Summary

The Final Act resulting from the Uruguay Round of negotiations of the General Agreement on Tariffs and Trade was signed on April 15, 1994. Because Congress will be considering legislation to implement the Final Act for the United States, GAO reviewed the negotiating objectives for the round, assessed what was accomplished, and analyzed the projected impact the Final Act would have in a number of areas. This second of two volumes is a reference document that (1) discusses the original trading problems that led to the Uruguay Round negotiations; (2) identifies the U.S.' specific negotiating objectives; (3) presents the results of negotiations as provisions of the final agreement; (4) analyzes the likely impact of the agreement, including whether it resolves the original trading problems; and (5) discusses issues that remain in contention and those that require further study. In GAO's view, the Final Act could produce overall economic gains for the United States, although some sectors of the U.S. economy would shoulder a disproportionate burden as a result of foreign competition. For example, four different studies have projected job losses, ranging from 72,000 to 255,000 over 10 years, for the textile and apparel industries under complete trade liberalization. Because the Final Act is expected to dislocate workers, their needs must be considered. Both deficit reduction and liberalized trade are important to the long-term health of the U.S. economy. Finding offsets to the five-year tariff revenue losses as required by the Budget Enforcement Act would preserve the overall economic gains of the Final Act and maintain deficit neutrality.

GAO reported information on the Uruguay Round's efforts to liberalize trade and investment worldwide, addressing six major areas of the agreement: (1) the agreement's efforts to facilitate increased worldwide trade in goods through reduction in tariffs; (2) the agreement's creation of the World Trade Organization and related revised dispute resolution procedures; (3) the agreement's revision of multilateral trade rules regarding subsidies, antidumping, and safeguards; (4) the agreement's expansion of coverage to new areas, including intellectual property, services, and trade-related investment; (5) the agreement's further expansion in areas already covered by GATT, including agriculture, textiles and clothing, government procurement, and trade and the environment; and (6) other negotiations linked to the Uruguay Round, including multilateral steel and aircraft subsidies negotiations.