    [Public Papers of the Presidents of the United States: George H. W. Bush (1991, Book I)]
    [February 26, 1991]
    [Pages 180-182]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Message to the Congress Transmitting Proposed Legislation To Implement
    the Administration's Enterprise for the Americas Initiative
    February 26, 1991

    To the Congress of the United States:
        I am pleased to transmit a legislative proposal entitled the
    ``Enterprise for the Americas Initiative Act of 1991.'' This proposal
    sets forth key measures to implement the investment, debt, and
    environmental components of my ``Enterprise for the Americas''
    Initiative announced on June 27, 1990. It will build on the provisions
    in Title IV of the Agricultural Trade Development and Assistance Act of
    1954 as amended by section 1512 of the Food, Agriculture, Conservation,
    and Trade Act of 1990 (``1990 Farm Bill'') to grant the Administration
    the remaining authority needed to implement these aspects of the
    Initiative. Also transmitted is a section-by-section analysis of the
    proposed legislation.
        This Initiative acknowledges the gains made for freedom in our
    hemisphere over the last year, as a resurgence of democratic rule has
    swept through the Americas. It also reaches out to support the
    realignment of economic policies that has paralleled this political
    shift.
        As the people of Latin America and the Caribbean search for
    prosperity following a decade of painful economic adjustment, their
    governments are focusing on economic growth and the free market policies
    needed to nourish it. By reforming economies and rebuilding their
    strengths, each country will contribute to the prospects for the
    Americas as a whole in the coming years. My new Enterprise for the
    Americas Initiative aims to build a broad-based partnership for the
    1990s to promote this process.
        The Initiative rests on three pillars--actions on trade, investment,
    and debt--through which we can reach out to our neighbors and support
    economic reform and sustained growth. First, we want to expand trade by
    entering into framework agreements on trade agreements that will
    establish a hemisphere-wide free trade system. Second, we want to
    encourage foreign and domestic investment and help countries compete for
    capital by reforming both broad economic policies and specific
    regulatory systems. Third, we want to build on our successful efforts to
    ease debt burdens and to increase the incentives for countries to reform
    their economies by offering additional measures in the debt area.
    Building a strong future for the hemisphere also depends on preserving
    and protecting the environment. Accordingly, we also propose to create
    resources to support environmental programs as an important element

    [[Page 181]]

    of debt reduction.
        The proposal I am transmitting to the Congress focuses on the
    investment, debt, and environment components of the Enterprise for the
    Americas Initiative. It reflects the mechanisms established in the 1990
    Farm Bill authorizing the reduction of PL-480 debt of eligible countries
    and the payment of interest in local currency to support environmental
    projects.
        The proposal provides for contributions by the United States to a
    multilateral investment fund to be established by the Inter-American
    Development Bank (IDB) that would foster a climate favorable to
    investment in Latin American and Caribbean countries. This Enterprise
    for the Americas Investment Fund will provide additional support for
    reforms undertaken as part of the new IDB investment sector lending
    program. The Fund will advance specific, market-oriented investment
    policy initiatives and reforms and finance technical assistance.
        The proposal establishes the Enterprise for the Americas Facility to
    support the objectives of the Initiative through administration of debt
    reduction operations for those nations that meet the investment reform
    and other policy conditions. Latin American and Caribbean countries can
    qualify for benefits under the Facility if they:
        Have in effect, have received approval for, or in
                exceptional circumstances are making significant progress
                toward International Monetary Fund/World Bank reform
                programs and World Bank adjustment loans;
        Have in place major investment reforms in conjunction with
                an IDB loan or are otherwise implementing or making
                significant progress toward open investment regimes; and
        Have negotiated a satisfactory financing program with
                commercial banks, including debt and debt service reduction,
                if appropriate.
        The proposal authorizes the reduction of concessional obligations
    extended under the Foreign Assistance Act of 1961. The Agency for
    International Development will exchange--at the direction of the
    Facility--new obligations for obligations outstanding as of January 1,
    1991. Principal on the new obligation will be paid in U.S. dollars.
    Interest will be at a concessional rate and paid in local currency if an
    eligible country has entered into an Environmental Framework Agreement
    establishing an Enterprise for the Americas Environmental Fund;
    otherwise, interest will be paid in U.S. dollars.
        The Environmental Fund into which local currency interest payments
    are deposited will be owned by the debtor country. The Environmental
    Framework Agreement negotiated with each country will provide guidelines
    for the administration of its Environmental Fund. This Agreement will be
    negotiated by the President in consultation with the Environment for the
    Americas Board, a Washington-based entity with both United States
    Government and nongovernmental representatives.
        This Board will also ensure that appropriate local administering
    bodies are established and will review the programs, operations, and
    fiscal audits of each administering body. Local administering bodies
    will include representatives from the United States Government, the
    debtor government, and a broad range of environmental nongovernmental
    organizations based in the participating country. A majority of the
    members of each administering body shall be individuals from such
    nongovernmental organizations.
        These administering bodies will be responsible for identifying
    projects and managing the use of the Environmental Funds in each
    country. They will prepare annual programs laying out their priorities
    and plans, which will be submitted to the Environment for the Americas
    Board for review. Grants in excess of $100,000 will be subject to the
    veto of the United States Government or the debtor government involved.
        The proposal also authorizes the sale, reduction, or cancellation of
    loans made to eligible countries under the Export-Import Bank Act of
    1945, as amended, and assets acquired under export credit guarantee
    programs authorized pursuant to the Commodity Credit Corporation Charter
    Act or section 4(b) of the Food for Peace Act of 1966. These sales,
    reductions, or cancellations will be undertaken only when pur-

    [[Page 182]]

    chasers confirm that they will be used to carry out debt-for-equity,
    debt-for-development, or debt-for-nature swaps in eligible countries.
        We believe that these investment, debt, and environmental measures
    will provide significant support to the efforts of Latin America and the
    Caribbean to build strong economies.
        The leaders of these countries have welcomed the Initiative and
    widely recognize it as the most significant opportunity--and challenge--
    in inter-American relations in recent years. These are the leaders who
    are facing difficult choices in reforming their economies and, in the
    process, turning the tide away from economic decline and environmental
    degradation.
        Their efforts are not merely of theoretical importance to us in the
    United States. We have not gone untouched by the economic crisis faced
    by Latin America and the Caribbean over the last decade. As countries in
    the region cut imports, postponed investment, and struggled to service
    their foreign debt, we too were affected. We lost trade, markets, and
    opportunities.
        Enactment of the Enterprise for the Americas Initiative Act of 1991
    will permit the United States to support the efforts of Latin American
    and Caribbean leaders, increasing the prospects for economic growth and
    prosperity throughout the hemisphere.

                                                                 George Bush

    The White House,
    February 26, 1991.