[Congressional Record (Bound Edition), Volume 147 (2001), Part 12]
[Senate]
[Pages 17726-17740]
[From the U.S. Government Publishing Office, www.gpo.gov]



        UNITED STATES-JORDAN FREE TRADE AREA IMPLEMENTATION ACT

  The PRESIDENT pro tempore. Under the previous order, the Finance 
Committee will now be discharged from further consideration of H.R. 
2603, and the Senate will now proceed to its consideration.
  The clerk will report the bill by title.
  The assistant legislative clerk read as follows:

       A bill [H.R. 2603] to implement the agreement establishing 
     a United States-Jordan free trade area.

  The PRESIDENT pro tempore. Under the previous order, there will now 
be 2 hours of debate on the bill with 1 hour under the control of the 
Senator from Texas, Mr. Gramm, and 1 hour under the control of the 
Senator from Montana, Mr. Baucus, or his designee.
  What is the will of the Senate? Time is running.
  The Senator from Montana, Mr. Baucus.
  Mr. BAUCUS. Mr. President, I rise to urge the adoption of H.R. 2603. 
That is a bill to implement the United States-Jordan Free Trade 
Agreement. The House passed the bill by a voice vote just before the 
August recess. The Finance Committee reported a virtually identical 
bill, also immediately before the August recess. Only two Members 
dissented when the Finance Committee reported that bill out.
  I have advocated the approval of this agreement since it was 
negotiated by the Clinton administration last year. Finally, after a 
number of hitches, a number of setbacks, the administration and 
Congress appear poised to give final approval to the United States-
Jordan Free Trade Agreement.
  This implementing bill sends an unmistakable signal of support for an 
important friend, an important ally in the Middle East. That signal was 
important when the agreement was signed last October. It is even more 
important now. Jordan has been a steadfast friend in its support for 
the United States' efforts to bring peace to the Middle East. We all 
remember the critical role played by King Hussein a few years ago. King 
Abdullah has maintained that support.
  As we all know, Jordan has been steadfast in its support for America 
in the wake of the terrorist attacks against us. In a September 12 
letter to President Bush, the King condemned the attacks and pledged 
Jordan's support in our fight against terrorism. As

[[Page 17727]]

he put it, Jordan is committed to work with the United States, ``to 
ensure that the enemies of peace and freedom do not prevail.''
  This is precisely the kind of commitment we now need from our friends 
and our allies. Accordingly, we should do whatever we can to reinforce 
Jordan's support. By implementing the free trade agreement, we will do 
just that.
  But that is not the only reason we should pass the implementing bill. 
To put it simply, it is a solid agreement that is not only good for 
Jordan but it is also good for the United States and good for the world 
trading system. The agreement itself is closely modeled upon the United 
States-Israel Free Trade Agreement. It provides for the staged 
elimination of tariffs and other trade barriers, provides for extensive 
intellectual property protection, and extends trading rules to new 
issues such as electronic commerce.
  The United States-Jordan Free Trade Agreement is truly a 21st century 
free trade agreement. But I do not just mean it addresses high-
technology trade issues. Our free trade agreement with Jordan also 
demonstrates a commitment to a progressive trade agenda, an agenda that 
recognizes the links between trade and environmental standards and 
between trade and labor standards, an agenda that puts these important 
matters on the same plane as market access, the protection of 
intellectual property rights, and other matters.
  Some Senators have criticized the labor and environmental provisions 
in the Jordan agreement. Let me respond and explain why these 
provisions are, in fact, positive developments that point the way 
toward further progress.
  In the areas of labor and environment, the United States and Jordan 
have undertaken a straightforward, common-sense obligation. Both 
countries have strong labor and environmental laws. Recognizing this, 
both countries agree to effectively enforce their own laws.
  This simple obligation reflects a recognition that as the more 
glaring tariff and nontariff barriers come down, measures such as a 
lowering of labor and environmental standards can have a trade 
distorting effect as well.
  Some have charged that the labor and environmental provisions in the 
Jordan agreement encroach on the sovereignty of the United States. That 
charge is basically--in fact, it is plainly--wrong.
  The provisions of the agreement do not in any way prevent us from 
enacting and enforcing the laws and regulations that we decide are 
appropriate to protect our environment and the health and safety of our 
own workers. This is a critical issue, so I want to be specific. For a 
labor or environmental measure to be challenged under the agreement, it 
must meet each of three conditions. Remember, this is for a labor or 
environmental measure to be challenged under the agreement. I will now 
briefly go over the three conditions that must be met.
  First, it must constitute a sustained or recurring course of action 
or inaction--a sustained or recurring course of action or inaction. 
Second, it must affect trade. It cannot be something that does not 
affect trade. It must affect trade. Third, it must be beyond the bounds 
of the reasonable exercise of discretion in such matters.
  Further, no arbitrator can order the United States to change its 
practices pursuant to the agreement. Let me repeat that. No arbitrator 
can order the United States to change its practices pursuant to the 
agreement.
  Under the agreement, dispute settlement will be based on nonbinding 
mediation--not arbitration but nonbinding mediation. That is very 
important. In other words, even in the unlikely event that the three 
conditions are met, and a mediator--not an arbitrator--and a mediator 
finds against the United States, that determination is purely advisory, 
intended only to guide the parties in resolving any disputes through 
consultation.
  To my mind, the approach to labor and environment in the Jordan 
agreement makes perfect sense. Consider the alternative. Would we 
really want to enter into a trade agreement with a country intent on 
weakening enforcement of its labor and environmental laws in order to 
gain a trade advantage? I don't think so. Yet the opponents of the 
labor and environmental provisions would permit precisely that result. 
That is not just bad policy, it is bad environmental policy, it is bad 
labor policy, and bad trade policy. Indeed, I hope that by including 
labor and environmental provisions in the Jordan agreement we will set 
a precedent for future trade agreements.
  In conclusion, let me stress that getting the United States-Jordan 
agreement off the ground would be essential even if we were not 
currently mobilizing support for a global campaign against terrorism. 
The agreement represents an important expression of American support 
for a key partner in the Middle East as well as a model of a 
progressive free trade agreement. I hope the President will sign it 
immediately so the benefits to both the United States and Jordan can 
begin to flow.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDENT pro tempore. The absence of a quorum has been 
suggested. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent the order for the 
quorum call be dispensed with.
  The PRESIDENT pro tempore. Without objection, it is so ordered. The 
Senator from Montana, Mr. Baucus.
  Mr. BAUCUS. Mr. President, in order to avoid dead time in the Senate 
while we are waiting for other Senators to speak, I would like to read 
into the Record two letters. One by our United States Trade 
Representative, Ambassador Robert Zoellick, to Jordan's Ambassador to 
the United States, and the other by Ambassador Muasher to USTR 
Zoellick. The letters are identical. They were exchanged on July 23 of 
this year in order to demonstrate common agreement on a critical point.

       Should any differences arise under the Agreement, my 
     Government will make every effort to resolve them without 
     recourse to formal dispute settlement procedures.
       In particular, my Government would not expect or intend to 
     apply the Agreement's dispute settlement enforcement 
     procedures to secure its rights under the Agreement in a 
     manner that results in blocking trade. In light of the wide 
     range of our bilateral ties and the spirit of collaboration 
     that characterizes our relations, my government considers 
     that appropriate measures for resolving any differences that 
     may arise regarding the Agreement would be bilateral 
     consultations and other procedures, particularly alternative 
     mechanisms, that will help to secure compliance without 
     recourse to traditional trade sanctions.

  Mr. President, again, this is an exchange of letters between 
Ambassador Zoellick and the Ambassador representing Jordan.
  I ask unanimous consent to have those letters printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                            Executive Office of the President,

                             Washington, DC, 20508, July 23, 2001.
     His Excellency Marwan Muasher,
     Ambassador of the Hashemite Kingdom of Jordan to the United 
         States.
       Dear Mr. Ambassador: I wish to share my Government's views 
     on implementation of the dispute settlement provisions 
     included in the Agreement between the United States of 
     America and the Hashemite Kingdom of Jordan in the 
     Establishment of a Free Trade Area, signed on October 24, 
     2000.
       Given the close working relationship between our two 
     Governments, the volume of trade between our two countries, 
     and the clear rules of the Agreement, I would expect few if 
     any differences to arise between our two Governments over the 
     interpretation or application of the Agreement. Should any 
     differences arise under the Agreement, my Government will 
     make every effort to resolve them without recourse to formal 
     dispute settlement procedures.
       In particular, my Government would not expect or intend to 
     apply the Agreement's dispute settlement enforcement 
     procedures to secure its rights under the Agreement in a 
     manner that results in blocking trade. In light of the wide 
     range of our bilateral ties and the spirit of collaboration 
     that characterizes our relations, my Government considers 
     that appropriate measures for resolving any differences that 
     may arise regarding the Agreement would be bilateral 
     consultations and other procedures, particularly alternative 
     mechanisms, that will help to secure compliance without 
     recourse to traditional trade sanctions.
           Sincerely,
                                               Robert B. Zoellick,
                                        U.S. Trade Representative.

[[Page 17728]]

     
                                  ____
                               Embassy of the H. K. of Jordan,

                                    Washington, DC, July 23, 2001.
     Hon. Robert B. Zoellick,
     U.S. Trade Representative,
     United States of America.
       Dear Mr. Ambassador: I wish to share my Government's views 
     on implementation of the dispute settlement provisions 
     included in the Agreement between the Hashemite Kingdom of 
     Jordan and the United States of America on the Establishment 
     of a Free Trade Area, signed on October 24, 2000.
       Given the close working relationship between our two 
     Governments, the volume of trade between our two countries, 
     and the clear rules of the Agreement, I would expect few if 
     any differences to arise between our two Governments over the 
     interpretation or application of the Agreement. Should any 
     differences arise under the Agreement, my Government will 
     make every effort to resolve them without recourse to formal 
     dispute settlement procedures.
       In particular, my Government would not expect or intend to 
     apply the Agreement's dispute settlement enforcement 
     procedures to secure its rights under the Agreement in a 
     manner that results in blocking trade. In light of the wide 
     range of our bilateral ties and the spirit of collaboration 
     that characterizes our relations, my Government considers 
     that appropriate measures for resolving any differences that 
     may arise regarding the Agreement would be bilateral 
     consultations and other procedures, particularly alternative 
     mechanisms, that will help to secure compliance without 
     recourse to traditional trade sanctions.
           Sincerely,

                                               Marwan Muasher,

                               Ambassador of the Hashemite Kingdom
                                                        of Jordan.
  Mr. BAUCUS. Mr. President, I want to say a few words about these 
letters, since many have referred to them as the U.S.-Jordan Agreement 
has moved through the Congress.
  First, this exchange of letters should not have been necessary. We 
should have passed this legislation months ago, without the exchange of 
letters.
  Second, the exchange of letters does not change the U.S.-Jordan 
Agreement one jot. It simply reflects the views of the current 
Administration and the Government of Jordan. It is not an amendment to 
the Agreement. Indeed, it is not even binding on future 
Administrations.
  Clearly, the number of disputes between our two countries will be 
few, if any. In the unlikely event we do go to formal dispute 
settlement, we should avoid resorting to sanctions, whatever the 
subject of the dispute. The exchange of letters expresses that view.
  However, if in a particular case a future Administration should 
decide that sanctions are appropriate, it will be free to act 
accordingly. Nothing in this exchange of letters changes that.
  Mr. President, I now would like to read into the Record article 5 of 
the agreement, pertaining to the environment.

       1. The Parties recognize that it is inappropriate to 
     encourage trade by relaxing domestic environmental laws. 
     Accordingly, each Party shall strive to ensure that it does 
     not waive or otherwise derogate from, or offer to waive or 
     otherwise derogate from, such laws as an encouragement for 
     trade with the other Party.
       2. Recognizing the right of each Party to establish its own 
     levels of domestic environmental protection and environmental 
     development policies and priorities, and to adopt or modify 
     accordingly its environmental laws, each Party shall strive 
     to ensure that its laws provide for high levels of 
     environmental protection and shall strive to continue to 
     improve those laws.
       3. (a) A Party shall not fail to effectively enforce its 
     environmental laws, through a sustained or recurring course 
     of action or inaction, in a manner affecting trade between 
     the Parties, after the date of entry into force of this 
     Agreement.
       (b) The Parties recognize that each Party retains the right 
     to exercise discretion with respect to investigatory, 
     prosecutorial, regulatory, and compliance matters and to make 
     decisions regarding the allocation of resources to 
     enforcement with respect to other environmental matters 
     determined to have higher priorities. Accordingly, the 
     Parties understand that a Party is in compliance with 
     subparagraph (a) where a course of action or inaction 
     reflects a reasonable exercise of such discretion, or results 
     from a bona fide decision regarding the allocation of 
     resources.
       4. for purposes of this Article, ``environmental laws'' 
     mean any statutes or regulations of a Party, or provision 
     thereof, the primary purpose of which is the protection of 
     the environment, or the prevention of a danger to human, 
     animal, or plant life or health, through:
       (a) the prevention, abatement or control of the release, 
     discharge, or emission of pollutants or environmental 
     contaminants;
       (b) the control of environmentally hazardous or toxic 
     chemicals, substances, materials and wastes, and the 
     dissemination of information related thereto; or
       (c) the protection or conservation of wild flora or fauna, 
     including endangered species, their habitat, and specially 
     protected natural areas in the Party's territory, but does 
     not include any statutes or regulations, or provision 
     thereof, directly related to worker safety or health.

  Again, to summarize, Mr. President, the labor and environmental 
provisions are somewhat contentious. They are framed in such a way that 
I think it helps labor and the environment in both the United States 
and Jordan, and in a way that does not in any way intrude upon American 
sovereignty.
  Let me repeat: The simple obligation that the United States and 
Jordan make reflects a recognition that as the more glaring tariff and 
non-tariff barriers come down, measures such as labor and environmental 
standards may have an effect on trade. Measures that may have a trade-
distorting effect have been dealt with in past trade agreements. Since 
a lowering or a suppression of labor and environmental standards may 
distort trade, these too should be dealt with in trade agreements.
  The idea here is to encourage countries to protect labor and labor 
rights and to protect the environment in ways that do not distort 
trade.
  The provisions of this agreement do not in any way prevent us from 
enacting and enforcing the laws and regulations that we decide are 
appropriate to protect our environment and the health and safety of our 
workers.
  For a labor or environmental measure to be challenged under the 
agreement, it must meet three conditions. I think it is important to 
re-state what those three conditions are.
  First, a measure must constitute a sustained or recurring action or 
inaction. It can't be just a single act by the President or by the 
Congress. It has to be a sustained or recurring action in order for a 
labor or environmental provision to be deemed trade distorting.
  Second, it must affect trade. An environmental action or labor action 
which may have a significant effect on the United States but does not 
affect trade is not actionable.
  Third, it must be beyond the bounds of a reasonable exercise of 
discretion.
  There are certainly matters that may slightly distort trade, and may 
arguably be sustained or recurring. But if the action is within the 
bounds of a reasonable exercise of discretion by the United States, 
then no action is permissible.
  Even if those tests are met, we move to the question of what sort of 
dispute settlement is provided for in this agreement. In this agreement 
there is no binding dispute settlement. There is consultation, but that 
is it. There is no arbitration in this agreement. There is no 
arbitration panel, no judge, and no tribunal. Rather, under this 
agreement, if one country thinks each of the three conditions is met, 
it may request non-binding mediation, and not arbitration. If a 
mediator finds that an action is inappropriate under this agreement, 
that finding is non-binding. And the parties will then move toward 
consultation, trying to work out what seems to make the most sense. 
Even if the mediator finds against the United States, the United States 
cannot be forced to follow the recommendation of the mediator.
  The argument against this provision is that it intrudes upon American 
sovereignty, that it commits the United States to at least listen to a 
mediator, and at least consult with Jordan on labor and environmental 
matters.
  I think that is not much of an argument against the agreement, 
because I think we want to encourage labor and environmental standards 
that are non-trade-distorting between the two countries.
  Let's say in this case that Jordan implements a labor or 
environmental action that is trade distorting. Absent the provisions of 
the agreement, it would be totally within bounds of Jordan to do so. 
But at least here we would have the opportunity to discuss the matter 
with Jordan. Consider what would happen if there were no labor or 
environment provisions in this agreement. In that case, could enact a 
trade-distorting labor law or an environmental law that hurts American 
trade and workers, and that hurts our economy, and we would have no 
recourse whatsoever. I think we want some recourse.

[[Page 17729]]

  The provisions in this agreement allow some recourse, in that both 
sides obligate themselves not to enact trade- distorting measures on 
labor and the environment. If one country does, there is at least a 
process whereby the countries can discuss it. The action by the 
mediator, if he takes any action, is not binding upon either party.
  So I think these are very good provisions. I think they are wise, and 
therefore, the agreement is something our country should approve and 
the President should sign very quickly.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDENT pro tempore. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. BAUCUS. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Bayh). Without objection, it is so 
ordered.
  Mr. BAUCUS. Mr. President, I see my good friend from North Dakota is 
ready to speak. But before he does speak, I would like to reemphasize 
and underline the point that trade agreements properly include not only 
the very traditional trade matters, such as tariffs, quotas, and 
subsidies, but they also include other matters which do have an effect 
on trade. I would like to suggest what a few of them are.
  For example, the length of product patents and copyrights on music 
has only recently been addressed in trade agreements. These are not 
tariffs, quotas, or subsidies, but they certainly affect trade. Thus, 
these issues were addressed in the Uruguay Round.
  What about the use of names, such as ``champagne,'' on a product 
label? Some suggest that the use of the word ``champagne'' is not 
generic because it means a particular region of the world--in France, 
Champagne. That was an issue brought up and included in the Uruguay 
Round.
  What about payments to farmers to promote conservation practices, 
such as land set-asides, or low till agriculture? These are not 
tariffs, quotas, or subsidies, but they definitely affect trade. In 
fact, this is a current trade issue with the Europeans. They are very 
concerned about the actions of the United States in that area.
  What about the placement of products on store shelves, just putting 
products on store shelves? For example, we had a dispute with Canada 
over distribution of beer and other alcoholic beverages. The point is, 
obviously, that trade agreements do include matters, and should include 
matters, which could have the effect of distorting trade. And if a 
country enacts environmental laws or labor laws that have the effect of 
distorting trade, I think most Americans would think that, if properly 
worded, in a common-sense way, they, too, should be addressed in trade 
agreements. That is what we are trying to do with this legislation. 
This is not a huge leap. This is not unreasonable. This is not radical. 
This is very modest, if you will, but very important.
  I urge Senators to look at this legislation closely and look at it in 
that light. When they do, I think they will recognize this is an 
agreement that should pass and be approved by the Senate and signed by 
the President very quickly, particularly in light of the current 
situation in the Mideast. But apart from the Mideast situation, on its 
merits only, this is a very good agreement.
  Mr. President, I yield to my friend from North Dakota for--how many 
minutes?
  Mr. DORGAN. Ten minutes.
  Mr. BAUCUS. Ten minutes.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, I have come to this Senate Chamber to 
support the trade agreement that is brought to the floor today. I 
believe it will be approved by the Senate by unanimous consent. Perhaps 
not, but I am told that it will be approved by the Senate, in any 
event.
  I have been a critic of our trade policies. I have been a critic and 
have voted against a fair number of trade agreements. This trade 
agreement, it seems to me, is a reasonable agreement. It is with an 
abiding friend, Jordan, that has been a very helpful country to us. We 
have had a long and good friendship with the country of Jordan. This 
trade agreement includes in it some provisions dealing with the 
environment and labor. I think this is a breakthrough and a step in the 
right direction.
  While trade relations between the United States and Jordan are 
important, the size of our trade is not very extensive. As a trading 
partner, Jordan ranks 98th.
  While I do not think the U.S.-Jordan Free Trade Agreement is going 
to, in one way or another, affect our country's trade balance, I want 
to say that at this time and place our country needs to worry about its 
trade policies on a much broader context.
  I have brought a chart with me that shows our country's ballooning 
trade deficit. For years, we have seen relentless growth in it. At the 
same time, there has been a systematic lack of concern among 
policymakers about it. It's as if they say: Well, it is happening, so 
let it happen.
  It injures this country to have this kind of relentlessly growing 
trade deficit. Last year the merchandise deficit was $452 billion. Our 
deficit with China was $84 billion; with Japan, $81 billion; and with 
the European Union, $55 billion. That is almost $1.25 billion a day. 
Every single day, 7 days a week, we are buying more from abroad than we 
are exporting.
  Now, what does that have to do with the current circumstances in the 
United States? Given the issues of national security, it is important 
for us to understand that no country can long remain a strong country 
unless it has a strong, vibrant manufacturing base. We are eroding the 
manufacturing base of this country.
  One thing that is not in this trade agreement--and it has never been 
in any trade agreement that I am aware of--is something that deals with 
currency fluctuations.
  Our manufacturing sector has now discovered that when it tries to 
sell abroad, it is much more difficult. Due to currency fluctuations, 
it 30 percent more expensive to sell a product abroad than it was 5 
years ago. This increase has nothing at all to do with the cost of 
manufacturing the product. It is solely due to the value of our 
currency.
  Because of currency fluctuation, our manufacturing base in this 
country is being hurt very substantially. There are some who say: Well, 
the doctrine of comparative advantage ought to determine how we trade, 
and we ought not worry about whether we retain a strong manufacturing 
sector in this country. I strongly disagree with that belief.
  No country can remain strong unless it has a very vibrant 
manufacturing base. Yet, due to currency fluctuations that have not 
been accounted for in our trade agreements, our manufacturing base has 
been undercut.
  We need to negotiate currency fluctuation mechanisms into our trade 
agreements. We may sign trade agreements that lead to reductions in 
tariffs. But if the currency fluctuates, and we don't have any 
mechanisms in place, U.S. exports may end up being more expensive, and 
U.S. imports may be less expensive.
  Our currency has fluctuated dramatically over the last few years. The 
U.S. dollar has risen about 40 percent against the Canadian dollar in 
the last 10 years. Generally speaking, the U.S. dollar has had a 30-
percent increase in value versus 5 years ago. It is worth 10 percent 
more just a year ago.
  On the television news people talk about the ``strong dollar.'' That 
is the wrong term. They should be saying, the ``Expensive dollar''. The 
dollar is more expensive today relative to other currencies. When our 
dollar is more expensive relative to other currencies, it means our 
manufacturers are at a disadvantage when competing against the rest of 
the world.
  My point is very simple: In these days, we are all very concerned 
about national security. And we should be. We are concerned about what 
is going to happen around the world with respect to terrorism and our 
aggressive approach in trying to deal with it. All of us want to speak 
as one; we want America to have one voice. With relentless 
determination, we want to

[[Page 17730]]

take on terrorists and do what is necessary.
  Part of national security is in the area of international trade. It 
is important that we straighten out the problems that have assisted in 
eroding our manufacturing base and have, at the same time, weakened our 
country from the inside.
  I met with the president of one of the Nation's large manufacturers 
this morning. It was coincidental and had nothing to do with speaking 
on this bill. The products that this country manufactures have been 
named, several times, by Fortune magazine as all-American products, the 
best in the world. The products are made in the finest manufacturing 
plant in the world; a plant that uses the finest state-of-the-art 
robotics. There is no manufacturing plant that is more high tech or 
more modern than the one used by this company.
  Yet, the company has discovered that, when trying to sell their 
product around the rest of the world, it has become more and more 
difficult. It is not because their product can't compete, but, rather, 
it is because the fluctuation of currency has made their product more 
expensive relative to the similar products manufactured in other 
countries. The president of this company said: The value of the dollar 
is hurting our company badly. And it is not just his company. It is 
true all over America.
  Jerry Jasinowski, president of the National Association of 
Manufacturers, recently remarked that the dollar is overvalued and that 
its strong value has led U.S. manufacturers to have little pricing 
power. In its annual report, the Association noted that: ``The dollar 
has reached a point at which it is pricing many U.S. goods out of world 
markets and making it harder to compete against imports here at home.''
  That was from the National Association of Manufacturers.
  My only point is this: I am going to support this trade agreement 
with Jordan because at this point in time it is the right thing to do. 
Right now, we are not talking about trade policy. With respect to trade 
policy, I have been a constant critic and will remain so. I voted 
against the North American Free Trade Agreement. I voted against GATT. 
Had I had a chance to vote against the bilateral agreement with China, 
I would have voted against it in an instant.
  If I might, as an aside, just point out, our negotiators, after long 
negotiations, agreed to allow China to have a tariff on U.S. 
automobiles that is 10 times higher than our tariff on Chinese 
automobiles sold in the United States. We agreed to a 2.5-percent 
tariff on Chinese automobiles, while they have a 25-percent tariff on 
U.S. automobiles. This is just a small example of what has happened to 
us in every trade agreement of consequence.
  It is long past time for our country to pay attention. The trade 
deficit is injuring the United States. Our trade agreement with Jordan 
will have almost nothing to do with the deficit and I will support it. 
It is the first agreement I have supported in a long time.
  The job in international trade is to bring NAFTA back and renegotiate 
it. We need to get rid of those bilateral trade agreements in which our 
country has a major disadvantage. We recently lost in the Chinese 
bilateral agreement. And we lost in the agreements we have had on GATT. 
People say: That is just the way things are. I say: It is not the way 
things are. It is the way we allow them to be. We don't have the 
backbone, the nerve, or the will to stand up and begin to say: We 
negotiate on behalf of the United States of America and we demand fair 
trade.
  If I could have just another minute, let me go through a couple of 
examples, lest people think this is all rhetoric.
  How much time do I have remaining?
  The PRESIDING OFFICER. Thirty-five seconds.
  Mr. DORGAN. I assume the Senator from Montana is delighted I am 
supporting the bill and probably not happy that I would talk about 
other trade problems.
  Mr. BAUCUS. I might ask how much time remains on our side?
  The PRESIDING OFFICER. Twenty minutes.
  Mr. BAUCUS. Mr. President, I will let the Senator speak for a few 
more minutes. Progress is progress. This is the first time the Senator 
has supported a trade agreement. I know in the future he will support 
others. I very much appreciate his taking the time to support this 
agreement. I yield the Senator another couple minutes.
  Mr. DORGAN. Mr. President, I am overwhelmed by the additional 
minutes.
  I have a couple of examples, if I might, on trade issues. Ask those 
who are working on these issues in the U.S. Trade Representative's 
office, in the Commerce Department, and those in Congress to try to 
address these issues with us.
  Motor Vehicles in Korea. Last year, we had about 570,000 vehicles 
shipped into the United States from Korea. Do you know how many 
vehicles we shipped to Korea? Seventeen hundred. Five hundred seventy 
thousand vehicles this way, 1,700 that way. Why? Because of the tariff 
and taxes, it raises substantially the price of American cars sold in 
Korea. It is not just price. There are other difficulties too in 
selling foreign vehicles in Korea. Standards and perceptions also play 
roles. The result is, we are not shipping cars to Korea. They are 
flooding our markets with theirs.
  Canada and Stuffed Molasses. Go to Canada and watch them load up 
Brazilian sugar on top of liquid molasses so they can ship it down here 
in the form of stuffed molasses. Then they take the sugar out and send 
the molasses back. Why? To violate U.S. trade laws.
  Japan and Steak. Go to Tokyo and have a T-bone steak and understand, 
if it came from the United States, it had a 38.5-percent tariff on it, 
12 years after the last beef agreement.
  People think this is all humorous and interesting. The fact is, it 
all represents the failure of this country to stand up for its 
producers. This country ought not be bashful about standing up for its 
producers, its manufacturers, American men and women and American 
businesses, who only demand the opportunity to compete fairly. It is 
not fair when currency fluctuations make our products 40 percent more 
expensive in foreign countries. We say that doesn't matter, but it does 
matter. It is not fair. Unfairness matters. We should and must be 
willing to compete in international trade, but the competition ought to 
be fair.
  I thank my colleague from Montana. I will support this trade 
agreement. It is a small one, not much of a trade consequence to us, in 
my judgment. It is written marginally better than previous agreements 
because it has labor and environmental issues in it.
  There is a big job ahead of us. We need to try and deal with the 
ballooning trade deficit. We need to try to convince the American 
people that what we are doing represents their best interests. We need 
to expand trade but it must be done in a manner that is fair to them.
  I will have more to say about international trade at some future 
point in time. I yield the floor.
  Mr. BAUCUS. Mr. President, I thank my good friend from North Dakota. 
He raises a very good point. Clearly, currency fluctuation certainly in 
the short term distorts trade almost to the magnitude which he 
suggested, a 30 to 40 percent differential.
  It is also true that, as imperfect as markets are in the long-term, 
the relative economic strength of countries tends to reflect the value 
of a country's currency--not entirely but tends to. There have been 
times when the dollar is low; there are times when the dollar is high. 
It is very difficult to write into an agreement how to manage currency 
fluctuations, extremely difficult, particularly with larger countries 
such as the United States, Japan, the EU, with a single-currency 
market.
  If the United States were to peg exchange rates vis-a-vis those other 
countries, it would be difficult for those countries to agree. I doubt 
that they would. Japan tends to like a low yen. It kind of likes the 
United States having a high dollar. I doubt that Japan would want to 
address exchange rates in a trade agreement. Could we force them to in 
a trade agreement? I

[[Page 17731]]

don't know. It would be difficult. The same applies to the EU.
  Let's say we were able to peg an exchange rate. Let's say it happened 
that the countries all agreed. Let's say that one of the country's 
economies deteriorates, for example, the United States or Japan or some 
other one. If the currencies are pegged, then it is going to be harder 
for that country to retain its economic strength, at least with respect 
to trade.
  There will be other distortions. It is like a balloon. If we stop 
natural competitive pressures worldwide from operating through exchange 
rates, the problem is going to pop up someplace else. I don't know that 
we have fully thought through where the ``someplace else'' might be in 
any rational discussion of exchange rates to include an attempt to 
address that consideration.
  I might add that, to some degree, this is an external-internal 
matter. It is much more complicated than what meets the eye. The U.S. 
Government, in many administrations, tends not to discourage a high 
dollar policy. Why is that? The reason is because the U.S. Government 
tends to be worried about inflation, as well as other considerations, 
in addition to the trade imbalance, the current imbalances.
  As my friend from North Dakota said--and he is right--trade deficits 
have been burgeoning, and it is a problem. To say that currency 
exchange provisions will solve the problem, I think, doesn't quite do 
it. The U.S. tends to be a country with a favored currency. We are 
perceived to be strong and to be dynamic, even in the wake of the 
events in the last several weeks. Investors worldwide tend to like 
dollars as opposed to other currencies. That tends to drive up the 
value of the dollar.
  There are a lot of factors to be considered here. Having said all 
that, I do agree with the Senator that at least an attempt should be 
made. We should at least have a more open discussion of these issues. I 
don't think our Treasury Secretary, or our President, or anybody else 
of stature in the executive branch, or the Chairman of the Federal 
Reserve should have an open discussion of these matters, for fear of 
people misinterpreting what they may be saying. But I do think it is 
important for the Congress, in the appropriate setting and in the 
appropriate situation, to begin to examine all the ramifications of 
exchange rates. It is extremely complicated. In smaller countries we 
can deal with it, but in larger countries, as in Japan, and with the EU 
beginning next January, it is going to be difficult.
  Mr. DORGAN. Will the Senator yield for a question?
  Mr. BAUCUS. I am happy to yield.
  Mr. DORGAN. Let me say that it was not my intent to say that solving 
the issue of fluctuating currencies would solve the trade problem. You 
cannot solve the trade problem without addressing the fluctuation of 
currency values. There are many other issues--although the fluctuating 
value of currencies is a 500-pound gorilla issue, it is not the only 
issue. I don't mean to suggest that if you solve that, you solve the 
problems. There are more.
  Mr. BAUCUS. Mr. President, I reserve 10 minutes. How much time is 
remaining?
  The PRESIDING OFFICER. Twelve minutes.
  Mr. BAUCUS. Mr. President, I reserve myself 5 minutes. I reserve the 
majority leader 5 minutes when he wishes to speak on the bill.
  I yield to my good friend from Virginia who I think wants to speak on 
the bill. Can the Senator take 5 minutes?
  Mr. ALLEN. I say to the Senator from Montana that I will try to say 
what I want to say in support of this measure in 5 minutes.
  Mr. BAUCUS. I yield the Senator from Virginia, Mr. Allen, 5 minutes.
  Mr. ALLEN. Mr. President, I rise in support of the United States-
Jordan Free Trade Agreement. First, I congratulate Chairman Baucus and 
Senator Grassley for their work in producing this very important 
legislation, which is a significant step forward in making Jordan a 
world partner with the United States.
  Most of the debate on this matter is centered on the new ground which 
this measure makes in including multiple worker rights provisions in 
the body of the U.S. trade agreement, rather than as a side agreement, 
for the first time.
  The volume of the bilateral trade between the United States and 
Jordan throughout the 1990s was consistently modest. Therefore, it is 
thought, this agreement is unlikely to have any great immediate or 
dramatic impact on the volume of bilateral trade.
  However, I wish to share with my colleagues what this agreement means 
to the Commonwealth of Virginia and, particularly, to the Albemarle 
Corporation, headquartered in Richmond, VA.
  Albemarle is a worldwide manufacturer and marketer of specialty 
chemicals, such as bulk ibuprofen, biocide products, and flame 
retardants. Nearly 50 percent of the corporation's revenues are derived 
from products that are sold outside the United States.
  Several years ago, Albemarle Corporation began negotiations with the 
Arab Potash Company to create a joint venture company that will process 
bromine and bromine derivatives from the Dead Sea in Safi, Jordan. This 
agreement will allow Albemarle to bring the bromine into the United 
States tariff free. It will be actually shipped to Albemarle's facility 
in Magnolia, AR, for final processing.
  This will represent a multimillion-dollar investment and it will be 
used for a variety of products, such as flame retardants for TVs and 
computers, and other products, and it obviously will provide Albemarle 
with increased marketing opportunities globally for these lines of 
products.
  It is anticipated that the capital outlay for this joint venture will 
be $150 million. This outlay makes this joint venture the largest U.S.-
Jordanian private venture in Jordan to date. At full operation, they 
will be creating over 200 new jobs at the plant near Safi and its main 
Amman office.
  I congratulate King Abdullah and his government for their efforts 
leading to Jordan's accession to the World Trade Organization. 
Acceptance by the World Trade Organization, combined with Jordan's 
economic reforms, are significant steps forward to making Jordan a 
world partner with the United States.
  These developments also made Albemarle more excited about conducting 
business with its Jordanian partners. This free trade agreement is 
another step toward solidifying our relationship and placing Virginia 
products on the same tariff footing as products from other countries.
  I believe fair and free trade is the best way to increase trade, 
encourage economic development, and improve investment opportunities 
for all involved. It is important that the achievements made by King 
Abdullah and the signing of this free trade agreement be recognized and 
ratified by the Senate. For that reason, I urge my colleagues to 
support this measure.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, how much time do I have?
  The PRESIDING OFFICER. One hour.
  Mr. GRAMM. Mr. President, I rise today to support the Jordanian free 
trade agreement, but I support it with reservations. I am determined 
that the adoption of this agreement not set a precedent for the future. 
What I would like to try to do, even though I know it may take a little 
time to do so, is explain to my colleagues the problems with this 
agreement, the problem that we have when we bring non-trade matters 
into fast track, and the very real sovereignty questions that are 
raised by this small and seemingly insignificant trade agreement.
  I would like to try to explain the logic of fast track and its 
history and, within that context, make it clear that, in the current 
international crisis in which we find ourselves, I have decided to 
withdraw my opposition to this agreement and, in the process, see it 
become law. In withdrawing that opposition in a moment of crisis where 
we need to reconfirm our bond of friendship with Jordan, I wish to make 
it very clear that in doing this we are not setting a precedent for the 
future.
  Now, having outlined all that, let me start at the beginning and try 
to explain the logic of fast track and the

[[Page 17732]]

problems we are going to have to address. The plain truth is that no 
one wants to address these issues, but they are there whether we like 
them or not. Therefore, at some point, we are going to have to come to 
grips with them when we adopt a bill that will provide what we used to 
call fast-track authority and now call trade promotion authority.
  Let me begin at the beginning. America, in the postwar period, 
immediately following World War II, recognized that world trade was a 
powerful engine for creating wealth and democracy and, in essence, 
remaking the world in our image.
  We had an incredible bipartisan consensus on trade: that neither 
party would try to use trade to politically benefit itself in the 
American electoral process because trade was too important in promoting 
prosperity and democracy and in fighting communism in the postwar 
period.
  In that context, we adopted what was then called fast-track trade 
authority, which gave the Executive some remarkable powers. Under fast 
track, a President could negotiate a trade agreement which, when it 
came before Congress, would be unamendable, and all of the Senate rules 
related to unlimited debate and unlimited amendment would be waived; 
further, there would be a time limit for consideration, and Congress 
would then simply have the ability to vote yes or no.
  That made sense in the following context: No. 1, Presidents argued, 
and I believe persuasively, that if you are going to negotiate a trade 
agreement where both sides give and take, you cannot then have that 
agreement be subject to further change, by Congress, after the fact. 
That is a persuasive argument, in my opinion.
  The second argument was that we were talking about a limitation of 
the constitutional prerogatives of Congress under article I of the 
Constitution, and we had agreed to limit those powers because we were 
talking about only external matters, such as protective tariffs. We 
were not making domestic law, but were simply setting out trade 
agreements that involved external pricing of American and foreign 
products but did not make law in America that would govern the well-
being of our people.
  With those two very strong arguments, we adopted fast-track 
authority, and let me say, the evidence is overwhelming that we were 
successful.
  When the Berlin Wall came down, it came down in part because we had 
the resolve to keep Ivan back from the gate, we were strong enough to 
deter a war, and our program of peace through strength worked. But what 
happened that really tore the wall down was that the growth of world 
trade generated a wealth-creating engine that created massive economies 
in places such as South Korea and Taiwan where those economic engines 
had never existed. It rebuilt Japan. It rebuilt Europe. The sheer power 
of that wealth-creating machine destroyed the Soviet Union.
  If there is one principle I am committed to, it is free trade. I take 
a back seat to no one in Congress in my defense of trade, and I make no 
excuses, such as talk about ``fair trade.'' I do not engage in fair 
trade with a grocery store; I buy food from them and sell them nothing. 
But what I am in favor of is trade. Not going to the grocery store 
might eliminate unfair trade with them, but it would mean I might go 
hungry, so I choose to go to the grocery store.
  One might wonder what is it about the Jordanian ``free trade'' 
agreement that I am unhappy about, especially my colleagues who have 
listened to me before talk about trade, knowing I am committed to it 
and have defended it under all circumstances against all opponents 
everywhere. What is wrong with the Jordanian free trade agreement?
  What is wrong is, for the first time, it brings into a trade 
agreement items that have to do with domestic law. It brings into a 
free trade agreement provisions that relate to labor law and labor 
standards, and environmental law and environmental standards, in 
America. And in the process, we are literally transferring a degree of 
American sovereignty in labor and environmental areas to decision-
making entities that will be beyond the control of the United States. 
This is a very serious matter.
  Let me talk generically about trade agreements that embody labor and 
environmental standards and then talk about this one in particular.
  When we built a consensus on fast-track authority, the consensus was 
based in part on the fact that the President was negotiating trade 
agreements, tariffs. It was clear that the intent of the negotiation 
was to lower tariffs on foreign goods coming into our economy and lower 
tariffs on American goods going into the economy of the country with 
which we entered these trade agreements. That was the understanding. It 
was clearly understood that, within that context, we were simply 
negotiating tariffs but not making domestic law.
  Someone who was going to debate this would immediately point out that 
in the last 10 years we have injected another issue: patent and 
copyright. They would say: We were already a little bit pregnant when 
we did that because that had a binding effect on America in terms of 
respecting patents and copyrights.
  I think that might score you a point in some debating class in high 
school or college, but the plain truth is, America is in the patent and 
copyright business. We own 90 percent of all the patents and copyrights 
in the world, and so when we negotiated to put into free trade 
agreements that countries would respect patent and copyright, that 
basically was a provision that had no effect on us because we owned the 
patents and copyrights, but it had an effect on our trading partners by 
committing them, at least through moral suasion, if not retaliation, to 
respecting patent rights and copyrights.
  I would argue that element in free trade agreements was pretty much 
like Britain being for freedom of the seas when they controlled the 
seas because they had the world's greatest navy. They were for British 
seas, just as we should be for freedom of the seas today.
  Two substantial problems arise when labor and environmental issues, 
or any other issue related to the laws under which we live and function 
every day in the United States, are brought into this fast-track 
process. One is a loss of power by Congress in ceding its rights under 
article I of the Constitution, and the other is a loss of American 
sovereignty, and they are both bad things.
  When you allow the President to negotiate labor and environmental 
laws, and labor and environmental standards, under fast-track 
authority, where the agreement cannot be debated and cannot be amended, 
what you are literally doing is giving the President of the United 
States a unilateral power to write domestic law under fast-track 
authority.
  Under fast-track authority, where the President has this power to 
write labor and environmental standards into trade agreements, which 
then become the law of the land when we adopt them, President Clinton, 
for instance, in a free trade agreement, could literally have included 
the Kyoto Environmental Treaty. It would have come to the Senate. It 
would have been unamendable and undebatable, and we would have had a 
dramatic loss in our law-making powers, and a substantial diminution in 
the effectiveness of fast-track had the Senate been forced to reject 
the agreement because non-trade matters been included.
  If we had a President who wanted to change environmental or labor 
law, and do it in a way to limit congressional power and authority, he 
could do it unilaterally through fast track, through negotiations of 
trade agreements. We never, ever contemplated such an extension of 
power when we wrote fast track. Never did we contemplate the Executive 
would make domestic law in these trade agreements. They were about 
tariffs. They were not about laws that would govern America and 
Americans in our daily lives.
  The second problem with allowing labor and environmental provisions 
in trade agreements that have expedited consideration is they represent 
a ceding of American sovereignty. In my opinion, they are 
unconstitutional.
  Let me explain how this would work in the context of a bilateral 
agreement

[[Page 17733]]

and then in the context of GATT. I'll start with GATT. Using fast-track 
authority where labor and environmental issues can be included, let us 
say that we entered into a GATT agreement where we agreed--as we do in 
this agreement, and I will talk about it in particular in a minute--on 
labor and environment provisions. Now, while we have to give the 
Clinton administration some credit for writing all kinds of boilerplate 
protections for congressional authority, in the end they could not 
protect what the provision is about.
  Under this bill, we agree with Jordan that we will not take any 
actions with regard to our labor or environmental laws that would 
advantage us in our trading with Jordan. Now, let me take those 
provisions and apply it to GATT and the World Trade Organization. Let 
us say this became the norm for trade agreements. Who decides whether a 
change in environmental law affects our competitive position with our 
trading partner? Who decides whether a change in regulation was made to 
benefit us in trade or because it was made through the Executive power 
of the President basically to promote the general well-being of the 
country? Is it not true, at least to a small degree, every change in 
environmental law and every change in labor law or regulation has a 
trade effect, making us more or less competitive?
  If we had the Jordanian free trade agreement as part of GATT, it is 
literally true, if we decided under the Clean Air Act to grant a clean 
air waiver to Atlanta, GA, which we have done in the past, and to 
Dallas, TX, which we are doing today, or Houston, which we are doing 
today, literally if this agreement were in existence as part of GATT a 
question would arise as to whether granting this waiver under the Clean 
Air Act benefited us in trade. In the case of GATT the judgment would 
be made by the World Trade Organization--a third party, a world 
organization, determining whether or not we are enforcing the Clean Air 
Act to benefit us in trade and, therefore, whether we should be 
penalized with protective tariffs against American products that put 
Americans out of work.
  If we had the provisions of this Jordanian free trade agreement in 
effect through GATT, and we then opened up ANWR to produce oil, the 
World Trade Organization and its decisionmaking body, which we are 
minority members of, could determine that by opening ANWR we have had 
degradation in environmental standards that benefit us in terms of 
trade and we could literally have protective tariffs imposed against 
American products on the world market and put Americans out of work.
  If we repealed Davis-Bacon, a special interest law that requires the 
Government to pay the highest prevailing wage for labor, it could be 
ruled by the World Trade Organization, if these provisions were in 
force worldwide, that we had violated the trade agreement, and we would 
then be subject to reprisal and punishment imposed on the American 
economy.
  If we adopted provisions that gave workers flexibility to work 60 
hours one week and 20 hours the next week by changing our antiquated 
wage and hour laws so that a working mom could go see her son play 
football on Friday afternoon, something that is eminently reasonable 
and long overdue, if the provisions of this bill were in effect 
worldwide through the World Trade Organization, we could have a 
judgment by a world decisionmaking body that we have violated our trade 
agreements by giving flexibility under the wage and hour laws, flex-
time/comp-time we call it; that we have benefited in trade and, 
therefore, we are subject to reprisal.
  My point is, as we go beyond the Jordanian free trade agreement, and 
as we go to fast-track authority and as this becomes part of our world 
trading system, I ask my colleagues, are we ready to give to the 
President of the United States unilateral authority to write domestic 
law we cannot amend and cannot debate? I am not ready to do that. I 
love our President. I do not think any Member of the Senate feels 
closer to our current President than I do, but I am not willing to give 
that authority to anybody. I do not know who is going to be President 
in the future. Are we willing, through a free trade agreement and 
through trade promotion authority, to put ourselves in a situation 
where the World Trade Organization can determine that by giving a 
waiver to Atlanta, GA, under the Clean Air Act, we are violating our 
international trade agreements and, therefore, protective tariffs can 
be imposed on American products to punish us for exercising our power 
under articles I and III of the Constitution?
  Is that not a loss of sovereignty that would be virtually 
unimaginable by the Founding Fathers? I think the answer is clearly 
yes.
  So the first point I wanted to make today is I have decided, just as 
one Member, to step aside and allow this Jordanian free trade agreement 
to become law, but not because I think these are good provisions. I 
think inclusion of these matters is one of the most dangerous actions 
we have taken since I have been a Member of the Senate. I am doing this 
today because we have a crisis in the world. We need to reaffirm our 
relationship with Jordan, a critical country in a very important part 
of the world, when we are at the very moment beginning to look toward a 
war with terrorism. So our relationship with Jordan is important.
  I do it also because our trade with Jordan is relatively 
insignificant. It is important to Jordan, of course, and we are 
grateful for it. We want to trade 1,000 times as much with them, but 
relatively speaking, we are not talking about any significant amount of 
trade.
  Finally, I am willing to do it, making it clear that this sets no 
precedent for the future. If it were not for this current crisis, this 
trade agreement negotiated by the Clinton administration would never 
have become the law of the land. I am willing, today, to step aside and 
vote for it because it sets no precedent, and it is clearly important 
internationally at this critical moment in a very important part of the 
world.
  However, I want my colleagues to understand that any efforts to take 
this process forward would entail giving the President unilateral 
powers to make domestic law in the labor and the environmental area 
without Congress having the ability to amend it or to extensively 
debate it. I am adamantly opposed to that, and I believe the American 
people would be opposed to it if they understood it.
  Second, if we go forward and embody the same provisions in major 
trade agreements, we are ceding sovereignty to the World Trade 
Organization and to dispute resolution organizations where we will 
literally have third parties casting the deciding votes as to whether 
we can grant waivers under the Clean Air Act, or open up ANWR, or 
change our wage and hour standards, or repeal Davis-Bacon, or do other 
things that make eminently good public policy. That is a ceding of 
sovereignty that has no popular support in this country, and it cannot 
be allowed to go forward.
  I turn to the Jordanian free trade agreement. First, if I could pick 
up this pen today and sign a free trade agreement with the world, I 
would do it. I am in favor of free trade. I believe free trade promotes 
freedom; I am for freedom. It promotes prosperity; I am for prosperity. 
My concern about the Jordanian agreement is the nontrade provisions. It 
has two provisions that may very well never be used in our trade with 
Jordan but they are extraordinarily dangerous.
  The first provision is related to the environment. It says, despite 
all the boilerplate efforts of the Clinton administration, that if 
either country--Jordan or the United States--did anything to change its 
environmental laws that improved its competitiveness with the other 
country, that would violate the trade agreement. Under the rules of 
world trade, there would then be a dispute resolution that would 
ultimately include a United States representative, a Jordanian 
representative, and a third party, which would determine whether a 
violation had occurred and, if so, whether the ``violating party'' 
would be subject to penalties.
  I understand the dollar value of our trade with Jordan is less than 
the combined budgets of the two great universities in my State. It is 
not significant in terms of the global picture. But principles are 
significant. And bad

[[Page 17734]]

principles are set often in little, insignificant bills. This provision 
literally puts us in a position where an international dispute 
resolution could determine, in the name of the environment, that 
opening ANWR or granting waivers, which we do routinely under the Clean 
Air Act, violate this agreement, and we could have trade reprisals 
imposed against us as a result of it.
  If we didn't sell anything to Jordan, it would obviously matter to 
the companies involved. It would be a terrible thing, but economically 
it would not be a catastrophe. My objection to including these labor 
and environmental provisions is based on principle, and if inclusion of 
these issues goes any further and is established worldwide, it is going 
to have a profound impact on the lawmaking authority of the U.S. 
Congress.
  Now, granted the Clinton administration puts nice boilerplate 
language that says to Jordan, you make your own laws; and it says to 
the United States, you make your own laws. But it also says, if those 
laws are judged to improve your competitiveness as a result of a 
reduction in your level of environmental protection, then there can be 
reprisals.
  Who makes that determination? The problem is, the United States does 
not make that determination. That determination is made by an 
international dispute resolution system. The same is true in this bill 
with regard to labor law. Under this bill, you have an obvious 
question: When have you changed labor standards to benefit yourself in 
terms of competition? With Jordan, who makes the determination?
  I would have no objection if the determination of whether we were 
meeting our agreement were made by Americans. I think it would be 
foolish to get into this area, because everyone who is the least bit 
objective about trade understands, if you care about labor standards, 
you are for trade, because trading countries are rich, and they have 
high wages, and they have good working conditions. If you care about 
the environment, you are for trade, because trading countries are rich 
and they can protect their environment, and they do.
  I know we have people talking about a race to the bottom in labor and 
environmental standards, but the truth is, trade is a race to the top, 
not to the bottom. But these are the problems with this bill.
  Now people do not want to deal with this issue. It was clear in the 
Finance Committee, people were not ready to come to grips with this 
issue. What is appealing about putting labor and environmental 
provisions into the bill is that it lets us be on three sides of a two-
sided issue. It lets us be with the people who want to have 
international labor and environmental standards, and yet be for trade. 
The problem is, you are either for trade or you are against it. When we 
write these provisions into our trade agreement, we are setting 
ourselves up for loss of sovereignty and we are ceding power to the 
executive branch of government. I think those are two extraordinarily 
dangerous things.
  This agreement will be approved today. I am going to support it. But 
I am going to support it as a matter of foreign policy. The President 
wants this agreement to show to Jordan we are committed to our 
friendship and our partnership. We need Jordan's support in this war on 
terrorism, and as a result, I, for one, intend to step aside and allow 
this agreement to be adopted. But in doing so, I want to make it clear 
that this sets no precedent in terms of our willingness to cede 
sovereignty over America's right to set its own environmental and labor 
laws and to interpret and enforce those laws without being penalized in 
world trade because some international decisionmaking body decides, in 
doing so, we benefited ourselves in terms of trade.
  I submit, why would you change these laws, if you were not in some 
way trying to benefit yourself, either by improving the environment or 
improving your competitiveness?
  Look at the application that Atlanta, GA, or Dallas, TX, or Houston, 
TX, submitted, asking for a waiver of the Clean Air Act. That 
application is full of the dire impacts that are going to be had if 
they stop building highways in Atlanta or Houston and if they have to 
shut down those refineries from Corpus Christi to Beaumont that produce 
50 percent of the petrochemicals in the world in the Houston area.
  Their application for a waiver of the Clean Air Act is full of 
exactly the argument that, if we don't grant this waiver and give them 
more time to meet these requirements, we are going to destroy hundreds 
of thousands of jobs and are going to adversely affect the ability of 
America to compete on the world market.
  If we expand this logic into the World Trade Organization, does 
anybody doubt that our competitors will take the application for a 
waiver of the Clean Air Act from Atlanta or Houston that is full of 
arguments, as it should be, about American competitiveness and say 
``not only did they not enforce their law by granting this waiver, but 
if you read the application from Houston, TX, it is full of the logic 
that is going to hurt them competitively if they don't grant a 
waiver?''
  Do we really want the World Trade Organization or an international 
dispute resolution putting our people out of work in Georgia or Montana 
or Texas because they believe when we changed our law, or when we 
changed the enforcement of it, that it benefited us in world trade? I 
do not think we signed on to do that.
  So that is where we are today. We have a trade agreement before us 
that was negotiated in the previous administration that has a very 
severe problem. If this agreement were with another country at another 
time, I do not believe it would be adopted. But today, facing a war 
with terrorism and given that this is with Jordan and given that the 
amount of trade involved is insignificant, from the United States point 
of view, I for one am willing to step aside and to support this bill. 
But I want to make it clear that any fast track or trade promotion 
authority legislation that would transfer the making of domestic law to 
the President, limiting--in this case eliminating--our power to amend 
or debate, or any future trade promotion agreement that would grant to 
a world decisionmaking authority the right to determine whether we have 
exercised our article I rights under the Constitution of the United 
States properly, where a world organization is making a determination 
as to whether our people are going to be put out of work because we 
amended labor and environmental laws in conformity with our rights 
under article I of the Constitution, that is something that I never, 
ever intend to support and never, ever within the ability to debate it 
and to fight it intend to see it accepted.
  We have to come to grips with these issues. We are putting them off 
today because this bill needs to pass. But these are matters that are 
going to have to be understood. They are going to have to be debated as 
we deal with fast-track authority, or as we now call it, trade 
promotion authority. To this point, everybody has tried to hide from 
these issues. But they are very real. They represent an assault on our 
separation of powers, they represent an assault on national 
sovereignty, and they do not belong in a fast-track or trade promotion 
agreement.
  With that, I reserve the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Mr. BAUCUS. Mr. President, how much time is remaining?
  The PRESIDING OFFICER. The Senator from Texas has 24 minutes and the 
Senator from Montana has 8.
  Mr. BAUCUS. Mr. President, I yield to the Senator from Nebraska, 4 or 
5 minutes?
  Mr. HAGEL. Let's try 5 minutes. I appreciate that.
  Mr. BAUCUS. I yield 5 minutes with the recognition there is only 3 
minutes left after the 5 minutes are used.
  Mr. HAGEL. Mr. President, I rise today to support the Jordanian free 
trade agreement. I wish also to strongly support the remarks just given 
by the distinguished senior Senator from Texas, Mr. Gramm. In my 
opinion, he has calibrated this exactly right. He has framed it right. 
He has made poignant remarks about issues that are most important to 
this debate this day but a continued debate on trade this body

[[Page 17735]]

must have, a debate which will take us, I hope, at some point in the 
near future, to the question of granting to the President of the United 
States what has been referred to as fast-track authority but now is 
referred to as trade promotion authority.
  September 11 highlighted why we need to strengthen our relations with 
the rest of the world. Tools that will be required to combat terrorism 
include more than just military power. I think most of us recognize 
that terrorism is not about human destruction; it is about holding 
nations and societies and peoples captive, hostage to the fear of 
terror.
  Terrorists are best able to harness the fears and prejudices of 
impoverished people to gain support for terrorist acts such as those 
that occurred on September 11. These areas are the breeding grounds of 
terrorism: the impoverished, the downtrodden, those people of the world 
with little or no hope.
  To combat terrorism and the support of terrorists, we need to broaden 
the understanding of what America stands for and to continue to help 
improve the lives of these impoverished people around the world. I 
believe trade helps do that. Trade also helps develop market economies 
and strengthens democracies. What does that mean? It is not an end unto 
itself but to stabilize regions of the world, stabilize governments, 
and help maintain responsible governments and relationships and 
standards of living and accountability and responsible action. That is 
what trade can do and has done.
  At our Banking Committee hearing last week, Chairman Greenspan stated 
that global economics relies on the movement of people and goods. The 
openness of economies is critical to that growth. We are talking about 
one small part of that larger universe of trade today. But nonetheless, 
it is an important part of this debate.
  The New York Times article by Tom Friedman last week pointed out that 
through all of the instability in the Middle East, Jordan last year 
grew in real numbers at about 4 percent. And as we are able to 
encourage and participate with Jordan through these bilateral trade 
agreements, we will continue to help Jordan grow, which helps, again, 
stabilize a very important region of the world.
  As Senator Gramm has pointed out, this agreement is far from perfect. 
In my opinion, sanctions should never be part of a market-opening trade 
agreement for many of the same reasons Senator Gramm enunciated and 
delineated with precision. Sanctions do not address the root of 
environmental or labor problems or other such problems. These are 
currently much better handled at other international organizations such 
as the United Nations and international labor organizations in other 
areas. I shall not go back and deal with the same area about which 
Senator Gramm talked. But sanctions will actually harm countries and 
will limit the much-needed capital they receive from exporting to the 
United States.
  For the reasons that have been stated before, the economy is a 
fundamental dynamic influencing a country's political stability, hence 
world peace.
  Trade contributes to a country's security for two reasons: It 
establishes relationships and understandings between two nations, and 
it raises the standard of living for nations and encourages that 
stability.
  In my opinion, this debate today is a good beginning to address a 
comprehensive trade agenda this Congress must have.
  This Congress must ultimately grant President Bush trade promotion 
authority. TPA is in the clear and vital interests of this country, and 
security and economic interests are interconnected and dependent on 
each other.
  Today, I encourage my colleagues to vote for this agreement, as 
flawed as it may be. But I consider it a good opening for the bigger 
trade debate issues that must come from this Congress. It is a good 
beginning. But we are far from the kind of finish that will be required 
not only for the trade interests of this country but the security 
interests of America and the world.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Miller). Who yields time?
  Mr. BAUCUS. Mr. President, I understand that we only have 2\1/2\ 
minutes.
  Mr. GRAMM. I yield the distinguished ranking member 15 minutes.
  The PRESIDING OFFICER. The Senator from Iowa is recognized.
  Mr. GRASSLEY. Mr. President, I am not going to bring up the same 
issues the Senator from Texas brought up. But I had a chance to listen 
to his remarks. I share many of the concerns that he has.
  Although I have been an enthusiastic supporter of this agreement from 
day 1 and have not found all of the considerations that he has to 
specific parts of it, I have reservations about those parts, 
particularly as they deal with labor and the environment, but to appeal 
to some extent through an exchange of letters that these issues have 
been taken care of at least enough to satisfy my concerns to move 
forward with this legislation.
  I speak in favor of the United States-Jordan Free Trade Agreement. I 
urge my colleagues to support it. But before we move forward, I would 
like to put this agreement in context--not a context different than 
other speakers have but to emphasize some things that have already been 
said.
  First of all, this agreement is very important between two countries 
that have been friends for a long time and that want to maintain that 
friendship.
  It has been almost a year since President Clinton and King Abdulla 
signed the U.S.-Jordan Free Trade Agreement. By all accounts the 
agreement should have passed Congress with little controversy.
  The Kingdom of Jordan and King Abdullah are good friends of the 
United States. The agreement itself is a good agreement. It opens up 
new markets for U.S. exports to Jordan. And it enhances Jordan's access 
to our markets. But there is one part of the agreement that caused 
problems.
  These are controversial labor and environment provisions that were 
put in the U.S.-Jordan Free Trade Agreement. It is these labor and 
environment provisions which slowed passage of an agreement that should 
have passed both Houses of Congress quickly.
  In the Senate legislation was introduced by Max Baucus on March 28, 
2001 to implement the agreement. On July 17 the Finance Committee began 
to debate the bill.
  During debate many Members expressed concern about the labor and 
environment provisions in the Jordan agreement.
  Many others pushed hard for an amendment to the agreement which would 
give the President trade negotiating authority, which was supported 
very eloquently by the Senator from Nebraska.
  Unfortunately, this amendment was withdrawn because of the chairman's 
opposition.
  To help move the agreement forward the U.S. Government and the 
Government of Jordan exchanged official letters on July 23, 2001.
  These important letters clarified that neither government intends to 
apply the labor and environment provisions in a way which blocks trade.
  The exchange of letters was an important development.
  After all, the purpose of a free trade agreement is to facilitate 
trade.
  After all, we are talking about an agreement that has the purpose of 
facilitating trade. That is pretty clear with the term ``free trade 
agreement''--not to deal with a bunch of social and environmental 
issues.
  While these commitments did not resolve every Senator's concern with 
the agreement, it was an important step forward.
  And because of these letters the Finance Committee was able to 
complete consideration of the bill on July 26, 2001.
  Unfortunately, some tend to characterize the labor and environment 
provisions in the Jordan FTA as a precedent for future trade 
legislation.
  I want it understood very clearly that I do not accept that, and I 
want to say that loudly and clearly. This should not be considered as a 
precedent.
  It does not mean that the Jordan free trade agreement in other ways 
does not

[[Page 17736]]

set a precedent. It is the first free trade agreement we have entered 
into with a Muslim country. I hope it is not the last.
  I also hope this sends a loud signal to our Muslim friends and our 
friends around the world. The United States wants close trading 
relationships with these countries and their people.
  We want to help your economies grow through trade.
  I think it was President Kennedy who said ``trade, not aid.''
  It enhances the prosperity throughout the world generally. But as the 
Jordan agreement is precedent setting with a Muslim country, we would 
surely expect it to enhance prosperity throughout the Middle East as 
well as the entire world benefitting because we all know that free 
trade is a very powerful engine of growth. It can lift millions out of 
poverty, as we have seen in the development of this regime since 1947 
when these free trade agreements started--and under the GATT process 
the revitalization of Japan and all of Western Europe. Countries that 
were poverty stricken 50 years ago are very prosperous today--Japan, 
Taiwan, South Korea, to name a few.
  Their prosperity depends a great deal upon trade. Lifting millions 
out of poverty also in the process opens the door to new hope for 
people. It offers opportunity to people who have only known despair.
  Trade can help undermine terrorism by taking away the fertile ground 
of poverty and hopelessness from which that terrorism is sown.
  It can broaden horizons and lift human spirits to greatness.
  Our friends and allies must know that we share their hope in the 
future. But trade and the regime for arriving at free trade agreements 
and further negotiations within the World Trade Organization are a way 
to show that we put our actions where our mouth is.
  It also shows that we have history on our side--that there has been 
progress made in the past. It can predict the good future that lies 
ahead as a result of freeing up trade. They must know we will open up 
our arms and embrace them through trade. Just as trade lifted Germany 
and Japan from the ashes of World War II, it will lift nations today.
  However, we have to have the tools to make it work. One of those 
tools, as you keep hearing in this debate--and a lot of other places--
is the need to give the President of the United States trade promotion 
authority. We ought to do this in the same apolitical or bipartisan way 
that it has been done over a long period of time. And this is done 
because we do not put a lot of preconditions on these negotiations. 
People of good will sit down to work out their differences, each 
respecting their own national interests. The President of the United 
States will not negotiate away the interests of the United States of 
America and its people.
  So it is time to give the President the power to negotiate trade 
agreements with our friends and our allies, and even with countries 
that we might not consider our friends and allies, if they are in the 
World Trade Organization.
  The Finance Committee has quite a history of bipartisanship in this 
area, to give the President what used to be called fast-track trade 
negotiating authority, now called trade promotion authority.
  This type of legislation, over a long period of time, has passed with 
broad bipartisan support. We in the Senate generally have not waited 
for others to act. We have seized the reins of leadership and have 
moved ahead. Today, we need to be doing that as well. I hope I can help 
move that process along. I hope this bill today helps do that as well. 
There is bipartisan legislation that is already introduced that would 
be a good bill for this committee to consider.
  At a time when the world economy is slowing, we must act. We must put 
aside our partisan preconditions and excuses to trade and show the 
world that the United States is ready, willing, and able to lead.
  I thank the Chair and reserve the remainder of what time I did not 
use for Senator Gramm.
  Mr. BINGAMAN. Mr. President, I rise today in very strong support of 
H.R. 2603, the United States-Jordan Free Trade Area implementing bill. 
There is a very limited time for debate available to my colleagues 
today on this legislation, so I will keep my comments short.
  First, let me say that the timing for the consideration of this 
legislation could not be more propitious given the horrific events that 
have just occurred in our country. As we consider this bill, let us not 
lose sight of the geo-political context within which we now conduct 
international affairs. Trade negotiations between the U.S. and Jordan 
were initiated for one reason alone, that being that government 
officials felt it would substantially increase economic interaction 
between the two countries and thus significantly enhance political 
stability in the Middle East as a whole. Although the immediate 
economic gains from the agreement will, no doubt, be modest, the long-
term political benefits will be considerable. Of particular importance 
are the opportunities the agreement potentially provides Palestinians 
living in Jordan and operating in qualified industrial zones. For these 
individuals, nearly all of whom at present live in poverty and have 
little chance to improve their lives, this agreement changes the 
equation and offers real hope. Significantly, it offers a tangible 
alternative to violence, and I need not emphasize how important a 
different path like this might be to young individuals, and the 
strategic interests of the United States, at this time.
  I understand the concern of certain colleagues about national 
sovereignty as it relates to the dispute resolution provisions in the 
agreement. But clearly this concern comes not because this agreement in 
particular threatens our sovereignty--from my perspective it does not 
and it will not, but rather because of the apprehension that this 
agreement establishes a precedent for future negotiations. The concern 
relates to this trade agreement being a ``model,'' and once this trade 
agreement is passed, others will certainly look much the same.
  To this criticism I respond by saying that each agreement negotiated 
by our country is unique and based on the issues that concern the 
parties at the time. There is no reason to assume that every agreement 
will contain similar language to that which is contained in this 
agreement. Indeed, there is much reason to doubt that they will. 
Clearly, there is a balance that must be found between having an 
agreement and having ways to ensure that the provisions that are in an 
agreement are implemented. In this particular case, I think a very 
appropriate arrangement has been created.
  But I want to emphasize today that I do intend to be very cognizant 
of how we establish dispute resolution mechanisms down the road. And I 
say this simply because we have reached a point in international trade 
relations where we have to ask if we are prepared to change the ideas 
and institutions that form the foundation of our political economic 
system to attain a trade agreement. That is the essence of the debate 
at hand, and if we have learned anything at all from NAFTA, it is that 
this is not something to be taken lightly.
  All this said, this legislation must be passed today, and it deserves 
to be passed today. It sends a signal to the people of Jordan that 
while they are already our political friend and ally, the time has come 
that they also become our economic partner. I look forward to the 
benefits, short and long-term, that will come as a result of this 
historic free trade area agreement. I would like to take this 
opportunity to compliment the Clinton and Bush Administrations for 
recognizing its significance and pushing the agreement forward.
  Mr. DURBIN. Mr. President, I rise today in support of this trade 
agreement between the U.S. and Jordan. It is important in terms of 
national security. Jordan is important in the quest for peace and 
security in the Middle East, which couldn't come at a more appropriate 
time. It is important economically--without a healthy Jordanian 
economy, they will not be able to play a constructive role in the 
Middle East.
  For me, it is important because it recognizes that included in the 
economic relationship between the U.S.

[[Page 17737]]

and Jordan are labor and environmental standards. It goes without 
saying that domestic labor markets and environmental standards are 
relevant to competition within a nation and between nations. Both the 
U.S. and Jordan have strong practices in the areas of labor and the 
environment.
  Some critics of this historic legislation counsel us that if either 
country fails to meet their commitments to enforce these or other 
provision of the agreement, they do not expect or intend to use 
traditional enforcement mechanisms to enforce them. This kind of talk 
is unfortunate. To say that regardless of the violations in a trade 
agreement, enforcement mechanisms will not be used is irresponsible. 
Trade sanctions are always a last resort. But to set a precedent in any 
agreement that under no circumstances is there an expectation they may 
have to be used is a mistake an unwise precedent.
  I should remind critics of this legislation that the agreement 
carefully sets up a framework for various consultations and mediation 
over a long period of time before either party could use sanctions only 
after recurring violations affecting trade and only with appropriate 
and commensurate measures. This is clear. Cutting corners on the 
important issues of labor and environmental standards in trade 
agreements is a step backwards for future constructive action on trade.
  I support this agreement because of the importance of our 
relationship and because the timing couldn't be more important. I 
support this agreement because we need to support our friends in the 
Middle East. By passing this legislation today, the United States 
Senate sends a clear signal of support to our many allies in the Middle 
East and a clear signal to Osama Bin Laden that we stand united with 
his neighbors to do whatever we can to promote the economies between 
civilized nations.
  Mr. HATCH. Mr. President, I rise to urge support of the free trade 
agreement between the United States and Jordan.
  As ranking Republican member of the Trade Subcommittee of the Finance 
Committee, I am pleased that the Jordanian Free Trade Agreement was 
approved by the full committee and now is receiving floor 
consideration.
  While some would say that this agreement amounts to nothing more than 
a garden variety trade agreement, they would be wrong. From a strict 
U.S. economic perspective, it is not a major agreement. However, as 
King Abdullah has made clear, from the standpoint of the Jordanians, it 
is an important precedent for his country and for other nations in the 
region. This was true before the tragic events of September, and may be 
more true today as our country wages a campaign to reach out to 
moderate Arab states.
  Bilateral free trade agreements between the U.S. and other countries 
help establish a mutual understanding of the norms and expectations of 
trade. I think when foreign business interests enter into trading 
partnerships with American firms under a free trade agreement, both 
parties can benefit economically, and the U.S. and our trading partner 
will almost inevitably grow closer together due to this type of joint 
enterprise.
  I must commend Chairman Baucus and Ranking Republican Member Grassley 
for their work on this agreement.
  Anyone who has followed the debate on this agreement knows that 
progress was slowed by a vigorous discussion of how the ambiguous 
language pertaining to labor and the environment in the Jordanian 
agreement might, or might not, serve as a precedent in any trade 
promotion authority legislation adopted by Congress.
  It is clear that the biggest stumbling block to passage of TPA 
legislation is how labor and the environment are handled. As a 
proponent of free trade, I have serious reservations about any move 
that would make labor and environmental concerns central concerns of 
trade negotiations.
  While I know that there may be some in the Senate who would like, for 
proper but misguided motivations, to attempt to raise the standard of 
living in the developing world through the implementation of non-trade 
aspects in trade legislation. But we must not confuse trade 
negotiations with social engineering. Our chief goal in trade 
negotiations must focus on benefitting American consumers and American 
workers.
  We must remember that what is good for the goose is good for the 
gander. If we try to impose our views on labor and environment on our 
trading partners, we should not be surprised if one day these trading 
partners complain that our food safety laws are insufficient, our air 
pollution levels too high, and our minimum wage too low.
  Even prior to the terrorist attacks two weeks ago, the economy was 
losing steam. It seems to me and I am sure to many other members of the 
Senate, that one good way to help revive and stimulate our economy is 
to pass trade promotion authority legislation. Fast track can help put 
our country back on the right path to economic recovery and growth.
  While it is my hope that we can work on a bi-partisan basis to pass 
TPA legislation before we adjourn for the year, the Jordanian agreement 
is not the vehicle to resolve all these issues. Today, we can 
accomplish a significant achievement by adopting the Jordanian 
agreement.
  On balance, this is a good agreement with a good partner, Jordan. It 
is not a model for how labor and environmental concerns should be 
addressed in trade promotion authority legislation. It is a statement 
to those in the MidEast and around the world that the United States is 
a good partner. King Abdullah and other world leaders need to know that 
partnering with the United States can result in tangible benefits to 
their citizens.
  I urge my colleagues to vote for this measure.
  Mr. MURKOWSKI. Mr. President, the U.S.-Jordan Free Trade Agreement is 
an important acknowledgment of our long-standing friendship with the 
Hashemite Kingdom of Jordan, which has been a stalwart ally in pursuing 
peace and prosperity in the Middle East. Opening our markets to free 
trade with one another is appropriate, not simply in order to foster 
the opportunities free trade can bring between our two economies, but 
to draw our countries closer together in the struggle for peace.
  I have been an advocate of this free trade agreement since the 
prospect of its negotiation was first raised some years ago. I believe 
strongly in the power of trade to eliminate poverty, encourage 
political transparency and draw nations closer together. I also believe 
that free trade is one of the best manifestations of mutual 
understanding, trust and congruent interests two like-minded countries 
as the United States and Jordan can have. So I have strongly supported 
the negotiation and implementation of this agreement on the essential 
policy grounds on which it is founded.
  I do not, however, support the inclusion in this agreement of 
politically charged provisions linking trade remedies to environmental 
and labor standards. We have learned over the years that as a means to 
enforce expressions of U.S. political will on other nations, trade 
sanctions are ineffective at best. Quite often, they do more harm to 
American interests, including the very interests they are invoked to 
serve, than doing nothing at all. Those that champion the linkage of 
trade with non-trade interests understand this basic fact quite well. 
Sanctions do not work. Sanctions are nothing more than thinly-veiled 
proxies for economic protectionism.
  The effort to link trade and environmental and labor standards are 
largely championed by those whose primary interest is in limiting the 
growth of trade. The labor movement is understandably interested in 
limiting the impact of trade on entrenched labor interests. Their 
desire is to maintain the economic status quo, not to promote growth 
through competition. Likewise, the American environmental movement 
perceives economic growth as inherently counter to their interests in 
preserving the environmental status quo. The evidence is overwhelming 
that the long-term benefits of trade are vastly more positive for labor 
and environmental interests. However, labor and enviromental groups 
serve only narrow, short-term interests.

[[Page 17738]]

  Those of us who understand the overwhelming economic and social 
benefits of expanded trade are rightly concerned, therefore, with the 
inclusion of environmental and labor provisions in trade agreements. 
Even seemingly innocuous provisions such as those slipped in, almost 
mischievously, by the previous Administration into the U.S.-Jordan Free 
Trade Agreement are designed as poison pills by the interest groups 
which championed them. They are invitations for mischief-making on a 
grand scale.
  There is no doubt that opening markets to new economic activity 
places new pressures on labor and environmental concerns. Attention to 
easing such impacts is thoroughly appropriate in implementing new trade 
agreements. To condition trade on prescribed labor and environmental 
standards is, however, to do the work of the opponents of trade. When, 
as in the case of the Jordan Free Trade Agreement, we establish an 
open-ended and vague linkage between trade and non-trade standards, we 
ransom our long-term policy interests for short-term political gain.
  Jordan is not, happily, a model for future trade agreements. Our 
interests in pursuing a free trade agreement with Jordan are 
unparalleled and unique. An attempt to draw parallels between the 
negotiated Jordan agreement and negotiations toward a new WTO Round, a 
Free Trade Agreement with the Americas, or even new bi-lateral 
agreements with other countries is fool's errand. The reasons pro-trade 
Americans support the agreement with Jordan have few echoes in our 
support for other more clearly economically-based trade negotiations. 
Jordan is the exception that proves the rule: trade agreements must 
stand on their own, or they will not stand.
  Mr. McCAIN. Mr. President, I am pleased to support passage of S. 643, 
the U.S.-Jordan Free Trade Area Implementation Act. Two weeks ago, a 
proud symbol of global free trade was destroyed by terrorists in New 
York City. The terrorists who struck the World Trade Center meant harm 
not only to the United States, but to the entire civilized world. In 
this new era, our attention turns increasingly to defending against 
this catastrophic threat, and to pursuing policies that advance our 
interests overseas and reflect the values of our people.
  Strengthening our strategic relations with our friends in the Middle 
East has become an urgent priority of American policy. This free trade 
agreement marks an important benchmark in U.S. relations with Jordan, 
an island of moderation and stability in a volatile region. U.S.-
Jordanian intelligence cooperation will be helpful to our efforts to 
crack down on terrorism at its source. That Congress has made 
ratification of this bilateral trade agreement a priority as we wind 
down the current session while sorting through the pressing obligations 
ahead reflects its meaning to our people, and our mutual interests.
  The U.S.-Jordan Free Trade Area represents the first free trade 
agreement the United States has negotiated with an Arab nation. 
Liberalized trade with Jordan will benefit both our economies. Although 
various Jordanian and American goods already enjoy duty-free status or 
low tariff rates, this free trade area will ensure that Jordanian and 
American consumers enjoy an expansion of commercial choice and value. 
Both nations will also benefit from greater foreign direct investment 
and trade-related job creation.
  I remain concerned about the hostility this Congress has shown 
towards free trade. Many important new trade bills enabling the 
expansion of bilateral and multilateral trade have not moved through 
the legislative process this year. Existing laws, such as the Andean 
Trade Preference Act and the Generalized System of Preferences, are set 
to expire shortly but have received little if any attention from 
Congress. This summer, we struggled as a body to determine whether or 
not we would honor our Nation's solemn commitments to NAFTA, an 
invaluable trade agreement with our neighbors and largest trading 
partners.
  Indeed, it has seemed as though free trade is no longer a priority of 
this body. In addition to the strategic significance of this 
legislation to U.S.-Jordanian relations, it is my hope that passage of 
this bill represents a change in the direction this Congress will take 
toward a policy of free trade that has upheld our prosperity and 
advanced our values around the world.
  Mr. LEVIN. Mr. President, the U.S.-Jordan Free Trade Agreement is an 
important agreement and I am pleased the Senate has agreed to pass it 
by unanimous consent today. The agreement will provide a closer 
economic relationship with the Hashemite Kingdom of Jordan, which has 
proven itself to be an important strategic ally in the Middle East. 
Importantly, this agreement also represents the first free trade 
agreement to include in the core text, binding provisions recognizing 
the trade impacts of labor and environmental standards. The agreement 
sets a precedent that future trade agreements should follow.
  Some in the Senate have opposed the agreement because of the labor 
and environmental provisions. The Administration responded to this 
opposition by exchanging side letters with the Government of Jordan 
indicating that neither country expected or intended to use trade 
sanctions to enforce the agreement. These letters do not specifically 
mention the labor and environmental provisions of the agreement. The 
exchange of letters was, however, clearly aimed at the labor and 
environmental provisions. I think that this exchange of letters was 
unfortunate. I continue to support the agreement, though, because the 
letters did not affect the text of the agreement. I believe in the need 
to have meaningful and binding labor and environmental provisions in 
trade agreements, provisions that are fully enforceable and can be 
implemented through the same mechanisms as any other part of the 
agreement.
  The PRESIDING OFFICER. The Senator from Nevada.
  Mr. REID. I suggest the absence of a quorum.
  The PRESIDING OFFICER. Without objection, it is so ordered. The clerk 
will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Nevada.
  Mr. REID. Mr. President, there are a number of Senators wishing to 
speak. The unanimous consent agreement indicated that this debate would 
be for 2 hours, which would end at about 2:08. I ask unanimous consent 
that the time be extended an additional 4 minutes on each side and that 
the vote occur thereafter.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Just to alert everyone, the two leaders may wish to speak 
on this legislation. If they do, they will use leader time and extend 
the time until we vote a little more. If that is the case, they can 
come and take care of that themselves. So the vote, as I understand it, 
will occur at approximately 2:15, 2:16, something like that.
  The PRESIDING OFFICER. The Senator is correct.
  Who yields time?
  The Senator from Montana.
  Mr. BAUCUS. Mr. President, as a consequence of the recent change in 
time, will the Presiding Officer indicate how much time is available to 
each side?
  The PRESIDING OFFICER. The Senator from Montana has 5 minutes 20 
seconds, and the Senator from Texas has 17 minutes.
  Mr. BAUCUS. I thank the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, it may very well be that the distinguished 
chairman of the Finance Committee would like to end the debate. I will 
afford him that courtesy.
  Let me just try to sum up very briefly by saying I am hopeful we can 
work together on a bipartisan basis to have trade promotion authority. 
There is no temporal issue that I have stronger feelings about than 
trade. I see it as an extension of freedom. I see it as the great 
promoter of economic opportunity and prosperity and happiness in

[[Page 17739]]

the world. I am in favor of world free trade. Obviously, I am in favor 
of free trade with any individual nation.
  There are very real problems when you bring domestic law into these 
trade agreements, and I have outlined today the two problems you have 
in trying to inject, in this case, domestic labor law, domestic 
environmental law, and then the enforcement of those laws through 
regulation. When you bring them into trade agreements, you create two 
very real problems: First, you give an extraordinary grant of power to 
the executive branch of Government to write domestic laws in a context 
where Congress' powers to debate and amend are severely limited; and, 
second, you pass decisionmaking authority, as to America's intent and 
as to the impact of the making of domestic law, to an international 
decisionmaking unit. And you create a situation where literally, with 
strong popular support, with the best of intentions, with the goal of 
promoting the well-being of our people--and the only legitimate 
objective of American Government is to promote the well-being of its 
people--we could find ourselves in a situation where a change in a 
labor or an environmental law was judged by an international 
decisionmaking body or dispute resolution mechanism to benefit us in 
trade, and I would hope that would be one of our objectives in passing 
law. But by judging it in those terms, we could literally have tariffs 
imposed on any American product sold on the world market, and the net 
result would be severe limits on our national sovereignty.
  These are very real issues. They are not easy to fix. If you are 
going to extend trade promotion authority into the area of domestic 
law--in this case, labor and environment--my own preference would be, 
knowing that trade promotes the environment, knowing that trade 
promotes labor rights by promoting competition, the ultimate right of a 
worker comes down to their ability to quit and go get another job. That 
is the ultimate worker right: I do not have to worry about somebody 
protecting my rights and treating me well when I can go across the 
street.
  Trade promotes that kind of competition. But there are two sides to 
every story. I know the distinguished chairman has very different 
views, at least on what he hopes to achieve with labor and 
environmental provisions.
  I conclude by saying I am willing to try to work with him to come up 
with a way of finding a solution to this problem so that we can give 
the President trade promotion authority at a time when we desperately 
need it, at a time when we need to be promoting world prosperity, and 
at a time when we need to be promoting democracy and capitalism, 
because democracy and capitalism do not give rise to the kind of hate 
that endangers us and our people and our future and our happiness. I do 
think it is important that we work this out. But these are very real 
issues, very tough issues.
  Let me conclude by saying that in having this bill go forward, from 
my own viewpoint, this is a decision that was made based on the 
necessity of approving this agreement now as we are looking at a long 
and difficult war on terrorism, a trade agreement that in the big 
scheme of economics is not very important, but the country with which 
we are entering into this agreement is a critical country, critical for 
American interests in the Middle East. And it is in the Middle East 
that many of our problems with world terrorism are focused. Without 
setting a precedent for this labor and environmental extension into 
trade or loss of sovereignty or violating the separation of powers, I 
intend to support the agreement.
  I reiterate, in conclusion, that I am willing to work with anybody to 
try to find a way to get trade promotion authority for the President. 
It would be a great tragedy if we adjourn this year without the 
President having this authority. It is an arrow in his quiver that he 
needs to fight this war. We are not going to win this war just with 
bullets, though we need some bullets and we need them properly 
delivered. However many we need, I am willing to buy. That alone will 
not win this war. Trade and the mutual respect it creates will be 
important tools, as important as bullets in winning this war.
  This trade promotion authority is very important, but to deal with 
it, we have to come to grips with these issues.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Bayh). The Senator from Montana.
  Mr. BAUCUS. Mr. President, I yield myself the remainder of the time.
  I first wish to congratulate Charlene Barshefsky, the very able U.S. 
Trade Representative who negotiated this agreement, and also President 
Bush and his administration. They have been very far-sighted in urging 
the Congress to pass this legislation for all the reasons I and others 
have mentioned.
  I also thank my colleague and good friend from Iowa, Senator 
Grassley, ranking member of the committee, for his steadfast support 
for this agreement.
  This agreement was signed by both countries last October. The 
implementing legislation was passed by the House before the August 
recess. A virtually identical bill was reported out of the Finance 
Committee with only two dissenting votes, again before the August 
recess.
  The point being, there was immense support for this agreement even 
before the disastrous events of September 11. Certainly, the events of 
September 11 make it all the more important now that we pass the bill 
to implement this agreement.
  I also thank Senator Gramm for allowing this bill to come to the 
floor. He had earlier expressed his disagreement with the bill to the 
point where its passage was a little bit uncertain. I very much thank 
the Senator for allowing this bill to come up and pass and for his 
support of the bill at this time.
  I respectfully disagree with some of his concerns. First, the 
distinctions he suggests between trade and non-trade issues are just 
not valid. We have a whole plethora of domestic issues routinely 
included in trade agreements, whether patents or copyrights or 
trademarks, uses of geographical names on labels, farm tilling 
practices. That gets pretty domestic. You can't get more domestic than 
farming. We address farm tilling practices in our discussions of trade. 
They are now very much in discussion between the European Union and 
ourselves with respect to which practices are included as trade-
distorting subsidies and which are not. There are a lot of domestic 
issues that are included in trade agreements.
  Second, the statement has been made that this agreement impinges upon 
American sovereignty. It is important to remind ourselves that any 
agreement the U.S. Government enters into with another country to some 
degree has sovereignty consequences. Arms control, for example, the 
Montreal Protocol restricting chloroflorocarbons, tax treaties, all 
have consequences for American sovereignty. International agreements 
are not a free lunch. They are bargained-for agreements that have 
consequences and have effects on each country's sovereignty.
  Also, it is important to remember that a lot of traditional economic 
provisions included in trade agreements have some effect on our 
sovereignty. For example, in the GATT, we have mutually agreed to 
reduce tariffs. If we didn't agree to reduce our tariffs, we would 
never get other countries to reduce theirs. The issue of intellectual 
property rights is another example. Agreements in this area have 
consequences to one degree or another on actions that this country may 
or may not take.
  The main point I wish to make is that the agreement before us does 
not infringe upon U.S. sovereignty because, under the agreement, 
neither country is required to change its laws. And there has been a 
lot of talk about international dispute settlement mechanisms. There is 
no binding international dispute settlement mechanism in this 
agreement. If there is a dispute, as I mentioned previously, three 
conditions have to be met for either side to request consultations. I 
won't go through those conditions again, because time is limited. But 
even if a party claims that the three conditions are met, the next step 
is to go to mediation, not arbitration. There is mediation, and it is 
non-binding.
  A mediator might suggest to the United States or to Jordan, let's say

[[Page 17740]]

the United States, that the United States has done something untoward. 
The United States can accept it or not accept it. There is no 
requirement whatsoever for the United States to accept what a non-
binding mediation panel--one panelist named by the United States, the 
other by Jordan, a third selected between them--might suggest. Again, 
it is non-binding.
  Finally, I might say that I do believe this agreement does set a 
precedent, by definition, because it is the first of its kind. That is 
a precedent. I hope that all future trade agreements will now, after 
the passage of this agreement, include proper, reasonable labor and 
environmental provisions, because that is where we are in the world 
today.
  The PRESIDING OFFICER. The Senator's time has expired.
  Who yields time? The Senator from Texas.
  Mr. GRAMM. Mr. President, I think I have pretty well said everything 
I came to say. Let me yield back my time and then if someone else wants 
to speak, they can come speak. If not, we can just remain in a quorum 
call until we are ready to vote. With that, let me yield back the 
remainder of my time, seeing the distinguished majority leader.
  The PRESIDING OFFICER. The majority leader.
  Mr. DASCHLE. Mr. President, I thank the distinguished Senator from 
Texas. Especially I thank the chair of the Senate Finance Committee and 
the ranking member for their work in getting us to this point.
  I simply wanted to come to the floor before the end of the debate to 
express my strong support for the Jordan Free Trade Area Implementation 
Act. This is the first-ever U.S. free trade agreement with an Arab 
country. I think at these very tenuous and challenging times, there 
could be no stronger statement for us to make than to pass this 
legislation. I appreciate very much the work by all of those involved 
to see that it is done.
  I note this agreement was negotiated before the events of September 
11. We are moving ahead today because forging this agreement is the 
right thing to do for the people of the United States. It is also the 
right thing to do for the people of Jordan. It serves as a statement 
that our enemy is terrorism, not the Muslim world.
  More than a year ago, President Clinton and King Abdullah began 
discussions about how we could more closely link the United States and 
Jordan, which, as everyone knows, is an increasingly important and 
strategic friend in the Middle East. This act is the result of those 
efforts, an important step in deepening that bond. When President 
Clinton and King Abdullah signed the United States-Jordan Free Trade 
Agreement a year ago, they expressed their concern about the impact of 
trade on workers and the environment. I share that concern today.
  I am pleased that written into the text for the first time ever are 
several provisions to protect the environment and the rights of 
workers.
  I see this as not only an important bilateral agreement but hopefully 
a template for future trade agreements as well.
  I recognize, as others have noted, that several of my colleagues have 
concerns about how this agreement is structured, and I thank them for 
saving this debate for another day and allowing us to move forward on 
this important legislation.
  Our disagreements on this bill are far outweighed by our areas of 
agreement. We all agree on the strategic importance and good friendship 
of the Kingdom of Jordan.
  Bordering Israel, Syria, Iraq, and Saudi Arabia, Jordan sits in the 
middle of a wide range of critical U.S. national interests--
geographically and politically.
  This centrality has been bolstered by Jordan's supportive orientation 
toward U.S. interests. This agreement should stand as a strong symbol 
of the importance we attach to our relations with Jordan.
  The Jordanians have taken admirable steps to improve relations with 
Israel, including the 1994 peace treaty that helped to advance the 
Middle East peace process.
  This trade agreement, as the foreign assistance and debt relief 
before it, is a signal to Jordan that we appreciate its efforts at 
peace in the Middle East and that we hope for more.
  That view is held by Israeli Prime Minister Sharon, who, on his first 
visit to Washington as Prime Minister, urged Congress to pass this 
historic trade agreement.
  This trade agreement is also a signal to King Abdullah that we 
support his efforts at economic modernization. He and his team have 
instituted a series of significant economic reforms in order to restore 
growth.
  We understand those reforms, while necessary, are painful. With this 
vote today, we are telling the Jordanians their reform and austerity 
will pay dividends.
  Lastly, and most importantly, this agreement signals that the United 
States is not the enemy of the Arab and Muslim world.
  Osama bin Laden and his associate extremists argue that the West is 
waging a war on Islam. Nothing could be further from the truth. We are 
waging a war on terrorism.
  Jordan's participation in this international coalition against terror 
will only hasten our triumph and isolate the extremists and criminals 
who attacked America 2 weeks ago.
  By further solidifying our important relationship at this critical 
time, the United States-Jordan Free Trade Area Implementation Act will 
give further impetus to the international coalition against terrorism 
and advance vital U.S. national security interests as well.
  For these reasons, I come to the floor in support of H.R. 2603 and 
hope that all my colleagues will do the same.
  I yield the floor.
  The PRESIDING OFFICER. All time has expired. The bill is before the 
Senate and open to amendment. If there be no amendment to be offered, 
the question is on the third reading and passage of the bill.
  The bill (H.R. 2603) was ordered to a third reading and was read the 
third time.
  The PRESIDING OFFICER. The bill having been read the third time, the 
question is, Shall the bill pass?
  The bill (H.R. 2603) was passed.
  Mr. BOND. Mr. President, I move to reconsider the vote.
  Mr. GRAMM. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                          ____________________