[Congressional Record Volume 143, Number 129 (Wednesday, September 24, 1997)]
[Extensions of Remarks]
[Pages E1835-E1836]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                  ON TRACK WITH OUR NATION'S INTERESTS

                                 ______
                                 

                          HON. PHILIP M. CRANE

                              of illinois

                    in the house of representatives

                     Wednesday, September 24, 1997

  Mr. CRANE. Mr. Speaker, recently, several Members of Congress, 
including myself, met with the administration to discuss fast-track 
trading authority soon to be offered in the House for consideration. 
This legislation grants the administration authority to negotiate and 
implement trade agreements with other nations, which Congress would 
either support or vote down unamended. It is my opinion that this 
authority is a necessary step toward the President's goal of having 
hemispheric free trade by the year 2005. More importantly, fast track 
is a necessary step to strengthen the U.S. economy at home--helping 
producers, workers, and consumers. The agreements made as a result of 
fast track will expand our markets far beyond our shorelines to other 
nations who desire high quality, American-made products. Exporting 
companies offer workers jobs, which provide better pay and better 
benefits. Consumers have a larger variety of products to choose from at 
more competitive costs.
  In the past, fast track has been derailed by special interests, who 
lack the foresight to see that the general interest of our Nation will 
benefit from free and open trade--a status that can be greatly assisted 
by extending traditional trading authority to this administration. The 
following article, which was printed in the Wall Street Journal, on 
September 12, 1997, highlights the need to pass fast track to maintain 
our Nation's role in the international marketplace. If it is not 
passed, special interests will in the end realize that their selfish 
motivations cause more harm than good. I hope my colleagues consider 
the points made in this article and support legislation to extend fast-
track trading authority to the administration.

             [From the Wall Street Journal, Sept. 12, 1997]

            U.S. Exporters to Latin America Need Fast-Track

                         (By Robert Mosbacher)

       When President George Bush unveiled his Enterprise of the 
     Americas Initiative in the early 1990s, many thought the 
     emergent free trade bloc would develop according to a ``hub-
     and-spoke'' model. As the ``hub'' of hemispheric trade, the 
     U.S. would form a series of inter-locking bilateral free 
     trade agreements with the ``spoke'' nations of Latin America 
     and the Caribbean until these agreements could be melded into 
     a single free trade accord. That vision is slipping away.
       President Clinton promised Wednesday to put trade expansion 
     back on the front-burner. He plans to ask Congress to renew 
     fast-track legislation, which would authorize the president 
     to negotiate international trade agreements on which Congress 
     would vote up or down. If he fails to secure fast-track 
     authority, however, the U.S. will be relegated to ``spoke'' 
     status in the emerging hemispheric trading order, leaving 
     many U.S. businesses at a disadvantage. Furthermore, fast-
     track authority should be clean--that is, it must not be 
     weighted down with requirements that trade agreements also 
     mandate environmental and labor regulations.
       Since the promising 1994 Miami summit, when the proposed 
     trade initiative was renamed the Free Trade Area of the 
     Americas, the U.S. has withdrawn from its leadership role on 
     liberalized trade. Instead, inter-locking trade relationships 
     have been forming around the southern cone customs union--
     Mercosur--comprising Brazil, Argentina, Uruguay and Paraguay.
       Last year, while Washington dithered, Mercosur took 
     decisive action, offering Chile and Bolivia associate 
     membership. This created a market of 220 million potential 
     consumers with a combined gross domestic product of about $1 
     trillion--more than twice the economic output of Asean, the 
     Association of Southeast Asian Nations.
       This year, while still waiting for the president to lead on 
     fast-track, Mercosur is planning free trade talks with 
     Colombia, Venezuela, Ecuador and Peru. Mercosur might soon 
     realize its goal of establishing a South America Free Trade 
     Area, which could serve as a counterweight to Nafta, the 
     North American Free Trade Agreement, in hemispheric free 
     trade talks. Mercosur has already been approached by the 
     European

[[Page E1836]]

     Union about a free trade alliance and will also soon begin 
     free trade talks with Mexico, Canada and the Central American 
     Common Market.
       One of the consequences of Mercosur's expansion and the 
     American retrenchment is that the U.S. is losing leverage in 
     hemispheric free trade talks. While official negotiations are 
     not scheduled to begin until 1998, the failure of the U.S. to 
     secure fast-track leaves open the distinct possibility that 
     the agenda and timetable for these talks will be dominated by 
     other countries.
       Lack of fast-track is also hurting U.S. companies seeking 
     access to the region's dynamic consumer markets. American 
     wine producers are losing market share in Venezuela to 
     Chilean producers, not because Venezuelans prefer Chilean 
     Merlot to Napa Valley Cabernet Sauvignon, but because Chile 
     has a free trade agreement with Venezuela that allows its 
     wines to enter the country tariff free. American wines, by 
     contrast, carry a hefty 20% duty. If the duty were to be 
     eliminated, industry experts believe that U.S. wine 
     producers could see their share of the Venezuelan market 
     jump from the current 5% to well over 30%.
       While California wine producers cannot pull up their vines 
     and move to more hospitable commercial climates, other 
     industries are less restricted. Caterpillar Inc., based in 
     Peoria, Ill., recently announced plans to produce bulldozers, 
     excavators and off-road trucks in Brazil for export to Chile. 
     The decision to build the equipment on foreign rather than 
     U.S. soil was based on tariff considerations. U.S. exports to 
     Chile face an average 11% tariff, while tariffs on Brazilian 
     exports are being phased out under Mercosur. Other companies 
     that may follow Caterpillar's lead include General Electric 
     and Eastman Kodak.
       Several major U.S.-based multinationals with joint ventures 
     in Chile--including IBM, Southwestern Bell and McDonald's--
     have announced plans to source millions of dollars in 
     equipment in Canada and Mexico rather than in the U.S. The 
     reason, again, is that Canada and Mexico have bilateral free 
     trade accords with Chile that permit their goods to enter the 
     South American country tariff-free, while U.S. goods face 
     prohibitive duties. According to the U.S. Chamber of 
     Commerce, the loss of opportunity for U.S. exports to Chile 
     is $480 million a year and climbing.
       Those who question the need for deeper economic integration 
     should consider the benefits of Nafta. Notwithstanding the 
     1994 peso devaluation--which halved the price of Mexico's 
     exports to the U.S.--U.S. exports to Mexico and Canada have 
     grown 34% since the pact took effect in 1994. They now 
     outstrip total U.S. exports to either the Pacific Rim or 
     Europe.
       According to a Council of the Americas study of 21 U.S. 
     states, nine states have witnessed 40% plus growth in exports 
     to Mexico and Canada since 1993 and another seven have seen 
     those export markets grow by more than 30% during that time. 
     In 1996, California exported to Mexico more than $9 billion 
     in goods and services. The California World Trade Commission 
     estimates that exports to Mexico support more than 125,000 
     jobs in the Golden State, with almost 25,000 of these jobs 
     resulting from export growth in 1995 alone.
       Nafta has also helped promote U.S. interests in Mexico by 
     helping stabilize the country in the aftermath of the peso 
     crisis. After Mexico's 1982 peso devaluation, it took seven 
     years before the country showed signs of recovery. By 
     contrast, Mexico's economy touched bottom and began to turn 
     around less than 12 months after the December 1994 
     devaluation. There is also little doubt that the climate of 
     openness fostered by Nafta raised political consciousness and 
     contributed to the July 6 electoral shakeup that ended 70 
     years of political dominance by the Institutional 
     Revolutionary Party.
       An activist American trade policy made possible by fast-
     track negotiating authority will keep the U.S. economy strong 
     and guarantee that future generations enjoy rising living 
     standards. That said, the importance of fast-track transcends 
     economic issues. As Rep. Lee Hamilton (D., Ind.) recently 
     said, ``Fast-track is not just about trade, it is about U.S. 
     leadership and influence in the world. And a president 
     without fast-track is a president without power to promote 
     U.S. interests abroad.'' We ignore this reality at our own 
     peril.

     

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