md.), sponsor of the rule-of-origin plan accepted by the House, said he was devoting time and energy to ensuring that the rule change prevails. Under the plan, the country where apparel is sewn would be considered the place of origin, instead of the country where it is cut, as specified in current regulations. The change, sought by the domestic textile and apparel industries, is vigorously opposed by retailers and importers, who say it would upset sourcing patterns and add sharply to the cost of imports.
On CBI parity, the House provides for $135 million in new financing to offset the tariff revenues that would be lost during parity's first year. Further extension of CBI would have to be considered in the future, depending on whether funding is available.
--Fairchild News Service

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