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The Honorable William J. Clinton
President of the United States
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500

Dear Mr. President:

The upcoming World Trade Organization (WTO) Ministerial Meeting in Seattle represents a unique opportunity for your Administration, and for the United States, to advance the principles of trade liberalization and support for the rule of law that has been the hallmark of U.S. trade policy for the past fifty years. Seattle also provides an ideal opportunity to launch a much needed public education campaign to restore an appreciation for global trade to sustain and enhance America's future prosperity. The PEC's recent experience with the national trade education tour has demonstrated the critical need for this effort. We urge you to take advantage of the Seattle Ministerial to further the mission of defining a national consensus on free and fair trade.

As members of your Export Council, we have been working to help define guiding principles for the Seattle Ministerial, as well as recommendations relating to key objectives which we believe should be part of the Ministerial declaration launching a new round of multilateral trade negotiations under the auspices of the WTO. The results of our deliberations follow.

The PEC strongly believes that a critical component of America's economic prosperity is nurtured by trade growth and stimulated by trade liberalization, although there are social consequences that accompany such growth that must be addressed. The WTO, and its precursor, the General Agreement on Tariffs and Trade (GATT), have helped stimulate economic expansion by ushering in fifty years of declining tariffs, setting ground rules for and reducing barriers to trade in both agricultural and industrial goods, while at the same time recognizing the need to maintain safeguard and other measures to respond to unfair trade practices. The Uruguay Round covered for the first time trade related intellectual property rights and services, brought agriculture under GATT rules, and established a meaningful WTO dispute settlement system.

The WTO is the leading engine for trade liberalization worldwide. It is imperative that we use the opportunity presented at Seattle to improve, extend, enforce and clarify WTO principles. Advancing the cause of further liberalization is an obligation, not a choice. Ninety-six percent of the world's population lives beyond America's borders, and technological advances in communications render these borders increasingly irrelevant in defining the marketplace where Americans must compete. As the world's economic pacesetter, our commitment to renewing America's national consensus for trade liberalization signals to the rest of the world that the U.S. intends to maintain its leadership in the marketplace and at the negotiating table.

Our discussions within the PEC, among our labor, business and Congressional members, yielded recommendations in six key areas concerning the Seattle Ministerial and beyond:

1. Using Seattle as a Vehicle to Advance National Trade Consensus

To strengthen public support for further global trade liberalization, the launch of new multilateral trade negotiations necessitates an ambitious public education campaign. The campaign should explain the nexus between trade – exports and imports – and a healthy, balanced US economy.

2. Launching the Seattle Round

A critical objective of the WTO Ministerial Conference is the launching of the new round of negotiations on the built-in agenda under the Agreement on Agriculture and the General Agreement on Trade in Services. The Members of the PEC encourage the negotiators to keep three key objectives in mind for these negotiations:

The length of the negotiating period should be no more than three years and schedules for the implementation of commitments should be similarly compressed. The timing must reflect the shortening of business cycles as a result of developments in technology. The Uruguay Round started in 1986 -- but the negotiations were not concluded until 1993, and the WTO Agreements did not enter into force until 1995 -- almost a decade later. Moreover, the phase-in of many important tariff benefits will not be completed until 2005.

The scope of the negotiations must be broad enough to encompass not only the built- in agenda for agriculture and services, but also other important trade issues facing U.S. businesses today. Among other issues, this would include improved market access for industrial goods, the streamlining of customs procedures (i.e., trade facilitation), and a broadening of the government procurement agreement. Given that any improvements to the existing WTO Agreements and commitments must be undertaken on the basis of a single undertaking, the scope of the negotiations also must be sufficiently broad to provide the basis for a successful conclusion. In addition, negotiators should strive to complete negotiations on specific issues and begin implementing results throughout the course of the negotiations, as long as this does not jeopardize their ability to reach agreement in more difficult areas and there is a mechanism in place for suspending implementation, if needed. This does not mean, however, that concrete progress towards further trade liberalization cannot be achieved at the Seattle Ministerial or early in the new round. Decisions should be taken at Seattle to conclude work on the pending accelerated tariff liberalization initiative (ATL), the Information Technology Agreement-II (ITA II), dispute settlement, e-commerce, transparency -- including transparency in government procurement, trade facilitation, and trade in food.

The Ministerial Declaration should establish basic ground rules for the negotiations. The Ministerial Declaration must establish that new commitments should exceed -- but in no case be less than -- members' existing levels of trade liberalization. The Ministerial Declaration should also include a standstill agreement to ensure that members do not move backwards during the negotiating period.

3. Ensuring Enforcement and Implementation of Agreements

Strong enforcement and timely implementation of existing WTO obligations is critical to gaining US public support for new agreements. Many Americans believe that trade agreements are implemented and enforced only by the United States and therefore provide benefits only to our trading partners. This growing perception has played a role in undermining support for further trade liberalization. The PEC urges the Administration to use the Seattle Ministerial to highlight the importance of fully implementing WTO commitments. In particular, the Administration should ensure that developing country members are prepared to fully implement by January 1, 2000 phase-in obligations under the Agreements on the Trade Related Aspects of Intellectual Property Rights (TRIPs), Trade Related Investment Measures (TRIMS), Subsidies and Countervailing Measures, and Customs Valuation. The launching of the new round must not be conditioned on an extension of time to implement existing WTO obligations. If countries do not take steps to implement their obligations, the U.S. government must be ready to use the dispute settlement mechanism to enforce timely compliance.

Improvements in the implementation of the results in WTO disputes are needed. The WTO dispute settlement system is the primary mechanism for enforcing the WTO obligations. Some countries, however, have not implemented dispute results in a full and timely manner -- thus perpetuating the impression that only the United States complies with our WTO obligations. The Administration should ensure that the WTO's ongoing review of the WTO dispute settlement system clarifies the timeframes for completing disputes and implementing the results, as well as the consequences for failing to implement the results in a timely manner.

Full implementation of TRIPS obligations must be one of the Administration's top priorities. The TRIPS agreement has ushered in a new era of protection for intellectual property around the globe, but its benefits will not be fully realized unless there is full and timely implementation of all TRIPS obligations. The Administration should use the built-in review process of the TRIPS Agreement as well as its own monitoring efforts to identify and act on implementation problems. This review may make it premature to begin comprehensive negotiations on TRIPS at the start of the new Round. Following the review process, the Ministers may decide that further negotiations to strengthen the TRIPS Agreement are appropriate.

The PEC urges the Administration to exercise leadership in providing and/or facilitating assistance and training to help emerging economies to comply with WTO requirements. We strongly support the development of programs such as USAID's "Partnerships for Industry Development" (PFID). This cooperative program between universities, the private sector, NGO's and USAID will help governments and industry in emerging economies to come into compliance with the WTO Sanitary and Phytosanitary (SPS) Agreement and other international food safety and quality standards. We also would urge a review of how of multilateral institutions and regional banks could provide technical assistance to countries struggling to implement WTO and other liberalization agreements.

4. Improving Transparency

Improvements in the transparency of the WTO, especially in the dispute settlement system, are critical to further developing confidence in the WTO's open rules-based trading system. These improvements, however, should not alter the requirement that only WTO member-governments may be parties to a dispute. The WTO dispute settlement system must become more open at each stage:

• Briefs must be made public upon submission;
• Meetings with the panel and appellate body must be open to the public;
• Business and other NGO's must be permitted to submit amicus curie briefs;
• Dispute results must be made public at the time the results are released to parties.

The Administration must exert all efforts to add or improve transparency requirements in the WTO agreements to ensure that members comply with these agreements. WTO members need to commit themselves to further transparency in their own legislative/regulatory processes to further their commitments to an open rules-based trading system. WTO members, as well as the individuals and businesses that are affected by government actions, need to have a legitimate opportunity to comment and have access to measures affecting trade. Members have the opportunity to genuinely demonstrate their commitment to transparency by concluding the Agreement on Transparency for Government Procurement in time for the Seattle Ministerial.

5. The Built-In Agenda on Agriculture and Services

Liberalizing Trade in Agriculture

The new round should bring liberalization in trade in agricultural products in line with other goods and services. Bound agricultural tariffs currently average over 40 percent, which is roughly the equivalent to the average industrial tariffs at the end of World War II. The Uruguay Round Agreement, which included agriculture for the first time, laid the foundation for the new round of negotiations to expand, liberalize and stabilize trade in food and agricultural products. By eliminating barriers to trade in food, the best areas for growing food (such as the United States) can be linked with areas of the world where food is needed, providing a growing world population with more, cheaper and better food and the foundation for sustainable, environmentally sound agriculture. As a consequence, consumers will spend less on food and have more resources available to spend on other goods, including imported manufactured products, for a better life.

Several specific negotiating positions will further this effort:

• The average tariff rates for food are significantly higher than for non-food products, averaging 50 percent by value, and need to be reduced to levels enjoyed by industrial goods. U.S. negotiators should insist on a trade negotiating formula that will lead to significant reductions in tariff peaks rather than a simple percentage reduction across the board. Where possible, the negotiators should seek "zero-for-zero" concessions in specific agricultural sectors.

• The administration should seek expanded two-way food trade flows based on agricultural specialization along lines of resource endowments. This will require special assurances of access to food supplies on a non-discriminatory basis.

• Agriculture continues to suffer from trade-distorting domestic measures. The negotiations should work for rules that allow countries to support their farmers only in non-distorting ways. Export subsidies for agricultural commodities need to be eliminated and state trading and other non-market activities need to be disciplined through effective competition and choice.

• The WTO negotiators should seek enforcement of food safety standards based on scientific knowledge and assessment (i.e., not arrived at through an arbitrary political process), including market access for products of biotechnology. Issues of consumer choice should be addressed in ways that minimize trade distortions.

Liberalizing Trade in Services

The next round of trade negotiations should focus on expanding coverage of the General Agreement on Trade in Services. This expansion can be achieved by:

Increasing the number of members that make sector-specific services commitments;

Expanding the depth of each member's commitments to ensure full market access and national treatment; and

Bringing new services under the scope of the agreement.

In addition, the negotiations should improve existing obligations requiring transparency and fairness in government regulations to ensure that service suppliers have adequate opportunities to review and comment on proposed measures and to access final measures affecting trade in services. The United States also should ensure that negotiations guard against action that could impede the development of e-commerce.

6. Exploring the Links Between Trade and Labor

The PEC believes that the development of the global trading system must proceed in parallel with efforts to ensure respect for core labor standards, and its results must include benefits for working people in all nations. The Singapore Declaration of core labor standards was an important first step in heightening attention to the intersection between trade and core labor standards. More work is warranted as governments and business grapple with the complex issues of globalization and adjustment. There is a mutually reinforcing relationship between core labor standards and trade liberalization so that adherence to such standards does not negatively effect the economic performance of developing countries.

We commit our resources to address trade issues relating to labor standards and where members of the WTO would benefit from further information and analysis on this relationship and developments in the ILO. Building a consensus about the importance, to all nations, of a more comprehensive global trading system can be achieved if there is confidence worldwide among workers that their rights and standards of living will not be jeopardized. We further urge consideration of specific institutional links between the ILO and the WTO to help facilitate a common agenda on issues of concern of both organizations.

We recommend that the Administration initiate a program through the Department of Labor, similar to the Department's child labor investigation, to analyze the linkages between core labor standards and international trade as related to a broader social integration of nations. This will help enhance public awareness of the subject and in developing a national consensus. It will also facilitate discussions in other organizations such as the PEC.

Further movement on trade liberalization must also proceed in parallel with a serious review of the efficacy of existing trade adjustment assistance programs. The Administration and Congress must develop adjustment assistance programs which recognize the realities of trade-displaced workers. Such realistic assistance programs must include private sector participation to ensure job-training programs provide displaced workers the skills the marketplace requires. We recommend the Administration, Congress and the private sector develop and implement an adjustment assistance program which anticipates the needs of displaced workers, providing stable resources, training and education which rapidly prepares displaced workers for employment.

In closing, Mr. President, we commit ourselves, both individually and collectively, to assist you in this undertaking. Exercise of Presidential leadership to extend the free trade agenda is clearly in the national interest. Your commitment to launch WTO negotiations is imperative. While this is necessary, it is not sufficient to sustain economic prosperity in this country. Success requires skillful negotiators and a wise and comprehensive trade policy that marries negotiations at the WTO together with negotiations in other venues, a social contract that nurtures a skilled workforce in a dynamic economy, and an effective education campaign to explain the economic and social value of trade.

Sincerely,

/s/
C. Michael Armstrong
Chairman

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