[Congressional Record Volume 148, Number 71 (Tuesday, June 4, 2002)]
[Senate]
[Pages S4956-S4960]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                 H.R. 3009, ANDEAN TRADE PREFERENCE ACT

  Mr. LUGAR. Mr. President, I wish to take a moment to discuss a 
security problem that exists in the Andean Trade Preference Act 
extension contained in H.R. 3009, as amended and passed by the Senate, 
and which must be addressed. The problem is that, in an understandable 
effort to support Andean economies by providing tuna export 
preferences, this bill unfairly harms the economies of Thailand, 
Indonesia, and the Philippines. Providing trade preferences to one 
ally, or regional bloc, at the expense of others is patently unfair.
  The problem this bill creates for the Philippines, and for American 
interests in the Philippines, is particularly troublesome. The entire 
tuna industry in the Philippines is located in the southern region of 
Mindanao. It is in Mindanao that Muslim terrorist cells, with reported 
ties to al-Quaeda, are operating. In order to combat the terrorist 
threat in the southern Philippines, American troops have recently been 
deployed to Mindanao and are training Philippine forces to track down 
terrorists. Damaging the Philippines' tuna export market by tipping the 
scale in favor of other countries will damage the single largest 
employer and increase instability in the exact area where U.S. troops 
are deployed to help create stability.
  If that were not enough, Mindanao's tuna industry was largely created 
by U.S. and other donor nations' assistance as a means to increase 
opportunities and provide jobs for former guerrillas. This effort 
succeeded and the majority of Muslim separatists in Mindanao have laid 
down their arms. Disrupting Mindanao's tuna industry will not only 
create economic instability in a strategically sensitive region, it 
will waste past investments of U.S. taxpayer money and could return 
some former Muslim fighters to their violent ways.
  I see my colleague from Alaska, the ranking member of the 
Appropriations Committee on the floor. He may wish to say a word about 
this matter since he was responsible for bringing this issue to the 
attention of many Senators.
  Mr. STEVENS. I thank my colleague and I agree with him about he 
seriousness of this matter. Senator Inouye and I became aware of this 
problem on a recent trip to Asia during which we met with officials in 
Beijing, Singapore, Jakarta, and Manila. All of our meetings had one 
common element--terrorism. Since that trip, Senator Inouye and I have 
been working to find a solution to this national security problem.
  As many of my colleagues may know, radical elements in Indonesia are 
currently trying to dominate the political and business communities in 
that country. In Singapore, we were made aware of terrorist attempts to 
attack the American Embassy with a plot involving 100 tons of 
explosives. The federal building in Oklahoma City was destroyed with 
only 3 tons of explosives.
  The major area of concern, however, is the Philippines, and in 
particular the province of Mindanao where the notorious Abu Sayyaf 
Group is kidnapping innocent people and wreaking havoc through bombings 
and murders. The general populace does not support this element, and 
have therefore been victimized. Currently at the invitation of the 
Philippine Government, American troops are in Mindanao advising and 
training Philippine troops to more effectively combat this terrorist 
threat. The Philippines is clearly on the frontline in the war against 
terror.
  Now, the major employee in Mindanao is the canned tuna industry. The 
bill before us will do significant harm to this industry. If the major 
employer in Mindanao is not able to maintain economic stability, the 
chaos in Mindanao will be exacerbated. Damaging the economy of 
Mindanao, as this bill will do, undermines the ongoing U.S.-Philippine 
counter-terrorism operation. To harm an ally in the war on terror in 
this manner clearly is not in the national security interest of the 
United States.
  I strongly urge that a solution to this problem be found before the 
conference report is presented to this body.
  Mr. LUGAR. I thank my colleague for that explanation and for bringing 
this matter to the Senate's attention. I certainly will join him in 
seeking a solution to this important national security matter. The only 
fair solution is to maintain tariff parity for our anti-terrorism 
allies who compete in this market. I believe my colleague from Missouri 
would like to make a comment.

[[Page S4957]]

  Mr. BOND. I thank my friend for yielding. I, too, would like to 
express my concern over the dire consequences extending preferential 
tariff treatment of packed tuna to the Andean region will have on our 
ASEAN allies. I believe maintaining stability in Mindanao is of utmost 
importance and I do not want to see our war on drugs succeed at the 
expense of our war on international terrorism. I urge our colleagues to 
address this issue during conference deliberations.
  Mr. SARBANES. Mr. President, I rise today to join my colleagues in 
expressing concerns about the effects, however unintended, that the 
proposed duty-free status for Andean nations would have on the canned 
tuna industry in the Philippines. I refer specifically to the status 
that would be accorded to canned tuna imports from Ecuador. I spoke 
during the debate on the harm the current provisions will do to the 
Philippine economy and how seriously it will undermine the anti-
terrorist efforts in the Philippines and elsewhere in Southeast Asia. 
But I want to point out again that the tuna industry in the Philippines 
is located in precisely the area where anti-terrorist efforts are most 
urgently needed.
  Clearly a multitude of issues are involved in any trade legislation. 
This issue is too important to be ignored and it is my hope that this 
serious problem will be resolved in the conference report when it comes 
before us for final passage.
  Mr. LUGAR. For the benefit of our colleagues, I will ask that two 
recent articles from the New York Times and one from the Asian Wall 
Street Journal be printed in the Record at the end of this colloquy. 
These articles detail the importance of the tuna industry to Mindanao 
and its strong connection to counter-terrorism efforts.
  Mr. TORRICELLI. I appreciate my colleagues raising this national 
security issue today. The unintended consequences of biasing our tuna 
tariffs against the Philippines were brought to my attention by both 
the Philippine Ambassador, as well as through the work of my 
distinguished colleagues. I am deeply concerned about how this bill 
will undermine America's counter-terrorism work in Mindanao and fully 
support the view that this issue must be resolved before the conference 
report is presented to the Senate.
  Enough has already been said about how undermining Mindanao's largest 
employer will spread instability, harm America's image, and waste past 
taxpayer investment in a critically important region. I do not need to 
elaborate further on those points. I would like to take just a moment, 
however, to highlight for my colleagues how this ill-advised provision 
came to be. The House Ways and Means Committee initially added it to 
their Andean trade bill. It was not part of the administration's 
request for Andean counter-narcotics legislation. It was added without 
a hearing and without examination of the national security implications 
of making this change in trade law.
  When the bill came before the Senate Finance Committee, the committee 
voted to limit the extent of the preference granted to the Andean 
countries. I supported that change as an improvement in the bill, but 
it did not go far enough to resolve the matter. I was hopeful that 
suggestions made by Senators Inouye and Stevens might be included into 
this bill to actually solve the problem created by this tuna provision. 
Fixing this provision on the floor, however, will not now be possible. 
Therefore, I join my colleagues in urging that parity be maintained for 
all America's friends seeking to participate in our tuna market. 
Tipping the balance of this market toward one group and away from 
another is unfair, wasteful, shortsighted, and counter to America's 
broader international interests.
  Mr. BIDEN. Mr. President, assisting Andean countries combat illicit 
narcotics is an important national security goal for the United States. 
The Foreign Relations Committee has heard considerable testimony from 
the administration and other witnesses as to the importance of this 
issue, both for the United States and for the maintenance of democracy 
in South America. Much effort and resources are already being devoted 
to this important goal, and the Administration plans to do still more. 
The Andean Trade Preferences Act extension passed by the Senate adds 
important additional support to this effort.
  At the same time, however, the United States and our allies are also 
engaged in a war against terrorism. Defeating global terrorism is a 
goal no less important than eradicating narcotics trafficking. One of 
the frontline States in the war against terrorism is the Philippines 
where, at the invitation of the Philippine Government, U.S. troops have 
been deployed to train the Armed Forces of the Philippines in 
counterterrorism. The reason our joint counterterrorism mission with 
the Philippines is relevant to discussion of the Andean trade bill is 
because one provision contained in this bill, in a laudable effort to 
support the legitimate economies of Andean countries, will seriously 
damage our counter-terrorism effort in the Philippines.
  The problematic provision is one that would give preference to Andean 
countries that export tuna to the United States. The primary loser in 
the tuna market would be countries in the Asia-Pacific region, 
especially our close treaty allies Thailand and the Philippines. 
Moreover, the Philippines' tuna industry is based in the southern 
province of Mindanao, precisely the region in which we are engaged in 
our counterterrorism mission. Indeed, Mindanao's tuna industry is in 
part the result of a successful U.S. foreign assistance program which 
helped develop economic alternatives for Muslim insurgents that have 
been active in the region for many years. I say this economic 
development program has been successful in Mindanao because most of the 
former insurgents have laid down their weapons and joined mainstream 
life in the Philippines. Only the most radical remain terrorists.
  So, in the Philippines today we have a successful counterterrorism 
effort underway that incorporates both economic incentives to give 
people a reason to participate in civil society, and military action 
against the few extremists who remain committed to violence. We cannot 
afford to remove one of the pillars of this effort by giving a 
competing trade advantage to Andean countries. This must be corrected 
as this bill moves to conference.
  Mr. LUGAR. As stated at the beginning of this colloquy, in addition 
to the Philippines, the economies of Thailand and Indonesia may also be 
impacted by this bill. We are hoping the points expressed in this 
colloquy will be addressed in conference.
  Mr. President, I ask unanimous consent that the newspaper articles to 
which I referred earlier be printed in the Record.
  There being no objection, the articles were ordered to be printed in 
the Record, as follows:

                [From the New York Times, May 21, 2002]

     Reduced Tariffs for Some Nations Strains Relations With Others

                          (By Keith Bradsher)

       General Santos City, the Philippines, May 16.--How should 
     the United States set its tariffs and trade rules, globally 
     or country-by-country?
       It is no arid academic debate to the tuna fishermen of this 
     knockabout port city on the south coast of Mindanao, nor to 
     sugar cutters in the Caribbean or garment workers in 
     Pakistan. Faraway changes in American fine print can have 
     very real, sometimes unintended consequences.
       A move in Congress to extend trade preferences to Andean 
     nations, in part to help wean their economies off coca 
     production, could lead to the layoff of thousands of Muslim 
     workers in the tuna industry here, even as American troops 
     help the Philippine army fight Abu Sayyaf Muslim insurgents 
     in this region.
       In Pakistan, officials have struggled to win a larger quota 
     for textile shipments to the United States as a reward for 
     Islamabad's help during the conflict in Afghanistan. And in 
     the Caribbean, the emergence of any especially pro-American 
     government brings a request for a larger quota to ship sugar 
     to the high-priced, highly protected American market.
       By returning to the pre-1922 practice of awarding 
     preferential trade treatment to certain countries and 
     regions, often for political rather than economic reasons, 
     Washington now finds itself constantly badgered for trade 
     concessions by whatever friendly nation is in the news at any 
     given moment.
       This is the problem that ``most favored nation'' status was 
     supposed to solve. When countries won that status--as nearly 
     all of America's trading partners did in recent decades--they 
     were assured that their exports would get the same tariff 
     treatment as any other, and that generally, concessions 
     awarded to one would be awarded to all.
       After the ruinous bilateral trade competition in Europe in 
     the 1930's, the United States backed a global adoption of the 
     same

[[Page S4958]]

     approach, leading in the decades after World War II to the 
     international trade rules enshrined in the General Agreement 
     on Tariffs and Trade and later to the creation of the World 
     Trade Organization.
       ``The history of trade negotiations basically was that, 
     because of the bilateral special deals that inevitably made 
     other nations unhappy, we came around to most-favored-nation 
     treatment and GATT negotiations,'' said William Cline, a 
     senior economist at the Institute for International Economics 
     in Washington.
       Up through the 1980's, most economists criticized regional 
     trade agreements as just as bad as bilateral deals. Beyond 
     making winners of some countries and losers of others, 
     regional blocs can be bad for global efficiency, by promoting 
     importers to favor a higher-cost producer within the bloc 
     over a lower-cost producer outside whose goods are still 
     subject to high tariffs and quotas.
       Global trade agreements minimize such drawbacks, because 
     these days very few countries remain outside them. But global 
     treaties are becoming increasingly difficult to conclude. The 
     last was wrapped up in Geneva in 1993; talks meant to produce 
     the next one did not get under way until last November in 
     Doha, Qatar, and are expected to take years.
       But the regional free trade concept has become fashionable 
     again, in great part because of the success of the European 
     Union, which hugely increased trade among its 15 members by 
     eliminating tariffs and trade barriers. It helped inspire the 
     1992 North American Free Trade Agreement--joining the United 
     States, Canada and Mexico--as well as several other regional 
     groupings.
       One provision of the Nafta treaty helped set off the 
     dispute now roiling American efforts to retain the support of 
     the Philippines in the war on terrorism.
       Among the tariffs to be eliminated within North America by 
     the treaty is the American duty on canned tuna imported from 
     Mexico. It will not disappear until 2008, and for the moment 
     it means little because Mexico, well north of the equatorial 
     waters where the best fishing grounds are found, has a tiny 
     tuna industry. But tuna from other countries is subject to 
     duty of up to 35 percent, creating a big incentive for Mexico 
     to build up its tuna fleet, despite the high labor and fuel 
     costs for the long journeys to where the tuna swim.
       Several smaller Central American and Caribbean nations also 
     have small tuna fleets; three years ago, Congress agreed to 
     phase out tuna duties for them on the same timetable.
       To the Andean nations of South America, these concessions 
     posed a serious threat--that preferential access to the 
     United States would soon make big new competitors out of 
     Mexico and Central America. The United States had lower 
     tariffs on many products from Andean nations like Ecuador and 
     Colombia in 1991, but canned tuna was not among them. When 
     the 1991 concessions came up for renewal last year, the 
     Andean nations, supported by Starkist, demanded that they be 
     expanded to include canned tuna.
       Ecuador has a huge tuna fishing fleet, and Colombia a 
     smaller one; both countries are eager to create jobs that do 
     not depend on narcotics trafficking. That persuaded the House 
     of Representatives to approve a bill earlier this year that 
     would immediately eliminate duty on Andean tuna.
       A more limited bill that would phase out duty on about a 
     third of current shipment is before the Senate as part of a 
     broader trade bill. If it passes, differences between the 
     provisions would be worked out in a conference of senators 
     and representatives.
       Now it is the Philippines' turn to feel threatened. Letting 
     Ecuador and Colombia, but not the Philippines, ship tuna to 
     the United States duty free would be both unfair and unwise, 
     officials in Manila are warning, because of the hardship it 
     would create in this poor, Muslim and sometimes rebellious 
     part of the country, where terrorists are believed to be 
     active. ``We understand you want to do this because of 
     narcotics,'' said Manuel A. Roxas II, the country's secretary 
     of trade and industry, ``but terrorism is just as 
     important.''
       Washington has been on notice for some time that this kind 
     of chain reaction of anger and demands for relief was likely 
     to develop. An influential report by the United States Tariff 
     Commission foresaw that special deals for some countries 
     would ``lead to claims from states outside the agreement 
     which, if granted, defeat the purpose of the treaties, and 
     which, if not granted, occasion the preferring of a charge of 
     disloyalty to treaty obligations.''
       The report was published in 1919.
                                  ____


                [From the New York Times, May 16, 2002]

                Drugs, Terror and Tuna: How Goals Clash

                          (By Keith Bradsher)

       General Santos City, The Philippines, May 15.--This 
     industrial city on the southern coast of Mindanao Island 
     illustrates how America's various strategic aims in the wars 
     on drugs and terrorism can clash, alienating important allies 
     engaged in battling terrorism.
       Among leaders of the Philippines' important tuna industry 
     here, resentment is running high over trade legislation now 
     on the Senate floor in Washington. The bill includes a 
     provision to eliminate steep import taxes on canned tuna from 
     Andean nations while keeping taxes in place for other 
     countries like the Philippines.
       The provision has attracted Congressional support because 
     it is seen as bolstering America's war on drugs. The idea is 
     that the bill help create well-paid jobs in Ecuador and 
     Colombia as an alternative to the drug trade.
       But in another war--the one against terrorism--the 
     legislation is causing anger in a country that has become an 
     important part of the administration's plans.
       It comes at a time when 600 American soldiers are helping 
     the Philippine Army track Abu Sayyaf Muslim insurgents in the 
     southernmost Philippines, and President Gloria Macapagal 
     Arroyo has staked much political capital on helping the 
     United States fight terrorism.
       Virtually all of the tuna industry of the Philippines is 
     located here and it employs thousands of migrant workers from 
     small Muslim fishing communities that used to be bastions of 
     various Muslim insurgencies. Local officials warn that the 
     legislation could wipe out the tuna industry.
       President Arroyo said that passage of the trade provision 
     would deal a severe blow to the economy here while handing a 
     propaganda victory to the Abu Sayyaf movement.
       The combination would create heavy domestic pressure for 
     the Philippines to retreat from its active support for the 
     American war on terrorism, she warned in a telephone 
     interview tonight.
       ``I will try very hard not to, but I will be under 
     tremendous pressure,'' she said.
       In much of the developing world, including Latin America 
     and Africa, trade restrictions on tariffs on products ranging 
     from steel to textiles are causing growing resentment toward 
     the United States. The perception that the Bush 
     administration is a projectionist one is growing.
       President Arroyo argued that General Santos, the main city 
     on the southern coast of Mindanao and home to most of the 
     Philippines' tune fishing fleet and canneries, was central 
     both to the economic future of this region and to the fight 
     against terrorism.
       A powerful pipe bomb with nails exploded on a crowded 
     sidewalk outside a supermarket here on April 21, killing 15 
     people and wounding dozens. A second pipe bomb was safely 
     defused before it exploded at another supermarket the same 
     day, and two shopping complexes have recently burned down 
     here in the middle of the night in separate, unexplained 
     incidents.
       Police detectives here say that they are still unsure 
     whether the attacks were terrorist incidents, criminal 
     attempts at extortion or some combination of the two. But 
     President Arroyo expresses no such doubts, saying tonight, 
     `The Abu Sayyaf has been trying to get into General Santos 
     and it has been very difficult for us to justify our support 
     for the United States.''
       In a city where tunas festoon everything from billboards to 
     restaurant signs, and where even the golf tournament is the 
     Tuna Cup, the fishing industry's influence is impossible to 
     miss.
       Workers heave baskets of fish onto crude steel carts, which 
     they then pull by hand over to a long open-sided shed. Women 
     wash and sort the fish on long tables, the concrete floor 
     beneath them dark and slippery with fish blood. A few larger 
     tuna, some the size of a man, are carried individually to 
     large, white boxes packed with half-melted ice, to be shipped 
     directly to Japan to be turned into sashimi.
       Renato Alonzo, 47, a fisherman in a ragged T-shirt and 
     flip-flops whose boat had just docked after two weeks at sea, 
     said that he had sold his tiny farm and joined a boat crew 10 
     years ago after learning he could nearly double his income, 
     to roughly $4,000 a year. Now he can afford to send his two 
     sons, aged 12 and 8, to school.
       The bustling fishing port here and the nearby row of tuna 
     canneries contrast sharply with most of Mindanao, where 
     peasants still toil on subsistence farms and on large 
     pineapple and coconut plantations. Years of drought, coupled 
     with inadequate irrigation, have crippled agriculture while 
     the global glut of low-priced steel has forced the closing of 
     a big steel mill in northern Mindanao.
       The tuna industry here barely existed until the late 1980's 
     when the United States led Japan, Italy and other donor 
     nations in an ambitious foreign aid program aimed at 
     rebuilding the Philippines after the fall of Ferdinand 
     Marcos.
       A full-scale guerrilla war being waged in Mindanao then, a 
     far broader conflict than the handful of kidnappings and 
     possibly bombings linked to Abu Sayyaf now. General Santos 
     City was nearly surrounded by several very large insurgences 
     that attracted poor youths from the island's Muslim minority. 
     The city had a small fishing fleet, but it mostly caught fish 
     for local consumption.
       But the world's richest fishing grounds lay between here 
     and Indonesia, although boats from Thailand mainly fished 
     them then. Foreign donors built the fishing port here as well 
     as a large cargo airport, a container port, extensive roads 
     and a modern phone system, hiring security guards from rebel 
     forces and buying sand, gravel and other construction 
     materials from rebel leaders' businesses.
       With ready transportation to foreign markets, six big 
     canneries were built, each employing more than 1,000 workers. 
     The only two other tuna canneries in the Philippines are in 
     Zamboanga City in southwestern Mindanao, the staging area for 
     American troops pursuing Abu Sayyaf. Some 30,000 fishermen 
     now supply the canneries.
       The tuna boom has helped persuade all of the rebel 
     movements except the Abu Sayyaf

[[Page S4959]]

     splinter group to lay down their arms under armistices with 
     the government. Many former rebel commanders and foot 
     soldiers have taken jobs at the canneries, which have had no 
     problem with the bombings that have afflicted shopping 
     centers.
       Abuhasan Jama is a former major in the Moro National 
     Liberation Front who studied guerrilla warfare in Malaysia in 
     1979 and 1980 and then spent 13 years fighting the Philippine 
     government in the jungles of Mindanao.
       Now he is the security chief at Ocean Canning here, his 
     eldest daughter is in college and he has found jobs at the 
     same cannery for three cousins who are also former 
     guerrillas. ``I like to work,'' said Mr. Jama, 41, recalling 
     that in the jungle ``sometimes you'd just eat leaves, the 
     roots.''
       Mariano M. Fernandex, the general manager of Ocean Canning, 
     said that he used to carry two Smith & Wesson handguns, one 
     strapped on each hip. ``It was like the Wild West here,'' he 
     said, adding that he carries only a cellphone now.
       Most of the tuna canned her is sold in the United States 
     under less famous brands like Keisha and Dagim. Bumble Bee 
     and Starkist used to buy large quantities of tuna here but 
     have recently begun relying on Ecuador instead, allowing that 
     country to edge past the Philippines last year to become the 
     second-largest foreign supplier of tuna to the United States, 
     after Thailand.
       Starkist in particular is now pushing for the elimination 
     of import tariffs on canned tuna from Ecuador.
                                  ____


           [From the Asian Wall Street Journal, May 17, 2002]

Poor Countries Find Free Trade Brings Few Gains; Tariffs on Tuna Trade 
          Snag; Philippine Fishing City: `We Were Very Naive'

                           (By James Hookway)

       The gospel of free trade is wearing thin in this remote 
     fishing city.
       Freshly caught deep-sea tuna are so inexpensive here that 
     visitors buy them whole and check them in as luggage at the 
     bustling little airport. Back in Manila, passengers crowd 
     round the baggage claim, hoping for an early glipmse of their 
     catch emerging on the conveyors belt trussed up in yards of 
     plastic wrap.
       Being so close to the rich tuna belt in the tropical waters 
     separating the Philippines and Indonesia gives General Santos 
     City a head start that is hard to beat in the fish business. 
     Sashimi and sushi aficionados in Japan prize Philippine tuna 
     for its high quality and low price. Free trade and the advent 
     of the World Trade Organization were supposed to help the 
     town build on that advantage by opening more markets for its 
     fish. Instead, Europe and the U.S. are putting up tariff 
     barriers that threaten the jobs of cannery workers here, 
     stunting economic growth in one of the most volatile corners 
     of Southeast Asia--a place where U.S. soldiers have recently 
     brought the war on terrorism.
       And, along with a slew of recent restrictions from rich 
     nations, several of which are headed for the WTO's dispute-
     resolution process, the tariffs are starting to sour many 
     Filipinos on the free-trade agenda their government 
     enthusiastically signed on to in the 1990s. ``We thought the 
     WTO was an idealistic thing, but nobody is abiding by its 
     true spirit,'' says Domingo Teng, who leads the local tuna 
     federation in between fishing trips. ``We were very naive.''
       That's a perception many poorer countries are beginning to 
     share. A ground-swell of skepticism about the WTO has been 
     building steadily since the pied piper of free trade, the 
     U.S., imposed duties of as much as 30% on steel imports in 
     February. Thailand and Indonesia quickly followed suit, and a 
     month later, Malaysia imposed its own 50% steel tariff. 
     Developing countries, especially India, Pakistan and Egypt, 
     bitterly complained that the WTO hadn't done enough to 
     improve access for their products to rich markets at the 
     body's ministerial meeting in Doha, Qatar, in November. The 
     tension eased somewhat when richer countries agreed to 
     further open key agricultural, fishery and textile markets in 
     the next round of trade talks, due to conclude by the end of 
     2003.
       Still, disappointment is rife in Asia, even among committed 
     free traders. ``There is a lot of disenchantment,'' says Alex 
     Magno, president of the Manila-based Foundation for Economic 
     Freedom. ``Free trade hasn't produced a lot of winners. What 
     we have here in the Philippines are losers, particularly in 
     garments and other labor-intensive industries. They can't 
     compete with more inexpensive producers such as China.'' This 
     resentment could worsen soon. President George W. Bush signed 
     a new U.S. farm bill this week that will boost crop and dairy 
     subsidies for American farmers. An 18-nation group of 
     agricultural exporters warns that the scale of the $180 
     billion six-year farm-aid program will hurt farmers around 
     the world and threatens negotiations for freer world 
     trade. ``The impact will be particularly damaging on 
     developing countries,'' the group said in a statement 
     released in Geneva on Wednesday.
       Of all the developing economies in Asia it was perhaps the 
     Philippines that most enthuisiastically embraced free trade 
     in the latter half of the 1990s. While Malaysia carefully 
     protected its car industry and Thailand and Indonesia 
     nurtured their cement markets, the Philippines accelerated a 
     series of tariff reductions. Despite foot-dragging on opening 
     up its retail industry to foreign hypermarkets, among other 
     stalled pledges, the Philippines has generally been keen to 
     shake off the shackles of a protectionist economy that left 
     the country dawdling during Asia's boom years.
       Yet while the Philippines has benefited from investments 
     geared toward call centers and microprocessors, more 
     traditional industries that employ the bulk of the country's 
     work force have struggled. In Manilia's Divisoria market, the 
     piles of T-shirts and jeans stacked in the stalls arrive from 
     China; just a few years ago, most were made locally. Facing 
     rising unemployment at home, more and more Filipinos are 
     joining the line for visas at the U.S. Embassy in the hope of 
     joining relatives in America. ``The orthodoxy that more free 
     trade will lead to better lives has been severely 
     challenged,'' says Philippine Trade Secretary Manuel Roxas 
     II.
       The Philippines is particularly upset with new tariff 
     barriers to the European Union. While tuna from former 
     European colonies in Africa, the Caribbean and the Pacific is 
     levy-free, canned tuna from the Philippines is slapped with a 
     bruising 24% tariff. Mr. Roxas can hardly believe it. ``We 
     were a Spanish colony for 300 years,'' he says. ``What more 
     do they want?'' EU officials deny that the tariff waiver 
     hurts the Philippine tuna industry.
       U.S. legislators, meanwhile, are moving toward reviving 10-
     year-old reductions in import tariffs on packaged tuna, 
     textiles and cut flowers as a way to wean Ecuador, Bolivia, 
     Peru and Colombia off the drug trade. Senators are being 
     lobbied hard by H.J. Heinz Co.'s StarKist Foods to cut the 
     tariffs. StarKist fishes and cans tuna in Ecuador, and 
     cutting the Latin American tariffs will be a shot in the arm 
     for its business. It would also make Philippine tuna look 
     much more expensive.
       Ignoring trade agreements is nothing new, of course, and 
     the WTO hasn't proven to be particularly speedy at resolving 
     trade disputes. Trade Secretary Roxas, however, is still keen 
     on giving it a go, at least for the time being. ``Let's see 
     where it gets us,'' he says. He will soon have his chance. 
     The Philippines' tuna row with Europe is headed for the WTO, 
     as is a dispute with Australia over bananas. Manila is 
     anxious to increase fruit exports to Australia, but farmers 
     there have successfully lobbied the government to keep 
     restrictions in place. Politicians in Canberra explain that 
     scientists haven't finished checking whether Philippine 
     bananas are disease-free and safe to import. The country 
     harbors five diseases, collectively known as the Black 
     Plague. Australian farmers worry that such imports could 
     decimate their crops, and government quarantine officials now 
     are conducting a risk analysis on importing the bananas, 
     which isn't likely to be completed soon. Meanwhile, 
     Philippine President Gloria Macapagal Arroyo finds it 
     difficult to contain her frustration. ``Sad to say, 
     sanitary requirements and technical standards now seem to 
     be the weapon of choice for protectionists,'' she told 
     business leaders in Malaysia.
       But it is the tuna industry that stirs the strongest 
     passions. General Santos City, carefully mapped out just 
     before World War II, features broad, quite avenues instead of 
     the packed and pot-holed roads found in most Philippine 
     cities. But this sleepy backwater is also a place where 
     fortunes are made.
       The source of those riches lies in the natural deep-water 
     bay the town straddles. Scores of tuna boats steam in every 
     morning to unload their cargo at the town's gleaming port, 
     sometimes after three months at sea. A kilometer or two down 
     the road, the General Tuna Corp. cannery churns out more than 
     300,000 cans of tuna a day for brands such as Chicken of the 
     Sea, Century Tuna and Fresca. Other factories line the coast 
     nearby. Outrigger boats meanwhile, head out to deeper waters 
     in the hope of landing a bluefin tuna. In Tokyo, bluefin 
     retail for around the price of a Toyota Corolla.
       ``When I first came here in 1991, there wasn't much of 
     anything,'' recalls Neil del Rosario, plant manager at the 
     General Tuna cannery. ``Now there are hardware stores, beauty 
     parlors, restaurants. McDonald's is coming here soon. The 
     tuna industry has made such a big impact on the community.''
       More than half of General Santos's 400,000 citizens are 
     dependent on tuna in one form or another. Mr. Teng, the head 
     of the fishing federation, says many more jobs would be 
     created if the tariffs are dropped quickly. ``This place 
     could really take off,'' he says.
       The tuna industry can also help stabilize one of the more 
     volatile corners of Southeast Asia. Not far from General 
     Santos, about 1,000 U.S. special forces are training 
     Philippine troops to track down a Muslim guerrilla group 
     linked to Osama bin Laden's al-Qaeda network. The Abu Sayyaf 
     has kidnapped scores of foreigners over the past few years, 
     and is currently holding hostage an American missionary 
     couple and a Filipino nurse. To the north, a larger but less 
     violent rebel army is in peace talks with the Philippine 
     government.
       The 30-year-old uprising has killed more than 120,000 
     people and severely retarded Mindanao's economy. The tuna 
     industry, however, helps provide jobs for Muslims who might 
     otherwise be tempted to join the decades-old rebellion 
     against Christian domination.
       Government officials argue that if the U.S. is willing to 
     waive tariffs in Latin America to aid its war on drugs, then 
     it should also lift barriers on the Philippine tuna trade to 
     help the war on terrorism. For the time being, though, 
     General Santos will have to

[[Page S4960]]

     tighten its belt. General Tuna has cut back to running at 75% 
     capacity; other canneries are running at just half-time. And 
     if there isn't any work, there isn't any pay. Mr. Teng is 
     beginning to worry about the consequences of the trade war.
       ``We need development before there is peace,'' he says. 
     ``Let's give these rebels the chance to come down out of the 
     hills. Maybe they can become millionaires too.''

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