[Congressional Record Volume 147, Number 33 (Tuesday, March 13, 2001)]
[Senate]
[Pages S2225-S2228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. GRAHAM (for himself, Mr. DeWine, Mr. Hagel, Mr. Breaux, 
        Mr. McCain, Mr. Dodd, Mr. Thompson, Mr. Biden, and Mr. Nelson 
        of Nebraska):
  S. 525. A bill to expand trade benefits to certain Andean countries, 
and for other purposes; to the Committee on Finance.
  Mr. GRAHAM. Mr. President, today I introduce a bill along with my 
colleagues Senators DeWine, Hagel, Breaux, McCain, Dodd, Thompson, 
Biden, and Ben Nelson to introduce the ``Andean Trade Preference 
Expansion Acts,'' a bill that would provide additional trade benefits 
to the countries of Bolivia, Colombia, Ecuador, and Peru.

[[Page S2226]]

  The Andean Trade Preference Act, commonly known as ATPA, was passed 
in 1991. That legislation is set to expire. If we are serious about 
halting the flow of drugs into this country, we must not let this 
happen. If we are committed to stabilizing the situation in Colombia, 
we must act this year, to both extend and expand those trade benefits.
  The office of the United States Trade Representative recently 
published a report assessing the operation of the Andean trade 
agreement so far. The report concluded that this agreement is 
strengthening the legitimate economies of countries in the region and 
is an important component of our efforts to contain the spread of 
illicit activities. Export diversification in beneficiary countries is 
increasing, net coca cultivation has declined slightly. Although there 
is still progress to be made, these countries are working 
constructively with the United States on issues of concern including 
working conditions and intellectual property protection.
  Despite this success, renewal of ATPA in its current form is not our 
goal. The landscape has changed since 1991.
  Perhaps the most significant alteration was last year's passage of 
the ``Trade and Development Act of 2000,'' which provided significant 
new trade benefits to countries of the Caribbean Basin Initiative. As a 
result of enhanced trade benefits to these countries, the Andean region 
stands to lose a substantial number of apparel industry jobs--up to 
100,000 jobs in Colombia alone. At least 10 U.S.-based companies that 
purchase apparel from Colombian garment manufacturers have already 
indicated their near-term intentions to shift production to Caribbean 
countries due to the significant cost savings associated with the new 
trade benefits afforded the region. Some of these U.S. companies have 
utilized Colombia as a manufacturing base for more than 10 years, 
providing desperately needed legitimate employment to the Colombian 
economy.
  The immediate reaction of these companies to enhanced Caribbean trade 
benefits creates a dilemma. Clearly, it does not make sense for 
Congress to provide foreign aid on the one hand, and implement trade 
legislation that puts tens of thousands of people out of work on the 
other. This bill will address that critical, unintended contradiction 
by harmonizing the trade benefits of the Caribbean and Andean nations.
  Specifically, our bill would extend duty-free, quota-free treatment 
to apparel articles assembled, cut or knit in Andean beneficiary 
nations using yarns and fabric wholly formed in the United States, and 
provide benefits to non-apparel items that were previously excluded 
from the Andean trade preferences package. These new benefits will 
create parity with the Caribbean Basin Initiative nations as well as 
expand an important source of economic and employment growth for the 
U.S. textile and apparel industry.
  The United States is at now a critical juncture with its neighbors in 
the Andean region.
  Last year, the United States government responded generously to 
Colombia's needs by providing a supplemental appropriations package of 
more than $1.6 billion dollars to help the country in its time of 
crisis. These funds were in addition to over $4.0 billion being spent 
by Colombia itself.
  Fundamental to Plan Colombia, and to the government's ability to 
succeed in its efforts to safeguard the country, will be efforts to 
encourage economic growth and provide jobs to the Colombian people. 
Today in Colombia more than one million people are displaced, the 
unemployment rate is nearly 20 percent and Colombia is experiencing the 
worst recession in 70 years. Without new economic opportunities, more 
and more Colombians will turn to illicit activities to support their 
families or seek to join the growing numbers of people who are leaving 
the country to find a better, safer future for their families.
  This ``trade plus aid'' approach to stabilizing the Andean region has 
been widely embraced. In its March 2000 report. ``First Steps Toward a 
Constructive U.S. Policy in Colombia,'' a Task Force I co-chair with 
General Brent Scowcroft recommended the extension of the ATPA, to 
include the same benefits as those contained under the Caribbean Basin 
Initiative.
  Although this bill provides benefits to all ATPA beneficiaries, it is 
particularly critical to Colombia, which in 1998 exported 59 percent of 
all textiles and apparel from the Andean region to the U.S., two-thirds 
of which were assembled and/or cut from U.S. yarns and fabric. 
Colombian President Pastrana recognizes this. In his visit to 
Washington last week he stressed that access to U.S. markets was among 
the top priorities.
  On a more comprehensive scale, passage of this legislation is 
critical to ensure that all nations in the Western Hemisphere can 
maintain their long-term competitiveness with Asian nations, 
particularly in the textile industry. At present, the textile products 
of most Asian nations are subject to quotas imposed by the Multi-Fiber 
Agreement, now known as the Agreement on Textiles and Clothing. This 
restriction on Asian textiles has enabled the nations of the Western 
Hemisphere to remain competitive, and further, the Andean region--
specifically Colombia--has become a significant market for fabric woven 
in U.S. mills from yarn spun in the U.S. originating from U.S. cotton 
growers.
  However, in 2005, these Asian import quotas will be phased out. At 
that time, textile production in both the Andean region and the 
Caribbean basin will be placed at a distinct and growing disadvantage. 
Disinvestment in the region will occur, reducing the incentive to use 
any material from U.S. textile mills or cotton grown in the United 
States.
  The Congress must act this year to renew and expand trade benefits 
for the Andean countries. If we do not move forward, the current 
benefits will expire and these countries will lose an important means 
of developing legitimate industries and employment.
  Mr. DeWINE. Mr. President, the illicit drug trade in the Andean 
region of South America is thriving. Lagging economies, weak law 
enforcement, and corrupt judiciary systems among many countries in the 
region have created an environment ideal for drug trafficking.
  The chaotic situation in Colombia illustrates this. The nation is 
suffering its worst recession in over 70 years. The unemployment rate 
is at nearly 20 percent. Not surprisingly, as the Colombian economy has 
worsened, the country's coca cultivation has skyrocketed, becoming the 
source of nearly 80 percent of the cocaine consumed in the United 
States. To make matters worse, as the illicit drug money has poured in, 
violent insurgent groups in Colombia have used it to fund their 
guerilla movements, movements creating instability not only within 
Colombia, but also across the entire Andean Region.
  Because of the dangerous and increasingly chaotic situation in the 
region, my colleagues--Senators Graham, McCain, Hagel, Breaux, Dodd, 
and Thompson--and I are introducing the ``Andean Trade Preference 
Expansion Act,'' a bill that will help establish much-needed stability 
and security in the Andean Region by promoting a strong economic 
environment for enhanced trade throughout the Western Hemisphere.
  This legislation is timely and important. The current Andean Trade 
Preference Act, which authorizes the President to grant certain 
unilateral preferential tariff benefits to Bolivia, Colombia, Ecuador, 
and Peru, is set to expire on December 4, 2001. We need to renew and 
expand this trade act not only because of its benefits for U.S. 
companies trading in the region, but also because it encourages 
economic development in Andean countries and economic alternatives to 
drug production and trafficking. I fear, Mr. President, that if the 
Andean Trade Preferences Act is not renewed by the end of this year, 
the economic and political situation in the Andean Region likely will 
destabilize further, threatening to expand an already booming illicit 
drug trade.
  The economic situation in the Andean Region is growing worse by the 
day. The nations within the region have been struggling to pull 
themselves out of one of the worst economic crises in decades. The 
recession has been more severe than anticipated, and the Andean 
Development Corporation recently forecast negative rates of growth for 
next year in Colombia, Ecuador and

[[Page S2227]]

Venezuela. Only Peru and Bolivia will grow at all, and marginally at 
best.
  The Colombian civil war and its spillover effect have further 
weakened domestic economies. Political instability has deterred foreign 
investment, and increased capital flight has put pressure on domestic 
currencies. While there are a few signs of possible recovery--including 
an increase in oil prices that will be helpful for Ecuador, Colombia 
and Venezuela--there is concern that the Andean region could experience 
a destabilizing financial crisis similar to the recent one in Asia.
  Last year, Congress and the Clinton Administration tried to address 
political instability in the Andean region through passage of ``Plan 
Colombia''--the emergency supplemental plan developed to address the 
political and social instability in the Andean region. The Plan 
established programs to strengthen Colombian government institutions 
and promote alternative crop development programs throughout the 
region. A key element of Plan Colombia is that it recognizes that if we 
fight only the Colombian drug problem, we risk creating a ``spillover'' 
effect, where Colombia's drug trade shifts to adjacent countries in the 
region.
  For Plan Colombia to succeed, it is crucial that we help bolster the 
faltering economies of the Andean countries--namely Colombia, Peru, 
Bolivia, and Ecuador--so they don't turn to the drug trade as an means 
for economic livelihood. The legislation we are introducing today--the 
Andean Trade Preference Expansion Act--will help embolden Plan Colombia 
and will help it succeed by increasing trade and economic opportunities 
within the region. Let me explain.
  The recent implementation of the Caribbean Basin Initiative, which 
provides enhanced trade benefits to nations trading with Caribbean 
countries, is having the unintended consequence of shifting economic 
opportunities away from the Andean Region to the Caribbean Basin. Such 
a shift is further shrinking the economies within the Andean Region. 
Colombia, for example, stands to lose up to 100,000 jobs in the apparel 
industry because of the CBI. The simple fact is that companies, 
including U.S.-based businesses, are moving production to the Caribbean 
Basin to capitalize on the significant cost savings associated with the 
new CBI law. Already, at least 10 U.S.-based companies that purchase 
apparel from Colombian garment manufacturers have indicated their 
intentions to shift production to the Caribbean.
  Our Andean Trade Preference Expansion Act would help correct for this 
unintended economic displacement by working in tandem with the CBI, so 
that we don't rob one region in our hemisphere to pay another. 
Specifically, our bill extends duty-free, quota-free treatment to 
apparel articles knit, assembled, or cut in an ATPA beneficiary nation 
that use yarns and fabrics wholly formed in the United States. This 
creates a measure of parity with Caribbean nations that currently 
receive trade preferences under the CBI. In addition, goods other than 
apparel that previously were not eligible for trade preferences under 
the current Andean Trade Preference Act would receive the NAFTA tariff 
rate.
  Although our bill provides benefits to all ATPA beneficiaries, it is 
particularly critical to Colombia, which, in 1998, exported to the 
United States 59 percent of all textiles and apparel from the Andean 
region. Two-thirds of those exports were assembled and/or cut from U.S. 
yarns and fabrics. We cannot allow Colombia's economy to take this kind 
of hit. Plan Colombia simply cannot be effective unless Colombia can 
improve its economy and create and maintain job opportunities. I 
believe that our new legislation will help prevent further economic 
destabilization and stands to promote future economic growth.
  Ultimately, we--as a nation--stand to lose or gain, depending on the 
economic health of our hemispheric neighbors. A more aggressive trade 
policy in the hemisphere is not only important for increasing markets 
for U.S. companies, but it also enhances stability and promotes 
security in the hemisphere. It is important to remember that a strong, 
and free, and prosperous hemisphere means a strong, and free, and 
prosperous United States. It is in our national interest to pursue an 
aggressive trade agenda in the Western Hemisphere to combat growing 
threats and promote prosperity.
  I urge my colleagues to join us in support of the Andean Trade 
Preference Expansion Act. It is the right thing to do for our neighbors 
and for our businesses here at home.
  Mr. McCAIN. Mr. President, I would like to join with Senators Graham, 
Hagel, DeWine, Dodd, Biden, Breaux, and Thompson today in introducing 
this important legislation to reauthorize the Andean Trade Preference 
Act. This legislation will renew and expand duty-free tariff treatment 
to our important trade partners: Bolivia, Colombia, Ecuador, and Peru. 
I would like to emphasize to my colleagues the importance of acting on 
this legislation, because the existing Andean Trade Preference Act will 
expire on December 4.
  Having recently visited the region, I would like to assure my 
colleagues that this program plays an important role in aiding the 
economic development of our Andean allies, and stabilizing fragile 
democracies in the region. The existing Andean Trade Preference Act has 
helped two-way trade between the United States and the region to nearly 
double in the 1990s. During this time, U.S. exports grew 65 percent and 
U.S. imports increased 98 percent. In addition, the program is 
responsible for an increase in industrial and agricultural imports from 
the Andean beneficiary countries. This economic diversification is 
beneficial for economic growth in the Andean region, and will reduce 
pressure for the citizens of the region to become involved in the drug 
trade.
  However, this program must be expanded to be truly effective. 
According to a recent study by the Congressional Research Service, only 
10 percent of the imports from the Andean region enter the United 
States exclusively under the provisions of the existing Andean Trade 
Preference Act. I join with my colleagues in supporting Senator 
Graham's legislation, because it plays an important first step in the 
reauthorization process by extending to the Andean region similar trade 
benefits to what the Congress voted to give the Caribbean region last 
year. During his confirmation hearing earlier this year, Ambassador 
Zoellick called for a ``renewed and robust Andean Trade Preference 
Act.'' I hope that my colleagues in the Senate will consider the United 
States Trade Representative's recommendations, and those of our allies 
in the Andean region, who have proven that they need expanded duty and 
quota-free treatment for their imports.
  Many of us have had the benefit of traveling to Colombia over the 
past few months to observe the American-funded drug eradication efforts 
there, and to discuss Plan Colombia with the region's leaders. During 
my visit to Colombia in February, President Andres Pastrana made clear 
that liberalized trade with the United States, in the form of renewal 
and expansion of the Andean Trade Preference Act, was a critical pillar 
of his strategy to promote alternatives to the drug trade in his 
country. Plan Colombia is premised upon reducing the power and allure 
of the narco-traffickers and their rebel supporters who threaten 
America's interest in a democratic, prosperous, and stable Western 
Hemisphere. While the military component of America's assistance 
package remains controversial at home, expanding our trade relationship 
with Colombia, a nation of industrious people and vast natural 
resources, is a logical extension of our compelling interest in 
strengthening the Colombian state and providing its people with 
rewarding economic opportunities in the legitimate economy.
  It is also important to view renewal and expansion of the Andean 
Trade Preference Act in terms of our larger trade agenda with our Latin 
American neighbors. Early reauthorization of this program will show our 
trade partners that the United States is seriously engaged in 
strengthening our trade relations and promoting interdependence in the 
region. It is my belief that the United States should pursue four 
policies this year in order to accomplish our mutually beneficial trade 
objectives with our Latin American partners:
  1. Early renewal of the Andean Trade Preference Act;
  2. Passage of trade promotion authority for the President;
  3. Completion of negotiations on a free trade agreement with Chile; 
and

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  4. Accomplishment of serious progress on the Free Trade Area of the 
Americas negotiations in order to meet an early conclusion of these 
negotiations in 2003.
  I look forward to working with the President and my colleagues in the 
Senate to pass this legislation in a timely manner before the December 
expiration. It is in our nation's economic and national security 
interests to reauthorize and expand trade benefits for the Andean 
region.
                                 ______