Congressional Record (Bound Edition), Volume 146 (2000), Part 6 - TRADE AND DEVELOPMENT ACT OF 2000--CONFERENCE REPORT--Continued

[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[Senate]
[Pages 7415-7443]
[From the U.S. Government Publishing Office, www.gpo.gov]

TRADE AND DEVELOPMENT ACT OF 2000--CONFERENCE REPORT--Continued

Mr. GRASSLEY. Mr. President, I ask unanimous consent that when
Senator Feinstein has finished speaking, Senator Feingold be able to
consume his time for debate on this bill.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from California.
Mrs. FEINSTEIN. Mr. President, I rise today to address the conference
report on the African Growth and Opportunity Act and to express my deep
disappointment that the conference decided to strip out of the report
the amendment which has been spoken about on this floor which addresses
HIV/AIDS in sub-Saharan Africa. This is an amendment I offered with the
Senator from Wisconsin, Mr. Feingold.
This amendment was accepted by the Senate, and it was intended to
provide African countries experiencing an HIV/AIDS crisis with the
ability to institute measures consistent with the World Trade
Organization intellectual property rules that are designed to ensure
the distribution of pharmaceuticals and medical technology to afflicted
populations.
We offered this amendment because we believed the act inadvertently
threatened to undermine the fight against HIV/AIDS in Africa. Our
amendment was a simple, commonsense approach consistent with
international law to fix this oversight. I believe the action of the
conference in stripping this amendment was unconscionable. I found it
especially disappointing because my office and staff had been working
with the chairman of the Finance Committee, Mr. Roth, to develop
compromise language that met our concerns and would be acceptable to
the conference.
Chairman Roth negotiated in good faith, and he and the other Senate
conferees--Mr. Moynihan, Mr. Biden, and Mr. Baucus--wanted to do the
right thing. Unfortunately, as I understand it, because of the way in
which the House and Senate Republican leadership dealt with this
conference, the majority leader and the Speaker, as I have been told,
decided my amendment was to be eliminated and presented a take-it-or-
leave-it offer to the conferees. The conference was never really

[[Page 7416]]

even given a chance to address this issue.
Perhaps they did not understand the full impact of what is happening
in Africa, and in these remarks I hope to make both the extent and the
nature of the AIDS crisis better known. I say this as someone who
supports the legislation. I voted in favor of it. I believe the
underlying principles of this legislation--opening up new possibilities
for economic engagement and trade between the United States and the
countries of sub-Saharan Africa--are good ones. I know the countries of
this region want to receive the benefits of the bill which will assist
their economic development and promote democracy in the region.
I said in earlier remarks the problem is that the way things are
going, there will not be an Africa left for this bill to help. I think
people underestimate the impact of that statement. What I hope to do in
these remarks is talk about the scope of the problem, give specific
country reports, talk about the economic, social, and political impact
of HIV/AIDS in sub-Saharan Africa, the need for affordable access to
pharmaceuticals, what compulsory licensing and parallel importing is,
and why the Feinstein-Feingold amendment is necessary.
I want to talk about drug companies' revenues from these drugs and
what else is to be done.
But before I do so, I acknowledge the fact that this morning the
White House has signed an Executive order to carry out the provisions
of the Feinstein-Feingold amendment.
At this point, I will read into the Record the following letter,
dated May 10:

I am pleased to inform you that today I will sign an
Executive Order that is intended to help make HIV/AIDS-
related drugs and medical technologies more accessible and
affordable in beneficiary sub-Saharan African countries. The
Executive Order, which is based in large part on your work in
connection with the proposed Trade and Development Act of
2000, formalizes U.S. government policy in this area. It also
directs other steps to be taken to address the spread of HIV
and AIDS in Africa, one of the worse health crises the world
faces.
As you know, the worldwide HIV/AIDS epidemic has taken a
terrible toll in terms of human suffering. Nowhere has the
suffering been as great as in Africa, where over 5,500 people
per day are dying from AIDS. Approximately 34 million people
in sub-Saharan Africa have been infected, and, of those
infected, approximately 11.5 million have died. These deaths
represent more than 80 percent of the total HIV/AIDS-related
deaths worldwide.
To help those countries most affected by HIV/AIDS fight
this terrible disease, the Executive Order directs the U.S.
Government to refrain from seeking, through negotiation or
otherwise, the revocation or revision of any law or policy
imposed by a beneficiary sub-Saharan government that promotes
access to HIV/AIDS pharmaceuticals and medical technologies.
This order will give sub-Saharan governments the flexibility
to bring life saving drugs and medical technologies to
affected populations. At the same time, the order ensures
that fundamental intellectual property rights of U.S.
businesses and inventors are protected by requiring sub-
Saharan governments to provide adequate and effective
intellectual property protection consistent with World Trade
Organization rules. In this way, the order strikes a proper
balance between the need to enable sub-Saharan governments to
increase access to HIV/AIDS pharmaceuticals and medical
technologies and the need to ensure that intellectual
property is protected.
I know that you preferred that this policy be included in
the Conference Report on the Trade and Development Act of
2000, as did I. However, through this Executive Order, the
policy this Administration has pursued with your support will
be implemented by the U.S. Government. The Executive Order
will encourage beneficiary sub-Saharan African countries to
build a better infrastructure to fight diseases like HIV/AIDS
as they build better lives for their people. At the same
time, the Trade and Development Act of 2000 will strengthen
African economies, enhance African democracy, and expand
U.S.-African trade. Together, these steps will enable the
United States to forge closer ties with our African allies,
broaden export opportunities for our workers and businesses,
and promote our values around the world.
Thank you for your leadership on this critically important
issue.
Sincerely,
Bill Clinton.

Mr. President, I ask unanimous consent that following my remarks, the
Executive order itself be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See exhibit 1.)
Mrs. FEINSTEIN. Mr. President, I thank the President for this
Executive order. It is the right thing to do and it is a major help. I
very much hope that the African countries will make use of this
Executive order and acquire the necessary pharmaceuticals that we here
in this country know can extend the lives and well-being of people.
Almost 1 year ago, on May 11, the World Health Organization declared
that HIV/AIDS is now the world's most deadly infectious disease. As of
December of last year, the AIDS Epidemic Update, published by the Joint
United Nations Program on HIV/AIDS, U.N. AIDS, and the World Health
Organization, notes the following:

As the 20th century draws to a close, some 33.6 million men
and women worldwide face a future dominated by a fatal
disease, unknown just a few decades ago. According to new
estimates from the Joint U.N. Program on HIV/AIDS and the
World Health Organization, 32.4 million adults and 1.2
million children will be living with HIV by the end of 1999.
Sub-Saharan Africa bears the brunt of the HIV/AIDS with
close to 70 percent of the global total of HIV positive
people. Most will die in the next 10 years, joining the 13.7
million Africans who have already died, and leaving behind
shattered families and crippled prospects for development.

Indeed, the hardest hit African companies face infection rates in
excess of 22 percent--that is 22 million people--an overall rate of
infection among adults in sub-Saharan Africa eight times the rate of
infection worldwide. In some countries of southern Africa, 20 to 30
percent of the population of the country itself are infected.
You can see from this chart the spread of AIDS in sub-Saharan Africa.
You see the major countries affected that I am speaking about--Namibia,
Botswana, Zimbabwe, Zambia--leading with 16 to 32 percent of adults
infected with HIV. The next tranche of 8 percent to 16 percent is in
the orange and it drops down from there. In South Africa, you have
almost 13 percent of the population infected; that is, 2.8 million
people. In Zimbabwe, it is 25.8 percent; that is, 1.4 million people.
In Uganda, it is 9.5 percent; that is, 870,000. In the Central African
Republic, it is almost 11 percent; that is 170,000. In Zambia, it is 19
percent; that is 730,000. In Kenya, it is 11.6 percent or 1.6 million
people.
The destruction caused by HIV/AIDS in sub-Saharan Africa, by far,
surpasses the devastation caused by famine, war, and even genocide in
Rwanda. According to the United Nations, over 10 times as many people
were killed by AIDS in sub-Saharan Africa last year as by war. This
chart shows the estimated adult and child deaths from HIV/AIDS during
1998--2 million people in sub-Saharan Africa, out of a global total of
2.5 million. You see why this is pandemic today, actually exceeding the
bubonic plague in Europe centuries ago.
The devastation caused by AIDS has dramatically reduced life
expectancy in sub-Saharan Africa from the highs witnessed in the early
to mideighties, before the devastating effect of AIDS began to be felt.
This chart shows that in Botswana, which is this line, life expectancy
has fallen from the age of 61 to age 50. In Zimbabwe, it fell from 59
to 47. In Zambia, it fell from age 50 to 38 years. In Malawi, it fell
from age 45 to 40 years. In Uganda, it fell from 48 to 38 years.
If the present trends continue, life expectancy--already shortened by
a decade or more in many sub-Saharan African countries--is projected to
fall more dramatically still. In Zimbabwe, for example, life expectancy
is expected to decline by 26 years by 2010, from the age of 59 to the
age of 33. That is more than half the life expectancy in little more
than two decades. I never thought I would ever see that kind of
devastation in one country.
AIDS is also affecting infant and child mortality rates, reversing
the declines that have been occurring in many countries during the
1970s and 1980s. According to the U.N., AIDS, by 2010, the child
mortality rates of children under 5 will increase by 200 percent in
Botswana, by 100 percent in Kenya, Malawi and Tanzania, and Zambia by
100 percent, and by 300 percent in Zimbabwe.

[[Page 7417]]

This becomes critical, if you understand that four pills can prevent
the transmission of HIV/AIDS from a mother to a child--four pills.
Look at these expected child mortality rates.
Over 30 percent of all children born to HIV-infected mothers in sub-
Saharan Africa will themselves be HIV infected. More than 500,000--half
a million--babies were infected this past year by their mothers, most
of them in sub-Saharan Africa.
As these statistics in the U.N. AIDS Report that I cited attest, sub-
Saharan Africa has been far more severely affected by AIDS than any
other part of the world.
Mr. President, it is not just adults who are being killed by AIDS in
sub-Saharan Africa. Out of 510,000 children killed by AIDS throughout
the entire world, 470,000 were African children. That is 92 percent of
the world's total.
What does that say for the future? Almost a half million children are
killed in one continent alone. For anyone who has ever been a mother or
a father, a grandmother or a grandfather, this number is mind numbing.
Beyond the carnage of the deaths, this disease has the potential to
destabilize already fragile political and economic systems in sub-
Saharan Africa.
The United Nations reports that 23.3 million adults and children are
infected with the virus, up from 22 million a couple of years ago.
Africa has only 10 percent of the world's population, but it has 70
percent of the worldwide total of infected people.
That is what this chart shows. And it is shocking.
Worldwide, there were 5.6 million new AIDS infections in 1999--3.8
million of them in Africa. That is two-thirds of the new infections of
AIDS taking place in Africa. Every day, 11,000 more people are infected
with HIV--1 in every 8 seconds--and 10,000 of the 11,000 new HIV
infections that take place around the world occur in this area.
Teachers, doctors, and nurses are today dying faster than they can be
replaced. What does that say about the human development and the
economic upward mobility of that country if the teachers, the doctors,
and the nurses die faster than they can be replaced? In addition to the
death toll striking down adults and children alike, as the ``Report on
the Presidential Mission on Children Orphaned by AIDS in Sub-Saharan
Africa'' notes:

Tragically, the worst is yet to come. During the next
decade more than 40 million children will be orphaned by
AIDS--40 million children orphaned by AIDS, and this ``slow-
burn disaster'' is not expected to peak until 2030. According
to UNICEF, the HIV-AIDS pandemic in sub-Saharan Africa is
having and will continue to have more impact on child
survival and maternal mortality than all other emergencies
combined. Without a doubt, AIDS has placed an entire
generation of Africa's children in jeopardy.

Of the 13 million children orphaned by AIDS so far, 10 million of
them are in sub-Saharan Africa.
In Zimbabwe, there are currently 600,000 AIDS orphans, and the
projection is that there will be more than 1 million by 2005. That is a
40-percent increase in orphans in one country alone in the next 5
years. Think about it for a minute. It is staggering.
There are rumors that some of the leaders of these countries don't
want to deal with the drugs that can prevent passage from the mother to
the child because they don't want to deal with the number of orphans
that are going to be present in that country. I find this also
shocking. You have more than 1 million orphans in 5 years growing up in
poverty, without parents and with little or no social structure.
What does this say about the success of an African Trade Act, if you
think about it? No teachers, no doctors, no nurses, and millions of
orphans without parents, what does that say about economic and human
development of a country?
In South Africa, there are already close to 250,000 AIDS orphans. The
number is expected to skyrocket to 2\1/2\ million by 2010. This is
South Africa. This is from 1990 to 2010. Here we are at 2000, and this
is what is anticipated to be the number of orphans by 2010. The number
is 2.5 million in one country alone. How can this bill provide them
with the resources to lead better lives in the future? What good will
this bill do if this happens?
All told, over 34 million people in Africa have been infected by HIV
since the pandemic began. That is the population of the State of
California. And an estimated 13.7 million Africans have lost their
lives to AIDS--more than the entire population of Los Angeles and New
York City combined. By 2005, if policies do not change, the daily death
toll will reach 13,000--double what it is today--with nearly 4 million
AIDS deaths in sub-Saharan Africa alone.
A recent CNN Interactive story, ``AIDS in Africa: Dying by the
Numbers,'' put the extent of the crisis in this way:

. . . The bubonic plague is reckoned to have killed about
30 million people in medieval Europe. The U.S. Census Bureau
projects that AIDS deaths and the loss of future populations
from the deaths of women of child-bearing age means that by
2010, sub-Saharan Africa will have 71 million fewer people
than it would otherwise.

In all of these countries in sub-Saharan Africa, there will be 71
million fewer people because of AIDS in the next 10 years. Just think
about that for a minute.
I would also like to spend some time addressing the situation in
several different countries in the region--some hard hit, some less
so--so that my colleagues have a better sense of the chaos and
disruption this disease is causing in individual countries and society.
The statistics that I cite below are drawn from UNA's World Health
Organization epidemiological fact sheets on AIDS and includes data up
to 1997. By all accounts, in almost every country in the region, the
situation has grown much worse in the past 3 years. There could be
little doubt about the pandemic.
Let's begin with Botswana. In Botswana, over 25 percent of the
population between 15 and 49 is infected with HIV. That is 25 percent
of the population. In Botswana's major urban areas, 40 percent of
pregnant women are infected with HIV. From 1994 to 1997, the rate at
which children have been orphaned in Botswana quadrupled. Almost 50
percent of Botswana's children under 15 are AIDS orphans. AIDS is
responsible for over half of the deaths of all children under the age
of five.
Let's look at Ethiopia. Ethiopia has a relatively low infection rate
for sub-Saharan Africa, just 9.3 percent, with 5.6 million out of a
population of 60 million infected. Over 35 percent of women in Ethiopia
age 20 to 24 have HIV. That is a rate 3 times higher than men. In 1985,
less than 1 percent of prostitutes in Addis Ababa were HIV positive. By
1990, that proportion had reached 54 percent. This is the point of
spreading of the disease. Very little is being done about it.
Kenya currently has a relatively low rate of HIV infection. It is 11
percent. HIV prevalence is much higher in the major urban areas and is
over 25 percent in Nairobi, where almost 90 percent of prostitutes are
HIV positive. This is the wonderful city of Nairobi, where 90 percent
of the prostitutes are spreading this disease heterosexually through
the countryside. There are currently at least 350,000 AIDS orphans in
Kenya, with the number expected to reach 1 million by 2005. By 2005,
Kenya will have one million orphans, thanks to AIDS. That is a 200
percent increase. The cumulative number of deaths due to AIDS has risen
from 16,000 in 1989 to 200,000 in 1995 and is expected to pass the one
million mark this year. One million dead and one million orphans.
Kenya is a beautiful country. It is shocking what is happening. I
hope some of the pharmaceutical companies that lobbied against this
amendment are listening. Mr. President, 75 percent of AIDS cases in
Kenya occur among adults age 20 to 45, the economically most productive
time of the population. The prevalence of HIV in pregnant women in
urban areas has risen from 2 percent in 1985 to 16 percent in 1997.
Let's go to Malawi. It is estimated around 1 in 7 of the population,
age 15 to 49, is HIV positive. That is 15 percent of the population, or
670,000 people. More than 80,000 people died of AIDS in 1 year alone,
1997, and Malawi has an accumulative death toll of over

[[Page 7418]]

450,000 people. I hope the pharmaceutical companies are listening.
Over 25 percent of women attending prenatal clinics in the urban
centers test positive for HIV. Girls 15 to 24 years in age are six
times more likely to be positive than boys the same age. Other
infectious diseases are also on the upswing. Tuberculosis has tripled
since the late 1980s, largely due to AIDS. By the end of 1997, over 6
percent of Malawi's children under 15 were orphans.
Let's look at Nigeria, Africa's most populace country, with 118
million people. More than 2.2 million people, around 5 percent, are HIV
positive. Although Nigeria appears to have a relatively low incidence
at present, trend lines are not comforting. The prevalence in pregnant
women in urban areas went from below 1 percent in 1991 to almost 7
percent in 1994. Likewise, the prevalence of HIV in prostitutes has
more than doubled during this same period in urban areas, and increases
from 3.9 percent to 23 percent in rural areas. Nearly 50 percent of the
prostitutes in Lagos, the largest city, are HIV positive, spreading the
disease. There were 350,000 AIDS orphans in Nigeria as of 1997.
Let's look at South Africa. About 3 million people in South Africa
are infected with HIV, 13 percent of a population of 43 million.
Estimates are by 2010, 25 percent of South Africa's population will be
HIV positive. By 1997, 180,000 children were orphaned. That figure will
skyrocket to 2 million by 2010. There will be two million orphans in
South Africa because of AIDS by 2010. Mr. President, 20 percent of
pregnant women are infected. There are close to 400,000 deaths due to
AIDS in South Africa since the beginning of the epidemic.
Let's go to Zambia, with an infection rate close to 20 percent. It is
one of the hardest hit countries in sub-Saharan Africa. As of 1997,
over 770,000 adults and children in Zambia were AIDS affected. There
are more than 630,000 estimated AIDS cases. There have been 600,000
cumulative deaths since the beginning of the epidemic. After Uganda,
Zambia has the highest proportion of children orphaned by AIDS in the
world. By the end of 1997, 360,000 children, almost 10 percent of the
children under 15, were orphaned because of AIDS. Four simple pills
could prevent the transmission of AIDS from a pregnant woman to a
child. Mr. President, 28 percent of adults in the urban area and 15
percent in rural areas are infected with HIV.
To give a sense of how the crisis is eroding social stability in
Zambia, last year alone, 1,300 teachers in Zambia died from AIDS. Only
700 new teachers were available to take their place. How do you teach
children to be able to get a job in the new marketplace that this bill
hopes to bring about if the teachers are dying of AIDS, if the children
are orphaned? Zimbabwe has one of the worst AIDS epidemics in the
world. Currently, 26 percent of all adults age 15 to 49 are infected
with HIV, more than 1.5 million out of a total population of 5.5
million.
The United Nations Population Division has projected that over the
next five years half of all child deaths in the country will be due to
AIDS.
As in Zambia, by the end of 1997 there were over 360,000 AIDS orphans
in Zimbabwe and, as I mentioned earlier, projections are for Zimbabwe
to be faced with over 1 million AIDS orphans in the next five years.
The HIV/AIDS crisis is driving families in sub-Saharan Africa worn-
down by widespread poverty to the brink of disaster, and eroding the
ability of the regions governments to provide services while at the
same time increasing the demand for them. This is especially true in
health care, where AIDS-related illnesses sometimes account for almost
half the hospital beds and in-patient days.
The transition to democracy in the region may also be imperiled, and
economic growth may grind to a halt as a result of the AIDS crisis
destabilizing social structures.
These numbers, and the impact this disease is having on individual
counties in sub-Saharan Africa, is staggering, but it is difficult to
capture the depth of the devastation and suffering in the region with
statistics and charts. To try to give a better sense of the impact of
HIV/AIDS, let me read the first few paragraphs from a story published
in the Village Voice last year, part of a Pulitzer Prize winning series
of articles by journalist Mark Schoofs.
Let me warn you: the following is not for the faint of heart or faint
of stomach.

They didn't call Arthur Chinaka out of the classroom. The
principal and Arthur's uncle Simon waited until the day's
exams were done before breaking the news: Arthur's father,
his body wracked with pneumonia, had finally died of AIDS.
They were worried that Arthur would panic, but at 17 years
old, he didn't. He still had two days of tests, so while his
father lay in the morgue, Arthur finished his exams. That
happened in 1990. Then in 1992, Arthur's uncle Edward died of
AIDS. In 1994, his uncle Richard died of AIDS. In 1996, his
uncle Alex died of AIDS. All of them are buried on the
homestead where they grew up and where their parents and
Arthur still live, a collection of thatch-roofed huts in the
mountains near Mutare, by Zimbabwe's border with Mozambique.
But HIV hasn't finished with this family. In April, a fourth
uncle lay coughing in his hut, and the virus had blinded
Arthur's aunt Eunice, leaving her so thin and weak she
couldn't walk without help. By September both were dead.
The most horrifying part of this story is that it is not
unique. In Uganda, a business executive named Tonny, who
asked that his last name not be used, lost two brothers and a
sister to AIDS, while his wife lost her brother to the virus.
In the rural hills of South Africa's KwaZulu Natal province,
Bonisile Ngema lost her son and daughter-in-law, so she tries
to support her granddaughter and her own aged mother by
selling potatoes. Her dead son was the breadwinner for the
whole extended family, and now she feels like an orphan.
In the morgue of Zimbabwe's Parirenyatwa Hospital, head
mortician Paul Tabvemhiri opens the door to the large cold
room that holds cadavers. But it's impossible to walk in
because so many bodies lie on the floor, wrapped in blankets
from their deathbeds or dressed in the clothes they died in.
Along the walls, corpses are packed two to a shelf. In a
second cold-storage area, the shelves are narrower, so
Tabvemhiri faces a grisly choice: He can stack the bodies on
top of one another, which squishes the face and makes it hard
for relatives to identify the body, or he can leave the
cadavers out in the hall, unrefrigerated. He refuses to
deform bodies, and so a pair of corpses lie outside on
gurneys behind a curtain. The odor of decomposition is faint
but clear.
Have they always had to leave bodies in the hall? ``No, no,
no,'' says Tabvemhiri, who has worked in the morgue since
1976. ``Only in the last five or six years,'' which is when
AIDS deaths here took off. Morgue records show that the
number of cadavers has almost tripled since the start of
Zimbabwe's epidemic, and there's been a change in who is
dying: ``The young ones,'' says Tabvemhiri, ``are coming in
bulk.''
The wide crescent of East and Southern Africa that sweeps
down from Mount Kenya and around the Cape of Good Hope is the
hardest-hit AIDS region in the world. Here, the virus is
cutting down more and more of Africa's most energetic and
productive people, adults aged 15 to 49. The slave trade also
targeted people in their prime, killing or sending into
bondage perhaps 25 million people. But that happened over
four centuries. Only 17 years have passed since AIDS was
first found in Africa, on the shores of Lake Victoria, yet
according to the Joint United Nations Programme on HIV/AIDS
(UNAIDS), the virus has already killed more than 11 million
sub-Saharan Africans. More than 22 million others are
infected [and nobody cares].
Only 10 percent of the world's population lives south of
the Sahara, but the region is home to two-thirds of the
world's HIV-positive people, and it has suffered more than 80
percent of all AIDS deaths.
Last year, the combined wars in Africa killed 200,000
people. AIDS killed 10 times that number. Indeed, more people
succumbed to HIV last year than to any other cause of death
on this continent, including malaria. And the carnage has
only begun.

In addition to the devastating health impact, HIV/AIDS in Sub-Saharan
Africa is also threatening to undermine economic, social, and political
stability in the region--the very issues which the African Growth and
Opportunity Act is intended to address.
In Zimbabwe and Botswana, for example, where roughly one of every
four people have AIDS, the disease has cut sharply into population
growth with profound consequences. According to Karen Stanecki, chief
of health studies for the U.S. Census Bureau:

The zero growth is coming because people are dying in their
young adult years, not after leading full lives and then
dying.

[[Page 7419]]

People are dying in the years when they're supposed to be most
productive.
As World Bank President James Wolfensohn said at the United Nations
this past January:

Many of us used to think of AIDS as a health issue. We were
wrong. AIDS can no longer be confined to the health or social
sector portfolios. AIDS is turning back the clock on
development.

As the HIV epidemic deepens in Africa, it is leaving an economically
devastated continent in its wake.
At the most simple level, already impoverished families that must
care for a member who is ill with HIV/AIDS find that what little they
had to pay for a child's education or invest for the future is now
gone.
The United Nations Joint Program on HIV/AIDS found that urban
families in the Cote d'Ivoire, known as the Ivory Coast in this
country, with a member sick from AIDS cut spending on their children's
education in half and reduced food consumption by about 40 percent as
they struggled to cover health care costs.
Moreover, as the epidemic has worsened, so have estimates of its
effect on African economies, even without taking into account broader
human welfare issues.
Indeed, because of the impact of HIV/AIDS, David Bloom, a professor
of economics and demography at the Harvard School of Public Health,
warns that ``The whole economy [in Africa] could unravel.''
In ``Confronting AIDS,'' the World Bank factored in labor supply
issues and the amount to which health care would be financed out of
savings to come up with a ``rough estimate'' of a 0.5 percent annual
reduction in per capita GDP growth. I believe this estimate to be on
the low side.
One-half of 1 percent may not seem like much. Indeed, for countries
with relatively high growth rates such as Uganda, that kind of
reduction will not seem to be immediately crippling, but a lower growth
rate has a cumulative effect.
A country whose growth rate is 2 percent a year will increase its GNP
per capita by 81 percent in one generation, or about 30 years. Each
generation will live much better than the last.
However, if AIDS reduces growth to just 1.5 percent per year, the
same country will increase its GNP per capita by only about 50 percent
in the same period.
This chart shows the change in per capita GDP caused by AIDS in
Kenya. The yellow is a no AIDS scenario, and one can see the enormous
rise in GDP. The red is the AIDS scenario, even with the African Growth
and Opportunity Act, and one can see how it is consequentially lower.
Thus, in Kenya, for example, UNAIDS estimates that while per capita
GDP was estimated to increase from 5,600 Kenyan shillings in 1990 to
over 6,000 Kenyan shillings by 2005 without AIDS, with the impact of
AIDS per capita GDP will remain stagnant over the same period of time.
Likewise, in South Africa UNAIDS estimates that because of the impact
of HIV/AIDS the Human Development Index--which measures the level of
human development through a formula based on life expectancy at birth,
adult literacy, school enrollment, and real per capita GDP has dropped
by over 15 percent from 1995 to the present. That is a 15-percent drop
due to AIDS in 5 years. Without HIV/AIDS South Africa's HDI was
projected to remain more or less the same.
Finally, the combined effects of HIV/AIDS on health, economic life,
the social fabric, and political institutions, has created a genuine
threat to future stability and security in sub-Saharan Africa.
That is why, at the initiative of Ambassador Holbrooke and Vice
President Gore, the 15-member United Nations Security Council decided
to address AIDS earlier this year.
As Secretary General Kofi Annan told the Security Council:

In already unstable societies, this cocktail of disasters
is a sure recipe for more conflict. And conflict, in turn,
provides fertile ground for further infections.

And, as Dr. Peter Piot, Executive Director of the Joint United
Nations Programme on HIV/AIDS, said:

Visibly, the epidemic is eroding the social fabric of many
communities. In its demographic, social and economic impact,
the epidemic has become more devastating than war, in a
continent where war and conflict appear to be endemic.

As U.S. Ambassador to the United Nations Richard Holbrooke said, if
we do not work with Africa now to address the problems associated with
the HIV/AIDS crisis, ``we will have to deal with them later when they
will get more dangerous and more expensive.''
It is in recognition of the destabilizing effects of HIV/AIDS in
Africa that the Clinton-Gore administration has taken the step of
designating AIDS a threat to U.S. national security interests, as
reported the other week in the Washington Post. I believe the
administration is to be congratulated for its recognition of the
profound effects that this disease is having, and for this effort.
There are many explanations for why this pandemic is sweeping across
sub-Saharan Africa: Certainly the region's poverty, which has deprived
Africans of access to health information, health education, and health
care. Conflict, which has led to increases in refugee flows, and
increases in prostitution have also played a role. Cultural and
behavior patterns, which has led to sub-Saharan Africa being the only
region in which women are infected with HIV at a higher rate than men,
may also play a role.
Clearly, in addressing the challenges presented by this disease there
needs to be considerable emphasis addressing the health care
infrastructure of sub-Saharan Africa and on additional resources for
education. I intend to address both these points later.
I also believe that if the international community is to be
successful in meeting this challenge, we must make every effort to get
appropriate medicine into the hands of those in need.
In the United States and much of the industrialized world, even as
sub-Saharan Africa has been ravaged by the impact of HIV/AIDS, we have
succeeded, in large part, in turning HIV/AIDS into a chronic disease;
not curing it--that must still remain a top priority--but managing it.
We have done so, in large parts, by developing effective
pharmaceuticals and getting them to those in need.
Indeed, for too many years there were no effective drugs.
I remember, as Mayor of San Francisco, I was the first mayor to
implement a program to deal with AIDS in the United States, and
remember trying to manage this disease in its early days, when cause,
let alone treatment, was unclear; when drugs were simply not available;
when HIV/AIDS was devastating our community, and many, many promising
young people--many of them my friends--were struck down in the prime of
their lives; and when we simply did not know how big the crisis would
get, or if our health care system could handle it.
So in some small way, I think I understand what policymakers in many
sub-Saharan African countries are now going through.
Now, thanks to recent medical research, we do have effective
medicine. For example, some recent pilot projects have had success in
reducing mother-to-child transmission by administering the anti-HIV
drug AZT, or a less expensive medicine, Nevirapine, NVP, during birth
and early childhood.
In fact, new studies indicate NVP can reduce the risk of mother-to-
child transmission by as much as 80 percent. Just think of the
statistics on orphans and HIV-infected children that could be stopped
with four of these pills. NVP is given just once to the mother during
labor and once to the child within three days of birth. Three or four
pills can mean that a child is prevented from being born with AIDS.
For just $4 a tablet--a little more than the cost of a large latte at
Starbuck's, not a lot here but a great deal in Africa--this inexpensive
drug regime has created an unprecedented opportunity for international
cooperation in the fight against AIDS. Currently, however, less than 1
percent of

[[Page 7420]]

HIV infected pregnant women have access to interventions to reduce
mother-to-child transmission.
In addition to such drugs as NVP, drug ``cocktails" administered in a
treatment regimen known as HAART--highly active antiretroviral
therapy--antiretroviral drugs can allow people living with AIDS to lead
a normal life. And use of the drugs can lead to long-term survival
rather than early death. Such treatment has proven highly effective in
developed countries, including our own.
Although some pharmaceutical companies may try to tell you otherwise,
most antiretrovirals drugs are relatively inexpensive to produce. AIDS
Treatment News recently reported that:

AZT in bulk can be purchased for 42 cents for 300 mg from
the worldwide suppliers; this price reflects profits not only
to the manufacturer but also to the middleman bulk buyer. The
same drug retails at my local pharmacy for $5.82 per pill.
This ridiculous price bears no real relation to the cost of
production.

Unfortunately--and inexplicably in my view--access for Africans to
AIDS medications or ``antiretrovirals'' is perhaps the most contentious
issue surrounding the response to the African epidemic.
According to an article, ``Poor Nations Ravaged by AIDS Need the
Right Resources'' that appeared in the December 1, 1999 issue of the
Journal of the American Medical Association:

For as many years as antiretroviral therapies have been
available, AIDS activists have accused pharmaceutical
companies of price gouging and challenged them to reduce
prices and cut their profit margins on drugs for people with
HIV infection and AIDS. In a pilot drug access initiative
launched in 1997 in Uganda, Cote d'Ivoire, Chile, and
Vietnam, UNAIDS succeeded in negotiating discounts on drugs
manufactured by Abbott Laboratories, Bristol-Myers Squibb Co,
Glaxo Wellcome Inc, Merck & Co Inc, and Roche Laboratories.
In Uganda, the cost of dual antiretroviral drug therapy has
been cut from $600 to $250 per month; triple combination
therapy that used to cost $1000 per month is now between $500
and $600 (J Int Assoc Physicians AIDS Care. 1999;5:48-60).
Dorothy Ochola, MD, coordinator of the drug access initiative
in Uganda, said the US Centers for Disease Control and
Prevention has offered free laboratory monitoring of patients
for 2 years.
While the program has helped hundreds of HIV-infected
people in Uganda gain access to therapy, it is far from a
cure-all. Along with government subsidies for drugs, the
initiative offers less expensive drugs for palliative care
and opportunistic infections, but patients must pay out of
pocket for antiretroviral drugs. With a population of 21
million and the number of HIV-positive persons estimated at
930,000, Uganda's approximately 825 patients receiving
antiretroviral drugs through the program are a drop in the
bucket.

Unfortunately, it is true that even at reduced rates in all too many
cases the cost of combination therapy is beyond the means of most
people living with AIDS and governments in sub-Saharan Africa.
Combination therapy in South Africa was estimated at $334 per month
or $4,000 per year, and UNAIDS reports that Brazil treated 75,000
people with antiretrovirals in 1999 at a cost of $300 million--or,
again, $4,000 per person.
I strongly believe that we have a strong moral obligation to try to
save lives when the medications for doing so exist, and it is critical
that the United States play a leadership role in the international
community to increase access to life-saving drugs.
For example, the United States should not oppose African governments
and donor agencies from achieving reductions in the cost of
antiretrovirals through negotiated agreements with drug manufacturers.
The British pharmaceutical firm Glaxo Wellcome, a major producer of
antiretrovirals, has already stated that it is committed to
``differential pricing,'' which would lower the cost of AIDS drugs in
Africa. And I say, hooray; one company. These efforts are to be
commended, and it is my sincere hope that companies willing to adopt
``differential pricing'' will help African countries get the drugs they
need at prices they can afford.
Now I will speak about compulsory licensing and parallel importing
for a moment.
This is the issue raised by my amendment and now the President's
Executive order. The United States must not oppose ``parallel
importing'' and ``compulsory licensing'' by African governments to
lower the price of patented medications so that HIV/AIDS drugs are more
affordable, and more people in Africa will have access to them.
Through parallel importing, patented pharmaceuticals can be purchased
from the cheapest source, rather than from the manufacturer. Under
compulsory licensing an African government could order a local firm to
produce a drug and pay a negotiated royalty to the patent holder.
Both parallel imports and compulsory licensing are permitted under
the World Trade Organization agreement for countries facing health
emergencies--and there can be little doubt that Africa is facing a
health emergency of monumental proportions.
My amendment, cosponsored by my colleague from Wisconsin, would have
simply codified current administration policy--as the administration
has now opted to do itself via Executive order--which states that the
U.S. Government will not oppose efforts by governments of the countries
of sub-Saharan Africa to supply HIV/AIDS drugs to their citizens
through compulsory licensing or parallel importing.
This amendment did not create new policy or a new approach on
intellectual property rights under the World Trade Organization
agreement on Trade Related Aspects of Intellectual Property Rights,
know as TRIPS, nor does it require IP rights to be rolled back or
weakened.
There are few in this body as committed to the notion of strict
protection of U.S. intellectual property rights as I am.
Just a few years ago, for example, when the United States and China
were involved in a dispute over IPR protection for movies, music, and
computer software, I worked with the administration to convince China
that it was important to respect the rights of the patent holder and
live up to its commitments to respect intellectual property rights.
And, I am pleased to note, China's record since that time on IP issues
has improved.
The compulsory licensing process under my amendment was fully
consistent with the WTO's approach to balancing the protection of
intellectual property with a moral obligation to meet public health
emergencies such as the HIV/AIDS pandemic in Africa.
According to an opinion I solicited from the Congressional Research
Service on this question, the amendment I offered:

. . . would appear to be consistent with the TRIPS
agreement since on its face it only prohibits U.S. government
authorities, such as the U.S. Trade Representative (U.S.T.R.)
From seeking a revocation of law or policy which offers
adequate intellectual property rights protection consistent
with the TRIPS agreement. . . . The TRIPS agreement permits
compulsory licensing under certain conditions. . . .

In other words, despite what some pharmaceutical companies have been
saying behind closed doors about this amendment over the past few
weeks, this amendment did not weaken intellectual property rights
protection one iota. It left the bar exactly where it is right now.
Let me be clear about this: My amendment--and now the President's
Executive Order--does not create new policy or a new approach on IP
rights under TRIPS, nor does it require IP rights to be rolled back or
weakened. All it asked is that in approaching HIV/AIDS in Africa, U.S.
policy on ``compulsory licensing'' and ``parallel importing'' remain
consistent with what is accepted under international trade law.
By doing so, this approach will allow the countries of sub-Saharan
Africa to determine the availability of HIV/AIDS pharmaceuticals in
their countries, and provide their people with affordable HIV/AIDS
drugs.
It was, or so I thought, a simple, common-sense approach to dealing
with one facet of one of the most pressing and important national
security and international health issues that we face in the coming
decades: The HIV/AIDS pandemic currently sweeping across sub-Saharan
Africa.

[[Page 7421]]

Let me provide one example of why the approach adopted by my
amendment, and now the President's Executive Order, is necessary.
On March 14 of this year, Doctor's Without Borders--the medical
relief group that won the Nobel Prize last year--sent a letter to
Pfizer calling on Pfizer to lower the price of fluconazole, a drug
needed to treat cryptococcal meningitus, the most common systemic
fungal infection in HIV-positive people, in developing countries.
As the Doctors Without Borders letter notes, in Thailand fluconazole
is available for just $1.20 for a daily dose. Yet in Kenya and South
Africa, the daily dose costs $17.84, almost 15 times higher. That is
unconscionable and is greed in the ultimate.
What accounts for the difference in price?
In Thailand a generic version is available. In Kenya and South Africa
the only supplier is Pfizer.
As Bernard Pecoul, director of the Doctors Without Borders Access to
Essential Medicines Campaign has noted, ``People are dying because the
price of the drug that can save them is too high.''
As the March 14 Doctors Without Borders letter notes, ``While we
appreciate that patents can be an important motor of research and
development funding, there must be a balance to ensure that people in
developing countries have access to life-saving medicines.'' I could
not agree more.
Under pressure from Doctors Without Borders, Pfizer has since agreed
to provide free fluconazole to South Africa. This situation never
should have existed to begin with.
Without ``compulsory licencing'' and ``parallel importing,'' which
would allow access to cheaper generic drugs, more people in sub-Saharan
Africa will suffer and die.
So why, given that it represented a common sense approach to a
devastating problem fully consistent with international trade law did
my amendment meet such stiff opposition in conference?
After long and hard consideration, I have concluded that there can be
only one possible answer to that question: Profits and corporate greed.
Simply put, the pharmaceutical companies which manufacture HIV/AIDS
drugs would prefer to be able to sell drugs for $18 a dose rather than
$1 per dose, with the additional $17 going straight to fattening the
bottom line.
If there was a legitimate policy debate to be had, why did the
opponents of including this provision in the bill not wage their fight
out in the open?
The answer is because they had no arguments which would stand up to
the light of day--so they restricted their activities to attacking this
amendment behind closed doors, out of the public view. And they
succeeded, in conference, with literally no one in the room except for
a few members, in getting this amendment killed.
The pharmaceutical companies who were opposed to this amendment--
opposed because they want to squeeze every last drop of profit from the
suffering of the millions of HIV/AIDS victims in sub-Saharan Africa--
were successful, behind closed doors, in killing my amendment.
The revenue created from the sale of HIV/AIDS-related drugs is
staggering.
Crixivan, used to treat HIV infections, produced $675 million in
revenue for Merck, in 1998; Zithromax, used to prevent Mycobacterium
avium complex in people with advanced HIV infections, produced over
$1.04 billion in revenue for Pfizer, in 1998; Fluconazole, used to
treat cryptococcal meningitis, produced $916 million in revenue for
Pfizer, in 1998; Epivir, used in combination with AZT as a treatment
option for HIV infection in adults and pediatric patients that are at
least three months old, produced $595 million in revenue for Glaxo
Wellcome, in 1998; Combivir, used as a treatment option for HIV
infection in adults and adolescent patients that are at least twelve
years old, produced $442 million in revenue for Glaxo Wellcome, in
1998; AZT, used for the treatment of adults with AIDS, produced $248
million in revenue for Glaxo Wellcome, in 1998; Taxol, used to treat
AIDS-related Kaposi's sarcoma, produced over $1.2 billion in revenue
for Bristol-Meyers Squibb, in 1998; Zerit, used for the treatment of
adults with advanced HIV infections, produced $551 million in revenue
for Bristol-Meyers Squibb, in 1998; Videx, used for the treatment of
adult and pediatric patients with advanced HIV that are intolerant to
or deteriorating on AZT, produced $162 million in revenue for Bristol-
Meyers Squibb, in 1998; Invirase, used for advanced HIV infections,
produced $397 million in revenue for Hoffman-La Roche, in 1998; Hivid,
used in combination with AZT for patients with advanced HIV, produced
$65 million in revenue for Hoffman-La Roche, in 1998; Famvir, used for
the treatment of recurrent mucocutaneous herpes simplex infections in
HIV-infected patients, produced $172 million in revenue for SmithKline
Beecham, in 1998; Gamimune N, used to prevent bacterial infections in
HIV-infected pediatric patients, produced $235 million for Bayer, in
1998; Biaxin, used to treat disseminated mycobacterial infections due
to Mycobacterium avium-intracellular complex (MAC), produced $1.25
billion in revenue for Abbott Laboratories, in 1998; Novir, used in
combination with nucleoside analogues for the treatment of HIV-
infections, produced $250 million for Abbott Laboratories, in 1998;
Epogen, used to treat anemia related to AZT therapy, produced $1.38
billion in revenue for Amgen, in 1998; Sustiva, used to treat HIV-1
infections in combination with other antiretrovirals, produced $75
million in revenue for DuPont Pharmaceuticals in 1998.
Viramune, used to treat HIV-infected adults experiencing clinical or
immunologic deterioration, produced $154 million in revenue for
Boehringer Ingelheim, in 1998; Serostim, used for the treatment of
AIDS-wasting and cachexia, produced $88 million in revenue for the
Ares-Serono Group in 1998; Viracept, used to treat HIV infection when
antiretroviral therapy is needed in adults and pediatric patients that
are at least two years old, produced $530 million for Agouron
Pharmaceuticals, in 1998; and Abelcet, used to treat aspergillosis, a
fungal infection, produced $73 million for The Liposome Company, in
1998.
All of the above-mentioned drugs were among the 500 best selling
drugs in the world, in 1998.
Driven in no small part by the profits on HIV/AIDS drugs, the
pharmaceutical sector has proven to be one of the most profitable
corporate sectors in the world. In 1999 pharmaceutical companies had a
18.6 percent return on revenues, which is 17 percent higher than the
number two sector on the list, and a 16.5 percent return on assets,
which is 7 percent higher than the number two sector on the list.
For shame, for opposing this amendment.
Merck, the producer of Crixivan, had an 18 percent return on revenues
and a 17 percent return on assets.
Bristol-Meyers Squibb, the producer of Taxol, Zerit, and Videx, had a
21 percent return on revenues and a 24 percent return on assets.
Pfizer, the producer of Zithromax and Fluconazole, had a 20 percent
return on revenues and a 15 percent return on assets.
Abbott Laboratories, the producer of Biaxin and Norvir, had a 19
percent return on revenues and a 17 percent return on assets.
Amgen, the producer of Epogen, had a 33 percent return on revenues
and a 27 percent return on assets.
Ironically, the pharmaceutical companies would profit more from the
approach embodied in my amendment than they do right now. Presently,
most sub-Saharan African countries are not buying these drugs since
they can not afford the price tag, so the pharmaceutical companies are
not earning any money at all on these HIV/AIDS drugs in these
countries. But if sub-Saharan African countries produced HIV/AIDS drugs
through ``compulsory licensing,'' or purchased them by ``parallel
importing,'' the pharmaceutical companies holding the patents on these
drugs would receive royalties.
I have a very hard time understanding how lobbyists behind closed
doors prevail on this body, in the middle of a world health crisis, to
prevent

[[Page 7422]]

the use of cheaper drugs when the figures I have documented are
decimating these countries in a major public health emergency. I don't
know how they sleep at night. I really do not. I don't know how they
can look at a country with 1 million or 2 million AIDS-produced orphans
and sleep at night. I really do not understand it.
Let me touch for a moment on what else is to be done.
By itself, the approach of the Feinstein-Feingold Amendment, and the
President's Executive order, will not solve the problem of HIV/AIDS in
Africa. It only addresses one area--an important area, but only one--of
a large and complex problem.
As Dr. David Satcher, the Surgeon General of the United States, wrote
in ``The Global HIV/AIDS Epidemic'' in JAMA, the Journal of the
American Medical Association, in April 1998:

More than a decade of experience has taught us how to
control HIV/AIDS--we know what works. Many developed
countries have successfully checked the spread of the
epidemic. While development of therapy and a vaccine
continue, prevention must be emphasized. The basic elements
of prevention include education, behavior change, voluntary
testing and counseling prevention of perinatal transmission,
and political commitment. Each country must find the mix of
methods appropriate to its particular conditions.
Education about HIV/AIDS is necessary but alone does not
change the behavior of populations. Promotion of voluntary
testing and counseling must complement education. Testing and
counseling break the deadly silence around HIV/AIDS and
empower individuals to make informed decisions and change
behaviors. Breaking the silence also will begin to diffuse
the stigma surrounding the disease. We have seen success with
behavioral change in Uganda and Thailand, the only two less-
developed countries with extensive capacity for voluntary
testing and counseling.
It is known that perinatal transmission of HIV can be
reduced by more than 50% by using antiretroviral therapy;
however problems with access to these drugs limit their use
in some countries. Transmission of HIV through breast-feeding
and poor survival of orphans make the avoidance of disease
via treatment for perinatal transmission more complex. We
continue to work with international organizations, other
governments, and pharmaceutical companies to lower costs and
expand access to antiretroviral drugs. Current treatment for
perinatal transmission, as well as use of antiretrovirals in
general, in less-developed countries is also limited by the
fact that very few people have been tested for HIV infection.
Treatment of other sexually transmitted diseases (STDs) is
important to control the spread of HIV. One of the reasons
HIV has spread so rapidly in Africa is that so many STDs go
untreated. Untreated STDs break down natural barriers that
prevent transmission. Access to even basic treatment for STDs
remains a problem for many less-developed countries.
Perhaps most important in the global battle against HIV/
AIDS is political commitment. Leaders at the national,
provincial, and local levels of government must speak out
about HIV/AIDS and encourage businesses and nongovernmental
organizations to commit to work against the disease. I was
encouraged by U.S. Vice President Al Gore and Deputy
President Thabo Mbeki of South Africa, who put the HIV/AIDS
threat at the top of the international agenda at the recent
meeting of the United States-South Africa Joint Commission.
They set an important example for leaders in developed and
less-developed countries.
American medicine and public health have an important role
to play in the global battle against HIV/AIDS by supporting
international organizations such as the Joint United Nations
Program on HIV/AIDS, the World Health Organization, and the
World Bank.
HIV/AIDS can be likened to the plague that decimated the
population of Europe in the 14th century. While the modern
epidemic affects people of all age groups, those of working
age are at highest risk, posing potentially dire economic,
social, and political consequences for the global community.
Unfortunately, the world continues to devote greater
attention and resources to traditional national security
issues such as wars, postponing notice of an epidemic that,
if left to spread unchecked, will kill more people than any
of the terrible conflagrations that have so marked this
century.

Because of the complexity of dealing with this issue, the Clinton-
Gore Administration has asked Congress to commit $150 million toward
vaccine research and AIDS treatment and prevention programs in Africa.
The Administration's initiative dedicates $100 million for the
prevention and treatment of HIV and AIDS in Africa, Asia and other
regions, doubling current U.S. funding of AIDS prevention efforts. An
additional $50 million will go to the Vaccine Fund of the Global
Alliance for Vaccines and Immunizations for research, and the purchase
and distribution of vaccines for other infectious diseases in
developing nations.
The Administration's initiative, announced by the Vice President this
past January, also includes plans for a public-private partnership with
U.S. business leaders active in Africa, with a goal of developing
workplace education programs designed to end the stigma and ``break
down the barriers against discussing AIDS.''
The Vice President has also proposed specific funding for the U.S.
military to work with armed forces in Africa to combat AIDS, an
especially important initiative given the high rates of infection among
soldiers.
I believe that it is crucial that we provide support for these
efforts at least at the level the Administration has called for.
In fact, I am a cosponsor of a bill introduced by my colleague from
California, Senator Boxer, which calls for USAID to make HIV/AIDS a
priority in foreign assistance funding and authorizes $2 billion over
five years, with at least 50 percent targeted at sub-Saharan Africa,
for a comprehensive coordinated effort to combat HIV/AIDS, including
testing, education, treatment, and the provision of medicines to
prevent mother-to-child transmissions.
I should note here that I was also disappointed that the Conference
choose not to include an Administration initiative to provide a tax
credit for the President's Millennium Vaccine Initiative tax credit
proposal. This proposal would create a tax credit to encourage the
development of vaccines for malaria, tuberculosis, HIV/AIDS, or any
infectious disease that causes over 1 million deaths annually
worldwide.
Such a tax credit would encourage the development of a vaccine for
HIV/AIDS. As Dr. Seth Berkley, president of the International AIDS
Vaccine Initiative has put it: ``We need new prevention technologies,
and the most critical one is a vaccine. . . . Ultimately, only a
vaccine can stop the epidemic.''
These actions and policies must be part of a larger development
effort if we are to help these sub-Saharan African countries control
the HIV/AIDS pandemic.
Debt relief must also be part of a this larger development effort. It
is unconscionable that many of these countries are spending more than a
quarter of their precious export earnings on debt service payments to
bilateral and multilateral creditors. The World Bank is correct when it
declares that debt burdens at these levels are unsustainable.
The citizens of most of these countries are extremely poor, and they
are burdened with unsustainable debts built up during the Cold War.
These debts were accrued during the 1970s and 1980s by unaccountable
governments.
Debt service diverts scarce resources away from spending on health
care, health education, and poverty reduction initiatives in these
countries. Debt servicing absorbs up to 40 percent of national revenue
among a majority of countries in sub-Saharan Africa.
We must lead the international community in efforts to write-off
unsustainable debts so these countries can spend more money health
education, infrastructure and services, as well as other development
needs.
Let me conclude and thank the Senate for its forbearance. I am sorry
for my display of emotion. I have watched people die of AIDS. I know
what it is like. I can't imagine what it must be like in Africa where
citizens maybe don't have a home, where they have an enormous cultural
taboo attached to it, where there is no food, there is no medicine, and
to know that a few pills can prevent the transmission of AIDS to a
child for a nominal sum of money, and to know, literally, that in the
coming years this could save 5 to 10 million people.
Just to think of what went on behind closed doors by lobbyists for
pharmaceutical companies is unconscionable. The TRIPS agreement, the
World

[[Page 7423]]

Trade Organization, at a time of national health emergency, permits
compulsory licensing and parallel importing. For these pharmaceutical
companies that have made the kind of money they have made--and I know
they will say they spent millions and millions on research and
development; I have a member of my family who was director of research
for one of the companies that worked on an antiretroviral--the bottom
line is every one of these annual reports shows a substantial increase
in profit.
Yet in little-known countries in sub-Saharan Africa, people are
literally dying by the millions. Today we are considering a trade
initiative bill which aims at giving them a better way of life. What is
the better way of life if you can't live? What is the better way of
life if you are dying of AIDS? What is a better way of life if you were
1 of 5 million orphans born in sub-Saharan Africa? What is a better
life if you were born one of these HIV-infected orphans?
I find the act of pharmaceutical companies in opposing this amendment
unconscionable.
I thank the Chair for its forbearance, and I thank the Senate. I also
thank the administration for doing a major act of conscience in the
production of an Executive order which will allow the purchase of these
drugs at the lowest possible rates.

Exhibit 1

Executive Order

access to hiv/aids pharmaceuticals and medical technologies

By the authority vested in me as President by the
Constitution and the laws of the United States of America,
including section 141 and chapter 1 of title III of the Trade
Act of 1974, as amended (19 U.S.C. 2171, 2411-2420), section
307 of the Public Health Service Act (42 U.S.C. 2421), and
section 104 of the Foreign Assistance Act of 1961, as amended
(22 U.S.C. 2151b), and in accordance with executive branch
policy on health-related intellectual property matters to
promote access to essential medicines, it is hereby ordered
as follows:
Section 1. Policy. (a) In administering sections 301-310 of
the Trade Act of 1974, the United States shall not seek,
through negotiation or otherwise, the revocation or revision
of any intellectual property law or policy of a beneficiary
sub-Saharan African country, as determined by the President,
that regulates HIV/AIDS pharmaceuticals or medical
technologies if the law or policy of the country:
(1) promotes access to HIV/AIDS pharmaceuticals or medical
technologies for affected populations in that country; and
(2) provides adequate and effective intellectual property
protection consistent with the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS Agreement)
referred to in section 101(d)(15) of the Uruguay Round
Agreements Act (19 U.S.C. 3511(d)(15)).
(b) The United States shall encourage all beneficiary sub-
Saharan African countries to implement policies designed to
address the underlying causes of the HIV/AIDS crisis by,
among other things, making efforts to encourage practices
that will prevent further transmission and infection and to
stimulate development of the infrastructure necessary to
deliver adequate health services, and by encouraging policies
that provide an incentive for public and private research on,
and development of, vaccines and other medical innovations
that will combat the HIV/AIDS epidemic in Africa.
Sec. 2. Rationale: (a) This order finds that:
(1) since the onset of the worldwide HIV/AIDS epidemic,
approximately 34 million people living in sub-Saharan Africa
have been infected with the disease;
(2) of those infected, approximately 11.5 million have
died;
(3) the deaths represent 83 percent of the total HIV/AIDS
related deaths worldwide; and
(4) access to effective therapeutics for HIV/AIDS is
determined by issues of price, health system infrastructure
for delivery, and sustainable financing.
(b) In light of these findings, this order recognizes that:
(1) it is in the interest of the United States to take all
reasonable steps to prevent further spread of infectious
disease, particularly HIV/AIDS;
(2) there is critical need for effective incentives to
develop new pharmaceuticals, vaccines, and therapies to
combat the HIV/AIDS crisis, including effective global
intellectual property standards designed to foster
pharmaceutical and medical innovation;
(3) the overriding priority for responding to the crisis of
HIV/AIDS in sub-Saharan Africa should be to improve public
education and to encourage practices that will prevent
further transmission and infection, and to stimulate
development of the infrastructure necessary to deliver
adequate health care services;
(4) the United States should work with individual countries
in sub-Saharan Africa to assist them in development of
effective public education campaigns aimed at the prevention
of HIV/AIDS transmission and infection, and to improve their
health care infrastructure to promote improved access to
quality health care for their citizens in general, and
particularly with respect to the HIV/AIDS epidemic;
(5) an effective United States response to the crisis in
sub-Saharan Africa must focus in the short term on preventive
programs designed to reduce the frequency of new infections
and remove the stigma of the disease, and should place a
priority on basic health services that can be used to treat
opportunistic infections, sexually transmitted infections,
and complications associated with HIV/AIDS so as to prolong
the duration and improve the quality of life of those with
the disease;
(6) an effective United States response to the crisis must
also focus on the development of HIV/AIDS vaccines to prevent
the spread of the disease;
(7) the innovative capacity of the United States in the
commercial and public pharmaceutical research sectors is
unmatched in the world, and the participation of both these
sectors will be a critical element in any successful program
to respond to the HIV/AIDS crisis in sub-Saharan Africa;
(8) the TRIPS Agreement recognizes the importance of
promoting effective and adequate protection of the
intellectual property rights and the right of countries to
adopt measures necessary to protect public health;
(9) individual countries should have the ability to take
measures to address the HIV/AIDS epidemic, provided that such
measures are consistent with their international obligations;
and
(10) successful initiatives will require effective
partnerships and cooperation among governments, international
organizations, nongovernmental organizations, and the private
sector, and greater consideration should be given to
financial, legal, and other incentives that will promote
improved prevention and treatment actions.
Sec. 3. Scope. (a) This order prohibits the United States
Government from taking action pursuant to section 301(b) of
the Trade Act of 1974 with respect to any law or policy in
beneficiary sub-Saharan African countries that promotes
access to HIV/AIDS pharmaceuticals or medical technologies
and that provides adequate and effective intellectual
property protection consistent with the TRIPS Agreement.
However, this order does not prohibit United States
Government officials from evaluating, determining, or
expressing concern about whether such a law or policy
promotes access to HIV/AIDS pharmaceuticals or medical
technologies or provides adequate and effective intellectual
property protection consistent with the TRIPS Agreement. In
addition, this order does not prohibit United States
Government officials from consulting with or otherwise
discussing with sub-Saharan African governments whether such
law or policy meets the conditions set forth in section 1(a)
of this order. Moreover, this order does not prohibit the
United States Government from invoking the dispute settlement
procedures of the World Trade Organization to examine whether
any such law or policy is consistent with the Uruguay Round
Agreements, referred to in section 101(d) of the Uruguay
Round Agreements Act.
(b) This order is intended only to improve the internal
management of the executive branch and is not intended to,
and does not create, any right or benefit, substantive or
procedural, enforceable at law or equity by a party against
the United States, its agencies or instrumentalities, its
officers or employees, or any other person.
William J. Clinton.

The PRESIDING OFFICER (Mr. Thomas). Under the previous order, the
Senator from Wisconsin is recognized.
Mr. FEINGOLD. I ask unanimous consent, at the conclusion of my
remarks, a Republican Senator be recognized to speak, if one seeks
recognition, and that Senator Hollings be the next speaker recognized
to speak thereafter.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. FEINGOLD. Mr. President, let me first say the senior Senator from
California certainly should not apologize for her emotion. If there
ever was an issue that deserves such a powerful display of passion and
emotion, it is this issue of the AIDS crisis in Africa and the
outrageous nerve of these pharmaceutical companies of removing this
modest provision that the Senate unanimously placed in the bill in the
conference report. It is an abysmal moment.
I thank the Senator for her leadership, her passion, and for her
willingness to continue this fight that we all will continue as long as
it takes.
Before we go any further with this conference report, I come to the
floor

[[Page 7424]]

to follow on the comments of the Senator from California to make
something clear to my colleagues. I think we can do better than this.
We have lost our way with this new Africa policy. We have to chart a
new course if we are to seek a better world for Africa and for America.
I say this as a Senator, an American, and as a human being who has
been to Africa, seen its promise, and been appalled by its suffering. I
come here to express my disappointment about the African Growth and
Opportunity Act and my deep dismay about how and why the Feinstein-
Feingold amendment on the HIV/AIDS crisis was kept out of the
conference report.
Very simply, I am talking today about the future of U.S.-Africa
policy. We have a role to play in Africa's future and we have to decide
what that role is going to be. Some in this body think AGOA is the
right example of what our role in Africa's future should be. The
African Growth and Opportunities Act supporters believe this
legislation is somehow a landmark, that it represents a real
opportunity for growth on the continent, a new way of thinking about
Africa. They want us to believe, as they believe, that to reject it
would be to reject all engagement with the continent and, indeed, to
reject all of the enterprise and energy of the people of Africa.
But they are wrong. This bill is deeply flawed. For 7 years I have
served on the Foreign Relations Subcommittee on Africa and I have
committed myself to supporting democratization, peace, and development
in the many countries of that continent. I support engagement with
Africa as strongly as any Member of this body. I am deeply concerned
about the dearth of economic ties between the people of the United
States and those of the African Continent. The current level of trade
between us is depressingly small. Africa represents only 1 percent of
our imports, 1 percent of our exports, and only 1 percent of our
foreign direct investment.
So if the question is, Should something be done to stimulate our
trade with Africa, the answer is ``absolutely.'' But I urge this body,
let's not pretend we are now somehow debating a comprehensive trade
package for Africa, for this bill is not in any sense comprehensive.
Let's not fail to address the need to build an environment, an actual
environment that will foster and sustain mutually beneficial economic
relationships. If we fail to assemble the components of that
environment in this trade package, it cannot be called comprehensive,
and I would certainly say it should not even be passed.
There really are only two defensible views of this bill. It either
does virtually nothing at all, or it does actual harm. This legislation
does very little for Africa. The trade benefits we are talking about
are not terribly significant, primarily making African states eligible
for temporary preferential access to the U.S. markets for textiles and
apparel. Many of Africa's primary exports are not addressed at all by
this legislation. This legislation does little to address the African
context for economic growth and that context is a challenging one. It
is a context of boundless potential amid a web of obstacles.
Economic growth in sub-Sarahan Africa faces the obstacle of a
staggering $230 billion in bilateral and multilateral debt. Africa's
debt service requirements now take over 20 percent of the region's
export earnings. How can Africa, to which the Presiding Officer has
certainly devoted a lot of his attention, become a strong economic
partner when its states must divert funds away from schools, away from
health care, and away from infrastructure in order to service this
crushing debt burden? How can we talk about economic engagement and
simply pay lip service to these painfully obvious realities?
I am sorry to say in several ways I think this legislation actually
would do harm. By addressing seriously only one industry, the textile
industry, it fails to support the kind of diversification that any
economy, including African economies, need to regain strength and
stability. I fear AGOA also fails to adequately tackle the serious
problem of transshipment.
Transshiment is a practice whereby, for example, producers in China
and other third party countries establish sham production facilities in
countries which may export to the United States under more favorable
conditions. Then these producers ship goods, made in their factories at
home and meant for the U.S. market, to the third country. In this case
it would be an African country. They pack it or assemble it in some
minor way and send it off to the United States of America with a new
label ``Made In Africa,'' thereby enjoying all the trade benefits that
label would bring.
As I told my colleagues on a number of occasions, and as I think they
know, transshipment is really a very serious problem. Approximately $2
billion worth of illegally transshipped textiles enter the United
States every year. The U.S. Customs Service has determined that for
every $1 billion of illegally transshipped products that enter the
United States, 40,000 jobs in the textile and apparel sector are lost.
In this regard, just to give you a sense of the thinking that goes on
behind this kind of scam, I would like to share some of the words from
the People's Republic of China. This is a quote taken directly from the
official web site of the Chinese Ministry of Trade and Economic
Cooperation. This is the quote:

There are many opportunities for Chinese business people in
Africa. . . . Setting up assembly plants with Chinese
equipment, technology and personnel could not only greatly
increase sales in African countries, but also circumvent the
quotas imposed on commodities of Chinese origin imposed by
European and American countries.

There it is, right on their web page. It is not hard to see that
those who would engage in transshipment are not too worried about the
protections we currently have in place to guard against it. This same
visa system that has failed us in the past is the basis, again, for the
allegedly effective AGOA protections. In fact, the African Growth and
Opportunity Act does not require that Africans themselves be employed
at firms that are receiving the trade benefits. This is progress? If
nothing else, I think it raises a red flag for my colleagues, when they
consider the African Growth and Opportunity Act. This should be a
crystal clear signal: Nothing in this Act ensures that whatever
opportunities this legislation may create--there is no guarantee these
will be opportunities for Africans, for citizens of African countries.
AGOA does not mention environmental standards at all, but any plan
for sustainable economic development must include some notion of
environmental protection. I think this is especially true of a
continent like Africa where, in some countries, 85 percent of the
people live directly off the land. We are all affected when logging and
mining deplete African rain forests and increase global warming.
We all lose when species unique to Africa are lost to hasty profit-
making schemes, hatched without regard to sustainability or long-term
environmental effects. Environmental quality also has serious
implications for peace and stability in the region. As we have seen in
the Niger Delta, environmental degradation can lead to civil unrest.
Responsible trade policies must adequately address human rights and
environmental issues, not just because it is the right thing to do but
because also in the long run it will create a better business climate
for Africans and Americans alike.
In addition, the African Growth and Opportunity Act fails to address
the critical role that development assistance ought to play in
promoting African growth and opportunity. That failure has raised an
alarm here at home and internationally. The perception is that the
United States has deluded itself into believing that a small package of
trade benefits, benefits which may not actually benefit Africans
themselves, can replace a responsible and well-monitored program of
development assistance. I am afraid that this inevitably will cast
doubt on the U.S. commitment to development in Africa.
I care about each of the objections I just raised to this bill. But
let me tell

[[Page 7425]]

you, just as the senior Senator from California indicated, more than
anything else what makes me doubt the U.S. commitment to development in
Africa is that this conference report turns a blind eye to the AIDS
crisis by excluding the modest Feinstein-Feingold amendment. As the
ranking member of the subcommittee on Africa, I have always felt very
strongly about the issue of AIDS in Africa. I tried to raise it last
year and this year in the context of the Africa trade debate. I raised
it on many occasions in meetings with African heads of state.
I applaud the U.N. Security Council's decision to address the crisis
earlier this year, and I do support the administration's call to
increase the resources directed at this AIDS crisis. But what I cannot
support, what I cannot applaud, and what I cannot even understand is
how this body can pass up an opportunity to take just one small step
toward addressing the AIDS crisis in Africa. I am referring to the
Feinstein-Feingold amendment. It was very modest. It simply prohibited
Federal money from being used to lobby a government to change TRIPS-
compliant laws, allowing access to HIV drugs. Our amendment was taken
out in the conference committee. So now this bill, which makes a weak
attempt to address Africa trade as it is, does nothing--an African
Growth and Opportunity Act does nothing to actually address the HIV/
AIDS crisis that affects every aspect of the African economy, not to
mention every African life.
We have before us a conference report which does nothing to fight the
AIDS crisis that is ravaging Africa, threatening to destroy its
economies and decimate its communities. Why? How can it be that we will
debate a bill of this nature and ignore the single most important issue
facing sub-Sarahan Africa today? Why is it that one modest provision
included by this Senate, the Feinstein-Feingold amendment regarding
HIV/AIDS drug in Africa, was removed from this bill?
When the Senate was debating that legislation last year, Senator
Feinstein and I offered our amendment, which was readily accepted by
the bill's managers, Senators Roth and Moynihan, to address a
critically important issue--an issue relating to Africa's devastating
AIDS crisis; an issue that has cast a dark shadow on United States-
African relations in the past.
Our amendment was simple. It prohibited the U.S. Government or any
agent of the U.S. Government from pressuring African countries to
revoke or change laws aimed at increasing access to HIV/AIDS drugs, so
long as the laws in question adhere to existing international
regulations governing trade. Quite simply, our amendment told the
executive branch to stop twisting the arms of African countries that
are using legal means to improve access to HIV/AIDS pharmaceuticals for
their people.
The Agreement on Trade Related Aspects of Intellectual Property
Rights, or TRIPS, allows for compulsory licensing in cases of national
emergency. Approximately 13 million African lives have been lost since
the onset of the crisis. According to the Rockefeller Foundation's
recent report, ``on statistics alone, young people from the most
affected countries in Africa are more likely than not to perish of
AIDS.'' Consider that I say to my colleagues: more likely to perish
than not. If these do not constitute emergency conditions, then I do
not know what does.
This was a very modest amendment, but the final version of the
amendment discussed by the conferees was even more modest. It was a
true compromise. It was not as strong as I would have liked it to be,
and I worked hard to keep it strong, but even the compromise pushed our
policy closer to the right thing. I again thank the Senator from
California, Mrs. Feinstein, the Senator from New York, Mr. Moynihan,
and the Senator from Delaware, Mr. Roth, and their staffs for working
so hard to keep this amendment in at the conference level.
But despite these efforts, despite the concessions that Senator
Feinstein and I made, despite the fact that this is the right thing to
do, the Feinstein-Feingold amendment was stripped in conference. The
opposition to our amendment is baffling. How do the conferees who
killed this provision justify pressuring these countries, where in some
cases AIDS has reduced life expectancies by more than 15 years, not to
use all legal means at their disposal to provide effective medicines
for their citizens? Without broader access to these drugs in Africa,
more people will suffer, more people will die--that is a simple fact.
I cannot imagine that ordinary Americans are urging their
representatives to oppose the Feinstein-Feingold amendment. I cannot
imagine that anyone would try to prevail upon my colleagues to oppose
this measure--except perhaps for pharmaceutical companies. The
pharmaceutical industry does not fear losing customers in Africa,
because they know that Africans simply cannot afford their prices. But
they do fear that taking this modest step in this time of crisis could
somehow, in some ill-defined scenario in the future, cut into their
most important consideration: their bottom line.
That brings me to the calling of the bankroll.
From time to time on this floor when we debate the issues, I review
some facts and figures that most of my colleagues are unwilling to
discuss.
I have dubbed it the ``calling of the bankroll''--a chance for my
colleagues and the public to consider not just the issues, but the
money that drives the issues in our democracy today.
I can tell you, the pharmaceutical industry is certainly no exception
when it comes to playing the political money game--in fact, huge
donations to the parties are the rule in the pharmaceutical industry.
I would like to discuss a few of the companies that fought against
the Feinstein-Feingold amendment, not in terms of policy, although I
have certainly done that and will continue to, but in terms of
political donations.
All the figures I am about to cite are for the first 15 months of the
current election cycle--all of 1999 and the first 3 months of this
year.
I will start with Pfizer, which is one of several pharmaceutical
giants that rank among the top soft money donors in 1999, and with good
reason. Pfizer and its executives gave more than $511,000 in soft money
during the period, including a $100,000 contribution earlier this year.
Pfizer was also a top PAC money donor in its industry during the
period, with more than $242,000 to Federal candidates during the
period.
Then there's Bristol Myers Squibb, another top soft money donor,
which, with its executives, gave nearly $529,000 in soft money to the
parties, including two $100,000 contributions during the period.
Bristol Myers Squibb also gave more than $146,000 in PAC money during
the period.
Merck and Company gave more than $51,000 in soft money and nearly
$168,000 in PAC money during the period.
And finally, Glaxo Wellcome and its executives gave more than
$272,000 in soft money to the parties and gave more PAC money than any
other pharmaceutical company during the period--more than $291,000.
Those are the donations of some of the pharmaceutical companies that
fought so hard against the Feinstein-Feingold amendment. They are
donations that signal influence, power, and political clout--political
clout that most Americans could never hope for, and no African living
with HIV could ever dream of. In the fight over the Feinstein-Feingold
amendment, the pharmaceutical companies clearly got their way, while
millions of Africans suffering from HIV and AIDS were left without even
one glimmer of hope from this body or this bill.
The people of Africa desperately need hope in the midst of the AIDS
crisis. I am going to share some numbers, along the lines of other
speakers, that put the staggering AIDS crisis in Africa in stark
relief.
The disease is already the fourth biggest cause of death in the
world. In at least five African countries, more than one adult in five
has HIV.
Economic growth in Africa faces the obstacle of a devastating HIV/
AIDS epidemic. In the course of 1998, AIDS was responsible for an
estimated 2 million African deaths. That is 5,500

[[Page 7426]]

deaths a day. At least 12 million Africans have been killed by AIDS
since the onset of the crisis. Africa accounts for over half of the
world's cases of HIV. The realities of a continent gripped by this
disease are truly horrifying--lines outside cemeteries as families wait
to bury the dead, and morgues that operate around the clock, 7 days a
week. I am told in Harare, Zimbabwe there are 24-hour morgues.
For Africa's children, it may be most horrifying of all. Eighty-seven
percent of the world's HIV-positive children live in Africa. According
to World Bank President James Wolfensohn, the disease has left 10
million African orphans in its wake. Their lives are that continent's
future. Their chronic illness and their deaths each day erode a little
more of Africa's promise. It is difficult to see how the United States
can enjoy mutually beneficial trade relations with Africa unless we
commit ourselves to addressing the HIV/AIDS crisis on a scale beyond
anything we have done before.
In Botswana, Namibia, Zambia and Zimbabwe, 25 percent of the people
between the ages of 15 and 19 are HIV positive.
One report by ING Barings, an investment bank, said that almost 19
percent of all skilled workers in South Africa will have HIV by 2015.
To make matters worse, food production in southern Africa has been
impacted by the crisis. For example, maize production in Zimbabwe
declined 61 percent last year due to illness and death from AIDS.
By 2010, sub-Saharan Africa will have 71 million fewer people than it
would have had if there had been no AIDS epidemic.
My recent trip to ten African countries only renewed my resolve to
address this matter with the urgency and seriousness it deserves.
When we were in Namibia, I saw a group of HIV-positive citizens pull
up to a meeting in a van with curtained windows, and they hurried to
the safety of the meeting room as soon as they arrived. They were
fearful. They were afraid that their identity would be revealed, and
that the stigma still attached to the disease would cause them to lose
their jobs and maybe even to be disowned by their own families. It was
shocking--in a country gripped by the epidemic, people are still afraid
to acknowledge the crisis.
In Zambia I visited an orphanage of sorts, where 500 children, many
of them orphaned when AIDS killed their parents, gathered by day.
This isn't even an orphanage where you get to stay at night. It is
just a place where a bunch of kids who don't have any parents hang out
during the day before they go out to the streets at night to sleep. At
night, there is only room for 50 of them--the rest must make their own
arrangements, and many end up sleeping on the streets, sometimes
prostituting themselves--thereby risking exposure to HIV in their own
struggle to survive. By the end of this year, an astonishing 10.4
million African children under 15 will have lost their mothers or both
parents to AIDS--90 percent of the global total of AIDS orphans.
In Zimbabwe, some estimates indicate that life expectancy has
precipitously dropped from 65 to 39 years. Let me repeat that: life
expectancy in Zimbabwe dropped from 65 to 39. Walking past the
Parliament building one day, I asked how old one had to be to become a
legislator there in Zimbabwe. What was the answer? The answer was 40.
Life expectancy is 39, but you have to be 40 to be elected to the
legislature. That exchange helped me to grasp how far-reaching the
consequences of this disease really are--no society is structured in a
way that prepares it to deal with an unchecked epidemic like AIDS. In
southern Africa, life expectancy at birth is dropping at a frightening
rate. According to one recent U.N. report, expected life spans in the
region will drop from 59 years in the early 1990s to just 45 by the
year 2010.
In July 1999, the National Institutes of Health released a report on
the effectiveness of a drug called nevirapine--NVP--in preventing
mother-to-child transmission of HIV. Studies indicate that this drug
can reduce the risk of mother-to-child transmission by more than 50
percent.
NVP is given just once to the mother during labor and once to the
baby within 3 days after birth. It cost $4 per tablet. This relatively
simple and inexpensive drug regimen has created an unprecedented
opportunity for international cooperation in the fight against the
vertical transmission of HIV.
And Uganda is making real headway with regard to prevention. There
was a time in Uganda when, of the women coming to the reproductive
health clinics, 35 to 40 percent of them tested positive for HIV. But
since 1992, the Ugandan Government's very frank and high-profile public
education efforts have helped to reduce the incidence of HIV infection
by more than 15 percent. Uganda has shown that something can be done.
Uganda has demonstrated that prevention can work.
But despite these positive signs, there are many fronts on which
there has been very little progress. Virtually no one has access to
drugs to treat the disease. Prevention is unquestionably the most
important element of the equation, but treatment cannot be ignored.
Poverty should not be a death sentence--not when the infectious disease
that is destroying African society can be treated.
The AIDS crisis in Africa is exactly what the TRIPS agreement was
meant to address. This is a crisis, an emergency on an incomprehensibly
vast scale. This is the rare and urgent situation that calls for
something beyond a dogmatic approach to intellectual property rights.
If allowing for a TRIPS-compliant response seems expensive, just
think how expensive it will be, in the long run, not to do so. Even
beyond the human tragedy, there are vast economic costs to this
epidemic. AIDS affects the most productive segment of society. It is
turning the future leaders of the region into a generation of orphans.
It is simply unconscionable for the U.S. Government to fight the
legal efforts of African states to save their people from this plague.
I cannot imagine why any of my colleagues would support such action.
Those dissatisfied with the TRIPS agreement should focus their efforts
on changing it--not on twisting the arms of countries in crisis who
seek only to protect their people from sickness and death in a manner
that complies fully with international law.
Again, how could the irresponsible and callous decision to strip the
Feinstein-Feingold amendment from the conference have been made? I have
some idea, as I said before. Some may have bowed to the pressure of the
pharmaceutical industry. And some members just don't get it.
But this body has to ``get it.'' We don't have time to posture while
HIV infects more than 15,000 young people each day, and the most
productive segment of a society is wiped out by disease. We cannot
waste precious legislative opportunities as millions of orphans grow up
on Africa's streets, without any guidance or education. After
witnessing the shocking violence that resulted, in large part, from the
masterful manipulation of disenfranchised youth in West Africa over the
last decade, I think we all have to take this threat seriously, and
acknowledge that the threat is fueled each day by the withering scourge
of AIDS that today is galloping through so much of Africa and other
parts of the developing world.
Mr. President, until recently this Senate has been moving in the
right direction on these issues. I have been pleased to work with many
of my colleagues in a bipartisan effort--I do want to mention in
particular the Presiding Officer, the Senator from Tennessee for his
efforts in this regard--we have worked together to raise the profile of
the epidemic and to work toward a comprehensive package aimed at
addressing this crisis. It disturbs me a great deal to think that
Members of this body have somehow failed to hear us, or perhaps refused
to listen.
As long as we fail to grasp the magnitude of the epidemic and its
consequences, AIDS will continue to take its terrible toll on families
and communities, on economies, and on stability around the world. And
as long as

[[Page 7427]]

we pass legislation like AGOA, we fail to seriously address virtually
every crucial aspect of our trade relationship with sub-Saharan Africa.
Everytime we make this kind of weak attempt to improve our trade
relationship with Africa, we admit that we are willing to dismiss
African countries' problems, and that we are comfortable ignoring the
continent's boundless promise.
I care deeply about Africa and about U.S. policy towards Africa, and
my colleagues know that. But I am here today not just because of my own
concerns, but because of others--because I know how deeply they care
about Africa, and I have heard them voice their very serious concerns
about AGOA.
African-American leaders ranging from Cornel West to Randall Robinson
have opposed the African Growth and Opportunity Act.
Last year, a group of African-American Ministers representing
communities from Massachusetts and Mississippi, California and New
Jersey, Virginia and Illinois came to Capitol Hill to express their
opposition to the African Growth and Opportunity Act. I would like to
submit the statement of Reverend Alexander Hurt of the Hurt Inner-City
Ministries for the Record.
Here is what he said.

I have never fully felt like an American until the day that
I watched my President land in the land of my fathers. It was
like introducing two old friends to each other. That the AGOA
is in any way associated with that trip is saddest part of
this debate. There are millions of African-Americans who,
like me, connect the President's trip of Africa with a start
of a new kind of relationship between not only Africa and
America, but Africa and the West. AGOA closes that
possibility. For it represents not a new future, but a return
to the past.
America in a period of abundance that is unknown in human
history, can not be moved to reach out to Africa to help
starving nations. In the end we must decide if we will have a
foreign policy that reaches out with a hand toward nations as
equals, or with a hammer and pound them into subjection. Few
things have changed with America's position toward Africa.
What was once done with the canon and the gun is now being
done with medicine and debt.

I have heard African voices raise the alarm about AGOA as well as
American ones. The Congress of South African Trade Unions, COSATU, has
issued a statement opposing the African Growth and Opportunity Act.
A statement issued by 35 African NGOs--including Angola's Journalists
for the Environment and Development, Kenya's African Academy of
Sciences, South Africa's International People's Health Council and
Zambia's Foundation for Economic Progress--strongly opposed AGOA.
Women's groups have spoken out as well. WiLDAF--Women in Law
Development in Africa, a coalition of African women and women's
advocacy groups, opposes the African Growth and Opportunity Act, as
does Women's EDGE, a coalition of international development
organizations and domestic women's groups.
The Africa-America Institute organized focus group discussions in
eight African countries and the U.S. to foster discussion of proposed
U.S.-Africa trade legislation. They found that AGOA will not contribute
to African development unless the U.S. and other donor countries also
increase investments in African human resource development and take
measures to relieve Africa's debt burden.
I know that others have voiced support for AGOA, and I don't question
their motives. Some of those supporters believe that this is the only
game in town, and that a deeply flawed Africa trade bill is better than
no bill at all. They are wrong. This bill should not become law.
Originally, I tried to make this bill better. I proposed alternative
legislation, the HOPE for Africa Act. It was based largely on the
efforts of my colleague from the House, Congressman Jesse Jackson, Jr.,
who has been an important leader on this issue.
The provisions of the HOPE bill pointed the way toward a more
comprehensive and a more responsible U.S.-Africa trade policy.
Mr. President, I wanted to amend AGOA to make goods listed under the
Lome Convention eligible for duty-free access to the U.S., provided
those goods are not determined to be import-sensitive by the President.
These provisions would mean more trade opportunities for more African
people.
My proposals clearly spelled out the labor rights that our trade
partners must enforce in order to receive benefits. They also contained
a monitoring procedure that involves the International Federation of
Trade Unions, so that violations would not be glossed over at the
expense of African workers.
I proposed stronger human rights language, and incentives for foreign
companies operating in Africa to bring their environmental practices
there up to the standards that they adhere to at home.
I proposed tough transshipment protections that give American
entities a stake in the legality of the products they import. I wanted
to be sure that Africans and Americans really would benefit from our
U.S.-Africa trade policy.
In that same vein, I proposed that trade benefits be contingent upon
the level of African content in products and the employment of African
workers.
I proposed that the U.S. re-assert its commitment to responsible,
well-monitored development assistance for Africa.
Mr. President, I would have been irresponsible not to propose changes
to AGOA to address the factors crippling Africa's economic potential
today--debt, HIV/AIDS, and corruption.
I urged this Senate to include anti-corruption provisions, to address
debt relief, to prioritize HIV/AIDS prevention and treatment, and to
address the issue of Africa's intellectual property laws, to ensure
that U.S. taxpayer dollars are not spent to undermine the legal efforts
of some African countries to gain and retain access to low-cost
pharmaceuticals.
Mr. President, if all of this sounds ambitious, it was. Any plan to
seriously engage economically with Africa must be ambitious. We must be
willing to do what is necessary to knock down the obstacles to a
healthy, thriving and just commercial relationship between the
countries of Africa and the U.S. The bill before us falls far short of
the minimum meaningful effort. The rhetoric that surrounds the African
Growth and Opportunity Act is certainly ambitious. It is the content
that is insufficient.
We must demand more of a U.S.-Africa trade bill than AGOA has to
offer. Ambitious plans can lead to rich rewards for both America and
Africa. Every time we turn our backs on a strong economic partnership
with African nations, we pass up an opportunity to bring stability,
democracy, and prosperity to the continent.
We can do better than this, Mr. President. We must do better. We have
veered dangerously off course with this legislation and with this
conference report. It is time to reconsider this bill and the direction
of U.S.-Africa policy because, very simply, our current course promises
failure of U.S. policy toward Africa and decades more of despair and
lost opportunity for Africa's people.
Mr. President, I yield the floor.
The PRESIDING OFFICER (Mr. Gregg). The Senator from Kentucky is
recognized.
Mr. BUNNING. Mr. President, I rise in opposition to the conference
report to H.R. 434, the Africa/CBI bill.
This is a bad proposal, and it should not become law. In fact, the
only good thing that I can say about it is that it's not as bad as it
could have been. Still, it should not pass.
In recent years, we have lost over 5,000 textile jobs in southern
Kentucky. Nationwide, we have lost over 100,000 textile jobs since
NAFTA. They're gone. They're not coming back.
Now there aren't many left, and I am not going to support any
legislation that I believe is going to ship the rest of these jobs
overseas.
But, that's just what this bill would do. It would suspend quotas and
duties on clothing made from many African-made fabrics. It calls for
duty-free imports of T-shirts and fabric from the Caribbean.
In short, it's going to make it cheaper and more enticing for the
textile

[[Page 7428]]

companies to locate overseas, where labor costs are lower, and to take
jobs with them.
The bill also extends duty-free treatment to other ``import
sensitive'' items like certain types of watches, electronic articles,
steel products, footwear, handbags, luggage, and glass products.
I respect the good intentions of those who support this bill in
wanting to help poor countries in Africa and the Caribbean. But I don't
think we should do that at the expense of American workers and their
jobs.
Furthermore, this bill simply looks like a one-way street to me. It
makes it easier for African and Caribbean nations to import products to
the United States, but as far as I can tell it doesn't do much for the
United States.
Of course, our economy is a lot bigger and stronger than all of
their's put together, but that doesn't mean we just give away part of
the store for free.
Mr. President, I believe strongly in free trade. I have long
supported fast-track legislation to give the President broad authority
to negotiate trade agreements. And I voted for the GATT legislation the
last time it came before Congress.
But I also believe in fair trade, and this bill isn't fair.
As I said earlier, this bill is bad but it is not as bad as it could
have been. When Congress first started working on this bill over 5
years ago, it was intended to provide NAFTA-like treatment to imports
from Caribbean nations. Fortunately, this bill doesn't go that far.
But, it still follows the same flawed concepts that are behind NAFTA
and have driven at least 7,000 Kentucky jobs south to Mexico.
Supporters of this bill say that economic growth and investment in
African and Caribbean nations will benefit us in terms of increased
exports and increased domestic employment because of those exports.
Of course we want healthy economies in this area to help strengthen
the growth and stability of democracy. But it doesn't make sense to
sacrifice a United States industry to do it.
As I pointed out on the Senate floor last year, the Caribbean Basin
apparel and textile business is already booming. Last year, apparel and
textile exports from the Caribbean and Central America to the United
States grew 9 percent, double that of the United States economy.
Passing this bill simply rewards the U.S. companies that have already
moved offshore, and entices others to do the same. In the process, we
stand to lose another 1.2 million jobs in the apparel and textile
industry.
We keep talking about creating a level playing field when it comes to
fair trade. But this bill pulls the field right out from under U.S.
industries which have already had an uphill fight just to stay alive.
This is a flawed bill and I'm going to vote against it. I just don't
see where it's in our interest to make it easier for other countries to
compete with American industries, and to entice U.S. companies to
relocate abroad.
This bill is not fair to the American worker.
I urge my colleagues to oppose it and any amendments that even try to
make it better.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
South Carolina is recognized.
Mr. HOLLINGS. Mr. President, as one would say on the bill affecting
textiles, in the famous words of President Reagan, ``Here we go
again.''
This is about more than textiles and textile jobs. It involves the
economic strength of the Nation. It involves its political strength.
The middle class is disappearing fast. We talk about the digital
divide. I want to comment on the disappearance of the middle class
itself.
Let me go right to textiles.
I was a witness some 40 years ago relative to the textile industry.
In that particular time period, 10 percent of America's consumption in
textiles was going to be represented in imports. That was a threat not
only to industry itself but to the Nation.
Specifically, I testified before the International Trade Commission.
At the time, President Eisenhower was in office. We went by to see
General Persons, his Chief of Staff. He said: Don't worry, you will win
the case. But in June we got an adverse decision.
At that time, with that adverse decision, I went to our friend,
Senator John F. Kennedy, a candidate for the Presidency of the United
States, and discussed at length the particular problem. We agreed on an
exchange of letters, so to speak, with me outlining the problem, and in
turn Senator Kennedy outlining what he thought would be a solution.
We all know then, that Kennedy was elected President. Early in 1961,
we had a conference at the White House. He said: In line with what I
outlined to you in the campaign, I want it to come under the national
security provisions of our trade laws.
So, hark, ye, all who talk and lament that we haven't passed a trade
bill in 6 years. It is a good thing we did not pass one, because what
we really need to do is get competitive and stop treating foreign trade
as foreign aid. This is not a Finance Committee. This is a Foreign
Relations Committee. It is a giving away the manufacturing backbone of
the United States of America.
Under that national security provision to protect the textile and
apparel industry, you had to have a hearing and a determination that
the particular commodity, or article, or product was important to our
national security.
I will never forget it. We set up the hearing with Secretary Ball--he
was the undersecretary for Dean Rusk at State--Secretary Goldberg of
Labor, Secretary Freeman of Agriculture, Secretary Hodges of Commerce.
A few people remember that Senator Kennedy had a bipartisan Cabinet
with a Republican Secretary of the Treasury, Mr. Dillon, and a
Republican Secretary of Defense, Mr. McNamara.
We had those five. We brought the witnesses. They made the finding
that, next to steel, textiles were second most important to our
national security. I remember the particular ``wag'' at that time,
that, look, you couldn't send them to war in a Japanese uniform. So we
had to be able to make the clothing and the uniforms.
As a result, President Kennedy on May 13, 1961, promulgated his
Seven-Point Program relative to the importation of textiles.
Mind you me: We feared at the time that 10 percent of America's
consumption in textile products was being imported or just about to be
imported.
As I look at the Chamber now, two-thirds of the clothing I am looking
at is imported--not 10 percent. With this particular conference report,
there isn't any question that certain parts of the textile industry
will immediately disappear, and the rest of it in a 4- or 5-year period
will be on the ropes.
You say: Why, oh, why, Senator from South Carolina, are you
objecting? Because the American Textile Manufacturers Institute is in
favor of the conference report
That selfish crowd. I call them selfish in a studied way. I authored
five textile bills that have gotten through this Senate. I had four of
those textile bills go through the House and the Senate, and four of
them were vetoed. I know from whence this particular Senator got the
votes for these bills. Yes. It was the apparel group in America, the
ones who make the clothing.
The little ditty is: We produce for America. We have the fine middle-
class jobs, and we are working around the clock. And, yes, we are the
most productive textile workers in the world.
The industry itself has invested some $2 million a year over the past
15 years, keeping up with modernization, with the best of machinery,
the best of approaches in employment.
I have made many a sneak through and they don't want to let a
Democrat in the plant. But I would sneak in on one floor and duck down
into the plant on the bottom floor. It is totally automated in the
weave room with the looms, spinning away. They used to have 115
employees, and now have only 15. They have cut back on the employees
and put in the most modern machinery. The worker, the machinery,

[[Page 7429]]

and the industry is the most productive. It is not a question of
productivity. We don't have to get globalization and competition so we
can make them productive. The politicians run around on the floor of
the Senate and some of them have never worked for a living. They don't
know what productivity is.
We have quite an opposition. Let me say a word about that. When we
first started out, we only had, say, the Japanese Government, with
their representatives coming in to talk. But soon after, Chase
Manhattan and Citicorp made a majority of their money outside of the
United States.
So, in addition to Koreans and Japanese, now we have the
international banks. Along with the international banks came the
international groups funding campus studies with contributions and they
began to get the expert studies off the campuses with the consultants.
So we had the banks, the universities, the consultants, and the foreign
operation. Then, of course, we had the retailers. They wanted to sell a
cheap product. So we had the National Retail Federation. They are the
biggest supporters of the print media in America, the newspapers. They
make their money off of retail advertising. So we have these
editorialists, who never bit into customs or the trade practices,
writing about free trade, free trade, free trade.
So we have the retailers. Then go to the book ``Agents of
Affluence,'' published about 10 years ago. At that time, Japan was
paying $113 million for over 100 representatives in Washington, DC, to
look out for their industry, their game of market share.
This bill is all backed up. The white tent is out. We saw it in
NAFTA. Only they are afraid to bring the tent down. They are meeting in
the White House itself. They are all getting together and running
around with the former Presidents, the former Secretaries of State. The
former chairman of the Finance Committee, the distinguished ranking
member, Senator Moynihan of New York said: When a freshman at City
College of New York, I heard that corporations ran America. He was
telling corporate America to get out and get the vote.
We had that crowd and we have my ATMI, which is my point. They don't
know from ``sic 'em'' about competition. They know extremely well how
we got the votes from Evelyn Dubrow and the apparel workers of America.
That's how we passed those bills. The cloth manufacturers have divorced
themselves from the apparel manufacturers and said: Fend for yourself.
We've got a better offer and we are going to start free trade. It
doesn't make any difference so long as we can get fabric forward. If we
can get the cloth, we can sell it to them in Africa, in the Caribbean
or in Mexico. We will let any trade bill go so long as we can sell. But
fend for yourself. You are out of business.
Let me tell you how many jobs we have now that are bound to be gone
because the States will be inundated. Alabama has presently 26,500
apparel jobs. Goodbye, Alabama. I want to see those Senators come here
now.
California, 146,900 textile, middle-class American jobs, earning $8
and sometimes $10 or more an hour. Middle class--I want to emphasize
that. Henry Ford said he wanted to make sure the person manufacturing
his product was capable of buying it. So he put in the wage scale which
allowed that and he started developing a strong middle class.
Florida, let's see the Florida Senators come here and say: Free
trade, free trade. Forget about the 19,700 apparel jobs. They are gone.
Why?
Because of us, because of us as Senators and Members of Congress,
setting the standard of living for industrial America. We say before
you can open up that ABC Manufacturing Company, that what you need do,
first, is have a minimum wage, then Social Security, then Medicare,
then Medicaid, then plant closing notice, then parental leave, then
clean air, then clean water, then safe working machinery, then a safe
working place--or we sent OSHA after you. Republicans and Democrats all
agree, before you open the front door, you better have all of that in
the plant or you are in violation of Federal law. You are out of step
with the standard of American living.
But if you can take off and get your T-shirts made in Bangladesh, you
have none of those requirements, and pay one cent an hour. In Burma, it
is 4 cents an hour. In China, it is 23 cents an hour. In the country of
Colombia, it is 70 to 80 cents an hour. In the Dominican Republic, it
is 60 cents an hour. In El Salvador, it is 59 cents an hour. In
Guatemala, it is 37 to 50 cents an hour. In Haiti, it is 30 cents an
hour. In Honduras, 43 cents an hour. In India, 20 to 30 cents an hour.
In Indonesia, 10 cents an hour. Malaysia, $1 an hour. Mexico, 50 to 54
cents an hour. Nicaragua, 23 cents an hour. Pakistan, 20 to 26 cents an
hour. Peru, 90 cents an hour. The Philippines, 58 to 76 cents an hour.
Romania, 24 cents an hour. Sri Lanka, 40 cents an hour. Thailand, 78
cents an hour.
As you well know, 30 percent in manufacturing is your labor cost, and
you can save as much as 20 percent by transferring your production
offshore to a low-wage country. That is, maintain your executive
office, maintain your sales force, but with a company of $500 million
in sales, transfer the production to Mexico or a low-wage country
offshore and you can make $100 million before taxes. Or you can
continue to work your own people and go broke. That is the trade policy
of this wonderful Finance Committee that runs all over the floor,
bleating and wailing and wondering: Oh, what are we doing for Africa?
Isn't this a grand thing we have for the Caribbean and everything else,
with no regard to the reality.
They taught us early on, at the beginning of the war in artillery, no
matter how well the gun is aimed, if the recoil is going to kill the
guncrew, you do not fire. The aim is good.
I would like to put in a Marshall Plan for Mexico. It is a fine
business. Let's help the Caribbean, let's help Africa, let's help
anybody. There is hunger in the world so let's find it and help with
it. But this crowd, wow, they are not going to pay for anything--
nothing. They are not going to have any regard from whence they came
and the strength of America itself.
Two-thirds of the garments already coming in are imported. In
Georgia, there are 26,100 apparel workers; Kentucky, 18,900; Maine,
2,600; Massachusetts, 10,400; Mississippi--the distinguished majority
leader said it is a wonderful thing. I want him to go back and tell
these 16,600 apparel workers it is the last call for breakfast.
In my beginning days, they used to have that early morning program,
the ``Breakfast Club,'' in Chicago, the Stevens Hotel, with Don McNeil.
They would get to the very end and they would say: ``It is the last
call for breakfast.'' I can hear the music now. This is the last call
for Texas, certainly the last call for the apparel workers, because
they are gone. Goodbye Mississippi, 16,600 will be applying for
unemployment compensation or going--where? I will tell you where they
are going. I think we had a list from the Department of Commerce of
these great jobs. I will tell you where they are.
You say: Wait a minute, Senator. How about that employment rate? We
have such low unemployment.
Here is where they are going: cashiers, janitors, cleaners, retail
salespeople, waiters and waitresses, registered nurses, systems
analysts, home health aides, security guards, nursing aides, anything
they can get that they can possibly do--for less pay, obviously. In
fact, the retail workers, they found out you can hire them as
independent contractors and you don't even have to pay for their health
care. They have every gimmick in the book to squeeze that middle class
here in the United States and bring them down to nothing.
So it goes, for New York, the Senators from New York, I want to
inform them, advisedly, there are 74,700. There is no one I respect
more, of course, than the senior Senator from New York and the senior
House Member, my friend, Charlie Rangel. But if I had Charlie here I
would say: Charlie, 74,700: Going, going--gone. This vote is

[[Page 7430]]

fixed. That is why we have this exercise here.
They talk about the most deliberative body. They do not call a thing
until it is greased; the jury is fixed. Then, after you have gotten the
vote of the jury, then you let them talk because it is all over.
North Carolina, 38,300; Pennsylvania, 34,900; South Carolina, 18,500;
Tennessee, 23,500; Virginia, 12,900--those are the apparel jobs that
are going, going, gone once we get this conference report voted on by
tomorrow, I take it. It will go to the President. They will all stand
around with big smiles in the Oval Office: Look what we have done. We
understand humankind. We want to help sub-Sahara. We want to help the
Caribbean.
Let me get right to the point with respect to the apparel versus the
cloth manufacturers. As you well know, the manufacture of the fabric
itself is capital intensive, so that is why they have not caught up
with them yet. But now they are beginning to build those facilities
down in Mexico. So, as I said a minute ago, it will be about 5 years
and then they will have their own fabric manufacturers down there
shipping into the American market. Otherwise, all that fine Japanese
machinery that we have in American plants, all of a sudden the price is
going to go up. They know how to compete. Our trade policy is anything
but reciprocal.
Cordell Hull said ``reciprocal free trade.'' My friend, the
distinguished Senator from New York, gets with Smoot-Hawley and Cordell
Hull and how we started the reciprocal trade agreements in the 1930s,
and we have been for freedom.
Not so at all. No. The very Congress that passed the reciprocal free
trade, historically they put in subsidies for agriculture in Montana--
yes. Subsidies for agriculture in Montana, and protective quotas. Do
not give me free trade for agriculture, you will not get my vote. No,
sir, I am not for free trade for agriculture because our protections,
our subsidies have made America's agriculture the showcase of the
world. We feed ourselves and 15 other countries.
But wait until the China bill. I can't wait for that one to come.
They are trying to sell the farmers a bill of goods. There are
3,338,000--go look at the record at the Department of Agriculture.
There are 3,338,000 farmers in America. In China, they have 700 to 800
million farmers. They talk about the percentage of arable land. Do not
be getting along with that percentage of arable land and everything
else. We already have a deficit in the balance of trade in cotton with
China. In wheat and cereals and corn and other feedgrains, we had a
plus balance 4 years ago, with the country of China, of 440 million. It
is down last year to 39 million. You watch them, in 2 years they will
have a plus balance. They will be shipping us wheat. But you are going
to hear these farmers out on the floor bleating--whoa, we have China
free trade for America's agriculture.
So with the wrong facts they have to go to the Department of
Agriculture and go to the People's Republic of China and see exactly
what they are doing. Actually, they have a glut in the People's
Republic of China in agriculture. They do not have the transportation.
They do not have the distribution. They do have hunger. But mind you
me, when they solve that transportation and distribution problem, then
they will be feeding the world like we have been bragging. And the
farmers will be coming up here again.
Like that Freedom to Farm, we gave them that sort of freedom to farm.
They came up and got, I think it was, $7 or $8 billion last year. They
are looking for another $6 billion here. You know that is the crowd
that looks to me, the textile Senator, saying: Free trade, free trade,
free trade, the whole time they are drooling at those subsidies, those
protective quotas, you know; looking at me like something is wrong,
that I do not understand how to be nice in this world globalization.
So here we go. Since NAFTA alone, we have lost, in the United States,
440,000 textile and apparel jobs--440,000.
I know in South Carolina we have lost 37,000 textile and apparel jobs
since NAFTA. This is from the Bureau of Labor Statistics. Remember, we
were going to create 200,000 jobs with NAFTA. Oh, we were going to do
everything. We were going to solve the drug problem. We were going to
solve the immigration problem. We were going to create jobs. And we
have gone from a $5 billion-plus balance of trade with Mexico to $23
billion minus, a deficit in the balance of trade. The average Mexican
worker has less take-home pay today than prior to NAFTA. It has not
helped anybody, but they are talking now about NAFTA for Africa and
NAFTA for the Caribbean.
I could get into that at length with respect to the disparity in
tariffs, with respect to our own quotas. They are being phased out by
2004.
Let me go to the main thrust of my point this afternoon, and that is
the importance of these middle-class jobs to the economy. I will never
forget a seminar in Chicago in the early eighties with Akio Morita, the
chairman of the board of Sony. He was lecturing about Third World
countries, emerging countries. He said the Third World countries had to
develop a strong manufacturing sector in order to become a nation
state. Then, pointing to me, he said: And, by the way, Senator, the
world power that loses its manufacturing capacity will cease to be a
world power.
Was Morita making some original observation? Not at all. Alexander
Hamilton made the same observation to the British in the early days of
1789. The British corresponded with the fledgling Colonies and said:
Now that you won your freedom, you trade with us what you produce best,
and we will trade back what we produce best--David Ricardo, the
Doctrine of Comparative Advantage.
Mr. Alexander Hamilton wrote a booklet. It is at the Library of
Congress, if someone on the Finance Committee wants to read it. In a
word, Hamilton told the British: Bug off; we are not going to remain
your colony; we are not going to export to you our agriculture, our
foodstuffs, our cotton, grain, indigo, our timber and iron ore and
import from the mother country the finished product; we are going to
develop our own manufacture.
The second bill that ever passed with respect to the National
Congress, in which I am privileged to serve, the second bill--the first
bill was the Seal of the United States--the second bill, on July 4,
1789, was a tariff bill of 50 percent on 60 different articles. We
started this economic giant, the United States of America, with
protectionism.
Abraham Lincoln followed it in the building of the transcontinental
railroad. They said: Mr. President, we can get the steel from England.
He said: Not at all. We will build our own steel plants, and when we
are through, we will not only have the railroad, we will have the steel
capacity.
Roosevelt, in the darkest days of the Depression, passed import
quotas on the subsidies for America's agriculture.
Dwight Eisenhower in 1955 put quotas on oil.
We have practiced, more or less, a protected trade policy--we have
many tariffs on many things still--while we have bleated: Free trade,
free trade, free trade, and joined the chorus: I like fair trade; I
like a level playing field.
Do not give me a level playing field. I want to trade to my advantage
and my interests. Business is business, and the game is market share.
The Japanese have set the tone, the practice, and the policy in the
Pacific rim, and the Europeans are following.
Let's talk China. There is not a deficit in the balance of European
countries. The European countries have a plus balance of trade with
China. What do we have with this ``free trade, free trade''? We have
$68 billion deficit and growing. That is not the most recent figure,
but $68 billion is the most authoritative figure I can give right now,
and it is getting worse every day. They know how to trade and how to
administer. We actually export about the same to Belgium and Singapore
than we do to the 1,300,000,000 Chinese in the People's Republic of
China.
Talk about exports, exports, exports, and the wonderful agreements--
we will have plenty of time to get into those agreements. They want to
continue that so we will not have even a touch

[[Page 7431]]

of sobriety. Give us one chance at bat to sober America up because
America is becoming very anxious and very concerned.
The Nation's strength of security is like a three-legged stool: We
have the one leg, the values of the Nation, and that is unquestioned.
The people the world around admire the United States of America. We
have stood for years on end for individual rights, human rights, and
democracy. I can talk on that because I am so proud of this country.
The second leg is the military, which is also unquestioned.
The third leg is the economic leg that has been fractured in the last
50 years and needs refurbishing, strengthening, and rebuilding. I say
fractured, I emphasize intentionally fractured.
I heard the distinguished Senator from Iowa say, since 1945, look at
the commerce, the commerce, the commerce. We were just like England in
1789. We had the only industry, the only production. In 1945, Europe
was devastated and the Pacific rim was devastated. We were looking for
customers. We were looking for buyers. We had production. Yes, we said
free trade, free trade. Concurrent with that, we instituted the
Marshall Plan and sent the money. We instituted along with that plan
the machinery and the expertise. We sent it overseas in the contest
between capitalism and communism, and it has worked. After 50 years, we
can stand proudly and say it has worked. Capitalism has defeated
communism. We are all proud of that and the sacrifice that went along
with it, because in those days of 1945 we were willing to sacrifice.
Today, we are not willing to sacrifice to save America itself--the
middle class and the economic strength of our society.
What happens is we have been engaged in this for some time and, as a
result, we have treated foreign trade as foreign aid. I think of Akio
Morita and losing manufacturing capacity. In 1945, we had 41 percent of
the workers in the United States engaged in manufacturing. In the year
2000, we are down to 14 percent.
In the nineties, in the United States, we have lost some 779,000
manufacturing jobs and in South Carolina, my State alone, some 40,500.
The industrial strength is fast diminishing.
I look at the different things about textiles, but I look also at the
ratios of imports to consumption and what we are going to manufacture
for ourselves. Let's see.
As a young Governor, they looked at me at that hearing I told you
about, at the very beginning, and said: Governor, what do you expect
them to make? Let them make the shoes. Let them make the clothing. And
we will make the airplanes and the computers.
My problem today is, they are making the shoes, they are making the
clothing, and they are making the airplanes and the computers. And so
it is.
Certain industrial thermal-processing equipment, 48.9 percent--almost
half of what we consume is imported--67 percent of textile machinery
and parts used in the United States we have to get from abroad; 55.3
percent of the machine tools for metal forming and parts; 51.9 percent
of semiconductor manufacturing equipment and robotics--we import it.
I remember one good thing President Reagan did was to put in
SEMATECH. He saved Intel microprocessing. Everybody is running around
here falling over each other after that Silicon Valley money: high
tech, high tech. We have somebody here from high tech. Bill Gates walks
around convicted of violating the Sherman antitrust law but you would
think he is a visiting potentate. All the little staffers and Senators
streaming behind him as he goes through the Halls. And then I go to
another policy meeting, and they announce we have another
microprocessing, high tech, Silicon Valley.
Let's get right to the point. Microsoft has 20,000 employees in
Seattle and Boeing of Seattle has approximately 75,000. They are in the
manufacturing. General Motors has 250,000. Mind you me, they are not
satisfied in high tech. They want to do away with the income tax, the
capital gains tax, the estate tax. They want to do away with 200 years
of State tort law--Y2K. They want to do away with the immigration laws
because--why?--they can import the Indians and the Filipinos in here
next to nothing.
Generally speaking, America Online has a service center now in the
Philippines. Call them and ask them. My light bill in South Carolina is
run through India. But high tech, high tech--they are all in a heat to
see. Who is fooling whom. They are after the money. High tech is after
the exemptions. They do not want to pay their wage. So there you go.
Right to the point, why do you think that the march in Seattle--I am
not talking about the crazies who came up there from Eugene, OR, and
broke up the town; I am talking about the march in Seattle in December;
the AFL-CIO, the responsible individuals--that march was led by Boeing
machinists. Why? Read Bill Greider's book ``One World, Ready or Not''
and you will see that much of that Boeing 777, before it can be sold in
downtown Shanghai, has to be made in downtown Shanghai. So they are
taking the airplane jobs there.
Or pick up the morning paper and you will see the automobile jobs in
China that are being taken from us. All the time I have to hear that
nauseating chant: free trade, free trade. Yes, I am for free trade. All
the interviewers. GE owns NBC. The president of GE, Jack Welch, told
everybody to go down to Mexico: All you suppliers, you aren't going to
be a GE supplier because I can get it cheaper. I will show you that
article in ``Business Week.''
Let's go right down to boilers and turbines; 44.4 percent of what we
consume has to be imported; electrical transformers, 43.2 percent;
aircraft engines and gas turbines, 70.3 percent; motorcycles, 48.5
percent; aircraft, 45.7 percent--we used to have 100 percent of that
business--office machines, 47.2 percent; microphones, loud speakers,
audio amplifiers, and combinations thereof, 77.9 percent; tape
recorders, tape players, video cassette recorders, turntables, compact
disc players, 100 percent; radio transmission and reception, 57.9
percent of what we consume--used to be made by middle-class America; no
longer--television apparatus, including cameras, camcorders, and cable
apparatus, 68.5 percent.
I remember when Zenith had their case, and their competitors had been
found in violation for dumping. And the International Trade Commission
in a unique decision held for Zenith--because they usually cancel out
the trade administration--but the trade commission exacted the penalty.
And the last stop, of course, was in the White House, in the Oval
Office, where the President had the authority to cancel it out.
The Cabinet all around the table, they all voted to enforce the
decision of the International Trade Commission. And in walked President
Reagan. He said: I just talked to Nakosone and we are not going to do
that.
You see, yes, it has been wonderful. It has been fine. It has worked.
We have peace in the world--whatever--and we have a booming economy.
But in a booming economy, you have to look at the consummate, the
concurrent effect here.
Electrical capacitors and resistors, 69.5 percent; automatic data
processing machines, 51.6 percent.
I read this because colleagues in the Senate say: There he goes again
on textiles. I have given up on textiles. I resign. I quit. When the
ATMI tackles me from behind, and they leave out the people who have
been getting the votes--the polls all taken--poor old Jay Mazur, poor
Evy Dubrow, and the rest of them--and unit, and the others who have
been working together--Seth Bodner, the knitwear folks, the apparel
folks--I just have to say it is gone. This bill is passed.
But while it passes, we have to have a stop, look, and listen at the
crossing and realize that 62.2 percent of clocks and timing devices
that we use in America are now imported; watches, 100 percent--
apparently we do not manufacture them anymore--drawing and mathematical
calculating and measuring instruments, 71.4 percent; luggage, handbags,
and flat goods, 79.7 percent; musical instruments and accessories, 57.2
percent; umbrellas, whips,

[[Page 7432]]

riding crops, and canes, 81.1 percent; silverware, 59.9 percent. We can
go to precious jewelry, which is 55.8 percent imported.
They have different clothing and all--sweaters, 76.4 percent; robes,
nightwear, and underwear, 68.8 percent--right on down the list.
I ask unanimous consent to have printed in the Record this
compilation of the import penetration of these articles.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Ratios of imports to consumption

[In percent]

Mr. HOLLINGS. It has 84.2 percent on footwear. So 85 percent of the
shoes on the floor here in the Senate Chamber are imported.
I ask unanimous consent to have printed in this particular list from
the International Trades Commission.
There being no objection, the material was ordered to be printed in
the Record, as follows:

1998 Ratios of Imports to Consumption

[In percent]

Certain industrial thermal-processing equipment and certain furnace48.9
Textile machinery and parts........................................67.0
Metal rolling mills and parts thereof..............................46.6
Machine tools for cutting metal and parts..........................48.1
Machine tools for metal forming and parts thereof..................55.3
Semiconductor manufacturing equipment and robotics.................51.9
Boilers, turbines, and related machinery...........................44.4
Electrical transformers, static converters, and inductors..........43.2
Molds and molding machinery........................................44.8
Aircraft engines and gas turbines..................................70.3
Automobiles, trucks, buses, and bodies and chassis of the foregoing40.6
Motorcycles, mopeds, and parts.....................................48.5
Aircraft, spacecraft, and related equipment........................45.7
Office machines....................................................47.2
Microphones, loudspeakers, audio amplifiers, and combinations there77.9
Tape recorders, tape players, video cassette recorders, turntables, and
compact disc players..............................................100
Radio transmission and reception apparatus, and combinations thereo57.9
Television apparatus, including cameras, camcorders, and cable
apparatus........................................................68.5
Electric sound and visual signaling apparatus......................49.9
Electrical capacitors and resistors................................69.5
Diodes, transistors, integrated circuits, and similar semiconductor
solid-state devices..............................................45.2
Electrical and electronic articles, apparatus, and parts not elsewhere
provided for.....................................................49.1
Automatic data processing machines.................................51.6
Optical goods, including ophthalmic goods..........................51.5
Photographic cameras and equipment.................................63.8
Watches.............................................................100
Clocks and timing devices..........................................62.2
Drawing and mathematical calculating and measuring instruments.....71.4
Luggage, handbags, and flat goods..................................79.7
Musical instruments and accessories................................57.2
Umbrellas, whips, riding crops, and canes..........................81.1
Silverware and certain other articles of precious metal............59.9
Precious jewelry and related articles..............................55.8
Men's and boys' suits and sportcoats...............................47.5
Men's and boys' coats and jackets..................................62.5
Men's and boys' trousers...........................................50.4
Women's and girls' trousers........................................56.4
Shirts and blouses.................................................62.9
Sweaters...........................................................76.4
Women's and girls' suits, skirts, and coats........................59.0
Robes, nightwear, and underwear....................................68.8
Body-supporting garments...........................................42.8
Neckwear, handkerchiefs, and scarves...............................46.7
Gloves, including gloves for sports................................76.1
Headwear...........................................................54.1
Leather apparel and accessories....................................67.2
Fur apparel and other fur articles.................................81.7
Footwear and footwear parts........................................84.2
Mr. HOLLINGS. Mr. President, this is one little reading of the U.S.
deficits in advanced technology because you know we have gone, they
say, from manufacturing to high tech.
They told England at the end of World War II: Don't worry. Instead,
of a nation of brawn, you are going to be a nation of brains. Instead
of producing products, you will provide services. Service economy,
service economy is the chant. And then, instead of creating wealth, you
are going to handle it and be a financial center.
England has gone into an economic hand basket. They have a bunch of
just scandal sheets--the newspapers and Parliamentarians--debating and
shouting at each other. Downtown London is an amusement park.
Are we going that way, too? They have gone out of business there.
Here are some deficits in advanced technology products. Parts of the
advanced machinery incorporated, $18.23 billion; hard disc drive units,
$9.72 billion; parts of turbojet or turbo propeller engines, $4.28
billion, Turbojet aircraft engines, $3.74 billion deficit, balance of
trade; parts for printers, $3.52 billion; new turbo fan planes, non-
military, $3.23 billion; cellular radio telephones, $3 billion; video
cassette and cartridge recorders, $3.32 billion, deficit; display
units, $1.64 billion; optical disc players, $1.64 billion; camcorders,
$1.09 billion; digital still-image video cameras, $1.07 billion.
Mr. President, rather than taking further time, I ask unanimous
consent to have printed in the Record at this point the U.S. Trade in
Advanced Technology Products showing the exports and imports and the
balance thereof.
There being no objection, the material was ordered to be printed in
the Record, as follows:

U.S. TRADE IN ADVANCED TECHNOLOGY PRODUCTS: 1999
----------------------------------------------------------------------------------------------------------------
Commodity code and description: Advanced
technology product Exports Imports Balance
----------------------------------------------------------------------------------------------------------------
8473301000 PRTS OF ADP MCH, NOT INCRPRTNG CRT, 0 18,227,808,970 (18,227,808,970)
PRT CRCT ASSEM..................................

[[Page 7433]]

8471704065 HARD DISK DRIVE UNT, NESOI, W/OUT 2,048,470,249 11,769,756,784 (9,721,286,535)
EXTNL POWR SUPLY................................
8473305000 PTS & ACCESSORIES OF MACH OF HEADING 0 7,743,829,608 (7,743,829,608)
OF 8471, NESOI..................................
8542138034 MONO IC, DIGITAL, MOS TRANS, DRAM, 0 4,980,391,722 (4,980,391,722)
>15000000 BITS..................................
8542138072 MONOLITHIC IC, DIGITAL, SILICON, 4,047,156,775 8,377,018,602 (4,329,861,827)
(MOS), (ASIC), (PLA)............................
8411919080 PARTS OF TURBOJET OR TURBOPROPELLER A/ 0 4,277,502,862 (4,277,502,862)
C ENGINES.......................................
8471300000 PORT DGTL ADP MACH, <10KG, AT LEAST 1,143,297,273 5,321,724,547 (4,178,427,274)
CPU, KYBRD, DSPLY...............................
8803300030 OTH PRTS OF ARPLNS/HLCPTRS, NESOI, NT 0 4,013,300,583 (4,013,300,583)
FR DOT OR USCG..................................
8411124000 TURBOJET AIRCRAFT ENGINES, THRUST 0 3,736,640,634 (3,736,640,634)
EXCEEDING 25 KN.................................
8473303000 OTHER PARTS FOR PRINTERS, NO CATHODE 0 3,523,211,984 (3,523,211,984)
RAY TUBE........................................
8802300040 NEW TURBOFAN PLANES, NON-MILITARY, 646,938,093 3,879,125,608 (3,232,187,515)
>4536 & 15000 KG................................
2934903000 OTHER HETEROCYCLIC COMPOUNDS USED AS 0 3,029,957,678 (3,029,957,678)
DRUGS...........................................
8525209070 CELLULAR RADIOTELEPHONES FOR PCRS, 1 0 3,020,465,433 (3,020,465,433)
KG AND UNDER....................................
3004909090 MEDICAMENTS NOT ELSEWHERE SPECIFIED 0 2,726,075,442 (2,726,075,442)
OR INCLUDED.....................................
8471706000 STORAGE UNITS, NESOI, NOT ASSEMBLED 511,587,342 3,211,010,776 (2,699,423,434)
IN CABINETS.....................................
8521106000 VIDEO CASSETTE & CARTRIDGE RECORDER/ 0 2,321,010,825 (2,321,010,825)
PLAYERS, COLOR..................................
8517903800 PC ASSEMBLIES FOR TELEPHONIC 0 1,728,565,731 (1,728,565,731)
APPARATUS, NESOI................................
8471604580 DISPLAY UNITS, NESOI, WITHOUT CRT.... 0 1,637,784,048 (1,637,784,048)
8519990045 OPTICAL DISC (INCLUDING COMPACT DISC) 0 1,637,445,266 (1,637,445,266)
PLAYERS.........................................
8542138057 MONO IC, DIG, SIL, MOS, EXC VOL, 0 1,591,589,716 (1,591,589,716)
(EEPROM) >900,000 BITS..........................
8542138066 MONO IC, DIG, SIL, MOS (ASIC) & (PLA) 266,700,462 1,505,423,883 (1,238,723,421)
MICROPROCES 8 BITS & <..........................
9018908000 INST & APPLIANCES FOR MEDICAL, 0 1,215,184,803 (1,215,184,803)
SURGICAL, ETC, NESOI............................
8525408050 CAMCORDERS (OTHER THAN 8 MM), NESOI.. 11,389,219 1,098,783,272 (1,087,394,053)
8525404000 DIGITAL STILL IMAGE VIDEO CAMERAS.... 21,952,736 1,089,597,336 (1,067,644,600)
8521900000 VIDEO RECORDING OR REPRODUCING 135,001,223 1,087,156,818 (952,155,595)
APPARATUS EXC TAPE..............................
8542138049 MONO, DIG, SIL, MOS, VOL, (SRAM) 0 933,400,512 (933,400,512)
>3,000,000 BITS.................................
8542300065 MONOLITHIC IC, OPERATING FREQUENCY 1,284,391,376 2,181,812,559 (897,421,183)
<100 MHZ, ANALOG................................
8471603000 DISPLAY UNITS, W/O CRT, & DISPLAY 191,417,160 1,012,102,430 (820,685,270)
DIAGNL 30.5 CM..................................
8525408020 CAMCORDERS, 8MM...................... 1,892,960 819,236,164 (817,343,204)
8803300060 OTHER PARTS, NESOI, OF MILITARY 0 774,171,267 (774,171,267)
AIRPLANES/HELICOPTRS............................
8517903600 PC ASSEMB FOR TELEHONE SWIT, TERM 0 751,187,201 (751,187,201)
APPA O/T TEL SETS...............................
8541290095 TRANSISTORS EXC PHOTOSENSITIVE 1W & 0 744,022,549 (744,022,549)
>, FREQ. <30MHG.................................
2844200020 URANIUM FLUORIDE ENRICHED IN U235.... 355,923,713 1,098,482,108 (742,558,395)
8471704035 FLOPPY DISK DRIVE UNT, NESOI, W/OUT 58,034,583 772,594,136 (714,559,553)
EXTRNL POW SPY..................................
2933394100 DRUGS CONT AN UNFUSED PYRIDINE RING 0 680,296,294 (680,296,294)
ETC, NESOI......................................
8517210000 FACSIMILE MACHINES................... 0 667,588,870 (667,588,870)
3818000090 OTHER CHEM ELEM DOPED, ELECTRON, 0 619,290,862 (619,290,862)
DISCS WAFERS ETC................................
3002100090 OTHER BLOOD FRACTIONS NESOI.......... 0 616,949,658 (616,949,658)
8542138067 MONO IC, DIG, SIL, MOS (ASIC) & (PLA) 181,422,015 798,242,504 (616,820,489)
MICROPROCES 16 BITS.............................
8517903200 PTS OF ART OF 8517.20, 8517.30, 0 602,626,375 (602,626,375)
8517.40.50, 8517.81.............................
8471608000 OPTICAL SCANNERS & MAGNETIC INK 375,128,897 965,817,115 (590,688,218)
RECOGNITION DEVICE..............................
8528124000 TV REC, COLOR, NON-HI DEF, PROJ TYP W/ 0 567,427,021 (567,427,021)
CATH-RAY TUBE...................................
8542300090 MONOLITHIC IC, FREQ., <100 MHG 1,584,815,325 2,141,256,559 (556,441,234)
(ANALOG/DIGITAL) NESOI..........................
9010420000 STEP & REPEAT ALIGNER, PROJECTION OF 49,534,168 594,935,912 (545,401,744)
CIRCUIT PATRN...................................
8517505000 CARRIER-CURRENT LINE SYSTEM 950,547,882 1,492,682,623 (542,134,741)
APPARATUS, TELEPHONIC...........................
8517902400 PTS FR TELPHONE SWITCH, TERMINAL APP 0 499,197,786 (499,197,786)
INC PC ASSEMB...................................
8471605100 LSR PRNTR UNITS W/CNTRL & PRT 0 482,262,408 (482,262,408)
MCHNIMS, >20PGS/MIN.............................
8525203025 RADIO TRANSCIEVERS, HAND-HELD, FREQ 0 466,870,671 (466,870,671)
>400 MHZ........................................
8534000020 PRINTED CIRCUITS OF PLASTIC/GLASS = 3 586,324,029 980,378,544 (394,054,515)
LAYERS, CNDT....................................
8542138041 MONO IC, DIG, SIL, MOS, VOL (SRAM) 0 369,673,484 (369,673,484)
300,000 <3,000,000 BITS.........................
8537109050 PANEL BOARDS & DISTRIBUTION BOARDS; 0 367,840,258 (367,840,258)
1,000 VOLTS.....................................
2933595300 OTHER AROM OR MOD-AROM DRUGS CONT A 0 365,464,433 (365,464,433)
PYRIMID ETC.....................................
9001100085 OPT FIBER BUNDLE & CABLE EXC OF 8544 0 349,337,906 (349,337,906)
NOT PLASTIC.....................................
8471605200 OTH LASER PRINTER UNITS W/CNTRL & PRT 0 337,358,804 (337,358,804)
MECHANISMS......................................
8525203080 RADIO TRANSCIEVERS, EXC HANDHELD, 400 0 334,664,064 (334,664,064)
MHZ.............................................
8542138051 MONO, IC, DIG, SIL, MOS, EXC VOL 0 331,577,991 (331,577,991)
(EEPROM) <80,000 BITS...........................
8473309000 OTH PRTS OF ADP MACH AND UNITS 0 331,471,302 (331,471,302)
INCORPORATING A CRT.............................
8411114000 TURBOJET AIRCRAFT ENGINES, THRUST NOT 0 310,678,629 (310,678,629)
EXCEED 25 KN....................................
2922191800 OTHER AROMATIC AMINO-ALCOHOLS, ETC 0 309,072,789 (309,072,789)
USED AS DRUGS, NE...............................
8525309005 TELEVISION CAMERAS, NESOI, COLOR..... 0 302,374,597 (302,374,597)
2922502500 OTHER AROMATIC AMINO-ALCOHOL-PHENOL 0 295,753,627 (295,753,627)
DRUGS...........................................
8517906400 PARTS OF TELEPHONIC APPARATUS, NESOI. 0 294,249,762 (294,249,762)
8528121201 TV REC, NON-HI DEF, COL, SNGL PICT 0 286,928,704 (286,928,704)
TUB N/O 34.29 CM................................
8542138060 MONO, IC, DIG, SIL, MOS, EX VOL, 0 274,086,910 (274,086,910)
(EPROM) >900,000 BITS...........................
----------------------------------------------------------------------------------------------------------------

Mr. HOLLINGS. Mr. President, we are worried. We have anxiety. There
is fear in the land, Mr. President. The foreign holdings as a percent
of the total publicly held debt--as we pay down the public debt, the
foreign holdings are still at 40.3 percent, according to the Treasury
Department. When you get these deficits, billions and billions--$347
billion in the balance of trade--so many dollars out in foreign
holdings, the dollar falls, the interest rates go up, the stock market
goes down, and recession sets in. Who is talking about it? Everybody
but us in public service. We are running around, ``I've got class
size,'' ``I've got a better class size.'' ``No, I've got charter
schools.'' ``No, I got a better plan here on health care.'' ``No, your
plan is no good.''
They are not talking about paying the bill so that we can keep the
country and the economy booming. They are talking about little
peripheral things over here--campaign finance and otherwise--not paying
the bill and reestablishing confidence in America.
The number of workers, as I have said at the very beginning, quoting
Morita, is down to 14 percent in manufacturing. I will read an excerpt
from Mr. Eamon Fingleton, Mr. President, entitled ``The Unmaking of
Americans.'' I want everyone to listen because we have books by
professors at Harvard and out at Berkeley in California and Stephen
Cohen and John Zysman who have written ``Manufacturing Matters.'' They
are trying to wake up a dormant Finance Committee that seems not to
understand anything about trade, who really think this is a good bill.
I am embarrassed for them because this is not going to just put out
some 74,700 apparel workers up in New York, but at least 18,500 that I
have in South Carolina and, ultimately the textile industry--as soon as
they can afford the machinery and get it in down in Mexico and these
other places. I will never forget 10 years ago when we debated
textiles. Macao had millions and millions of dozens of shirts and
didn't have a shirt factory. China was transhipping them through Macao.
So now China takes this sub-Sahara bill that will make a few people
rich, but not the African countries or the African people, just as
those shirts didn't make Macao any richer. China will transship right
on through sub-Sahara Africa and, in the process, get rid of the
American apparel workers and, before long, the textile workers.
Let's quote Mr. Fingleton here as to the importance of manufacturing
and you will get a better grasp of this:

In recent decades, it has become increasingly fashionable
for American opinion leaders to belittle the economic
importance of manufacturing. If we are to believe such
prophets of the New Economy as commentator Michael Rothschild
and Megatrends author, John Naisbitt, manufacturing is now a
distinctly second-rate activity that should take a backseat
to post-industrial businesses like software writing and
moviemaking. Their opinions are increasingly endorsed by
pundits in everything from the Wall Street Journal to Wired.
It is time this view was challenged. The truth is, it is a
highly dangerous myth that is rapidly weakening the United
States' ability to lead the world economy. Not only do those
who advocate post-industrialism--let's

[[Page 7434]]

call them post-industrialists--overestimate the prospects for
information-based products and services, they greatly
underestimate the prospects for manufacturing.
When the post-industrialists talk about manufacturing, it
is clear they are referring mainly to such unsophisticated
activities as the snap-together assembly work carried out in
the television-set factories of the developing world. By
implicitly defining manufacturing in such disparaging terms,
they set up a straw man--for there is no question that, in an
increasingly integrated world economy, most types of assembly
work are so labor intensive that they can no longer be
conducted profitably in high-wage nations like the United
States. Overlooked by the post-industrialists, however, is
the fact that assembly is only the final stage in the
production of modern consumer goods. Earlier stages are
typically much more sophisticated--the making of advanced
components such as laser diodes, liquid crystal displays,
lithium-ion batteries and flash memories, for example. Then
there is the production of the high-tech materials that go
into such components. Semiconductor-grade silicon
manufacturing, for instance, is concentrated mainly in such
high-wage nations as Japan and Germany.

We have a $74 billion deficit in the balance of trade with Japan, Mr.
President. I think it is $28 billion deficit with Germany.

And still more sophisticated than the fabrication of such
components and materials is the manufacture of the production
machinery used in the process. Perhaps the iconic example of
such machinery is the stepper--the highly precise
lithographic device that prints circuit lines on silicon
chips.
Manufacturing components, materials and production
machinery is generally both know-how-intensive and capital
intensive. As such it can be conducted effectively only in
the world's richest and most advanced economies--and workers
engaged in such work are thereby shielded from low-wage
competition from developing nations. The United States once
dominated this type of production, but these days, as is
abundantly clear from the nation's mounting trade deficits
with Japan and Germany, it is at best an also-ran. In
steppers, for instance, GCA, the once world-beating American
player, closed its doors in 1993, leaving the field almost
entirely to Japan's Nikon and Canon and Europe's ASM. In
high-tech materials, the United States is now similarly
dependent on imports. And in crucial new components such as
laser diodes and liquid crystal displays, the country was
never a contender in the first place.

I remember the gulf war and the flat-panel displays we got from Japan
for our defense work.
It is really discouraging to this particular Senator when we mark up
the defense appropriations bill. We have in there a Buy-America
provision trying to maintain steel ball bearings for Ohio and South
Carolina because Timken and others produce them. They do an outstanding
job. But we have those who put in an amendment to strike that out--that
it is un-American and all.
I don't know where they got this idea about what America is--that we
are supposed to meet a referee in bankruptcy, dissolve the assets, and
send it around to the Caribbean, to sub-Sahara, and everything else on
the premise that it is good policy for us to sometime come to the help
of these particular countries. It would be good if it were not
destroying us in the making.

Manufacturing's most obvious advantage is that it creates
an excellent range of jobs. Whereas post-industrial
businesses like software and financial services tend to
recruit mainly from the cream of the intellectual crop,
manufacturing harnesses the skills of everyone from ordinary
factory hands to the most brilliant scientists and the most
capable managers. In fact, as the late Bennett Harrison of
New York's New School (a longtime TR columnist) pointed out
in his book Lean and Mean in 1997, unskilled workers ``barely
off the farm'' can readily be trained to operate computer-
controlled presses and similarly sophisticated production
machinery. In Harrison's terms, today's high-tech production
machinery is not ``skill-demanding'' but ``skill-enabling.''

Let's emphasize that. It is ``skill-enabling,'' because the Senator
from South Carolina is a witness. We brought in BMW, the automobile
manufacturer, from Munich, Germany. It is in Spartanburg. It has 2,000
employees, and it will have this time next year hopefully 1,000 more.
They were supposed to get another facility down in Mexico. They
learned. They said: Wait a minute. The productivity of these people
just off the farm, and otherwise skilled workers, can produce, and they
have been producing.
Mr. President, I ask unanimous consent that the article in its
entirety be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

The Unmaking of Americans

(By Eamon Fingleton)

In recent decades it has become increasingly fashionable
for American opinion leaders to belittle the economic
importance of manufacturing. If we are to believe such
prophets of the New Economy as commentator Michael Rothschild
and Megatrends author John Naisbitt, manufacturing is now a
distinctly second-rate activity that should take a backseat
to post-industrial businesses like software writing and
moviemaking. Their opinions are increasingly endorsed by
pundits in everything from the Wall Street journal to Wired.
It is time this view was challenged, The truth is, it is a
highly dangerous myth that is rapidly weakening the United
States' ability to lead the world economy. Not only do those
who advocate postindustrialism--let's call them
postindustrialists--overestimate the prospects for
information-based products and services, they greatly
underestimated the prospect for manufacturing.
When the post-industrialists talk about manufacturing, it
is clear they are referring mainly to such unsophisticated
activities as the snap-together assembly work carried out in
the television-set factories of the developing world. By
implicitly defining manufacturing in such disparaging terms,
they set up a straw man-for there is no question that, in an
increasingly integrated world economy, most types of assembly
work are so laborintensive that they can no longer be
conducted profitably in high-wage nations like the United
States. Overlook by the post-industrialists, however, is the
fact that assembly is only the final stage in the production
of modern consumer goods. Earlier stages are typically much
more sophisticated--the making of advanced components such as
laser diodes, liquid crystal displays, lithium-ion batteries
and flash memories, for example. Then there is the production
of the high-tech materials that go into such components.
Semiconductor-grade silicon manufacturing, for instance, is
concentrated mainly in such high-wage nations as Japan and
Germany. And still more sophisticated than the fabrication of
such components and materials is the manufacture of the
production machinery used in the process. Perhaps the iconic
example of such machinery is the stepper--the highly precise
lithographic device that prints circuit lines on silicon
chips.
Manufacturing components, materials and production
machinery is generally both know-how-intensive and capital-
intensive. As such it can be conducted effectively only in
the world's richest and most advanced economies--and workers
engaged in such work are thereby shielded from low-wage
competition from developing nations. The United States once
dominated this type of production, but these days, as is
abundantly clear from the nation's mounting trade deficits
with Japan and Germany, it is at best an also ran. In
steppers, for instance, GCA, the once world-beating American
player, closed its doors in 1993, leaving the field almost
entirely to Japan's Nikon and Canon and Europe's ASM. In
high-tech materials, the United States is now similarly
dependent on imports. And in crucial new components such as
laser diodes and liquid crystal displays, the country was
never a contender in the first place.
Why does all this matter? Because, conventional wisdom to
the contrary, advanced manufacturing offers fundamental
advantages over post-industrial services in building a rich
and powerful economy.
Manufacturing's most obvious advantage is that it creates
an excellent range of jobs. Whereas post-industrial
businesses like software and financial services tend to
recruit mainly from the cream of the intellectual crop,
manufacturing harnesses the skills of everyone from ordinary
factory hands to the most brilliant scientists and the most
capable managers. In fact, as the late Bennett Harrison of
New York's New School (a longtime TR columnist) pointed out
in his book Lean and Mean in 1997, unskilled workers ``barely
off the farm'' can readily be trained to operate
computercontrolled presses and similarly sophisticated
production machinery. In Harrison's terms, today's high-tech
production machinery is not ``skill-demanding'' but ``skill-
enabling.''
Manufacturers also score over information businesses in
their export prowess. That's because, for one thing,
manufacturers usually avoid the piracy problems that so
drastically reduce American information businesses' receipts
from abroad. Moreover, manufactured goods are generally
universal in application and, as such, contrast sharply with
information-based products, which are in most cases quite
culture-specific. Whereas a typical information product may
have to be adapted for different languages and customs in
different markets around the world, a typical manufactured
product requires little if any adaptation. In many cases,
information businesses don't find it worthwhile to adapt
their products for foreign markets, and even where they do,
they tend to have the adaption done

[[Page 7435]]

abroad, thus generating costs that cut deeply into the net
revenues remitted to the United States.
A third key advantage of advanced manufacturing--the most
important of all--is that it delivers higher incomes. Not
only does the large amount of capital required for the
enterprise offer workers protection against competition from
cheap labor, it can also powerfully boost worker
productivity. A good example is the contribution that
expensive robots make in enabling Japanese auto workers to
achieve the world's highest productivity levels. Higher
productivity in turn is, of course, the royal road to higher
wages.
Indeed, nearly two decades after the United States began
its fateful drift into full-scale post-industrialism,
international economic comparisons consistently show that
Americans have lagged in income growth in the interim. The
result is that, as measured at recent market exchange rates,
the United States has now been overtaken in absolute wage
levels by at least four manufacturing-oriented nations--
Denmark, Sweden, Germany and, perhaps most surprisingly of
all, Japan, the supposed ``basket case'' economy of the
1990s.
And if capital intensity is not enough to boost and protect
wages, advanced manufacturing's requirement for proprietary
production know-how given many industry incumbents a critical
advantage. Take a product like a notebook computer's flat-
screen liquid crystal display. LCDs are basically an
adaptation of semiconductor technology, and are manufactured
using similar equipment. Thus in theory many computer
companies around the world could enter this fast-growing
business. But in practice few have done so, with the result
that the world market is utterly dominated by a handful of
Japanese manufacturers--Tokyo-based Sharp alone enjoys a
world market share of close to 50 percent. Why such market
concentration? The key is yield, the percentage of flaw-free
products in each production batch. Given that even a
microscopic speck of dust can render the tiny transistors
that control each dot on a screen dysfunctional, the quality-
control challenge is enormous. A new entrant to the industry
would probably be lucky to get a 10 percent yield of good
Screens, whereas established Japanese firms are believed to
achieve yields of 90 percent or more.
All in all, America's failure in the past two decades to
take full advantage of manufacturing's numerous rewards is
alarmingly apparent in the nation's deteriorating trade
figures. The U.S. trade deficit in 1999 is likely to exceed
$250 billion--an all-time record and an increase of about 50
percent on the startling $168.6 billion incurred in 1998. It
would be an exaggeration to say that the nation's
manufacturing decline is the sole cause of the worsening
trade trend, but it is clearly one of the most important
contributing factors.
And what is really worrying about these deficits is that
they are to a large extent incurred with nations like Japan
and Germany, where wages run 20 percent to 40 percent higher
than American levels. Other things being equal, when a lower-
wage country imports a product from a higher-wage one, we can
reasonably assume that the manufacturing technology concerned
is one in which the importing country is lacking. Much of
what American corporations import from higher-wage nations
consists of components ``outsourced'' from foreign rivals.
The U.S. firms got used to the practice in the 1970s and
early 1980s when Japanese and German wages were still low by
U.S. standards, and outsourcing components could be justified
on the theory that it freed American workers to specialize in
higher-level work. These days, however, American corporations
that outsource to Japan or Germany are effectively admitting
they lag in the technology race.
So what should the United States do to regain dominance in
manufacturing? First, consider one of the key reasons for the
country's loss of its leadership position: other nations'
industrial policies, which almost always contain a strong
element of explicit or implicit protection for home
industries. The classic example is United States-Japan
competition in electronics. While U.S. electronics
manufacturers such as RCA and Zenith were largely barred from
selling in the Japanese market, their Japanese competitors
were welcomed with open arms in the American market--the
inevitable result was that the Americans found it
increasingly unprofitable to invest for the long term.
Though the party line these days is that such protectionism
has largely been eliminated in key foreign markets, the
reality is that other nations maintain industrial policies
that put U.S. manufacturers at a disadvantage. For American
decisionmakers this creates an acute dilemma and a
particularly distressing one for today's 50-something power
holders, who in their youth espoused the soaring hope that
the world could be taught to sing in perfect harmony. If they
cling to the idealistic One-Worldism of the Flower Power era,
they will continue to advocate free trade--and in the process
will condemn the American manufacturing sector to, at best,
permanent underdog status. The alternative is to slam the
brakes on globalism and go back to the sort of modest but
sufficient tariff levels that prevailed in the Eisenhower
years. Such a move would certainly raise screams from
devotees of that ultimate pseudo-science laissez-faire
economics. But in the absence of convincing alternatives (and
in particular of a real commitment to free trade on the part
of America's competitors), it must have a place on the
agenda.

Mr. HOLLINGS. Mr. President, we need to remember we are not only
going to lose 74,700 apparel jobs in New York but in apparel
manufacturing throughout the United States.
I want to go to the morning paper because they had a big conclave
over at the White House. It says, ``Political Heavyweights Pull for
Agreement with China.'' They have Vice President Gore and former
President Carter. But they also have the former Secretary of State,
Henry Kissinger.
Quoting from this morning's Los Angeles Times:

Clinton asked rhetorically, ``Why are we having this
debate?'' His answer: Because people are anxiety ridden about
the forces of globalization, or they are frustrated over the
human rights record of China, or they don't like all the
procedures of the WTO. President Clinton's answer to ``Why
are we having this debate?''--``Because people are anxiety
ridden about the forces of globalization.''

The legacy of President Franklin Delano Roosevelt--I will have to
talk about a proud Democrat. I hope the distinguished Ranking Member
doesn't mind me doing that. I think in time I might get him to join. I
watched his votes, and he is very sensitive to the needs of little
people. The great legacy of Franklin Delano Roosevelt is: ``All we have
to fear is fear itself.''
I can hear him now. We had a little headset in 1933. That is before
daddy went broke. He had a flourishing business. Amongst other things,
he printed and delivered paper bags. But he printed the names of the
German grocery stores all around Charleston: Hoffmeyer, Meyers,
Hochwanger, Heiselmeier, Fahler, Reumeyers--I can see them all now.
They called my father and said: Bubba, no use sending those bags to
people who are not paying the grocery bill, and we can't pay you for
the bags. He said: Well, got your name on them. I can't use them
otherwise. Just do what you can. I am sending them around.
But we had at that time in 1933 a headset. I can hear President
Roosevelt.
I had the pleasure of seeing him as a youngster in 1936 when he came
through Charleston and boarded the ship. He came by train from
Washington to Charleston, boarded the cruiser, and went on down to
Buenos Aires, Argentina. I was looking up at President Roosevelt.
Later, of course, when I was a senior cadet at the Citadel, ready to
go off into the invasion of North Africa, I could hear him in 1941
about the ``four freedoms.'' He said the four freedoms are the freedom
of religion, the freedom of speech, the freedom from want, and the
freedom, Mr. President, from fear. That was the legacy. That was the
legacy of the greatest President of our time.
Now what is our legacy? I can tell you. You do not have to get
politician Hollings or get the business leadership.
What is the business leadership?
``Backlash: Behind the Anxiety Over Globalization.''
The legacy of President Clinton is a legacy of fear. This crowd had
better wake up and understand it because we are going out of business.
The President just last week was down in Charlotte talking about the
digital divide, the digital divide, middle America.
How in the world can they buy a computer? Not the poor; middle
America can't afford that. They are trying to hold onto a job. They are
trying to pay for the house upkeep. They are trying to buy the clothes.
And they are doing pretty good. But they look at those 37,000 from
South Carolina who are gone, gone.
Washington is telling all of middle America that they never had it so
good. We got a boom. Let's get the boom going. They see these jobs
going, and they see all of our good friends, the immigrants, with fine
business earnings coming in and taking a lot of the jobs. They see
plant closings in Columbia. That is the way it is factored in.

[[Page 7436]]

I always loved to go to Ireland. But in Ireland, they have a booming
business taking care of all the banking and insurance accounts and
everything else.
What do we do? We got rid of what Henry Ford created, and that is the
middle class. Ford said, in the early days, I want to make sure that
the individual producing this automobile is making enough money to buy
it. That, along with the labor movement in America, got health care,
retirement benefits, and everything elsewhere which they could pay
for--not only pay for their home but send their kid to college, maybe
get a little home at the beach or in the mountains, buy a boat to put
out in the lake and go fishing, something for retirement.
They talk about Social Security. I see that fellow, Morris, is
telling Bush: Don't try to talk about. Don't touch Social Security.
Why? Because it is supersensitive because of fear--the legacy of the
Clinton administration. He has no idea about the digital divide and no
idea about trade. That boy from Arkansas has gone up there and seen the
bright lights in New York. He has left us. I can tell you right now, he
is not looking out for middle America.
``The best political community is formed by citizens of the middle
class,'' said Aristotle in 315 B.C.
It is to the middle class we must look for the safety of England,
says Thackeray.
In England, what we call the middle class is in America virtually the
Nation.
In the 1880s, Matthew Arnold: ``The upper class is our nation's past,
the middle class is its future.''
I don't know about a future. That is what is worrying the Senator
from South Carolina--not the textile jobs. They are gone. They are
leaving them fast, including one closed just last week. The best of
operators are closing.
I can see it, and I know what is going to happen to the textile
manufacturer. It will be totally gone. As soon as they can afford the
machinery in Mexico and the Caribbean, they will print the cloth and
these fellows will take their money and run. That is what you have in
ATMI. That is why I warn everyone, we are not just getting rid of the
textile jobs.
I said at the beginning we learned in the artillery, no matter how
well the aim, if the recoil is going to kill the gun crew, don't fire.
You got a good aim, no question. Let's do something for the
Caribbean. Let's do something for Africa. But on this score, where two-
thirds of the clothing is already imported, let's not kill off the
apparel industry. There are 74,700 jobs in New York, 18,500 in South
Carolina, 146,900 in California. We will have a candidate saying: Boom,
boom, boom, wonderful economy.
This is what he ought to be talking about. We have to rebuild the
economic strength of this Nation. That is not going to happen at the
present rate. This conference report ought to be sent back to the
conferees and we ought to put in a competitive trade policy.
I had a bill with the Finance Committee 15 years ago. I have talked
to the distinguished chairman not only about a value-added tax to pay
the bill but I have talked about a correlation and coordination. There
are 28 Departments and Agencies in trade. When we think that Commerce
has it, they say no; in Agriculture, that is a farm product, and they
say, no, the final say is over at Treasury Department. Why? Because
40.3 percent is foreign owned, foreign holdings, a percent of total of
the privately-held public debt. Talk about paying down the public debt;
foreign holdings as a percent is already up to 40.3 percent. When we
are ready to enforce a dumping provision against Japan, they say: We
are not going to buy your T-bills. And Treasury calls up and says that
hearing was good. The tail is wagging the dog and corporations.
Senator Moynihan, as a freshman at City College of New York, said
that they taught him corporations run America. They have preempted
trade policy. We representatives, Senators and Congressmen, don't have
any say. It is fixed with the White House. The corporations come around
and fix the vote. By the time they call, nobody is on the floor and
they couldn't care less. Let them puff and blow, the middle class be
gone, the textile industry be gone, they are all Republican anyway. Now
the apparel workers, the owners--the apparel workers are Democrat,
anyway, so they would just as soon get rid of them. We will lose 26,000
apparel workers in Alabama, 19,700 in Florida, 26,100 in Georgia,
18,900 in Kentucky, 2,600 in Maine, 10,400 in Massachusetts,
Mississippi loses 16,600, New York loses 74,700, North Carolina loses
38,300.
Imagine the President in Charlotte, NC, last week talking about the
digital divide, and middle America is about to lose another 38,000 jobs
in and about Charlotte--can't even buy a computer, and he doesn't
understand it. He doesn't understand his legacy of fear. Roosevelt has
freedom from fear as his legacy. What we have is a legacy of fear. It
not that we are not sophisticated and understand globalization. We
understand making a living and paying our bills and working hard to do
it. Even though you work hard, they tell you: Globalization. Be gone.
You, the most productive textile worker in the world, be gone, because
you don't understand globalization, competition, competition,
productivity.
The most productive industrial worker in the world is in the United
States. Right now, the record shows Japan to be No. 8; Netherlands is
No. 2; Germany is No. 3.
The Japanese pay way more in wages. It isn't low wages. They have a
specific policy. That Lexus automobile you buy for $30,000 in
Washington, DC, is sold for $40,000 in downtown Tokyo. They make up the
$10,000 on their own domestic economy and got it through the financing,
and the people accept that. They are taking over more and more and
more. The distinguished Senator is a foreign policy and an expert, and
he knows better than any that money talks. Forget about the Sixth
Fleet, forget about the hydrogen bomb. Money talks now.
We have been on a binge in the 1990s, but financially we are going
out of business. The market is showing it right this afternoon while I
am talking. You can talk to anybody in the trucking business. It is
closing in, and people are beginning to hunker down.
When I started my remarks, I related when the distinguished Senator
was in the Kennedy administration, we put in a 7-point textile program
because 10 percent of America's consumption of textiles and clothing
was going to be represented in imports. Now we have two-thirds. We are
ready to get rid of the other third overnight, and we think we are
proud of it; we are doing a good job.
It is a well considered thing with respect to Africa, the Caribbean,
to help them find business. We believe in it. However, we have given at
the store. Now is the time to save the home. Now is the time to save
middle America. Now is the time to eliminate the fear by instituting a
competitive trade policy.
I yield the floor.
Mr. MOYNIHAN. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER (Mr. DeWine). The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DODD. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DODD. Mr. President, at the outset of these remarks let me
commend the distinguished Senator from New York, my good friend and
colleague, along with the chairman of the trade subcommittee and others
who make up the membership of the Finance Committee, for their
leadership on this issue. It has been a long time since this body has
dealt with a trade issue as significant, in my view, as the matter
before us. That is not because of the volume of trade or the size or
magnitude of the financial transactions which will ensue as a result of
our adoption of this agreement, but because, in my view, it sends a far
more important signal to some of the very poor, if not the poorest,
areas of this globe, that the wealthiest nation of the world at the
beginning of the 21st century recognizes that we bear some
responsibility for trying to alleviate

[[Page 7437]]

some of the devastating hardship that afflicts too many millions of
people around this Earth.
This agreement that deals with the sub-Saharan African nations and
the Caribbean Basin is an important first step in this century to take
meaningful steps to alleviate some of the devastating human hardships
that affect too many innocent people.
I am proud to associate myself with this proposal. I urge the
adoption of it by what I hope will be an overwhelming vote of this body
so, as we begin this new century, we say to future generations who will
sit in the chairs we now hold in this body that the 21st century is a
century where the free flow of goods and services across the Earth is
something that ought to be a central ingredient for economic success in
improving the human condition.
Passage of this legislation, in my view, comes at a very critical
time for the future economic success of the regions that are covered by
this legislation, the sub-Saharan African region and the Caribbean
nations.
One has only to pick up the paper to read of the crippling effects of
poverty, famine, and illness that have taken hold in Africa and the
devastating impact natural disasters, such as Hurricanes Georges and
Mitch, have had on the economies of Caribbean nations. This legislation
will give these nations the opportunity--just the opportunity--to begin
recovering and to help them establish a foothold in our increasingly
interconnected global marketplace.
At the same time, this bill equally recognizes the importance of
protecting American interests and American jobs by including a number
of very specific safeguards aimed at ensuring the viability and success
of our domestic producers. Overall, I believe the committee has
presented the Senate with a very balanced trade package.
The central focus of this legislation is the provisions relating to
the 48 desperately poor countries of the sub-Sarahan African region.
This region of the world has continuously been disregarded as a serious
trading partner. While we have granted trade benefits to other areas of
the world, including Mexico and Canada, Africa has never been afforded
a similar opportunity--never. I believe the African Growth and
Opportunity Act will significantly alter our trade relationship with
Africa, while also providing these countries with the beginnings of the
means for positive and substantial economic reform.
I will take this opportunity to address some of the highlights of
this legislation.
First, the legislation provides duty and quota-free access to U.S.
markets for certain textiles and apparel. This provision should not
adversely affect the domestic apparel industry since African exports of
these products--and listen to this carefully --account for less than 1
percent of our total imports.
We are opening our door to 48 nations in the poorest region of the
world for something that amounts to less than 1 percent coming into our
Nation. That is why I said at the outset of these remarks that it is
not the magnitude of the trading relationship that will happen or the
dollar amount that will exchange hands, but for the first time we will
recognize this part of the world as an important part of the world, and
one that needs our help.
There is not enough money in the appropriations bucket to draw upon
to provide the kind of relief these people need in these 48 nations. We
cannot do that, but we can begin to give them the opportunity of access
to a tiny percentage of our market, and offer some hope and relief to
millions of people.
We should not do it without regard to the interests of our own
people. I listened carefully to the remarks of my good friend and
colleague from South Carolina. He speaks with great passion about the
people he represents in his State. There are thousands of others across
this country who earn a living every day in the apparel and textile
industry. None of us ought to disregard their interests. Our
responsibility, first and foremost, must be to our own people.
In this piece of legislation, we protect American workers. In a few
short years, if we fail to adopt the measure before us, the quotas that
are presently allowed in trade bills with the Pacific Rim countries
will come to an end. Once that has come to an end, the markets will
open up and a domestic content requirement will not be necessary.
Literally thousands of jobs that today find a home in the textile and
apparel industry in this country could be lost forever.
One of the things I admire about the authors of this bill is--and
they truly deserve our commendation--the fact that not only have they
found a way to provide some meaningful economic opportunity for
millions of people in some of the poorest parts of the world, if not
the poorest, but they have also done so in a way that takes into
consideration the needs of our own people. It is a well-balanced piece
of legislation. I strongly support their efforts.
To address the serious problem of transshipment of apparel products,
this legislation also establishes strict provisions to curb the
practice of transshipment of products from one place to another.
Beneficiary countries must adopt a visa system to guard against illegal
transshipment and the use of counterfeit documents.
In addition, countries are also required to enact regulations that
would allow the U.S. Customs Service to investigate alleged cases of
transshipment. To that end, almost $6 million has been authorized to
assist the Customs Service in these efforts and to provide technical
assistance to African nations which will help them combat
transshipment. Furthermore, if a country is found to be engaging in
illegal transshipping activities, it may be denied benefits for up to 5
years, a significant penalty. I again commend the authors for the
inclusion of that provision.
In the event the U.S. apparel industry suffers economic injury or a
threat of economic injury due to a surge in imports, a so-called
``snap-back'' provision has been included in this bill that would set
duties back to their non-preferential levels. The President of the
United States has been granted authority to monitor African imports,
and he has the right to initiate investigations to determine whether
imports are harmful to domestic producers.
Second, the bill enhances the 1984 Caribbean Basin Initiative by
promoting economic growth in this region. Like the benefits accorded
the sub-Saharan African nations, the enhanced Caribbean Basin
Initiative will grant duty and quota-free treatment to apparel and
textiles made from U.S. yarn and fabric. Benefits have also been
extended to products not currently included under the Caribbean Basin
Initiative, including footwear, tuna, and watches.
Strict transshipment provisions also apply to these CBI nations. The
legislation similarly calls on these nations to institute effective
Customs programs to prevent illegal transshipment. Moreover, it
establishes a ``one strike and you're out'' provision. Should an
exporter be found to have illegally transshipped apparel or textiles
from a Caribbean Basin Initiative nation into the United States, the
President has the authority to deny benefits to that exporter for up to
2 years and who may be required to remit payment totaling three times
the existing textile and apparel quotas.
I cite the details of this because it is important our colleagues
understand that the authors have been very careful to write into this
legislation provisions that will guard against the very things of which
the bill is being accused.
Is it perfect? Will there be those who may try to take advantage of
this? I am certain there will be, but the overall benefits of this
legislation with the provisions to guard against illegal activities
certainly warrant support of this bill, given the good and beneficial
provisions included in it that should provide the relief I mentioned
earlier.
I am pleased the conference report includes language that links trade
benefits to countries' commitment to eliminating one of the worst forms
of child labor. We can thank our colleague from Iowa, Senator Harkin,
who

[[Page 7438]]

cares deeply about this issue and helped write, I gather, some of the
provisions dealing with it. The bill also bans imports of products made
with forced or indentured child labor.
This morning, President Clinton issued an Executive order that adds a
provision that was dropped in conference making AIDS and HIV drugs more
readily available to African nations whose people have been so ravaged
by this deadly disease.
I note the presence of our colleague from the State of Wisconsin who
has spoken eloquently about the issue of AIDS and the importance of
trying to do more to alleviate the overwhelming problems that have
crippled literally millions of people in many of these nations.
This is not to say this is a perfect conference report, as I said
earlier, and I am disappointed the conferees did not include funding
for similar trade preferences to the nation of Colombia. My good friend
and colleague from New York heard me talk about this. I believe I
overextended my friendship with him by calling on numerous occasions to
see whether or not we could include Colombia as part of this package.
I note my colleague from Florida, as well, who spent countless hours
to find ways to provide some meaningful alternative economic
opportunities for the people of Colombia who today are presently
engaged, in far too many cases, in the growth and production of
narcotics products. Unfortunately, they end up, too often, in the
cities of our Nation, where drugs and narcotic trafficking is a huge
problem. My hope was, by including Colombia, in addition to the other
provisions that will soon be debated in the Senate, we would have been
able to provide a meaningful economic alternative for these people who
today engage in the drug production and trafficking in that country. My
hope is, in the near future, we will move to the Andean agreements
which are up for reauthorization and that Colombia can be included,
along with her neighboring countries.
This legislation is about helping countries help themselves by
strengthening their economies. It is increasingly difficult to find
funds even for the most worthy of aid initiatives. Trade, not aid, has
been the answer to a country's well-being.
While industrialized nations of the world have benefited from U.S.
trading policies, it is time we offer less fortunate nations of the
Caribbean and sub-Saharan Africa comparable opportunities.
In the year 2005, pursuant to the GATT rule, all WTO member countries
will gain quota-free access to our markets--quota-free access in 5
years. CBI enhancement and the African Growth and Opportunity Act, if
enacted, will allow countries in those regions to better prepare for
that day and to equip them to become full trading partners in the
global economy during the next decade.
If we do not do it and we have the quota-free access to our markets,
then I do not think anything we can do 5 years from now will provide
any relief economically whatsoever for the 48 nations of the sub-
Saharan region and the more than two dozen nations in the Caribbean
Basin that will benefit as a result of this legislation.
So, again, I commend Senator Roth, who is not here with us today--but
we certainly think of him and recognize his leadership on this issue--
and, as I said, Senator Moynihan, who will more than likely be dealing
with one or two of the last trade bills of his tenure in the Senate.
But it is worthy of him, in the waning days of his career here, that he
would fight as hard as he has to see to it this legislation would have
a full hearing, debate, and an opportunity for passage in the Senate.
Lastly, may I say, again, we are a great and wonderful nation. We
like to think of ourselves as a generous and good people. While I said
a moment ago that it is far more important that we consider the impact
of anything we do on our own people, it is, I think, in the hearts and
spirits of all Americans that we try to reach out and help others.
I had the wonderful privilege of serving as a Peace Corps volunteer
back in the 1960s when I graduated from college. It was a seminal event
in my life--a life-changing experience, to learn from a distance, in a
way, how our country was thought of. Despite the difficulties of the
day that raged in Southeast Asia, and our own difficulties here at
home, we were thought of, in the nation that I served in, as a good
people, a giving people.
As we begin this century, as I mentioned earlier--the 21st century--
we have an opportunity, with this bill, to say to millions of people,
the most desperately poor people in the world, that this, the greatest
nation of all, is willing to extend a hand, a helping hand. We must
help them to get on their feet, to provide the kinds of tools that will
make it possible for them to achieve economic opportunity, to enhance
the cause of democracy in these nations, which can never survive in the
absence of some economic growth and opportunity. With this legislation
we are doing ourselves and future generations, in this Nation and
around the world, a great favor, indeed.
I commend the authors of the bill. I strongly support its adoption
and hope this small but meaningful effort will begin to make a
difference in the lives of millions of people in Africa and in the
Caribbean Basin.
I yield the floor.
Mr. ROTH. Mr. President, I want to express my strong support
for the conference agreement on H.R. 434, the Trade and Development Act
of 2000. Senate passage of the conference agreement would mark the
first significant trade legislation to pass both Houses of Congress in
close to a decade, other than the implementation of trade agreements
under special fast track procedures. As such, the bill represents a
powerful statement regarding America's leadership on trade.
The conference agreement--and the House's 309-110 vote--vindicates
the approach that we took in the Finance Committee and here in the
Senate this past November. Our goal was to create a ``win-win''
approach to the Africa and Caribbean trade preference programs that
would ensure benefits to American firms and workers as well as to our
trading partners in those two regions. The conference report does just
that.
The conference report retains those provisions of the bill that the
textile industry's own analysis suggested would produce an additional
$8 billion in sales of American fiber and fabric and create an
additional 120,000 jobs. Those provisions--commonly known as ``807A''
and ``809''--were adopted without revision by the conferees. Those
provisions require that all textile components assembled into apparel
articles benefiting from those provisions must be made from U.S.
fabric, unless subject to certain de minimis exceptions specified in
the conference agreement.
Where the conference agreement broadens the benefits available to our
trading partners beyond those included in the Senate-passed
legislation, the provisions create discrete categories of apparel that
may benefit from the use of regionally-produced fabric, and in certain
limited instances, fabric from third countries used by the least
developed countries in Africa. That said, where the conference
agreement does expand those benefits for Africa and the Caribbean, it
also creates new opportunities for U.S. interests as well. For example,
the conference agreement's rules of origin expressly provide for the
use of American yarn, which relies on American cotton, for regionally-
made knit fabric that can be used in apparel articles destined for the
U.S. markets under the benefits provided by the conference agreement.
The conference agreement deserves the Senate's support. The
conference agreement represents an attempt to reach out and provide not
just a helping hand, but an opportunity--an opportunity for millions
around the world to seize their own economic destiny.
Africa has for too long suffered from our neglect. The continent
faces daunting political, economic and social challenges. Yet, African
leaders are seizing the opportunity to press for political and economic
change. The same holds true in the Caribbean and Central America. The
changes in the region since the original CBI legislation passed in 1983
have been dramatic. Our goal must be to support those changes.

[[Page 7439]]

The goal of the Trade and Development Act of 2000 is to meet Africa's
leaders and those in the Caribbean and Central America half way. It is
not a panacea for problems they face; rather, it is a small
downpayment--an investment--in a partnership that I hope we can foster
through our actions here.
This is a measure that is supported by every African and Caribbean
government. It represents a commitment by leaders in both regions to a
stronger economic relationship with the United States, and that street
runs both ways. Our exports to the Sub-Saharan region of Africa, for
example, already exceed by 20 percent our exports to all the states of
the former Soviet Union combined. We furthermore run a regular surplus
in our trade with the Caribbean and Central America. In other words, in
helping Africa and the Caribbean, we are also helping ourselves.
The conference agreement will also serve as an agent of positive
change.. The eligibility criteria in both the Africa and CBI provisions
are expressly designed to foster economic opportunity and political
freedom. That includes the criterion added here in the Senate by a vote
of 96-0 obliging beneficiaries of these two programs, as well as the
Generalized System of Preferences, to implement their international
obligations with respect to the elimination of the worst forms of child
labor, such as slavery, indentured servitude, and prostitution.
For those who would argue that the bill creates incentives to
transship third country fabric through either Africa or the Caribbean,
the conference agreement has a response that was worked out in close
consultation with the Customs Service and all other interested parties.
To protect against customs fraud designed to gain access to the program
illegally (commonly referred to as ``transshipment''), the conference
agreement contains unprecedented protections. They include requirements
that the beneficiary countries, with U.S. technical assistance, develop
their own effective enforcement infrastructure to combat transshipment
and cooperate fully with the U.S. Customs Service in its investigation
of alleged customs fraud. In addition, with respect to any individual
exporter found fraudulently to have claimed the trade benefits extended
under the conference agreement, the conference agreement would expel
the exporter from eligibility for the program's benefits. The
conference agreement would also authorize the appropriation of funds
necessary to improve the U.S. Customs Service's investigation of
transshipment generally, in order to contribute to the success of the
program's benefits.
For those who have expressed their concern that the new programs will
lead to a flood of new imports at a time when the U.S. industry is
already under economic pressure to adjust due to agreements reached in
the Uruguay Round, the conference agreement has a response as well.
First, the rules of origin under the conference agreement largely
reflect the approach we adopted in the Senate, one that favors the use
of American fabric. That means that any increase in imports will
necessarily imply an increase in sales of American textiles. Second,
the conference agreement also provides a mechanism by which domestic
producers of apparel articles competing with those imported under these
program can obtain temporary relief from unexpected surges in
particular categories that threaten serious injury to the competing
domestic industry.
The conference agreement would add certain other provisions that I
believe will strengthen the prospects for success. For example, with
respect to Africa, the conference agreement encourages the negotiation
of new trade-liberalizing agreements with interested Sub-Saharan Africa
trading partners that would build on the foundation that the conference
agreement establishes, and toward that end the conference agreement
makes permanent the position of Assistant United States Trade
Representative for African Affairs.
The conference agreement also includes a variety of other measures
that address other aspects of the challenges facing Africa and other
aspects of our economic relationship with the continent. Those include
a sense of the Congress resolution regarding the need for comprehensive
debt relief for the world's poorest countries (most of which are in
Sub-Saharan Africa); the targeting of U.S. technical assistance to
foster the goals of the conference agreement with respect to Sub-
Saharan Africa; encouraging the development of a special equity fund
for fostering investment in Africa at the U.S. Overseas Private
Investment Corporation; directing the expansion of U.S. Commerce
Department initiatives designed to foster the development of African
markets for U.S. exports; the donation of air traffic control equipment
no longer in use in the United States to eligible Sub-Saharan Africa
countries; a sense of the Congress relating to efforts to combat
desertification; and authorization of a study regarding potential
improvements in Sub-Saharan agricultural practices.
With respect to the Caribbean and Central America, the conference
agreement adds provisions designed to foster the success of the
initiative as well. Those include encouragement to enter into
negotiations with interested trading partners on trade agreements that
would liberalize two-way trade further and directions to the President
to organize regular meetings of the U.S. Trade Representative with
trade ministers from the region to eliminate obstacles to a stronger
economic relationship between the United States and our trading
partners in the region.
The conference agreement contains a number of other trade-related
provisions that are worth noting. Those includes the permanent
establishment of a special representative on agricultural trade at USTR
and a statement of agricultural trade negotiating objectives that we
hope will shape the agenda for the ongoing trade talks in the World
Trade Organization on agriculture.
The conference agreement also provides a boost to our review of trade
adjustment assistance programs to ensure that they are operating
effectively. While the conference agreement does not include the Senate
amendment expanding our farmers' access to TAA programs, it does
highlight the need to review our current TAA programs with a view
toward to ensuring that those programs do provide benefits to farmers
as those programs were originally intended to do when established in
1962. That review is already under way within the Finance Committee.
The conference agreement would also extend permanent normal trade
relations to Kyrgyzstan and Albania. Kyrgyzstan deserves special
mention because it is the first of the former Soviet republics, apart
from two Baltic countries, to join the World Trade Organization. It has
also made considerable progress toward a market economy and political
pluralism. Establishing stronger trade links with the Kyrgyz republic
is designed to foster a stronger relationship on a broader front, both
economically and politically.
I would also like to express my support for those provisions of the
conference report designed to address the tariff inversion affecting
the suit-making and fabric industries in this country. I have worked
with a number of Senators for the past six months to forge this
compromise that would address the concerns of both the domestic suit-
makers, fabric-makers, and wool growers. I am particularly proud that
the compromise was reached on the basis of tariff cuts that benefit all
of the parties. The conference agreement resolves a difficult problem
that has undermined the competitiveness of all sides of the U.S.
industry and I am pleased that we have been able to reach an agreement
that should foster both stronger suit-makers and stronger fabric-
makers, as well as assist our sheep industry in developing new markets
for its wool fiber.
I would also like to note my disappointment that we were unable to
agree on a way to make further progress in addressing the scourge of
AIDS affecting so many African countries. I worked for several months
to reach a compromise with both sides of the debate regarding the
supply of patented drugs to combat AIDS-related

[[Page 7440]]

disease, but that effort went unrewarded. I would have hoped that the
conference report would have gone further, particularly where we had
worked on what I thought were constructive potential compromises, but I
am certain that there will be other opportunities in this Congress to
rejoin those discussions.
Any conference agreement is, by its nature a compromise. In this
instance, I am convinced that the conference agreement is the stronger
for it. While we did not accomplish all that I hoped, this conference
agreement represents an incredible accomplishment.
For that, I particularly want to thank the majority leader for his
commitment to this process. I want to convey my special thanks to my
esteemed colleague, the ranking member of the Finance Committee,
Senator Moynihan, for his leadership throughout this process, to
Senator Grassley, chairman of the Subcommittee on International Trade,
for his sustained contribution, and to the other Senate conferees.
I also want to applaud the efforts of our counterparts on the House
side, from the chairman and ranking member of the Ways and Means
Committee, Congressmen Archer and Rangel, to the chair and ranking
member of the Ways and Means Trade Subcommittee, Congressmen Crane and
Levin, and to the Speaker of the House, Congressman Hastert. They made
this conference agreement a reality.
Mr. MOYNIHAN. Mr. President, I see my friend from Florida is here, so
I am happy to yield to him.
Mr. GRASSLEY addressed the Chair.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I need only a few minutes to respond to
a couple previous remarks. I will not take very long, I say to the
Senator from Florida.
Mr. President, I want to, first of all, follow up on a comment that
Senator Dodd and Senator Moynihan made about Colombia and including it
in the Caribbean Basin Initiative. I was hopeful we could do that. I
sent several communiques to the leaders about doing that. I am sorry it
could not be done in this conference agreement. I hope we get an
opportunity this year to include Colombia as a beneficiary country in
the Caribbean Basin Initiative program because I think it will help the
economy of Colombia, help them overcome the civil distress they have
there, even more than the aid that we currently give to Colombia,
although that aid is very necessary.
I also want to make a short comment on the effort put forth by the
Senator from California, Senator Feinstein, to explain the situation
with AIDS in Africa, and her attempt to help relieve that terrible
situation through the AIDS provision she included in the Africa trade
bill. I applaud my distinguished colleague, the senior Senator from
California, for her great concern for the victims of the AIDS disaster
in Africa. We all could not help but be deeply moved by her
presentation and the compassion that she expressed this morning.
I supported Senator Roth's efforts to seek a compromise on her
provisions that would have been acceptable to the House. The Senator
from California, as well as Senator Roth, have performed a great
service in bringing this issue to our attention and in trying to do
something about it.
Then lastly, I will say a few words on the comments made by Senator
Hollings, in his long and very thorough presentation of his point of
view--which I disagree with, or at least his conclusions.
He is a distinguished Senator with great knowledge on this particular
issue. I think he is wrong in opposing the bill because he says that
this conference report will devastate the U.S. apparel industry.
Sub-Saharan Africa currently supplies less than 1 percent of the
total value of apparel imports to the United States. Under the most
optimistic circumstances, the recent analysis by the nonpartisan
International Trade Commission shows that passage of this legislation
would increase apparel imports to this country from sub-Saharan Africa
by about 3 percent. Most, if not all, of this increase would come at
the expense of Far Eastern suppliers, not the U.S. manufacturers.
Again, let me emphasize, that is from the nonpartisan--at least
bipartisan--International Trade Commission. The legislation in the
conference report establishes a mechanism under which domestic
producers can petition for relief from import surges that threaten
serious injury.
Under these provisions, tariffs could be reimposed in limited
instances in which a domestic producer could establish a meritorious
case. So we have that option just in case the analysis made by the
International Trade Commission might be wrong. I do not think it is
going to be wrong. In fact, I have great confidence their predictions
will not be wrong. But just in case there are some unexpected import
surges, our legislation provides for a petition for relief in those
instances.
Furthermore, we have the industry's own analysis. It suggests that
this legislation will create an additional 120,000 jobs, largely due to
provisions requiring that all apparel items benefiting from provisions
contained in the Caribbean Basin Initiative portion of this legislation
must be assembled by textile components using U.S. fabrics.
More generally, I want to say a word about the idea that free trade
has not provided economic benefits to the average American. I want to
quote from the economic report of the President, who is, of course, a
member of the same party as the Senator from South Carolina.
The President's own economic report for fiscal year 2000 shows that,
because of trade agreements that have liberalized trade and opened new
markets, the average American has realized an annual economic benefit
of $1,000 every year since 1963. Since we traditionally measure
economic benefits by how they affect families, with a family of four,
that is an annual benefit of $4,000 per family.
Think in terms of what we have tried to do for families through
proposals for tax cuts. That amount of $4,000 is far more than any tax
cut that we have debated in the Congress. The idea that the average
American does not benefit from free trade is simply not true. My source
of that information--I tell the Senator from South Carolina--is the
leader of his party, President Clinton, making those statements in his
own budget document.
I yield the floor.
The PRESIDING OFFICER. The Senator from Florida.
Mr. GRAHAM. Mr. President, since the early 1980s, the United States
has implemented a logical series of policy initiatives with respect to
the nations of the Caribbean Basin.
First, in 1983, we enacted the Caribbean Basin Initiative, CBI, to
stabilize the region by building stronger, more diverse economies. This
initiative had the added goals of enhancing national security, and
reducing the flow of illegal drugs and illegal immigrants into the
United States.
Second, after the enactment of NAFTA in 1993, we moved to ``level the
playing field,'' for the CBI region by further enhancing our trade
relationship with the CBI nations. Today, after 7 years of debate, we
will vote on the final passage of this measure.
Third, we have responded quickly and compassionately to a number of
humanitarian crises in the CBI region; most recently to Hurricanes
Mitch and Georges, which caused unprecedented damage and misery in many
Latin American nations.
And finally, we now look towards 2005, a year that will bring the
expiration of the Agreement on Textiles and Clothing and the
implementation of the Free Trade Area of the Americas, both of which
will significantly affect trade relations throughout the Western
Hemisphere. Today, I will discuss the importance of the legislation
before us, as well as the future of our relationship with some of our
most important neighbors.
I am very pleased that the full Senate is now considering the
conference report on H.R. 434, which includes a number of trade
enhancement measures, including the Africa Growth and Opportunity Act
and Caribbean Basin

[[Page 7441]]

Trade Enhancement. Although I fully support all the measures in this
package, I have a particular interest in the United States-Caribbean
Basin Trade Enhancement Act. Since the passage of NAFTA put our
Caribbean neighbors at a competitive disadvantage, I have worked to
enhance the Caribbean Basin Initiative that was originally passed in
1983. I thank Senators Roth, Moynihan, and Lott for their support in
bringing this important piece of legislation to the floor, in addition
to their tireless work with the Senate and House conferees to reach
agreement on a number of provisions included in this bill.
Over the past 7 years, I have worked to enhance and build upon our
existing trade relationship with our neighbors in the Caribbean Basin
region. Three times, in 1993, 1995, and 1997, I introduced CBI
enhancement legislation to achieve this important goal. On February 3,
1999, in response to the overwhelming devastation and destruction
caused by Hurricane Georges and Hurricane Mitch, I introduced the
Central American and Caribbean Relief Act. This bill represented a
broad and comprehensive strategy to provide immediate disaster relief,
economic and infrastructure recovery and development, and long-term
trade enhancements that would benefit both the United States and the
countries in the region well into the new millennium.
Although we passed legislation in March 1999 that provided immediate
disaster relief to the countries in the region that were impacted by
Hurricanes Georges and Mitch, I am pleased that we are now considering
final passage of a bill that includes many of the long term trade
enhancement provisions I introduced in the Central American and
Caribbean Relief Act. Trade is the best form of aid. Enacting this
legislation is critical to the continued economic health of our nation
and the economic health of our closest neighbors in the Caribbean and
Latin America. It is also in our national security interests.
There are many compelling reasons to pass this legislation. The first
is humanitarian. I have made three trips to the region in the year
following the devastation of Hurricane Georges and Hurricane Mitch. I
know that many of my colleagues have also seen the destruction caused
by these hurricanes. These two destructive storms caused a level of
death and devastation not seen in this hemisphere in over 200 years.
We have all heard of the tremendous loss of life, economic
disruption, and human suffering caused by these hurricanes. As a
neighbor, a friend, and a great nation, we have an obligation to
respond with assistance that will help the region recover as rapidly as
possible.
A second reason to pass this legislation is economic: CBI
enhancements are in the best economic interest of the United States.
Experience shows us that providing trade benefits to the Caribbean
basin in good for the United States. Following enactment of the
Caribbean Basin Initiative in 1983, our trade position with the region
improved from a deficit of $3 billion in 1983 to a surplus of nearly
$3.5 billion in 1998. Between 1983 and 1998, U.S. exports to the region
increased fourfold, while total imports into the U.S. from the region
grew by less than 20 per cent. On a per capita basis, our trade surplus
with the CBI region has consistently out-paced our trade surplus with
any other region of the world. In fact, since 1995, U.S. exports to the
CBI countries have increased by approximately 32 percent. Over 58
million consumers in the 24 countries in the CBI region purchase 70
percent of their non-oil imports from the United States.
Yet another reason to strengthen the Caribbean economy is the
stability of our closest neighbors. In 1983 the Caribbean Basin, which
includes Central America, was a region inflamed with violent conflicts
and rampant drug trafficking. The primary goal of the initial CBI
legislation was to stabilize the region by building stronger, more
diverse economies, and to enhance our national security by reducing the
flow of illegal drugs and illegal immigrants into the United States.
While everyone can agree that the region's worst days are behind it,
we have a continued national security interest in the Caribbean Basin--
such as stemming the flow of illegal drugs into the United States.
Without assistance to restart the regional economy and make it possible
for people to provide for their families, the nations in the region
will be even more susceptible to the scourge of drug trafficking. The
people of the region must have opportunities in the legal economy so
that they may feed their families and resist the financial temptations
associated with drug trafficking.
In addition, failing to enact CBI enhancements will increase the
pressure for migration to the United States. The people of the region
must have real opportunity at home so that they are not forced to flee
in order to find employment and feed their families.
Passage of this legislation is not only critical to ensure that the
Caribbean Basin is no longer negatively affected by NAFTA, but it will
also boost the region's long-term competitiveness with Asian nations,
particularly in the textile industry.
Although current CBI textile production costs are somewhat higher
than costs in Asia, the textile products of most Asian nations are
currently subject to quotas imposed by the Multi-Fiber Agreement, now
known as the Agreement on Textiles and Clothing. This restriction on
Asian textiles has enabled the CBI region to remain competitive, and
further, the CBI region has become a significant market for fabric
woven in U.S. mills from yarn spun in the U.S. originating from U.S.
cotton growers.
However, in 2005, the Asian import quotas will be phased out. At that
time, textile production in the Caribbean basin will be placed at a
distinct and growing disadvantage. Disinvestment in the region will
occur, reducing the incentive to use any material from U.S. textile
mills or cotton grown in the United States.
That is why passing CBI enhancement legislation now is critical to
the U.S. textile and yarn industries, as well as to the U.S. cotton
growers. Sixty-four thousand U.S. textile workers depend on our
partnership with the Caribbean. Overall, four hundred thousand U.S.
jobs are dependent upon textile exports to the CBI region. Only by
providing incentives for the development of strong relationships with
apparel manufacturers in our hemisphere will we have any chance to
maintain a market for U.S. cotton and textiles after the Asian quotas
are eliminated in 2005.
Inherent in our CBI enhancement efforts are public and private
investment incentives that will increase productivity and the quality
of life within the region. We anticipate the textile industry will
provide investment capital targeted for the construction and
maintenance of schools, health and child care facilities, and
technology enhancements to increase the productivity of both workers
and existing manufacturing facilities. A well trained and healthy
workforce will be more productive and efficient as Caribbean basin
producers compete for shares of the international textile market.
Mr. President, we are about to make a fundamental decision that will
impact twenty-seven of our closest neighbors. The choice is clear,
stark and beyond reasonable debate. Will we engage or will we retreat?
I urge my colleagues to extend this assistance to our neighbors in
order to expand commerce and promote economic and political stability
in the region.
With the final passage of this legislation, we have an unprecedented
opportunity to strengthen our economic and national security through
the enhancement of our trade relationship with our neighbors in the
region. We must act prior to 2005 to build a dynamic, formidable
Western Hempishere trade alliance that encourages U.S. industry to
invest in the region and to make commitments to rebuilding the
industrial infrastructure in the region.
There are a number of additional initiatives, both at home and
abroad, that we should aggressively pursue in order to build a true
``partnership for success'' with both the Caribbean and the other
nations of the Western Hemisphere. Mr. President, as we take the

[[Page 7442]]

first step in this process today in passing CBI enhancement
legislation, let me outline and advocate a comprehensive strategy for
economic growth and development throughout our hemisphere.
First, here in the U.S., we should move quickly to modernize and
improve both the facilities and organizations that manage our
international trade.
For example, in recent years, the variety of trade and commerce that
are carried out at seaports has greatly expanded. This continuing
growth of activity at seaports has increased the opportunities for a
variety of illegal activities, including drug trafficking, cargo theft,
auto theft, illegal immigration, and the diversion of cargo, such as
food products, to avoid safety inspections.
In 1998, I asked the President to establish a federal commission to
evaluate the nature and extent of crime and the overall state of
security in seaports, and to develop recommendations for improving the
response of federal, state and local agencies to all types of seaport
crime. In response to my request, President Clinton established the
Interagency Commission on Crime and Security in U.S. Seaports on April
27, 1999.
Although the Commission will soon release its final report, it has
already identified at least four preliminary recommendations for
improving seaport security:
First, we should establish minimum security guidelines for all U.S.
seaports. These would include uniform practices for physical security,
certification for private security officers at seaports, guidelines for
restricting vehicle access to seaports, and other, similar measures.
Second, local ports should establish and maintain local port security
committees, made up of federal, state, and local agencies with trade
and law enforcement responsibilities at seaports. These committees
would discuss and develop solutions for issues related to port
security. For example, a joint initiative among state and local police
departments in South Florida, the FBI, and the Customs Service, known
as the Miami-Dade County Auto Theft Task Force, has been very
successful. In the last 3 years, this task force has recovered 851
stolen vehicles valued at $19 million.
Third, federal, state, and local law enforcement agencies should
conduct cooperative, interagency threat assessments for seaports within
their jurisdictions, with an eye towards coordinating their efforts to
combat criminal activity.
And finally, we should encourage the development and deployment of
new technologies that would further assist law enforcement and trade
officials in carrying out their missions at the ports. Currently, few
ports employ measures such as security cameras, carbon dioxide
detectors, vessel tracking devices, or enhanced x-ray equipment, all of
which could assist law enforcement personnel in accomplishing their
mission. Enhanced technology will not only facilitate the movement of
legitimate trade, but will also assist in the rapid detection of
criminal and terrorist activities.
The second critical domestic initiative is the modernization of the
U.S. Customs Service. On a typical day, dedicated Customs officers in
over 900 U.S. field locations and 34 foreign offices perform multiple
tasks associated with the successful performance of the agency's
mission. This includes the examination of 550 vessels, 45,000 trucks,
344,000 vehicles, and 1.3 million passengers.
Perhaps even more important, Customs officers seize over 4000 pounds
of narcotics and $1.2 million in drug money in a day, and they make 67
criminal arrests of those involved in a various illegal activities,
including drug running and money laundering. And finally, in their role
as facilitator of U.S. trade, Customs processes over 58,600 import
shipments worth $2.6 billion, monitors 27,000 export shipments, and
collects over $60 million of revenue per day.
It is vital that the automation systems upon which Customs relies to
perform its mission-critical functions be up-to-date and capable of
handling the ever-increasing pressure on the Service. And this is the
problem.
Currently, the Customs Service relies on severely aging automation
systems. In particular, Customs Automated Commercial System (known as
ACS), which is at the core of their trade enforcement and compliance
functions, and is over sixteen (16) years old, is increasingly
susceptible to short-term ``brown-outs'' and long-term failure. With an
ACS system failure, even for a few hours, the Customs Service's
responsibility for protecting American borders becomes significantly
more difficult.
Commissioner Kelly and the Customs Service are ready to move forward
with the modernization of their information technology systems. They
have determined the funding requirements to accomplish their
modernization goals in the most cost-effective fashion. Customs will
require $12 million for the remainder of fiscal year 2000, and they
have requested $338.4 million for fiscal year 2001 in order to complete
this project.
The importance of Customs modernization cannot be overstated; it is a
fundamental component of moving U.S. trade policy into the 21st
century. I urge my colleagues to support Commissioner Kelly in his
effort to streamline and modernize the Customs Service, and to fully
fund this critically important initiative.
Third, we must pass legislation that recognizes the comprehensive
role of the Customs service in both trade facilitation and law
enforcement. Both the Senate and the House have passed bills to
reauthorize the U.S. Customs Service. Both bills would provide Customs
with the necessary funding it requires to perform its multi-faceted
functions of drug interdiction, passenger and cargo inspection, and
trade facilitation.
Both bills enhance drug interdiction and investigative efforts, the
facilitation of international trade, the targeted use of sophisticated
technology, the efficient allocation of assets and resources, and the
enhancement of Customs internal affairs functions. In addition, the
Senate bill directs the Customs Service to establish performance goals
and indicators, as well as priorities and objectives by which we may
evaluate the effectiveness of Customs operations.
I urge both chambers of Congress to resolve quickly the differences
between the two bills, and to pass a comprehensive Customs
Reauthorization Act as a demonstration of our commitment to support the
first line of defense against the flow of drugs and drug money across
our borders, and boost the first line of offense in promoting trade.
In the interest of expanding trade and economic development
throughout the Western Hemisphere, there are a number of legislative
initiatives already under consideration by the Senate that should be
finalized and passed before we complete our business this year.
As I have already stated, the primary goal of the Caribbean Basin
Initiative (CBI) was to stabilize the region by building stronger and
more diverse economies, encouraging growth in international trade,
developing a strong economic relationship between the U.S. and the
region, and creating employment opportunities in the legitimate economy
as an alternative to drug trafficking.
In 1991, after 8 years of resounding success in the CBI region,
Congress passed the Andean Trade Preferences Act (ATPA), providing CBI-
like trade benefits to the countries of Bolivia, Colombia, Ecuador, and
Peru. In the nine years following enactment of ATPA, U.S. exports to
the Andean region have more than doubled, from $3.9 billion in 1991 to
nearly $9 billion in 1998. U.S. exports to Colombia account for over
half of this increase, growing from $2 billion in 1991 to $4.8 billion
in 1998. During the same time period, Andean exports to the U.S.
increased by almost 80 percent.
In the wake of the Asian financial crisis, Colombia and its Andean
neighbors are struggling with issues similar to the challenges of the
CBI region--only much worse. After more than 60 years of sustained
growth, Colombia is

[[Page 7443]]

experiencing its worst economic recession since the 1930s. Unemployment
in Colombia is at an historic high of 21 percent; the Colombian economy
is suffering from three consecutive quarters of negative growth. The
economic downturn in Colombia has harmed both foreign and domestic
investor confidence in the Andean region.
Drug trafficking is undermining the democratic foundations of the
Andean region. The Office of National Drug Control Policy (ONDCP)
recently released information indicating Colombian coca cultivation has
increased 140 percent over the past five years. More than 300,000 acres
of coca are currently under cultivation in the jungles and mountains of
Colombia. Actual cocaine production in Colombia has risen from 230
metric tons to 520 metric tons, a 126 percent increase in the same five
year period. ONDCP estimates that 80 percent of the cocaine available
on our nation's streets was cultivated on Colombian farm land,
processed in Colombian drug labs, or smuggled into the U.S. through
Colombia's roads, rivers, and air space.
The people of the Andean region are also suffering from the rampant
guerilla violence that plagues Colombia and threatens the stability of
the entire Andean region. In 1998, there were over 21,000 murders and
1,100 kidnapings in Colombia. Ninety percent of these murders and
kidnapings were related to the armed conflict between the Government of
Colombia and the anti-government insurgent groups who control almost 40
percent of the country, are heavily involved in cocaine and heroin
trafficking, and who regularly violate the national sovereignty of
their Andean neighbors.
Colombia's best and brightest citizens are leaving their homes in
record numbers. Since 1995, over 1 million Colombians have fled their
country to escape the drug and guerilla related violence that threatens
the entire region. In the last year alone, more than 100,000 Colombians
have moved to South Florida. Seventy percent of the Colombians
displaced by the violence and terror in their country will never return
to Colombia.
In response to this crisis, the government of Colombia has formulated
Plan Colombia. The administration, in turn, has responded generously to
Colombia's needs by considering a supplemental appropriations package
of more than $1.6 billion to help the country in this time of crisis.
This will supplement over $4.0 billion being spent by Colombia itself.
Fundamental to Plan Colombia, and to the government's ability to
succeed in its efforts to safeguard the country, will be efforts to
encourage economic growth and provide jobs to the Colombian people.
Without new economic opportunities, more and more Colombians will turn
to illicit activities to support their families or seek to join the
growing numbers of people who are leaving the country to find a better,
safer future for their families.
As part of its Colombian assistance package, the administration has
proposed $145 million over the next 2 years for alternative economic
development targeted toward Colombian coca and poppy growers. Although
agricultural reform is an important component of the administration's
plan, agricultural programs alone are insufficient in addressing the
alternative development needs in the Andean region. Again Mr.
President, trade is the best form of aid.
The United States is at a critical juncture with its neighbors in the
CBI and Andean regions. As we enhance our trading relationship with our
partners in the Caribbean by passing the legislation under
consideration today, we must also work to expand and enhance our
trading relationships with the countries of the Andean region.
Currently, under ATPA, Bolivia, Colombia, Ecuador, and Peru enjoy the
same trade benefits that we currently extend to the CBI region.
However, upon final passage and enactment of CBI enhancements, our
Andean trading partners will be at a competitive disadvantage.
To promote economic growth and regional stability, the Congress must
consider additional trade measures that benefit the Andean region.
First, the Congress should grant early renewal of ATPA. Early renewal
of this important trade agreement will signal the United States'
support of Colombia's economic reform efforts, and will boost the
confidence of both domestic and international investors in pursuing
business opportunities that create jobs and enhance international trade
in Colombia and the Andean region.
Second, the Congress should consider granting CBI parity to the ATPA
beneficiaries. During 1999, Colombia and its Andean neighbors exported
approximately $562 million in textiles and apparel to the United
States. While insignificant in comparison to the $8.4 billion in
textile and apparel exports originating in the CBI region, Andean
textile and apparel production sustains more than 200,000 jobs in
Colombia alone--valuable jobs in the legitimate economy. Absent CBI
parity, the Andean region will find itself at a significant competitive
disadvantage with the 27 countries of the CBI region.
Third, the Senate should approve passage of the administration's
supplemental assistance package for Colombia. The proposal responds to
an emergency situation, expresses a strong U.S. commitment to Colombia,
and complements other key elements of Plan Colombia. I believe that it
will help mobilize higher levels of commitment from the Colombian
government and the private sector, and will catalyze and sustain
multilateral efforts of support for Colombia.
As we consider the final passage of CBI enhancements, as well as the
President's Colombian aid package, the United States has an
unprecedented opportunity to make significant accomplishments in
regions ravaged by natural disasters, economic contraction, and the
scourge of drug trafficking. However, as we make the fateful decisions,
we must recognize that the dollars we spend on eradication and
interdiction will be wasted unless the expansion and enhancement of
international trade is included as a critical component of an effective
economic assistance and counter drug strategy.
We must also aggressively pursue the Fee Trade Area of the Americas,
which will put in place the future framework for trade in our
hemisphere. We cannot afford to fail in this task, and I am encouraged
by the progress that has been made up to this point.
Last year, Congress passed my resolution stating that Miami should
host the permanent Secretariat of the Free Trade Area of the Americas.
Coupled with the passage of the trade legislation under consideration
today, these actions indicate that the United States Congress still
believes that opening markets and expanding economic links abroad are
in our national interests. We must continue to demonstrate our
leadership in this movement.
There is also much that can and should be accomplished by our
Caribbean partners to ensure that their end of the international
trading system is as efficient as it can be. They must work to ensure
the efficiency of their seaports, airports, and transportation systems.
We can help with technical assistance. International institutions such
as the World Bank and the Inter-American Development Bank can use their
assistance programs to promote efficiency and increase investment in
the textile and apparel sector of the Caribbean economy. We can also
work with these institutions and industries to ensure that
internationally recognized labor rights are respected. Such initiatives
will continue to build a consensus in the U.S. and aboard on the
benefits of expanded trade.
Upon final passage of CBI enhancement legislation, we will begin the
important process of establishing a true ``partnership for success''
with some of our important neighbors. Mr. President, the action of the
Senate today is a good start, but is only the beginning. I urge my
colleagues to look towards the future, and to take advantage of the
real economic benefits that can be achieved by further enhancing our
relationship with the nations of the Western Hemisphere.

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