[Congressional Record Volume 142, Number 46 (Friday, March 29, 1996)]
[Extensions of Remarks]
[Pages E505-E506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     THE CARIBBEAN BASIN INITIATIVE

                                 ______


                         HON. CHARLES B. RANGEL

                              of new york

                    in the house of representatives

                         Friday, March 29, 1996

  Mr. RANGEL. Mr. Speaker, One of the legislative accomplishments of 
which I am most proud is my association with the passage of the 
Caribbean Basin Initiative [CBI] in 1982. The CBI was truly bipartisan 
legislation, introduced by President Ronald Reagan and embraced by the 
Democratic Congressional leadership led by former Chairman Dan 
Rostenkowski of the House Committee on Ways and Means.
  The CBI has been truly a success story, a great example of what 
President Reagan called friends helping friends in the letter that he 
sent me after signing the legislation to provide our Caribbean 
neighbors with greater access to our market in the United States. I 
don't believe that we fully appreciated at that time how much mutual 
benefit there would be over the years in CBI. Now the Caribbean has 
become a significant purchaser of goods and services from the United 
States, helping to create jobs here at home.
  The CBI has been responsible for a decade of unparalleled growth in 
trade between the United States and the Caribbean, acting as a catalyst 
for exports, investment and employment creation in the economies of the 
United States and the Caribbean. As the growth process in CBI economies 
has been strengthened by increased United States investment in 
increased purchases of United States goods and services. Each dollar 
spent by the Caribbean generates 60 cents per dollar of United States 
exports. Jamaica, for example, purchases more than 65 percent of its 
imports from the United States. Trinidad and Tobago purchases more than 
half of its imports from the United States.
  In 1991, the last year prior to the embargo, Haiti purchased 61 
percent of its imports from the United States. Restoring the economy of 
the new Haiti, therefore, is not a matter of charity or foreign 
assistance, it is a policy that is rooted in the realization that there 
is mutual self-interest for Haiti and the United States in making the 
Haitian economy viable. The Caribbean is a significant market for 
United States exports and these exports produce jobs in the United 
States.
  Ambassador Bernal, in his editorial, addresses this reality and 
challenges us to keep the United States-Caribbean trade relationship 
vital by providing parity to access to the United States markets to 
that provided by our trading partners in NAFTA. As one of the original 
cosponsors of the Caribbean parity legislation which was reported out 
of the Ways and Means Committee Subcommittee on Trade last year, I am 
looking forward to working with Chairman Crane and the administration 
to achieve its passage in the present Congress.

             [From the Wall Street Journal, Mar. 22, 1996]

             A Jamaican's Case for Trade Parity With NAFTA

                         (By Richard L. Bernal)

       U.S.-Caribbean commercial links have generated American 
     jobs at a rate of nearly 17,000 a year since the mid-1980s. 
     U.S. overall exports to the Caribbean have expanded by more 
     than 100%, and Caribbean exports to the U.S. have climbed by 
     roughly 50%. By the end of 1994, combined U.S.-Caribbean 
     trade stood at $24 billion.
       The 24 nations of the Caribbean Basin--among them Jamaica, 
     Trinidad, the Dominican Republic and all Central American 
     countries--have enjoyed these strong economic and trade 
     relations during the past dozen years largely through the 
     mechanism of the Caribbean Basin Initiative (CBI). But recent 
     changes in U.S. trade law have put the long-term viability of 
     this relationship in jeopardy. Under the North American Free 
     Trade Agreement, for example, Mexican exports now enjoy 
     access to the U.S. market exceeding that accorded to 
     Caribbean exports. The General Agreement on Tariffs and Trade 
     implementing act has exacerbated these effects by phasing out 
     a program that regulated the importation of textile and 
     apparel products from all countries.
       As a result, Caribbean countries are now forced to compete 
     in their largest market at a substantial competitive 
     disadvantage. In the two years that Nafta has been in effect, 
     there has been a steady diversion of trade and investment 
     away from the Caribbean Basin nations. In the textile and 
     apparel sector alone, Mexico has displaced other Caribbean 
     countries. It is now the single largest source of U.S. 
     garment imports from this hemisphere. Such diversion has 
     begun to erode U.S.-Caribbean trade relations, weakening the 
     employment base of hundreds of thousands of Americans who 
     depend upon strong U.S.-Caribbean trade links.
       During a visit with Central American leaders last month, 
     Secretary of State Warren Christopher announced that 
     President Clinton will include in his fiscal year 1997 budget 
     request a key proposal to strengthen U.S.-Caribbean Basin 
     economic relations. Coming on the heels of Cuba shooting down 
     two unarmed civilian planes. Mr. Christopher's announcement 
     underscores the compelling U.S.

[[Page E506]]

     national and security interests in maintaining strong 
     economic links with the Caribbean region.
       Secretary Christopher's announcement advances a bipartisan 
     proposal currently before the Congress that will correct the 
     unintended adverse effects of Nafta on the Caribbean Basin. 
     The prospect of enhanced U.S.-Caribbean trade links enjoys 
     wide-spread support, and has been endorsed by many Carribbean 
     heads of government and countless business and community 
     leaders, both in the U.S. and in the Caribbean.
       As currently envisioned, the proposal will insure that 
     Caribbean and Mexican exports enjoy equal access to the U.S. 
     market during the next 10 years. During this transitional 
     period of ``Nafta parity,'' Caribbean countries will be 
     required to take reciprocal steps to expand market access for 
     U.S. products, strengthen investment guarantees, expand 
     worker's rights, and improve intellectual property 
     protection. By the end of the 10-year period, the U.S. will 
     have strengthened its commercial relationship with the 
     Caribbean region while the CBI countries will be in a better 
     position to join a hemispheric-wide free Trade Area of the 
     Americas.
       The benefits of Nafta parity would be felt strongly over 
     the next few years in both the Caribbean and in the U.S. 
     Presently, the U.S.-Caribbean commercial relationship 
     supports more than 260,000 jobs in the U.S. and countless 
     more throughout the Caribbean. The Caribbean Basin is now the 
     10th-largest export market for the U.S. and one of the few 
     regions in the world where U.S. exporters maintain trade 
     surpluses. Nafta parity will build on this framework as 
     elevated trade levels generate thousands of new jobs each 
     year in the U.S. and the Caribbean.
       The benefits to U.S. industry for this program are clear as 
     well. Nafta parity will enhance international competitiveness 
     of the U.S. textile and apparel industry by building on the 
     productive relationship already enjoyed by U.S. and Caribbean 
     firms. Since Caribbean garment exports rely upon U.S. 
     components and labor for as much as 70% of their value-added, 
     and expansion of the Caribbean garment industry directly 
     benefits U.S. firms and workers. Many Caribbean governments 
     already operate programs that successfully fight illegal 
     textile transhipment from East and South Asian countries, so 
     Nafta parity will strengthen a framework that protects the 
     domestic industry from quota violations. Finally, as 
     Caribbean governments take steps to strengthen intellectual 
     property and investment protections--as Jamaica has already 
     done--many other U.S. industries will gain.
       This trading relationship means that overall economic 
     growth and development in the Caribbean Basin can directly 
     translate into expanded export opportunities for the U.S. 
     Roughly 60 cents of each dollar the region earns from exports 
     to the U.S. market is spent in the U.S. buying American-made 
     consumer goods, food products, raw materials and capital 
     equipment.
       In this context, Nafta parity has emerged as a cost-
     effective economic and foreign policy instrument to promote 
     regional development. Increased trade activity will provide 
     many additional commercial opportunities, which are so 
     crucial for healthy economic growth in cities and rural areas 
     throughout the U.S. Stronger trade links will inevitably lead 
     to better cooperation in other areas, such as narcotics 
     interdiction, anticorruption activities, and efforts to fight 
     terrorism and international crime. Moreover, as Caribbean 
     economies prosper, they will become less dependent on U.S. 
     foreign aid at a time when foreign assistance is getting 
     close scrutiny. In many ways, therefore, Nafta parity 
     represents a tangible ``trade, not aid'' approach, which has 
     taken on new importance in light of the U.S. budget debate.
       Numerous studies have shown that strong regional economic 
     links are crucial not only in creating economic opportunities 
     throughout the U.S. and the Caribbean Basin but also in 
     supporting stable and mutually beneficial security 
     relationships. Congress should advance U.S. national security 
     interests in the region by moving quickly to enact Nafta 
     parity.

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