[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

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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-

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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.