WASHINGTON — Opposition to the GATT agreement has widened with a coalition of 18 agricultural groups now threatening to fight it because of administration proposals they say could cut production and raise wholesale prices on a variety of commodities, including cotton.
The coalition, which leaders say could influence enough votes to defeat GATT in the Senate, joins the textile industry in an anti-GATT stance. While the textile industry opposes GATT because of its absence of market-opening initiatives, the combination of both lobbies could be a formidable force working against the treaty when it comes before Congress.
The agricultural coalition is marshaling against an administration proposal to pay for the tariff revenue that will be lost when GATT takes effect by cutting deficiency payments to farmers. If the payments, which essentially guarantee farmers that their commodity prices will be profitable, are reduced, U.S. farmers could be forced out of business, thus reducing the supply of crops.
If there are commodity shortages, prices could rise, said John McGuire, vice president of the National Cotton Council, which represents cotton growers and is part of the coalition.
The administration has estimated it needs to raise $16 billion to pay for the tariff revenue that will be lost during the first five years of GATT when trade barriers are reduced. While U.S. Trade Representative Mickey Kantor has said that for every $1 lost in tariff income, the U.S. will earn $3 from the expanded trade benefits, under budget law, all reductions to government income must be offset.
Al Tank, vice president of the National Pork Producers Association, which is leading the coalition, said the Office of Management and Budget has proposed raising up to $5.7 billion by reducing subsidies to farmers. A cut of that magnitude, he said, would “decimate all export and domestic programs” that farmers rely on.
The agriculture coalition is asking the administration to waive the budget act so the money doesn’t have to be raised, Tank said. Second, the coalition is asking that the agricultural sector only be asked to pay for the tariff revenue that will be lost on agricultural products, which amounts to about $825 million, Tank said.
“If they don’t waive the budget act, they won’t get GATT passed,” he said. “Agriculture is becoming the petty-cash account for this government and this administration.”