[Congressional Record Volume 143, Number 149 (Thursday, October 30, 1997)]
[Extensions of Remarks]
[Pages E2141-E2142]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          FAST TRACK AUTHORITY

                                 ______
                                 

                          HON. HENRY A. WAXMAN

                             of california

                    in the house of representatives

                       Thursday, October 30, 1997

  Mr. WAXMAN. Mr. Speaker, I appreciate this opportunity to share with 
my colleagues the reasons I am unable to support H.R. 2621, the 
Reciprocal Trade Agreement Authorities Act of 1997.
  I support the principle of granting fast track authority to President 
Clinton to negotiate new trade agreements. Since our markets are the 
most open in the world, we have the most to gain by international 
agreements that pry open markets in countries with protectionist 
policies. In addition, we are uniquely positioned to forge 
relationships with our neighbors in this hemisphere that can help raise 
their standards of living and provide a significantly larger consumer 
base for our goods and services. Finally, since Mexico and Canada now 
enjoy special trade status with the United States under the North 
American Free Trade Agreement [NAFTA], it would seem illogical to deny 
a similar arrangement to other countries in the region.
  Unfortunately, however, the debate on trade policy no longer 
encompasses simple unfair dumping and tariff barriers. Trade 
negotiations now have a direct impact on our country's ability to 
maintain strong health and environmental standards because these 
standards can be challenged as trade barriers.
  The fast track language under H.R. 2621 is more regressive than that 
held by previous administrations and further restricts the authority of 
the President to negotiate trade agreements that include domestic and 
global environmental objectives. In addition, the language on food 
safety standards could reduce levels of risk to an international lowest 
common denominator. Third, the language would entitle companies to 
collect compensation if unjustified nontariff barriers restrict their 
activities. Since many environmental and health regulations have been 
interpreted as nontariff barriers to trade, governments could be 
required to compensate companies when public health and welfare 
regulations hinder capital flows. And finally, my longstanding concern 
that the broad rulemaking authority of international trade bodies is 
not instituted in a transparent, democratic manner has not been 
adequately addressed.


    DIRECTLY RELATED TO TRADE LANGUAGE WOULD THREATEN ENVIRONMENTAL 
                               SAFEGUARDS

  Since the fast track procedure was established in 1974, Presidents 
have been granted broad discretion to negotiate and include in fast 
tracked bills any terms the President has judged necessary or 
appropriate. Unfortunately, H.R. 2621 severely constrains President 
Clinton's ability to negotiate environmental, health, and labor 
provisions in trade agreements and leaves open to challenge many of the 
environmental and health protections we already have in place.
  Under section 102(a)(2) of H.R. 2621, labor and environmental 
measures are considered overall trade objectives only if they are 
directly related to trade and decrease market opportunities for U.S. 
exports or distort U.S. trade. Under this legislation, funding for 
border clean-up projects, worker safety objectives, infrastructure and 
right-to-know requirements, enforcement of multilateral environmental 
agreements, and human rights standards would not be part of a trade 
agreement.
  Further, even if the President wanted to negotiate an environmental 
provision, section 103(b)(3)(b) would prohibit its inclusion in the 
fast track implementing legislation unless it were necessary for the 
operation or implementation of the U.S. rights or obligations under 
such trade agreements.
  In addition, the 1988 fast track language included ``reducing or 
eliminating barriers, taking into account domestic objectives such as 
legitimate health and safety * * *'' as a goal for trade in services 
and foreign investments. H.R. 2621, however, would ``reduce or 
eliminate barriers to international trade in services including 
regulatory and other barriers that deny national treatment and 
unreasonably restrict the establishment and operation of service 
suppliers.'' (Section 102.2)
  H.R. 2621 simply fails to protect our Nation's ability to maintain 
strong environmental and health standards. Although section 
102(b)(7)(B) seeks ``to ensure that foreign governments do not derogate 
from or waive existing domestic environmental, health, safety or labor 
measures * * * as an encouragement to gain competitive advantage,'' it 
contains no enforcement language and provides no incentives for trading 
partners to establish minimum levels of environmental, health, or 
safety protections. It also fails to address the competitive advantage 
that countries without environmental or labor laws would enjoy. 
Finally, the section contains an escape clause stating that the 
designation ``is not intended to address changes to a country's laws 
that are nondiscriminatory and consistent with sound macroeconomic 
development.'' Consequently, a country could waive its environmental, 
health and safety laws to attract investment if such an action is 
considered sound macroeconomic policy.


  POTENTIAL FOR LOWEST COMMON DENOMINATOR HEALTH AND SAFETY STANDARDS

  H.R. 2621 could potentially invalidate U.S. safety standards and 
expose Americans to levels of risk set by an international lowest 
common denominator. This is especially troubling given our experience 
with NAFTA even though U.S. Trade Representative Kantor assured 
Congress in 1993 that ``each government may establish those levels of 
protection for human, animal or plant life or health that the 
government considers to be appropriate.''
  In addition, the World Trade Organization's [WTO] ruling that 
rejected the European Union's [EU] ban on hormone-fed beef clearly 
contradicts that position. Under its ruling, the WTO determined that 
the EU had not provided a sufficient assessment of the hormone's risk. 
The EU was forced to accept international standards of risk as defined 
by the Codex Alimentarius Commission and denied its right to make its 
own societal determinations of public safety even though it presented 
credible scientific studies in support of its position.

  This case sets a dangerous precedent for other sanitary and 
phytosanitary judgments on food safety, biotechnology, and food 
irradiation decisions. It is particularly threatening to U.S. food 
safety since some Codex standards permit residues of pesticides that 
have been banned in the U.S. and allows residues of others at much 
higher levels than the U.S. allows. Codex standards allow higher levels 
of residue than the U.S. on pesticides like DDT, heptachlor, aldrin, 
diazinon, lindane, permethrin, and benomyl.
  H.R. 2621's provisions would exacerbate this problem by restricting 
Congress's ability to impose precautionary bans on unsafe products. 
U.S. domestic legislation has often relied on such precautionary 
measures to protect the public health and safety. For example, certain 
medical devices are not allowed on the market until they can be proven 
safe. H.R. 2621 would shift the burden of proof to consumers and health 
officials to first prove that devices are not safe before they could be 
restricted from the market.
  Of additional concern is that NAFTA's implementing legislation 
rewrote poultry and meat

[[Page E2142]]

safety regulations to allow countries to make food safety inspections 
if their inspections were equivalent to ours. This language replaced a 
standard that required inspections to be at least as rigorous as ours. 
NAFTA and the WTO provide for an equivalency standard, but no formal 
rulemaking has begun to define equivalency. Unfortunately, food safety 
protections have been substantially weakened under NAFTA. USDA food 
safety checks have been reduced to 1 percent at the Mexican border, 
while Mexican food exports to the U.S. have increased by 45 percent. 
Equivalency standards are also applied to nonfood standards, 
performance standards, and good manufacturing practices, which are 
similarly difficult to evaluate.
  Instead of curing these serious problems, H.R. 2621 would endorse the 
continued erosion of U.S. sovereignty and make it even more difficult 
for Congress and the President to establish standards of risk that we 
believe are appropriate, based on sound science, and protect the 
American people.


                        expropriation of assets

  Another area of concern is the potential for corporations to sue 
under a takings mechanism for compensation of unrealized profits due to 
environmental or health regulations. Under article 1110 of NAFTA, the 
Ethyl Corporation is currently suing the Government of Canada for $251 
million worth of damages in a claim that Canada's ban on the gas 
additive MMT constitutes an expropriation of company profits. MMT is 
banned in many U.S. States because of its harmful effects on children 
and its capacity to destroy catalytic converters.
  Another case was recently filed against the Mexican Government by the 
Metal Clad Corporation. That company is suing on the basis that a 
governmental declaration of a marsh as a nature preserve is an 
expropriation of the company's potential assets had they been awarded a 
contract to built a toxic dump in that location.
  Section 102(3)(D) of the foreign direct investment provisions of the 
fast track proposal endorses this takings approach and requires the 
U.S. to establish standards for expropriation and compensation for 
expropriation. Under NAFTA corporations are already granted authority 
to sue governments directly. The Multilateral Agreement on Investment, 
one of the multilateral agreements that could be covered under fast 
track authority, would allow business-dominated international arbitral 
panels to decide whether an environmental regulation is considered a 
taking of a property. H.R. 2621 would set a new precedent that could 
require governments to compensate companies if public health and 
welfare regulations reduce the value of investments, regardless of the 
impact on public health and welfare.


    no adequate dispute resolution mechanisms, public oversight, or 
                        environmental assessment

  During the NAFTA and GATT debates, I strongly supported a transparent 
dispute settlement that would allow outside parties an opportunity to 
present the dispute resolution panel with their views in writing. 
Unfortunately, this proposal was not adopted and the dispute mechanisms 
remain secret. Amicus briefs and other public comments are not 
permitted.
  An open process for dispute resolution is particularly important 
because trade agreements can have such a significant impact on public 
health and welfare. Two American alws--the Clean Air Act and the Marine 
Mammal Protection Act--have already been changed as a consequence of 
international trade challenges. And, unlike any other area of 
international negotiations, decisions are enforceable by the ruling 
bodies through trade sanctions. Our fundamental rights--ones we have 
taken for granted in the U.S.--are severely diminished in this process.
  Unfortunately, the calls in H.R. 2621 for increased transparency of 
the process are inadequate. Transparency should include public notice 
and comment periods for all international trade rulemaking bodies and a 
legally-binding procedure for Enviromental Impact Assessments [EIA's] 
for all future trade and investment agreements. Further EIA's should be 
prepared early enough in the negotiation process to provide for public 
comment and full review by the negotiators. Final EIA's should 
accompany the trade bill sent to Congress for fast track review.
  While I am unable to support H.R. 2621 for these reasons, I am 
interested in working with President Clinton and my colleagues on 
language that would provide the necessary structures to protect the 
public interest in trade agreements negotiated under fast track 
authority.

                          ____________________