[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the quorum call be rescinded.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,
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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,
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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.
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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.
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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
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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
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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
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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
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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.
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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.
____________________