[Congressional Record Volume 149, Number 128 (Wednesday, September 17, 2003)]
[Senate]
[Pages S11634-S11635]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      NEGOTIATION OF A U.S.-CENTRAL AMERICAN FREE TRADE AGREEMENT

  Mr. BAUCUS. Mr. President, I rise today to address the ongoing 
negotiations for a United States-Central America Free Trade Agreement--
also known as the ``CAFTA.''
  These negotiations present a couple of unique challenges.
  First, most of the CAFTA countries are less developed, both 
economically and politically, than Mexico, Chile, or any of our other 
FTA partners. This presents challenges to the abilities of the Central 
American countries--both to negotiate a comprehensive set of 
commitments and to implement them effectively.
  Second, these negotiations are on an accelerated schedule. They 
started in January 2003 and are set to conclude by the end of this 
year. The limited trade negotiating capacities of the CAFTA countries 
makes this an ambitious goal.
  Third, several of the CAFTA countries played a less than constructive 
role at the WTO Cancun Ministerial. Their participation in the G-21 and 
the role of that group in precipitating the meeting's collapse raises 
serious questions about their commitment to trade liberalization.
  I support comprehensive free trade agreements that create sound 
market access rules and meaningful commercial opportunities for 
American farmers, workers, and businesses. And I support, in principle, 
the goal of reaching such an agreement with the five CAFTA countries.
  But we need to be realistic. A CAFTA agreement will be politically 
difficult here--much more so than the recently passed free trade 
agreements with Singapore and Chile. The issues it raises will be 
challenging on both sides of the aisle.

[[Page S11635]]

  Next year's vote on CAFTA will also set the stage for the many free 
trade agreements that are lining up to pass through Congress: Morocco, 
Australia, the Dominican Republic, South Africa, Bahrain. The list just 
keeps growing.
  To keep our trade agenda moving forward, we need a CAFTA that can 
pass with a large majority. If CAFTA sours the Congress on FTAs we are 
in for real trouble.
  With only 4 months left in the negotiations, time is running short. 
But there is still time enough to push the CAFTA negotiations in the 
right direction. We can do that by addressing three principal concerns:
  First, there needs to be a clear acknowledgment by our negotiators 
that CAFTA presents different challenges than other agreements. These 
countries have different political, legal, and social structures, and 
different economies, than any of our existing FTA partners.
  We cannot simply table the Singapore and Chile texts and say we are 
done. Not for market access or agriculture. Not for services and 
intellectual property. Not for environment or labor. One size does not 
fit all.
  Second, we need to make sure that this agreement is comprehensive. 
Taken together, the CAFTA countries are about our 18th largest trading 
partner. They account for one percent of U.S. trade. So the commercial 
benefits from this agreement will be modest at best.
  Absent significant commercial gains, the only way to ``sell'' the 
CAFTA to our farmers, workers, and businesses, is as a strong model for 
future agreements.
  We hear from Costa Rica that they don't want a telecom chapter in the 
agreement. This is a bad precedent.
  Similarly, we can't allow ourselves to go too far down the path of 
``non-reciprocal'' market access provisions for developing countries, 
just to get an agreement done.
  Given their reluctance to tackle hard issues in the FTA negotiations 
and the recent actions of some of the CAFTA countries in Cancun, I am 
frankly skeptical about where the CAFTA negotiations are headed. If we, 
and the CAFTA countries, are not prepared to conclude a comprehensive 
agreement, we need to ask ourselves if this agreement is worth 
negotiating at all.
  Third, we need to do more to address legitimate concerns about 
environment and labor.
  Any number of objective sources have pointed out deficiencies in the 
environmental and labor laws of the various CAFTA countries.
  And there is widespread agreement including among the CAFTA 
governments themselves--that these countries lack the capacity to 
effectively enforce their own environmental and labor laws.
  Yet that is just what the text tabled by USTR would require them to 
do. Even as the evidence mounts, our negotiators stick stubbornly to 
their determination not to go beyond the Chile and Singapore texts.
  That won't work. For CAFTA, we need a different approach.
  To date, our domestic politics on environment and labor have been 
polarized. The CAFTA countries see that and they use it as an excuse 
not to engage constructively.
  I want to help break this deadlock. I want to get us all talking 
about constructive ways to address environment and labor.
  A workable approach to environment and labor in the CAFTA will do two 
things. It will help the CAFTA countries overcome their capacity 
limitations. And it will give assurance that meaningful improvements in 
environmental and labor standards and enforcement in those countries 
are occurring.
  In the next weeks, I plan to release a detailed proposal for 
addressing environmental issues in the CAFTA. I will give just a short 
preview today.
  My proposal combines improvements to the Chile and Singapore 
environment chapter text with enhancements to the trade capacity 
building and environmental cooperation programs.
  In the text, I propose changes that will help build an open and 
responsive system of environmental regulation in the CAFTA countries. 
For example, the citizen petition process used in the NAFTA side 
agreement has helped empower environmental NGOs in Mexico, with 
positive effects. I think that should be a model for the CAFTA.
  On trade capacity building, I think we can make this process work 
better to achieve long-term environmental and sustainable development 
goals. On the U.S. side, that means creating a mechanism that assures 
funding for capacity building over the long term.
  For the CAFTA countries, it means completing the ongoing regional 
process of setting environmental priorities, and establishing a 
monitoring system to assure that capacity building is leading to 
progress toward those goals.
  I look forward to sharing my detailed proposal in the near future.
  It does not serve America's trade interests to negotiate imperfect 
trade agreements simply to put another notch on our belt.
  I hear people say all the time that America has fallen behind other 
countries in negotiating FTAs and needs to ``catch up.'' But this is 
not a numbers game. We must always remember that it is the quality, not 
the quantity, of our free trade agreements that matters.
  I hope that I will be able to work with the administration to pass a 
good agreement with Central America. It is an important region, and 
this could be a significant agreement.
  But the Trade Act--and specifically the provisions on labor and 
environment--must be adhered to. Submitting the same labor and 
environment text for all agreements--regardless of the situation in 
that country--is not, in my view, consistent with the Trade Act.
  If we end up with an agreement that ignores Members' concerns on 
labor and the environment, I will work hard against it.
  I hope it does not come to that. I hope that we can work together on 
an agreement that makes sense and moves the ball forward. And I stand 
ready to do that.

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