[Congressional Record Volume 147, Number 125 (Monday, September 24, 2001)]
[Senate]
[Pages S9679-S9693]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
UNITED STATES-JORDAN FREE TRADE AREA IMPLEMENTATION ACT
The PRESIDENT pro tempore. Under the previous order, the Finance
Committee will now be discharged from further consideration of H.R.
2603, and the Senate will now proceed to its consideration.
The clerk will report the bill by title.
The assistant legislative clerk read as follows:
A bill [H.R. 2603] to implement the agreement establishing
a United States-Jordan free trade area.
[[Page S9680]]
The PRESIDENT pro tempore. Under the previous order, there will now
be 2 hours of debate on the bill with 1 hour under the control of the
Senator from Texas, Mr. Gramm, and 1 hour under the control of the
Senator from Montana, Mr. Baucus, or his designee.
What is the will of the Senate? Time is running.
The Senator from Montana, Mr. Baucus.
Mr. BAUCUS. Mr. President, I rise to urge the adoption of H.R. 2603.
That is a bill to implement the United States-Jordan Free Trade
Agreement. The House passed the bill by a voice vote just before the
August recess. The Finance Committee reported a virtually identical
bill, also immediately before the August recess. Only two Members
dissented when the Finance Committee reported that bill out.
I have advocated the approval of this agreement since it was
negotiated by the Clinton administration last year. Finally, after a
number of hitches, a number of setbacks, the administration and
Congress appear poised to give final approval to the United States-
Jordan Free Trade Agreement.
This implementing bill sends an unmistakable signal of support for an
important friend, an important ally in the Middle East. That signal was
important when the agreement was signed last October. It is even more
important now. Jordan has been a steadfast friend in its support for
the United States' efforts to bring peace to the Middle East. We all
remember the critical role played by King Hussein a few years ago. King
Abdullah has maintained that support.
As we all know, Jordan has been steadfast in its support for America
in the wake of the terrorist attacks against us. In a September 12
letter to President Bush, the King condemned the attacks and pledged
Jordan's support in our fight against terrorism. As he put it, Jordan
is committed to work with the United States, ``to ensure that the
enemies of peace and freedom do not prevail.''
This is precisely the kind of commitment we now need from our friends
and our allies. Accordingly, we should do whatever we can to reinforce
Jordan's support. By implementing the free trade agreement, we will do
just that.
But that is not the only reason we should pass the implementing bill.
To put it simply, it is a solid agreement that is not only good for
Jordan but it is also good for the United States and good for the world
trading system. The agreement itself is closely modeled upon the United
States-Israel Free Trade Agreement. It provides for the staged
elimination of tariffs and other trade barriers, provides for extensive
intellectual property protection, and extends trading rules to new
issues such as electronic commerce.
The United States-Jordan Free Trade Agreement is truly a 21st century
free trade agreement. But I do not just mean it addresses high-
technology trade issues. Our free trade agreement with Jordan also
demonstrates a commitment to a progressive trade agenda, an agenda that
recognizes the links between trade and environmental standards and
between trade and labor standards, an agenda that puts these important
matters on the same plane as market access, the protection of
intellectual property rights, and other matters.
Some Senators have criticized the labor and environmental provisions
in the Jordan agreement. Let me respond and explain why these
provisions are, in fact, positive developments that point the way
toward further progress.
In the areas of labor and environment, the United States and Jordan
have undertaken a straightforward, common-sense obligation. Both
countries have strong labor and environmental laws. Recognizing this,
both countries agree to effectively enforce their own laws.
This simple obligation reflects a recognition that as the more
glaring tariff and nontariff barriers come down, measures such as a
lowering of labor and environmental standards can have a trade
distorting effect as well.
Some have charged that the labor and environmental provisions in the
Jordan agreement encroach on the sovereignty of the United States. That
charge is basically--in fact, it is plainly--wrong.
The provisions of the agreement do not in any way prevent us from
enacting and enforcing the laws and regulations that we decide are
appropriate to protect our environment and the health and safety of our
own workers. This is a critical issue, so I want to be specific. For a
labor or environmental measure to be challenged under the agreement, it
must meet each of three conditions. Remember, this is for a labor or
environmental measure to be challenged under the agreement. I will now
briefly go over the three conditions that must be met.
First, it must constitute a sustained or recurring course of action
or inaction--a sustained or recurring course of action or inaction.
Second, it must affect trade. It cannot be something that does not
affect trade. It must affect trade. Third, it must be beyond the bounds
of the reasonable exercise of discretion in such matters.
Further, no arbitrator can order the United States to change its
practices pursuant to the agreement. Let me repeat that. No arbitrator
can order the United States to change its practices pursuant to the
agreement.
Under the agreement, dispute settlement will be based on nonbinding
mediation--not arbitration but nonbinding mediation. That is very
important. In other words, even in the unlikely event that the three
conditions are met, and a mediator--not an arbitrator--and a mediator
finds against the United States, that determination is purely advisory,
intended only to guide the parties in resolving any disputes through
consultation.
To my mind, the approach to labor and environment in the Jordan
agreement makes perfect sense. Consider the alternative. Would we
really want to enter into a trade agreement with a country intent on
weakening enforcement of its labor and environmental laws in order to
gain a trade advantage? I don't think so. Yet the opponents of the
labor and environmental provisions would permit precisely that result.
That is not just bad policy, it is bad environmental policy, it is bad
labor policy, and bad trade policy. Indeed, I hope that by including
labor and environmental provisions in the Jordan agreement we will set
a precedent for future trade agreements.
In conclusion, let me stress that getting the United States-Jordan
agreement off the ground would be essential even if we were not
currently mobilizing support for a global campaign against terrorism.
The agreement represents an important expression of American support
for a key partner in the Middle East as well as a model of a
progressive free trade agreement. I hope the President will sign it
immediately so the benefits to both the United States and Jordan can
begin to flow.
Mr. President, I suggest the absence of a quorum.
The PRESIDENT pro tempore. The absence of a quorum has been
suggested. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BAUCUS. Mr. President, I ask unanimous consent the order for the
quorum call be dispensed with.
The PRESIDENT pro tempore. Without objection, it is so ordered. The
Senator from Montana, Mr. Baucus.
Mr. BAUCUS. Mr. President, in order to avoid dead time in the Senate
while we are waiting for other Senators to speak, I would like to read
into the Record two letters. One by our United States Trade
Representative, Ambassador Robert Zoellick, to Jordan's Ambassador to
the United States, and the other by Ambassador Muasher to USTR
Zoellick. The letters are identical. They were exchanged on July 23 of
this year in order to demonstrate common agreement on a critical point.
Should any differences arise under the Agreement, my
Government will make every effort to resolve them without
recourse to formal dispute settlement procedures.
In particular, my Government would not expect or intend to
apply the Agreement's dispute settlement enforcement
procedures to secure its rights under the Agreement in a
manner that results in blocking trade. In light of the wide
range of our bilateral ties and the spirit of collaboration
that characterizes our relations, my government considers
that appropriate measures for resolving any differences that
may arise regarding the Agreement would be bilateral
consultations and other procedures, particularly alternative
mechanisms, that will help to secure compliance without
recourse to traditional trade sanctions.
Mr. President, again, this is an exchange of letters between
Ambassador Zoellick and the Ambassador representing Jordan.
[[Page S9681]]
I ask unanimous consent to have those letters printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Executive Office of the President,
Washington, DC, 20508, July 23, 2001.
His Excellency Marwan Muasher,
Ambassador of the Hashemite Kingdom of Jordan to the United
States.
Dear Mr. Ambassador: I wish to share my Government's views
on implementation of the dispute settlement provisions
included in the Agreement between the United States of
America and the Hashemite Kingdom of Jordan in the
Establishment of a Free Trade Area, signed on October 24,
2000.
Given the close working relationship between our two
Governments, the volume of trade between our two countries,
and the clear rules of the Agreement, I would expect few if
any differences to arise between our two Governments over the
interpretation or application of the Agreement. Should any
differences arise under the Agreement, my Government will
make every effort to resolve them without recourse to formal
dispute settlement procedures.
In particular, my Government would not expect or intend to
apply the Agreement's dispute settlement enforcement
procedures to secure its rights under the Agreement in a
manner that results in blocking trade. In light of the wide
range of our bilateral ties and the spirit of collaboration
that characterizes our relations, my Government considers
that appropriate measures for resolving any differences that
may arise regarding the Agreement would be bilateral
consultations and other procedures, particularly alternative
mechanisms, that will help to secure compliance without
recourse to traditional trade sanctions.
Sincerely,
Robert B. Zoellick,
U.S. Trade Representative.
____
Embassy of the H. K. of Jordan,
Washington, DC, July 23, 2001.
Hon. Robert B. Zoellick,
U.S. Trade Representative,
United States of America.
Dear Mr. Ambassador: I wish to share my Government's views
on implementation of the dispute settlement provisions
included in the Agreement between the Hashemite Kingdom of
Jordan and the United States of America on the Establishment
of a Free Trade Area, signed on October 24, 2000.
Given the close working relationship between our two
Governments, the volume of trade between our two countries,
and the clear rules of the Agreement, I would expect few if
any differences to arise between our two Governments over the
interpretation or application of the Agreement. Should any
differences arise under the Agreement, my Government will
make every effort to resolve them without recourse to formal
dispute settlement procedures.
In particular, my Government would not expect or intend to
apply the Agreement's dispute settlement enforcement
procedures to secure its rights under the Agreement in a
manner that results in blocking trade. In light of the wide
range of our bilateral ties and the spirit of collaboration
that characterizes our relations, my Government considers
that appropriate measures for resolving any differences that
may arise regarding the Agreement would be bilateral
consultations and other procedures, particularly alternative
mechanisms, that will help to secure compliance without
recourse to traditional trade sanctions.
Sincerely,
Marwan Muasher,
Ambassador of the Hashemite Kingdom
of Jordan.
Mr. BAUCUS. Mr. President, I want to say a few words about these
letters, since many have referred to them as the U.S.-Jordan Agreement
has moved through the Congress.
First, this exchange of letters should not have been necessary. We
should have passed this legislation months ago, without the exchange of
letters.
Second, the exchange of letters does not change the U.S.-Jordan
Agreement one jot. It simply reflects the views of the current
Administration and the Government of Jordan. It is not an amendment to
the Agreement. Indeed, it is not even binding on future
Administrations.
Clearly, the number of disputes between our two countries will be
few, if any. In the unlikely event we do go to formal dispute
settlement, we should avoid resorting to sanctions, whatever the
subject of the dispute. The exchange of letters expresses that view.
However, if in a particular case a future Administration should
decide that sanctions are appropriate, it will be free to act
accordingly. Nothing in this exchange of letters changes that.
Mr. President, I now would like to read into the Record article 5 of
the agreement, pertaining to the environment.
1. The Parties recognize that it is inappropriate to
encourage trade by relaxing domestic environmental laws.
Accordingly, each Party shall strive to ensure that it does
not waive or otherwise derogate from, or offer to waive or
otherwise derogate from, such laws as an encouragement for
trade with the other Party.
2. Recognizing the right of each Party to establish its own
levels of domestic environmental protection and environmental
development policies and priorities, and to adopt or modify
accordingly its environmental laws, each Party shall strive
to ensure that its laws provide for high levels of
environmental protection and shall strive to continue to
improve those laws.
3. (a) A Party shall not fail to effectively enforce its
environmental laws, through a sustained or recurring course
of action or inaction, in a manner affecting trade between
the Parties, after the date of entry into force of this
Agreement.
(b) The Parties recognize that each Party retains the right
to exercise discretion with respect to investigatory,
prosecutorial, regulatory, and compliance matters and to make
decisions regarding the allocation of resources to
enforcement with respect to other environmental matters
determined to have higher priorities. Accordingly, the
Parties understand that a Party is in compliance with
subparagraph (a) where a course of action or inaction
reflects a reasonable exercise of such discretion, or results
from a bona fide decision regarding the allocation of
resources.
4. for purposes of this Article, ``environmental laws''
mean any statutes or regulations of a Party, or provision
thereof, the primary purpose of which is the protection of
the environment, or the prevention of a danger to human,
animal, or plant life or health, through:
(a) the prevention, abatement or control of the release,
discharge, or emission of pollutants or environmental
contaminants;
(b) the control of environmentally hazardous or toxic
chemicals, substances, materials and wastes, and the
dissemination of information related thereto; or
(c) the protection or conservation of wild flora or fauna,
including endangered species, their habitat, and specially
protected natural areas in the Party's territory, but does
not include any statutes or regulations, or provision
thereof, directly related to worker safety or health.
Again, to summarize, Mr. President, the labor and environmental
provisions are somewhat contentious. They are framed in such a way that
I think it helps labor and the environment in both the United States
and Jordan, and in a way that does not in any way intrude upon American
sovereignty.
Let me repeat: The simple obligation that the United States and
Jordan make reflects a recognition that as the more glaring tariff and
non-tariff barriers come down, measures such as labor and environmental
standards may have an effect on trade. Measures that may have a trade-
distorting effect have been dealt with in past trade agreements. Since
a lowering or a suppression of labor and environmental standards may
distort trade, these too should be dealt with in trade agreements.
The idea here is to encourage countries to protect labor and labor
rights and to protect the environment in ways that do not distort
trade.
The provisions of this agreement do not in any way prevent us from
enacting and enforcing the laws and regulations that we decide are
appropriate to protect our environment and the health and safety of our
workers.
For a labor or environmental measure to be challenged under the
agreement, it must meet three conditions. I think it is important to
re-state what those three conditions are.
First, a measure must constitute a sustained or recurring action or
inaction. It can't be just a single act by the President or by the
Congress. It has to be a sustained or recurring action in order for a
labor or environmental provision to be deemed trade distorting.
Second, it must affect trade. An environmental action or labor action
which may have a significant effect on the United States but does not
affect trade is not actionable.
Third, it must be beyond the bounds of a reasonable exercise of
discretion.
There are certainly matters that may slightly distort trade, and may
arguably be sustained or recurring. But if the action is within the
bounds of a reasonable exercise of discretion by the United States,
then no action is permissible.
Even if those tests are met, we move to the question of what sort of
dispute settlement is provided for in this agreement. In this agreement
there is no binding dispute settlement. There is consultation, but that
is it. There is no arbitration in this agreement. There is no
arbitration panel, no judge, and no
[[Page S9682]]
tribunal. Rather, under this agreement, if one country thinks each of
the three conditions is met, it may request non-binding mediation, and
not arbitration. If a mediator finds that an action is inappropriate
under this agreement, that finding is non-binding. And the parties will
then move toward consultation, trying to work out what seems to make
the most sense. Even if the mediator finds against the United States,
the United States cannot be forced to follow the recommendation of the
mediator.
The argument against this provision is that it intrudes upon American
sovereignty, that it commits the United States to at least listen to a
mediator, and at least consult with Jordan on labor and environmental
matters.
I think that is not much of an argument against the agreement,
because I think we want to encourage labor and environmental standards
that are non-trade-distorting between the two countries.
Let's say in this case that Jordan implements a labor or
environmental action that is trade distorting. Absent the provisions of
the agreement, it would be totally within bounds of Jordan to do so.
But at least here we would have the opportunity to discuss the matter
with Jordan. Consider what would happen if there were no labor or
environment provisions in this agreement. In that case, could enact a
trade-distorting labor law or an environmental law that hurts American
trade and workers, and that hurts our economy, and we would have no
recourse whatsoever. I think we want some recourse.
The provisions in this agreement allow some recourse, in that both
sides obligate themselves not to enact trade- distorting measures on
labor and the environment. If one country does, there is at least a
process whereby the countries can discuss it. The action by the
mediator, if he takes any action, is not binding upon either party.
So I think these are very good provisions. I think they are wise, and
therefore, the agreement is something our country should approve and
the President should sign very quickly.
Mr. President, I suggest the absence of a quorum.
The PRESIDENT pro tempore. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. BAUCUS. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER (Mr. Bayh). Without objection, it is so
ordered.
Mr. BAUCUS. Mr. President, I see my good friend from North Dakota is
ready to speak. But before he does speak, I would like to reemphasize
and underline the point that trade agreements properly include not only
the very traditional trade matters, such as tariffs, quotas, and
subsidies, but they also include other matters which do have an effect
on trade. I would like to suggest what a few of them are.
For example, the length of product patents and copyrights on music
has only recently been addressed in trade agreements. These are not
tariffs, quotas, or subsidies, but they certainly affect trade. Thus,
these issues were addressed in the Uruguay Round.
What about the use of names, such as ``champagne,'' on a product
label? Some suggest that the use of the word ``champagne'' is not
generic because it means a particular region of the world--in France,
Champagne. That was an issue brought up and included in the Uruguay
Round.
What about payments to farmers to promote conservation practices,
such as land set-asides, or low till agriculture? These are not
tariffs, quotas, or subsidies, but they definitely affect trade. In
fact, this is a current trade issue with the Europeans. They are very
concerned about the actions of the United States in that area.
What about the placement of products on store shelves, just putting
products on store shelves? For example, we had a dispute with Canada
over distribution of beer and other alcoholic beverages. The point is,
obviously, that trade agreements do include matters, and should include
matters, which could have the effect of distorting trade. And if a
country enacts environmental laws or labor laws that have the effect of
distorting trade, I think most Americans would think that, if properly
worded, in a common-sense way, they, too, should be addressed in trade
agreements. That is what we are trying to do with this legislation.
This is not a huge leap. This is not unreasonable. This is not radical.
This is very modest, if you will, but very important.
I urge Senators to look at this legislation closely and look at it in
that light. When they do, I think they will recognize this is an
agreement that should pass and be approved by the Senate and signed by
the President very quickly, particularly in light of the current
situation in the Mideast. But apart from the Mideast situation, on its
merits only, this is a very good agreement.
Mr. President, I yield to my friend from North Dakota for--how many
minutes?
Mr. DORGAN. Ten minutes.
Mr. BAUCUS. Ten minutes.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I have come to this Senate Chamber to
support the trade agreement that is brought to the floor today. I
believe it will be approved by the Senate by unanimous consent. Perhaps
not, but I am told that it will be approved by the Senate, in any
event.
I have been a critic of our trade policies. I have been a critic and
have voted against a fair number of trade agreements. This trade
agreement, it seems to me, is a reasonable agreement. It is with an
abiding friend, Jordan, that has been a very helpful country to us. We
have had a long and good friendship with the country of Jordan. This
trade agreement includes in it some provisions dealing with the
environment and labor. I think this is a breakthrough and a step in the
right direction.
While trade relations between the United States and Jordan are
important, the size of our trade is not very extensive. As a trading
partner, Jordan ranks 98th.
While I do not think the U.S.-Jordan Free Trade Agreement is going
to, in one way or another, affect our country's trade balance, I want
to say that at this time and place our country needs to worry about its
trade policies on a much broader context.
I have brought a chart with me that shows our country's ballooning
trade deficit. For years, we have seen relentless growth in it. At the
same time, there has been a systematic lack of concern among
policymakers about it. It's as if they say: Well, it is happening, so
let it happen.
It injures this country to have this kind of relentlessly growing
trade deficit. Last year the merchandise deficit was $452 billion. Our
deficit with China was $84 billion; with Japan, $81 billion; and with
the European Union, $55 billion. That is almost $1.25 billion a day.
Every single day, 7 days a week, we are buying more from abroad than we
are exporting.
Now, what does that have to do with the current circumstances in the
United States? Given the issues of national security, it is important
for us to understand that no country can long remain a strong country
unless it has a strong, vibrant manufacturing base. We are eroding the
manufacturing base of this country.
One thing that is not in this trade agreement--and it has never been
in any trade agreement that I am aware of--is something that deals with
currency fluctuations.
Our manufacturing sector has now discovered that when it tries to
sell abroad, it is much more difficult. Due to currency fluctuations,
it 30 percent more expensive to sell a product abroad than it was 5
years ago. This increase has nothing at all to do with the cost of
manufacturing the product. It is solely due to the value of our
currency.
Because of currency fluctuation, our manufacturing base in this
country is being hurt very substantially. There are some who say: Well,
the doctrine of comparative advantage ought to determine how we trade,
and we ought not worry about whether we retain a strong manufacturing
sector in this country. I strongly disagree with that belief.
No country can remain strong unless it has a very vibrant
manufacturing base. Yet, due to currency fluctuations that have not
been accounted for in our trade agreements, our manufacturing base has
been undercut.
[[Page S9683]]
We need to negotiate currency fluctuation mechanisms into our trade
agreements. We may sign trade agreements that lead to reductions in
tariffs. But if the currency fluctuates, and we don't have any
mechanisms in place, U.S. exports may end up being more expensive, and
U.S. imports may be less expensive.
Our currency has fluctuated dramatically over the last few years. The
U.S. dollar has risen about 40 percent against the Canadian dollar in
the last 10 years. Generally speaking, the U.S. dollar has had a 30-
percent increase in value versus 5 years ago. It is worth 10 percent
more just a year ago.
On the television news people talk about the ``strong dollar.'' That
is the wrong term. They should be saying, the ``Expensive dollar''. The
dollar is more expensive today relative to other currencies. When our
dollar is more expensive relative to other currencies, it means our
manufacturers are at a disadvantage when competing against the rest of
the world.
My point is very simple: In these days, we are all very concerned
about national security. And we should be. We are concerned about what
is going to happen around the world with respect to terrorism and our
aggressive approach in trying to deal with it. All of us want to speak
as one; we want America to have one voice. With relentless
determination, we want to take on terrorists and do what is necessary.
Part of national security is in the area of international trade. It
is important that we straighten out the problems that have assisted in
eroding our manufacturing base and have, at the same time, weakened our
country from the inside.
I met with the president of one of the Nation's large manufacturers
this morning. It was coincidental and had nothing to do with speaking
on this bill. The products that this country manufactures have been
named, several times, by Fortune magazine as all-American products, the
best in the world. The products are made in the finest manufacturing
plant in the world; a plant that uses the finest state-of-the-art
robotics. There is no manufacturing plant that is more high tech or
more modern than the one used by this company.
Yet, the company has discovered that, when trying to sell their
product around the rest of the world, it has become more and more
difficult. It is not because their product can't compete, but, rather,
it is because the fluctuation of currency has made their product more
expensive relative to the similar products manufactured in other
countries. The president of this company said: The value of the dollar
is hurting our company badly. And it is not just his company. It is
true all over America.
Jerry Jasinowski, president of the National Association of
Manufacturers, recently remarked that the dollar is overvalued and that
its strong value has led U.S. manufacturers to have little pricing
power. In its annual report, the Association noted that: ``The dollar
has reached a point at which it is pricing many U.S. goods out of world
markets and making it harder to compete against imports here at home.''
That was from the National Association of Manufacturers.
My only point is this: I am going to support this trade agreement
with Jordan because at this point in time it is the right thing to do.
Right now, we are not talking about trade policy. With respect to trade
policy, I have been a constant critic and will remain so. I voted
against the North American Free Trade Agreement. I voted against GATT.
Had I had a chance to vote against the bilateral agreement with China,
I would have voted against it in an instant.
If I might, as an aside, just point out, our negotiators, after long
negotiations, agreed to allow China to have a tariff on U.S.
automobiles that is 10 times higher than our tariff on Chinese
automobiles sold in the United States. We agreed to a 2.5-percent
tariff on Chinese automobiles, while they have a 25-percent tariff on
U.S. automobiles. This is just a small example of what has happened to
us in every trade agreement of consequence.
It is long past time for our country to pay attention. The trade
deficit is injuring the United States. Our trade agreement with Jordan
will have almost nothing to do with the deficit and I will support it.
It is the first agreement I have supported in a long time.
The job in international trade is to bring NAFTA back and renegotiate
it. We need to get rid of those bilateral trade agreements in which our
country has a major disadvantage. We recently lost in the Chinese
bilateral agreement. And we lost in the agreements we have had on GATT.
People say: That is just the way things are. I say: It is not the way
things are. It is the way we allow them to be. We don't have the
backbone, the nerve, or the will to stand up and begin to say: We
negotiate on behalf of the United States of America and we demand fair
trade.
If I could have just another minute, let me go through a couple of
examples, lest people think this is all rhetoric.
How much time do I have remaining?
The PRESIDING OFFICER. Thirty-five seconds.
Mr. DORGAN. I assume the Senator from Montana is delighted I am
supporting the bill and probably not happy that I would talk about
other trade problems.
Mr. BAUCUS. I might ask how much time remains on our side?
The PRESIDING OFFICER. Twenty minutes.
Mr. BAUCUS. Mr. President, I will let the Senator speak for a few
more minutes. Progress is progress. This is the first time the Senator
has supported a trade agreement. I know in the future he will support
others. I very much appreciate his taking the time to support this
agreement. I yield the Senator another couple minutes.
Mr. DORGAN. Mr. President, I am overwhelmed by the additional
minutes.
I have a couple of examples, if I might, on trade issues. Ask those
who are working on these issues in the U.S. Trade Representative's
office, in the Commerce Department, and those in Congress to try to
address these issues with us.
Motor Vehicles in Korea. Last year, we had about 570,000 vehicles
shipped into the United States from Korea. Do you know how many
vehicles we shipped to Korea? Seventeen hundred. Five hundred seventy
thousand vehicles this way, 1,700 that way. Why? Because of the tariff
and taxes, it raises substantially the price of American cars sold in
Korea. It is not just price. There are other difficulties too in
selling foreign vehicles in Korea. Standards and perceptions also play
roles. The result is, we are not shipping cars to Korea. They are
flooding our markets with theirs.
Canada and Stuffed Molasses. Go to Canada and watch them load up
Brazilian sugar on top of liquid molasses so they can ship it down here
in the form of stuffed molasses. Then they take the sugar out and send
the molasses back. Why? To violate U.S. trade laws.
Japan and Steak. Go to Tokyo and have a T-bone steak and understand,
if it came from the United States, it had a 38.5-percent tariff on it,
12 years after the last beef agreement.
People think this is all humorous and interesting. The fact is, it
all represents the failure of this country to stand up for its
producers. This country ought not be bashful about standing up for its
producers, its manufacturers, American men and women and American
businesses, who only demand the opportunity to compete fairly. It is
not fair when currency fluctuations make our products 40 percent more
expensive in foreign countries. We say that doesn't matter, but it does
matter. It is not fair. Unfairness matters. We should and must be
willing to compete in international trade, but the competition ought to
be fair.
I thank my colleague from Montana. I will support this trade
agreement. It is a small one, not much of a trade consequence to us, in
my judgment. It is written marginally better than previous agreements
because it has labor and environmental issues in it.
There is a big job ahead of us. We need to try and deal with the
ballooning trade deficit. We need to try to convince the American
people that what we are doing represents their best interests. We need
to expand trade but it must be done in a manner that is fair to them.
I will have more to say about international trade at some future
point in time. I yield the floor.
[[Page S9684]]
Mr. BAUCUS. Mr. President, I thank my good friend from North Dakota.
He raises a very good point. Clearly, currency fluctuation certainly in
the short term distorts trade almost to the magnitude which he
suggested, a 30 to 40 percent differential.
It is also true that, as imperfect as markets are in the long-term,
the relative economic strength of countries tends to reflect the value
of a country's currency--not entirely but tends to. There have been
times when the dollar is low; there are times when the dollar is high.
It is very difficult to write into an agreement how to manage currency
fluctuations, extremely difficult, particularly with larger countries
such as the United States, Japan, the EU, with a single-currency
market.
If the United States were to peg exchange rates vis-a-vis those other
countries, it would be difficult for those countries to agree. I doubt
that they would. Japan tends to like a low yen. It kind of likes the
United States having a high dollar. I doubt that Japan would want to
address exchange rates in a trade agreement. Could we force them to in
a trade agreement? I don't know. It would be difficult. The same
applies to the EU.
Let's say we were able to peg an exchange rate. Let's say it happened
that the countries all agreed. Let's say that one of the country's
economies deteriorates, for example, the United States or Japan or some
other one. If the currencies are pegged, then it is going to be harder
for that country to retain its economic strength, at least with respect
to trade.
There will be other distortions. It is like a balloon. If we stop
natural competitive pressures worldwide from operating through exchange
rates, the problem is going to pop up someplace else. I don't know that
we have fully thought through where the ``someplace else'' might be in
any rational discussion of exchange rates to include an attempt to
address that consideration.
I might add that, to some degree, this is an external-internal
matter. It is much more complicated than what meets the eye. The U.S.
Government, in many administrations, tends not to discourage a high
dollar policy. Why is that? The reason is because the U.S. Government
tends to be worried about inflation, as well as other considerations,
in addition to the trade imbalance, the current imbalances.
As my friend from North Dakota said--and he is right--trade deficits
have been burgeoning, and it is a problem. To say that currency
exchange provisions will solve the problem, I think, doesn't quite do
it. The U.S. tends to be a country with a favored currency. We are
perceived to be strong and to be dynamic, even in the wake of the
events in the last several weeks. Investors worldwide tend to like
dollars as opposed to other currencies. That tends to drive up the
value of the dollar.
There are a lot of factors to be considered here. Having said all
that, I do agree with the Senator that at least an attempt should be
made. We should at least have a more open discussion of these issues. I
don't think our Treasury Secretary, or our President, or anybody else
of stature in the executive branch, or the Chairman of the Federal
Reserve should have an open discussion of these matters, for fear of
people misinterpreting what they may be saying. But I do think it is
important for the Congress, in the appropriate setting and in the
appropriate situation, to begin to examine all the ramifications of
exchange rates. It is extremely complicated. In smaller countries we
can deal with it, but in larger countries, as in Japan, and with the EU
beginning next January, it is going to be difficult.
Mr. DORGAN. Will the Senator yield for a question?
Mr. BAUCUS. I am happy to yield.
Mr. DORGAN. Let me say that it was not my intent to say that solving
the issue of fluctuating currencies would solve the trade problem. You
cannot solve the trade problem without addressing the fluctuation of
currency values. There are many other issues--although the fluctuating
value of currencies is a 500-pound gorilla issue, it is not the only
issue. I don't mean to suggest that if you solve that, you solve the
problems. There are more.
Mr. BAUCUS. Mr. President, I reserve 10 minutes. How much time is
remaining?
The PRESIDING OFFICER. Twelve minutes.
Mr. BAUCUS. Mr. President, I reserve myself 5 minutes. I reserve the
majority leader 5 minutes when he wishes to speak on the bill.
I yield to my good friend from Virginia who I think wants to speak on
the bill. Can the Senator take 5 minutes?
Mr. ALLEN. I say to the Senator from Montana that I will try to say
what I want to say in support of this measure in 5 minutes.
Mr. BAUCUS. I yield the Senator from Virginia, Mr. Allen, 5 minutes.
Mr. ALLEN. Mr. President, I rise in support of the United States-
Jordan Free Trade Agreement. First, I congratulate Chairman Baucus and
Senator Grassley for their work in producing this very important
legislation, which is a significant step forward in making Jordan a
world partner with the United States.
Most of the debate on this matter is centered on the new ground which
this measure makes in including multiple worker rights provisions in
the body of the U.S. trade agreement, rather than as a side agreement,
for the first time.
The volume of the bilateral trade between the United States and
Jordan throughout the 1990s was consistently modest. Therefore, it is
thought, this agreement is unlikely to have any great immediate or
dramatic impact on the volume of bilateral trade.
However, I wish to share with my colleagues what this agreement means
to the Commonwealth of Virginia and, particularly, to the Albemarle
Corporation, headquartered in Richmond, VA.
Albemarle is a worldwide manufacturer and marketer of specialty
chemicals, such as bulk ibuprofen, biocide products, and flame
retardants. Nearly 50 percent of the corporation's revenues are derived
from products that are sold outside the United States.
Several years ago, Albemarle Corporation began negotiations with the
Arab Potash Company to create a joint venture company that will process
bromine and bromine derivatives from the Dead Sea in Safi, Jordan. This
agreement will allow Albemarle to bring the bromine into the United
States tariff free. It will be actually shipped to Albemarle's facility
in Magnolia, AR, for final processing.
This will represent a multimillion-dollar investment and it will be
used for a variety of products, such as flame retardants for TVs and
computers, and other products, and it obviously will provide Albemarle
with increased marketing opportunities globally for these lines of
products.
It is anticipated that the capital outlay for this joint venture will
be $150 million. This outlay makes this joint venture the largest U.S.-
Jordanian private venture in Jordan to date. At full operation, they
will be creating over 200 new jobs at the plant near Safi and its main
Amman office.
I congratulate King Abdullah and his government for their efforts
leading to Jordan's accession to the World Trade Organization.
Acceptance by the World Trade Organization, combined with Jordan's
economic reforms, are significant steps forward to making Jordan a
world partner with the United States.
These developments also made Albemarle more excited about conducting
business with its Jordanian partners. This free trade agreement is
another step toward solidifying our relationship and placing Virginia
products on the same tariff footing as products from other countries.
I believe fair and free trade is the best way to increase trade,
encourage economic development, and improve investment opportunities
for all involved. It is important that the achievements made by King
Abdullah and the signing of this free trade agreement be recognized and
ratified by the Senate. For that reason, I urge my colleagues to
support this measure.
I yield the floor.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mr. GRAMM. Mr. President, how much time do I have?
The PRESIDING OFFICER. One hour.
Mr. GRAMM. Mr. President, I rise today to support the Jordanian free
trade agreement, but I support it with reservations. I am determined
that the adoption of this agreement not set a precedent for the future.
What I would like to try to do, even though I know it
[[Page S9685]]
may take a little time to do so, is explain to my colleagues the
problems with this agreement, the problem that we have when we bring
non-trade matters into fast track, and the very real sovereignty
questions that are raised by this small and seemingly insignificant
trade agreement.
I would like to try to explain the logic of fast track and its
history and, within that context, make it clear that, in the current
international crisis in which we find ourselves, I have decided to
withdraw my opposition to this agreement and, in the process, see it
become law. In withdrawing that opposition in a moment of crisis where
we need to reconfirm our bond of friendship with Jordan, I wish to make
it very clear that in doing this we are not setting a precedent for the
future.
Now, having outlined all that, let me start at the beginning and try
to explain the logic of fast track and the problems we are going to
have to address. The plain truth is that no one wants to address these
issues, but they are there whether we like them or not. Therefore, at
some point, we are going to have to come to grips with them when we
adopt a bill that will provide what we used to call fast-track
authority and now call trade promotion authority.
Let me begin at the beginning. America, in the postwar period,
immediately following World War II, recognized that world trade was a
powerful engine for creating wealth and democracy and, in essence,
remaking the world in our image.
We had an incredible bipartisan consensus on trade: that neither
party would try to use trade to politically benefit itself in the
American electoral process because trade was too important in promoting
prosperity and democracy and in fighting communism in the postwar
period.
In that context, we adopted what was then called fast-track trade
authority, which gave the Executive some remarkable powers. Under fast
track, a President could negotiate a trade agreement which, when it
came before Congress, would be unamendable, and all of the Senate rules
related to unlimited debate and unlimited amendment would be waived;
further, there would be a time limit for consideration, and Congress
would then simply have the ability to vote yes or no.
That made sense in the following context: No. 1, Presidents argued,
and I believe persuasively, that if you are going to negotiate a trade
agreement where both sides give and take, you cannot then have that
agreement be subject to further change, by Congress, after the fact.
That is a persuasive argument, in my opinion.
The second argument was that we were talking about a limitation of
the constitutional prerogatives of Congress under article I of the
Constitution, and we had agreed to limit those powers because we were
talking about only external matters, such as protective tariffs. We
were not making domestic law, but were simply setting out trade
agreements that involved external pricing of American and foreign
products but did not make law in America that would govern the well-
being of our people.
With those two very strong arguments, we adopted fast-track
authority, and let me say, the evidence is overwhelming that we were
successful.
When the Berlin Wall came down, it came down in part because we had
the resolve to keep Ivan back from the gate, we were strong enough to
deter a war, and our program of peace through strength worked. But what
happened that really tore the wall down was that the growth of world
trade generated a wealth-creating engine that created massive economies
in places such as South Korea and Taiwan where those economic engines
had never existed. It rebuilt Japan. It rebuilt Europe. The sheer power
of that wealth-creating machine destroyed the Soviet Union.
If there is one principle I am committed to, it is free trade. I take
a back seat to no one in Congress in my defense of trade, and I make no
excuses, such as talk about ``fair trade.'' I do not engage in fair
trade with a grocery store; I buy food from them and sell them nothing.
But what I am in favor of is trade. Not going to the grocery store
might eliminate unfair trade with them, but it would mean I might go
hungry, so I choose to go to the grocery store.
One might wonder what is it about the Jordanian ``free trade''
agreement that I am unhappy about, especially my colleagues who have
listened to me before talk about trade, knowing I am committed to it
and have defended it under all circumstances against all opponents
everywhere. What is wrong with the Jordanian free trade agreement?
What is wrong is, for the first time, it brings into a trade
agreement items that have to do with domestic law. It brings into a
free trade agreement provisions that relate to labor law and labor
standards, and environmental law and environmental standards, in
America. And in the process, we are literally transferring a degree of
American sovereignty in labor and environmental areas to decision-
making entities that will be beyond the control of the United States.
This is a very serious matter.
Let me talk generically about trade agreements that embody labor and
environmental standards and then talk about this one in particular.
When we built a consensus on fast-track authority, the consensus was
based in part on the fact that the President was negotiating trade
agreements, tariffs. It was clear that the intent of the negotiation
was to lower tariffs on foreign goods coming into our economy and lower
tariffs on American goods going into the economy of the country with
which we entered these trade agreements. That was the understanding. It
was clearly understood that, within that context, we were simply
negotiating tariffs but not making domestic law.
Someone who was going to debate this would immediately point out that
in the last 10 years we have injected another issue: patent and
copyright. They would say: We were already a little bit pregnant when
we did that because that had a binding effect on America in terms of
respecting patents and copyrights.
I think that might score you a point in some debating class in high
school or college, but the plain truth is, America is in the patent and
copyright business. We own 90 percent of all the patents and copyrights
in the world, and so when we negotiated to put into free trade
agreements that countries would respect patent and copyright, that
basically was a provision that had no effect on us because we owned the
patents and copyrights, but it had an effect on our trading partners by
committing them, at least through moral suasion, if not retaliation, to
respecting patent rights and copyrights.
I would argue that element in free trade agreements was pretty much
like Britain being for freedom of the seas when they controlled the
seas because they had the world's greatest navy. They were for British
seas, just as we should be for freedom of the seas today.
Two substantial problems arise when labor and environmental issues,
or any other issue related to the laws under which we live and function
every day in the United States, are brought into this fast-track
process. One is a loss of power by Congress in ceding its rights under
article I of the Constitution, and the other is a loss of American
sovereignty, and they are both bad things.
When you allow the President to negotiate labor and environmental
laws, and labor and environmental standards, under fast-track
authority, where the agreement cannot be debated and cannot be amended,
what you are literally doing is giving the President of the United
States a unilateral power to write domestic law under fast-track
authority.
Under fast-track authority, where the President has this power to
write labor and environmental standards into trade agreements, which
then become the law of the land when we adopt them, President Clinton,
for instance, in a free trade agreement, could literally have included
the Kyoto Environmental Treaty. It would have come to the Senate. It
would have been unamendable and undebatable, and we would have had a
dramatic loss in our law-making powers, and a substantial diminution in
the effectiveness of fast-track had the Senate been forced to reject
the agreement because non-trade matters been included.
If we had a President who wanted to change environmental or labor
law, and do it in a way to limit congressional power and authority, he
could do it unilaterally through fast track,
[[Page S9686]]
through negotiations of trade agreements. We never, ever contemplated
such an extension of power when we wrote fast track. Never did we
contemplate the Executive would make domestic law in these trade
agreements. They were about tariffs. They were not about laws that
would govern America and Americans in our daily lives.
The second problem with allowing labor and environmental provisions
in trade agreements that have expedited consideration is they represent
a ceding of American sovereignty. In my opinion, they are
unconstitutional.
Let me explain how this would work in the context of a bilateral
agreement and then in the context of GATT. I'll start with GATT. Using
fast-track authority where labor and environmental issues can be
included, let us say that we entered into a GATT agreement where we
agreed--as we do in this agreement, and I will talk about it in
particular in a minute--on labor and environment provisions. Now, while
we have to give the Clinton administration some credit for writing all
kinds of boilerplate protections for congressional authority, in the
end they could not protect what the provision is about.
Under this bill, we agree with Jordan that we will not take any
actions with regard to our labor or environmental laws that would
advantage us in our trading with Jordan. Now, let me take those
provisions and apply it to GATT and the World Trade Organization. Let
us say this became the norm for trade agreements. Who decides whether a
change in environmental law affects our competitive position with our
trading partner? Who decides whether a change in regulation was made to
benefit us in trade or because it was made through the Executive power
of the President basically to promote the general well-being of the
country? Is it not true, at least to a small degree, every change in
environmental law and every change in labor law or regulation has a
trade effect, making us more or less competitive?
If we had the Jordanian free trade agreement as part of GATT, it is
literally true, if we decided under the Clean Air Act to grant a clean
air waiver to Atlanta, GA, which we have done in the past, and to
Dallas, TX, which we are doing today, or Houston, which we are doing
today, literally if this agreement were in existence as part of GATT a
question would arise as to whether granting this waiver under the Clean
Air Act benefited us in trade. In the case of GATT the judgment would
be made by the World Trade Organization--a third party, a world
organization, determining whether or not we are enforcing the Clean Air
Act to benefit us in trade and, therefore, whether we should be
penalized with protective tariffs against American products that put
Americans out of work.
If we had the provisions of this Jordanian free trade agreement in
effect through GATT, and we then opened up ANWR to produce oil, the
World Trade Organization and its decisionmaking body, which we are
minority members of, could determine that by opening ANWR we have had
degradation in environmental standards that benefit us in terms of
trade and we could literally have protective tariffs imposed against
American products on the world market and put Americans out of work.
If we repealed Davis-Bacon, a special interest law that requires the
Government to pay the highest prevailing wage for labor, it could be
ruled by the World Trade Organization, if these provisions were in
force worldwide, that we had violated the trade agreement, and we would
then be subject to reprisal and punishment imposed on the American
economy.
If we adopted provisions that gave workers flexibility to work 60
hours one week and 20 hours the next week by changing our antiquated
wage and hour laws so that a working mom could go see her son play
football on Friday afternoon, something that is eminently reasonable
and long overdue, if the provisions of this bill were in effect
worldwide through the World Trade Organization, we could have a
judgment by a world decisionmaking body that we have violated our trade
agreements by giving flexibility under the wage and hour laws, flex-
time/comp-time we call it; that we have benefited in trade and,
therefore, we are subject to reprisal.
My point is, as we go beyond the Jordanian free trade agreement, and
as we go to fast-track authority and as this becomes part of our world
trading system, I ask my colleagues, are we ready to give to the
President of the United States unilateral authority to write domestic
law we cannot amend and cannot debate? I am not ready to do that. I
love our President. I do not think any Member of the Senate feels
closer to our current President than I do, but I am not willing to give
that authority to anybody. I do not know who is going to be President
in the future. Are we willing, through a free trade agreement and
through trade promotion authority, to put ourselves in a situation
where the World Trade Organization can determine that by giving a
waiver to Atlanta, GA, under the Clean Air Act, we are violating our
international trade agreements and, therefore, protective tariffs can
be imposed on American products to punish us for exercising our power
under articles I and III of the Constitution?
Is that not a loss of sovereignty that would be virtually
unimaginable by the Founding Fathers? I think the answer is clearly
yes.
So the first point I wanted to make today is I have decided, just as
one Member, to step aside and allow this Jordanian free trade agreement
to become law, but not because I think these are good provisions. I
think inclusion of these matters is one of the most dangerous actions
we have taken since I have been a Member of the Senate. I am doing this
today because we have a crisis in the world. We need to reaffirm our
relationship with Jordan, a critical country in a very important part
of the world, when we are at the very moment beginning to look toward a
war with terrorism. So our relationship with Jordan is important.
I do it also because our trade with Jordan is relatively
insignificant. It is important to Jordan, of course, and we are
grateful for it. We want to trade 1,000 times as much with them, but
relatively speaking, we are not talking about any significant amount of
trade.
Finally, I am willing to do it, making it clear that this sets no
precedent for the future. If it were not for this current crisis, this
trade agreement negotiated by the Clinton administration would never
have become the law of the land. I am willing, today, to step aside and
vote for it because it sets no precedent, and it is clearly important
internationally at this critical moment in a very important part of the
world.
However, I want my colleagues to understand that any efforts to take
this process forward would entail giving the President unilateral
powers to make domestic law in the labor and the environmental area
without Congress having the ability to amend it or to extensively
debate it. I am adamantly opposed to that, and I believe the American
people would be opposed to it if they understood it.
Second, if we go forward and embody the same provisions in major
trade agreements, we are ceding sovereignty to the World Trade
Organization and to dispute resolution organizations where we will
literally have third parties casting the deciding votes as to whether
we can grant waivers under the Clean Air Act, or open up ANWR, or
change our wage and hour standards, or repeal Davis-Bacon, or do other
things that make eminently good public policy. That is a ceding of
sovereignty that has no popular support in this country, and it cannot
be allowed to go forward.
I turn to the Jordanian free trade agreement. First, if I could pick
up this pen today and sign a free trade agreement with the world, I
would do it. I am in favor of free trade. I believe free trade promotes
freedom; I am for freedom. It promotes prosperity; I am for prosperity.
My concern about the Jordanian agreement is the nontrade provisions. It
has two provisions that may very well never be used in our trade with
Jordan but they are extraordinarily dangerous.
The first provision is related to the environment. It says, despite
all the boilerplate efforts of the Clinton administration, that if
either country--Jordan or the United States--did anything to change its
environmental laws that improved its competitiveness with the other
country, that would violate the trade agreement. Under the rules of
world trade, there would then be a dispute resolution that would
ultimately include a United States representative,
[[Page S9687]]
a Jordanian representative, and a third party, which would determine
whether a violation had occurred and, if so, whether the ``violating
party'' would be subject to penalties.
I understand the dollar value of our trade with Jordan is less than
the combined budgets of the two great universities in my State. It is
not significant in terms of the global picture. But principles are
significant. And bad principles are set often in little, insignificant
bills. This provision literally puts us in a position where an
international dispute resolution could determine, in the name of the
environment, that opening ANWR or granting waivers, which we do
routinely under the Clean Air Act, violate this agreement, and we could
have trade reprisals imposed against us as a result of it.
If we didn't sell anything to Jordan, it would obviously matter to
the companies involved. It would be a terrible thing, but economically
it would not be a catastrophe. My objection to including these labor
and environmental provisions is based on principle, and if inclusion of
these issues goes any further and is established worldwide, it is going
to have a profound impact on the lawmaking authority of the U.S.
Congress.
Now, granted the Clinton administration puts nice boilerplate
language that says to Jordan, you make your own laws; and it says to
the United States, you make your own laws. But it also says, if those
laws are judged to improve your competitiveness as a result of a
reduction in your level of environmental protection, then there can be
reprisals.
Who makes that determination? The problem is, the United States does
not make that determination. That determination is made by an
international dispute resolution system. The same is true in this bill
with regard to labor law. Under this bill, you have an obvious
question: When have you changed labor standards to benefit yourself in
terms of competition? With Jordan, who makes the determination?
I would have no objection if the determination of whether we were
meeting our agreement were made by Americans. I think it would be
foolish to get into this area, because everyone who is the least bit
objective about trade understands, if you care about labor standards,
you are for trade, because trading countries are rich, and they have
high wages, and they have good working conditions. If you care about
the environment, you are for trade, because trading countries are rich
and they can protect their environment, and they do.
I know we have people talking about a race to the bottom in labor and
environmental standards, but the truth is, trade is a race to the top,
not to the bottom. But these are the problems with this bill.
Now people do not want to deal with this issue. It was clear in the
Finance Committee, people were not ready to come to grips with this
issue. What is appealing about putting labor and environmental
provisions into the bill is that it lets us be on three sides of a two-
sided issue. It lets us be with the people who want to have
international labor and environmental standards, and yet be for trade.
The problem is, you are either for trade or you are against it. When we
write these provisions into our trade agreement, we are setting
ourselves up for loss of sovereignty and we are ceding power to the
executive branch of government. I think those are two extraordinarily
dangerous things.
This agreement will be approved today. I am going to support it. But
I am going to support it as a matter of foreign policy. The President
wants this agreement to show to Jordan we are committed to our
friendship and our partnership. We need Jordan's support in this war on
terrorism, and as a result, I, for one, intend to step aside and allow
this agreement to be adopted. But in doing so, I want to make it clear
that this sets no precedent in terms of our willingness to cede
sovereignty over America's right to set its own environmental and labor
laws and to interpret and enforce those laws without being penalized in
world trade because some international decisionmaking body decides, in
doing so, we benefited ourselves in terms of trade.
I submit, why would you change these laws, if you were not in some
way trying to benefit yourself, either by improving the environment or
improving your competitiveness?
Look at the application that Atlanta, GA, or Dallas, TX, or Houston,
TX, submitted, asking for a waiver of the Clean Air Act. That
application is full of the dire impacts that are going to be had if
they stop building highways in Atlanta or Houston and if they have to
shut down those refineries from Corpus Christi to Beaumont that produce
50 percent of the petrochemicals in the world in the Houston area.
Their application for a waiver of the Clean Air Act is full of
exactly the argument that, if we don't grant this waiver and give them
more time to meet these requirements, we are going to destroy hundreds
of thousands of jobs and are going to adversely affect the ability of
America to compete on the world market.
If we expand this logic into the World Trade Organization, does
anybody doubt that our competitors will take the application for a
waiver of the Clean Air Act from Atlanta or Houston that is full of
arguments, as it should be, about American competitiveness and say
``not only did they not enforce their law by granting this waiver, but
if you read the application from Houston, TX, it is full of the logic
that is going to hurt them competitively if they don't grant a
waiver?''
Do we really want the World Trade Organization or an international
dispute resolution putting our people out of work in Georgia or Montana
or Texas because they believe when we changed our law, or when we
changed the enforcement of it, that it benefited us in world trade? I
do not think we signed on to do that.
So that is where we are today. We have a trade agreement before us
that was negotiated in the previous administration that has a very
severe problem. If this agreement were with another country at another
time, I do not believe it would be adopted. But today, facing a war
with terrorism and given that this is with Jordan and given that the
amount of trade involved is insignificant, from the United States point
of view, I for one am willing to step aside and to support this bill.
But I want to make it clear that any fast track or trade promotion
authority legislation that would transfer the making of domestic law to
the President, limiting--in this case eliminating--our power to amend
or debate, or any future trade promotion agreement that would grant to
a world decisionmaking authority the right to determine whether we have
exercised our article I rights under the Constitution of the United
States properly, where a world organization is making a determination
as to whether our people are going to be put out of work because we
amended labor and environmental laws in conformity with our rights
under article I of the Constitution, that is something that I never,
ever intend to support and never, ever within the ability to debate it
and to fight it intend to see it accepted.
We have to come to grips with these issues. We are putting them off
today because this bill needs to pass. But these are matters that are
going to have to be understood. They are going to have to be debated as
we deal with fast-track authority, or as we now call it, trade
promotion authority. To this point, everybody has tried to hide from
these issues. But they are very real. They represent an assault on our
separation of powers, they represent an assault on national
sovereignty, and they do not belong in a fast-track or trade promotion
agreement.
With that, I reserve the remainder of my time.
The PRESIDING OFFICER. Who yields time?
Mr. BAUCUS. Mr. President, how much time is remaining?
The PRESIDING OFFICER. The Senator from Texas has 24 minutes and the
Senator from Montana has 8.
Mr. BAUCUS. Mr. President, I yield to the Senator from Nebraska, 4 or
5 minutes?
Mr. HAGEL. Let's try 5 minutes. I appreciate that.
Mr. BAUCUS. I yield 5 minutes with the recognition there is only 3
minutes left after the 5 minutes are used.
Mr. HAGEL. Mr. President, I rise today to support the Jordanian free
trade agreement. I wish also to strongly support the remarks just given
by the distinguished senior Senator from Texas, Mr. Gramm. In my
opinion, he
[[Page S9688]]
has calibrated this exactly right. He has framed it right. He has made
poignant remarks about issues that are most important to this debate
this day but a continued debate on trade this body must have, a debate
which will take us, I hope, at some point in the near future, to the
question of granting to the President of the United States what has
been referred to as fast-track authority but now is referred to as
trade promotion authority.
September 11 highlighted why we need to strengthen our relations with
the rest of the world. Tools that will be required to combat terrorism
include more than just military power. I think most of us recognize
that terrorism is not about human destruction; it is about holding
nations and societies and peoples captive, hostage to the fear of
terror.
Terrorists are best able to harness the fears and prejudices of
impoverished people to gain support for terrorist acts such as those
that occurred on September 11. These areas are the breeding grounds of
terrorism: the impoverished, the downtrodden, those people of the world
with little or no hope.
To combat terrorism and the support of terrorists, we need to broaden
the understanding of what America stands for and to continue to help
improve the lives of these impoverished people around the world. I
believe trade helps do that. Trade also helps develop market economies
and strengthens democracies. What does that mean? It is not an end unto
itself but to stabilize regions of the world, stabilize governments,
and help maintain responsible governments and relationships and
standards of living and accountability and responsible action. That is
what trade can do and has done.
At our Banking Committee hearing last week, Chairman Greenspan stated
that global economics relies on the movement of people and goods. The
openness of economies is critical to that growth. We are talking about
one small part of that larger universe of trade today. But nonetheless,
it is an important part of this debate.
The New York Times article by Tom Friedman last week pointed out that
through all of the instability in the Middle East, Jordan last year
grew in real numbers at about 4 percent. And as we are able to
encourage and participate with Jordan through these bilateral trade
agreements, we will continue to help Jordan grow, which helps, again,
stabilize a very important region of the world.
As Senator Gramm has pointed out, this agreement is far from perfect.
In my opinion, sanctions should never be part of a market-opening trade
agreement for many of the same reasons Senator Gramm enunciated and
delineated with precision. Sanctions do not address the root of
environmental or labor problems or other such problems. These are
currently much better handled at other international organizations such
as the United Nations and international labor organizations in other
areas. I shall not go back and deal with the same area about which
Senator Gramm talked. But sanctions will actually harm countries and
will limit the much-needed capital they receive from exporting to the
United States.
For the reasons that have been stated before, the economy is a
fundamental dynamic influencing a country's political stability, hence
world peace.
Trade contributes to a country's security for two reasons: It
establishes relationships and understandings between two nations, and
it raises the standard of living for nations and encourages that
stability.
In my opinion, this debate today is a good beginning to address a
comprehensive trade agenda this Congress must have.
This Congress must ultimately grant President Bush trade promotion
authority. TPA is in the clear and vital interests of this country, and
security and economic interests are interconnected and dependent on
each other.
Today, I encourage my colleagues to vote for this agreement, as
flawed as it may be. But I consider it a good opening for the bigger
trade debate issues that must come from this Congress. It is a good
beginning. But we are far from the kind of finish that will be required
not only for the trade interests of this country but the security
interests of America and the world.
I yield the floor.
The PRESIDING OFFICER (Mr. Miller). Who yields time?
Mr. BAUCUS. Mr. President, I understand that we only have 2\1/2\
minutes.
Mr. GRAMM. I yield the distinguished ranking member 15 minutes.
The PRESIDING OFFICER. The Senator from Iowa is recognized.
Mr. GRASSLEY. Mr. President, I am not going to bring up the same
issues the Senator from Texas brought up. But I had a chance to listen
to his remarks. I share many of the concerns that he has.
Although I have been an enthusiastic supporter of this agreement from
day 1 and have not found all of the considerations that he has to
specific parts of it, I have reservations about those parts,
particularly as they deal with labor and the environment, but to appeal
to some extent through an exchange of letters that these issues have
been taken care of at least enough to satisfy my concerns to move
forward with this legislation.
I speak in favor of the United States-Jordan Free Trade Agreement. I
urge my colleagues to support it. But before we move forward, I would
like to put this agreement in context--not a context different than
other speakers have but to emphasize some things that have already been
said.
First of all, this agreement is very important between two countries
that have been friends for a long time and that want to maintain that
friendship.
It has been almost a year since President Clinton and King Abdulla
signed the U.S.-Jordan Free Trade Agreement. By all accounts the
agreement should have passed Congress with little controversy.
The Kingdom of Jordan and King Abdullah are good friends of the
United States. The agreement itself is a good agreement. It opens up
new markets for U.S. exports to Jordan. And it enhances Jordan's access
to our markets. But there is one part of the agreement that caused
problems.
These are controversial labor and environment provisions that were
put in the U.S.-Jordan Free Trade Agreement. It is these labor and
environment provisions which slowed passage of an agreement that should
have passed both Houses of Congress quickly.
In the Senate legislation was introduced by Max Baucus on March 28,
2001 to implement the agreement. On July 17 the Finance Committee began
to debate the bill.
During debate many Members expressed concern about the labor and
environment provisions in the Jordan agreement.
Many others pushed hard for an amendment to the agreement which would
give the President trade negotiating authority, which was supported
very eloquently by the Senator from Nebraska.
Unfortunately, this amendment was withdrawn because of the chairman's
opposition.
To help move the agreement forward the U.S. Government and the
Government of Jordan exchanged official letters on July 23, 2001.
These important letters clarified that neither government intends to
apply the labor and environment provisions in a way which blocks trade.
The exchange of letters was an important development.
After all, the purpose of a free trade agreement is to facilitate
trade.
After all, we are talking about an agreement that has the purpose of
facilitating trade. That is pretty clear with the term ``free trade
agreement''--not to deal with a bunch of social and environmental
issues.
While these commitments did not resolve every Senator's concern with
the agreement, it was an important step forward.
And because of these letters the Finance Committee was able to
complete consideration of the bill on July 26, 2001.
Unfortunately, some tend to characterize the labor and environment
provisions in the Jordan FTA as a precedent for future trade
legislation.
I want it understood very clearly that I do not accept that, and I
want to say that loudly and clearly. This should not be considered as a
precedent.
It does not mean that the Jordan free trade agreement in other ways
does not
[[Page S9689]]
set a precedent. It is the first free trade agreement we have entered
into with a Muslim country. I hope it is not the last.
I also hope this sends a loud signal to our Muslim friends and our
friends around the world. The United States wants close trading
relationships with these countries and their people.
We want to help your economies grow through trade.
I think it was President Kennedy who said ``trade, not aid.''
It enhances the prosperity throughout the world generally. But as the
Jordan agreement is precedent setting with a Muslim country, we would
surely expect it to enhance prosperity throughout the Middle East as
well as the entire world benefitting because we all know that free
trade is a very powerful engine of growth. It can lift millions out of
poverty, as we have seen in the development of this regime since 1947
when these free trade agreements started--and under the GATT process
the revitalization of Japan and all of Western Europe. Countries that
were poverty stricken 50 years ago are very prosperous today--Japan,
Taiwan, South Korea, to name a few.
Their prosperity depends a great deal upon trade. Lifting millions
out of poverty also in the process opens the door to new hope for
people. It offers opportunity to people who have only known despair.
Trade can help undermine terrorism by taking away the fertile ground
of poverty and hopelessness from which that terrorism is sown.
It can broaden horizons and lift human spirits to greatness.
Our friends and allies must know that we share their hope in the
future. But trade and the regime for arriving at free trade agreements
and further negotiations within the World Trade Organization are a way
to show that we put our actions where our mouth is.
It also shows that we have history on our side--that there has been
progress made in the past. It can predict the good future that lies
ahead as a result of freeing up trade. They must know we will open up
our arms and embrace them through trade. Just as trade lifted Germany
and Japan from the ashes of World War II, it will lift nations today.
However, we have to have the tools to make it work. One of those
tools, as you keep hearing in this debate--and a lot of other places--
is the need to give the President of the United States trade promotion
authority. We ought to do this in the same apolitical or bipartisan way
that it has been done over a long period of time. And this is done
because we do not put a lot of preconditions on these negotiations.
People of good will sit down to work out their differences, each
respecting their own national interests. The President of the United
States will not negotiate away the interests of the United States of
America and its people.
So it is time to give the President the power to negotiate trade
agreements with our friends and our allies, and even with countries
that we might not consider our friends and allies, if they are in the
World Trade Organization.
The Finance Committee has quite a history of bipartisanship in this
area, to give the President what used to be called fast-track trade
negotiating authority, now called trade promotion authority.
This type of legislation, over a long period of time, has passed with
broad bipartisan support. We in the Senate generally have not waited
for others to act. We have seized the reins of leadership and have
moved ahead. Today, we need to be doing that as well. I hope I can help
move that process along. I hope this bill today helps do that as well.
There is bipartisan legislation that is already introduced that would
be a good bill for this committee to consider.
At a time when the world economy is slowing, we must act. We must put
aside our partisan preconditions and excuses to trade and show the
world that the United States is ready, willing, and able to lead.
I thank the Chair and reserve the remainder of what time I did not
use for Senator Gramm.
Mr. BINGAMAN. Mr. President, I rise today in very strong support of
H.R. 2603, the United States-Jordan Free Trade Area implementing bill.
There is a very limited time for debate available to my colleagues
today on this legislation, so I will keep my comments short.
First, let me say that the timing for the consideration of this
legislation could not be more propitious given the horrific events that
have just occurred in our country. As we consider this bill, let us not
lose sight of the geo-political context within which we now conduct
international affairs. Trade negotiations between the U.S. and Jordan
were initiated for one reason alone, that being that government
officials felt it would substantially increase economic interaction
between the two countries and thus significantly enhance political
stability in the Middle East as a whole. Although the immediate
economic gains from the agreement will, no doubt, be modest, the long-
term political benefits will be considerable. Of particular importance
are the opportunities the agreement potentially provides Palestinians
living in Jordan and operating in qualified industrial zones. For these
individuals, nearly all of whom at present live in poverty and have
little chance to improve their lives, this agreement changes the
equation and offers real hope. Significantly, it offers a tangible
alternative to violence, and I need not emphasize how important a
different path like this might be to young individuals, and the
strategic interests of the United States, at this time.
I understand the concern of certain colleagues about national
sovereignty as it relates to the dispute resolution provisions in the
agreement. But clearly this concern comes not because this agreement in
particular threatens our sovereignty--from my perspective it does not
and it will not, but rather because of the apprehension that this
agreement establishes a precedent for future negotiations. The concern
relates to this trade agreement being a ``model,'' and once this trade
agreement is passed, others will certainly look much the same.
To this criticism I respond by saying that each agreement negotiated
by our country is unique and based on the issues that concern the
parties at the time. There is no reason to assume that every agreement
will contain similar language to that which is contained in this
agreement. Indeed, there is much reason to doubt that they will.
Clearly, there is a balance that must be found between having an
agreement and having ways to ensure that the provisions that are in an
agreement are implemented. In this particular case, I think a very
appropriate arrangement has been created.
But I want to emphasize today that I do intend to be very cognizant
of how we establish dispute resolution mechanisms down the road. And I
say this simply because we have reached a point in international trade
relations where we have to ask if we are prepared to change the ideas
and institutions that form the foundation of our political economic
system to attain a trade agreement. That is the essence of the debate
at hand, and if we have learned anything at all from NAFTA, it is that
this is not something to be taken lightly.
All this said, this legislation must be passed today, and it deserves
to be passed today. It sends a signal to the people of Jordan that
while they are already our political friend and ally, the time has come
that they also become our economic partner. I look forward to the
benefits, short and long-term, that will come as a result of this
historic free trade area agreement. I would like to take this
opportunity to compliment the Clinton and Bush Administrations for
recognizing its significance and pushing the agreement forward.
Mr. DURBIN. Mr. President, I rise today in support of this trade
agreement between the U.S. and Jordan. It is important in terms of
national security. Jordan is important in the quest for peace and
security in the Middle East, which couldn't come at a more appropriate
time. It is important economically--without a healthy Jordanian
economy, they will not be able to play a constructive role in the
Middle East.
For me, it is important because it recognizes that included in the
economic relationship between the U.S. and Jordan are labor and
environmental standards. It goes without saying that domestic labor
markets and environmental standards are relevant
[[Page S9690]]
to competition within a nation and between nations. Both the U.S. and
Jordan have strong practices in the areas of labor and the environment.
Some critics of this historic legislation counsel us that if either
country fails to meet their commitments to enforce these or other
provision of the agreement, they do not expect or intend to use
traditional enforcement mechanisms to enforce them. This kind of talk
is unfortunate. To say that regardless of the violations in a trade
agreement, enforcement mechanisms will not be used is irresponsible.
Trade sanctions are always a last resort. But to set a precedent in any
agreement that under no circumstances is there an expectation they may
have to be used is a mistake an unwise precedent.
I should remind critics of this legislation that the agreement
carefully sets up a framework for various consultations and mediation
over a long period of time before either party could use sanctions only
after recurring violations affecting trade and only with appropriate
and commensurate measures. This is clear. Cutting corners on the
important issues of labor and environmental standards in trade
agreements is a step backwards for future constructive action on trade.
I support this agreement because of the importance of our
relationship and because the timing couldn't be more important. I
support this agreement because we need to support our friends in the
Middle East. By passing this legislation today, the United States
Senate sends a clear signal of support to our many allies in the Middle
East and a clear signal to Osama Bin Laden that we stand united with
his neighbors to do whatever we can to promote the economies between
civilized nations.
Mr. HATCH. Mr. President, I rise to urge support of the free trade
agreement between the United States and Jordan.
As ranking Republican member of the Trade Subcommittee of the Finance
Committee, I am pleased that the Jordanian Free Trade Agreement was
approved by the full committee and now is receiving floor
consideration.
While some would say that this agreement amounts to nothing more than
a garden variety trade agreement, they would be wrong. From a strict
U.S. economic perspective, it is not a major agreement. However, as
King Abdullah has made clear, from the standpoint of the Jordanians, it
is an important precedent for his country and for other nations in the
region. This was true before the tragic events of September, and may be
more true today as our country wages a campaign to reach out to
moderate Arab states.
Bilateral free trade agreements between the U.S. and other countries
help establish a mutual understanding of the norms and expectations of
trade. I think when foreign business interests enter into trading
partnerships with American firms under a free trade agreement, both
parties can benefit economically, and the U.S. and our trading partner
will almost inevitably grow closer together due to this type of joint
enterprise.
I must commend Chairman Baucus and Ranking Republican Member Grassley
for their work on this agreement.
Anyone who has followed the debate on this agreement knows that
progress was slowed by a vigorous discussion of how the ambiguous
language pertaining to labor and the environment in the Jordanian
agreement might, or might not, serve as a precedent in any trade
promotion authority legislation adopted by Congress.
It is clear that the biggest stumbling block to passage of TPA
legislation is how labor and the environment are handled. As a
proponent of free trade, I have serious reservations about any move
that would make labor and environmental concerns central concerns of
trade negotiations.
While I know that there may be some in the Senate who would like, for
proper but misguided motivations, to attempt to raise the standard of
living in the developing world through the implementation of non-trade
aspects in trade legislation. But we must not confuse trade
negotiations with social engineering. Our chief goal in trade
negotiations must focus on benefitting American consumers and American
workers.
We must remember that what is good for the goose is good for the
gander. If we try to impose our views on labor and environment on our
trading partners, we should not be surprised if one day these trading
partners complain that our food safety laws are insufficient, our air
pollution levels too high, and our minimum wage too low.
Even prior to the terrorist attacks two weeks ago, the economy was
losing steam. It seems to me and I am sure to many other members of the
Senate, that one good way to help revive and stimulate our economy is
to pass trade promotion authority legislation. Fast track can help put
our country back on the right path to economic recovery and growth.
While it is my hope that we can work on a bi-partisan basis to pass
TPA legislation before we adjourn for the year, the Jordanian agreement
is not the vehicle to resolve all these issues. Today, we can
accomplish a significant achievement by adopting the Jordanian
agreement.
On balance, this is a good agreement with a good partner, Jordan. It
is not a model for how labor and environmental concerns should be
addressed in trade promotion authority legislation. It is a statement
to those in the MidEast and around the world that the United States is
a good partner. King Abdullah and other world leaders need to know that
partnering with the United States can result in tangible benefits to
their citizens.
I urge my colleagues to vote for this measure.
Mr. MURKOWSKI. Mr. President, the U.S.-Jordan Free Trade Agreement is
an important acknowledgment of our long-standing friendship with the
Hashemite Kingdom of Jordan, which has been a stalwart ally in pursuing
peace and prosperity in the Middle East. Opening our markets to free
trade with one another is appropriate, not simply in order to foster
the opportunities free trade can bring between our two economies, but
to draw our countries closer together in the struggle for peace.
I have been an advocate of this free trade agreement since the
prospect of its negotiation was first raised some years ago. I believe
strongly in the power of trade to eliminate poverty, encourage
political transparency and draw nations closer together. I also believe
that free trade is one of the best manifestations of mutual
understanding, trust and congruent interests two like-minded countries
as the United States and Jordan can have. So I have strongly supported
the negotiation and implementation of this agreement on the essential
policy grounds on which it is founded.
I do not, however, support the inclusion in this agreement of
politically charged provisions linking trade remedies to environmental
and labor standards. We have learned over the years that as a means to
enforce expressions of U.S. political will on other nations, trade
sanctions are ineffective at best. Quite often, they do more harm to
American interests, including the very interests they are invoked to
serve, than doing nothing at all. Those that champion the linkage of
trade with non-trade interests understand this basic fact quite well.
Sanctions do not work. Sanctions are nothing more than thinly-veiled
proxies for economic protectionism.
The effort to link trade and environmental and labor standards are
largely championed by those whose primary interest is in limiting the
growth of trade. The labor movement is understandably interested in
limiting the impact of trade on entrenched labor interests. Their
desire is to maintain the economic status quo, not to promote growth
through competition. Likewise, the American environmental movement
perceives economic growth as inherently counter to their interests in
preserving the environmental status quo. The evidence is overwhelming
that the long-term benefits of trade are vastly more positive for labor
and environmental interests. However, labor and enviromental groups
serve only narrow, short-term interests.
Those of us who understand the overwhelming economic and social
benefits of expanded trade are rightly concerned, therefore, with the
inclusion of environmental and labor provisions in trade agreements.
Even seemingly innocuous provisions such as those slipped in, almost
mischievously, by the previous Administration into the U.S.-Jordan Free
Trade Agreement are
[[Page S9691]]
designed as poison pills by the interest groups which championed them.
They are invitations for mischief-making on a grand scale.
There is no doubt that opening markets to new economic activity
places new pressures on labor and environmental concerns. Attention to
easing such impacts is thoroughly appropriate in implementing new trade
agreements. To condition trade on prescribed labor and environmental
standards is, however, to do the work of the opponents of trade. When,
as in the case of the Jordan Free Trade Agreement, we establish an
open-ended and vague linkage between trade and non-trade standards, we
ransom our long-term policy interests for short-term political gain.
Jordan is not, happily, a model for future trade agreements. Our
interests in pursuing a free trade agreement with Jordan are
unparalleled and unique. An attempt to draw parallels between the
negotiated Jordan agreement and negotiations toward a new WTO Round, a
Free Trade Agreement with the Americas, or even new bi-lateral
agreements with other countries is fool's errand. The reasons pro-trade
Americans support the agreement with Jordan have few echoes in our
support for other more clearly economically-based trade negotiations.
Jordan is the exception that proves the rule: trade agreements must
stand on their own, or they will not stand.
Mr. McCAIN. Mr. President, I am pleased to support passage of S. 643,
the U.S.-Jordan Free Trade Area Implementation Act. Two weeks ago, a
proud symbol of global free trade was destroyed by terrorists in New
York City. The terrorists who struck the World Trade Center meant harm
not only to the United States, but to the entire civilized world. In
this new era, our attention turns increasingly to defending against
this catastrophic threat, and to pursuing policies that advance our
interests overseas and reflect the values of our people.
Strengthening our strategic relations with our friends in the Middle
East has become an urgent priority of American policy. This free trade
agreement marks an important benchmark in U.S. relations with Jordan,
an island of moderation and stability in a volatile region. U.S.-
Jordanian intelligence cooperation will be helpful to our efforts to
crack down on terrorism at its source. That Congress has made
ratification of this bilateral trade agreement a priority as we wind
down the current session while sorting through the pressing obligations
ahead reflects its meaning to our people, and our mutual interests.
The U.S.-Jordan Free Trade Area represents the first free trade
agreement the United States has negotiated with an Arab nation.
Liberalized trade with Jordan will benefit both our economies. Although
various Jordanian and American goods already enjoy duty-free status or
low tariff rates, this free trade area will ensure that Jordanian and
American consumers enjoy an expansion of commercial choice and value.
Both nations will also benefit from greater foreign direct investment
and trade-related job creation.
I remain concerned about the hostility this Congress has shown
towards free trade. Many important new trade bills enabling the
expansion of bilateral and multilateral trade have not moved through
the legislative process this year. Existing laws, such as the Andean
Trade Preference Act and the Generalized System of Preferences, are set
to expire shortly but have received little if any attention from
Congress. This summer, we struggled as a body to determine whether or
not we would honor our Nation's solemn commitments to NAFTA, an
invaluable trade agreement with our neighbors and largest trading
partners.
Indeed, it has seemed as though free trade is no longer a priority of
this body. In addition to the strategic significance of this
legislation to U.S.-Jordanian relations, it is my hope that passage of
this bill represents a change in the direction this Congress will take
toward a policy of free trade that has upheld our prosperity and
advanced our values around the world.
Mr. LEVIN. Mr. President, the U.S.-Jordan Free Trade Agreement is an
important agreement and I am pleased the Senate has agreed to pass it
by unanimous consent today. The agreement will provide a closer
economic relationship with the Hashemite Kingdom of Jordan, which has
proven itself to be an important strategic ally in the Middle East.
Importantly, this agreement also represents the first free trade
agreement to include in the core text, binding provisions recognizing
the trade impacts of labor and environmental standards. The agreement
sets a precedent that future trade agreements should follow.
Some in the Senate have opposed the agreement because of the labor
and environmental provisions. The Administration responded to this
opposition by exchanging side letters with the Government of Jordan
indicating that neither country expected or intended to use trade
sanctions to enforce the agreement. These letters do not specifically
mention the labor and environmental provisions of the agreement. The
exchange of letters was, however, clearly aimed at the labor and
environmental provisions. I think that this exchange of letters was
unfortunate. I continue to support the agreement, though, because the
letters did not affect the text of the agreement. I believe in the need
to have meaningful and binding labor and environmental provisions in
trade agreements, provisions that are fully enforceable and can be
implemented through the same mechanisms as any other part of the
agreement.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. I suggest the absence of a quorum.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will call the roll.
The bill clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Nevada.
Mr. REID. Mr. President, there are a number of Senators wishing to
speak. The unanimous consent agreement indicated that this debate would
be for 2 hours, which would end at about 2:08. I ask unanimous consent
that the time be extended an additional 4 minutes on each side and that
the vote occur thereafter.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Just to alert everyone, the two leaders may wish to speak
on this legislation. If they do, they will use leader time and extend
the time until we vote a little more. If that is the case, they can
come and take care of that themselves. So the vote, as I understand it,
will occur at approximately 2:15, 2:16, something like that.
The PRESIDING OFFICER. The Senator is correct.
Who yields time?
The Senator from Montana.
Mr. BAUCUS. Mr. President, as a consequence of the recent change in
time, will the Presiding Officer indicate how much time is available to
each side?
The PRESIDING OFFICER. The Senator from Montana has 5 minutes 20
seconds, and the Senator from Texas has 17 minutes.
Mr. BAUCUS. I thank the Chair.
The PRESIDING OFFICER. The Senator from Texas.
Mr. GRAMM. Mr. President, it may very well be that the distinguished
chairman of the Finance Committee would like to end the debate. I will
afford him that courtesy.
Let me just try to sum up very briefly by saying I am hopeful we can
work together on a bipartisan basis to have trade promotion authority.
There is no temporal issue that I have stronger feelings about than
trade. I see it as an extension of freedom. I see it as the great
promoter of economic opportunity and prosperity and happiness in the
world. I am in favor of world free trade. Obviously, I am in favor of
free trade with any individual nation.
There are very real problems when you bring domestic law into these
trade agreements, and I have outlined today the two problems you have
in trying to inject, in this case, domestic labor law, domestic
environmental law, and then the enforcement of those laws through
regulation. When you bring them into trade agreements, you create two
very real problems: First, you give an extraordinary grant of power to
the executive branch of Government to
[[Page S9692]]
write domestic laws in a context where Congress' powers to debate and
amend are severely limited; and, second, you pass decisionmaking
authority, as to America's intent and as to the impact of the making of
domestic law, to an international decisionmaking unit. And you create a
situation where literally, with strong popular support, with the best
of intentions, with the goal of promoting the well-being of our
people--and the only legitimate objective of American Government is to
promote the well-being of its people--we could find ourselves in a
situation where a change in a labor or an environmental law was judged
by an international decisionmaking body or dispute resolution mechanism
to benefit us in trade, and I would hope that would be one of our
objectives in passing law. But by judging it in those terms, we could
literally have tariffs imposed on any American product sold on the
world market, and the net result would be severe limits on our national
sovereignty.
These are very real issues. They are not easy to fix. If you are
going to extend trade promotion authority into the area of domestic
law--in this case, labor and environment--my own preference would be,
knowing that trade promotes the environment, knowing that trade
promotes labor rights by promoting competition, the ultimate right of a
worker comes down to their ability to quit and go get another job. That
is the ultimate worker right: I do not have to worry about somebody
protecting my rights and treating me well when I can go across the
street.
Trade promotes that kind of competition. But there are two sides to
every story. I know the distinguished chairman has very different
views, at least on what he hopes to achieve with labor and
environmental provisions.
I conclude by saying I am willing to try to work with him to come up
with a way of finding a solution to this problem so that we can give
the President trade promotion authority at a time when we desperately
need it, at a time when we need to be promoting world prosperity, and
at a time when we need to be promoting democracy and capitalism,
because democracy and capitalism do not give rise to the kind of hate
that endangers us and our people and our future and our happiness. I do
think it is important that we work this out. But these are very real
issues, very tough issues.
Let me conclude by saying that in having this bill go forward, from
my own viewpoint, this is a decision that was made based on the
necessity of approving this agreement now as we are looking at a long
and difficult war on terrorism, a trade agreement that in the big
scheme of economics is not very important, but the country with which
we are entering into this agreement is a critical country, critical for
American interests in the Middle East. And it is in the Middle East
that many of our problems with world terrorism are focused. Without
setting a precedent for this labor and environmental extension into
trade or loss of sovereignty or violating the separation of powers, I
intend to support the agreement.
I reiterate, in conclusion, that I am willing to work with anybody to
try to find a way to get trade promotion authority for the President.
It would be a great tragedy if we adjourn this year without the
President having this authority. It is an arrow in his quiver that he
needs to fight this war. We are not going to win this war just with
bullets, though we need some bullets and we need them properly
delivered. However many we need, I am willing to buy. That alone will
not win this war. Trade and the mutual respect it creates will be
important tools, as important as bullets in winning this war.
This trade promotion authority is very important, but to deal with
it, we have to come to grips with these issues.
I yield the floor.
The PRESIDING OFFICER (Mr. Bayh). The Senator from Montana.
Mr. BAUCUS. Mr. President, I yield myself the remainder of the time.
I first wish to congratulate Charlene Barshefsky, the very able U.S.
Trade Representative who negotiated this agreement, and also President
Bush and his administration. They have been very far-sighted in urging
the Congress to pass this legislation for all the reasons I and others
have mentioned.
I also thank my colleague and good friend from Iowa, Senator
Grassley, ranking member of the committee, for his steadfast support
for this agreement.
This agreement was signed by both countries last October. The
implementing legislation was passed by the House before the August
recess. A virtually identical bill was reported out of the Finance
Committee with only two dissenting votes, again before the August
recess.
The point being, there was immense support for this agreement even
before the disastrous events of September 11. Certainly, the events of
September 11 make it all the more important now that we pass the bill
to implement this agreement.
I also thank Senator Gramm for allowing this bill to come to the
floor. He had earlier expressed his disagreement with the bill to the
point where its passage was a little bit uncertain. I very much thank
the Senator for allowing this bill to come up and pass and for his
support of the bill at this time.
I respectfully disagree with some of his concerns. First, the
distinctions he suggests between trade and non-trade issues are just
not valid. We have a whole plethora of domestic issues routinely
included in trade agreements, whether patents or copyrights or
trademarks, uses of geographical names on labels, farm tilling
practices. That gets pretty domestic. You can't get more domestic than
farming. We address farm tilling practices in our discussions of trade.
They are now very much in discussion between the European Union and
ourselves with respect to which practices are included as trade-
distorting subsidies and which are not. There are a lot of domestic
issues that are included in trade agreements.
Second, the statement has been made that this agreement impinges upon
American sovereignty. It is important to remind ourselves that any
agreement the U.S. Government enters into with another country to some
degree has sovereignty consequences. Arms control, for example, the
Montreal Protocol restricting chloroflorocarbons, tax treaties, all
have consequences for American sovereignty. International agreements
are not a free lunch. They are bargained-for agreements that have
consequences and have effects on each country's sovereignty.
Also, it is important to remember that a lot of traditional economic
provisions included in trade agreements have some effect on our
sovereignty. For example, in the GATT, we have mutually agreed to
reduce tariffs. If we didn't agree to reduce our tariffs, we would
never get other countries to reduce theirs. The issue of intellectual
property rights is another example. Agreements in this area have
consequences to one degree or another on actions that this country may
or may not take.
The main point I wish to make is that the agreement before us does
not infringe upon U.S. sovereignty because, under the agreement,
neither country is required to change its laws. And there has been a
lot of talk about international dispute settlement mechanisms. There is
no binding international dispute settlement mechanism in this
agreement. If there is a dispute, as I mentioned previously, three
conditions have to be met for either side to request consultations. I
won't go through those conditions again, because time is limited. But
even if a party claims that the three conditions are met, the next step
is to go to mediation, not arbitration. There is mediation, and it is
non-binding.
A mediator might suggest to the United States or to Jordan, let's say
the United States, that the United States has done something untoward.
The United States can accept it or not accept it. There is no
requirement whatsoever for the United States to accept what a non-
binding mediation panel--one panelist named by the United States, the
other by Jordan, a third selected between them--might suggest. Again,
it is non-binding.
Finally, I might say that I do believe this agreement does set a
precedent, by definition, because it is the first of its kind. That is
a precedent. I hope that all future trade agreements will now, after
the passage of this agreement, include proper, reasonable labor and
environmental provisions, because that is where we are in the world
today.
The PRESIDING OFFICER. The Senator's time has expired.
[[Page S9693]]
Who yields time? The Senator from Texas.
Mr. GRAMM. Mr. President, I think I have pretty well said everything
I came to say. Let me yield back my time and then if someone else wants
to speak, they can come speak. If not, we can just remain in a quorum
call until we are ready to vote. With that, let me yield back the
remainder of my time, seeing the distinguished majority leader.
The PRESIDING OFFICER. The majority leader.
Mr. DASCHLE. Mr. President, I thank the distinguished Senator from
Texas. Especially I thank the chair of the Senate Finance Committee and
the ranking member for their work in getting us to this point.
I simply wanted to come to the floor before the end of the debate to
express my strong support for the Jordan Free Trade Area Implementation
Act. This is the first-ever U.S. free trade agreement with an Arab
country. I think at these very tenuous and challenging times, there
could be no stronger statement for us to make than to pass this
legislation. I appreciate very much the work by all of those involved
to see that it is done.
I note this agreement was negotiated before the events of September
11. We are moving ahead today because forging this agreement is the
right thing to do for the people of the United States. It is also the
right thing to do for the people of Jordan. It serves as a statement
that our enemy is terrorism, not the Muslim world.
More than a year ago, President Clinton and King Abdullah began
discussions about how we could more closely link the United States and
Jordan, which, as everyone knows, is an increasingly important and
strategic friend in the Middle East. This act is the result of those
efforts, an important step in deepening that bond. When President
Clinton and King Abdullah signed the United States-Jordan Free Trade
Agreement a year ago, they expressed their concern about the impact of
trade on workers and the environment. I share that concern today.
I am pleased that written into the text for the first time ever are
several provisions to protect the environment and the rights of
workers.
I see this as not only an important bilateral agreement but hopefully
a template for future trade agreements as well.
I recognize, as others have noted, that several of my colleagues have
concerns about how this agreement is structured, and I thank them for
saving this debate for another day and allowing us to move forward on
this important legislation.
Our disagreements on this bill are far outweighed by our areas of
agreement. We all agree on the strategic importance and good friendship
of the Kingdom of Jordan.
Bordering Israel, Syria, Iraq, and Saudi Arabia, Jordan sits in the
middle of a wide range of critical U.S. national interests--
geographically and politically.
This centrality has been bolstered by Jordan's supportive orientation
toward U.S. interests. This agreement should stand as a strong symbol
of the importance we attach to our relations with Jordan.
The Jordanians have taken admirable steps to improve relations with
Israel, including the 1994 peace treaty that helped to advance the
Middle East peace process.
This trade agreement, as the foreign assistance and debt relief
before it, is a signal to Jordan that we appreciate its efforts at
peace in the Middle East and that we hope for more.
That view is held by Israeli Prime Minister Sharon, who, on his first
visit to Washington as Prime Minister, urged Congress to pass this
historic trade agreement.
This trade agreement is also a signal to King Abdullah that we
support his efforts at economic modernization. He and his team have
instituted a series of significant economic reforms in order to restore
growth.
We understand those reforms, while necessary, are painful. With this
vote today, we are telling the Jordanians their reform and austerity
will pay dividends.
Lastly, and most importantly, this agreement signals that the United
States is not the enemy of the Arab and Muslim world.
Osama bin Laden and his associate extremists argue that the West is
waging a war on Islam. Nothing could be further from the truth. We are
waging a war on terrorism.
Jordan's participation in this international coalition against terror
will only hasten our triumph and isolate the extremists and criminals
who attacked America 2 weeks ago.
By further solidifying our important relationship at this critical
time, the United States-Jordan Free Trade Area Implementation Act will
give further impetus to the international coalition against terrorism
and advance vital U.S. national security interests as well.
For these reasons, I come to the floor in support of H.R. 2603 and
hope that all my colleagues will do the same.
I yield the floor.
The PRESIDING OFFICER. All time has expired. The bill is before the
Senate and open to amendment. If there be no amendment to be offered,
the question is on the third reading and passage of the bill.
The bill (H.R. 2603) was ordered to a third reading and was read the
third time.
The PRESIDING OFFICER. The bill having been read the third time, the
question is, Shall the bill pass?
The bill (H.R. 2603) was passed.
Mr. BOND. Mr. President, I move to reconsider the vote.
Mr. GRAMM. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
____________________