Rhetoric aside, the 1988 trade bill continues rather than contorts world trade policy and does not close the U.S. market, but opens it, a deputy U.S. trade representative says.
Ambassador Alan F. Holmer said the new trade agreement creates an extended freer market and encourages unilateral trade as it was before World War II.Holmer gave an overview of the 1988 Omnibus Trade Bill Friday as part of a two-day conference on the U.S.-Canada Free Trade Agreement at Brigham Young University.
The agreement, which became effective Jan. 1, calls for the removal of most trade barriers between the two countries in a 10-year period.
"Earlier versions of the bill really deserve the derogatory remarks that were used to describe it," Holmer said. "It would have turned back anti-growth, competition and other trade laws. The bill would have been a retreat from multilateralism."
Holmer said that in 1974 when landmark trade legislation passed, the United States had the world's largest trade deficit and exports surged to a whopping 34 percent.
Since that time, the climate has changed. In 1988, the United States was the largest national debtor and had a $135 billion to $140 billion trade deficit. In 1987 the United States had $24 billion in exports and the trade deficit was down by $35 billion.
This change showed a trend toward easy support of free trade, he said. The amendments to the trade bill's Sections 201 and 301 began as remedies to the problem.
The amended Section 301 "blasts open all markets from foreign markets to U.S. markets," Holmer said. The United States has a trade agreement with Japan for beef, but Japan has one with Australia as well and citrus producers in California benefit as much as South American citrus producers.
"I believe there is no other trade institution that has been as effective in opening foreign markets as Section 301 used by the Reagan administration," he said.
The amendment to 301 also resolves questions over mandatory retaliation toward countries involved in terrorist activities. At the same time the law defends U.S. economic interests.
Section 201, used for international legalized protection, has some improvements from a free trade perspective, he said.
"There is no doubt that throughout the whole process, there were widely different perspectives within the legislative branch, executive branch, U.S. government and foreign government. We have moved the process along and I am very optimistic."