[Congressional Record Volume 145, Number 60 (Thursday, April 29, 1999)]
[Senate]
[Pages S4454-S4456]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ABRAHAM (for himself and Mr. Hollings):
  S. 922. A bill to prohibit the use of the ``Made in the USA'' label 
on products of the Commonwealth of the

[[Page S4455]]

Northern Mariana Islands and to deny such products duty-free and quota-
free treatment; to the Committee on Finance.


             the ``made in usa'' label defense act of 1999

  Mr. ABRAHAM. Mr. President, I am very pleased today to join my 
distinguished colleague Senator Hollings in introducing legislation to 
defend the truth and the integrity of the ``Made in USA'' label.
  This is the second time, Mr. President, that the Senator from South 
Carolina and I have worked together to defend the ``Made in USA'' 
label.
  Last Congress, when the Federal Trade Commission proposed to dilute 
the meaning of the ``Made in USA'' label by allowing that label on 
products with substantial foreign content, Senator Hollings and I 
introduced a bipartisan resolution opposing this plan.
  Our resolution urged the FTC to restore the traditional and honest 
standard for the use of the ``Made in USA'' label. That standard, which 
has been in existence for more than 50 years, is that products must be 
``all or virtually all'' made in the U.S.A. in order to earn the label 
``Made in USA.''
  Mr. President, there was an overwhelming outpouring of grassroots 
support from the American people for this straightforward and honest 
standard and for our Resolution. In just a few months, a total of 256 
Members of Congress, including the Majority and Minority Leaders of the 
U.S. Senate, joined us as cosponsors of our Senate Resolution and its 
companion bill in the House.
  We were extremely pleased to see the FTC reverse its decision to 
dilute the ``Made in USA'' label and return to the traditional and 
time-tested standard for the use of the label. Frankly, this is the 
only standard that makes sense to the American consumers. If it says 
``Made in USA'' the U.S. consumer has a right to expect that the entire 
product and all of its components was made by U.S. citizens.
  This standard is honest. It is clear. It provides value for all those 
who look for the label and for those who have earned the use of it.
  But in order to retain that value, the integrity of the ``Made in 
USA'' label must be defended. We cannot and will not permit the ``Made 
in USA'' label to be used misleadingly. It belongs to those American 
businesses and workers who follow the rules, pay the taxes, and work 
hard--often against the odds presented by unfair foreign competition--
to continue to manufacture products here in America.
  These workers are correct to insist that Congress protect this 
cherished symbol of American pride and workmanship from abuse and 
misuse.
  That is why Senator Hollings and I recently informed our colleagues 
of our intention to introduce ``The `Made in USA' Label Defense Act of 
1999.''
  This legislation is necessary to close loopholes that currently allow 
the ``Made in USA'' label to be misused. These loopholes must be closed 
to prevent the inappropriate and misleading use of this label at the 
expense of American consumers, taxpayers, and U.S. workers.
  The particular misuse of the ``Made in USA'' label which we seek to 
address involves a U.S. territory, the Commonwealth of the Northern 
Mariana Islands, or as it is sometimes referred to, Saipan.
  To understand how this situation arose, some history is in order.
  Saipan was the site of an important battle in World War II which cost 
America 15,000 casualties. Following the end of the war, it was 
administered by the U.S. on behalf of the United Nations as a district 
of the Trust Territory of the Pacific Islands from 1947 to 1986. In 
1986, Saipan came under U.S. sovereignty pursuant to a Covenant that 
was approved by popular vote in Saipan and by the U.S. Congress (Public 
Law 94-241.) At that point, Saipan, now known as the Commonwealth of 
the Northern Mariana Islands, or CNMI, became an insular possession of 
the United States.
  CNMI negotiators for this Covenant sought an exemption from U.S. 
immigration laws. This exemption was granted, but it came with a clear 
warning from the Reagan Administration: the exemption was not to be 
used to bring in a permanent alien labor force in order to evade duties 
and quotas on Asian textile products and to provide unfair competition 
to domestic textile industry. The duty free and quota free treatment 
provided to Headnote 3(a) industries such as textiles was to benefit 
local U.S. citizens living and working in the CNMI.
  In a letter to the Governor of the CNMI in May of 1986, the year in 
which the Covenant was adopted, the Assistant Secretary for Territorial 
and International Affairs of Interior Department in the Reagan 
Administration, Richard R. Montoya, issued the following clear warnings 
to the Government of the CNMI:

       The recent news reports on the tremendous growth in alien 
     labor in the Northern Mariana Islands are extremely 
     disturbing. . . . I would be remiss if I did not speak 
     frankly to you on the possible consequences of the NMI's 
     alien labor policy.
       As I have often stated, the intent of the Congress in 
     providing the privilege of Headnote 3(a) to the territories 
     is to benefit local and not alien job and business growth. 
     The extensive and permanent use of alien labor in Headnote 
     3(a) industries is an abuse which cannot be tolerated by the 
     [Reagan] Administration.
       The objectives of the recently negotiated Covenant 
     financial agreement could be derailed as the wholesale 
     transfer of U.S. tax, trade and social benefits to non-U.S. 
     citizens occurs under the CNMI's alien labor promotion 
     policies.

  Mr. President, I ask unanimous consent to insert the full text of 
this letter, dated May 7, 1986, from then-Assistant Secretary Richard 
Montoya to the then-Governor of the CNMI, Pedro Tenorio, at this point 
in my remarks.
  At the time of the concerns raised in this letter, the total number 
of aliens in the CNMI was a mere 6,600 people. Today, the number of 
alien workers in the textile industry alone greatly exceeds this 
number. The number of non-U.S. citizens in the CNMI now tops 35,000, 
and actually exceeds the number of U.S. citizens in the territory. In 
fact, 91 percent of the entire private sector workforce is composed of 
alien labor.
  Even more alarming, Mr. President, we are now told by U.S. Government 
officials and news media investigations that the People's Republic of 
China itself may actually be involved in running some of these garment 
factories in Saipan. According to the February 8, 1998 Philadelphia 
Inquirer: ``One of the biggest island factories is Marianas Garment 
Manufacturing, Inc.--indirectly owned by the China National Textiles 
Import and Export Corp. (Chinatech), a behemoth that handles $1.2 
billion in Chinese textile exports to the world, much of it to the 
United States.'' If this is true, then companies owned by the communist 
Chinese government have succeeded in deceiving U.S. consumers and 
evading U.S. trade laws. Clearly, this is a situation that demands the 
immediate attention of and a firm response by both parties in the 
Congress.
  But what concerns Senator Hollings and myself and what directly 
prompted us to introduce this legislation is the direct effect of the 
CNMI situation on American consumers.
  First, American consumers are deceived by the fact that, due to a 
loophole in U.S. law, the more than $1 billion worth of textile 
products that are now shipped each year from the CNMI to the U.S. can 
be legally labeled as ``Made in USA''--even though they are made with 
nearly all foreign labor and foreign materials.
  This deceives American consumers, who have a right to expect that 
products labeled as ``Made in USA'' are made by U.S. workers with U.S. 
materials.
  Second, American taxpayers are harmed because these foreign goods are 
allowed to be imported into the U.S. duty-free--as if they were made by 
U.S. workers. As the CNMI was so clearly warned by the Reagan 
Administration, duty free treatment for textiles from the insular 
possessions was designed to help local U.S. citizens in these 
territories.
  This abuse of our duty-Free laws is costing American taxpayers an 
estimated $200 million annually. This $200 million could be used to 
fund a tax cut to the American people or could be used to reduce other 
duties.
  Mr. President, let me say that I am a strong believer in free trade. 
I believe the U.S. and the whole world benefits form the unfettered 
movement of goods and services.
  But the fact that foreign garment exports to the U.S are laundered in 
Saipan to escape duties and quotas has

[[Page S4456]]

nothing to do with free trade and everything to do with a form of 
subterfuge. We cannot allow those nations whose imports are subject to 
lawful duties and quotas to evade these laws at the expense of American 
taxpayers.
  Third, American workers also are being harmed by this situation 
because the $200 million which these foreign imports escape paying to 
the U.S. Treasury acts as a subsidy for these misleadingly labeled 
products.
  Mr. President, in order to address these concerns, I am proud to join 
today with my colleague from South Carolina in introducing a tightly 
crafted and narrowly drawn piece of legislation that will address these 
concerns.
  Our bill is designed to protect Americans from the deleterious 
effects of the current situation by closing what we believe our 
colleagues will agree are two indefensible loopholes in current law:
  (1) The loophole that allows these factories in the CNMI to use the 
``Made in USA'' label on their products or in any way imply that they 
were produced or assembled in the United States.
  (2) The loophole that allows foreign exports from the CNMI to 
masquerade as U.S.-made products for duty and quota purposes. Further, 
I will work to ensure that the estimated $200 million derived from 
eliminating the duty-free treatment of these products is rebated to the 
American taxpayer through tax cuts or tariff reductions.
  If in the future the CNMI feels that the domestic content of its 
products has increased to the extent that a use of the ``Made in USA'' 
label on these products would no longer be deceptive to the consumer, 
then it can petition Congress for a change in the covenant. Given its 
history of ignoring warnings from both Republican and Democratic 
Administrations on this matter, Senator Hollings and I believe that the 
burden should be on the CNMI to prove to Congress and the American 
people that products coming from the CNMI deserve to be labeled ``Made 
in USA.''
  At the same time, Mr. President, we are currently engaged in the long 
and arduous process of bringing China into the World Trading 
Organization. I support China's admission into the WTO as long as they 
meet the same criteria which all member nations must meet and as long 
as they are truly dedicated to working to reduce and eliminate such 
trade barriers as quotas and tariffs. Our long-term objective must be 
to create a global trading regime where all nations conduct trade and 
commerce on a level playing field. However, until countries such as 
China demonstrate that they are prepared to adhere to such principles, 
we must continue to take certain steps to protect our own domestic 
industries and workers from the unfair trade practices utilized by some 
of our trading partners, such as those currently ongoing in the CNMI.
  This legislation is a bipartisan compromise measure that I hope 
avoids the political pitfalls of previous measures. Mindful of Members 
who wish not to interfere in the domestic laws of the CNMI, our bill 
merely takes those minimal steps necessary to defend the ``Made in 
USA'' label from misuse and to enforce U.S. trade laws for the benefit 
of the American taxpayer. It simply prevents the substantive equivalent 
of foreign textile products from evading U.S. trade laws.
  There will be those who argue that more is necessary, and this may be 
true. But Senator Hollings and I are committed to doing that which can 
be done on a bipartisan basis and achieved in this Congress.
  We urge our colleagues on both sides of the aisle to cosponsor this 
important legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 922

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE

       This Act may be cited as the ``Equality for Israel at the 
     United Nation Act of 1999.''

     SEC. 2. EFFORT TO PROMOTE FULL QUALITY AT THE UNITED NATIONS 
                   FOR ISRAEL.

       (a) Congressional Statement.--It is the sense of the 
     Congress that--
       (1) the United States should help promote an end of the 
     inequity experienced by Israel in the United Nations whereby 
     Israel is the only longstanding member of the organization to 
     be denied acceptance into any of the United Nations region 
     blocs, which serve as the basis for participation in 
     important activities of the United Nations, including 
     rotating membership on the United Nations Security Council; 
     and
       (2) the United States Ambassador to the United Nations 
     should take all steps necessary to ensure Israel's acceptance 
     in the Western Europe and Others Group (WEOG) regional bloc, 
     whose membership includes the non-European countries of 
     Canada, Australia, and the United States.
       (b) Reports to Congress.--Not later than 60 days after the 
     date of the enactment of this Act and on a quarterly basis 
     thereafter, the Secretary of State shall submit to the 
     appropriate congressional committees a report which includes 
     the following information (in classified or unclassified form 
     as appropriate):
       (1) actions taken by representatives of the United States, 
     including the United States Ambassador to the United Nations, 
     to encourage the nations of the Western Europe and Others 
     Group (WEOG) to accept Israel into their regional bloc;
       (2) efforts undertaken by the Secretary General of the 
     United Nations to secure Israel's full and equal 
     participation in that body;
       (3) specific responses solicited and received by the 
     Secretary of State from each of the nations of Western Europe 
     and Others Group (WEOG) on their position concerning Israel's 
     acceptance into their organization; and
       (4) other measures being undertaken, and which will be 
     undertaken, to ensure and promote Israel's full and equal 
     participation in the United Nations.
                                 ______