James D. Robinson III Chairman and chief executive officer of American Express IN September, 74 trade ministers met at Punta del Este, Uruguay, and agreed to launch a new four-year round of multilateral trade negotiations under the auspices of the General Agreement on Tariffs and Trade - a significant devel opment in efforts to keep alive open trading.
Congress has made clear its intention to enact trade legislation this year. Now is the time for Congress, the administration, and the private sector to build on the success of Punte del Este and to develop a consensus for addressing the critical trade issues facing the United States today.
The ``Uruguay Round'' could be the first major reform of the global trading system since GATT's formation 40 years ago. Authorization for the new trade round should be the centerpiece of any US trade bill.
Congress should also strengthen existing trade laws. Section 301 of the Trade Act of 1974 addresses unfair barriers to US trade and development. Authority to take action under this section should be transferred from the president to the US trade representative to ensure that economic interests are not overshadowed by political and diplomatic considerations. In cases involving an infringement of an international agreement, the representative should be required to retaliate, though the president should retain the authority to suspend that action. Also, protection of US intellectual property rights should be strengthened.
Further, Section 201, which permits the president to grant temporary relief to domestic industries because of an increase in fairly traded imports, must be amended to increase its effectiveness. High priority should be given to making changes related to adjustments, such as changes in definition of the cause of injury in a recession (to qualify for import relief); submission of adjustment plans by firms seeking relief; broader relief, including a possible customized adjustment program of economic assistance; and a consolidated worker adjustment program (i.e., for both import and non-import problems).
It is important to recognize that the trade deficit is affected by budget, fiscal, and monetary policies. Enactment of responsible trade legislation is only one step that must be taken to help reduce the trade deficit and restore US competitiveness. Reducing the federal budget deficit, making progress on third-world debt, and bringing the dollar into more appropriate alignment with other currencies should be top priorities as well.