Summary: GAO discussed its report on U.S. participation in the multilateral trading system, focusing on: (1) comparative trading practices of the United States and its major trading partners; (2) reasons for alleged widespread variance from the General Agreement on Tariffs and Trade's (GATT) principles and rules; (3) the possibility of extending GATT coverage to services; and (4) whether support of GATT continues to be in the U.S. interest. GAO found that, although the GATT system has been weakened by participation in bilateral understandings and the undertaking of unilateral actions that violate the central GATT principle of nondiscrimination, multilateralism and the principles contained in GATT serve the United States' interest. GAO believes that, as the world's largest importer, the United States has a significant stake in GATT and should support such endeavors as the newly created GATT committee on trade in agriculture and a new round of trade talks to include agricultural and manufactured goods and service trade. Imbalances in fundamental economic policies are threatening the multilateral trading system, but there is no workable alternative system. Therefore, GAO believes that it is essential that fundamental problems, such as the U.S. budget deficit, are addressed directly rather than sacrificing the multilateral trading system to the U.S. trade deficit.
