[Congressional Record Volume 141, Number 15 (Wednesday, January 25, 1995)]
[House]
[Pages H660-H661]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              CONCERNS ABOUT THE PROPOSED MEXICAN BAILOUT

  The SPEAKER pro tempore (Mr. Gekas). Under a previous order of the 
House, the gentleman from Michigan [Mr. Stupak] is recognized for 5 
minutes.
  Mr. STUPAK. Mr. Speaker, I am here tonight to express my concerns 
about the proposed Mexican bailout.
  Proponents of NAFTA suggested that its passage would create jobs in 
America, promote free-market economics in Mexico, raise living 
standards in both countries, and encourage Mexico's move toward 
democracy. Those who thought that NAFTA would be a magical elixir were 
wrong. NAFTA has not fulfilled its promises because the current 
political and economic conditions in Mexico make that fulfillment 
impossible. The same conditions that existed in Mexico when we debated 
NAFTA exist today. Necessary changes can only happen one way--through 
the Mexican Government. But Salinas did not do it, and President 
Zedillo has given no indication that he will be any different from 
Salinas.
  First, this bailout will not save NAFTA. Mexico's problems run far 
deeper than short-term debt.
  Second, this bailout will not help restore international confidence 
in the Mexican economy.
  Third, this bailout will not help Mexico's or our working and middle 
class.
  The direct beneficiaries of this package will be members of the 
Mexican business and political elite seeking to protect their wealth 
against further devaluation of the peso.
  When the taxpayers of the United States are asked continuously to 
prop up the Mexican economy--and with continued devaluation of the 
peso, there is no indication that this will be the last time--they 
deserve some accountability. While I do not believe this $40 billion 
will be the last for Mexico, the way I see it, there is only two ways 
that this agreement is going to be palatable to the majority of 
Members.
  First, stringent conditions need to be placed on the issuance of such 
a loan guarantee to ensure prompt repayment--and these conditions must 
be part of the legislative language. The generosity of the United 
States has often been our own worst enemy in getting repaid. We have 
consistently dealt with international debt owed to us through reduction 
or cancellation--ultimately to the detriment of our taxpayers. There 
must be guarantees that this loan will be repaid in full and in a 
timely manner.
  [[Page H661]] Second, American taxpayers must get something genuine 
and tangible in return for our continued generosity. This can be best 
accomplished in the areas of law enforcement and environmental 
protection.
  The United States is party to an extradition treaty with Mexico, 
which provides for extradition of Mexican nationals who cross the 
border and commit offenses. However, in practice, the Government of 
Mexico does not extradite its own nationals. According to article 9 of 
the Extradition Treaty Between the United States and Mexico (31 UST 
5059; TIAS No. 9656), singed on May 4, 1978:

       Neither Party shall be bound to deliver up its own 
     nationals, by the executive authority of the requested Party 
     shall, if not prevented by the laws of the Party, have the 
     power to deliver them up if, in its discretion, it be deemed 
     proper to do so.

  The problem is that Mexico has a habit of not deeming it proper to 
extradite its citizens who commit crimes here in the United States. 
While under the treaty, at least four United States citizens have been 
extradited to Mexico for crimes committed there, no Mexican citizens 
have been extradited to the United States for crimes committed in this 
country.
  As a member of Chairman Condit's Information Justice Subcommittee in 
the 103d Congress, I was present at a hearing regarding the extradition 
of one Serapio Rios. On September 14, 1992, Mr. Rios crossed into 
California, kidnapped and raped a 4\1/4\-year-old girl, and fled back 
into Mexico to hide behind this so-called extradition treaty. As the 
distraught mother testified:

       It took nine months to get extradition papers processed and 
     served to the Mexican government. We have a treaty with 
     Mexico, but Mexico has never extradited one of its citizens 
     back to the U.S. for trial. My government should press for 
     change.

  If this mother were here today, she would say to you, three years 
later, that the Mexican Government did not find this violent felon 
extraditable. The Mexican Government knows where Rios is, but they 
refuse to extradite him, even after the Mexican Government promised a 
Member of this body in exchange for the Member's NAFTA vote, that Rios 
would be extradited.
  I want to let this mother, and those that have similar stories, know 
that they are not forgotten. I feel that this proposed bailout presents 
us with a unique opportunity to press for change.
  While it may not be feasible at this time to change the language of 
the 1978 treaty, President Zedillo needs to get the message that $40 
billion of U.S. cooperation demands reciprocity. The area of 
extradition is one place where the Mexican Government can show good 
faith by extraditing Rios and the Mexican perpetrators who are accused 
of committing 24 major crimes such as rape and murder, here in the 
United States, and then flee across the border to Mexico because they 
know Mexico will not extradite them under the 1978 treaty. There should 
be no U.S. loan guarantee until Rios and other indicted perpetrators 
are brought to justice in the United States.
  In addition to the question of law enforcement, language protecting 
our natural resources must be included in the bailout language. NAFTA 
promotes free trade in resources by limiting the rights of a government 
to enact measures restricting such trade. Chapter 3 of NAFTA sets out 
blanket prohibitions against government regulation of natural resource 
trade. No Government is permitted to regulate or prohibit the flow of 
natural resources including water.
  Specifically, Article 309 of NAFTA reads:

       Parties may not adopt or maintain any prohibition or 
     restriction on the importation of any good of another party, 
     or the exportation of any good destined for another country.

  There is no clause in NAFTA that exempts water exports from these 
provisions. Water is subject to the same requirements of goods as other 
goods described in Article 309. Water is listed as item 22.01 in the 
NAFTA tariff heading; it states in part:

       Including natural waters not containing added sugar or 
     other sweetening matter nor flavored, ice, and snow.

  This could mean Great Lakes water. In addition, the national 
treatment provisions of NAFTA prohibit governments from according 
foreign investors any less favorable treatment than is provided 
domestic corporations. This provision could permit foreign corporations 
to demand the same access to water resources that domestic consumers 
have.
  Several other features of NAFTA could directly influence existing 
protection against water diversion. Article 302 of NAFTA requires that 
parties not increase duties on items including resources, or adopt new 
ones, and Article 315 limits the right of parties to restrict trade 
through duties, taxes or other changes. All of these articles could be 
applicable to Great Lakes water. Again if our natural resources are not 
specifically excluded, they may as well be included.
  In the simplest terms, NAFTA articulates rules of trade that will 
restrict the ability of sovereign governments, and the people who elect 
them, to regulate the export or diversion of fresh water resources. 
NAFTA facilitates the trade of water by making it virtually impossible, 
under a toothless dispute resolution process, to refuse water export 
proposals.
  Is this diversion a legitimate possibility? It certainly is. It is 
already happening, albeit legally, on a small scale via the Chicago 
River diversion project and could easily happen on a larger scale.
  No grand pipeline or huge engineering project is required to 
accomplish this. Currently, the Chicago Diversion project diverts 3,200 
cubic feet per second to the Midwestern plains but the Army Corps of 
Engineers has calculated that the Chicago diversion could accommodate 
8,700 cubic feet per second if necessary. Over a limited amount of 
time, such an increase could lower water levels on Lake Michigan-Huron 
by \1/2\ foot. Should the Government of Mexico lay claim to Great Lakes 
water, increased diversion through Chicago would take Great Lakes water 
to the confluence of the Mississippi and Ohio Rivers where it could 
meet up with engineering projects designed to take it over the border.
  Lowered water levels can cause significant problems with drinking 
water intakes. Lowered water levels could affect hydro-electric power 
production. Lowered water levels could dramatically affect navigation 
in the Great Lakes and eventually Hudson Bay. Lowered water levels can 
damage the valuable coastal wetlands of the Great Lakes basin.
  Mexico could increase its demand for fresh water. One in four 
Mexicans lack access to potable water and 55% of available water is 
being used for urban, industrial, and agricultural activities. As we 
see by this proposed bailout, Mexico is not afraid to come to the 
United States for help when their own policies begin to destroy the 
fabric of the country. Mexico is ripe to become a net importer of Great 
Lakes water. Two proposals were born out of the 1960's to accomplish 
just such a goal: the North American Water and Power Alliance, and the 
Great Replenishment and Northern Development Canal (the Grand Canal). 
In fact, the National Geographic magazine, November 1993, cites the 
real possibility of water diversion.
  In putting protection against diversion in the loan guarantee 
legislation, we are not asking Mexico to do anything that United States 
State governments haven't already done. Since 1980's, Midwestern 
leaders have (1) signed a regional Great Lakes Charter--an agreement 
among Governors of 8 Great Lakes States and Canadian regional premiers 
to limit diversion, (2) enacted the United States Water Resources Act 
of 1986 which gives Governors of 8 Great Lakes States a veto over any 
proposed diversion of Great Lakes water, (3) they rejected a 
significant proposed increase in the existing Chicago diversion of 
Great Lakes water in 1988 when the Governor of Illinois proposed 
increased diversion, etc. Furthermore, the citizens of the Great Lakes 
region have supported the concept that Great Lakes water must remain in 
the Great Lakes 80% of the population opposes diversions of water. 
Great Lakes is one of our region's, and indeed our country's, greatest 
resources.
  Congress should not continue this pattern of giving and giving 
without a hint of reciprocity from a Mexican Government that continues 
to artificially depress wages, that allows its banks to stack debt on 
borrowers, and that considers our extradition treaty a joke. This 
bailout, like NAFTA, is an opportunity to force change, but we must 
make the most of this opportunity. I call on my colleagues to demand 
change in Mexico. This bailout needs to be tied, inextricably to this 
change. I want to see some good faith moves on the part of the Mexican 
Government, or I intend to bail out on the bailout.


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