[Congressional Record Volume 148, Number 66 (Tuesday, May 21, 2002)]
[Senate]
[Pages S4592-S4614]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page S4592]]
            ANDEAN TRADE PREFERENCE EXPANSION ACT--Continued

  The PRESIDING OFFICER. The Senator from Mississippi.


                           Amendment No. 3406

  Mr. LOTT. Parliamentary inquiry, Madam President. What is the pending 
order of business?
  The PRESIDING OFFICER. There is a motion to table the Allen 
amendment.
  Mr. LOTT. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms) and the Senator from Arkansas (Mr. Hutchinson) are necessarily 
absent.
  The yeas and nays resulted--yeas 49, nays 49, as follows:

                      [Rollcall Vote No. 119 Leg.]

                                YEAS--49

     Allard
     Baucus
     Bennett
     Bond
     Breaux
     Brownback
     Burns
     Byrd
     Campbell
     Chafee
     Cochran
     Conrad
     Craig
     Crapo
     Daschle
     Domenici
     Ensign
     Enzi
     Frist
     Gramm
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Kyl
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Murkowski
     Nelson (FL)
     Nelson (NE)
     Nickles
     Reid
     Roberts
     Santorum
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Torricelli
     Voinovich
     Wyden

                                NAYS--49

     Akaka
     Allen
     Bayh
     Biden
     Bingaman
     Boxer
     Bunning
     Cantwell
     Carnahan
     Carper
     Cleland
     Clinton
     Collins
     Corzine
     Dayton
     DeWine
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Fitzgerald
     Graham
     Harkin
     Hollings
     Johnson
     Kennedy
     Kerry
     Kohl
     Landrieu
     Leahy
     Levin
     Lieberman
     Mikulski
     Miller
     Murray
     Reed
     Rockefeller
     Sarbanes
     Schumer
     Sessions
     Shelby
     Snowe
     Specter
     Stabenow
     Thurmond
     Warner
     Wellstone

                             NOT VOTING--2

     Helms
     Hutchinson
       
  The VICE PRESIDENT. On this question, the yeas are 49, the nays are 
49. The Senate being equally divided, the Vice President votes ``yes,'' 
and the motion to table is agreed to.
  Mr. GRAMM. I move to reconsider the vote.
  Mr. LOTT. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mrs. Clinton). The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Madam President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Madam President, I ask unanimous consent there be 30 
minutes equally divided in the usual form prior to a vote in relation 
to the Hutchison amendment No. 3441; that upon disposition of the 
Hutchison amendment, the Kerry amendment No. 3430, be the pending 
business, with 60 minutes for debate equally divided and controlled in 
the usual form prior to a vote in relation to the amendment; that upon 
disposition of the Kerry amendment, the Senate resume the Dorgan 
amendment No. 3439, there be 30 minutes of debate controlled by Senator 
Dorgan, and that at the use or yielding back of that time, the 
amendment be withdrawn without further intervening objection or debate; 
that no second-degree amendments be in order to either the Hutchison or 
Kerry amendments covered under this unanimous consent agreement prior 
to a vote in relation to the amendments.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. This last vote took a long time; the vote this morning took 
a long time. The Democrats and the Republicans are now even. We will 
have 25 minutes, the majority said, before we will cut off the votes. 
Everyone should be on notice. That means whether we have a hearing with 
the Defense Department or we are in a car wreck in front of the Labor 
Department, it doesn't matter, after 25 minutes we will cut off the 
vote.
  Mr. LOTT. Having been in the same position on how long these votes 
require, I understand and support what the assistant majority leader 
stated. We need to bring these votes to a conclusion.
  I must add, though, in the last vote we did have a Senator who had 
been involved in a little accident and had to take a little extra time 
to get here; otherwise, we would not have asked it be held so long. I 
think it is fair notice that everyone realize we have a lot of work to 
do. We cannot hold every vote open 20 or more minutes. We will try to 
cooperate with the democratic leadership in that effort.
  Mr. REID. If the Republican leader will yield, the votes are 15 
minutes; we will extend them an extra 10 minutes. The votes are still 
15 minutes.
  The PRESIDING OFFICER. The Senator from Texas.


                           Amendment No. 3441

  Mrs. HUTCHISON. Madam President, I call up amendment No. 3441 and ask 
for its immediate consideration.
  The PRESIDING OFFICER (Mr. Carper). The Senator from Texas is 
recognized.
  Mrs. HUTCHISON. I introduce this amendment to the trade package. I 
strongly support the bill on the floor, including the Andean Trade 
Preference Act and the Generalized System of Preferences. These 
programs seek to help the Andean countries of Bolivia, Columbia, 
Ecuador, and Peru, and other developing nations, by applying 
preferential treatment for their exports.
  We want to reduce and eliminate tariffs on imports from these 
countries to help them develop stronger economies. These programs 
benefit both countries. They improve the lives of the citizens of the 
exporting countries through improved economic conditions. These 
programs give open access to the U.S. market, the best market in the 
world.
  For example, since the Andean Trade Preference Act went into effect 
in 1991, the Andean nations have experienced $3.2 billion in new output 
and $1.7 billion in new exports. This has led to the creation of more 
than 140,000 legitimate jobs in the region. These programs help the 
United States by developing better markets for our exports. If we can 
help developing countries increase economic growth and prosperity, 
they, then, will demand more imports, which will, of course, provide 
U.S. manufacturers with more consumers for their products.
  Another important benefit of the Andean Trade Preference Act is that 
by providing for the people of these regions employment opportunities 
in legitimate businesses, we hope to keep them from needing or wanting 
or in any way being drawn to narcotics businesses. This contributes 
greatly to promoting stability in the area and to our efforts to reduce 
the flow of illegal drugs across our borders.
  It is clear that the Andean Trade Preference Act and the Generalized 
System of Preferences help both sides. Since we are giving a benefit to 
these countries, however, we do have the right to expect something in 
return to ensure that we do not help countries that may work against 
our interests in other ways. For this reason, we have established 
conditions that a country must meet in order to qualify as a 
beneficiary.
  Conditions we have required in the past include that a beneficiary 
not be a Communist-controlled country; that it has not nationalized or 
expropriated property of U.S. citizens; that it enforce the protection 
of intellectual property of U.S. citizens; certainly we want it to 
recognize binding arbitration awards in favor of U.S. citizens; we want 
to make sure they give preferential treatment to the United States if 
they give it to other developed nations; we want to make sure that any 
country with which we have these preferences is a signatory to an 
extradition treaty with the United States; and we want to make sure 
they recognize workers' rights.
  In the bill before the Senate today we add seven more criteria that 
the President must consider before designating a country a beneficiary, 
including whether the country has demonstrated a commitment to the WTO 
and to negotiating a Free Trade Area of the

[[Page S4593]]

Americas; that the protection of intellectual property rights is 
consistent with the Uruguay Round agreement; that the country provides 
specific workers rights; demonstrates a commitment to eliminating the 
worst forms of child labor; that the country has met counter-narcotics 
certification criteria; that the country has taken steps to implement 
an anti-corruption convention; and that government procurement 
procedures are transparent and nondiscriminatory.
  As I have looked at this list of criteria, I noticed a glaring 
omission. We are in the middle of a war on terrorism; yet there is no 
requirement that a country with which we would have fair trade and give 
preferences would support us in that war. It is clear we are fighting a 
war for freedom itself. We can't win this war alone. We need the help 
of our friends and allies around the world, for example, to track down 
terrorist cells or to cut off funds. More than $100 million in assets 
of terrorists and their supporters have been frozen around the world. 
Of that $100 million, the United States has frozen about $30 million. 
The other $70 million has been cut off by various allies. We must have 
the cooperation of allies and friends if we are going to defeat the 
enemy of freedom.
  I am introducing an amendment today that establishes a requirement in 
addition to the seven new requirements that we have included in the 
bill before the Senate that the country support our efforts in the war 
on terrorism in order to receive beneficiary status under the Andean 
Trade Preference Act or Generalized System of Preferences. The kind of 
help that each country can give will vary and it may depend on the 
circumstances a particular country faces, the opportunity presented to 
it. Some will help us militarily, some will cut off funds, while others 
will share intelligence which can be very helpful, very important. Some 
may do so publicly, some privately. It is even possible a country may 
not have an opportunity to provide anything but moral support, but we 
want that moral support.
  We want the country to be on the record helping us in the fight for 
freedom and making sure that a terrorist network cannot gain a foothold 
in any country with whom we have trade preferences.
  I don't think it would be appropriate to try to specify the kind of 
help that a country must give. But I believe we must make it clear that 
we expect the country receiving preferences from the United States with 
whom we will start trade, we will have commerce, we will send goods in, 
and we will hopefully export goods from that country to the United 
States--there will be a lot of commerce. We need to make sure that the 
people with whom we are trading will respect this war on terrorism and 
be helpful to our country in rooting out terrorism wherever it may be.
  I hope my colleagues will support this effort. I certainly think it 
is going to be very important for us to have the help of every nation 
on Earth. Every nation that is freedom loving is also a nation that is 
at risk, if we don't win this war on terrorism. If these terrorists can 
defeat the United States of America, they will try to take over the 
world and wipe out freedom wherever it may be. We are in this together. 
We must have the full cooperation of every country with whom we are 
trading.
  The bill before us today is going to put America, I hope, in a much 
better position to have better trade relations with countries around 
the world. The Andean Trade Preference Act has been in place but has 
lapsed. These poor countries are certainly good partners. We want to 
continue to have good trade relations with these countries and help 
them build democracies and stable governments.
  There are 130 free trade agreements in the world. The United States 
is party to only three. The Andean Trade Preference Act has lapsed. We 
will hopefully renew it with passage of this legislation. But there are 
130 agreements in the world, and the United States is party to only 
three. That is not a tenable situation.
  We need to open our markets. We need to provide more jobs in America 
by exporting products. We need to help other countries have access to 
the great market of the United States of America which has the greatest 
consumer capacity in the world. We need to be open to these countries 
that need this kind of help to stabilize their own governments. It is 
in everyone's best interest that we have free and fair trade. It 
promotes freedom and democracy.
  If we are going to have free and fair trade to promote freedom and 
democracy, we should certainly require that people help us in the war 
on terrorism. The war on terrorism is the war to protect freedom in the 
world. It goes hand in hand with free and fair trade, democracy, free 
enterprise, and open government. But we must also win the war on 
terrorism and protect freedom for ourselves, our allies, and our 
trading partners throughout the world.
  I urge my colleagues to support this amendment to add the eighth 
criteria to the seven that the President would use to select countries 
that would receive the preferences of our country.
  I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? At the moment, 
there is not a sufficient second.
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, parliamentary inquiry.
  Mrs. HUTCHISON. I asked for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There is a sufficient second.
  The yeas and nays were ordered.
  Mrs. HUTCHISON. Mr. President, I inform the Senator from Montana that 
if there is no one on the other side, I am prepared to yield back the 
time.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I think the Senator from Texas has a good 
idea. Under current law, there is discretion but this would extend 
benefits. Certainly strong consideration should be given to a country's 
support or lack of support for our war on terrorism.
  I think the Senator has added a very valuable additional criteria to 
the President's which should be considered. I urge all Senators to 
support the amendment.
  I yield the remainder of our time. We are ready for a vote.
  The PRESIDING OFFICER. All time is yielded. The question is on 
agreeing to the amendment. The yeas and nays have been ordered, and the 
clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from North Carolina (Mr. 
Helms), the Senator from Tennessee (Mr. Thompson), the Senator from 
Arkansas (Mr. Hutchinson), and the Senator from New Hampshire (Mr. 
Gregg) are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 96, nays 0, as follows:

                      [Rollcall Vote No. 120 Leg.]

                                YEAS--96

     Akaka
     Allard
     Allen
     Baucus
     Bayh
     Bennett
     Biden
     Bingaman
     Bond
     Boxer
     Breaux
     Brownback
     Bunning
     Burns
     Byrd
     Campbell
     Cantwell
     Carnahan
     Carper
     Chafee
     Cleland
     Clinton
     Cochran
     Collins
     Conrad
     Corzine
     Craig
     Crapo
     Daschle
     Dayton
     DeWine
     Dodd
     Domenici
     Dorgan
     Durbin
     Edwards
     Ensign
     Enzi
     Feingold
     Feinstein
     Fitzgerald
     Frist
     Graham
     Gramm
     Grassley
     Hagel
     Harkin
     Hatch
     Hollings
     Hutchison
     Inhofe
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Kyl
     Landrieu
     Leahy
     Levin
     Lieberman
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Mikulski
     Miller
     Murkowski
     Murray
     Nelson (FL)
     Nelson (NE)
     Nickles
     Reed
     Reid
     Roberts
     Rockefeller
     Santorum
     Sarbanes
     Schumer
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stabenow
     Stevens
     Thomas
     Thurmond
     Torricelli
     Voinovich
     Warner
     Wellstone
     Wyden

                             NOT VOTING--4

     Gregg
     Helms
     Hutchinson
     Thompson
  The amendment (No. 3441) was agreed to.
  Mr. BAUCUS. Mr. President, I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.


                           Amendment No. 3430

  The PRESIDING OFFICER. Under the previous order, there is 60 minutes 
on the Kerry amendment No. 3430.
  Mr. BAUCUS. Mr. President, the next amendment is the Kerry amendment,

[[Page S4594]]

as the Chair announced, with 60 minutes evenly divided. I am just going 
to take a few minutes until the Senator from Massachusetts is back, so 
he can speak on his amendment.
  Very briefly, this amendment may sound good on the surface, but for 
very compelling reasons it is not a good idea. It is a very bad idea. I 
will tell you why. It is true that under current law, one has the 
argument that foreign investors are at an advantage compared to 
domestic investors in seeking to protect their rights, say, in a fifth 
amendment takings question regarding, say, an environmental statute. 
The Methanex case dealing with MTBEs in California has not yet been 
resolved, but there is an argument that foreign investors in this case 
are in a more advantageous position than a U.S. investor with respect 
to the same kind of proceeding, and that is because of the way 
investor-state relationship rights are written under chapter 11 of 
NAFTA.
  There are many treaties which govern investor-state relations that 
are causing some question. One is the one I mentioned. I will not get 
into great detail as to why the amendment offered by the good Senator 
from Massachusetts should not be adopted. Suffice it to say that in 
this underlying bill we have made major changes to ``level the playing 
field'' between foreign and domestic investors, as well as the rights 
of those seeking to uphold municipal and State regulations with respect 
to public health, safety, and the environment. It is totally a level 
playing field.
  To make that point even further, we adopted in the underlying bill a 
provision suggested by the Senator from Massachusetts, Mr. Kerry, which 
made it crystal clear the rights of foreign investors in America do not 
enjoy an advantageous position over the rights of American investors to 
make sure the playing field is exactly level.
  As a matter of comity, I can now let the Senator from Massachusetts 
go ahead and explain his amendment. I thought I would get started while 
we were waiting for the Senator to come to the Chamber. He has had some 
other matters to attend. He is here immediately, and we are glad to 
have him here to speak to the amendment.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Massachusetts is recognized.
  Mr. KERRY. Mr. President, are we operating under any time 
constraints?
  The PRESIDING OFFICER. There is 60 minutes of debate equally divided.
  Mr. KERRY. Mr. President, I yield myself such time as I may use.
  I want to acknowledge the hard work the chairman and ranking member 
and those who are trying to press this issue have made. The issue I am 
raising does not threaten the capacity of investor-state relationships 
to be protected.
  Let's be very clear about what is happening. As is so often the case 
on the floor of the Senate, especially when we are limited in time as 
to how much debate we are going to have, and when we get into these 
pressure situations, big arguments are thrown out. People raise these 
red herrings and these notions of sort of a threat to business or to 
treaties or other things. I respectfully submit that a careful analysis 
of what we do does not in any way threaten the capacity of the 
investor-state relationships to be protected under treaties and, 
specifically, for this trade relationship that somehow we are going to 
approve on the floor--and I am going to vote for it. I am not trying to 
disrupt the process. I am here trying to make this process fair and 
sensible.
  The fact is that chapter 11 of NAFTA is designed to provide foreign 
investors with the means to seek compensation when a government takes 
action to decrease the value of the investment. We obviously want that; 
other investors want that. If a government takes an action that 
decreases the value of the investment, people have a right to recourse. 
Either the action of the government might be through the direct 
physical seizure of property or it might be indirect regulatory action 
of some kind. That process, which we set up in this legislation, is the 
model for how that will be done. So it is appropriate that we do that 
here.
  But I am not coming to the floor expressing a concern that is mine 
alone. The U.S. Conference of Mayors supports this amendment. The 
National Council of State Legislatures supports this amendment. The 
National Association of Attorneys General supports this amendment, and 
countless other State and government entities do. The attorney general 
of the chairman's home State of Montana supports it.
  On May 14 he wrote:

       I applaud the Baucus amendment, but remain concerned that 
     the amendment would not be adequate to protect United States 
     sovereign interests and preserve the authority of the U.S. 
     Government at all levels to enact and enforce reasonable 
     measures to protect the public welfare.

  A lot of people have grown upset and concerned about the effect of 
NAFTA's investment settlement dispute process and the effect it has had 
on the ability of those States to promulgate legitimate health and 
safety laws. The National Association of Manufacturers--no supporter of 
this amendment--has acknowledged that investment provisions such as you 
find in chapter 11 of NAFTA merit improvement. They have even 
acknowledged it needs improvement.
  So the test here is not whether we ought to be doing this, but 
whether we are improving it. The reason it is so important is the 
following: When we passed NAFTA, there wasn't one word of debate on the 
subject of the chapter 11 resolution--not one word. Nobody knew what 
was going to happen. Nobody knew what the impacts might be. And, 
steadily, foreign investment in the United States is increasing. That 
trend will be accelerated as we have a free trade area of the Americas 
agreement that is being developed. A recent report by the Taxpayers for 
Common Sense at Tufts University shows that, unless we change the 
chapter 11 model, claims against the United States will average $32 
billion annually. That is just in terms of claims. It doesn't even 
address the millions of dollars the Federal Government is going to 
spend defending against these claims.
  Let me explain this in sort of graphic terms. I want to add that 
among the groups supporting the amendment are the National Conference 
of State Legislatures, Conference of Mayors, National League of Cities, 
Conference of Chief Justices, Taxpayers for Common Sense, Consumers 
Union, League of Conservation Voters. All of them support the notion 
that we have to change this particular amendment.
  The letters of the attorneys general of New York, California, and 
Montana are particularly instructive.
  The attorney general of New York wrote:

       The rights granted foreign investors under H.R. 3005 could 
     go far beyond the carefully fashioned taking and due process 
     jurisprudence articulated by the U.S. Supreme Court under the 
     5th and 14th amendments.
       In other words, unless we change this, we are giving to 
     foreign investors the right to have an application of 
     standards that go well beyond the fourth and fifth 
     constitutional amendments, which are applied to businesses 
     here at home.
  It has the ability to apply a takings standard, an expropriation 
standard that, in effect, is subject to a whole looser standard than 
that required by the Constitution of the United States.
  What my colleagues are being asked to vote on is, Do you believe that 
American businesses ought to be subject to a fair playing field and 
that foreign investors should not be advantaged over American investors 
and the standards by which our businesses do business at home?
  There are a lot of examples. Let me share quickly the concern of 
Montana Attorney General Mike McGrath. He wrote:

       I frankly believe an overwhelming majority of American 
     people and Montanans would react with outrage to the idea 
     that an otherwise final and definitive ruling of our domestic 
     courts would be reversed by foreign arbitration panels and 
     could provide the basis for monetary claims against United 
     States taxpayers.

  He could not put it better. That is exactly already what is 
happening. It is happening right now. Let me share with my colleagues a 
few of the cases in which that is now happening.
  First of all, there is the Methanix case, the most notorious of the 
cases, in which a Canadian corporation is suing for California's ban on 
MTBE. The details are fairly straightforward.
  In 1998, the Governor of California banned the fuel additive MTBE 
because it has a tendency to leak out of gasoline storage tanks at a 
much faster rate than other blended gasoline, such as ethanol. We have 
just been through an ethanol fight on the floor of the

[[Page S4595]]

Senate. We decided that we think it is preferable to use ethanol to 
MTBE. MTBE travels quickly through the ground water, contaminating 
drinking water, leaving it foul smelling and bad tasting. It is also a 
known carcinogen and suspected carcinogen in humans.
  Methanix, whose subsidiaries produce methanol, which is the M in the 
MTBE, filed a chapter 11 claim on the grounds that the ban diminishes 
their expected profits. Methanix claims that this public health law 
discriminates against the flow of capital and therefore discriminates 
against the goals of NAFTA.
  I am not sure any of us would say that makes a lot of sense, but the 
arbitration panel has yet to agree, and the case demonstrates exactly 
why we need to protect legitimate health and welfare laws.
  The Methanix case is the most expensive of any pending claim. They 
are seeking compensation and almost $1 billion in damages. It is not 
just California that would suffer. All of us as a consequence would 
suffer because each State is subject to the same kind of problem, and 
that State, California in particular, would lose money out of education 
funds, highway funds, or other grants from the Federal Government were 
that case to succeed.
  A less well known case, but perhaps more egregious, is the case 
against a jury finding by a Mississippi court against the Lowen Group, 
which is a Canadian-owned funeral parlor chain. Lowen was sued by a 
Biloxi funeral home for unlawful anticompetitive actions designed to 
drive up local insurance costs, forcing smaller funeral parlors into 
selling. A Mississippi State court agreed with the Biloxi funeral home 
and awarded $500 million in damages.
  Lowen appealed to the State supreme court which refused to reduce the 
bond amount needed to receive a stay. Instead of paying a bond, Lowen 
settled the case for $175 million. It then proceeded to the NAFTA 
tribunal to file a claim. Lowen's chapter 11 case is predicated on the 
argument that the trial court's refusal to vacate the verdict was 
tantamount to an expropriation, and the case is now pending.

  The message of this case and of the Methanix case could not be more 
clear: Anytime a foreign corporation dislikes the outcome of a U.S. 
jury trial, it can run to an international arbitration panel and try to 
get the ruling reversed. That is not what we wanted to have or intended 
to have happen in NAFTA, but the only way to protect it is to change 
that law now.
  There are other cases. Let me call attention to the Mondev case which 
has nothing to do with the environment but everything to do with our 
sovereignty. The doctrine of sovereign immunity is centuries old in 
this country, and it holds that you cannot sue a government unless such 
a lawsuit is expressly permitted. But a claim against an action taken 
by the city of Boston by Mondev International, a Canadian real estate 
developer, has challenged this concept before a NAFTA tribunal.
  The Mondev case is an example of those cases where we ultimately see 
the sovereignty of the Supreme Court of the United States being 
subjected to second-guessing and questioning by a secret tribunal of 
NAFTA, over which we have no control of the standards because the 
standards have not been set to respect the Constitution of the United 
States.
  I can remember how many times Senator Helms from North Carolina has 
come to the Senate Chamber and said we should not sign a treaty that 
somehow obviates the demands of the Constitution of the United States. 
It seems to me that is precisely the principle which is at stake here, 
which is why Senator Helms, who I know will not be here to vote, 
supports this amendment as others who believe the Constitution should 
not be subjected to second-guessing by an international tribunal.
  These second-guessing efforts will have a chilling effect in the end 
on investment. They create expensive litigation. Just the threat of the 
litigation is, in and of itself, a chilling effect. I believe, based on 
these claims, chapter 11, as it currently stands, can be used to 
threaten governments from enacting public health measures.
  The Canadian Government has now sought to ban the use of the words 
``light,'' ``mild,'' and ``low tar'' from cigarette advertising. Philip 
Morris recently issued a warning to Canada under NAFTA that Canada must 
compensate investors when measures expropriate investments in Canada. 
We are going to go back and forth on this. We are going to have a 
constant second-guessing and a constant challenging of these standards.
  It seems to me we ought to recognize that the Baucus bill, as 
amended, does not ensure that long-held U.S. case law on expropriation 
is upheld. The Baucus bill allows cases still to be decided against the 
United States when regulatory or statutory actions result in a partial 
taking. Such a case would stand on far more tenuous grounds in U.S. 
courts based on U.S. law and legal precedents.
  My amendment would ensure that foreign companies could use investment 
dispute mechanisms. We do not say they cannot do it. We honor the 
concept of NAFTA or any treaty creating a dispute mechanism, but when a 
Government action causes physical invasion of property or denial of 
economic use of that process, that should be consistent with U.S. 
Supreme Court holdings.
  In the Concrete Pipe case which was decided by the Supreme Court in 
1993, the Court said:

       Our cases have long established that the mere diminution of 
     a value of property, however serious, is insufficient to 
     demonstrate a taking.

  We should not subvert that holding of the Supreme Court by refusing 
to embrace in this legislation a recognition of American sovereignty in 
court procedure.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. GRAMM. Mr. President, I yield myself 10 minutes.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. I yield 10 minutes to the Senator from Texas.
  The PRESIDING OFFICER. The Senator from Texas is recognized for 10 
minutes.
  Mr. GRAMM. Mr. President, we just heard a wonderful dissertation on 
the trade equivalent of single-entry bookkeeping. Our dear colleague 
has talked on and on about investment protections in the United States, 
but he has not said one word about investment protections in other 
countries for American investors.
  I want to take a moment to remind my colleagues of a little history 
that I think is critically important in understanding this issue.
  At the end of World War II, we negotiated a series of treaties known 
as Friendship, Commerce, and Navigation Treaties. Later, in the 1980s, 
we began entering into what are known as bilateral investment treaties, 
and today we have 45 such treaties. In both the FCN treaties and the 
bilateral investment treaties, we established procedures to protect our 
investors overseas. These protections, which were modeled on familiar 
concepts of American law, became the standard for protection of private 
property and investment around the world. And they made sure that our 
investors were protected from unfair treatment by foreign nations.
  Why does the business community in America adamantly opposed the 
Kerry amendment? It is not because of concerns about foreign investor 
protections here in America. It is because they are concerned about 
protections for Americans overseas. Investment is a reciprocal process. 
We negotiated 45 bilateral investment treaties in order to protect 
American investment from being confiscated by actions of other 
countries.
  As for foreign investment in America, our colleague argues that 
billions of dollars will be lost to foreign investors. But he fails to 
point out that never, ever, have we lost a case since these 45 treaties 
have been in effect. Not once since chapter 11 of NAFTA has been in 
effect have we ever lost a case. Not once has there ever been a 
judgment against the United States of America for failing to protect 
private property or investments.
  The problem with this amendment is very simple and straightforward. 
The problem is that we are not talking only about foreign investors in 
America. We are talking about American investors around the world as 
well. These investment agreements are reciprocal.
  In countries all over the world, if an investor is a large American 
company,

[[Page S4596]]

for the most part that company is protected. The governments of those 
countries are not likely to mess with the company's investments. Nor 
are they likely to let their local units of government mess with those 
investments. But a real problem arises when smaller American businesses 
want to invest abroad. They may not be granted the protections they 
need.
  If we take away the investor protections we have worked for years to 
establish, if we carve out certain areas where investor protections 
will not apply, if we narrow the scope of investor protections, we will 
be leaving American investors vulnerable to actions by foreign 
governments. And in turn we will be discouraging our businesses from 
investing around the world. Keep in mind that United States investment 
abroad helps create a market for American goods, promote capitalism, 
promote democracy, and do everything else that we in the United States 
want to see done around the world. It is critically important that that 
investment be protected.
  Every day these investment treaties protect American investment 
around the world. Meanwhile, we have never lost a case under these same 
investment treaties.
  Let me explain further to my colleagues what happens if we do not 
provide investment protections. American businesses in certain 
countries often end up being forced to deal with government corruption. 
Congress passed the Foreign Corruption Practices Act to try to stop 
such corruption. But under this amendment to lower investor 
protections, hundreds of billions of dollars of American investment 
abroad would be jeopardized. We are the largest investor in the world, 
and these protections are critically important to us.
  Let me just recap, then. Today, we have 45 bilateral investment 
treaties in effect, and each one of them contains a procedure whereby 
if American investors have their property taken, if they are 
discriminated against, if they cannot send their earnings back to their 
home country, they have in place procedures under which they can get 
access to justice.
  In 57 years since we have had investment treaties, never, ever has 
the United States of America lost a case. But every day these same 
treaties protect American investments in Central and South America, in 
Africa, in Asia, in the developing world, in the very countries we say 
we want to see develop capitalist and democratic systems.
  If we adopt the Kerry amendment, not only would we be responding to a 
circumstance that has never existed, since America has never lost a 
case, but we would be undercutting protections for the hundreds of 
billions of dollars' worth of American investments abroad. And, because 
of the massive economic damage that would result, we would lose the 
support of the business community for the trade promotion authority 
bill.
  What would we gain if we adopted the Kerry amendment? We simply would 
gain some ``degree of protection'' in cases that seem silly on their 
face. It is hard for me to imagine that any of the cases mentioned 
could possibly result in an affirmative judgment, but that is 
speculation since no judgment has been made. In 57 years we have never 
had a judgment against the United States of America.
  Remember, investment agreements are reciprocal. If the Kerry 
amendment applied only to investment in America, this would be a 
largely symbolic but not a very harmful amendment because American 
protections are solid. But investment protections are reciprocal. 
Therefore, whatever protections we pledge to apply to foreign investors 
in America are going to apply to our investors in Mexico, our investors 
in Africa, our investors in South America, and our investors in 
developing countries in Asia. Since the Kerry amendment would affect 
not only foreign investors here but our investors there, we would be 
stripping away the protections that American investment now have. We 
would be hurting American companies, and their hundreds of billions of 
dollars of potential investment, and we would lose the jobs, economic 
growth, and economic opportunity that has resulted from our status as 
the world's largest investing nation and the world's largest exporting 
nation.
  The Kerry amendment should not be adopted. There is no basis for 
adopting it. It does our interests virtually no good in America, but it 
does massive harm to our interests everywhere else in the world.
  I reserve the remainder of my time.
  Mr. KERRY. How much time do I have remaining?
  The PRESIDING OFFICER (Mr. Johnson). Fifteen minutes twenty-four 
seconds.
  The Senator from Montana.
  Mr. BAUCUS. I ask unanimous consent that the underlying time 
agreement be extended an additional 30 minutes equally divided.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Massachusetts.
  Mr. KERRY. Mr. President, let me answer my friend from Texas. There 
is no stronger debater, there is nobody obviously we know who is more 
capable of making an argument, but this is an argument in which the 
Senator is flat, dead wrong.
  Only five cases are pending today that were brought against the 
United States in which we are a defendant under chapter 11. No case has 
yet been decided. When he says we have never lost a case, no case has 
been decided in which the United States is a defendant. We are 
currently a defendant in five cases, and there were only six cases 
until 1998. Since then, there have been another five cases. What the 
attorneys general of our States and the conference of mayors of our 
States and those responsible for the taxpayer--I mean, the businesses 
are sitting there, many of them with offshore interests, many of them 
not paying any taxes. It is not going to come out of their pocket, but 
the average American taxpayer is going to feel the bite if we have an 
expropriation case decided against an American company that comes 
against, say, the State of California or another State, and that is 
going to come out of the pockets of our citizens.

  Secondly, the Senator from Texas is absolutely incorrect when he 
suggests this is going to leave our companies defenseless abroad. Let 
me be very specific. If a foreign government overreaches, the same 
investor-state mechanism will exist. We do not take away the investor-
state relationship. We honor it. We do not take away the investor-state 
mechanism for resolution of disputes. We leave it in place. All we do 
is say the standard by which it should apply should not be less than 
the standard applied by the Constitution of the United States. It is 
very simple. Our businesses, our States, our taxpayers, should not have 
another country or another business from another country suing us and 
claiming that one of our health laws or one of our environmental laws 
has taken away the profits of that company and then some international 
arbitration panel, without any American judge who applies the standards 
of the American courts' case law that has been settled, are going to 
decide, oh, yes, we think that is a great idea. Let's hit the taxpayers 
of California to pay us because our investors are losing a lot of 
money.

  No one should doubt this is coming down the road. Chapter 11 has yet 
to be put to the test. Before it is put to the test, we ought to have 
the courage to say we are happy to honor the concept of an 
international standard, but don't undo the case law established by the 
Supreme Court of the United States. That is all we are saying.
  My colleague from Texas tries to say we will undo years of settled 
procedure for companies doing business abroad. That is just not true. 
That is not what we are going to do. We are suggesting a U.S. investor 
abroad can still win a claim, provided the investor can show they are 
discriminated against on the grounds of national treatment, which is 
the international standard we have agreed to; a performance requirement 
is the basis of the offensive State action; the offending legislation 
as enacted or applied is discriminatory in purpose; and if there is a 
wrongful expropriation under the standards by the Supreme Court.
  I remind my colleague that under the standards of the Supreme Court 
is Justice Scalia who has argued what that appropriate standard ought 
to be. Let me be specific. In the 1999 case College Savings Bank vs. 
Florida Prepaid Postsecondary Education Expense Board,

[[Page S4597]]

the Supreme Court ruled the activity of doing business or the activity 
of making a profit do not constitute forms of property that can be the 
basis of takings claims.
  That is an opinion authored by Justice Scalia. We are suggesting what 
the Senator from Texas is allowing for is some arbitration panel with a 
group of people who do not believe in the Supreme Court standard, to 
suddenly say we will apply a different standard to the takings. That 
does a disservice to our businesses and a disservice to the American 
taxpayer.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. I have 2 minutes, and I would like to respond very 
briefly.
  First, under the Kerry amendment, if you were an American investor, 
you could not even file a claim against a developing country that has 
taken your property unless the U.S. Government agrees to it. And what 
if the U.S. Government were in some sensitive negotiation with that 
country? They would want you to simply go away. Whoever heard of having 
investor protections that are determined on a case by case basis by a 
government rather than pursuant to an agreement?
  Second, it is one thing for an amendment to say that we should borrow 
part of the evolving takings standard--and we all know that the takings 
doctrine is evolving--from the Supreme Court. But it is another thing 
to convert that evolving standard into a new international principle, 
with the result that if a developing country takes only 99.9 percent of 
an investor's property, the investor has no claim or protections.
  Clearly, governments that are interested in shaking down American 
investors are not interested in taking the investor away; they are 
interested in being paid off for the right to do business in their 
country. A key purpose of the investment treaties we negotiated over 
the past 57 years was to prevent our investors from being forced to pay 
off corrupt governments abroad. That is what we have been trying to 
stop. Through the Cold War, where we did not have these agreements in 
place, American businesses had no choice but to pay off corrupt local 
governments, which the Communists then pointed to as capitalism. That 
caused us problems all over the world. We negotiated these agreements 
to put an end to those problems and instill the rule of law worldwide.
  When we start imposing these limits requiring compensation only for 
total confiscation, requiring governmental approval in order to claim 
your protections, and then carving out specific areas where your 
protections and the rule of law do not apply, it does not take a 
corrupt government long to figure out that they can impose 
``regulations'' or ``special fees'' or ``targeted taxes'' in the 
unprotected areas.
  The net result is to extract money from American businesses. Not only 
is that profoundly wrong, not only is it corrupt, it discourages 
investment, it hurts American companies, and it hurts American jobs.
  It is one thing to say we do not need these protections for people 
who invest in America. But it is another to say that we do not need 
them for Americans who invest overseas. The plain truth is America has 
never had a judgment against it under our investment treaties in some 
57 years. There has never been a judgment against the United States of 
America for violating investor protections.
  We can't adopt the Kerry amendment so that it would apply only to 
investment in the United States and would not affect protections for 
our investments around the world. If we could, it would be a useless 
amendment. And we should not adopt the Kerry amendment and carve out 
areas where American investors are not protected. If we did, we would 
be asking for big-time problems with corruption. This is why every 
business group in America is adamantly opposed to this amendment, and 
why I urge my colleagues to reject it.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Once again, I say with respect to the Senator from Texas, 
he is both missing and distorting the point at the same time. I hope my 
colleagues notice for the first time in history since I have known the 
Senator from Texas to be in the Senate he is defending the right of 
lawyers to sue without any kind of screening or any kind of effort to 
restrict a frivolous suit.

  I have never heard the Senator from Texas do that. I am delighted 
that he is protecting the right of lawyers to sue without any 
screening. This screening is exactly what was recommended, I might add, 
in a letter from Chairman Baucus to Ambassador Zoellick on March 26. 
Here is what the letter said:

       It may be prudent to establish screening mechanisms in 
     other sensitive areas such as environmental regulation as a 
     way to ensure that frivolous or inappropriate claims can be 
     dismissed as early as possible. In general, I view this 
     concept as consistent with the objective of the TPA bill to 
     eliminate frivolous claims and deter their filing in the 
     first place.

  The amendment I have offered includes a small screen to help weed out 
the frivolous lawsuits, and it would require the approval of the home 
government to do that, which only works to our benefit. If someone is 
going to sue in another country they are going to sue anyway. But in 
order to sue in our country it seems to me we would like to have, once 
again, the standard applied as to what is frivolous or not.
  I used to practice law. I remember when we did medical malpractice 
cases we finally set up a screening mechanism. Many States in America 
have set up a board which reviews cases using members of the profession 
to make a determination of whether or not it is a legitimate claim so 
we don't tie up the court system with a whole set of illegitimate 
claims. That is all this seeks to do. It does not change the standard 
whatsoever. We are not changing the standard with respect to any 
capacity of our companies to be protected abroad or otherwise. We are 
simply applying, frankly, a standard that most of them can understand; 
that most would have a full expectation of receiving if they were being 
tried in a court in our country.
  I am surprised the Senator from Texas does not want American 
companies to know that if they are engaged in one of these processes 
abroad, they are going to have a higher standard applied to them. The 
standard as developed by the court system of our country, in which most 
of us believe, we think, is one of the highest standards in the world.
  Our businesses are better protected by having the continuity of that 
standard and the certainty of the way in which our case law has been 
interpreted.
  I reserve the remainder of my time.
  Mr. McCAIN. Mr. President, this amendment jeopardizes foreign 
investment and seeks to place unnecessary and harmful restrictions on 
the protections afforded to U.S. investors abroad. The amendment would 
substitute the carefully crafted language of the managers' amendment 
for language that would bind the Administration to a set of negotiating 
mandates.
  The stated purpose of the Kerry amendment is to ``ensure that any 
artificial trade distorting barrier relating to foreign investment is 
eliminated in any trade agreement entered into under'' trade promotion 
authority. Unfortunately, the amendment language would do just the 
opposite.
  Foreign investment is critical to international trade and vital to 
the development of economies around the world. Foreign direct 
investment provides for the expansion of industries and infrastructure 
while promoting economic development and the rule of law.
  As the world's largest foreign investor, the United States invests an 
average of $150 billion a year in private capital in foreign nations. 
This involvement not only benefits the countries receiving such 
investments, it also results in the creation of more American jobs and 
new markets for U.S. products abroad.
  American companies investing in foreign nations are generally more 
successful and typically pay employees higher salaries than those that 
do not. Not surprisingly, these companies are also among America's top 
exporters, comprising over 75 percent of U.S. exports over the past 25 
years. American companies invest abroad to expand market share, 
establish local relationships, promote visibility, and establish a more 
efficient means of distribution to foreign consumers--enabling these 
companies to become more competitive globally.

[[Page S4598]]

  Because many nations lack legal systems that afford protections 
similar to those afforded in the United States, the U.S. has entered 
into investment agreements for over 70 years in order to provide U.S. 
companies that invest abroad with the same level of protection they 
enjoy under U.S. laws. Without these investment agreements, the risk of 
investing in developing nations would simply be too great for most U.S. 
companies.
  This amendment would restrict investment agreements from providing 
the full investor protections granted to them under U.S. law. In turn, 
the amendment would weaken the protections granted by the 45 bilateral 
investment treaties negotiated by the U.S., in addition to the 
protections under NAFTA and the U.S. Vietnam Trade Agreement.
  Should the Kerry amendment pass, foreign investing in the U.S. will 
retain access to the protections granted to investors by U.S. laws, 
regardless of the terms of an investment agreement, but U.S. investors 
abroad will not be afforded these same protections.
  Under the amendment, in order for environmental, health, or safety 
laws to be considered in violation of an investment agreement, an 
investor must demonstrate that a foreign country enacted such laws 
solely to discriminate against foreign investors. This high burden of 
proof that a foreign country intended to discriminate will enable 
foreign nations to arbitrarily use or establish environmental, health, 
or safety laws as a veiled means of protectionism. This is precisely 
the type of action that U.S. investment protections have historically 
attempted to prevent.
  Legitimate concerns have been raised regarding the investor-state 
dispute settlement procedures contained within NAFTA's chapter 11. Last 
summer, Ambassador Zoellick met with the NAFTA ministers to discuss 
these concerns. Progress was made and the ministers agreed to work to 
improve the tribunals, particularly in the area of transparency.
  The managers of this legislation have dedicated themselves to 
addressing concerns regarding the protections given to investors, and, 
in particular, investor-state dispute settlement procedures. They 
should be complimented for establishing a valuable set of investment 
negotiating objectives which will improve future investment agreements 
while not tying the hands of our trade negotiators in the process.
  Through both the Trade Act of 2002 and the Baucus-Grassley-Wyden 
amendment which passed the Senate last week, Senators Baucus and 
Grassley made considerable efforts to address concerns regarding 
investment agreements while strengthening the negotiating position of 
the U.S. The Trade Act instructs U.S. negotiators to adhere to a list 
of well-founded objectives while crafting investment provisions. Among 
those objectives are instructions to ``establish protections consistent 
with U.S. legal principles and practice'' and not to afford foreign 
investors greater rights than those currently enjoyed by U.S. citizens 
and companies domestically.
  To address concerns regarding the lack of oversight of tribunal 
decisions, the managers appropriately recommend the establishment of an 
appellate body to review tribunal decisions. In order to prevent 
potential abuse of process, the Trade Act encourages the creation of a 
mechanism to eliminate frivolous claims. Further, it addresses concerns 
regarding transparency, by encouraging that tribunal hearings be open 
to the public, with a mechanism for accepting amicus curiae briefs.
  The thorough principles established by the managers of this bill are 
unprecedented in breadth and scope. No such principles have ever been 
written into previous trade promotion authority bills, and I believe 
this language will result in an improvement of the protections that are 
afforded to U.S. companies in future agreements and the process by 
which investor-state disputes are mediated.
  The Kerry amendment represents a continuation of the trade-
distorting, protective measures we have dealt with recently. Not only 
is this amendment potentially damaging to U.S. companies, it once again 
calls into question our nation's dedication to our trade-related 
commitments.
  Existing U.S. investment agreements and the negotiating objectives 
included in the compromise Trade Act provide more than adequately for 
the legitimate concerns regarding investor-state dispute settlement 
procedures. This amendment could seriously damage U.S. interests and I 
strongly urge my colleagues to oppose it.
  Mr. BIDEN. Mr. President, I support Senator Kerry's amendment to 
strengthen the protections for State and local government to achieve 
their environmental and other important priorities. The Kerry Amendment 
adds to the objectives that our negotiators will seek to achieve in 
future trade discussions. While we cannot mandate specific outcomes in 
those negotiations, we here in Congress will be able to look at future 
trade agreements to make sure that they include additional safeguards 
for the kinds of regulations that some international investors have 
challenged under NAFTA's Chapter 11.
  We all agree that to make trade work, to bring the benefits of 
expanding markets to American workers and consumers, we must give 
investors the confidence that the countries they move into will not 
discriminate against them. They need to know that they will not have 
plants and equipment expropriated, or rendered worthless through some 
government regulation or other action.
  But such protections can go too far, as many observers of actions 
taken under NAFTA investor-state provisions have concluded. The Kerry 
Amendment makes sure that our negotiators will be careful to balance 
the need for investor protections with the need for state and local 
governments to protect their citizens as they see fit. That is the kind 
of balance that will help to restore popular support for the many real 
benefits of expanded trade, and will help to secure Congressional 
support for future trade agreements.
  Mr. ALLEN. Mr. President, I rise to oppose the amendment that Senator 
Kerry has offered. The Kerry amendment unfortunately seeks to impose 
highly detailed negotiating mandates on the President, and would give 
those mandates the force of law in the United States.
  The bipartisan bill that is currently before us provides balanced 
guidance to U.S. negotiators both to protect U.S. investors abroad and 
to address the legitimate concerns that have been raised about 
investment rules.
  The purpose of our investment agreements, and the dispute resolution 
provisions in them, is to level the playing field; to ensure that 
Americans operating abroad obtain the same benefits and protections 
provided to Americans and foreign investors operating in the United 
States.
  NAFTA's rules on investment--the so-called chapter 11--are not novel 
or unusual; they are modeled on longstanding international and U.S. 
practice. Arbitral dispute-resolution panels were not invented by 
NAFTA; they have been in use for more than 40 years.
  Chapter 11 is only one of over 1,600 bilateral investment treaties 
worldwide, the vast majority negotiated by the European Union's member-
states, Japan, and Canada. These investment agreements ensure that 
investors are treated fairly when operating abroad.
  These treaties contain an arbitral dispute-resolution process similar 
to that found in chapter 11. The arbitrators selected on these panels 
frequently are distinguished lawyers, jurists and statesmen including 
Warren Christopher, Benjamin Civiletti, Attorney General for President 
Carter, and Abner Mikva former Member of Congress and White House 
Counsel for President Clinton.
  The United States has thus far entered into 43 bilateral investment 
treaties of this nature. If not for these treaties, U.S. investors 
operating in these countries could be disadvantaged, especially in 
comparison to their competitors from the European Union, Japan, and 
Canada.
  Many U.S. companies and major trade associations tell us that these 
provisions are extremely important to protecting Americans against 
abuses in other countries. U.S. investors invest $3 trillion abroad and 
these investments account for more than a quarter of all U.S. exports. 
In short, foreign investment by U.S. firms keeps us competitive and 
builds jobs for Americans.

[[Page S4599]]

  Several domestic constituencies, including environmental groups, have 
expressed great concern about the potential for use of these provisions 
to undermine important U.S. laws and regulations especially those 
protecting health, safety and the environment. The U.S. Government is 
vigorously defending U.S. environmental laws against any such charges.
  The current administration is working with all interested parties in 
an effort to address these concerns for NAFTA and future investment 
agreements while continuing to protect American companies against abuse 
in other countries.
  Steps have already been taken. For example, in July, 2001, the United 
States, Canada, and Mexico, through the NAFTA Trade Commission, issued 
an interpretation on two matters relating to chapter 11.
  Some have concerns regarding the confidentiality of the panels.
  It has been agreed that the parties would make publicly available all 
documents issued by or submitted to a NAFTA arbitration panel.
  Others have complained that one type of investment protection called 
``general treatment'' provides rights to foreign investors beyond U.S. 
law.
  It was clarified that this provision affords no more than the minimum 
standard of treatment under customary international law and that 
provisions of other agreements (WTO) do not form part of the minimum 
standard, as some claimants were arguing in chapter 11 cases.
  The United States, Canada, and Mexico have and will continue to 
utilize of our right under NAFTA to provide guidance to arbitral 
panels. Chapter 11 does not provide novel rules on what constitutes an 
expropriation beyond that covered by traditional investment agreements 
or by U.S. courts.
  The truth of the matter is that overall trade helps the American 
family. The lower tariffs and higher incomes that followed the signing 
of the North American Free Trade Agreement (NAFTA) and the Uruguay 
Round of the General Agreement on Tariffs and Trade (GATT) resulted in 
benefits of $1,300 to $2,000 a year for the average American family of 
four.
  According to a recent University of Michigan study, a new trade round 
could deliver an annual benefit of $2,450 for this same family. Trade 
does not discriminate against the rich or the poor; it seeks to elevate 
all economic levels.
  Contrary to popular belief, trade on balance, provides American 
workers with more opportunities to obtain higher-paying jobs than are 
lost due to international competition.
  It gives more people the chance to make a better life for themselves 
and their family.
  The U.S. Department of Commerce reports that, on average, jobs tied 
to exports earn 13 percent to 18 percent more than earned in other 
jobs.
  In other words, trade brings prosperity and opportunity to more 
workers than are lost.
  The effect of the North American Free Trade Agreement are as follows.
  U.S. exports to our NAFTA partners increased 104 percent between 1993 
and 2000, while U.S. trade with the rest of the world grew only half as 
fast.
  In the 8 years since NAFTA's implementation, U.S. exports to Mexico 
and Canada have grown to support nearly 3 million American jobs today--
one-third more than in 1993.
  We trade about $2 billion a day with our NAFTA partners--that's 
almost $1.4 million a minute.
  As U.S. government data indicate, without NAFTA, the United States 
would have lower-paying jobs and would export less, and Mexico and the 
United States would have lower environmental standards.
  In the Commonwealth of Virginia, export sales of merchandise in 2000 
totaled $10.5 billion, up nearly 30 percent from the 1993 export total 
of $8.1 billion. Virginia businesses recorded export sales of $1,490 
for every person in the State.
  And, unlike what some of my colleagues may have you believe, trade is 
also beneficial for the environment.
  Studies have shown that countries that open their markets actually 
spend more money in efforts to preserve and protect the environment as 
a result of gains through trade. Attempts to impose environmental 
regulations have often been self-defeating because they have stifled 
the trade necessary for economic growth, which would enable countries 
to afford to adopt environmental protection policies. The overall track 
record of the United States in promoting initiatives to protect the 
environment provides evidence that environmental freedom and the 
economic development it engenders are correlated with sound 
environmental policies.
  Fair and free trade agreements must not and will not compromise 
American sovereignty.
  In response to concerns that trade deals may be unconstitutional and 
could undermine U.S. sovereignty.
  It should be stressed that the United States will always determine 
our own domestic laws.
  Even if future trade agreements allowed some disputes to be submitted 
to an international tribunal for initial determination, no trade 
agreement could grant an international organization the power to change 
U.S. laws.
  Proper trade agreements foster adherence to the rule of law and 
protect private property and intellectual property rights.
  Free trade forces participating countries to play fair. For example, 
because of its membership in the World Trade Organization, China will 
now have to crack down on software piracy, which has been a growing 
problem for sometime to many U.S. manufacturers.
  China has long been the world's largest source of pirated compact 
disks and software.
  In China last year, software firms lost over $1 billion in profits to 
piracy.
  Furthermore, while many criticized China's WTO membership, American 
industry will benefit because, to comply with agreements of the 
organization, China now has to lower tariffs and non-tariff barriers.
  The bottom line is that the United States needs to negotiate more 
free trade agreements. Of the more than 130 trade and investment 
agreements that exist throughout the world, the United States is party 
to only three: specifically, with Jordan, Israel, and the NAFTA 
countries of Canada and Mexico.
  Free and fair trade and the chapter 11 issues are immensely important 
to the high-tech sector as well. The U.S. high-tech sector invests more 
abroad than any other industry. Leading, innovative U.S. companies have 
benefited from a set of stable and predictable rules governing 
investment in overseas markets.
  Investments in foreign markets by high-tech companies, which support 
manufacturing and rapidly growing information technology services, are 
an integral part of a virtuous cycle that keeps this sector growing and 
strong.
  The fact that large and small companies alike can reach customers in 
other countries with goods and services means that they can continue to 
provide great opportunities here at home for our engineers, researchers 
and other highly-paid and highly-skilled workers.
  The bipartisan trade package includes a number of needed reforms that 
have arisen out of cases of foreign investors bringing actions in the 
U.S. These reforms include provisions for increased transparency, 
consistency in the rights afforded to foreign and domestic investors in 
the U.S., and improvements to dispute settlement procedures. And, it 
includes clarification of the definition of expropriation, although, 
Mr. President, Senator Kerry's amendment is not one of them.
  The Kerry amendment would go far beyond these important and necessary 
changes and would impose new negotiating mandates in the area of 
investor protections.
  These rigid requirements would tie U.S. negotiators' hands while 
giving our trading partners greatly increased leverage to make demands 
on their own.
  The bipartisan trade package includes needed changes in the area of 
investment provisions and these should be passed by the Senate and 
implemented in trade agreements.
  The Kerry amendment, in its attempt to address these concerns, goes 
too far and will create uncertainty and undermine the investment 
protections for U.S. companies as they do business in overseas markets.
  These are only a few of the many reasons that my colleagues should 
join me in opposing this amendment and press

[[Page S4600]]

forward to pass this trade legislation in order to benefit America.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield myself such time as I may consume.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. BAUCUS. Mr. President, we sympathize with the general concern of 
the Senator from Massachusetts; namely, making sure that foreign 
investors do not have greater rights in the United States compared to 
domestic investors in challenging whether an action by a government 
body, say a State, city or county, is a takings under the Constitution 
of the United States. We all recognize that.

  This is an area that is complex. It requires us to step back a little 
bit and find a ``level playing field'' between foreign investors and 
U.S. investors.
  The Senator from Texas is absolutely correct. The main reason we are 
addressing this situation really began years ago when U.S. investors 
were being discriminated against overseas. It caused quite a few 
problems in many countries. So over the years, various treaties have 
been written between the United States and other countries trying to 
create a balance between foreign and domestic investors in the United 
States and in other countries. That is the whole goal here.
  When NAFTA was written, including chapter 11, there probably was too 
much emphasis given to protecting U.S. investors' rights overseas 
rather than the interests of government here at home because that was 
the biggest concern at that time. Since then, there has been a rising 
concern that perhaps NAFTA went too far and gave too great a protection 
to foreign investors versus domestic investors in the United States, 
which led to concerns raised by the Senator from Massachusetts.
  In this bill, we attempted to correct that problem with various 
provisions. We have lots of provisions in the bill to even the playing 
field.
  We also took a provision suggested by the Senator to make it crystal 
clear that there is absolutely no favoritism given to domestic versus 
foreign investors who sued the United States challenging whether 
certain regulations were takings under the fifth amendment. It makes no 
difference whether it is foreign or domestic investors; an investor 
will be treated exactly the same whether he or she were in the other 
category. We took that language and added to that the amendment in the 
underlying bill to make that very clear.
  But we have to make sure that American investors--while we are 
protecting ourselves by making sure foreign investors don't have an 
advantage over U.S. domestic investors in the United States--overseas 
are treated fairly and are not discriminated against.
  There are some very glaring problems with the amendment offered by 
the Senator from Massachusetts.
  First, he tries to define what constitutes a taking under the fifth 
amendment. His definition, first, is simplistic and, second, it is 
wrong.
  First, it is simplistic, because all of us who have studied these 
issues know--believe me; I spent quite a bit of time a few years ago on 
the Environment and Public Works Committee--that the Supreme Court's 
definition of what constitutes a taking, and, therefore, requires 
compensation is extremely complicated. It is extremely complex. It 
depends totally upon the facts and circumstances of the case.
  I will not take the Senate's time to quote all of the language of the 
Supreme Court opinions on takings which makes this point very clear. 
But that is the case.
  The Senator from Massachusetts, however, wants to define in a 
sentence what ``takings'' is. His definition is wrong. With all due 
respect to my good friend from Massachusetts, it is also irrelevant 
because we can't define takings. The Supreme Court says what takings 
is. The Supreme Court under Marbury v. Madison interprets the 
Constitution. The Congress doesn't say what the Constitution says. We 
could say a lot. When it comes to what constitutes a fifth amendment 
taking, the Supreme Court decides that; we can't make that decision.

  Here is how the Senator from Massachusetts defines takings. It is 
wrong. He says a measure is not a taking if it causes a mere diminution 
in the value of property. You can't define takings like that. It is 
wrong. You can't define it here in the statute. The Supreme Court is 
going to define what a taking is.
  With the Senator's language, we are adding a huge incorrect and 
irrelevant complexity. It just shouldn't happen. It just fouls things 
up. It is not the right thing to do.
  He has in his amendment another provision which is a real problem; 
namely, that investors--in the United States or any country--who want 
to bring an action in the other country--say a Canadian investor in the 
United States is claiming that actions are takings. That Canadian 
investor has to get permission from his country. Turn that around. 
Obviously, other countries are going to do the same thing, or turn that 
around in our case. We Americans would have to get permission from the 
U.S. Government to bring an action against another country claiming 
expropriation, an additional hurdle which the Senator from 
Massachusetts places in the way of a U.S. investor seeking redress 
overseas.
  Now, I ask you. The Senator from Texas made the point: What if the 
U.S. State Department is in negotiations with, let us say, France over 
some matter, no matter what it is. Maybe it has to do with the Middle 
East; who knows what it is. Let us say a major American investor wants 
redress because he believes the French Government took action which was 
an expropriation of his property. He would have to get the approval of 
the U.S. Government. Knowing the State Department as we do, they are 
going to get very involved, or could get very involved, and impede or 
prevent that American from exercising his rights.
  The Kerry amendment requires the investor to get permission from his 
host country before he can bring an action before the dispute panel 
where the investor thinks the action of the other country amounts to 
expropriation. There is another problem. It is a huge loophole. 
Essentially, this loophole says a foreign investor in the United States 
has to first prove that the primary purpose of the regulation was not 
discriminatory.
  No U.S. investor is going to be able to prove that the primary 
purpose of a foreign regulation was not discriminatory. That creates a 
huge additional burden for the U.S. investor that a foreign investor in 
the United States does not have.
  Most Americans say: Gee, what is wrong with that? Let us make those 
foreigners have to prove a much higher and an almost impossible 
standard compared with the domestic investors. It is going to happen. 
Do you think other countries are going to just sit back and take that? 
They are going to do the same thing. They are going to say: Wait a 
minute. In France, in Canada, or in whatever country, an American 
investor who wants to come to that country, assuming he can first get 
permission from his own United States State Department has to show that 
the primary purpose in France, or in Canada, or in whatever country is 
to discriminate against Americans. The American investor cannot prove 
that. It is almost impossible to prove that the primary purpose in that 
country was to discriminate against Americans. It is almost impossible.
  That is why this amendment, while on the surface it talks about all 
these cases--and there are going to be cases. There are always going to 
be cases pending for a dispute settlement action. There will always be. 
But the mechanism which the Senator from Massachusetts prescribes here, 
when one reads the exact language of his amendment, has all these very 
deep flaws. To say there are unintended consequences is to say blithely 
that there will be dramatic consequences as a result in the consequence 
of this action, if we are so foolish enough to pass this amendment.
  I know that is strong language. I have the utmost respect for my good 
friend from Massachusetts. But that is what this language does. One has 
to read the language.
  As I said from the outset, we have gone overboard to take the earlier 
language suggested by the good Senator to make sure that the playing 
field is in fact level. We have done that. That is in the bill. That is 
in the bill. But to go further and adopt the provisions now offered by 
the Senator will have very

[[Page S4601]]

dire consequences for American investors overseas, and also boomerang 
against the various municipalities and States.

  I hear about a letter stating that the States basically are a little 
fearful Uncle Sam might do some things that will override their 
prerogatives. But I don't think the persons who wrote that letter 
really thought through the full implications of this amendment offered 
by the Senator from Massachusetts because, if they had, I doubt very 
seriously many of them would have signed the letter.
  I reserve the remainder of my time.
  Mr. KERRY. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from Massachusetts has 22 minutes 
24 seconds.
  Mr. KERRY. Mr. President, I yield myself such time as I may use.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. KERRY. Mr. President, I will speak to what the distinguished 
chairman has just said because, once again, this amendment does not do 
the things that have just been alleged. Let me be very specific about 
it.
  First of all, the chairman sort of brushes off the serious 
consequences to U.S. interests by the status quo. I would ask him, and 
I would ask my colleagues, does anybody here believe that the Governor 
of California made the decision he made with respect to methanol on a 
discriminatory basis? There isn't anybody in America who would suggest 
that he did. Yet that case is being brought now. It exists.
  The fact is we do nothing to change the standard by which a business 
would have the opportunity to resolve its investor-state relationship. 
In fact, we are not declarative as to the issue of expropriation.
  What we do in this amendment is seek to define over 80 years of 
Supreme Court decisions as to what is not an expropriation. We do not 
say what it is, which is what the Senator was just arguing. We do not 
define ``expropriation.'' All we do is point out what it is not. We 
clarify exactly what the Supreme Court has said in the 1993 Concrete 
Pipe case, where they said: Our cases have long established--this isn't 
hard to define; these are the words of the Supreme Court--we have long 
established that mere diminution in the value of property, however 
serious, is insufficient to demonstrate a taking.

  So the Supreme Court of the United States has established a standard 
which they say we have long established, which Justice Scalia 
reaffirmed as recently as 1999 in the College Savings Bank case.
  So all we are doing is saying that is not an expropriation. But if 
you allow this law to stand as it does today, it could be an 
expropriation by the standard that an arbitration panel decides to 
apply. So we are subjecting our States and ourselves to the resolution 
of a dispute by a standard that we know has long been established by 
the Supreme Court to be otherwise. They might define an expropriation 
to be exactly what the Supreme Court has said it is not.
  All I seek to do in this amendment is to say we embrace the 
definition of the Supreme Court as to what it is not. We do not try to 
establish what it is beyond what it is not. So, once again, people are 
grabbing at things to try to make this seem more perilous than it 
really is.
  Moreover, with respect to the screening, the screening applies to a 
U.S. company applying to a U.S. screening process. It is in our 
interest to have knowledge that we are not, in fact, engaging in some 
wholesale discriminatory process that works contrary to the intent of 
the treaty and that there is a legitimate claim.
  But what happens in another country is up to that country. It is up 
to that country now. If they want to go ahead and bring suit against 
us, just like the Canadian corporation has done, suing California for 
$1 billion because they are trying to protect its citizens from the 
effects of MTBE--and now they are at risk for $1 billion under this 
silly law the way it stands. It is silly law, and nobody even debated 
it when it was put into place originally. It has not even been debated. 
This is the first time we have debated it on the floor of the Senate.
  We are seeing a growing number of lawsuits now where companies are 
coming in and saying: Hey, we don't like that health law. We don't like 
the definition of ``cigarettes.'' We are going to come in and tell you 
you can't use those words; you are diminishing our ability to sell 
cigarettes in your State. So you are taking away our property. Your 
citizens owe us money.
  This is common sense. Sure, we have a lot of people who like the 
status quo because they profit from the status quo. But that doesn't 
mean it is good law. And that doesn't mean it protects the interests of 
the United States. And that doesn't mean it is based on common sense.
  I respectfully suggest that what we are doing is a sensible way of 
trying to establish the high standards of the court system of the 
United States. What other people want to do in their countries is their 
business, but this is the way we should set up the screening in ours.
  There isn't anybody here who is going to argue that the international 
business structure is the cleanest or most devoid of corruption today. 
The United States is one of the few countries that has the anticorrupt 
businesses practice. As far as I know, in recent years, the French were 
allowed to deduct bribes on their income taxes. And there are a whole 
bunch of folks who run around the country offering money under the 
table, all kinds of different ways.
  This will be the first time I have heard people on the floor of the 
Senate defending the capacity of these other countries to do clean 
business.
  I think we ought to raise the standard. That is precisely what I am 
trying to do.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. How much time is remaining on each side?
  The PRESIDING OFFICER. The Senator from Massachusetts has 16 minutes. 
The Senator from Montana has 19 minutes.
  Mr. BAUCUS. Mr. President, I yield to my good friend from Nebraska--
how many minutes?
  Mr. HAGEL. Seven minutes.
  Mr. BAUCUS. Mr. President, I yield 7 minutes to the Senator from 
Nebraska.
  The PRESIDING OFFICER. The Senator from Nebraska.
  Mr. HAGEL. Mr. President, I rise today in opposition to the Kerry 
amendment. Almost every American who has a pension plan has an interest 
in maintaining strong investment protections, the kind that we now have 
in the current trade promotion authority bill.
  Almost every pension plan carries company portfolios that invest 
overseas. If those investments lose value due to unfair, arbitrary, or 
discriminatory action by a foreign government, then the U.S. company 
deserves compensation. It is what the U.S. courts offer American 
companies invested in the United States. It is what U.S. courts offer 
foreign companies invested in the United States.
  The current TPA bill ensures that U.S. companies abroad are afforded 
the same fair and transparent arbitration procedures that are 
consistent with U.S. law, practice, and principles.
  The Kerry amendment puts into jeopardy this protection. U.S. 
companies that invest overseas make important contributions to the U.S. 
standard of living that, in many cases, are greater than those of 
purely domestic firms. These contributions help to increase U.S. 
productivity and include: research and development, exports, and 
investments in capital equipment.
  Since 1982, these companies have performed well over half of all U.S. 
research, and not only research but significant development as well.
  Since 1977, these companies have shipped over half to three-quarters 
of all U.S. exports. Their affiliates are important recipients of these 
exports and accounted for nearly half of these shipments in 1997.
  These companies undertake the majority of all U.S. investment in 
physical capital in the manufacturing sector; as much as 57 percent in 
that sector. More than 70 percent of the net income earned by overseas 
affiliates of American companies returns to the United States. It is a 
significant number.
  More than 70 percent of the net income earned by overseas affiliates 
of American companies returns to the

[[Page S4602]]

United States. That means jobs, opportunity, and growth for this 
country--not overseas, not other markets, but this country. The well-
being of these companies is important, obviously, to our economy.
  Investing abroad has similar risks that investing in the U.S. has. 
There is a chance that a local regulation may change the value of your 
property or your asset. No one wants to have their property 
expropriated but sometimes the Government determines a public policy 
need to do so. When that happens, U.S. law and these investment 
protection provisions in the TPA bill say that the company is entitled 
to at least compensation.
  The purpose of the investment protections is to afford the same 
protections to U.S. companies in foreign countries that foreign 
investors get in U.S. courts. Given the developing world's lack of 
sound judicial systems, there is a need for an investor-state dispute 
mechanism that is based on U.S. law, practice and legal principles.
  The investment provisions in the current TPA bill direct U.S. 
negotiators to obtain the following, clearly: protections for U.S. 
companies invested abroad against discrimination in expropriatory 
actions by foreign governments or for their unfair and inequitable 
treatment; transparent and open investor-state panels; mechanism to 
weed out frivolous claims and deter the filing of such claims; 
procedures for the efficient selection of arbitrators and the 
expeditious disposition of claims; enhanced public input into the 
development of government positions; a review mechanism to deal with 
potential aberrant decisions; protections on expropriation consistent 
with U.S. legal principles and practice; and protections on fair and 
equitable treatment consistent with U.S. legal principles and practice.
  The TPA bill contains mechanisms that address the legitimate 
criticisms we have heard over the past year about the investment 
provisions in the North American Free Trade Agreement chapter 11 
investment section. We have heard much about that in the debate this 
afternoon.
  As plainly and clearly as I can say it, there is no need for the 
Kerry amendment. I urge my colleagues to oppose the Kerry amendment.
  Mr. President, I yield back the remainder of my time.
  The PRESIDING OFFICER. Who yields time? The Senator from Montana.
  Mr. BAUCUS. Mr. President, I appreciate the remarks of my friend from 
Nebraska. I might go further and say, not only is there no need for the 
Kerry amendment but it would create huge problems for Americans in 
America and problems for Americans overseas. Whether they are intended 
or unintended consequences, I am not sure, but those consequences are 
real.
  I must repeat, the underlying bill was changed in the Chamber to 
include language suggested by the Senator from Massachusetts, Mr. 
Kerry, that solves all the problems he has now been talking about.
  What are they? Essentially if you listened closely to the cases he 
has been talking about, the concern is that a foreign investor might 
have superior rights compared to a domestic investor. The language we 
adopted says clearly that foreign investors have no greater rights than 
a domestic investor. That is the language in the underlying bill. We 
are talking about trade promotion authority. We are talking about fast 
track. We are talking about negotiating objectives. We are talking 
about what we would like our executive branch trade negotiators to work 
toward, the guidelines under which we are giving them to work.
  One of the guidelines in the current bill is that foreign investors 
would have no greater rights than domestic investors in investor-state 
dispute settlements. That is clear. All the problems the Senator from 
Massachusetts talked about are already taken care of. That is why in 
many respects the statement by the Senator from Nebraska is true. It is 
unneeded. The problem is already cured in the bill with the inclusion 
of the language that foreign investors enjoy no greater rights than 
domestic investors.
  If you look at the actual language of the amendment, not only is it 
not needed, it creates a whole host of additional problems we just 
don't need to have. One is when we try to define what expropriation is. 
We can't redefine the Supreme Court's definition of what expropriation 
is. That is up to the Supreme Court to define so long as it applies 
equally to domestic and foreign as the underlying language provides.
  Second, he creates an initial hurdle that a domestic investor has to 
get approval from his host government before he or she could seek 
redress of rights in the foreign country. For an American investor that 
means the United States Government and the State Department and, who 
knows, the Treasury Department can get involved and say, we have 
problems with the other country. We don't know if we want you to 
proceed with your case in the other country; we don't want you to do 
that. That is what is called for by the Senator's language.
  In addition, he suggests that a foreign investor cannot bring a claim 
presumably in the United States unless that foreign investor can prove 
that the underlying action by the municipality or the State was 
primarily to discriminate against the foreign investor, an almost 
impossible burden to meet. Clearly, if we create that almost impossible 
burden for foreign investors in the United States, other countries can 
do the same. This means that other countries, under the guise of public 
health and safety and environmental protection, could discriminate 
against the United States in a very subtle way and discriminate against 
U.S. investors as opposed to their own investors, but make it very 
difficult, if not impossible, for the U.S. investor to prove that the 
primary purpose of that other country was to discriminate against the 
United States. That is what this language says.

  I am not talking about potential problems. I am talking about the 
exact language of the bill. I will run through them again. It tries to 
define--incorrectly--what constitutes a taking under the fifth 
amendment of the Constitution and, B, it requires that a host investor 
get permission of the host government and, C, sets the impossible 
standard that a foreign investor must show that the primary purpose was 
to discriminate against him in seeking redress in a foreign country.
  That is going to boomerang against the United States. The main point, 
taking care of all the problems suggested by the Senator from 
Massachusetts, there are no problems left. We handled it. It is in the 
bill. Second, the additional language that he suggests is just going to 
cause a whole host of problems that we don't need, to put it mildly.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. BAUCUS. Mr. President, how much time remains on both sides?
  The PRESIDING OFFICER. The Senator from Montana has 8 minutes, and 
the Senator from Massachusetts has 16 minutes.
  Mr. BAUCUS. Mr. President, I yield 4 minutes to the Senator from 
Iowa.
  Mr. GRASSLEY. Mr. President, I thank Senator Baucus for how he has 
worked in a team with those of us who worked this compromise out to 
defeat a lot of crippling amendments. I see this as the last crippling 
amendment. Senator Baucus and my colleagues on this side of the aisle 
have already made strong arguments why the amendment ought to be 
defeated. I add my thoughts to theirs.
  Senator Baucus and I took great care to address concerns raised about 
potential abuse of the investor-state dispute process. At the same 
time, the bill recognizes that protecting U.S. citizens abroad is also 
an extremely important objective.
  This amendment threatens to undermine the bill's careful balance in 
two ways.
  First, it ignores the delicate political compromises needed to pass 
this bill. In doing so, it jeopardizes passage of both trade adjustment 
assistance and trade promotion authority.
  Second, the bill undermines the careful substantive balance outlined 
in the bill. Under the guise of protecting Government's ability to 
apply health, environmental and safety regulations, it takes away the 
rights of U.S. citizens to receive a fair and impartial hearing when 
their property is confiscated overseas.
  Let me give you an example. In 1972, the Pakistani Government 
nationalized ten schools belonging to the Presbyterian Church of 
America. For the

[[Page S4603]]

past 30 years, the Presbyterian Church has been trying to recover their 
investment. Even after the Pakistani Supreme Court ruled in 1992 that 
the state could not take their land, Pakistan continued to deny the 
church its property.
  It should not take 30 years for a church to recover its own property, 
but that is what the current state of play in too many parts of the 
world. And that is why we need strong investor-state dispute settlement 
procedures. Let me give another example.
  Nearly 30 years ago, Richard Bell, a U.S. citizen living in Costa 
Rica, had his property expropriated by the Costa Rican Government for a 
national park. Despite assurances from several Costa Rican 
administrations that the matter would be resolved, it took until 
October 2001 before Costa Rica entered into a framework agreement with 
Mr. Bell to submit the issue to arbitration. And that agreement would 
never have been reached without hundreds of hours of U.S. government 
assistance. Mr. Bell declined to use the Costa Rican courts due to 
extensive delays associated with the judicial system. In hindsight, 10 
years in the judicial system does not seem so bad.
  Not every country in the world provides quick access to justice like 
the United States. The amendment would hurt our ability to help these 
citizens. And I think that is a mistake.
  As Stuart Eizenstat, former deputy Secretary of the Treasury during 
the Clinton administration wrote recently in an editorial:

       By demanding that the Senate both reduce investors' 
     protection against expropriation and force investors to 
     obtain permission to file claims before tribunals, the 
     critics would strip U.S. investors of key protections and 
     potentially to politicize the dispute settlement process.

  The ability of U.S. citizens to invest abroad and foreign citizens to 
invest in the United States is not something to be taken for granted. 
For the last 25 years, each successive administration has recognized 
that it is critical to negotiate strong, objective and fair investment 
protections in our international agreements to continue to promote such 
investment. These traditional investment protections are largely based 
on U.S. law and policy and established international law.
  The bill carefully balances concerns about the investor-state dispute 
settlement process without weakening core investment rules that serve 
America's interests. The degree of support for the final product is 
demonstrated by a strong bipartisan committee vote of 18 to 3 in favor 
of the bill.
  I urge my colleagues not to upset this careful balance. Again, let me 
quote from a recent editorial by Stuart Eizenstat:

       The Senate should approve the Baucus-Grassley Fast Track 
     bill without delay and should resist attempts to weaken 
     investment protection rules that embody core values of the 
     United States: respect for private property, 
     nondiscrimination, and the right to appear before an 
     independent and impartial tribunal.

  This amendment undermines these core values. I urge my colleagues to 
reject it.
  The PRESIDING OFFICER. Who yields time?
  Mr. KERRY. Mr. President, what is the time situation?
  The PRESIDING OFFICER. The Senator from Massachusetts has 16 minutes.
  Mr. KERRY. And the opponents?
  The PRESIDING OFFICER. They have 4 minutes.
  Mr. KERRY. Mr. President, I yield myself such time as I may use.
  Let me respond to the distinguished ranking member. What he read was 
a Supreme Court case about eminent domain. That is completely separate 
from what I am seeking to address. It has nothing to do with what my 
amendment does. He talked about the Supreme Court and the standard with 
respect to the right of our companies to seek redress if a government 
takes their property. That stays exactly the way it is today. That is 
expropriation by eminent domain.
  What we are talking about is exclusively regulatory action, when a 
government takes regulatory action, passes a law to implement 
environmental standards, or a health standard, and a company then comes 
in and claims that the particular regulation was purposefully to 
discriminate against that company, not for the welfare of its citizens.
  Now, are the Senators saying we should not require that appropriate 
standard, that you ought to be able to win a regulatory expropriation 
when it is discriminatory? That is not a problem; that is a standard. 
That is an appropriate way to measure whether or not a regulation 
reaches too far or is appropriate.
  Let me be very precise about how this works. Consider the MTBE ban in 
California. Nine States have now followed California's lead. 
California--and the Governor or the State--is being sued by a Canadian 
company claiming their removal of methanol is discriminatory. It is 
geared as an expropriation that has taken their value. Nine States have 
now done the same thing. Are they all going to be subjected to suit? 
Are we going to have every company have the ability to come in and say, 
we think you are just passing this, whether or not you have hurt our 
business, so they settle for just $175 million? That is what I talked 
about--a nuisance settlement of $175 million that comes out of the 
taxpayers.
  Chapter 11, as it currently stands, is being used to threaten 
governments from enacting public health measures. Here is an example: 
The Canadian Government has sought to ban the use of the words 
``light,'' ``mild,'' and ``low tar'' from cigarette packaging, and 
Philip Morris recently issued a warning to Canada that, under NAFTA, 
Canada must compensate foreign investors when measures expropriate 
investments in Canada. So Philip Morris is warning Canada that their 
use of the words ``light,'' ``mild,'' and ``low tar''--banning those 
words--is taking value away from Philip Morris. Should that be 
subjected to a standard of being discriminatory against Philip Morris, 
or to a standard of, is that a legitimate health concern of the 
Canadian Government? It works both ways. It absolutely works both ways.
  Now, there are three significant areas where the Baucus bill, as 
amended, falls short. No. 1, it does not ensure that the long-held U.S. 
Supreme Court case law on expropriation on what is not expropriation is 
upheld. I reiterate, we are not defining expropriation. We are simply 
saying that under the long-held U.S. case law this particular kind of 
reduction of business is not when an expropriation ought to apply 
because otherwise a secret--we don't have any right to know what 
the deliberations are, we don't know what the standards are. It is an 
arbitration panel of three judges of another country that is going to 
decide. We think that is an expropriation.

  The second thing is that I do not rule out the possibility that an 
investor could bring an expropriation case. We simply limit the use of 
an expropriation standard to those cases in which U.S. case law 
recognizes regulatory taking. Secondly, we provide a protection for 
legitimate public interest law.
  The amended bill does not guarantee that a legitimate domestic law is 
protected. My amendment provides safe harbor for Federal, State, and 
local laws and regulations protecting public health and safety and the 
environment, except when the action taken is primarily discriminatory. 
That is an appropriate standard to apply, and that is what we ought to 
vote for.
  The current bill allows claims to be decided on a question of whether 
the free flow of goods or capital is impeded by public health. That is 
not a standard we should want to adopt in our country.
  Thirdly, we uphold the principle of due process. The principle of due 
process is somewhat close to the international law of what is called 
fair and equitable treatment. But fair and equitable treatment is 
completely vague. We don't know what it means. We don't know how that 
standard has been applied. It can mean many things. One thing we have 
tried to do over the years in this country is define clearly under the 
due process clause of the U.S. Constitution what process is, what 
rights attach to people. If the concept of fair and equitable treatment 
remains the guiding principle of the investor-state dispute panels, 
without further clarification, then you have a very real risk that 
those panels import a different legal standard into their consideration 
than that which our U.S. companies have a right to expect.

[[Page S4604]]

  I believe American companies win with the passage of this amendment 
because, in fact, it has the practical effect of making future 
investor-state arbitration panels have their rulings based on concrete, 
well-defined U.S. laws, rather than nebulas, uncertain, unclear, 
international precedents.
  Under my amendment, an American investor can win before an 
arbitration panel if they show they were discriminated against on the 
grounds of national treatment or if the offending regulation is enacted 
or applied in a discriminatory, purposeful fashion.
  If a foreign government passes legislation that is discriminatory, of 
course, an investor will be able to seek compensation. There is nothing 
in this legislation that diminishes their capacity.
  What I sought to do in my amendment originally was to guarantee that 
no foreign investor would have greater rights than a U.S. investor. The 
amendment by the chairman simply says they will not have lesser rights. 
It does not protect their right to guarantee that a foreign investor 
will not have greater rights. That is what this is about.
  I hope my colleagues will help American businesses to be properly and 
adequately protected and our States to be protected with their laws of 
public purpose: to protect the environment and protect our health 
standards.
  I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time? If no one yields time, time 
will be charged equally to both sides.
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, there are many statements the Senator made 
with which I take issue because they are inaccurate. One of the most 
inaccurate is the last statement the Senator made, that there is 
nothing in the bill to make sure foreign investors are not accorded 
greater rights than domestic investors. This is the Kerry language 
which we provided for in the underlying bill--not the Kerry amendment 
now being offered, but Kerry language he suggested earlier.
  Let me read it:

       Insert the following: foreign investors in the United 
     States are not accorded greater rights than United States 
     investors in the United States.

  That is what is in the bill. So his statement to the contrary, that 
there is nothing in the bill that assures foreign investors do not have 
greater rights than domestic investors, is inaccurate. We already 
include it in the underlying bill.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President, the Senator is correct, that is the 
language that was used, but it is preamble language. It is in the 
preamble. It has no teeth. There is no substance to it. What I am 
trying to do is guarantee in each of these categories that there are 
teeth, there is substance in the law that, in fact, guarantees you will 
not have those greater rights because still all of this is subject to 
the international panel's application of standards; they ultimately 
will decide.
  Unless we establish some standard by which to measure it, that is 
literally a statement without any enforcement mechanism whatsoever.
  I reserve the remainder of my time.
  Mr. BAUCUS. Mr. President, how much time remains?
  The PRESIDING OFFICER. Six minutes to the Senator from Massachusetts 
and 2 minutes to the Senator from Montana.
  Mr. BAUCUS. Mr. President, I will take 1 minute. This debate is 
devolving into little details. In my 1 minute, let me say, again, the 
Senator is inaccurate because we are talking about negotiated 
objectives in the bill. They all have the same force and effect. That 
is, the language referred to has the same effect as it would for 
another part of the bill. We are talking about negotiated objectives 
given to our negotiators as they try to negotiate other agreements.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Texas.
  Mr. GRAMM. Mr. President, I will take just 1 minute of time. Let me 
first say there is much about the argument by the Senator from 
Massachusetts that, first, I do not understand and, second, I do not 
agree with.
  First, let me say I was puzzled by his reference to lawsuits and 
Republican opposition thereto. If there is any principle I believe in, 
it is the right of people to protect their property.
  Second, it seems to me that the Senator has written an amendment that 
addresses no legitimate concern because in the 57 years we have had 
investment treaties giving investors in America the right to go to 
arbitration to have their investment protected, no one has ever won a 
suit against the United States of America.
  And meanwhile, American investors use these rights every day in every 
developing country in the world. They make the difference between 
confiscation and destruction of American investments, and the 
protection of American investments and the jobs that flow from them.
  The Senator argues that nothing in his amendment lessens the rights 
of American investors. Nothing could be further from the truth. His 
amendment would require investors to get government permission to 
protect their basic property rights. Governments would have to sign off 
in order for investors to obtain protection of their property. Nothing 
could be more alien to the American system than that notion.
  His amendment also deems exempt those State and local laws and 
ordinances related to a series of issues--such as health, safety, 
environment, or public morals, whatever that is--unless the laws and 
ordinances were intended solely to take investor property. That new 
standard would run counter to our notion of discrimination--which looks 
at impact not intent--and would be much harder to breach. Finally, the 
Kerry amendment says that your property is protected only if the taking 
is complete. That is little consolation to an American investor.
  I urge the rejection of the Kerry amendment.
  The PRESIDING OFFICER (Ms. Cantwell). The Senator's time has expired.
  All time remaining is that of the Senator from Massachusetts.
  Mr. KERRY. Madam President, how much time remains?
  The PRESIDING OFFICER. Six minutes.
  Mr. KERRY. I will not use all that time.
  The Senator from Montana is correct, we are reaching the end. Let me 
once again answer my friend from Texas and say we have established 
screening mechanisms with respect to certain kinds of cases all through 
our country. Lawyers have accepted the notion--we even have rules in 
the Federal court under rule 11, if I recall it correctly, which seek 
to deal with the question of frivolous lawsuits.
  What we are trying to do is recognize that we want to establish some 
order in the system. I think most people would agree that the challenge 
by the Canadian company to the California statute with respect to MTBE 
is frivolous. No one here would believe that is somehow discriminatory 
or a taking; nevertheless, we have a lawsuit. California taxpayers are 
exposed for the potential of $1 billion for what was a legitimate 
health effort.
  If people think that ought to be tying up the arbitration panels of 
rule 11, go ahead and vote for it, but I do not think it should. There 
ought to be some kind of mechanism by which you have a signoff on 
whether there is a legitimacy to the claim. Since it is your own 
Government making that judgment, particularly with respect to a U.S. 
business interest, it is really hard to conjure up a scenario within 
which they are not going to be pretty permissive if there is some 
legitimacy to a claim.
  What we really see here is resistance to the notion that we should 
raise the standard of international behavior with respect to the 
potential of what is or is not a cause for action in an expropriation. 
I submit to my colleagues that the standard here is vague. The standard 
is now carried out in secret. It is carried out according to standards 
that our businesses do not know and cannot anticipate.
  It is carried out by a standard that is less than the rights afforded 
our businesses under the U.S. Constitution; less than those rights, 
according to the due process clause, the fourth and fifth amendments; 
and less than those rights according to the settled case law of the 
Supreme Court of the United States for a long period of time, to quote 
the Supreme Court itself.

[[Page S4605]]

  I believe we should put in some objectives which state clearly what 
we would like to have negotiated. All of this is a negotiating 
objective. I do not deny what the Senator has said. These are goals. 
But why not be precise about what we want negotiated and the standards 
that we think ought to apply?
  If they find the kind of problems the Senator from Texas is saying, 
they will not negotiate it the same way. These are all objectives. Let 
us vote for a standard and an objective in the negotiations so we 
arrive at the better protection of American businesses with respect to 
expropriation and we do not submit our States to a series of frivolous 
lawsuits as they are currently and we do not allow a process of 
intimidation to take place between company and government as we see in 
the Phillip Morris-Canada situation with respect to smoking.
  That is what this vote is about. Since this is not the meat and 
potatoes in the end anyway, what we vote is not the final word. What we 
are voting is an intent and a direction, and I hope my colleagues will 
vote the intent and direction of raising the standard by which the U.S. 
businesses are going to be treated in the trade resolution process.
  I yield the remainder of my time.
  The PRESIDING OFFICER. The Senator from Montana.
  Mr. BAUCUS. Madam President, is all time yielded back?
  The PRESIDING OFFICER. All time has expired.
  Mr. BAUCUS. Madam President, I move to table the Kerry amendment, and 
I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The question is on agreeing to the motion.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Arkansas (Mr. 
Hutchinson), the Senator from New Hampshire (Mr. Gregg), the Senator 
from North Carolina (Mr. Helms), and the Senator from New Mexico (Mr. 
Domenici), are necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 55, nays 41, as follows:

                      [Rollcall Vote No. 121 Leg.]

                                YEAS--55

     Allard
     Allen
     Baucus
     Bennett
     Bingaman
     Bond
     Breaux
     Brownback
     Bunning
     Burns
     Campbell
     Cantwell
     Carper
     Chafee
     Cochran
     Craig
     Crapo
     DeWine
     Ensign
     Enzi
     Feinstein
     Fitzgerald
     Frist
     Graham
     Gramm
     Grassley
     Hagel
     Hatch
     Hutchison
     Inhofe
     Kyl
     Landrieu
     Lincoln
     Lott
     Lugar
     McCain
     McConnell
     Miller
     Murkowski
     Nelson (NE)
     Nickles
     Roberts
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Snowe
     Specter
     Stevens
     Thomas
     Thompson
     Thurmond
     Voinovich
     Warner

                                NAYS--41

     Akaka
     Bayh
     Biden
     Boxer
     Byrd
     Carnahan
     Cleland
     Clinton
     Collins
     Conrad
     Corzine
     Daschle
     Dayton
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Harkin
     Hollings
     Inouye
     Jeffords
     Johnson
     Kennedy
     Kerry
     Kohl
     Leahy
     Levin
     Lieberman
     Mikulski
     Murray
     Nelson (FL)
     Reed
     Reid
     Rockefeller
     Sarbanes
     Schumer
     Stabenow
     Torricelli
     Wellstone
     Wyden

                             NOT VOTING--4

     Domenici
     Gregg
     Helms
     Hutchinson
  The motion was agreed to.
  Mr. REID. Madam President, I move to reconsider the vote, and I move 
to lay that motion on the table.
  The motion to lay on the table was agreed to.


                             Change Of Vote

  Mr. REID. Mr. President, on rollcall vote No. 121, Senator Biden 
voted ``aye.'' It was his intention to voted ``no.'' Therefore, I ask 
unanimous consent that Senator Biden be permitted to change his vote 
since it will not affect the outcome of the vote.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The foregoing tally has been changed to reflect the above order.)
  Mr. REID. Madam President, the Senator from West Virginia, Mr. 
Rockefeller, wishes to speak in morning business in regard to the 
American soldier who was killed the day before yesterday in 
Afghanistan. I ask unanimous consent that the Senator from West 
Virginia be recognized for up to 10 minutes to speak as if in morning 
business.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  (The remarks of Mr. Rockefeller are printed in today's Record under 
``Morning Business.'')
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Madam President, I ask unanimous consent that amendment No. 
3442 be temporarily set aside. I have spoken to Senator Dorgan, and he 
is in agreement. The managers of the bill are trying to work something 
out on this amendment. So I ask that it be set aside.
  I also say, for the edification of Members, that immediately Senator 
Dorgan is going to speak, as there is a unanimous consent agreement 
pending allowing him to do so, for up to half an hour on the Cuba 
amendment he offered. Following that, Senator Torricelli is going to 
offer amendment No. 3415, under a half-hour time agreement, evenly 
divided. Then we are going to go to a Grassley amendment that he is 
going to offer.
  This is about as far as we will be able to get this evening, the 
majority leader has indicated. So that is where we are. We will have 
something more definite as soon as Senator Dorgan finishes his 
statement on Cuba. We will have something written up so people know 
more definitely what this will be.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from North Dakota.


                      Amendment No. 3439 withdrawn

  Mr. DORGAN. Madam President, it is my intent not to take the 30 
minutes. But I do want to make some comments about an amendment I have 
offered that is now pending, amendment No. 3439. This amendment deals 
with language that was in the farm bill that passed the Senate and went 
to conference dealing with the ability to sell food to Cuba.
  As my colleagues know, we have had an embargo with respect to the 
country of Cuba for some four decades. That embargo included, for most 
of those four decades, an embargo on the shipment or sale of food to 
Cuba. That changed a couple years ago because my colleagues and I 
decided that an embargo ought not include an embargo on food shipments, 
that using food as a weapon is not the appropriate thing to do.
  So we lifted that embargo with respect to food, though it was lifted 
in a very narrow way. And the Cubans have been able to buy American 
food, especially following the hurricane in Cuba. They have purchased 
$75 to $90 million worth of food from this country now. It has to be 
purchased with cash, and they have to do it through a French bank in 
order to accomplish the transaction.
  In fact, following the vote in September of 2000, where we allowed 
food to be sold to the Cubans, one of the people who opposed that, a 
Congressman from Florida, said he was satisfied that the language in 
the legislation was restrictive, making it difficult for the United 
States companies to do business in Cuba because they will have to go 
through third countries for financing. In point of fact, he was saying 
it is going to make it very difficult for us to sell food to the 
Cubans.
  We agree that it is difficult. As a result of that, we put 
legislation on the farm bill in the Senate by a very significant vote. 
That legislation says that Cuba could access private financing in this 
country for the purchase of food from the United States. No government 
subsidies at all, just private financing, if they can find private 
financing. We included that in the farm bill that left the Senate and 
went to conference and got stripped out of the conference, even though 
the House of Representatives had a vote. They voted 273 to 143 to 
endorse the Senate plan for more trade with Cuba.
  So the House has spoken on this issue. The Senate has spoken on it. 
By far, the vast majority of both the House and the Senate said we do 
not want to use food as a weapon. Let's be

[[Page S4606]]

able to sell food to the Cubans, if they want to buy food. If they want 
to access private financing, they can access private financing, if they 
can find it somewhere. But let's not make it more difficult for those 
in the world who need access to that which our farmers grow in such 
abundance to have access to that food--let's not make that more 
difficult.
  There are some who still are rooted in the 1960s. This 40-year 
embargo with Cuba has not succeeded through 10 United States 
Presidents. It just has not succeeded.
  I do not stand here suggesting that I have any sympathy for the 
Castro regime. We need to, as a country, persuade Cuba to move towards 
democracy, move towards greater human rights. I believe we will best do 
that by doing just as we do with China and Vietnam--both Communist 
countries--engaging them with trade and commerce and travel.
  I believe we will best do that in Cuba in exactly the same manner. 
That is why I believe that changing our laws with respect to trade, 
especially with respect to food, and also with respect to travel, will 
be the method by which we move Cuba and move the Castro government 
towards a day when there will be open elections in Cuba, democracy, and 
a better record on human rights in Cuba.

  There are some in this town who do not agree with me. And I respect 
that. But I tell you, I wonder, for the life of me, how does someone 
really believe that our selling chicken gizzards, turkey legs, pork 
lard, wheat, and dried beans to Cuba undermine the interests of the 
United States? Does anybody really believe that, that the sale of these 
agricultural products to Cuba undermines the economic interests or the 
security interests of the United States? No one really believes that 
any longer.
  So I do not believe we ought to use food as a weapon anywhere in the 
world, under any circumstance. That does not hurt Fidel Castro. He has 
never missed breakfast or dinner because this country decided it will 
not sell food to Cuba. But the poor, sick, and hungry people in Cuba, 
who have missed a lot of meals, they are the ones who hurt from this 
country's policy of using food as a weapon.
  So this amendment is very simple. It lifts, ever so narrowly, that 
portion of the embargo that deals with food and allows Cuba to purchase 
food from this country with private financing--not public financing, 
just private financing.
  Why should our farmers be the victims of a foreign policy that 
doesn't work? Why should our farmers be told that they cannot sell 
their crops to Cuba using the kinds of private financing that are 
common to agricultural sales involving other countries? That doesn't 
make any sense to me.
  I know my colleague from New Jersey has a different view on this. Let 
me, if I might, out of my time, yield to my colleague from New Jersey 
for 4 minutes.
  (Mr. REED assumed the chair.)
  Mr. TORRICELLI. Mr. President, I thank my colleague from North Dakota 
for yielding me this time.
  There are profound differences in the Senate over American policy 
towards Cuba, as there are divisions in the United States. For 40 
years, the Cuban people have seen their nation enslaved by an alien 
ideology. The Cuban people, who by their nature are independent, 
industrious people, entrepreneurial in spirit, strong of faith and 
nationalism, have seen their country's independence compromised by 
foreign alliances, their sense of entrepreneurship compromised by 
communism, and the free spirit of the Cuban people dampened by state 
control over almost every facet of life.
  Ten years ago, this Congress recognized that America was maintaining 
a fiction in its policy toward Cuba. We pretended to have an embargo 
but allowed American corporations to trade with Cuba through Europe. We 
said we were offended at human rights violations in Cuba, the denial of 
all basic rights, but we maintained normal economic enterprise through 
our allies. The Cuban Democracy Act and then the Helms-Burton Act, 
under the Clinton administration, changed these circumstances. That 
issue is now before the Congress again, and it is a good debate.
  As certainly as Senator Dorgan feels the need for change, I rise in 
the belief that what is required is not change but more time. It has 
admittedly been a long time. I cannot say with any satisfaction that 
the policy has yielded any results. I can only tell you that American 
policy is justifiable, morally and strategically, and that the burden 
of change is not with us. The United States Government has no argument 
with the Cuban people. It is for this reason that American law has 
exempted food and medicine and cultural exchanges and media visits from 
the embargo.
  For 10 years since the modern embargo was written, the U.S. 
Government has made concession after concession. To the Castro 
government we allowed the opening of news bureaus in the hope that 
Castro would institute some reform, and there was none. The Clinton 
administration allowed charter flights so tourists could visit in the 
hope there would be some concession from Castro, and there was none. We 
believed that if we would loosen up visas for tourists to begin to 
visit in some small numbers, we would get some reciprocal action by 
Castro, and there was none--time and time and time again. Indeed, in 
the licensing of food deliveries and other economic enterprise, every 
single request that was made of the Treasury Department was granted, 
concession after concession.
  What is it we sought? Some small indication from Havana of change. If 
Fidel Castro had done anything, a single opposition newspaper, one; an 
election in a small town, one province; a single political party in 
opposition--anything--there would be no embargo today.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. TORRICELLI. I ask for 1 more minute.
  Mr. DORGAN. I yield an additional minute.
  The PRESIDING OFFICER. Without objection, the Senator is recognized.
  Mr. TORRICELLI. Under American law, the moment the President of the 
United States has certified there is a free election in Cuba, by law 
there is no embargo. I know Senator Dorgan and I will address the 
Senate on this issue at another day, another time, on another piece of 
legislation. It is an important debate for the Senate. On this day I 
did not want Cuban Americans to believe that this Senate is of one 
mind. I believe in defeating Fidel Castro. I believe the Cuban people 
can still live to see a free day. I don't intend to yield the fight 
until we reach that day.
  I thank the Senator from North Dakota for yielding the time.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, my colleague and I share the goal of 
democratic reforms in Cuba and human rights in Cuba. It is just that I 
believe that the quickest route to changing the Government of Cuba is 
not through a policy that for 40 years has been a failure but, instead, 
by developing policies that we have decided work in China, Vietnam, and 
elsewhere, policies of engagement.
  I believe very strongly that having unfettered trade with Cuba and 
United States citizens traveling in Cuba is the quickest way that 
exists in order to bring democratic reform and human rights to Cuba.
  It is interesting to me that in the early 1970s, it was Richard Nixon 
who went to China. When he went to China, do you know who was the 
leader of China? Mao Tse Tung, a repressive Communist leader who 
virtually obliterated human rights in China. Richard Nixon went to 
China and began an engagement with China to open and expand trade and 
travel with China over a period of years.
  Now in the Senate we hear people say, when we have these votes, 
engagement with China is the way to bring China along on human rights 
and democratic reforms. Engagement with China, a Communist country, is 
the way for us to accomplish that goal. They say that with Vietnam as 
well, a Communist country. Engagement with Vietnam, more trade, more 
travel, more engagement will move us towards greater human rights and 
greater democratic reforms in China and Vietnam. But they say that 
logic does not exist with respect to Cuba. Why? For 40 years this 
policy has existed, and for 40 years it has failed.

[[Page S4607]]

  Despite the fact we have opened a crevice dealing with the sale of 
agricultural products to Cuba, the State Department and the 
administration are not helping us move food to Cuba when Cuba wants to 
buy it for cash. The head of Alimport, which is the agency that buys 
food for Cuba, applied for a visa to come to the United States. That 
visa was revoked. Why? Because they indicated on a previous visit to 
the United States, the head of Alimport, Mr. Pedro Alvarez, seemed to 
do things that were undermining our country's interests. What were 
these things? He said in the United States that he hoped Cuba could buy 
more food from the United States. That undermines our country's vital 
interests? I think not.
  I always find it interesting the way our country handles these 
issues, not just this but trade issues generally. We use trade as a way 
of creating foreign policy to punish and reward. I have spoken before 
about this. We have this little trade disagreement with Europe. Europe 
slaps some prohibitions on hormone beef coming from the United States. 
What is our response to Europe? We slap big penalties on Europe. We 
take aggressive, tough action against goose liver, truffles, and 
Roquefort cheese. That is enough to scare the devil out of anybody. We 
are going to take action against your goose liver.
  Going to Cuba, Pedro Alvarez wants to come to this country because he 
wants to buy--if you don't mind my reading a few of these things--
chicken innards, chicken gizzards, chicken entrails, pork trimmings, 
yes, pork loins, wheat, corn, soybeans, dried beans, eggs. The list is 
a long list.
  Does anybody really think that any part of this as a sale to Cuba is 
going to undermine the interests of our country? Does anybody really 
think that? I don't think so.
  My colleague from New Jersey always states his case well. I 
understand his point. Neither he nor I wants to give comfort to a 
government that doesn't respect human rights.
  But this isn't about giving comfort to the government. This is about 
our responsibility. Our responsibility, in my judgment, is to decide as 
a country that it is not a moral policy to use food as a weapon. I hope 
we never again use food as a weapon.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. DORGAN. In the final 30 seconds I have remaining, I intend to 
withdraw my amendment No. 3439, and I will explain why that is the 
case. Some of those who have cosponsored amendment No. 3439, and who 
support us on all of these issues when we vote on Cuba issues, have 
indicated to me they would feel constrained to support a tabling motion 
only because it would exist on trade promotion authority, and they 
don't want to jeopardize that legislation in any way. They have 
indicated they would support this proposition that I offer on future 
legislation. So it is my intention to offer it on an appropriations 
bill.
  I ask unanimous consent to withdraw amendment No. 3439 at this 
moment.
  The PRESIDING OFFICER. The amendment is withdrawn.


                           Amendment No. 3415

  Mr. REID. Mr. President, it is my understanding now that the business 
before the Senate would be No. 3415, the Torricelli-Mikulski amendment.
  The PRESIDING OFFICER. That is correct.
  Mr. REID. I thank the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.
  Mr. TORRICELLI. Mr. President, for more than a century, American 
workers have made enormous progress in their working conditions and 
securing their most basic rights in the sale of their labor. It is the 
foundation of our very economy that the United States uniquely created 
circumstances where those who made products had decent enough wages to 
buy them. Those who were engaged in the production had sufficient 
leisure time to enjoy the fruits of their own labor. People fought and 
died for these rights in the labor movement. They were not given 
easily, not simply established, but fought for by a generation of 
workers.
  Those rights are very much now at issue as the Senate debates the 
expansion of international trade and fast-track authority for the 
President in new bilateral agreements.
  The question arises on the sanctity of these rights and their ability 
to be defended in an international context. What does it mean to 
American workers to have the right of association, the right to 
organize and bargain collectively, the prohibition of forced or 
compulsory labor, minimum wage, prohibitions on child labor, maximum 
hours, or safety conditions?
  Regarding the issue before the Senate, if we are to engage in these 
new international labor agreements, are we creating a situation where 
Americans can continue to have pride that we afford these things to our 
own people, to our own workers, while seeking the benefits of lower 
prices and cheaper goods through cheaper labor? Are we sending American 
workers into competition with those who enjoy none of these rights?

  Is there not some degree of hypocrisy? We want these things for our 
workers, but we put our workers in a situation of competition with 
workers in China, Latin America, or Africa who enjoy none of these 
rights. Indeed, what meaning will it have to claim these things for 
ourselves if we allow products into America from nations that guarantee 
none of these rights?
  The examples around the globe are as striking as they are compelling. 
Human Rights Watch recently released a report documenting child labor; 
obstacles to unionizing on banana plantations in Ecuador, the world's 
largest exporter of bananas. The report cited children as young as 8 
years old working long hours in hazardous conditions, exposed to toxic 
pesticides, drinking contaminated water, using sharp tools, hauling 
heavy loads and, in some cases, suffering sexual harassment.
  I am told that it is progressive to be arguing on the Senate floor 
for fast track, for labor agreements with all nations, with no 
conditions on labor rights. I am told that is progressive.
  What is progressive in allowing products into the United States made 
from child labor, exploited children? What is progressive about not 
insisting that these basic rights be afforded to those whose products 
will come into America, those who use the products. Nations who import 
these goods cannot morally separate themselves from the means of 
production. If you buy it, if you import it, if you negotiate with the 
countries that cast a blind eye to the sexual harassment, the 
exploitation, the long hours, the unsafe conditions, the contamination, 
the sickness, and the death, you are part of the problem. You are not 
only condoning it, you are encouraging it by providing a market for it.
  So I rise today not only for our own workers who will be forced into 
competition with these conditions to survive, making the right for 
minimum wage, to organize, for health benefits, for retirement, for 
safe conditions meaningless given the competitive circumstances in 
which we place our own companies; I also rise for their people because 
in this competition no one succeeds. It is a competition of 
exploitation. Everybody loses.
  The same report documenting abuses in Ecuador found that workers 
feared dismissal if they even attempted to unionize and are replaced by 
``permanent temporary'' workers. So not only are these conditions 
horrific, there is no chance through collective bargaining, through the 
exercise of union rights, to redress the grievance. If you told me that 
conditions in these nations were abhorrent but that through trade 
workers would organize themselves, they would be guaranteed better 
rights, conditions, and labor, it would be something worth attempting. 
The marketplace will not improve these conditions. Forcing American 
workers to compete with these companies in these circumstances will 
become a near permanent condition.
  There are many industries that are facing these same circumstances. 
It is not simply agriculture. It is the garment industry, it is the 
footwear industry, and it is not simply Latin America.
  Indeed, China in some cases may be the most egregious, offering low 
wages, weak labor laws, and suppression or control of all trade 
activity. In China, this has been particularly true in garments and 
footwear in which retailers subcontract orders to the absolutely lowest 
bidders with no inquiry, no control, perhaps not even any interest, in 
the degree of exploitation.
  There is something wrong with this system, and I do not know how it 
is

[[Page S4608]]

corrected. Amendment after amendment is lost on this Senate floor. 
People rise for footwear, but it can be lost for garments and for 
agriculture. If it was exploitation of somebody else in another 
country, it is their problem, not ours. On the contrary.
  I want affordable goods for the constituents of my State as much as 
any Senator. I believe in free, fair, open competition as much as 
anybody. I believe in the ability of the American worker, American 
business to compete with anybody, anywhere, anytime on a free and fair 
basis. But who here believes there is something to be gained by 
competing with what amounts to slave labor in conditions of death and 
exploitation? Who believes any American worker in any industry could 
survive that competition? And, indeed, are we not replete with examples 
of the fact that they cannot?
  I do not know how these circumstances ever change. I know that if 
America were going to the lowest bidder for businessmen, I know if we 
were looking around the world for the cheapest possible bankers and 
financiers, I know if there were no working conditions for lawyers in 
India, Pakistan, or Latin America and we were importing that labor, it 
would get someone's attention. But garment workers, footwear workers, 
agricultural workers, have they no advocates? Is there no concern for 
the competition in which we put our people in these circumstances? 
There is concern, but there is a minority.
  I have heard enough of this debate. I have watched enough votes. I 
have seen every Member defeated on every amendment to know mine will be 
no different. They are hollow words, but they will be read again. We do 
an injustice to the American workers. We do an injustice to those in 
developing countries who only want the right to form their own unions, 
the basic protection of themselves and their families.
  The monarchies of Europe in the 18th and 19th centuries faced similar 
circumstances. Europeans, even in those governments, could have raised 
their standard of living by getting cheaper products from nations that 
practiced slavery, and very often they would not; they would not be 
part of it.
  What, I say to my colleagues, is the difference from importing 
products during that exploitation--from the exploitation of children 
who are worked at 8 years old for little or no wages; people who are 
locked in dormitories at night so they cannot leave the factory; people 
who are paid in script, not money; people who work because they have no 
choice or die? Different centuries, different words, same results: 
Human exploitation.
  The President wants authority to negotiate with a series of Third 
World nations to enter into free trade agreements with the United 
States. If we were here on a different basis, I not only would vote for 
that authority, I would offer the bill. I would be here arguing for it 
every day. What separates us is not a desire to open markets or have 
free trade, it is the simple conditions of doing so.
  If I believed George W. Bush would negotiate free trade agreements 
insisting on the rights of foreign workers to organize, or a minimum 
wage, or child labor, this would be the right thing to do.

  The language before this Senate does not contain any requirements to 
bring the domestic laws of any nation into the compliance of the ILO 
conventions, guaranteeing protection against the most egregious 
violations of workers. It requires nothing, so that is exactly the kind 
of support I intend to give it: Nothing.
  Under my amendment, workers' rights provisions would be assured just 
as we are protecting intellectual property or investor rights because 
it is not as if there are not some assurances to some Americans in fast 
track. If you own a patent, we will defend you. If you have 
intellectual property, the U.S. Government will respect it. But if you 
are the heirs of garment workers and agricultural workers, the rights 
you fought for--protection from being in competition with a child for 
labor, not to compete with someone who earns under the minimum wage--
you will get none of those protections at all.
  I regret the Senate has come to this point, and I regret that we 
could not come to common terms in how to engage in international 
agreements to open borders. It did not have to be. While I know my 
amendment may not succeed, I assure the Senate we will visit this 
subject again. There is just so much we can lose, so many industries 
that can be lost, so many American workers we put in competition with 
people in desperate circumstances.
  The downward spiral of living circumstances of working families in 
America, the loss of benefits, wages, industries, communities, is just 
so much of a burden that can be borne until we insist not simply on 
opening markets, but opening them on some common basis of respect for 
human rights and human dignities in international labor.
  I thank my colleagues for the opportunity to offer the amendment and 
to address this subject.
  Mr. CORZINE. Mr. President, I rise to lend my support to Senator 
Torricelli's amendment which would require prospective trading partners 
to ensure that their domestic laws provide adequate labor protections. 
The amendment calls on countries interested in trading with the United 
States to conform their labor protection regime to the labor standards 
of the International Labor Organization's Declaration. The amendment 
would further require that the worker rights protections including in 
the underlying legislation be subjected to the same dispute resolution 
mechanism as other areas.
  For far too long American businesses have been operating at a 
comparative disadvantage. Through years of improvements, the United 
States today provides its workers with a market basket of protections: 
the 40-hour workweek, the minimum wage, OSHA standards. But, as the 
business community has long pointed out, each of those protections 
comes with a cost as well as a benefit. It costs more to provide 
workers with a fair wage. It costs more to provide a safe workplace and 
allow workers to associate freely. It costs more to treat workers with 
dignity. It is a cost of doing business in a democratic society.
  Other countries take advantage of lax worker protections to attract 
manufacturing companies away from pro-worker regulatory regimes. 
Developing countries desperate for economic improvement are in a 
regulatory race to the bottom, putting downward pressure on 
international wages and working conditions. Sacrificing decent working 
conditions and base salaries may give these countries an edge in 
industry, but it puts their workers at risk.
  The Baucus-Grassley bill was correct to put worker rights on the 
agenda of U.S. trade negotiators, but it did not go far enough. This 
amendment would guarantee that the worker protections included in the 
bill can be enforced through the dispute resolution process. If it 
makes sense to enforce the investment protections included in 
international agreements, it makes as much sense to enforce labor 
protections.
  We must establish a level playing field for all countries. No country 
should feel pressured to exploit children or undermine worker safety in 
an effort to attract development dollars. And no country should be put 
at a competitive disadvantage for providing its workers with basic 
protections or with basic dignity.
  I urge my colleagues to support Senator Torricelli's amendment, which 
seeks to ensure that the United States puts its national values into 
practice and considers the rights of workers throughout the world when 
it frames international trade agreements.
  The PRESIDING OFFICER. Is there further debate on the amendment?
  If not, the question is on agreeing to amendment No. 3415.
  The amendment (No. 3415) was rejected.
  Mr. GRAMM. I move to reconsider the vote.
  Mr. REID. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. Mr. President, it is my understanding, pursuant to the 
previous order, that the Republicans have indicated they want to offer 
an amendment.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.

[[Page S4609]]

  Mr. BAUCUS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, we are waiting for Senators Grassley and 
Brownback with respect to a sense of the Senate regarding granting 
Russia PNTR benefits. I hope those Senators can come fairly quickly 
because as soon as they do we can take up that resolution.
  In the meantime, I will say a few words about the health provisions 
included in the pending legislation. I say from the outset that I am 
extremely pleased about these provisions. They represent, first, a true 
bipartisan compromise, the result of months of negotiations, and, I 
might add, lots of concessions on both sides.
  After all that effort, I believe we have reached an agreement that 
will provide real, genuine help to families affected by new trade 
policies.
  Before describing the proposals, I commend Senator Grassley from 
Iowa. Many people spend a lot of time talking about bipartisanship in 
this town, but Senator Grassley does more than just talk. He is 
bipartisan. His efforts on this issue and others were crucial to 
getting a workable bipartisan compromise. I am happy to have him as my 
partner on the Finance Committee.
  What is the proposal? The proposal provides a 70 percent tax credit 
for health insurance premiums to workers who participate in trade 
adjustment assistance, known as the TAA program. This tax credit is 
advanceable and it is refundable. That means workers displaced by trade 
will not have to pay the full cost of their health insurance and then 
wait to be reimbursed when they file their tax returns the next year. 
They get the help up front, when they need it.
  Employees can also use this credit for a number of health insurance 
options. Those include maintaining their existing health insurance 
under what is known as COBRA coverage; purchasing insurance through a 
State high-risk pool or comparable coverage that the State has 
established; a State employee benefit plan or comparable coverage; they 
can purchase through a State-operated health plan; or coverage 
purchased through a private pool.
  Some Senators expressed concern about the impact on workers with 
individual market policies. And they argue it will take a long time to 
establish a State group coverage option. These are good points. They 
are valid. We attempted to address them.
  Workers covered by individual market policies before losing their 
jobs will be able to keep those policies and take full advantage of the 
70 percent tax credit. In addition, because we believe it will take 
some time for the Treasury Department to set up the tax credit 
mechanism and because it will take States some time to establish group 
purchasing agreements, we have included interim coverage under the 
National Emergency Grant Program.
  In short, it is not everything that Senators on either side of the 
aisle wanted. There are some provisions and concessions made on both 
sides of the aisle. We dropped on our side the Medicaid provisions. We 
yielded on the issue of requiring those eligible for COBRA to purchase 
only COBRA coverage. Most importantly, we moved from a premium subsidy 
to a tax credit, something that Republicans and centrists support.
  Similarly, the compromise is not everything the other side wanted. 
There is a tax credit, but not for the purchase of individual coverage. 
Indeed, the size of the tax credit, 70 percent, represents a sacrifice 
on both sides. Those on our side started at 75 percent; the other side 
wanted 60 percent. In the end, we split the difference at 70 percent--
not exactly an even split, but a good split.
  None of the sacrifices were easy. Each side had to swallow a bit of 
their pride. While we may have given up a little, displaced workers and 
their families gained a lot. I am proud we proved our ability to work 
together and compromise to help Americans in need.
  The trade adjustment assistance provisions are very significant. They 
are a huge improvement over current law. These provisions give health 
insurance benefits to displaced employees. They give substantial 
benefits for a couple of years to employees displaced because of trade. 
They are a main driver of this bill. In addition, we are giving fast 
track negotiating authority to the President under certain negotiating 
objectives. But the real substance of the legislation that is about to 
be passed here that has immediate legislative effect is the trade 
adjustment assistance provisions. They are significant. That is the 
legislation that will be enacted as a consequence of the trade bill we 
are now negotiating. I urge all colleagues to remember that.

  When we hear complaints of displaced employees, rest assured there 
are significant provisions that help those employees that will be 
displaced because of trade.
  The underlying bill develops a greater consensus on trade so more and 
more Americans are able to gain the benefits of trade--not just the 
multinational companies, but small business, so all the people that 
work in America so diligently to try to improve their income and have 
health insurance for their family and children can live a good life, 
take vacations and so forth.
  In the past, there has not been sufficient consensus on trade, and 
there still is not sufficient consensus, but the provisions help move 
us in that direction.
  I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BROWNBACK. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.


                Amendment No. 3446 to Amendment No. 3401

  Mr. BROWNBACK. I call up amendment 3446 and ask for its immediate 
consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Kansas [Mr. Brownback] proposes an 
     amendment numbered 3446 to amendment No. 3401.

  Mr. BROWNBACK. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

(Purpose: To extend permanent normal trade relations to the nations of 
    Central Asia and the South Caucasus, and Russia, and for other 
                               purposes)

       At the appropriate place, insert the following:

     SEC. ____. DEMOCRACY AND FREEDOM THROUGH TRADE ACT.

       (a) Findings.--Congress makes the following findings:
       (1) The United States is now engaged in a war against 
     terrorism, and it is vital that the United States respond to 
     this threat through the use of all available resources.
       (2) Open markets between the United States and friendly 
     nations remains a vital component of our Nation's national 
     security for the purposes of forming long, lasting 
     friendships, strategic partnerships, and creating new long-
     term allies through the exportation of America's democratic 
     ideals, civil liberties, freedoms, ethics, principles, 
     tolerance, openness, ingenuity, and productiveness.
       (3) Utilizing trade with other nations is indispensable to 
     United States foreign policy in that trade assists developing 
     nations in achieving these very objectives.
       (4) It is in the United States national security interests 
     to increase and improve our ties, economically and otherwise, 
     with Russia, Central Asia, and the South Caucasus.
       (5) The development of strong political, economic, and 
     security ties between Russia, Central Asia, the South 
     Caucasus, and the United States will foster stability in this 
     region.
       (6) The development of open market economies and open 
     democratic systems in Russia, Central Asia and the South 
     Caucasus will provide positive incentives for American 
     private investment, increased trade, and other forms of 
     commercial interaction with the United States.
       (7) Many of the nations in this region have secular Muslim 
     governments that are seeking closer alliance with the United 
     States and that have diplomatic and commercial relations with 
     Israel.
       (8) The nations of Russia, Central Asia and the South 
     Caucasus could produce oil and gas in sufficient quantities 
     to reduce the dependence of the United States on energy from 
     the volatile Persian Gulf region.
       (9) Normal trade relations between Russia, Central Asia, 
     the South Caucasus, and the United States will help achieve 
     these objectives.
       (b) Sense of Congress.--(1) Prior to extending normal trade 
     relations with Russia and the nations of Central Asia and the 
     South Caucasus, the President should--

[[Page S4610]]

       (A) obtain the commitment of those countries to developing 
     a system of governance in accordance with the provisions of 
     the Final Act of the Conference on Security and Cooperation 
     in Europe (also known as the ``Helsinki Final Act'') 
     regarding human rights and humanitarian affairs;
       (B) ensure that those countries have endeavored to address 
     issues related to their national and religious minorities 
     and, as a member state of the Organization for Security and 
     Cooperation in Europe (OSCE), committed to adopting special 
     measures for ensuring that persons belonging to national 
     minorities have full equality individually as well as in 
     community with other members of their group;
       (C) ensure that those countries have also committed to 
     enacting legislation to provide protection against incitement 
     to violence against persons or groups based on national, 
     racial, ethnic, or religious discrimination, hostility, or 
     hatred, including anti-Semitism; and
       (D) ensure that those countries have continued to return 
     communal properties confiscated from national and religious 
     minorities during the Soviet period, facilitating the 
     reemergence of these communities in the national life of each 
     of those countries and establishing the legal framework for 
     completion of this process in the future.
       (2) Earlier this year the Governments of the United States 
     and Kazakhstan exchanged letters underscoring the importance 
     of religious freedom and human rights, and the President 
     should seek similar exchanges with all nations from the 
     region.
       (c) Permanent Normal Trade Relations for Russia.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President, after certifying to Congress that all 
     outstanding trade disputes have been resolved with Russia, 
     may--
       (A) determine that such title should no longer apply to 
     Russia; and
       (B) after making a determination under subparagraph (A) 
     with respect to Russia, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extensions under paragraph (1)(B) 
     of nondiscriminatory treatment to the products of Russia 
     included under paragraph (1)(B), title IV of the Trade Act of 
     1974 shall cease to apply to that country.
       (d) Permanent Normal Trade Relations for Kazakhstan.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (A) determine that such title should no longer apply to 
     Kazakhstan; and
       (B) after making a determination under subparagraph (A) 
     with respect to Kazakhstan, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extension under paragraph (1)(B) of 
     nondiscriminatory treatment to the products of Kazakhstan 
     included under paragraph (1)(B), title IV of the Trade Act of 
     1974 shall cease to apply to that country.
       (e) Permanent Normal Trade Relations for Tajikistan.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (A) determine that such title should no longer apply to 
     Tajikistan; and
       (B) after making a determination under subparagraph (A) 
     with respect to Tajikistan, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extension under paragraph (1)(B) of 
     nondiscriminatory treatment to the products of Tajikistan 
     included under paragraph (1)(B), title IV of the Trade Act of 
     1974 shall cease to apply to that country.
       (f) Permanent Normal Trade Relations for Uzbekistan.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (A) determine that such title should no longer apply to 
     Uzbekistan; and
       (B) after making a determination under subparagraph (A) 
     with respect to Uzbekistan, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extension under paragraph (1)(B) of 
     nondiscriminatory treatment to the products of Uzbekistan 
     included under paragraph (1)(B), title IV of the Trade Act of 
     1974 shall cease to apply to that country.
       (g) Permanent Normal Trade Relations for Armenia.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (A) determine that such title should no longer apply to 
     Armenia; and
       (B) after making a determination under subparagraph (A) 
     with respect to Armenia, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extensions under paragraph (1)(B) 
     of nondiscriminatory treatment to the products of Armenia 
     included under paragraph (1)(B), title IV of the Trade Act of 
     1974 shall cease to apply to that country.
       (h) Permanent Normal Trade Relations for Azerbaijan.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (A) determine that such title should no longer apply to 
     Azerbaijan; and
       (B) after making a determination under paragraph (1) with 
     respect to Azerbaijan, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extensions under paragraph (1)(B) 
     of nondiscriminatory treatment to the products of Azerbaijan 
     included under paragraph (1)(B), title IV of the Trade Act of 
     1974 shall cease to apply to that country.
       (i) Permanent Normal Trade Relations for Turkmenistan.--
       (1) Presidential determination and extension of 
     nondiscriminatory treatment.--Notwithstanding any provision 
     of title IV of the Trade Act of 1974 (19 U.S.C. 2431 et 
     seq.), the President may--
       (A) determine that such title should no longer apply to 
     Turkmenistan; and
       (B) after making a determination under subparagraph (A) 
     with respect Turkmenistan, proclaim the extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the products of that country.
       (2) Termination of application of title iv.--On or after 
     the effective date of the extensions under paragraph (1)(B) 
     of nondiscriminatory treatment to the products of 
     Turkmenistan included under paragraph (1)(B), title IV of the 
     Trade Act of 1974 shall cease to apply to that country.

  Mr. BROWNBACK. Mr. President, I thank my colleagues and I thank the 
chairman of the Finance Committee and the ranking member for the 
consideration of this amendment.
  This amendment is particularly important in light of what has taken 
place recently in this country and around the world. The attack on 
September 11 has been an issue that is front and center of our minds 
since that date.
  I came from a secure briefing where we were talking about what was 
known prior to that time period. This week, the President of the United 
States heads to Russia to work with the Russians on several issues. One 
is reduction of nuclear weaponry.
  A two thirds reduction of missiles announced last week was an 
incredible reduction of nuclear missile material and nuclear missile 
capacity. There are United States troops in regions of the former 
Soviet Union that prior to September 11 we probably would not have 
dreamed of having present, in places such as Uzbekistan, Kazakhstan, 
and Georgia. the United States has troops there, training or on 
missions, dealing with the war on terrorism.
  We have had a great deal of cooperation from these countries in the 
war on terrorism. It is an important point. It is an incredible point 
of safety for our people in the United States, and it is an incredible 
moment for the United States and the world that are seeing taking place 
post-cold war when you consider where we are with Russia. Even last 
week in the NATO meeting, Russia said, OK, we will come closer to 
joining in with NATO. This is something that 5 years ago could not have 
even been contemplated. Yet we are seeing that growing closeness taking 
place between the United States and Russia. We see a growing 
cooperation on terrorism taking place there and in central Asia. We are 
seeing the United States troops in this region.
  We need to reduce our dependence on Middle East oil. A key part of 
that is what is taking place in Russia and central Asia.
  Our Nation was brutally and callously attacked September 11, 2001. We 
continue to mobilize with diplomatic and military action abroad, as 
well as bolstering defenses at home. We are facing a sustained war 
effort against international terrorism and a sustained readiness at 
home not seen since World War II. Let there be no doubt those 
individuals and organizations responsible for terrorism against the

[[Page S4611]]

United States will be found and brought to justice and America's shores 
will be safe again.
  As America continues to mobilize military, intelligence, and law 
enforcement assets to confront our enemy, there is one asset we have 
yet to mobilize which can be just as valuable as a bomb or a bullet. I 
believe that is trade. Trade with America can be an effective catalyst 
for the long-term viability of the institutions of democracy, the 
economic strength that bolsters them and our friends abroad.
  Economic prosperity, civil rights, and liberties are an extension of 
the democratic society, which, in turn, ameliorate internal strife and 
dissatisfaction that can lead to extremism, evil, and terror.
  By reaching out to our friends and struggling nations, by opening our 
markets to their products and vice versa, we can deploy the 
entrepreneurship of America as a weapon to help solidify the 
foundations of democracy, civil liberty, human right and economic 
prosperity abroad.
  As we continue to debate trade promotion authority, it is also 
important we take this opportunity and ensure the nations seeking the 
benefits of increased and improved economic relations with the United 
States also benefit from certainty in their trading relationship with 
us; certainty that we will remain committed to their continued 
development, and certainty that, while the path of democratic and 
market reforms will not always be smooth, our commitment to their 
efforts will remain unwavering.

  Today I offer an amendment that would make such a clear, strong, and 
principled statement. My amendment would extend permanent normal trade 
relations to Russia and the nations of Central Asia and the South 
Caucasus: Kazakhstan, Tajikistan, Uzbekistan, Turkmenistan, Armenia, 
and Azerbaijan, which will join Georgia and Kyrgystan in this regard.
  Title IV of the Trade Act of 1974, the Jackson-Vanik provision, 
denies unconditional normal trade relations to certain countries, 
Russia and the former Soviet Republics in particular, that had non-
market economies and that restricted immigration rights. Given the 
importance of strengthening our economic relationships, and encouraging 
continued democratic and market reforms, I believe that now is the time 
to permanently waive Jackson-Vanik for Russia and all of the nations of 
Central Asia and the South Caucasus.
  Unfortunately, not everyone agrees.
  Currently, the United States and Russia are engaged in a poultry 
trade dispute. Earlier this year Russia implemented a comprehensive ban 
on U.S. poultry imports, apparently in an effort to protect its 
developing domestic poultry industry. Some are concerned that Russia is 
contemplating similar actions on other products.
  Russia should have strong domestic industries. However, we have 
learned the hard lesson throughout the first half of the twentieth 
century that nations cannot build lasting economic strength through 
protectionism. I am pleased to have signed letters along with many of 
my colleagues in support of the U.S. poultry industry on this issue. 
The statement inherent in those letters is that nations cannot make 
unilateral, anti-trade decisions as if they operate in a vacuum.
  Unilateralism, or more specifically bypassing unilateralism in favor 
of open markets and cooperation, is the very reason that we are 
debating trade promotion authority today. Theoretically we have come to 
recognize that open markets, not protectionism, best serves the common 
good. Even though, in practice, our debate over trade promotion 
authority demonstrates even an American interest in at least some forms 
of protectionism, I hope that my colleagues who have also opposed 
Russia's actions on poultry keep these important principles in mind as 
we finish our debate on trade promotion authority.
  Some are also concerned that Russia, Central Asia, and the South 
Caucasus are not yet ready to graduate from Jackson-Vanik. Jackson-
Vanik was intended to ensure that Soviet Jews could freely emigrate, 
but has also come to symbolize human rights more generally. The process 
of graduation from Jackson-Vanik has come to include several steps that 
nations operating under Jackson-Vanik must take to protect human 
rights, religious freedom, and equality for ethnic and religious 
minority groups. Jackson-Vanik graduation also includes the return of 
communal property confiscated from national and religious minorities 
during the Soviet period, which is intended to facilitate the 
reemergence of those communities in the national life of each such 
country, as well as the establishment of a legal framework for the 
completion of this process in the future. Finally, graduation has come 
to require an exchange of letters between nations under Jackson-Vanik 
and U.S. representatives at the most senior levels, which underscore 
the importance of human rights and religious freedom.
  I have worked closely with organizations such as the National Council 
on Soviet Jewry, B'nai B'rith, and others, organizations I have the 
utmost respect for, to help bring this region into the Western 
community. I believe these important steps towards supporting human 
rights and religious freedom should be pursued by all nations, and I 
will continue to work towards that end. Progress has been made in the 
nations we are discussing here today.
  In February of this year, Assistant Secretary of State Beth Jones 
secured the commitment from Uzbek President Islam Karimov that his 
government would allow the International Committee of the Red Cross, 
ICRC, to view the conditions of detainees. This is an important step 
that will allow the international community to identify potential human 
rights violations.
  In Kazakhstan prison conditions are harsh, however, the Government is 
taking an active role in efforts to improve prison conditions and the 
treatment of prisoners, and observers have noted significant 
improvements in prison conditions.
  In Azerbaijan, though the Government largely controls radio and 
television, the primary source of information for most of the 
population, the Government took significant steps towards improving the 
media. These steps include the announcement that five private 
television stations would be granted long sought-after operating 
licenses by the frequencies committee.
  In Armenia, prison conditions are Spartan and medical treatment is 
inadequate, however, according to domestic human rights organizations, 
conditions continue to improve.
  I do not rise today in support of permanent normal trade relations 
with Central Asia and the South Caucasus because they are perfect--far 
from it. I do so because they continue to demonstrate a commitment to 
improving human rights and religious freedom, and the extension of 
permanent normal trade relations will only create an impetus for 
further reforms through increased economic and political association 
with the United States. By continuing to grow our relations with these 
countries, together we are going to improve their human rights and 
religious freedom conditions.
  For years Congress went through the process of debating the merits of 
extending normal trade relations to the Peoples Republic of China, and 
just last year the Congress approved China's accession to the World 
trade Organization. Trade with China has always been conditioned on the 
premise that increasing trade with China would increase China's contact 
and acceptance of the values, liberties, and fundamental beliefs that 
make our nation great. I do not believe anyone in the Senate is 
prepared to suggest China has a commendable record on human rights. 
Certainly not this Member, particularly in view of what is taking place 
even today in their dealing with the North Koreans entering China, to 
be forced back, sometimes with bounties. If trade can achieve these 
goals in regard to China, the positive impact of trade on Russia, 
Central Asia, and the South Caucasus is no less than a foregone 
conclusion. If a trading relationship with China will improve their 
human rights record, the same will hold true for Central Asia, the 
South Caucasus, and Russia as well.

  In addition to improvements over human rights and religious freedom, 
we must also be mindful of the remarkable developments that have taken 
place in this region of the world since September 11.
  This week President Bush travels to Moscow and will sign an historic 
agreement between our nations to eliminate

[[Page S4612]]

two thirds of our nuclear weapons stockpiles. Five years ago that would 
have been world news for a month. Today it is hardly passing news for a 
day. Just last week the North Atlantic Treaty Alliance and Russia 
announced the formation of the NATO-Russia council, a decision-making 
body to counter terrorism and other security threats to our common 
interests.
  Think, where would we be today if we didn't have the bases and the 
operations that took place out of Uzbekistan, Kazakhstan, bases to be 
able to land in Azerbaijan, troops right now working on 
counterterrorism in Georgia?
  Today in Central Asia and the South Caucasus, multiple nations are 
seeking to embrace democracy, make market reforms, and build a closer 
relationship with the United States. Our friends in this region have 
been instrumental in our ability to bring the war effort directly to 
enemy al-Queda forces in Afghanistan. These nations represent immediate 
targets for increased economic ties with the U.S., and are 
representative of the types of nations that must have strong economic 
ties to the U.S. to help address internal difficulties. Plus, if they 
are not building ties with the U.S. they will be building them with 
nations in the region, some much less friendly towards the U.S., some 
of which have significant internal militant Islamic forces that want to 
move forward in these countries today. Clearly, we don't want that to 
take place.
  In light of these crucial developments, I continue to believe that 
now is the right time to send the strong message to Russia, Central 
Asia, and the South Caucasus that they are on the right path, that we 
recognize the importance of the steps they have taken, and we are 
committed to continue working with them to strengthen democracy within 
their borders and open their markets to the world around them. I 
continue to feel that extending permanent normal trade relations with 
these important nations is the right way to make such a statement, and 
it is in the best interests of the United States that we do so now.
  Permanently waiving Jackson-Vanik for these important allies would 
cost us nothing. Yet we have much to gain from the certainty created in 
our economic relationship with these nations to permanent normal trade 
status. Particularly, if we can do this with China, given their human 
rights record, we can do that in this region. Russia itself owns 
immense fossil fuel reserves which could reduce our reliance on oil 
from the volatile Middle East. Kazakhstan, Turkmenistan, Uzbekistan, 
and Azerbaijan are also valuable sources of oil. Kyrgyzstan has made 
impressive progress in making market reforms since its days as a Soviet 
Republic, which can provide fertile ground for American investment. 
Georgia is making significant progress towards market reforms as well.

  It is also the case that several of these Central Asian and south 
Caucasus nations are suffering from internal strife caused by 
corruption and extremist Islamic fundamentalists. Kyrgyzstan's and 
Uzbekistan's Governments are currently targets of the terrorist 
organization, Islamic Movement of Uzbekistan, which seeks to create 
Islamic states in the region. Tajikistan is especially vulnerable in 
this regard as the flow of narcotics and refugees from Afghanistan, its 
neighbor to the south, have weakened that nation.
  These nations are in dire need of American influence. They need 
access to our markets, as well as investment from American industry. By 
providing them with permanent normal trade relations, we will send a 
clear signal that the United States is prepared to engage this region 
permanently through trade and help bolster the democratic, market-
opening reforms that are currently underway.
  As strong as I believe that on balance extended permanent normal 
trade relations to these nations is the right thing to do today, I 
again recognize the difference of opinion held by some of my 
colleagues. It seems clear to me that however appropriate such action 
might be, permanent normal trade status will not be approved by this 
Senate today. Senator Grassley has filed a second-degree amendment to 
mine, which expresses the sense of the Senate supporting the 
President's trip to Russia to meet with President Putin and deepen the 
friendship between our nations. I certainly thank Senator Grassley for 
offering this amendment, and I endorse it.
  I suggest, however, that some additions might be made to this sense 
of the Senate, if possible. I think it is fully appropriate, as well as 
consistent with the provision, that we include language recognizing the 
considerable efforts the nations of central Asia and the south Caucasus 
have made in assisting our antiterrorism efforts. I remind my 
colleagues that we have troops based in some of these nations.
  Finally, I also encourage my colleagues to support including language 
supporting the extension of permanent normal trade relations to our 
friends at the appropriate time.
  I think this is an important and significant geopolitical issue for 
the United States. This goes beyond trade. It is an important trade 
issue, but it is important geopolitically for us to do this.
  While I recognize the votes are not here today, I hope in the near 
future the votes will be there for us to extend PNTR to the countries 
which I have identified. They are on the front lines of our war on 
terrorism. They will be countries that will fight terrorism internally, 
and they will increasingly do so in the future. If the United States is 
not dramatically engaged in this region, you can pay me now or pay me 
later. They are going to be involved in this fight, and we are going to 
have more difficulty doing it in the future if we don't engage these 
nations now. Their populations are hungry for us to say: Yes, the 
United States wants to help. Work with us. Work with us in a positive 
way so we can have jobs and some opportunities and not be pulled by a 
militant Islamic group that says: Look, the West doesn't care for you. 
The West is opposed to you. The West doesn't like you. They do not 
believe in you.

  We shouldn't be saying that. We should be engaging them as rapidly as 
we possibly can. Certainly, in the case of the former Soviet Union, we 
would be welcoming them with open arms as fast as we possibly could. 
They have already taken action. Do not quibble about that. Instead, let 
us engage these countries that seek our engagement, and let us do it in 
a constructive manner so we can help them. We will be helping ourselves 
as well.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Iowa.


         Amendment No. 3474, As Modified, To Amendment No. 3446

  Mr. GRASSLEY. Mr. President, I would like to offer a second-degree 
amendment to Senator Brownback's amendment. I send a modified amendment 
to the desk.
  The PRESIDING OFFICER. The amendment is so modified. The clerk will 
report.
  The assistant legislative clerk read as follows:

       The Senator from Iowa [Mr. Grassley] proposes an amendment 
     numbered 3474, as modified, to amendment No. 3446.

  Mr. GRASSLEY. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       In lieu of the matter proposed to be inserted insert the 
     following:

     SEC. ____. SENSE OF THE SENATE REGARDING THE UNITED STATES-
                   RUSSIAN FEDERATION SUMMIT MEETING, MAY 
                   2002.

       (a) Findings.--The Senate finds that--
       (1) President George W. Bush will visit the Russian 
     Federation May 23-25, 2002, to meet with his Russian 
     counterpart, President Vladimir V. Putin;
       (2) the President and President Putin, and the United 
     States and Russian governments, continue to cooperate closely 
     in the fight against international terrorism;
       (3) the President seeks Russian cooperation in containing 
     the war-making capabilities of Iraq, including that country's 
     ongoing program to develop and deploy weapons of mass 
     destruction;
       (4) during his visit, the President expects to sign a 
     treaty to significantly reduce American and Russian 
     stockpiles of nuclear weapons by 2012;
       (5) the President and his NATO partners have further 
     institutionalized United States-Russian security cooperation 
     through establishment of the NATO-Russia Permanent Joint 
     Council, which meets for the first time on May 28, 2002, in 
     Rome, Italy;
       (6) during his visit, the President will continue to 
     address religious freedom and human rights concerns through 
     open and

[[Page S4613]]

     candid discussions with President Putin, with leading Russian 
     activists, and with representatives of Russia's revitalized 
     and diverse Jewish community; and
       (7) recognizing Russia's progress on religious freedom and 
     a broad range of other mechanisms to address remaining 
     concerns, the President has asked the Congress to terminate 
     application to Russian of title IV of the Trade Act of 1974 
     (commonly known as the ``Jackson-Vanik Amendment'') and 
     authorize the extension of normal trade relations to the 
     products of Russia.
       (b) Sense of the Senate.--The Senate--
       (1) supports the President's efforts to deepen the 
     friendship between the American and Russian peoples;
       (2) further supports the policy objectives of the President 
     mentioned in this section with respect to the Russian 
     Federation;
       (3) supports terminating the application of title IV of the 
     Trade Act of 1974 to Russia in an appropriate and timely 
     manner; and
       (4) looks forward to learning the results of the 
     President's discussions with President Putin and other 
     representatives of the Russian government and Russian 
     society.

  Mr. GRASSLEY. Mr. President, before I talk about my approach and my 
feelings on this whole issue of our relationship with the former Soviet 
Union countries, I commend Senator Brownback for the very thoughtful 
approach that he has on these issues, and the attention he has given 
this foreign policy consideration, as well as foreign trade-connected 
issues of the former Soviet Union.
  I understand his interest in seeing normal trade relations extended 
to Russia, central Asia, and the south Caucasus.
  The Democracy and Freedom Through Trade Act introduced today may be 
an appropriate vehicle to do just that. I certainly think this issue 
deserves a hearing. But I am not sure it is appropriate for this bill. 
Instead, I offer this sense-of-the-Senate amendment on the upcoming 
U.S.-Russian Federation Summit. It expresses a sense of the Senate in 
support of our President's efforts to strengthen our relations with 
Russia. The amendment itself seeks to build upon that relationship by 
expressing the Senate's support for restoring permanent normal trade 
relations with Russia.
  Given the upcoming meeting between President Bush and Russian 
President Vladimir Putin, this resolution is a timely opportunity for 
the Senate to express its support for recent developments between our 
two countries, and also to express encouragement for these two 
Presidents when they meet later this week.
  Since September 11, a new partnership has grown between the United 
States and Russia as a result of our close cooperation and common 
efforts in the fight against international terrorism.
  This enhanced relationship recently produced a new strategic 
framework between Russia and the United States to significantly reduce 
stockpiles of nuclear weapons by the year 2012.
  In addition, the United States and Russia, along with our NATO 
partners, have further institutionalized the U.S.-Russian security 
cooperation through the establishment of the NATO-Russia Permanent 
Joint Council. That Council meets for the first time May 28 of this 
year in Rome. It is clear that historic progress is being made between 
the United States and Russia, and that even more forward movement would 
be beneficial for both countries. I hope that movement continues.
  I am not oblivious to the fact that there have been decades of 
tension between our countries. And I don't think we can be so naive as 
to think that there are not problems down the road. But it surely is 
important, particularly when there are opportunities such as the last 
few months to grow our relationship based upon those opportunities. 
Since there is this opportunity for benefit to both countries, I 
believe the time has come for Congress to seriously consider the 
elimination of Jackson-Vanik requirements with regard to Russia, and, 
thus, begin debate on the extension of normal trade relations.
  President Bush has recently asked Congress to restore permanent 
normal trade relation status for Russia based on this policy of free 
and unfettered immigration. However, there are important issues that 
must be addressed during this discussion that go beyond just the issue 
of the Helsinki accords as it dealt with the subject of immigration. 
For example, there are some outstanding trade issues that need to be 
addressed. Among these are recent problems dealing with the U.S. 
poultry exports to Russia.
  We also need to see greater progress on religious freedom and human 
rights, and the concerns of many people within Russia and also people 
outside of Russia who have concerns that Russia have more religious 
freedom.
  I am pleased that President Bush has stated his commitment to work 
with Russia to help freedom and tolerance become fully protected in 
Russian law and Russian life.
  President Bush has also stated his commitment to work with Russia to 
advance free immigration, safeguard religious liberty, and enforce 
legal protections for ethnic and religious minorities. I am surely 
hopeful that President Bush will further address these concerns openly 
and candidly in his discussions with President Putin during his 
upcoming visit.

  So I believe the best hope for a positive future between our two 
countries is to develop an understanding of, and appreciation for, each 
culture, with both personal and business relationships. The development 
of commerce, international trade, and the sharing of ideas will further 
advance economic and political stability for both Americans and 
Russians.
  I have said so many times on the floor of the Senate--particularly 
when trade issues are before this body, and even sometimes when trade 
issues are not before this body--that we political leaders and 
diplomats should not be so smug as to think that the only way we are 
going to have peaceful relations between us--between the United States 
and some other country--is if political leaders and diplomats do it.
  In fact, I have expressed the view that our efforts are kind of a 
spit in the ocean compared to the efforts that can be made through 
commerce. That is why I have stated that this trade promotion authority 
bill is so important to world peace, to the development of 
relationships, because as we break down the barriers of trade, as we 
enhance opportunities for commerce, individual businesspeople in one 
community doing business in another country, and vice versa, we are 
going to build relationships that will enhance opportunities for peace 
much greater than what political leaders can do, not denigrating the 
efforts of political leaders in the process.
  This is particularly true as we look forward to doing away with 
Jackson-Vanik vis-a-vis Russia, as we look forward to Russia coming 
into the World Trade Organization, very much as we have looked at 
improving our relationship with China, with China now being a member of 
the World Trade Organization.
  So what the Senator from Kansas is doing may be a small step by 
political leaders, but it is an important small step. I just think his 
doing it on this trade promotion bill is not the ideal place to do it. 
So that is why I have offered this second-degree amendment.
  I encourage my colleagues to support this resolution which, in turn, 
supports President Bush's policy objectives with respect to the Russian 
Federation and calls for the termination, in an appropriate and timely 
manner, of the application of Jackson-Vanik provisions to Russia.
  When it comes to the issue of this substitute that is before us, I 
hope we can get it adopted in a consensus way because this is one 
opportunity for us to show support for the President. Whether we are 
Republicans or Democrats, we have to admit that when it comes to 
enhancing our relationships with Russia, it has to be done through our 
head of state, through our chief diplomat, our Chief Executive, the 
President of the United States.
  We should do everything we can to support the President at the time 
of his trip to Europe, to Moscow and St. Petersburg to further refine 
our relationships with the President of the Russian Federation and, in 
turn, with the Russian people.
  I yield the floor.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative 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 (Mr. Dayton). Without objection, it is so 
ordered.

[[Page S4614]]

  Mr. REID. Mr. President, the majority leader has asked me to announce 
there will be no more rollcall votes tonight. The managers may have 
some other business to do. But basically this is the end of rollcall 
votes for tonight.
  Mr. President, I ask unanimous consent--I have cleared this on the 
other side--the pending amendment be set aside temporarily to offer an 
amendment. I have cleared this with Senator Gramm.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.


                Amendment No. 3521 To Amendment No. 3401

  Mr. REID. Mr. President, I send an amendment to the desk. This would 
be the Democrats' next in order.
  The PRESIDING OFFICER. The clerk will report the amendment.
  The assistant legislative clerk read as follows:

       The Senator from Nevada [Mr. REID], for Mr. Jeffords, 
     proposes an amendment numbered 3521 to amendment No. 3401.

  Mr. REID. Mr. President, I ask unanimous consent reading of the 
amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

 (Purpose: To authorize appropriations for certain staff of the United 
                        States Customs Service)

       At the end of the title relating to Customs 
     Reauthorization, insert the following:

     SEC. ____. AUTHORIZATION OF APPROPRIATIONS FOR CUSTOMS 
                   STAFFING.

       There are authorized to be appropriated to the Department 
     of Treasury such sums as may be necessary to provide an 
     increase in the annual rate of basic pay--
       (1) for all journeyman Customs inspectors and Canine 
     Enforcement Officers who have completed at least one year's 
     service and are receiving an annual rate of basic pay for 
     positions at GS-9 of the General Schedule under section 5332 
     of title 5, United States Code, from the annual rate of basic 
     pay payable for positions at GS-9 of the General Schedule 
     under section 5332, to an annual rate of basic pay payable 
     for positions at GS-11 of the General Schedule under such 
     section 5332; and
       (2) for the support staff associated with the personnel 
     described in subparagraph (A), at the appropriate GS level of 
     the General Schedule under such section 5332.

  The PRESIDING OFFICER. The Senator from Nevada.


                             Cloture Motion

  Mr. REID. Mr. President, I send a cloture motion to the desk.
  The PRESIDING OFFICER. The cloture motion having been presented under 
rule XXII, the Chair directs the clerk to read the motion.
  The assistant legislative clerk read as follows:


                             Cloture Motion

  We, the undersigned Senators, in accordance with the provisions of 
rule XXII of the Standing Rules of the Senate, hereby move to bring to 
a close the debate on Calendar No. 295, H.R. 3009, the Andean Trade 
Preference Act.
  Max Baucus, Zell Miller, Harry Reid, Tom Carper, Joseph Lieberman, 
Tom Daschle, Jeff Bingaman, Christopher Bond, Larry E. Craig, Gordon 
Smith of Oregon, Chuck Grassley, Orrin Hatch, Pete Domenici, Pat 
Roberts, Chuck Hagel, and Robert F. Bennett.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

                          ____________________