[Congressional Record Volume 145, Number 141 (Monday, October 18, 1999)]
[Senate]
[Pages S12786-S12789]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MOYNIHAN:
  S. 1746. A bill to authorize negotiation of a free trade agreement 
with the Republic of Turkey, to provide authority for the 
implementation of the agreement, and for other purposes; to the 
Committee on Finance.


            the u.s.-turkey free trade agreement act of 1999

  Mr. MOYNIHAN. Mr. President, I rise today to introduce the U.S.-
Turkey Free Trade Agreement Act of 1999. This bill provides traditional 
trade negotiating authority--we once called it ``fast track 
authority''--for a free trade agreement (FTA) with the Republic of 
Turkey. It would authorize the President to negotiate and conclude a 
free trade agreement with one of America's most important allies and 
bring that agreement and any necessary implementing legislation back to 
the Congress for an up-or-down vote, within a time certain.
  I would begin by noting that Turkey has played a singular role at the 
crossroads of East and West since 1923, when the legendary Mustafa 
Kemal ``Ataturk'' built a western-oriented, secular state out of the 
ashes of the collapsed 600-year old Ottoman Empire. Its constitution 
establishes a democratic, parliamentary form of government with an 
independent judiciary. Indeed, it is the only Muslim country with a 
secular democracy.
  Turkish-American friendship is longstanding: it was first consecrated 
in the Treaty of Commerce and Navigation between the United States and 
the Ottoman Empire in 1830. The 1929 Treaty of Commerce and Navigation 
cemented our commercial ties with the new republic, while the July 12, 
1947 agreement on aid to Turkey, implementing the Truman Doctrine, 
inaugurated the very close relationship that continues today. Our 
friendship has since been reinforced by more than 60 agreements, 
treaties and memoranda of understanding.
  It is time to take that relationship a step farther, and begin 
negotiations toward a free trade agreement with Turkey. Not only do our 
strategic and political interests dictate closer economic integration, 
but our commercial interests do so as well.
  Straddling Europe and Asia, Turkey has played a central role in 
safeguarding the United States' security interests in the region since 
it first entered World War II on the side of the allies at the end of 
the war. Turkey was a charter member of the United Nations and joined 
the North Atlantic Treaty Organization (NATO) in 1952. It currently has 
the largest military force in the Middle East, and the second largest 
military force in NATO.
  Its geography, history, and relative economic success put Turkey in a 
position of potential influence in Central Asia, which is, of course, 
populated mainly by Turkic peoples. To the west, Turkey plays an 
important role in Europe, both because of its NATO membership and the 
situation on Cyprus. We applaud the recent improvements in Turkey's 
relations with Greece, and hope for more. This past summer the two 
countries held bilateral talks on a range of issues, talks which 
continued in early September. The tragedy of the recent earthquakes 
further reinforced this burgeoning relationship as Greece and then 
Turkey promptly dispatched emergency rescue crews and supplies to 
assist the other in dealing with these disasters.
  And to the south, Turkey is, without question, one of our two most 
important allies in the Middle East. The other is its neighbor, Israel, 
with whom the United States negotiated a free trade agreement that went 
into effect in 1985. Less well known is the fact that Turkey and Israel 
negotiated a free trade agreement in 1996, which was ratified in 1997 
and is in force today. A U.S.-Turkey FTA would simply complete the 
triangle.
  Writing in the September 28, 1999 edition of The Washington Post, Dr. 
Isaiah Frank, the very distinguished William L. Clayton Professor of 
International Economics at Johns Hopkins University's School of 
Advanced International Studies, argued persuasively on political 
grounds for a free trade agreement with Turkey.

       The EU's equivocation [over Turkey's proposed membership in 
     the European Union] has bred Turkish disaffection from Europe 
     and plays into the political hands of the Islamists who as 
     recently as 1996 were at the helm of the government. Clearly, 
     the enormous U.S. stake in a secular, Western-oriented Turkey 
     warrants action by the United States to offset the EU's 
     arm's length treatment and to strengthen and solidify the 
     country's Western political and economic integration.

  But Dr. Frank was correct to point out as well that a free trade 
agreement with Turkey would also be in the United States' economic 
interest. Turkey is an industrial country, underpinned by strong free 
market principles and a vibrant private sector. It was in 1961 a 
founding member of the Organization for Economic Cooperation and 
Development, the exclusive club--there are today only 29 OECD member 
countries--that serves as the principal economic forum for the 
industrialized world.
  In the 1980's, Turkey took major steps to liberalize its economy. 
Progress continues to be made: earlier this year, Turkey's parliament 
passed a significant banking reform bill, landmark social security 
reform and constitutional amendments removing obstacles to foreign 
investment and promoting the privatization of state-owned enterprises. 
Turkey's increasingly open economy has produced rewards: during most of 
the 1990's, it has been one of the fastest growing of the OECD 
countries and, for the past eight years, it has had the fourth highest 
annual growth rate, after Ireland, Korea and Luxembourg, recording a 
4.4% average annual rate of growth in GNP between 1990 and 1998.
  Turkey has opened itself to the global economy in significant ways. 
It became a Contracting Party to the General Agreement on Tariffs in 
Trade in 1951 and joined the World Trade Organization as a charter 
member in 1995. Turkey signed a free trade agreement with the European 
Free Trade Association in 1991 and established a customs union with the 
European Union in 1996. As Dr. Frank noted, it has sought full 
membership in the EU, thus far without success. There has been, of 
late,

[[Page S12787]]

some limited progress in that regard: on October 13, 1999, the European 
Commission suggested that Turkey be made a candidate for possible EU 
membership, but proposed that negotiations be deferred for some 
unspecified time. The matter is to be discussed at the EU summit this 
December. In 1992, Turkey joined ten other countries (Albania, Armenia, 
Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia and 
Ukraine) to form the Black Sea Economic Cooperation group, which aims 
at promoting multilateral cooperation and trade in that region.
  Our own economic ties with Turkey have strengthened over the years as 
well. In 1986, we concluded a bilateral investment treaty and in 1998 a 
bilateral tax treaty. And on September 29, 1999, President Clinton and 
Prime Minister Bulent Ecevit signed a Trade and Investment Framework 
Agreement, which establishes a bilateral Council on Trade and 
Investment that will serve as a forum for regular discussions on 
commercial matters. Helpful steps all, but, I would argue, not bold 
enough. I agree with Dr. Frank that a free trade agreement with Turkey 
ought to be our goal.
  Yes, our trade with Turkey is still on a small scale. In 1998, U.S. 
merchandise exports to Turkey reached $3.5 billion, making Turkey our 
34th largest export market. Our imports from Turkey were even smaller--
$2.5 billion, or less than 0.3 percent of total imports--making Turkey 
our 39th largest source of imports.
  Certainly Turkey compares favorably with Chile, the only country with 
whom the United States has begun free trade agreement negotiations 
since the North American Free Trade Agreement entered into force. In 
1998, U.S. merchandise exports to Chile totaled $3.9 billion, only 
slightly higher than our $3.5 billion in exports to Turkey that year, 
while our imports from Chile in 1998 were the same as our imports from 
Turkey--$2.5 billion. And both countries fall within the World Bank's 
grouping of ``upper middle income'' countries based on per capita GNP: 
in 1998's Turkey's stood at $3,160, compared with $4,810 for Chile.
  Turkey's market potential is certainly greater than Chile's: Turkey's 
population is four times the size of Chile's population (62 million vs. 
15 million) and Turkey's total imports in 1998--about $42 billion--were 
double Chile's total imports that year--$19 billion.
  To be sure, more than 50 percent of Turkey's trade--both exports and 
imports--is conducted with the European Union, but the United States is 
Turkey's second largest single-country trading partner, after Germany. 
And in 1993, the Department of Commerce designated Turkey one of 10 
``Big Emerging Markets''--a focal point for U.S. export and investment 
promotion efforts--because of its ``outstanding growth prospects'' and 
growing market of 62 million consumers.
  I am convinced that there are strong economic arguments for a free 
trade agreement with Turkey. Our negotiators will have to take care, of 
course, that the benefits of the FTA are restricted to the United 
States and Turkey. But this is a matter that will be addressed when the 
negotiators write the rules of origin that will apply to the FTA.
  The legislation that I am introducing today would set us on the 
course of negotiating and implementing an FTA with Turkey, much as we 
negotiated an FTA over a decade ago with Turkey's neighbor, and our 
dear friend, Israel. And much as Turkey and Israel have seen it in 
their mutual interest to negotiate a free trade agreement.
  Dr. Frank made the case persuasively and succinctly in his op-ed 
piece in The Washington Post:

       In light of Turkey's strategic role as a U.S. ally in a 
     rough neighborhood, a U.S.-Turkey free-trade agreement would 
     help consolidate Turkey's Western orientation and contribute 
     to stability in a highly volatile region of the world.

  I am hopeful that this bill will start us down that path.
  I ask unanimous consent that the text of my bill and Dr. Frank's op-
ed article be inserted into the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1746

       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 ``United States-Turkey Free 
     Trade Agreement Act of 1999''.

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) The Republic of Turkey (in this Act referred to as 
     ``Turkey'') has played an important strategic, political, and 
     economic role in Europe, Asia, and the Middle East since its 
     founding in 1923 by Mustafa Kemal ``Ataturk'' following the 
     collapse of the 600-year Ottoman Empire.
       (2) The friendship shared between the United States and 
     Turkey dates to the late 18th century and was consecrated by 
     the Treaty of Commerce and Navigation between the United 
     States and the Ottoman Empire in 1830.
       (3) The United States reaffirmed its relationship with 
     Turkey by entering into the Treaty of Commerce and Navigation 
     of 1929.
       (4) The United States and Turkey have subsequently entered 
     into over 60 treaties, memoranda of understanding, and other 
     agreements on a broad range of issues, including a bilateral 
     investment treaty (1986), a bilateral tax treaty (1998), and 
     a trade and investment framework agreement (1999), as 
     evidence of their strong friendship.
       (5) Turkey is located in the strategic corridor between 
     Europe and Asia, bordering the Black Sea and the 
     Mediterranean Sea.
       (6) Turkey has been a strategic partner of the United 
     States since it joined the allies at the end of World War II.
       (7) The strategic alliance between Turkey and the United 
     States was cemented by--
       (A) the agreement of July 12, 1947 implementing the Truman 
     doctrine;
       (B) Turkey's membership in the North Atlantic Treaty 
     Organization (NATO) in 1952; and
       (C) the United States-Turkey Agreement for Cooperation on 
     Defense and Economy of 1980.
       (8) Turkey is also an important industrialized economy and 
     was a founding member of the Organization for Economic 
     Cooperation and Development (OECD) and the United Nations.
       (9) Turkey has made significant progress since the 1980's 
     in liberalizing its economy and integrating with the global 
     economy.
       (10) Turkey has joined other nations in advocating an open 
     trading system through its membership in the General 
     Agreement on Tariffs and Trade and the World Trade 
     Organization.
       (11) Despite the deep friendship between the United States 
     and Turkey, their trading relationship remains small.
       (12) In 1998, United States merchandise exports to Turkey 
     reached $3,500,000,000.
       (13) In 1998, United States imports from Turkey totaled 
     $2,500,000,000 or less than 0.3 percent of United States 
     total imports.
       (14) A free trade agreement between the United States and 
     Turkey would greatly benefit both the United States and 
     Turkey by expanding their commercial ties.

     SEC. 3. NEGOTIATING OBJECTIVES FOR A UNITED STATES-TURKEY 
                   FREE TRADE AGREEMENT.

       The overall trade negotiating objectives of the United 
     States with respect to a United States-Turkey Free Trade 
     Agreement are to obtain--
       (1) more open, equitable, and reciprocal market access 
     between the United States and Turkey; and
       (2) the reduction or elimination of barriers and other 
     trade-distorting policies and practices that inhibit trade 
     between the United States and Turkey.

     SEC. 4. NEGOTIATION OF A UNITED STATES-TURKEY FREE TRADE 
                   AGREEMENT.

       (a) In General.--Subject to sections 5 and 6, the President 
     is authorized to enter into an agreement described in 
     subsection (c). The provisions of section 151(c) of the Trade 
     Act of 1974 (19 U.S.C. 2191(c)) shall apply with respect to a 
     bill to implement such agreement if such agreement is entered 
     into on or before December 31, 2005.
       (b) Tariff Proclamation Authority.--
       (1) In general.--The President is authorized to proclaim--
       (A) such modification or continuation of any existing duty,
       (B) such continuance of existing duty-free or excise 
     treatment, or
       (C) such additional duties
     as the President determines to be required or appropriate to 
     carry out the trade agreement described in subsection (c).
       (2) Limitations.--No proclamation may be made under 
     paragraph (1) that--
       (A) reduces any rate of duty (other than a rate of duty 
     that does not exceed 5 percent ad valorem on the date of 
     enactment of this Act) to a rate which is less than 50 
     percent of the rate of such duty that applies on such date of 
     enactment;
       (B) provides for a reduction of duty on an article to take 
     effect on a date that is more than 10 years after the first 
     reduction that is proclaimed to carry out a trade agreement 
     with respect to such article; or
       (C) increases any rate of duty above the rate that applied 
     on the date of enactment of this Act.
       (3) Aggregate reduction; exemption from staging.--
       (A) Aggregate reduction.--Except as provided in 
     subparagraph (B), the aggregate reduction in the rate of duty 
     on any article which is in effect on any day pursuant to a

[[Page S12788]]

     trade agreement entered into under paragraph (1) shall not 
     exceed the aggregate reduction which would have been in 
     effect on such day if--
       (i) a reduction of 3 percent ad valorem or a reduction of 
     one-tenth of the total reduction, whichever is greater, had 
     taken effect on the effective date of the first reduction 
     proclaimed under paragraph (1) to carry out such agreement 
     with respect to such article; and
       (ii) a reduction equal to the amount applicable under 
     clause (i) had taken effect at 1-year intervals after the 
     effective date of such first reduction.
       (B) Exemption from staging.--No staging under subparagraph 
     (A) is required with respect to a rate reduction that is 
     proclaimed under paragraph (1) for an article of a kind that 
     is not produced in the United States. The United States 
     International Trade Commission shall advise the President of 
     the identity of articles that may be exempted from staging 
     under this subparagraph.
       (4) Rounding.--If the President determines that such action 
     will simplify the computation of reductions under paragraph 
     (3), the President may round an annual reduction by the 
     lesser of--
       (A) the difference between the reduction without regard to 
     this paragraph and the next lower whole number; or
       (B) one-half of 1 percent ad valorem.
       (5) Other limitations.--A rate of duty reduction or 
     increase that may not be proclaimed by reason of paragraph 
     (2) may take effect only if a provision authorizing such 
     reduction or increase is included within an implementing bill 
     provided for under section 6(c) and that bill is enacted into 
     law.
       (c) Agreement Described.--An agreement described in this 
     subsection means a bilateral agreement between the United 
     States and Turkey that provides for the reduction and 
     ultimate elimination of tariffs and nontariff barriers to 
     trade and the eventual establishment of a free trade 
     agreement between the United States and Turkey.

     SEC. 5. CONSULTATIONS WITH CONGRESS ON NEGOTIATIONS OF A 
                   UNITED STATES-TURKEY FREE TRADE AGREEMENT.

       Before entering into any trade agreement under section 4 
     (including immediately before initialing an agreement), the 
     President shall consult closely and on a timely basis on the 
     nature of the agreement and the extent to which it will 
     achieve the purposes of this Act with--
       (1) the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate;
       (2) the congressional advisers for trade policy and 
     negotiations appointed under section 161 of the Trade Act of 
     1974 (19 U.S.C. 2211); and
       (3) each other committee of the House of Representatives 
     and the Senate, and each joint committee of Congress, which 
     has jurisdiction over legislation involving subject matters 
     that would be affected by the trade agreement.

     SEC. 6. IMPLEMENTATION OF UNITED STATES-TURKEY FREE TRADE 
                   AGREEMENT.

       (a) Notification and Submission.--Any agreement entered 
     into under section 4 shall enter into force with respect to 
     the United States if (and only if)--
       (1) the President, at least 60 calendar days before the day 
     on which the President enters into the trade agreement, 
     notifies the House of Representatives and the Senate of the 
     President's intention to enter into the agreement, and 
     promptly thereafter publishes notice of such intention in the 
     Federal Register;
       (2) within 60 calendar days after entering into the 
     agreement, the President submits to Congress a description of 
     those changes to existing laws that the President considers 
     would be required in order to bring the United States into 
     compliance with the agreement;
       (3) after entering into the agreement, the President 
     submits a copy of the final legal text of the agreement, 
     together with--
       (A) a draft of an implementing bill described in subsection 
     (c);
       (B) a statement of any administrative action proposed to 
     implement the trade agreement; and
       (C) the supporting information described in subsection (b); 
     and
       (4) the implementing bill is enacted into law.
       (b) Supporting Information.--The supporting information 
     required under subsection (a)(3)(C) consists of--
       (1) an explanation as to how the implementing bill and 
     proposed administrative action will change or affect existing 
     law; and
       (2) a statement--
       (A) asserting that the agreement makes progress in 
     achieving the objectives of this Act; and
       (B) setting forth the reasons of the President regarding--
       (i) how and to what extent the agreement makes progress in 
     achieving the objectives referred to in subparagraph (A);
       (ii) whether and how the agreement changes provisions of an 
     agreement previously negotiated;
       (iii) how the agreement serves the interests of United 
     States commerce; and
       (iv) any proposed administrative action.
       (c) Bills Qualifying for Trade Agreement Approval 
     Procedures.--The provisions of section 151 of the Trade Act 
     of 1974 apply to an implementing bill submitted pursuant to 
     subsection (b) that contains only--
       (1) provisions that approve a trade agreement entered into 
     under section 4 that achieves the negotiating objectives set 
     forth in section 3 and the statement of administrative action 
     (if any) proposed to implement such trade agreement;
       (2) provisions that are--
       (A) necessary to implement such agreement; or
       (B) otherwise related to the implementation, enforcement, 
     and adjustment to the effects of such trade agreement; and
       (3) provisions necessary for purposes of complying with 
     section 252 of the Balanced Budget and Emergency Deficit 
     Control Act of 1985 in implementing the applicable trade 
     agreement.

     SEC. 7. CONSIDERATION OF IMPLEMENTING BILL.

       (a) Congressional Consideration of Implementing Bill.--When 
     the President submits to Congress a bill to implement the 
     trade agreement as described in section 6(c), the bill shall 
     be introduced and considered pursuant to the provisions of 
     section 151 of the Trade Act of 1974 (19 U.S.C. 2191).
       (b) Conforming Amendments.--Section 151 of the Trade Act of 
     1974 (19 U.S.C. 2191) is amended--
       (1) in subsection (b)(1), by inserting ``section 6 of the 
     United States-Turkey Free Trade Agreement Act of 1999'' after 
     ``the Omnibus Trade and Competitiveness Act of 1988,''; and
       (2) in subsection (c)(1), by inserting ``or under section 6 
     of the United States-Turkey Free Trade Agreement Act of 
     1999,'' after ``the Uruguay Round Agreements Act,''.
                                  ____


               [From the Washington Post, Sept. 28, 1999]

                           A Place for Turkey

                           (By Isaiah Frank)

       As Turkish Prime Minister Bulent Ecevit visits President 
     Clinton today, an important and highly sensitive subject 
     belongs on the agenda.
       As a staunch ally of the United States, Turkey is unique. 
     It is the only member of NATO that has sought entry into the 
     European Union (EU) without success. The three most recent 
     NATO members--Poland, Hungary and the Czech Republic--are 
     already engaged in accession negotiations with the EU, but 
     turkey, whose NATO membership dates back to 1952, has been 
     kept at arm's length. Is there anything the United States can 
     do to counter the deep disappointment and alienation felt in 
     Turkey at being excluded from full acceptance into an ever 
     more economically integrated European community?
       During the Cold War, Turkey was regarded by the United 
     States and its Western allies as the main bulwark against the 
     southern expansion of Soviet power. Among NATO countries, its 
     military establishment has ranked second in size to that of 
     the United States. Since the end of the Cold War, Turkey has 
     continued its close security cooperation with the United 
     States. It played a key role in the U.S.-led Gulf War, its 
     soldiers joined U.S. troops in international peacekeeping 
     operations in Bosnia, and its provided valuable logistical 
     support to the recent U.S. air operation in Serbia. As the 
     only firmly established secular democracy among Muslim 
     states, Turkey is vital to U.S. interest in sensitive 
     regions, including the Balkans, the Caucasus, the Middle East 
     and Central Asia.
       In order to consolidate its secular and pro-Western 
     orientation as well as tighten its economic links to Europe, 
     Turkey has sought full membership in the EU virtually from 
     the organization's inception. The EU, however, has decided 
     that Turkey does not yet meet the required criteria. Instead, 
     the EU signed a customs union agreement with turkey, which 
     went into effect on Jan. 1, 1996. While Turkish officials 
     initially considered the customs union a step toward full 
     membership, it soon became clear that the European Union 
     regarded it as a substitute for full membership.
       Despite continuing official EU reaffirmations of Turkey's 
     eligibility for full membership, the reality of de facto 
     rejection has increasingly sunk in. Not only is turkey 
     omitted from the list of countries (Poland, Hungary, the 
     Czech Republic, Slovenia, Estonia and Cyprus) with which 
     accession negotiations have already begun, it is also left 
     out of a project second wave of expansion that will include 
     five additional countries: Bulgaria, Romania, Lithuania, 
     Latvia and Slovakia.
       Why is Turkey being excluded? A variety of reasons have 
     been given, including the Kurdish problem and related issues 
     of human rights, Turkey's macroeconomic situation, and the 
     opposition of Greece because of the Cyprus situation. But 
     there is some indication of a softening of the Greek 
     position, provided Turkey does not place roadblocks in the 
     way of Cyprus's current efforts to join the EU. As for the 
     Kurdish problem, Turkey is making progress in working out a 
     peaceful solution. And the EU acknowledges that the country 
     is headed in the right direction in reforming its economy.
       If EU standards for resolving these problems are ultimately 
     met, will Turkey then be admitted? Many Turkish leaders 
     believe this unlikely because of officially unspoken EU 
     apprehensions. Turkey's population of 64 million is second in 
     size only to Germany's among present and prospective members 
     of the EU. In some European circles, this sends up several 
     red flags. If admitted, would Turkey exert undue weight in EU 
     decision-making? With EU membership entailing the free 
     movement of workers, what effects would the admission of a 
     populous and relatively

[[Page S12789]]

     low-income country have on European labor markets? And 
     finally, would the EU be willing to integrate fully with a 
     country that is almost entirely Muslim? None of these 
     considerations is discussed openly, but they are clearly in 
     the background of the debate.
       The EU's equivocation has bred Turkish disaffection from 
     Europe and plays into the political hands of the Islamists 
     who as recently as 1996 were at the helm of the government. 
     Clearly, the enormous U.S. stake in a secular, Western-
     oriented Turkey warrants action by the United States to 
     offset the EU's arm's length treatment and to strengthen and 
     solidify the country's Western political and economic 
     integration.
       One such step would be for the United States to offer to 
     negotiate a free-trade agreement with Turkey. Indeed, there 
     is precedent for such a bilateral agreement, one motivated 
     more by political considerations than economic advantages, 
     and that is the 1985 U.S. free-trade agreement with Israel.
       But the economic rationale for such an agreement with 
     Turkey should not be dismissed. For Turkey the advantages are 
     obvious; the United States ranks second as a market for its 
     exports and third as a source of its imports. For the United 
     States, Turkey is one of the world's 10 big ``emerging 
     markets,'' and this country is Turkey's largest foreign 
     investor.
       A U.S.-Turkey free-trade agreement would not be a 
     substitute for Turkish membership in the EU, a goal that 
     Turkey should continue to pursue as it gets its political and 
     economic house in order. But it would help compensate for a 
     growing belief in Turkey that the country has little prospect 
     of entry into the EU mainly because of European prejudice 
     against a Muslim country. In light of Turkey's strategic role 
     as a U.S. ally in a rough neighborhood, a U.S.-Turkey free-
     trade agreement would help consolidate Turkey's Western 
     orientation and contribute to stability in a highly volatile 
     region of the world.

                          ____________________