Short title

This Act may be cited as the

NAFTA Accountability Act

Findings

The Congress makes the following findings: (1)

Rising deficits in United States trade accounts

One of the purposes of the North American Free Trade Agreement (NAFTA), as stated in the preamble, is to create an expanded and secure market for goods and services. Instead, the NAFTA has resulted in a spiraling United States trade deficit with Mexico and Canada that will exceed $135 billion in 2007, and more than $919 billion since the agreement’s inception. Rather than harmonious development and expansion as envisioned and growing trade surpluses for the United States, the NAFTA has resulted in United States job losses and escalating trade deficits which are draining more than $10 billion a month from the United States economy. (2)

Lack of fair agricultural trade

United States agriculture is 18 times more efficient than that of Mexico. One of the purposes of the NAFTA is to reduce distortions to trade. In addition, the NAFTA is supposed to promote conditions of fair competition and to establish mutually-advantageous rules governing trade. However, since the NAFTA, there has been a rapid escalation of one-way trade of Canadian grain exports of wheat, durum wheat, and barley to the United States, disrupting markets and marketing channels. Surges in the importation of certain Mexican fruits and vegetables threaten United States domestic production and the importation of livestock and meat products from the NAFTA Parties has exacerbated the severe problems facing United States livestock producers. Surges in United States farm exports to Mexico, such as yellow corn, white corn, and dried beans have contributed to the collapse of Mexico’s ejido farm economy, dislodging over 4 million Mexican peasants, with no transitional plan for their accommodation. These landless peasants now wander the continent seeking employment. Human exploitation of the landless peasants by criminal elements has markedly increased. With the final phaseout on December 31, 2007, of the tariff on white corn and beans, it is estimated an additional one to two million Mexican peasants will be uprooted from their farmlands, worsening the situation and adding to the illegal immigration challenges facing the United States. (3)

Jobs, wages, and living standards

One of the purposes of the NAFTA is to create new employment opportunities and improve working conditions and living standards in the respective territories of the NAFTA Parties. Instead, there has been a substantial loss of over 1 million living-wage jobs in the United States and the collapse of Mexico’s small farm and indigenous business sector. A survey of United States companies conducted 20 months after the implementation of the NAFTA found that 90 percent of the companies that had anticipated an increased number of jobs from the NAFTA have, in fact, not increased employment since the NAFTA was implemented. In the first year of the NAFTA’s implementation, United States workers had the sharpest drop of real hourly wages on record. In Mexico, more than 1 million agricultural jobs alone have evaporated since the implementation of the NAFTA while wages stagnate around $4 per day. In addition to the loss of purchasing power by workers in both nations, there has been erosion in the standards of living in the United States, Canada, and Mexico as poverty rates rise and real income stagnates. Moreover, usurious remittance practices, whereby Mexican workers in the United States transfer money back home further trap workers in an unending cycle of exploitation. It is estimated these remittances represent nearly $20 billion of economic activity for Mexico, the second largest source of income after petroleum. However, workers lose up to 40 percent of the value of their wages in the transfer. (4)

Erosion of the United States manufacturing base

One of the purposes of the NAFTA is to enhance the competitiveness of firms in the global market. However, rather than increase the ability of the manufacturing sector in the United States to compete in the world market, the NAFTA has facilitated and accelerated the outsourcing of United States manufacturing facilities and jobs to lower-wage Mexico. The NAFTA has contributed, conservatively, to a net loss of over 1 million manufacturing jobs in the United States during the last 13 years. Conversely, Mexico has become an export platform displacing United States production. An unprecedented flood of imports of manufactured and agricultural goods now enter the United States. Further, Mexico has experienced an outsourcing of productivity to even lower-wage China, as Chinese imports to Mexico have grown and are imported into the United States. (5)

Deteriorating health and environment

Other purposes of the NAFTA are to safeguard the public welfare and to strengthen the development and enforcement of environmental laws and regulations. Yet, since the implementation of the NAFTA, the public welfare has been undermined by increased imports of food products that do not meet United States health standards and the lack of necessary environmental investment along Mexico’s northern border and the maquila zones. In addition, the NAFTA has accelerated the relocation of United States manufacturing facilities to Mexico’s border zone, where hundreds of new manufacturing plants have been added. Without adequate environmental safeguards, the uncontrolled industrial and population growth in the border zone has aggravated pollution and health hazards, increasing the incidence of infectious diseases and human exposure to toxins. (6)

Rising illegal drugs and inadequate inspection

Rather than safeguarding the public welfare, the NAFTA has allowed the increased flow of illegal drugs and controlled substances into the United States from Mexico at accelerated rates. Almost all cocaine and marijuana illegally entering the United States now comes through Mexico, with an increasing portion carried by trucks which undergo more limited inspection under the NAFTA. Fewer than 2 percent of all cargo entering the United States in inspected. (7)

Weak protection of legal rights

The promotion of sustainable development as well as the protection and enhancement of basic human rights are stated objectives of the NAFTA. As envisioned, the NAFTA is to increase economic opportunity together with expansion of political freedoms and human rights. Yet these objectives are not being fulfilled, especially in Mexico, where citizens continue to experience greater infringements of such basic rights and freedoms. Ordinary citizens frequently use the term impunity to describe the lack of a transparent and just legal system. United States businesses complain of corruption and lack of fair play in Mexico’s judicial and law enforcement systems. (8)

NAFTA should not be expanded

The Congress approved the NAFTA in order to achieve economic, social, and environmental benefits for the people of the United States. Based on currently available information, the goals and objectives of the NAFTA are not being achieved. Therefore, the NAFTA should not be expanded to include any other country. (9)

NAFTA to be renegotiated and benefits certified

Based on the experience with the NAFTA since its implementation, it has become evident that further negotiation is required to resolve fundamental inadequacies within the NAFTA with respect to trade balances, currency differentials, health and environmental conditions, agricultural provisions, systems of justice, illegal immigration, and NADBANC operation. If the NAFTA is to continue, Congress must require certification of specific measures of economic, social, legal, and environmental progress. Otherwise Congress has no choice but to withdraw its approval of the NAFTA.

Conditions for continued participation in the NAFTA

(a)

In general

(1)

Withdrawal of approval

Notwithstanding any other provision of law, unless each of the conditions described in paragraph (2) is met— (A)the approval of the NAFTA by the Congress provided for in section 101(a) of the North American Free Trade Agreement Implementation Act shall cease to be effective beginning on October 1, 2009; and (B)not later than April 1, 2009, the President shall provide written notice of withdrawal to the Governments of Canada and Mexico in accordance with Article 2205 of the NAFTA. (2)

Conditions for continuing participation in NAFTA

The conditions described in this paragraph are that before December 31, 2008— (A)the President— (i)renegotiate the terms of the NAFTA in accordance with paragraphs (1), (2), and (3) of subsection (b); and (ii)provide the certification to the Congress described in subsection (b)(8); (B)the Secretary of Labor provide the certification described in subsection (b)(4); (C)the Secretary of Commerce provide the certification described in subsection (b)(5); (D)the Secretary of Agriculture and the Administrator of the Food and Drug Administration provide the certification described in subsection (b)(6)(A); (E)the Administrator of the Environmental Protection Agency submit the certification and report described in subsection (b)(6)(B); and (F)the Attorney General of the United States provide the certification described in subsection (b)(7). (b)

Areas of renegotiation and certification

The areas of renegotiation and certification described in this subsection are as follows: (1)

Renegotiate the NAFTA to correct trade deficits

The President is authorized and directed to confer with the Governments of Canada and Mexico and to renegotiate the terms of the NAFTA to provide for implementation of emergency adjustments of tariffs, quotas, and other measures to stabilize and balance the flow of trade among the NAFTA Parties when the United States has an annual deficit in trade of goods and services with another NAFTA Party that— (A)exceeds 10 percent of United States exports to that Party; or (B)equals or exceeds $500,000,000 for three or more consecutive years. (2)

Renegotiate the NAFTA to correct currency distortions

The President is authorized and directed to confer with the Governments of Canada and Mexico and to renegotiate the terms of the NAFTA to provide for the implementation of emergency adjustments of tariffs, quotas, and other measures to mitigate the adverse effects of rapid or substantial changes in exchange rates between the United States dollar and the currency of another NAFTA Party. (3)

Renegotiate the NAFTA to correct agricultural provisions

The President is authorized and directed to confer with the Governments of Canada and Mexico and to renegotiate the terms of the NAFTA to provide for the implementation of emergency tariffs, quotas, and other measures to bring the levels of wheat, durum wheat, and barley imported from Canada to levels that are comparable to the levels of these products imported during the 10-year period before the date the NAFTA entered into force with respect to the United States. The President is further authorized and directed to renegotiate the terms of the NAFTA to establish and strengthen provisions to prevent imports of agricultural commodities from any NAFTA Party from unfairly displacing United States production, to provide improved mechanisms for relief for United States producers that are adversely impacted by such imports, and to address the serious and growing problem of Mexico’s displaced ejido peasant farmers and crime associated with lawless zones on both sides of the United States-Mexico border. (4)

Certification of gains in United States jobs and living standards

If the Secretary of Labor and the Secretary of Agriculture, after consultation with appropriate government agencies and citizen organizations, determine that— (A)the number of jobs resulting from increased exports of United States goods and services to other NAFTA Parties exceeds the number of jobs lost because of imports of goods and services from other NAFTA Parties since January 1, 1994, and (B)the purchasing power of wage-earners in the United States has increased since January 1, 1994,

the Secretaries shall so certify to the Congress.

(5)

Certification of increased domestic manufacturing

If the Secretary of Commerce and the Secretary of Agriculture, after consultation with the appropriate government agencies and citizen organizations, determine that the export of United States manufactured and agricultural goods to the NAFTA Parties exceeds the imports of manufactured and agricultural goods from the NAFTA Parties, the Secretaries shall so certify to the Congress. In making the determination, the Secretaries shall not include any goods originating outside the United States that are exported to another NAFTA Party, nor imports from another NAFTA Party that are destined for other countries. (6)

Certification relating to health and environmental standards

(A)

In general

If the Secretary of Agriculture and the Administrator of the Food and Drug Administration, after consultation with appropriate government agencies and citizen organizations, determine, with respect to imports from NAFTA Parties, that since January 1, 1994, there has been a reduced incidence of contaminated and adulterated food, food containing additives or pesticide residues exceeding United States standards, or food containing additives or pesticide residues which cannot be legally used in the United States, the Secretary and Administrator shall so certify to the Congress. In making this determination, all foods and food products, including fruits, vegetables, grains, oilseeds, and meats, both fresh and processed, shall be reviewed. Special attention shall be given to foods which have had a history of violations. (B)

Border area pollution

If the Administrator of the Environmental Protection Agency determines that conditions affecting public health in the United States-Mexico border zone have not worsened since January 1, 1994, the Administrator shall so certify to the Congress. In addition, the Administrator, in consultation with the Secretariat for the NAFTA Commission on Environmental Cooperation, shall report to the Congress on the outcomes of the Administration’s investigations on pollution and health hazards in and around the United States-Mexico border zone since the implementation of the NAFTA and a plan to remedy such pollution and health hazards. The report shall include— (i)a description and status report of all industrial site cleanup and environmental improvement projects begun in the border zone since January 1, 1994; (ii)information available from local, State, and Federal health agencies reflecting the incidence since January 1, 1990, in and around the border zone of hepatitis, neural stem birth defects, lupus, chronic adolescent diarrhea, tuberculosis, nonneural birth defects, cholera, botulism, and other disorders commonly related to industrial pollution, inadequate infrastructures, and hazardous waste; and (iii)information on the incidence of air and water pollution since January 1, 1990, and the causes, levels, and types of pollution which have occurred. (7)

Certification relating to illegal drugs

If the Attorney General of the United States determines, after a review by the Drug Enforcement Administration and consultation with appropriate government agencies and citizen organizations, that increased imports from the NAFTA Parties are not resulting in an increase in crime with illegal drugs or other controlled substances from Mexico or Canada, the Attorney General shall so certify to the Congress. The Attorney General through the Drug Enforcement Administration shall conduct a thorough review and report to the Congress regarding the flow of illegal drugs from Mexico and Canada and the relationship of such flow of illegal drugs to trade of other commodities and services with the NAFTA Parties and shall make recommendations to remedy the serious challenges to law enforcement by such flow of illegal drugs. (8)

Certification relating to democracy and human freedoms

If the President, after consultation with appropriate government agencies, international organizations, and citizen organizations, determines that the Government of Mexico— (A)is elected in free and fair elections, (B)protects the rights of its citizens to organize into political parties, (C)protects the rights of its citizens to free speech and the right of the news media to operate without fear of government control or reprisal, (D)protects the rights of its citizens to assemble and to organize associations to advance human rights and economic opportunities, and (E)receives fair and impartial litigation of suits and trials according to the rule of law in a transparent justice system,

the President shall so certify to the Congress.

Consultation with Congress

The President shall consult at least semiannually with the Congress regarding the negotiations described in paragraphs (1), (2), and (3) of section 3(b). The United States Trade Representative shall consult with the appropriate committees of Congress in the development of any technical and conforming amendments that may be required to carry out the provisions of this Act.

Sense of Congress that NAFTA not be expanded

Until such time as the conditions described in section 3(b) are met, it is the sense of the Congress that the President should not engage in negotiations to expand the NAFTA to include other countries and that trade promotion authority should not be renewed with respect to the approval of any such expansion of the NAFTA.

Definitions

As used in this Act: (1)

NAFTA

The term NAFTA means the North American Free Trade Agreement entered into between the United States, Canada, and Mexico on December 17, 1992. (2)

NAFTA party

The term NAFTA Party means the United States, Canada, or Mexico. (3)

United States-Mexico border zone

The term United States-Mexico border zone means the area that comprises the 12-mile zone on the Mexican side of the United States-Mexico border and the counties within any State of the United States that are contiguous with Mexico.