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forward through GATT and with other countries where the wages 

 are much lower than ours, the danger of companies going into tax- 

 free havens in these countries. We have companies that are paying 

 their fair share for social services through the tax structure up 

 here. 



Could there be some type of tax equivalency assessed as goods 

 come from these other counties into the United States? This is an 

 area that we must begin looking at because you have companies 

 here that are paying through the tax structure for roads, sewers, 

 water systems, schools, et cetera. That type of tax structure doesn't 

 exist in many countries. Or the companies are being asked to es- 

 cape this type of a tax structure in the process of going into those 

 countries. 



Ambassador Kantor. The question of direct subsidies in both 

 production and distribution or marketing is being addressed seri- 

 ously in the Uruguay Round. It is something where we were con- 

 cerned about the language and one reason why we have been un- 

 able to reach agreement. 



The whole area of market access is critical. I believe — and I 

 think you believe — that American workers, given open markets and 

 expanded trade can compete with anyone on Earth. The productiv- 

 ity of our workers is first in the world right now. 



One of the things that has hampered us is the lack of open mar- 

 kets, a lack of comparably open markets on the part of our trading 

 partners. That was the challenge that President Clinton laid in 

 front of the world in his American University speech, that we 

 would welcome products from other countries and we want them to 

 welcome ours as well. We believe that not only in western Ken- 

 tucky but all over the country that if we can open markets and pro- 

 vide market access tariffication in agriculture and other areas that 

 we will prosper, lead global growth, and our workers will benefit 

 from it. 



In answer to your question, if you're going toward whether we 

 should throw up more barriers to entry 



Mr. Barlow. This is not a barrier at all. I would like to dispute 

 that and will dispute that as we go forward in trade policies debate 

 as long as I am here in Congress. This is not a trade barrier. 



This is a tax equivalency. Our companies are pajdng their fair 

 share of taxes in this country. Many companies are going abroad 

 to certain countries where they get either a negotiated tax-free sta- 

 tus or where the fact is that these countries simply do not have so- 

 cial structures that levy taxes on industry. So goods are coming 

 back into this country at an unfairly low rate. This is distinct from 

 the wage, which is another problem. 



I am talking about some tax equivalency levy, paid as a good 

 comes from a country where there is a tax-free structure into a 

 country such as ours where companies are responsible taxpayers. 



Ambassador Kantor. The inability of economic harmonization is 

 naturally what you're driving at. It is really something interesting 

 because it underlies a lot of what we're trying to do in these sup- 

 plemental agreements on the North American Free-Trade Agree- 

 ment. Frankly, if we're able to come back with tough, meaningful 

 agreements with teeth in these areas and harmonize standards and 



