By  on June 23, 1994

WASHINGTON -- Prospects for the GATT Uruguay Round had a mixed day in the Senate Wednesday.

Two key senators offered a possible solution to complaints that foreign subsidies permitted in the agreement could create unfair competition for U.S. industry. On the down side, all 43 Senate Republicans warned President Clinton in a letter that the planned inclusion of a seven-year fast-track extension in the implementing legislation jeopardizes their support for the agreement.

Max Baucus (D., Mont.), chairman of the Senate Trade Subcommittee, and Jack Danforth (R., Mo.), ranking panel Republican, sent U.S. Trade Representative Mickey Kantor a letter and a six-page outline of what they want to see in the GATT-implementing legislation on six items, including the subsidy matter.

"We firmly believe that such legislation is critical to ensuring that the Uruguay Round serves our national interest by promoting economic growth and job creation throughout our country," the letter said.

To deal with unfair trade practices, including foreign subsidies and dumping, Danforth and Baucus outlined a process under which higher tariffs could be levied.

They also addressed concerns that the World Trade Organization, created under the new GATT agreement, threatens U.S. sovereignty. Their plan would permit private companies involved in trade disputes to be present during WTO deliberations and would require any changes in U.S. law mandated by the WTO to be considered first by Congress. In addition, if the WTO finds another country has practiced unfair trade policies with the U.S., USTR would have the authority to take additional punitive actions against the violating country on top of WTO penalties.

Meanwhile, all Senate Republicans said in their letter to Clinton that they had "serious concerns" about including a fast-track extension in GATT. Last week the administration submitted its fast-track proposal to Congress for inclusion in the implementing legislation.

Senate Republicans also said labor and environmental standards should be debated separately by Congress and not included in fast-track authority. Including those matters would "further jeopardize consideration of the Uruguay Round implementing legislation this year," the letter said.

Senate Republican opposition to tying trade to labor and environmental standards poses a dilemma to the administration.

In the House, some Democrats, led by Rep. Richard Gephardt (D., Mo.), are insisting the linkage be in any fast-track agreement.

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