The Great GATT

Thirty-four nations now meeting in Geneva are urging that good fences do not make good neighbors and that lower tariff walls are needed for economic stability in the free world. These nations have a chance to strengthen the world trade system by changing the General Agreement on Tariffs and Trade into a permanent organization. The original GATT agreement, signed in 1947, reduced tariffs on a large scale and showed that many nations were willing to work for a liberal trade system. The agreement also adopted with few exceptions the "most favored nation" policy of the United States, by which one nation's tariffs apply uniformly to all other nations.

Despite the impetus GATT gave to lowering tariffs and to making trade policy uniform, weaknesses have become apparent. In the U.S., for example, GATT functions only as an executives agreement, along with reciprocal trade. In addition, when tariff disputes arose. GATT is more effective as a forum than as an agency with binding powers. Such flaws are causing many nations at the present meeting to aim for a stronger agreement backed by a permanent organization. This agency would have power to review action of individual governments which discriminate in their trade policies and evade the "most favored nation" clause.

To achieve sweeping and uniform tariff reductions, the United States should support the strengthening of GATT. With the decline in U.S. foreign aid, European and Asian economies desperately need more trade, especially if this country continues to discourage trade with the Soviet bloc. The American economy, too, needs the stimulus to production that increased foreign trade would bring. Since both American economy and American security are bound so tightly with the economies of all other nations, bi-lateral agreements are not most effective, because, just as in disarmament, it is impossible for one or two nations to succeed alone.

Another important way to strengthen GATT is to submit the agreement to the U.S. Congress for approval, also recommended by the Randall Commission. For GATT is not only shaky in structure; it has also been attacked in the U.S. as unconstitutional. Democratic majorities and Committees in the next session are ore likely to give Eisenhower support in his liberal trade program than the 83rd Congress did, and formal consideration of GATT is an important part of that program. A stronger international tariff agreement, backed by U.S. Congressional approval, would go a long way toward freer trade.