[Congressional Record Volume 147, Number 159 (Friday, November 16, 2001)]
[House]
[Pages H8332-H8335]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
IN OPPOSITION TO ANDEAN TRADE ACT'S TUNA PROVISIONS
The SPEAKER pro tempore (Mr. Forbes). 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 could not help but feel it necessary
to take this special order with the hope that my colleagues in the
House, as well as the American people, can appreciate my concerns about
the provisions of a certain piece of legislation that was just recently
passed by this Chamber. This is in reference to H.R. 3009, the Andean
Trade Agreement bill.
Mr. Speaker, the current trade policy with regards to canned tuna has
provided significant benefits to certain Latin America countries,
namely, Bolivia, Colombia, Peru, as well as Ecuador, while maintaining
an industrial tuna processing base in the United States. Since the
enactment of the Andean Trade Agreement 10 years ago, the number of
tuna factories in that region, the Andean region in South America, has
actually increased by 229 percent. Production capacity now is up 400
percent. Direct employment is up by 257 percent. U.S. exports have
grown from about $15 million to $100 million annually.
In addition, the U.S. tuna industry has invested well over $30
million in new facilities and vessels. However, I must repeat,
extending this agreement by providing duty-free treatment to canned
tuna from our Andean friends and countries there in Latin America,
especially Ecuador, in my humble opinion, Mr. Speaker, will practically
destroy the entire U.S. tuna industry.
I have heard the argument that Congress has included canned tuna both
in the Caribbean Basin Initiative, as well as NAFTA, and some have
questioned why are we not doing the same for Ecuador and the Andean
region. The simple answer is that no other country
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that has been extended this benefit has the potential to literally wipe
out and destroy the entire U.S. tuna industry.
Mr. Speaker, Ecuador alone has a production capacity equivalent to
2,250 tons per day. Using a 5-day workweek, this equates to a
production capacity equivalent to 48.6 million cases per year. Using a
6-day workweek, Ecuador's production capacity will be equivalent to
58.5 million cases per year.
To put this in perspective, U.S. consumption is at 45.3 million cases
per year. In short, Ecuador could produce enough canned tuna to flood
the U.S. market. Brand names like Chicken of the Sea and Bumble Bee,
brand names that Americans have come to trust, in my opinion will be
eliminated from the grocery shelves. It is even questionable whether
tuna from Ecuador is dolphin-safe. So serious are these issues that
Mexico now even levies 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 tuna from the United States.
I am all for free trade, but I am also for fair trade. The fact of
the matter is, more than 10,000 jobs in American Samoa, Puerto Rico and
California will be lost if H.R. 3009 passes in its current form. Why?
Because the minimum wage rate for cannery workers in Ecuador is 69
cents per hour, Mr. Speaker, which in my humble opinion brings us to
the real issue of this legislation.
Mr. Speaker, H.J. Heinz Corporation, the parent company of StarKist
Tuna Company, has lobbied aggressively for the inclusion of canned tuna
in the Andean Trade Agreement. But it must be made clear that StarKist
Tuna Company is the only U.S. tuna processor that supports duty-free
treatment for canned tuna exported from Ecuador. Put another way,
StarKist is the only U.S. tuna processor willing, in my opinion, to
sell out American workers in exchange for 69-cent-per-hour wages that
StarKist now pays its tuna workers in Ecuador.
As you know now, Mr. Speaker, American Samoa is the home of the
largest tuna cannery facility in the world. One facility, currently
operated by StarKist, a subsidiary of Heinz Corporation, employs about
2,700 workers. The other facility is operated by Chicken of the Sea of
California and currently employs about 2,500 workers. Together, these
two companies employ more than 74 percent of my district's workforce in
the private sector. Approximately 85 percent of the private sector jobs
in my district are dependent, either directly or indirectly, upon the
tuna fishing and processing industry. As Malcolm Stockwell, the former
vice president of StarKist Seafood, recently testified before a Senate
committee, ``A decrease in production or departure of one or both of
the existing tuna processors in American Samoa could devastate the
local economy, resulting in massive unemployment and insurmountable
financial problems.''
The CEO of Chicken of the Sea has already noted that if the Andean
Trade Agreement includes duty-free treatment of canned tuna, its
operations in American Samoa will be forced to lay off over 1,000
cannery workers, and that is just for starters. StarKist has testified
that if Ecuador is given the same trade preference as the U.S.
territory of American Samoa, its production would almost immediately
shift to low labor cost areas like Ecuador.
Mr. Speaker, I specifically asked StarKist and Heinz executives what
financial loss StarKist would incur if canned tuna was not included in
the Andean Trade Agreement. I was told that StarKist would suffer no
economic loss. In other words, StarKist is the only one who is pushing
for this because of the low labor costs among Andean countries.
I wish to note that the minimum wage in American Samoa is at $3.20
per hour, which is, by far, way below even our own national minimum
wage structure. It reminds me of the words offered by the late Senator
Borah from Idaho when the issue of fair labor standards was debated in
the Congress as far back as 1937.
Senator Borah said, ``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 employed to live.''
Senator Pepper from Florida then asked the Senator, ``What if he
cannot afford to pay it?''
Senator Borah responded, ``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 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, Mr. Speaker, I agree with Senator Borah. StarKist,
like any other industry, should pay its employees proper wages. That
was one of the big issues in the 1930s when the question of labor
minimum wages was debated in the Congress. The fear was that if some
kind of a minimum wage standard would be established, there would be
chaos in the business industry, especially in those days in the South,
which was always looked upon as an area of low labor costs, 10 to 12
cents an hour for a 10-hour workday, even among children at the time, I
suppose. What they found out is that when they did establish a minimum
wage standard since the 1930s, there was tremendous economic growth in
the economy.
When all is said and done, Mr. Speaker, tuna processing is the only
industry holding together the economy of my district. American Samoa's
only advantage in the global marketplace is duty-free access to the
U.S. market. What price has American Samoa paid to have U.S. trade
privileges, I ask.
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 to the United States. Ecuador and other Latin
American countries do not. American Samoa has been the backbone of
StarKist sales. The Andean countries have not. In the past 25 years,
StarKist and Chicken of the Sea have exported almost $6 billion worth
of canned tuna from American Samoa to the United States. Thanks to
American Samoa, StarKist is now the number one brand of tuna in the
world today.
Mr. Speaker, why is it that StarKist and the parent company Heinz
Corporation are pushing to allow tuna imports to come to the United
States duty-free from the Andean countries and yet are opposed by two
other major tuna processing centers here in the United States and even
by the entire U.S. tuna fishing fleet here in our country?
At a recent hearing, a StarKist official testified, ``StarKist will
continue to sell and can tuna. However, the history of tuna canning in
the U.S. 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 are such
strong supporters of the trade agreement that the entire U.S. tuna
industry opposes? At 69 cents per hour for wages earned for cannery
workers in Ecuador, I can understand why StarKist is pushing for
passage of this legislation.
Mr. Speaker, the U.S. International Trade Commission conducted
section 201 and section 332 investigations in 1984, 1986, 1990 and 1992
to determine if canned tuna was an import-sensitive product. In each
case they overwhelmingly concluded that canned tuna is an import-
sensitive product. The facts that made canned tuna an import-sensitive
product in the ITC studies still apply today. With the advent of canned
tuna from low-wage countries, retail pricing of canned tuna, when
adjusted for inflation, has dropped by 53 percent between 1980 and
2000.
Canned tuna represents a tremendous value versus other sources of
canned protein. In May of 2000, light meat tuna retail prices were 10
cents per ounce while albacore retail tuna prices were 23 cents per
ounce. Competitive proteins were significantly more expensive. That is,
canned chicken was selling at 40 cents per ounce, canned turkey at 40
cents per ounce, Spam at 33 cents per ounce and corned beef was selling
at 20 cents per ounce.
Due to the intense competitive environment caused by low-cost foreign
imports, retail prices of canned tuna in
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the U.S. are the lowest among all developed nations of the world. The
comparison includes Australia, Canada, France, Germany, Italy, Spain
and the United Kingdom.
U.S. tuna processors face significant wage disparities when compared
with foreign tuna processors. Average hourly wages in the U.S.
processing facilities in California, Puerto Rico and American Samoa are
approximately $11, $6.50 and $3.20, respectively.
{time} 1615
Average hourly labor rates in the key exporting countries of Thailand
and Ecuador are approximately 60 cents and 69 cents per hour
respectively.
It should also be noted, Mr. Speaker, that tuna processors in foreign
nations are not required to abide by the same health, welfare, safety,
regulatory, conservation or even environmental standards imposed upon
U.S. tuna processors. In addition, they often receive government and
other financial subsidies that provide an unfair economic advantage.
The quantity of tuna imports measured in kilograms between 1990 and
the year 2000 has increased by 20.3 percent. Within this number, canned
tuna imports have increased by 10 percent, while imports of frozen tuna
loins have increased by 67.3 percent.
Specifically, Mr. Speaker, as it relates to Ecuador and Colombia in
1990 before the U.S.-Andean trade agreement was enacted, Ecuador and
Colombia tuna exports to the United States represented only 2.6 percent
of total U.S. tuna imports. In other words, in 1990 the total value of
tuna that was imported from tuna loins and canned loins from these two
countries was at $9.7 million.
In the year 2000, after 10 years of the Andean trade agreement in
force, Ecuador and Colombia tuna exports to the U.S. represents now
23.3 percent of the total U.S. tuna imports. This represents a 796.2
percent increase, Mr. Speaker, over 10 years and an annualized rate of
growth of 24.5 percent.
Mr. Speaker, these increases in exports have been enabled by a
tremendous expansion of Ecuadorian and Colombian tuna processing and
fishing industries. As I stated earlier, factories are now increased
from 7 to 23 percent. Annual production capacity has increased from 108
million cases per ton to 500 million tons. Direct employment has
increased from 3,500 employees now to 12,500 employees or an increase
of 257 percent. The fleet, which was nonexistent 10 years ago, now
represents the second largest tuna fishing fleet in the eastern
tropical Pacific, right below Mexico. The Ecuadorian fleet now catches
more than 35 percent of the total tuna landed out of the east tropical
Pacific.
As imports have increased, U.S. production volumes have declined
because trade benefits provided to foreign nations make it difficult
for U.S. processing facilities to compete.
For example, in 1990, four of the five tuna processing facilities in
Puerto Rico have closed. Once the largest employer in Puerto Rico, with
more than 15,000 jobs in 1990, Bumble Bee now operates the last
processing facility in Puerto Rico with less than 1,000 workers.
Bumble Bee has stated that they will close their Puerto Rico factory
within 6 months if tuna is included in the ATPA. The key reason is the
hourly labor rate differential of $6.50 an hour in Puerto Rico versus
69 cents an hour in Ecuador. That is obvious.
Chicken of the Sea has closed their tuna processing facility in
Terminal Island in California, while Bumble Bee still operates its
Santa Fe Springs plant in California. Total employment has dropped from
1,000 now to a mere 300.
Bumble Bee has stated that if tuna is included in APTA, they will
shift at least half of their California production to Ecuador within 12
months, resulting in the loss of more than 100 jobs. This will probably
lead to the full closure of their California factory within 2 years.
My district has not lost either of the two tuna processing facilities
yet, operated by both Chicken of the Sea and StarKist, Mr. Speaker.
However, in Department of Labor wage hearings over the past 10 years,
both Chicken of the Sea and StarKist have stated emphatically that any
increase in wage rates will increase in the shift of production to
lower-wage countries.
Based on these testimonies, a total hourly wage increase since 1990
has been approximately 20 cents per hour, which to me personally, Mr.
Speaker, is an insult, much less than the increase in the U.S. minimum
wage over the same period of time. The minimum wage in Samoa is less
than half that of the U.S. despite American Samoa being a U.S.
territory. American Samoa recognizes that any decreases in tuna sector
employment can decimate their fragile economy where the tuna industry
represents 88 percent of private sector employment.
I do not know, Mr. Speaker, how would you describe the disparity in
wage rates, whether or not 69 cents per hour in Ecuador would be
considered cheap labor or slave labor. I sometimes have a very
difficult time distinguishing between the two standards.
Chicken of the Sea has stated that if tuna is included in APTA, they
will shift about half of their workers in American Samoa to Ecuador
within 12 months; and like I said, that is just the beginning.
Concerning our tuna fishing fleet, this is one of the other great
concerns that I have concerning this legislation, Mr. Speaker.
In 1990, the U.S. tuna fishing fleet was the dominant fleet in the
world, allowing the U.S. to exert leadership in international
conservation efforts. The U.S. fleet developed the eastern tropical
Pacific fishing grounds and then developed the western tropical fishing
grounds where they operate today.
In the year 2000, the U.S. tuna fishing fleet now has been surpassed
by Taiwan, Spain, South Korea, Mexico, Ecuador, Venezuela, Japan, and
France; and we are no longer the dominant fishing nation that we once
were.
U.S. tuna boat owners are disadvantaged, as they are required to
abide by strict safety, personal liability, regulatory and
environmental and conservation standards that are vigorously enforced
by the U.S. Department of Commerce National Marine Fisheries Service
and the U.S. Coast Guard. These standards are not observed by foreign-
flag vessels and are not even enforced by their respective governments.
Mr. Speaker, as an example, between 1997 and the year 2000,
Ecuadorian- and Colombian-flag tuna fishing vessels incurred more than
900 violations of Inter-American Tropical Tuna Commission regulations,
with the acronym of IATTC. The IATTC is a multilateral organization
that establishes fishing regulations in the eastern tropical Pacific
Ocean. While the IATTC reports violations, the flag countries of the
violating vessels are to take enforcement action. To date, of the 900
violations only three, only three have been resolved.
The U.S. State Department, which represents the U.S. and the IATTC,
is well aware of these violations and has the authority to impose a
U.S. embargo on fishery products from Ecuador and Colombia to force
compliance with international conservation regulation. However, and
unfortunately, Mr. Speaker, they have not yet taken any action.
Mr. Speaker, if tuna is included in the APTA, the eastern tropical
Pacific fishing grounds will become more valuable. However, the U.S.
tuna fishing fleet, which developed this fishery in the 1960s and the
1970s, cannot return to the ETP, as Mexico, Ecuador and Venezuela have
systematically taken up all available fishing licenses and quotas.
If tuna is included in the APTA, employment in my own district in
tuna processing facilities will be reduced, the U.S. fleet will lose
their largest market for selling their catch, and they will become
competitively disadvantaged versus all other international fleets.
All of the major U.S. tuna boat owners have stated that if tuna is
included in this bill, they will immediately begin the process of
divesting their ownership positions in their vessels worth hundreds of
millions of dollars, and the vessels will ultimately move to foreign
ownership.
As the vessels move to foreign ownership, Mr. Speaker, the U.S. would
lose its voice in multinational conservation efforts.
Mr. Speaker, the U.S. tuna processing and fishing industry has
supported the objectives of the Andean
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trade agreement for the past 10 years despite the fact that canned tuna
was excluded from the actual agreement. To ensure the survival of the
U.S. tuna processing and fishing industry, and to recognize the support
they have provided for the Andean pact nations, I would certainly hope
that the U.S. Congress would continue to exclude canned tuna from the
provisions of this bill.
Mr. Speaker, excluding canned tuna from APTA will not negatively
impact the economies of Ecuador and Colombia, I can assure. In fact,
Bumble Bee, which has a $30 million tuna processing facility with more
than 1,200 employees in Ecuador, will continue to invest and grow in
that region.
Excluding canned tuna from APTA will support more than 10,000 U.S.
tuna processing and fishing jobs in California, Puerto Rico, American
Samoa, and the entire U.S. tuna fishing fleet whose jobs will be at
risk, obviously.
Excluding canned tuna from the APTA will support my district's
economy where some 85 to 88 percent of the private sector employment is
provided by the tuna industry.
Exclusion of canned tuna for the APTA will support the U.S. tuna
fishing fleet of approximately 50 vessels, as I have stated earlier,
out of American Samoa and supply the U.S. canneries while giving the
U.S. a strong voice, hopefully, in multinational fisheries
conservation.
Mr. Speaker, the U.S. represents the largest market for canned tuna
consumption in the world. It is estimated that the U.S. represents 28
percent of that global consumption.
Canned tuna is consumed by 96 percent of U.S. households.
Canned tuna represents the number three item in U.S. grocery stores
based on dollar sales per linear foot per shelf space.
Three U.S. brands, Bumble Bee, StarKist and Chicken of the Sea,
represent more than 85 percent of U.S. tuna consumption.
I would like to share with my colleagues some interesting facts to
consider. Bumble Bee Seafoods, Incorporated, is a U.S. corporation
headquartered in San Diego, California, with revenues of approximately
$750 million and employment of approximately 5,000 people.
Bumble Bee is a wholly owned subsidiary of ConAgra Foods, a U.S.
corporation headquartered in Omaha, Nebraska, with annual revenues of
approximately $27 billion and employment of approximately 80,000
workers, almost all of which is in the United States. ConAgra is the
second largest retail food company in the United States and the largest
food service provider.
Bumble Bee is the number two brand of canned tuna in the United
States with a 27 percent branded market share. Within canned tuna,
Bumble Bee has the number one position in albacore and the number two
position in light meat.
Bumble Bee is the leading brand of canned seafood with number or two
positions in salmon, shrimp, crab, sardines, and other canned seafood
varieties.
Bumble Bee operates tuna, shrimp and surimi processing facilities in
California, Puerto Rico, Louisiana, Minnesota, Ecuador, Fiji, and even
Trinidad.
Bumble Bee is the largest buyer of canned salmon in the world and the
largest customer of U.S.-owned processing locations in the State of
Alaska.
Bumble Bee sources raw material from U.S. fishing vessels harvesting
tuna, salmon, pollock, whiting, shrimp and other fish species in the
major oceans of the world.
Mr. Speaker, I want to personally thank again the gentleman from
California (Mr. Thomas), the chairman of the Committee on Ways and
Means, and the gentleman from New York (Mr. Rangel), our senior ranking
member, for their offered assistance to continue our efforts to
formulate some resolution to my concerns relative to the U.S. tuna
industry.
I would be remiss if I did not also express my personal thanks and
appreciation especially to my colleague and friend, the gentleman from
California (Mr. Cunningham), without whom we would not have gone this
far to find a solution hopefully to the needs of our workers and the
entire U.S. tuna industry.
I also want to thank Mr. Dennis Mussell, the CEO of Chicken of the
Seafood Company, and Mr. Chris Lischewski, the CEO of Bumble Bee
Seafood, and Mr. Julius Zolezzi and Paul Crampe who represented some 50
boat owners and who make up the entire U.S. tuna fishing fleet through
the United Tuna Cooperative.
Mr. Speaker, I do not mind that we work with our colleagues to
address the social and economic needs of our friends in the Andean
region. We have been doing this now for the past 10 years since the
Andean trade agreement was enacted.
My only concern, Mr. Speaker, is that our national policy also now is
to sacrifice the entire U.S. tuna industry in order to accommodate the
economic needs of our friends from Ecuador, Bolivia, Peru and Colombia.
I hope not, Mr. Speaker. I sincerely hope not.
One of the issues or reasons why we are trying to do crop
substitution in helping these Andean countries was to lessen the drug
trafficking going on coming from Latin America into our country. I
recall one of the previous presidents of the Republic of Colombia made
a very interesting observation. He said if there was not so much
consumption and demand by Americans maybe there would not be a supply
or a need to have a supply of drugs coming from Latin America.
So I look forward to continuing consultations with our House
colleagues, as well as with the Members of the House when this bill
will be further reviewed, I hope, in conference.
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