Economic Report of the President 1994 - The American Presidency ...

Earlier rounds of GATT talks had focused almost exclusively ontariff reductions. The market access component of the UruguayRound continues this tradition by reducing tariffs on literally thousandsof manufactured goods—by more than one-third on average.Such tariff reductions should be a tonic for world trade and growth,just as they have been in the past, and should increase specializationand economic efficiency around the globe. As usual, producerswill gain from bigger markets and consumers will gain from lowerprices.But the most remarkable achievements of the Uruguay Roundare to be found elsewhere. For the first time, trade in agriculturalcommodities has been brought under GATT—a goal that had eludedtrade negotiators for decades. When fully effective, the agreementwill reduce agricultural export subsidies by 21 percent in volumeand 36 percent in value, saving taxpayers and consumers inmany countries billions of dollars. Trade in agricultural goods willalso be liberalized by reducing tariffs on certain commodities (likebeef and fruits and vegetables), partially opening markets thatwere previously closed (like rice in Japan and the Republic ofKorea), and prohibiting certain food "safety" measures that werereally disguised trade barriers. America's farmers, consumers, andtaxpayers all stand to gain handsomely from this agreement.In addition, for the first time GATT disciplines have been extendedto a variety of service industries. This achievement of theUruguay Round is a vitally important precedent for the UnitedStates for two reasons. One is that production patterns both hereand elsewhere have been shifting and will continue to shift towardservices. The other is that the United States seems to have astrong comparative advantage in many service industries; in fact,our trade surplus in services is already three times larger than ourtrade surplus in agriculture.The United States did not succeed in bringing all services intothe agreement, and will continue to press for trade liberalizationin sectors that were left out of the Uruguay Round. But the gainswere still significant: Trade rules in such important industries asaccounting, consulting, construction, and telecommunications willnow require that foreign countries grant the same treatment toAmerican firms operating abroad as they do to their own companies.Finally, the path-breaking agreement will provide much strongerprotection for a range of intellectual property rights including patents,copyrights, trademarks, and trade secrets. Since the UnitedStates is the home of so much commercial innovation, we will reaplarge gains from the agreement. Among the biggest industrial winnersare software, Pharmaceuticals, and biotechnology.47