WASHINGTON — As Congressional trade titans Sen. Daniel P. Moynihan (D., N.Y.), and Rep. Sam Gibbons (D., Fla.) sit down Tuesday to resolve the final outstanding issues on the GATT Uruguay Round implementing bill, broadening trade benefits for Caribbean Basin countries likely will be the last thing left on the table.
The proposal, ardently advanced by Gibbons, acting chairman of the House Ways and Means Committee, in defense of his Florida ports, is just as vehemently protested by Senate Finance Committee Chairman Moynihan, protector of organized labor and New York apparel workers.
As Gibbons acknowledged last week, it will be in the hands of the Clinton administration to break the standoff.
“I don’t know what the administration wants to do,” Gibbons told reporters. “It’s up to them.”
All involved say its ultimate fate depends on whether it gains or loses votes for GATT.
Should the CBI parity plan be struck from the GATT bill, Gibbons has repeatedly vowed he will bring it back again before Congress next year. However, the odds of passage next year are highly uncertain, since the November elections are expected to bring significant changes to the makeup of Congress. It is anticipated, though, that Gibbons will be among the returnees to Congress.
Under the plan, apparel imports from the Caribbean would be given the same quota and tariff treatment granted Mexico under the North American Free Trade Agreement. The Caribbean is already a key supplier of apparel under 807 programs, which allow apparel sewn in the Caribbean from U.S.-cut fabrics to be imported under tariffs collected only on value added. The argument among CBI parity advocates is that NAFTA gives Mexico a decided competitive advantage.
A crucial factor in resolving the CBI parity issue this time around is time. It’s running out on the 103rd Congress.
With the House and Senate expected to adjourn in early or mid-October, the administration and GATT proponents are more willing to streamline the GATT implementing bill to eliminate any opposition to it and expedite a vote before adjournment.
The administration’s willingness last week to drop a plan to extend fast-track negotiating authority for subsequent trade agreements, an item Deputy U.S. Trade Representative Rufus Yerxa said was deemed more important than CBI parity, is illustrative of its willingness to compromise and the importance it has placed on passing GATT this year.
CBI parity has lost out before, when it was struck last year from the North American Free Trade Agreement. After extensive lobbying by Gibbons among his colleagues for the plan, it was determined that despite the backing of the 40-member Congressional Black Caucus and the 18 members of the Hispanic Caucus, it would jeopardize the votes of textile state members and so was dispensable.
With the work on resolving the differing House and Senate versions of the GATT implementing legislation drawing to a close, all sides are having their say in an attempt to influence Gibbons and Moynihan, who will be doing the last minute negotiating with the Clinton administration on Tuesday.
Once the two versions are reconciled, the proposed legislation will be forwarded to the White House and then formally returned to Congress in the form of a GATT implementing bill that must be either approved or denied without any changes.
If Gibbons and Moynihan complete their work Tuesday, Congress could vote on GATT during the first week of October. In addition to the CBI parity plan, other unresolved issues include a plan to change the rule of apparel origin from the country where it is cut to where it is sewn, antidumping regulations, and finding some $12 billion to pay for the tariff revenue that would be lost during the first five years of GATT.
The CBI parity plan, estimated to cost up to $800 million, could face problems because of its cost. With Congressional Republicans finding fault with the majority of the administration’s plan to fund GATT, coming up with more money could prove difficult.
The American Apparel Manufacturers Association and the American Textile Manufacturers Institute are backing the parity plan and are among those making a last-minute pitch.
Larry Martin, director of government relations for the AAMA, is optimistic it will prevail.
“I’m quite confident based on the support it has in the administration and on Capitol Hill that we’ll get CBI parity,” he said in a telephone interview.
Stewart Boswell, AAMA president, along with ATMI and Caribbean and Latin American organizations, wrote members of the House Ways and Means and Senate Finance committees Sept. 12, seeking support for CBI and reminding members that Central American and Caribbean countries have been helpful to the U.S. as it’s dealt with the immigration crises with Haiti and Cuba. Jamaica has helped process Haitian boat people, while Panama and Honduras have agreed to accept several thousand refugees from Cuba. Also, several Caribbean countries have agreed to provide troops in the event of an invasion of Haiti, Boswell wrote.
A senior staffer on the House Ways and Means Committee agreed that the events in Haiti could influence the administration’s decision on CBI parity. The staffer said proponents of the parity plan were counting on it being employed as a way to strengthen ties with the Caribbean friends of the U.S. and insure their backing of any military action in Haiti.
Boswell also wrote that since NAFTA was enacted, the growth in apparel imports is swinging from the CBI region to Mexico.
“CBI parity is urgently needed to restore equity in apparel trade,” he said. “The combination of NAFTA and the [CBI] interim trade program will contribute significantly to the economic and political stability of the Western Hemisphere and it will help the domestic apparel and textile industries compete in the global marketplace.”
Caribbean presidents also are having their say. In a letter to President Clinton Aug. 20, the presidents of Costa Rica, Guatemala, Nicaragua, El Salvador, Honduras and Panama urged passage of CBI parity saying it would “constitute a transcendental step toward the economic liberalization of the hemisphere.”
The CBI parity plan is in the House’s version of the GATT implementing bill and not in the Senate’s. In exchange for this free-trade status, CBI countries would have one year to meet international intellectual property rights laws, and would have to agree to meet international labor standards and enact environmental protection regulations.
Even though the industry organizations are for CBI parity, apparel workers and unions are against it and are pressuring textile state members to oppose it.
One of those feeling the heat is Rep. L.F. Payne (D., Va.). His Republican opponent is criticizing him because of his vote for NAFTA, and so Payne is wrestling with whether he will vote for GATT. Payne unsuccessfully attempted to strike the CBI parity provision during House Ways and Means Committee deliberations on the implementing bill.
House Textile Caucus chairman John Spratt (D., S.C.), wrote Gibbons Wednesday to reaffirm Spratt’s opposition to CBI parity. Spratt initially expressed his parity opposition in early June in a previous letter to Gibbons.
Saying it will lead to a loss of U.S. textile and especially apparel jobs to the Caribbean, Spratt said in his latest letter, “U.S. apparel plants will close and new ones will open in CBI countries to benefit from wages that are even cheaper than prevailing rates in Mexico. I can understand why the Caribbean countries support parity. For them, it means more jobs and more investment. But it is hard to understand why the U.S. government supports such a proposal.”
Desperate for a foreign policy success, the Clinton administration will do whatever it takes to win passage of GATT, predicted Auggie Tantillo, former deputy assistant secretary for Commerce under Bush and now a political consultant to Fieldcrest Cannon, among other firms.
“If CBI costs votes, it will go,” Tantillo said, predicting that Moynihan will have more leverage when he meets with Gibbons.
“What’s more important,” Tantillo asked, “CBI parity or GATT? They are reducing the issues of disagreement and getting rid of CBI will be one of them.”
— Fairchild News Service