[Congressional Record Volume 141, Number 10 (Wednesday, January 18, 1995)]
[Extensions of Remarks]
[Page E118]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                  CARIBBEAN BASIN ECONOMIC SECURITY ACT

                                 ______


                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                       Wednesday, January 18, 1995
  Mr. CRANE. Mr. Speaker, today I am introducing the Caribbean Basin 
Economic Security Act. This bill would grant tariff treatment 
equivalent to that accorded to members of the North American Free-Trade 
Agreement [NAFTA], to Caribbean Basin beneficiary countries, for a 6-
year period, pending their accession to NAFTA.
  This bill would also direct the USTR to meet on a regular basis with 
trade ministers of countries in the Caribbean to discuss the likely 
timing and possible procedures for initiating negotiations for 
beneficiary countries to accede to NAFTA.
  Finally, as a way to encourage the administration to give a high 
priority to expanding trade with the Caribbean, the bill requires 
annual reports to Congress which: One, assess progress toward economic 
development and market oriented reforms in the Caribbean, and; two, 
analyze beneficiary countries with respect to their ability to 
undertake the trade obligations of NAFTA.
  First proposed by the Reagan administration in 1982 and passed by the 
Congress in 1983, the Caribbean Basin Initiative [CBI] program is based 
on the understanding that the United States has a special 
responsibility to help the small, poorer economies which are our 
neighbors in the hemisphere. Because of the Caribbean's close proximity 
to the United States, Congress agreed, on a bipartisan basis, that it 
was in the best interest of the United States to encourage the 
development of strong democratic governments and healthy economies in 
these countries, through the expansion of trade.
  Made permanent in 1990, the Caribbean Basin Initiative extends duty-
free treatment to a wide-range of products imported from beneficiary 
countries. The program has served as a text-book example of the job-
creating effects of promoting increased trade. As a result of the CBI, 
thousands of new jobs were created in the Caribbean. Even more 
remarkable was the increase in U.S. exports to the region during the 
life of the CBI program. They grew from $5.8 billion in 1983 to $12.3 
billion in 1993. This represents a 112 percent increase, a rate three 
times the growth rate of U.S. exports to the world.
  The legislation I am introducing today would ensure that the value of 
the U.S. commitment to the Caribbean contained in the CBI is not eroded 
over time. An unfortunate result of the passage of the NAFTA, enacted 
in 1993, is that some investment is being diverted from the Caribbean 
to Mexico.
  This bill is designed to remedy the negative effects of NAFTA on the 
Caribbean by putting these countries on a clearer path toward 
eventually assuming the reciprocal trade obligations of NAFTA. For that 
to take place, the USTR must meet regularly in ministerial meetings 
with these countries in order to analyze and assess how they can best 
reform their economies in preparation for NAFTA membership. For some of 
the poorest countries, especially those in the Eastern Caribbean, this 
will require strong leadership from the United States, and longer 
transition periods during which NAFTA obligations can be phased in.
  I am aware that the administration and possibly some U.S. industries 
will have concerns regarding the unilateral nature of the trade 
benefits in this bill. To them I would emphasize that the unilateral 
benefit in my bill is for a temporary period of 6 years so as to give 
these small economies time to develop and to undertake structural 
reforms.
  I believe it is important that we start with the goal of achieving 
full NAFTA accession for CBI countries, because the standards of NAFTA, 
I believe, represent clear guide posts for charting trade expansion in 
the Western Hemisphere. My bill would allow for the negotiation of 
separate bilateral free-trade agreements, if necessary.
  In my view, USTA should work with Canada and Mexico to ensure that 
CBI countries can be early partners with NAFTA members in the upcoming 
negotiations aimed at establishing the Free-Trade Agreement of the 
Americas [FTAA], announced at the recent Summit of Americas meeting in 
Miami.
  As followup to the Summit of the Americas, the administration will be 
working to negotiate the accession of Chile to NAFTA this year. I 
believe it is equally important to work out a consensus with countries 
in the Caribbean regarding a procedure for expanding NAFTA which will 
include them. The Ways and Means Committee plans to consult closely 
with the administration in the coming weeks to achieve this goal.
  Having been considered during approval of the NAFTA and Uruguay round 
implementing bills, NAFTA parity legislation represents unfinished 
business from the 103d Congress. It is my intention to seek swift 
approval of this bill by the Trade Subcommittee as soon the Contract 
With America schedule will permit.


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