[Congressional Record Volume 147, Number 133 (Friday, October 5, 2001)]
[House]
[Pages H6417-H6419]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
ANDEAN TRADE PREFERENCE ACT
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 3, 2001, the gentleman from American Samoa (Mr. Faleomavaega)
is recognized for 60 minutes as the designee of the minority leader.
Mr. FALEOMAVAEGA. Mr. Speaker, I just learned yesterday that a bill
was hastily prepared 2 nights ago by the staff of the Committee on Ways
and Means and without the opportunity to seek comments and testimonies,
even to appear before the Subcommittee on International Economic Policy
and Trade, the bill was marked up in full committee this morning. The
bill passed today by a vote of 23 to 17, rejecting my good friend's,
the gentleman from New York (Mr. Rangel), amendment that would have
literally saved the U.S. tuna industry.
I wanted to thank my good friend, the gentleman from California (Mr.
Baca) for his eloquent remarks, the gentleman from Louisiana (Mr.
Jefferson) for his support, and the gentleman from Georgia (Mr. Lewis)
for his support. I especially want to note, the precious vote that also
was received by my good friend, the gentleman from Georgia (Mr.
Collins) for his support of this legislation.
Mr. Speaker, I sincerely hope the great spirit will enlighten my
colleagues of the House, especially if this bill, H.R. 3009, the Andean
Trade Preference Act, if this bill passes by not excluding tuna as a
duty-free import from Andean countries, it will essentially mean the
loss of some 10,000 jobs to tuna cannery workers in California, Puerto
Rico, and my district of American Samoa.
Mr. Speaker, current trade policy with regards to canned tuna has
provided significant benefits to certain Latin American countries,
while at the present time has maintained an industrial tuna processing
base in the United States.
Since the enactment of the Andean Trade Preference Act, a number of
tuna factories in the Andean region has increased to 229 percent,
production capacity is up to 400 percent, direct employment is up to
257 percent, and U.S. exports have grown from about $15 million to $100
million annually.
{time} 1315
In addition, the U.S. tuna industry has invested over $20 million in
new facilities and vessels. However, I must repeat, extending this
agreement by providing duty-free treatment to canned tuna from Andean
countries, especially Ecuador, will, in my opinion, destroy the U.S.
tuna industry.
I have heard the argument that Congress has included canned tuna both
in the Caribbean Basin Initiative and NAFTA, and some have questioned
why we are not doing the same for Ecuador and the Andean region. Well,
the answer simply is that no other region, especially a country like
Ecuador, once we allow duty-free canned tuna to be imported from the
Andean countries, has the potential of literally wiping out or
destroying the U.S. tuna industry.
For example, Mr. Speaker, Ecuador alone has the production capacity
now equivalent to 2,250 tons per day production. Using a 5-day
workweek, this equates to a production capacity equivalent to 48.6
million cases of canned tuna per year. And using a 6-day workweek,
Ecuador's production capacity is equivalent to 58.5 million cases of
canned tuna per year. Now, the interesting thing about this, Mr.
Speaker, is that U.S. consumption is only 45.3 million cases of canned
tuna per year. What does that mean? Ecuador could produce enough canned
tuna to flood the entire U.S. market. And brand names like Chicken of
the Sea and Bumble Bee, brands that Americans have come to trust, would
be eliminated from grocery stores. It is even questionable whether tuna
from Ecuador is dolphin-safe. So serious are these issues that Mexico
levied a 24 percent duty last year on canned tuna exported from
Ecuador.
Mr. Speaker, it is also important to note that Ecuador levies a 20
percent duty on imported canned tuna from the United States. Now, I am
all for free
[[Page H6418]]
trade, Mr. Speaker; but I am also for fair trade. The fact of the
matter is, more than 10,000 jobs in my district, Puerto Rico, and
California will be lost if H.R. 3009 passes in its current form. Why?
Because the minimum wage rate for workers in Ecuador is 69 cents per
hour. This is why a company like StarKist Tuna Company and its parent
company, the Heinz Corporation, have been pressuring Congress to allow
StarKist to hire fish cleaners in Ecuador and pay Ecuadorans 69 cents
per hour. Would this be considered cheap labor or slave labor, I ask,
Mr. Speaker?
Mr. Speaker, the Heinz Corporation, the parent company of StarKist
Seafood Company, has lobbied for the inclusion of canned tuna as a
duty-free import in the Andean Trade Agreement. But it must be made
clear that the StarKist Seafood Company is also the only U.S. tuna
processor that supports duty-free treatment for canned tuna exported
from Ecuador. Put another way: StarKist is the only tuna processor
willing, in my opinion, to sell out American workers in exchange for
wages of 69 cents per hour to pay Latin American workers.
As my colleagues may know, Mr. Speaker, American Samoa is the home of
the largest tuna cannery facility in the world. One cannery facility is
operated by StarKist, a subsidiary of Heinz Corporation; and the other
facility is owned by the Chicken of the Sea, a company out of
California. Today, these two companies employ more than 5,150
employees, or 74 percent of American Samoa's workforce. Approximately
80 percent of the private sector jobs in my district, Mr. Speaker, are
dependent, either directly or indirectly, upon the tuna fishing and
processing industry.
As Malcolm Stockwell, former vice president of StarKist Seafood
Company recently testified, and I quote, ``A decrease in production or
departure of one or both of the existing processors in American Samoa
could devastate the local economy, resulting in massive unemployment
and insurmountable financial problems.''
The chief executive officer of Chicken of the Sea has already noted
that if the Andean Trade Agreement includes duty-free treatment for
canned tuna, its operations in American Samoa would be forced to
downsize by as much as 50 percent. StarKist has testified that if
Ecuador is given the same trade preference as a U.S. territory, like my
district, its production would almost immediately shift to low labor-
cost areas.
Now, let us talk about labor-cost areas. In fact, I just want to
share another bit of information with my colleagues this afternoon.
Right now, under the Andean Trade Agreement, fish loins are exported
duty free to the United States; and companies like Bumble Bee, Chicken
of the Sea, and StarKist buy these fish loins from Andean countries,
like Ecuador. But if canned tuna can also be imported duty free, what
is to prevent these U.S. tuna companies from laying off 800 workers
from Puerto Rico and closing their facilities in my district, as well
as in California, and going and operating out of Ecuador and other
Andean countries?
Mr. Speaker, my people want to work. They do not want handouts. I do
not know if my colleagues are aware of the fact that for the 40 years
since the welfare program was implemented here in the United States, my
leaders and our people have never wanted to have welfare applied to our
territory. Why? Because we want to work. We do not want handouts. We
want to work for what we earn. And if this happens, if this bill
passes, with the destruction of the U.S. tuna industry, am I going to
have to now come before the Congress and ask for subsidies in support
of the 10,000 displaced workers as a result of this bad and poor
legislation?
Mr. Speaker, I specifically asked StarKist and H.J. Heinz executives
what financial loss StarKist would incur if canned tuna was not
included in the Andean Trade Agreement, and I was told StarKist would
suffer no economic loss. In other words, StarKist is only in it for the
lower labor cost among the Andean countries. I also wish to note that
the minimum wage rate in my own district, in American Samoa, for a fish
cleaner, is only $3.20 per hour, which is below the national minimum
wage standard and which reminds me of these words offered by a good
Senator from Idaho by the name of Senator Borah during the course of
the Fair Labor Standards debate right here in this Chamber in 1937.
Senator Borah said, and I quote, ``I look upon a minimum wage such as
will afford a decent living as a part of a sound national policy. I
would abolish a wage scale below a decent standard of living, just as I
would abolish slavery. If it disturbed business, it would be the price
we must pay for good citizens. I take the position that a man who
employs another must pay him sufficient to enable the one employee to
live.'' And Senator Pepper, from Florida, asked, ``Well, what if he
cannot affords to pay it?'' Senator Bora responded, and I quote, ``If
he cannot afford to pay it, then he should close up the business. No
business has a right to coin the very lifeblood of workmen and women
into dollars and cents. Every man or woman who is worthy of hire is
entitled to sufficient compensation to maintain a decent standard of
living. I insist that American industry can pay its employees enough to
enable them to live.''
Quite frankly, I agree with Senator Borah, Mr. Speaker. StarKist,
like any other industry, should pay its employees, whether in Ecuador
or American Samoa, enough to live. StarKist should not be about the
business of lobbying to suppress wages.
Mr. Speaker, I want to share a bit of history also with the Members.
At a time when the national debate right here in this Chamber was about
whether or not we should have a minimum standard wage rate, and this
debate took place in 1937, the Members representing our fellow
Americans from the South did not like the idea that if business wanted
to find cheap labor they would go to the South. Industries up in the
North always took advantage of the fact that they could find cheap
labor if they would go to the South. Well, when this minimum wage was
finally passed in the Congress, and after a hot debate in this Chamber,
guess what, there was no economic chaos. There was tremendous growth
that came along with it, with the increase of wages of the working men
and women in our country.
When all is said and done, Mr. Speaker, tuna processing is the only
industry holding together the economy of my district, the Territory of
American Samoa. American Samoa's only advantage in the global
marketplace is duty-free access to the U.S. market. And what price has
American Samoa paid to have the U.S. trade privileges? As a territory
of the United States, our men and women have paid the ultimate
sacrifice in military service to our Nation.
American Samoa pledges its allegiance without question to this great
Nation of ours. Ecuador and other Andean countries do not. American
Samoa has been the backbone of StarKist's sales. Ecuador has not. In
the past 25 years, StarKist and Chicken of the Sea have exported more
than $6 billion worth of tuna from American Samoa to the United States.
Thanks to American Samoa, StarKist is the number one brand of tuna in
the world today. They call him ``Charlie, the Tuna.'' Well, I do not
know about Charlie the Tuna these days with the way they are operating.
Mr. Speaker, why is it that StarKist and its parent company, Heinz
Corporation, are willing to allow tuna imports to coming into the U.S.
duty free from other Andean countries, a position opposed by two other
major U.S. tuna companies and even the entire U.S. tuna-fishing fleet?
As StarKist testified at a recent Senate hearing, and I quote,
``StarKist will continue to can and sell tuna. However, the history of
tuna canning in the United States and Puerto Rico has demonstrated
quite clearly that StarKist will also take whatever action is required
to remain cost competitive.''
Is this why StarKist and Heinz Corporation support a trade agreement
that the entire U.S. industry opposes? Will StarKist and Heinz
Corporation sell out America at a time when our Nation is in recession
and our country is under attack?
Mr. Speaker, I trust that the Members of this esteemed body will do
what is right for America. I trust that in these difficult times
Members of this body will protect U.S. industries and U.S. workers,
particularly the tuna industry. I trust that we will stand
[[Page H6419]]
united together to exclude canned tuna from this proposed bill, H.R.
3009.
I would like to share with my colleagues some additional information
that was submitted to me by my good friend, the CEO of the Bumble Bee
Seafood Company out of California, in San Diego. Another note to my
colleagues:
The Andean Pact nations do not comply with many of the environmental
regulations supported by the United States. For instance, one of the
Andean Pact countries, Bolivia, does not adhere to the dolphin-safe
position of the U.S. market. In addition, many of the Andean Pact
countries refuse to take enforcement actions against them.
The bill also penalizes the U.S. tuna industry for being American.
Not only do we adhere to minimum wage standards and provide Social
Security and medical insurance for our workers, we also enforce U.S.
regulations regarding the environment and trade.
The letter says, ``I support the U.S. initiative to battle the drug
trade.'' We all know that, Mr. Speaker. But I think what is most
important here is that I am making an appeal to StarKist Tuna Company
and its parent company, Heinz Food Corporation, to join with the rest
of the U.S. tuna industry to make the U.S. tuna industry a viable and
credible industry in our country for the sake of some 10,000 workers
who are about to lose their jobs if the Congress does the bidding of
Heinz Corporation.
I think this is most unfair, Mr. Speaker; and I will continue working
on this issue in the coming weeks and months. I sincerely hope that
there will be a reasonable and an equitable solution to this problem
that we now have.
Mr. Speaker, I submit for the Record the full letter from the CEO of
the Bumble Bee Seafood Company, to which I earlier referred.
Bumble Bee Seafoods,
San Diego, CA, August 22, 2001.
Hon. Eni F. H. Faleomavaega,
Rayburn Bldg.,
Washington DC.
Dear Congressman Faleomavaega: I am writing on behalf of
Bumble Bee Seafoods, the number one brand of canned seafood
and number two brand of canned tuna in the United States.
Bumble Bee, the only American company with a financial
investment in the Andean tuna industry (in Ecuador), along
with Chicken of the Sea and U.S. tuna boat owners, strongly
oppose the granting of NAFTA status for canned tuna products
to members of the Andean Pact as contemplated in S525.
The U.S. tuna industry has been an essential part of the
U.S. economy for close to 100 years. We currently provide
more than 10,000 jobs in California, Puerto Rico and American
Samoa. In addition, we support an even greater number of jobs
in related industries and we underpin the existence of the
U.S. high seas tuna fishing fleet that operates throughout
the Pacific Ocean.
From a consumer standpoint, canned tuna represents the
third fastest moving product category in the entire U.S.
grocery business and provides a high quality, affordable
source of protein for 96% of U.S. families.
As written, S.525 would significantly damage the U.S. tuna
industry, threatening jobs in both the processing and fishing
sector. More importantly, it would place our business into
foreign hands and benefit countries that do not abide by the
same environmental, labor and safety standards imposed on
U.S. manufacturers. S525 penalizes the U.S. tuna industry for
being American and does an injustice to the U.S. consumer.
Let me give you some key facts:
The Andean Pact nations do not comply with many of the
environmental regulations supported by the United States. For
instance, one of the Andean Pact countries, Bolivia, does not
adhere to the dolphin safe position of the U.S. market. In
addition, many of the Andean Pact countries refuse to take
enforcement action against their flag vessels which have been
found to be in violation of IATTC, (Inter American
Tropical Tuna Commission) fishing regulations. These
actions--or lack of action--threaten the conservation of
the tuna stocks.
U.S. Trade policy already provides beneficial access to the
U.S. market for the Andean Pact countries through the sale of
frozen tuna `loins'. The current import duty on tuna loins
into the United states is less than one half of one percent,
which is virtually zero. This trade policy has enabled the
Andean Pact tuna industry to explode over the last ten years
and supports our position that tuna should continue to be
exempted from the Andean Trade Preference Agreement.
Andean Pact Tuna Industry Growth--1990 to 2000
Number of tuna factories has increased from 7 to 23, up
229%; production capacity has increased from 450 to 2,250
tons per day, up 400%; direct employment has increased from
about 3,500 to 12,500, up 257%; exports to the U.S. have
grown from about $15 million to more than $100 million, up
567%; European exports are up even more significantly; the
Andean fishing fleet has grown to the largest in the ETP and
now represents more than 35% of the ETP catch.
To put this capacity in perspective, there is enough
production capacity in the Andean Pact countries to supply
the entire U.S. market. This leads to the real risk of
product dumping which will damage the domestic tuna industry.
This Andean Pact product is manufactured utilizing labor
costs of less than $0.70/hour and a cost structure that is
subsidized by their various governments. This will force the
closure of U.S. tuna processing facilities and will decimate
the economies of western Puerto Rico and American Samoa where
85% of public sector employment is based on the U.S. tuna
industry.
The risk of product dumping has already been experienced by
our NAFTA trading partner to the south, Mexico. Mexico
recently imposed a 23% import duty on canned tuna products
from one of the Andean Pact nations, Ecuador, due to product
dumping.
S. 525 is not reciprocal. The bill provides NAFTA duty
benefits to the United States market while the Andean Pact
countries continue to enforce trade barriers against the U.S.
tuna industry by imposing import duties on U.S. produced
canned tuna as follows: Ecuador, 20%; Colombia, 20%; Peru,
12%; Bolivia, 10%; Venezuela (a possible addition to the
Andean Pact), 20%.
This non-reciprocity also extends to other U.S. produced
products that are essential to the processing of canned tuna
such as empty cans, packaging and ingredients which are
subject to import duties by the Andean Pact countries.
The bill penalizes the U.S. tuna industry for being
American. Not only do we adhere to minimum wage standards and
provide social security and medical insurance for our
workers, we also enforce U.S. regulations regarding the
environment and trade. Providing NAFTA trade benefits to the
Andean Pact countries awards them for not complying with
these policies.
S. 525 ignores the obligation we have to the U.S. consumer
since the quality and food safety standards of many of the
tuna processing facilities in the Andean Pact countries are
not up to the same standards utilized by U.S. canned tuna
processors.
To support the U.S. initiative to battle the drug trade,
Bumble Bee has already established tuna loining operations in
one of the Andean Pact countries. Ecuador. We are the only
American company that has invested in Andean Pact region--
close to $25 million--and we currently provide more than
2,000 jobs.
Yet despite our presence in Ecuador, Bumble Bee does not
support S. 525 due to the negative ramifications we have
highlighted in this letter.
In summary, S. 525 does not recognize the current tariff
benefits on tuna products enjoyed by Andean Pact countries,
ignores the tariff recently imposed on tuna products from
Ecuador by our primary NAFTA trading partner, will lead to
``dumping'' that will in turn cause significant harm to the
U.S. tuna industry and has significant potential to have
negative consequences on the American consumer.
We therefore urge you to exempt canned tuna products from
the scope of trade benefits offered by S. 525. There is no
justification for granting such trade benefits at this time.
I would like to meet with you to discuss this matter in
more detail. I can be reached by phone, e-mail or mail and am
happy to travel to Washington to provide any other facts or
information that can help you make an informed and
responsible decision on this critical piece of trade
legislation.
Thank you in advance for your support.
Very truly yours,
Christopher Lischewski,
President, Chief Operating Officer,
Bumble Bee Seafoods.
____________________