GATT TAKES BOLD STEP FOR WORLDWIDE COMMERCE

For 50 years, since the closing days of World War II, one truism has prevailed everywhere among the most enlightened leaders of the free world: the overriding importance of pursuing a freer and more open system of international trade and commerce. This is no abstraction. The importance of this lesson is brutally grounded in the painful and enormously costly lessons these visionary leaders drew from the 1930s and 1940s.

The forces of reaction and beggar-thy-neighbor protectionism prevailed at a crucial point in the late 1920s and early 1930s, as when President Herbert Hoover signed the infamous Smoot-Hawley tariff, sent to him by a Republican Congress. No single act had more to do with turning the stock market crash of October 1929 into the decade-long catastrophe known as the Great Depression.

Within weeks other nations retaliated by raising their tariffs, trade collapsed and a full-scale trade war engulfed the world. It was no accident that as the world economy spiralled downward, Fascist dictators came to power in Italy and Germany, and a brutally aggressive military dictatorship strengthened its hold on Japanese government. As nation after nation saw economies collapsing and unemployment reaching devastating levels, demagogic dictators found receptive ears for their messages of hate and fear. Thus was the stage set for World War II, history's greatest cataclysm. When Sir Winston Churchill called that conflict "the unnecessary war," he had much of this history in mind.

This is the real meaning of the debate over the General Agreement on Tariffs and Trade, or GATT. It is history we forget at our peril. The 31 years from 1914-1945 saw countless millions killed in two World Wars. The half-century since the close of World War II has been, relatively speaking, a period of peace and of previously unimagined prosperity. Respected economic historians point to the principal difference: the establishment, after World War II, of a multinational forum for resolving trade disputes. The most recent product of this dispute-resolving mechanism is the GATT, overwhelmingly approved this week by bipartisan majorities of the House and Senate.

GATT, in cutting foreign tariffs and opening foreign markets to our agricultural and industrial products, will be a boon to trade, increased living standards and jobs worldwide. This will benefit consumers. Economists' forecasts of the equivalent of a $700 million tax cut aren't seriously disputed.

The bipartisan nature of the post-World War II consensus on trade cannot be overemphasized. In this case, bipartisanship was sufficiently broad that support for the GATT included such unabashed protectionists as Minority Leader Richard Gephardt, who spent so much of last year opposing NAFTA, the North American Free Trade Agreement. Every American president since Harry Truman has supported this goal and this means of achieving it. Every living president endorsed this particular agreement. These leaders know their history. They also know the indispensable role played by decisive American leadership. Rejection of the GATT would have sent a terrible signal of an inward-looking United States in retreat from the world. Moreover, economists who cannot agree on anything else in that "dismal science" are united on the importance of the GATT's goal.

And what of the objections raised by opponents? One by one, they were met and answered by supporters in a congressional debate that served the important function of educating the American public. No attempt will be made here to answer each of them, but it is worth mentioning that the most serious of them was the allegation of a loss of American sovereignty. No less a legal authority than former Judge Robert Bork examined the agreement, and the World Trade Organization it establishes, and assured the House and Senate that this was a red herring. Besides, lawmakers concerned about this issue exacted provisions that the U.S. can withdraw from the WTO if a majority concludes that American sovereignty is threatened.

All Americans will benefit from the passage of GATT. It is enormously to their credit that lopsided bipartisan majorities faced down the noisy critics and voted confidently for a brighter future in world commerce.