Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

GATT Chief Welcomes Crucial U.S. Vote

GENEVA -- GATT chief Peter Sutherland on Friday hailed the U.S. Senate for approving the new world trade treaty, predicting it would create more jobs and give a huge boost to economic growth.


The Senate vote removed the last real barrier to the creation of a new World Trade Organization (WTO) on schedule Jan. 1, he said.


"The U.S. vote was always of crucial importance because it could have derailed the whole process, derailed eight years of work and an achievement that will go down in history as a remarkable one," he said in an interview.


The deal, he said, "will create a better, more prosperous and politically a safer world, as it will mitigate the tensions that would otherwise exist between peoples."


The treaty slashes tariffs worldwide by more than one third and liberalizes markets for goods, services, farm produce and textiles.


Joining the House of Representatives in a triumphant bipartisan finale to the debilitating partisan strife of the 103rd Congress, the Senate approved the treaty by a surprisingly large margin of 76 to 24 votes late Thursday.


Moments before, the Senate scaled an even more critical procedural hurdle in producing eight more than the required 60 votes to overcome objections that the agreement broke budget rules because revenue lost from tariff cuts was not fully offset by spending reductions. The vote on the budget waiver was 68 to 32.


In a formal statement, Sutherland said the outcome of the troubled U.S. ratification process showed the United States "is prepared to continue to provide strong leadership for multilateral economic cooperation."


He also hailed as "excellent news" the approval of the treaty on Friday by the Lower House of the Japanese parliament, a vote which effectively means Japan became the second of the four top trading powers to ratify the deal.


The other two, the European Union and Canada, have pledged they will complete the process before the end of the year -- thus ensuring that the WTO is launched with nearly all the major players on the international trade scene on board.


With the U.S. and Japanese votes, 39 countries out of the 117 who have so far signed the accord -- negotiated from 1986 to the end of 1993 -- have ratified it. GATT officials now expect dozens more to follow suit before the end of the year.


Eventually, it is expected to link around 145 countries.


The centerpiece of the treaty was the WTO, which will administer the new rules and agreements and gradually absorb the GATT -- a "temporary" body for 48 years because of U.S. resistance in the 1940s to form a more powerful organisation.


Opponents of the accord in Washington said the WTO could undermine U.S. sovereignty by overruling domestic laws on labor and the environment. Others said it would cause more job losses in developed countries.


But Sutherland rejected both arguments.


The treaty, he said, "is something that will affect virtually everybody around the world both directly and indirectly.


"It will affect their lives by the improvement of their economic prospects, improving their prospects of achieving greater employment by providing greater growth and prosperity."


In advanced countries, which have seen unemployment remain high despite the economic recovery of the past two years, he said, "I believe it is going to create jobs, and substantially increase them at that."


GATT analysts say the treaty will be pumping an extra $510 billion annually into the world economy by the year 2005, a decade after it goes into effect.