By  on June 30, 1994

WASHINGTON -- The GATT Uruguay Round advanced a step closer to Congressional passage Wednesday with the addition of tougher protections for the domestic textile industry against transshipping and additional foreign market opening provisions for U.S. exports.

The House Trade Subcommittee unanimously agreed to forward its draft of implementing legislation for GATT to the full Ways and Means Committee, which could begin work on its version in July after Congress returns from its Fourth of July holiday. Acting committee Chairman Sam Gibbons (D., Fla.), said GATT would be considered as soon as the panel completes work on health care reform.

In another trade development Wednesday, a resolution to deny China its most-favored-nation status was sent to the full House with an unfavorable recommendation by the House Ways and Means Committee in a 31-6 vote. Also, Acting Committee Chairman Sam Gibbons (D., Fla.), said the panel would not consider a bill introduced by Rep. Nancy Pelosi (D., Calif.), House Majority Leader Richard Gephardt (D., Mo.), and Senate Majority Leader George Mitchell (D., Maine), that would deny the low tariffs granted under MFN to exports from Chinese government-owned factories.

By denying the plan to restrict China's trade benefits a hearing before the committee and consequently a floor vote, Gibbons is practically assuring that President Clinton's decision to extend China's trade benefits another year and to separate consideration of China's trade status from its human rights policies will not be overturned by Congress. While a House vote on a plan to deny China MFN is likely, an identical measure was rejected by the House last July in a 105 to 318 vote.

In the GATT deliberations, provisions sponsored by Rep. L.F. Payne (D., Va.) and accepted by the subcommittee would provide several benefits for the domestic textile and apparel industries.

The Commerce Department would be required to publish in the Federal Register the integration schedules for textile and apparel products. Once published, the schedules could only be changed by law. The Committee for the Implementation of Textile Agreements would be required to insure that integration of the most sensitive products would not occur until the end of the 10-year period phasing in the new liberalized world trade order under GATT.Chief Textile Negotiator Jennifer Hillman told subcommittee members the administration supported the provision because it would put certainty into the process of cutting trade barriers and allow manufacturers to make long-range plans.

Another Payne provision says that countries found to be transshipping textiles and apparel to the U.S. during the 10-year period could have their quotas adjusted to account for the circumvented goods. Also, countries through which goods are transshipped could have their quotas reduced.

As for market access, the draft legislation provides that countries that want to join the newly created World Trade Organization, such as India or Pakistan, would have to open their markets to U.S. textiles and apparel exports or face five possible sanctions.

Those sanctions would involve denied entry for goods that exceed yearly quota levels; reduced quota growth rates; denial of the tariff-free treatment under the Generalized System of Preferences; an investigation of unfair trade practices; or tariffs on textiles and apparel that are high priority for those countries would not be reduced until the end of the 10-year phase-in.

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