WASHINGTON — The Clinton administration is eyeing retailing as a source for some of the money it will need to make up for reduced tariff revenue under the GATT Uruguay Round treaty, U.S. Trade Representative Mickey Kantor said Wednesday.
Under budget requirements, the administration is faced with finding $13 billion in new taxes or spending cuts over a five-year period to balance the expected revenue shortfall once the GATT treaty goes into effect. The treaty, which was formally signed by 109 nations last week — the main negotiations were completed in December — still requires Congressional ratification.
Retailers — along with pharmaceutical makers, agriculture and manufacturers of heavy equipment — are likely targets for cash-raising because those are sectors that will benefit from the liberalization of worldwide trading rules under the treaty, Kantor told the Senate Agriculture Committee Wednesday.
He did not specify how the money might be collected from retailers. On agriculture, the administration has toyed with the idea of cutting subsidies.
That idea, however, met stiff resistance Wednesday when 17 senators sent a letter to President Clinton saying that if new farm spending reductions are proposed, “the prospects for Congressional approval of the Uruguay Round implementing legislation would be seriously complicated.”
Kantor told the panel that no decisions have yet been made on the funding sources. He said that he, along with Office of Management and Budget Director Leon Panetta and Treasury Secretary Lloyd Bentsen, was meeting with Congressional Democrats and Republicans to come up with an acceptable funding formula.
The administration is not considering waiving the budget act that requires Congress to offset the tariff reductions of GATT with new taxes or spending cuts because “we want to make sure the financial markets know we’re working toward budget discipline.”
The administration must come up with funding before the GATT-implementing legislation can be submitted to Capitol Hill for approval.
During the hearing, Sen. Jesse Helms (R., N.C.), asked Kantor to meet with members of Congress from textile states to discuss the implications of GATT for the domestic industry.