GATT: SHOULD WE CARE?

David Merrefield

So it finally happened: The U.S. Congress last week put to rest months of political wrangling by passing the General Agreement on Tariffs and Trade Uruguay Round implementing bill. The measure, described as the biggest free-trade pact in history, slashes tariffs and quotas worldwide.

Those are the facts of the matter, but since there is no evident provision in the bill that directly affects food retailing or wholesaling, should the selling side of the food trade care much about GATT?

Maybe so, it turns out. Last week, as GATT blazed its tortured trail through the two chambers of Congress, I chatted with a batch of food-trade association executives who make it their business to figure out what, if anything, GATT portends for various aspects of the food trade.

Here's a distillation of their views on GATT's effects:

Tim Hammonds, the Food Marketing Institute's president and chief executive officer, is chief among those who argue that GATT bodes well for retailing, wholesaling and more: "I think it's good to remember that the food business, more than any other, is global in its reach, so it is in our direct interest to favor GATT and other measures that liberalize trade.

"If we had to go to our consumers and say, 'You can only have product that comes from the United States,' we would see very angry consumers, and maybe picketing consumers.

"It's easy to forget how much product comes from outside the United States, especially in the fresh area, and how beneficial that is for our consumers. GATT will benefit every supermarket by making imported goods less expensive and more reliably available." Also, Tim mentioned, the export of processed food products from the United States to other lands will be enhanced by GATT, a situation that should confer benefit on smaller manufacturers and wholesalers, several of the latter being exporters in their own right.

Indeed, the biggest effect of GATT will be to encourage the interchange of products from nation to nation through the reduction or elimination of tariff and nontariff barriers, a fact that arrests the attention of C. Manly Molpus, Grocery Manufacturers of America's president and chief executive officer.

"GATT will open doors to the free flow of America's quality branded food and consumer packaged goods worldwide," he said. "Our members will have the ability to fairly compete in new markets worldwide."

Others mentioned that GATT will hand all forms of commerce an underlying benefit in the shape of quickened economic activity.

Tom Zaucha, president and chief executive officer of the National Grocers Association, said that "trade initiatives such as GATT can only result in enhancing America's position in the global marketplace, increase job opportunities and markets for American products, and strengthen the U.S. economy."

Similarly, John Block, president of the National-American Wholesale Grocers' Association, said, "The GATT regime will result in an additional $100 billion to $200 billion in annual U.S. economic activity once the treaty is fully phased in, after 10 years." FMI's Tim Hammonds talked about one of the ways in which GATT could stimulate an important economic sector -- agriculture -- and, by extension, maybe retailing and wholesaling too: "There's a lot of farmland in the U.S. that's being kept idle under auspices of government crop payments made to keep land out of use. "Farmers would much prefer to have this land working, and to the degree that exports are encouraged, some of this land will go back to work. "That will spark all kinds of spending for farm infrastructure in rural America. That will benefit small towns and the supermarkets there."

So, at least in the initial flourish of opinion, GATT seems great -- and of more than passing interest to sellers of food products.