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Houston Fast Track Briefing 4/8/91 [OA 6897] [1]
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Houston Fast Track Briefing 4/8/91 [OA 6897] [1]
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Grant/Dooley
April 1, 1991
A:Mextrade / Draft five
PRESIDENTIAL REMARKS: HISPANIC FREE TRADE BREAKFAST
THE HOUSTONIAN
MONDAY, APRIL 8, 1991
TIME?
((Acknowledgements))
Good morning. I've been looking forward to meeting with
you today, because I want to discuss two issues important to us
all: America's ability to compete in the global marketplace and
our ability to negotiate with our trading partners. I've said
many times that the hard work of freedom awaits us. Today, I've
come to ask your help in that challenge.
Last month, I asked Congress to extend our "fast track"
authority in trade negotiations. Through this mechanism, our
negotiators can assure their counterparts that agreements they
reach at the bargaining table will be the same ones voted on at
home. It makes us good to our word.
Fast-track doesn't affect Congress' power to accept or
reject treaties. It just prevents Congress from changing
agreements we have reached, and forcing everyone involved to
start from scratch.
We need fast track now to pursue vital trade pacts -- the
North American Free Trade Agreement, the Uruguay Round and the
Enterprise for the Americas Initiative. If we lose our fast
track authority, we lose all three of those agreements. We lose
trade. We surrender our role as a world leader and role model.
2
Those who oppose fast track cite a variety of issues --
wage rates, environmental quality, health and safety concerns.
We care about those, too. And we're working on them, with a
step-by-step plan to resolve each and every challenge.
Here's the key: A vote against fast-track is a vote against
things we all hold dear -- growth in other lands -- prosperity at
home. It ignores the dramatic and wonderful changes in the world
economy.
We want to play a leading role in that emerging, exciting
world; we don't want to hide from it. We want to join in the
thrilling business of innovation; we don't want to chain people
to outmoded technologies and ideas.
Let me be clear about this: A vote against fast track is a
vote against our negotiators. It is a vote against our trading
partners. It is a vote against progress.
Right now, we have the chance to expand opportunity and
economic growth from the Yukon the the Yucatan. The North
American Free Trade Agreement would link us with our largest
trading partner, Canada, and our third-largest partner, Mexico.
It would create the largest, richest trade zone on earth -- 360
million consumers in a market that generates $6 trillion in
output a year.
Just think of the benefits: A unified North American market
would let us all build on our strengths. It would provide more
and better jobs for U.S. workers. It would stimulate price
competition, lower consumer prices, improve product quality. If
3
you want to talk about a compelling fairness issue, consider
this: The agreement would make necessities such as food and
clothing more affordable, and more available to our poorest
citizens. It would raise productivity and produce a higher
standard of living throughout the continent.
Let me illustrate the stakes involved in the fast-track
debate by discussing the Mexican component of the North American
Free Trade Agreement. Trade with Mexico has helped both our
countries. Just four years ago, we had a $91 million trade
deficit with Mexico. Today, we enjoy a $28 billion surplus.
This turnaround took place because Mexican President Carlos
Salinas believes in free trade. He has slashed tariff rates for
some goods from 100 percent to 10 percent. As a result, our
exports to Mexico have doubled in the past four years. That
export boom has created 320,000 new jobs in the United States,
good jobs. Each additional billion dollars in exports creates
20,000 new jobs here in the United States.
Now, I don't have to tell anyone in this room about Mexico's
market potential -- 80 million consumers who want to buy our
goods. Nor do I have to tell you that as Mexico grows and
prospers, it will need even more of the goods we're best at
producing -- computers, manufacturing equipment, high-tech and
high-value products.
Unfortunately, we have a tough fight ahead of us. One of
our Congressional opponents said the other day, "My concern is
that our trade negotiators keep uppermost in their mind the
4
impact of this agreement on American jobs, American companies,
and American exports." ///
I couldn't agree more.
Let's talk about his concerns. We've already seen what the
reduction in Mexican tariffs has done for American exports. A
free-trade agreement would eliminate the remaining tariffs
entirely. That would stimulate exports, create new jobs,
generate wealth and hope on both sides of the border.
Let's take a look at the impact on American companies. When
trade barriers vanish, goods flow freely across borders.
Investment flows freely across borders. And everybody --
businessmen and workers, to farmers and consumers -- reaps the
benefits of growth.
Consider the environment: The North American Free Trade
Agreement fits into a winning strategy for improving
environmental quality. Opponents of fast-track and the trade
pacts forget that prosperity offers the surest road to worker
safety, public health and environmental quality.
This Administration wants to ensure that Mexican economic
growth goes hand in hand with environmental protection. Our
E.P.A. is already assisting the Salinas government with its
environmental programs. President Salinas has shown he's serious
about cleaning up the environment -- by requiring all new cars to
have catalytic converters and recently by shutting down Mexico's
largest oil refinery for pollution violations. I believe that
President Salinas cares deeply about his nation and its people,
5
and that he means business when he says he wants to clean up
Mexico's air and water.
Finally, consider the matter of working conditions in
Mexico. The trade surplus has caused Mexican wages to rise very
quickly over the last few years, and it has produced no tangible
reduction in American wages. That being the case, someone ought
to ask the opponents of fast track why they oppose prosperity in
Mexico. Someone should ask why they oppose letting our neighbors
enjoy the benefits of progress. Ask them what is wrong with
increased productivity in the countries.
throughout both continuat Ask
them why
Mexicans should not enjoy higher wages and better lives.
And ask them what's wrong with a more stable Mexico. As you
know, Mexico is in the midst of a brain drain. It already
graduates more engineers per capita than the U.S. does -- yet
more and more good workers who can't find jobs head for the
border every day. A free-trade pact would encourage investment,
create jobs, lift wages and give talented Mexican citizens
opportunites they don't enjoy today. A stronger Mexico, in turn,
means a stronger United States, and a stronger North American
alliance.
So you see, we have much to gain from extending fast track
-- a new era of open, free and fair trade -- a future of
unprecedented economic growth and regional harmony.
The vote on fast-track -- and on the trade agreements --
really is a vote on what kind of America we want to build. A
"yes" vote expresses confidence in American know-how and
6
ingenuity. It says we believe in Mexico's ability to adapt to a
level economic playing field. Free and open markets let people
pursue their dreams by competing against other dreamers,
entrepreneurs.
As with most good things in life, competition involves risk.
But we always have been a nation of risk-takers, adventurers.
Our forefathers hacked an industrial superpower out of a rough
wilderness. We have tamed hostile land and explored deep space.
We have created technologies and products unlike any others
produced in human history. We have placed the wisdom of the ages
within reach of anyone who can operate a computer.
We are the world's largest trader, and we have nothing to
fear but the fear-mongers themselves. //
Opponents of fast track and the Free Trade Agreement like
to focus on envy, suspicion, fear -- sentiments unworthy of us as
a people. They like to pretend that the world has not moved into
a new era of international competition and cooperation. They
seem to be the only ones who haven't learned that defeatism
produces defeat, while confidence and self-reliance produce
greatness.
We stand ready to seize the opportunities that the new world
economy offers us. With your help, I know we can conquer the
demagogues of defeat. //
Thank you for your support, and God bless our great country.
# # #
Grant/Dooley
April 1, 1991
A:Mextrade / Draft four
PRESIDENTIAL REMARKS: HISPANIC FREE TRADE BREAKFAST
THE HOUSTONIAN
MONDAY, APRIL 8, 1991
TIME?
((Acknowledgements))
Good morning. I've been looking forward to meeting with
you today, because I want to discuss two issues important to us
all: America's ability to compete in the global marketplace and
our ability to negotiate with our trading partners. I've said
many times that the hard work of freedom awaits us. Today, I've
come to ask your help in that challenge.
Last month, I asked Congress to extend our "fast track"
authority in trade negotiations. Through this mechanism,
Congress ensures that the President can negotiate on equal terms
with his counterparts. It lets our negotiators ensure our
partners that the agreements reach at the bargaining table will
be the same ones voted on at home.
Fast-track doesn't affect Congress' power to accept or
Good
reject treaties. It just lets us assure our partners that
for
Congress will not change agreements that we have reached.
our word
We need fast track now to pursue vital trade agreements --
the North American Free Trade Agreement, the Uruguay Round and
the Enterprise for the Americas Initiative. If we lose our fast
track authority, we lose all three of those agreements. We lose
trade. We surrender our role as a world leader and role model.
BF
2
Those who oppose fast track cite a variety of issues --
wage rates, environmental quality, health and safety concerns.
We care about those, too. And we're working on them, with a
step-by-step plan to resolve each and every challenge.
Here's the key: A vote against fast-track is a vote against
things we all hold dear. It rejects growth in other lands. (It
rejects prosperity at home. It ignores the dramatic and
wonderful changes in the world economy.
We want to play a leading role in that emerging, exciting
world; we don't want to hide from it. We want to join in the
thrilling business of innovation; we don't want to enslave people
with outmoded technologies and ideas.
Let me be clear about this: A vote against fast track is a
vote against our negotiators. It is a vote against our trading
partners. It is a vote against progress.
Right now, we have the chance to expand opportunity and
economic growth from the Yukon the the Yucatan. The North
American Free Trade Agreement would link us with our largest
trading partner, Canada, and our third-largest partner, Mexico.
It would create the largest, richest trade zone on earth -- 360
million consumers in a market that generates $6 trillion in
output a year.
Just think of the benefits: A unified market would let us
all build on our strengths. It would provide more and better
jobs for U.S. workers. It would stimulate price competition,
lower consumer prices, improve product quality. If you want to
3
talk about a compelling fairness issue, consider this: The
agreement would make necessities such as food and clothing more
affordable, and more available to our poorest citizens. It would
raise productivity and produce a higher standard of living
throughout the continent.
Let me illustrate the stakes involved in the fast-track
debate by discussing the Mexican component of the North American
Free Trade Agreement. Trade with Mexico has helped both our
countries. Just four years ago, we had a $91 million trade
deficit with Mexico. Today, we enjoy a $28 billion surplus.
This turnaround took place because Mexican President Carlos
Salinas believes in free trade. He has slashed tariff rates
for
some goods from 100 percent to 10 percent. As a result, our
exports to Mexico have doubled in the past four years. That
move?
export boom has created 320,000 new jobs in the United States,
good jobs Each additional billion dollars in exports creates
20,000 new jobs here in the United States.
Now, I don't have to tell anyone in this room about Mexico's
market potential -- 80 million consumers who want to buy our
goods. Nor do I have to tell you that as Mexico grows and
prospers, it will need even more of the goods we're best at
producing -- computers, manufacturing equipment, high-tech and
high-value goods.
Unfortunately, we have a tough fight ahead of us. One of
our Congressional opponents said the other day, "My concern is
that our trade negotiators keep uppermost in their mind the
4
impact of this agreement on American jobs, American companies,
and American exports." ///
I couldn't agree more.
Let's talk about his concerns, one at a time. We've already
seen what the reduction in Mexican tariffs has done for American
exports. A free-trade agreement would eliminate the remaining
tariffs entirely. That would stimulate exports, create new jobs,
generate wealth and hope on both sides of the border.
Let's take a look at the impact on American companies. When
trade barriers vanish, goods flow freely across borders.
Investment flows freely across borders. And everybody -- from
businessmen and workers, to farmers and consumers -- reaps the
benefits of growth.
Consider the environment: Fast-track fits into a winning
strategy for improving environmental quality. Opponents of fast-
track authority forget that prosperity offers the surest road to
worker safety, public health and environmental quality.
This Administration wants to ensure that Mexican economic
growth goes hand in hand with environmental protection. Our
E.P.A. is already assisting the Salinas government with its
environmental programs. President Salinas has shown he's serious
about cleaning up the environment --- by requiring all new cars to
have catalytic converters and recently by shutting down Mexico's
largest oil refinery for pollution violations. I believe that
President Salinas cares deeply about his nation and its people,
What happened
to
5
and that he means business when he says he wants to clean up
Mexico's air and water.
Finally, consider the matter of working conditions in
Mexico. The trade surplus has caused Mexican wages to rise very
quickly over the last few years, and it has produced no tangible
reduction in American wages. That being the case, someone ought
to ask the opponents of fast track why they oppose prosperity in
Mexico. Someone should ask why they oppose letting our neighbors
enjoy the benefits of progress. Ask them what is wrong with
increased productivity in the both countries. Ask them why
Mexicans should not enjoy higher wages and better lives.
Indeed, ask them what's wrong with a more stable Mexico. As
you know, Mexico is in the midst of a brain drain. It already
graduates more engineers per capita than the U.S. does -- yet
more and more good workers who can't find jobs head for the
border every day. A free-trade pact would encourage investment,
create jobs, lift wages and give talented Mexican citizens
a
reason to stay home, set down roots, and build a better country
A stronger Mexico, in turn, means a stronger United States, and a
stronger North American alliance.
So you see, we have much to gain from extending fast track
-- a new era of open, free and fair trade -- and with it, a
future of unprecedented economic growth and regional harmony.
The vote on fast-track really is a vote on what kind of
future Americans want. A "yes" vote expresses confidence in
American know-how and ingenuity. It says we believe in Mexico's
6
ability to adapt to a level economic playing field. Free and
open markets let people pursue their dreams by competing against
other dreamers, entrepreneurs.
As with most good things in life, competition involves risk.
But we always have been a nation of risk-takers, adventurers.
Our forefathers hacked an industrial superpower out of a rough
wilderness. We have tamed hostile land and explored deep space.
We have created technologies and products unlike any others
produced in human history. We have placed the wisdom of the ages
within reach of anyone who can operate a computer.
We are the world's largest trader, and we have nothing to
fear but the fear-mongers themselves. //
The North American Free Trade Agreement lets us exercise
our national genius for innovation. It lets us show generosity
toward our neighbors and friends. Opponents of this agreement
like to focus on envy, suspicion, fear -- sentiments unworthy of
us as a people. They like to pretend that the world has not
moved into a new era of international competition and
cooperation. They seem to be the only ones who haven't learned
that defeatism produces defeat, while confidence and self-
reliance produce greatness.
We stand ready to seize the opportunities that the new world
economy offers us. With your help, I know we can conquer the
high priests of defeat. //
Thank you for your support, and God bless our great country.
# # #
2
Those who oppose fast track cite a variety of issues --
wage rates, environmental quality, health and safety concerns.
We care about those, too. And we're working on them, with a
step-by-step plan to resolve each and every challenge.
Here's the key: A vote against fast-track is a vote against
things we all hold dear. It rejects growth in other lands. It
rejects prosperity at home. It ignores the dramatic and
wonderful changes in the world economy.
We want to play a leading role in that emerging, exciting
world; we don't want to hide from it. We want to join in the
thrilling business of innovation; we don't want to enslave people
with outmoded technologies and ideas.
Let me be clear about this: A vote against fast track is a
vote against our negotiators. It is a vote against our trading
partners. It is a vote against progress.
Right now, we have the chance to expand opportunity and
economic growth from the Yukon the the Yucatan. The North
American Free Trade Agreement would link us with our largest
trading partner, Canada, and our third-largest partner, Mexico.
It would create the largest, richest trade zone on earth -- 360
million consumers in a market that generates $6 trillion in
output a year.
Just think of the benefits: A unified market would let us
all build on our strengths. It would provide more and better
jobs for U.S. workers. It would stimulate price competition,
lower consumer prices, improve product quality. If you want to
Grant/Dooley
April 1, 1991
A:Mextrade / Draft four
PRESIDENTIAL REMARKS: HISPANIC FREE TRADE BREAKFAST
THE HOUSTONIAN
MONDAY, APRIL 8, 1991
TIME?
((Acknowledgements))
Good morning. I've been looking forward to meeting with
you today, because I want to discuss two issues important to us
all: America's ability to compete in the global marketplace and
our ability to negotiate with our trading partners. I've said
many times that the hard work of freedom awaits us. Today, I've
come to ask your help in that challenge.
Last month, I asked Congress to extend our "fast track"
authority in trade negotiations. Through this mechanism,
Congress ensures that the President can negotiate on equal terms
with his counterparts. It lets our negotiators ensure our
partners that the agreements reach at the bargaining table will
be the same ones voted on at home.
Fast-track doesn't affect Congress' power to accept or
reject treaties. It just lets us assure our partners that
Congress will not change agreements that we have reached.
We need fast track now to pursue vital trade agreements --
the North American Free Trade Agreement, the Uruguay Round and
the Enterprise for the Americas Initiative. If we lose our fast
track authority, we lose all three of those agreements. We lose
trade. We surrender our role as a world leader and role model.
2
Those who oppose fast track cite a variety of issues --
wage rates, environmental quality, health and safety concerns.
We care about those, too. And we're working on them, with a
step-by-step plan to resolve each and every challenge.
Here's the key: A vote against fast-track is a vote against
things we all hold dear. It rejects growth in other lands. It
rejects prosperity at home. It ignores the dramatic and
wonderful changes in the world economy.
We want to play a leading role in that emerging, exciting
world; we don't want to hide from it. We want to join in the
thrilling business of innovation; we don't want to enslave people
with outmoded technologies and ideas.
Let me be clear about this: A vote against fast track is a
vote against our negotiators. It is a vote against our trading
partners. It is a vote against progress.
Right now, we have the chance to expand opportunity and
economic growth from the Yukon the the Yucatan. The North
American Free Trade Agreement would link us with our largest
trading partner, Canada, and our third-largest partner, Mexico.
It would create the largest, richest trade zone on earth -- 360
million consumers in a market that generates $6 trillion in
output a year.
Just think of the benefits: A unified market would let us
all build on our strengths. It would provide more and better
jobs for U.S. workers. It would stimulate price competition,
lower consumer prices, improve product quality. If you want to
3
talk about a compelling fairness issue, consider this: The
agreement would make necessities such as food and clothing more
affordable, and more available to our poorest citizens. It would
raise productivity and produce a higher standard of living
throughout the continent.
Let me illustrate the stakes involved in the fast-track
debate by discussing the Mexican component of the North American
Free Trade Agreement. Trade with Mexico has helped both our
countries. Just four years ago, we had a $91 million trade
deficit with Mexico. Today, we enjoy a $28 billion surplus.
This turnaround took place because Mexican President Carlos
Salinas believes in free trade. He has slashed tariff rates for
some goods from 100 percent to 10 percent. As a result, our
exports to Mexico have doubled in the past four years. That
export boom has created 320,000 new jobs in the United States,
good jobs. Each additional billion dollars in exports creates
20,000 new jobs here in the United States.
Now, I don't have to tell anyone in this room about Mexico's
market potential -- 80 million consumers who want to buy our
goods. Nor do I have to tell you that as Mexico grows and
prospers, it will need even more of the goods we're best at
producing -- computers, manufacturing equipment, high-tech and
high-value goods.
Unfortunately, we have a tough fight ahead of us. One of
our Congressional opponents said the other day, "My concern is
that our trade negotiators keep uppermost in their mind the
4
impact of this agreement on American jobs, American companies,
and American exports." ///
I couldn't agree more.
Let's talk about his concerns, one at a time. We've already
seen what the reduction in Mexican tariffs has done for American
exports. A free-trade agreement would eliminate the remaining
tariffs entirely. That would stimulate exports, create new jobs,
generate wealth and hope on both sides of the border.
Let's take a look at the impact on American companies. When
trade barriers vanish, goods flow freely across borders.
Investment flows freely across borders. And everybody --
businessmen and workers, to farmers and consumers -- reaps the
benefits of growth.
Consider the environment: Fast-track fits into a winning
strategy for improving environmental quality. Opponents of fast-
track authority forget that prosperity offers the surest road to
worker safety, public health and environmental quality.
This Administration wants to ensure that Mexican economic
growth goes hand in hand with environmental protection. Our
E.P.A. is already assisting the Salinas government with its
environmental programs. President Salinas has shown he's serious
about cleaning up the environment -- by requiring all new cars to
have catalytic converters and recently by shutting down Mexico's
largest oil refinery for pollution violations. I believe that
President Salinas cares deeply about his nation and its people,
5
and that he means business when he says he wants to clean up
Mexico's air and water.
Finally, consider the matter of working conditions in
Mexico. The trade surplus has caused Mexican wages to rise very
quickly over the last few years, and it has produced no tangible
reduction in American wages. That being the case, someone ought
to ask the opponents of fast track why they oppose prosperity in
Mexico. Someone should ask why they oppose letting our neighbors
enjoy the benefits of progress. Ask them what is wrong with
increased productivity in the both countries. Ask them why
Mexicans should not enjoy higher wages and better lives.
Indeed, ask them what's wrong with a more stable Mexico. As
you know, Mexico is in the midst of a brain drain. It already
graduates more engineers per capita than the U.S. does -- yet
more and more good workers who can't find jobs head for the
border every day. A free-trade pact would encourage investment,
create jobs, lift wages and give talented Mexican citizens a
reason to stay home, set down roots, and build a better country.
A stronger Mexico, in turn, means a stronger United States, and a
stronger North American alliance.
So you see, we have much to gain from extending fast track
-- a new era of open, free and fair trade -- and with it, a
future of unprecedented economic growth and regional harmony.
The vote on fast-track really is a vote on what kind of
future Americans want. A "yes" vote expresses confidence in
American know-how and ingenuity. It says we believe in Mexico's
6
ability to adapt to a level economic playing field. Free and
open markets let people pursue their dreams by competing against
other dreamers, entrepreneurs.
As with most good things in life, competition involves risk.
But we always have been a nation of risk-takers, adventurers.
Our forefathers hacked an industrial superpower out of a rough
wilderness. We have tamed hostile land and explored deep space.
We have created technologies and products unlike any others
produced in human history. We have placed the wisdom of the ages
within reach of anyone who can operate a computer.
We are the world's largest trader, and we have nothing to
fear but the fear-mongers themselves. //
The North American Free Trade Agreement lets us exercise
our national genius for innovation. It lets us show generosity
toward our neighbors and friends. Opponents of this agreement
like to focus on envy, suspicion, fear -- sentiments unworthy of
us as a people. They like to pretend that the world has not
moved into a new era of international competition and
cooperation. They seem to be the only ones who haven't learned
that defeatism produces defeat, while confidence and self-
reliance produce greatness.
We stand ready to seize the opportunities that the new world
economy offers us. With your help, I know we can conquer the
high priests of defeat. //
Thank you for your support, and God bless our great country.
# # #
THE WHITE HOUSE
Office of the Press Secretary
For Immediate Release
March 19, 1991
EXTENSION OF FAST TRACK AUTHORITY
FACT SHEET
FAST TRACK PROCEDURES
Historical Background to the Fast Track
For the better part of this century, the Congress and the
Executive have recognized that the negotiation and
implementation of trade agreements require special
cooperation.
In the aftermath of the record-high rates of the Smoot-
Hawley Tariff Act of 1930 and the Depression they helped
fuel, both the Congress and the Executive branch recognized
that only by working closely together could the two branches
effectively bring down barriers to our foreign trade and
open international markets for U.S. products and services.
This new partnership was reflected in the Reciprocal Trade
Agreements Act of 1934, which gave the President authority
not only to conclude tariff-cutting agreements but also to
implement them without the need for subsequent legislation.
As countries began to rely less on tariff protection and
more on non-tariff trade barriers, the scope of trade
negotiations broadened, and the "fast-track" procedures were
created by the Congress as the necessary complement to this
broader trade agenda.
Fast track procedures for approval of trade agreements were
included by the Congress in trade legislation in 1974, 1979,
and again in the 1988 Trade Act.
Fast Track is Essential to Successful Trade Negotiations
While assuring the Congress meaningful participation
throughout the negotiation process, fast track provides two
guarantees essential to the successful negotiation of trade
agreements: (1) a vote on implementing legislation within a
fixed period of time, and (2) no amendments to that
legislation.
2
These procedures reflect the understanding that trade
agreements, in which results in one area are often linked to
results in others, are particularly vulnerable to multiple
amendments that, while possibly small in themselves, could
unravel entire agreements.
Whether the balance of benefits contained in any trade
agreement is in the overall interest of the United States
can only be determined by looking at the whole package.
Through the fast track, the Congress gave the President the
same bargaining power possessed by his counterparts: the
ability to ensure that the agreement reached internationally
would be the agreement voted on at home.
Without fast track, the President cannot assure our
negotiating partners that the deal they strike is the deal
that will be voted on by the Congress.
Without that assurance, foreign governments are reluctant to
negotiate with the United States and will not make the tough
concessions necessary to reach agreements the United States
would be willing to sign. No trading partner will give its
bottom line knowing that the bargain could be reopened.
Using fast track, the United States has negotiated and
implemented three remarkable agreements that were each
approved by an overwhelming majority in both Houses of the
Congress. These agreements -- the results of the Tokyo
Round in 1979, the Free Trade Agreement with Israel in 1985,
and the Free Trade Agreement with Canada in 1988 -- have
reduced barriers to trade and contributed to growth in the
United States and worldwide.
The United States has much to gain from trade agreements
that open markets and provide rules for free and fair trade.
Maintaining the fast track will preserve our ability to
continue our efforts to liberalize trade and open markets
through the General Agreement on Tariffs and Trade, through
other multilateral agreements and through bilateral
agreements.
The Congress is an Essential Part of the Fast Track Process
o
Fast track procedures preserve the role of the Congress
during the negotiation, approval, and implementation of
trade agreements.
To ensure congressional and private sector input, the fast
track statute contains extensive notification and
consultation requirements. At each step along the way, from
3
initiation through implementation, the Congress is an active
partner.
To use the fast track for any agreement, bilateral or
multilateral, the President must notify the Congress 90
calendar days before signature. By the time the President
gives his 90-day notification, our many private sector
advisory committees must report their views on the agreement
both to the Congress and to the President. For bilateral
agreements, the Congress must be given advance notice of the
negotiations; during the following 60 legislative working
days, either the Senate Finance or House Ways and Means
Committee can vote to deny fast track treatment.
Once an agreement is reached, the Congress and the
Administration work in close consultation to formulate
implementing legislation. The process has involved the full
participation of all committees of jurisdiction, not only
those committees traditionally consulted in setting trade
negotiating objectives. If the agreement and its
implementing legislation are still not acceptable, they can
be rejected by a majority vote of either House.
0
We are today engaged in bilateral and multilateral trade
initiatives that hold unprecedented promise for the
advancement of U.S. economic objectives. With such
initiatives in train, it is clearly in the national interest
to continue a partnership that has proved its worth for
almost 60 years.
Use of Fast Track if Extended
In incorporating the fast track in the 1988 Trade Act, the
Congress expressly contemplated that an extension might be
necessary and appropriate in order for the President to
pursue effectively the trade policy goals set out in the
law.
If extended, the fast track would be available until June 1,
1993, and would be used to implement trade initiatives such
as completing the Uruguay Round, negotiating a North America
Free Trade Agreement (NAFTA) with Mexico and Canada, and
pursuing the trade objectives of the Enterprise for the
Americas Initiative.
o
Supporting fast track will allow these important initiatives
to go forward without in any way detracting from the ability
of the Congress to assess each agreement on its merits when
presented for approval.
4
A Vote Against Fast Track Denies Fast Track for all Agreements
Current fast track authority would have expired on
June 1 if the President had not requested an extension by
March 1. The requested extension is granted automatically
unless either house passes a statutorily prescribed
disapproval resolution before June 1.
The language of the disapproval resolution, which is set out
in the statute, makes clear that disapproval eliminates all
fast track authority, multilateral and bilateral.
The disapproval resolution cannot be amended to eliminate
fast track for some agreements but not others because the
resolution itself cannot be amended. It is not possible,
for example, to vote against the fast track for the Uruguay
Round agreements but preserve it for the NAFTA.
If a disapproval resolution is passed by either House, the
fast track is gone for all purposes, and the President's
ability to successfully negotiate any trade agreement
requiring congressional approval, bilateral or multilateral,
is severely crippled if not eliminated entirely.
Simply put, a vote against fast track is a vote against
trade.
Continuing Fast Track is Essential to Securing Economic Gains
As the world's largest trader, the United States has an
enormous stake in the future of the global trading system.
Exports have become a vital source of strength to the U.S.
economy. In 1990, the nearly 8.5 percent growth in U.S.
exports accounted for 88 percent of U.S. economic growth.
In order to sustain the expansion of exports and consequent
growth, we must continue our efforts to open world markets.
We must maintain our active leadership role. Without an
extension of fast track, those efforts are futile.
Maintaining fast track procedures -- and the partnership
between the Congress and the executive branch that fast
track represents -- will keep on course our joint efforts to
liberalize trade and open markets through the GATT, through
other multilateral agreements, and through bilateral
agreements. No country stands more to gain from those
efforts than the United States.
As we approach the beginning of a new century, we should not
hesitate to pursue the opportunities for expanded economic
growth and prosperity presented by successful trade
negotiations.
5
In order to turn those opportunities into realities, the
Congress and the Executive must continue to work together in
the manner envisioned by the fast track.
THE IMPORTANCE AND BENEFITS OF THE URUGUAY ROUND
Uruguay Round is the Most Ambitious of Trade Negotiations to Date
The world trading system is now vastly more complex than it
was when the GATT was written in 1947. Over one-third of
world trade, more than $1 trillion, is inadequately covered
by international trade rules.
The Uruguay Round negotiations -- in which 108 countries
participate -- are an ambitious effort to strengthen and
expand the global trading system as well as to further lower
trade barriers. Launched in 1986 in Punta del Este,
Uruguay, these negotiations are the eighth round of
multilateral trade negotiations conducted under the auspices
of GATT.
The United States led the call for the far-reaching agenda
of issues in the Uruguay Round. The Congress established
objectives for the Uruguay Round in the Omnibus Trade and
Competitiveness Act, passed in August of 1988.
The negotiating agenda runs the gamut of U.S. interests,
both in opening world markets and in establishing internal
rules of fair play in areas vital to U.S. competitiveness
-- services, investment, agriculture, and intellectual
property. The negotiations fall into four broad categories:
market access (tariffs and non-tariff measures, natural
resource-based products, tropical products, and
textiles);
--
the "new" areas of services, trade-related intellectual
property rights (TRIPs), and trade-related investment
measures (TRIMs);
agriculture; and
GATT rules (dispute settlement, safeguards, GATT
Articles including balance of payments reform, and the
non-tariff measure codes, including subsidies and
antidumping).
o
Moreover, unlike previous GATT negotiating rounds,
developing countries are active participants in every aspect
of the negotiations.
6
The Administration is Committed to Ensuring that the Uruguay
Round Results in Agreements that Truly Meet U.S. Objectives
o
This resolve was demonstrated at Brussels in December 1990.
The U.S. delegation and other important delegations
determined that it was preferable to end the ministerial
meeting without result rather than to lower ambitions and
accept minimal Uruguay Round agreements.
The negotiations formally resumed in all areas on
February 26, 1991, when a framework to negotiate
agricultural reform was reached. The exact pace of
negotiations will depend on how quickly we are able to reach
an acceptable solution on agriculture.
The Administration is not prepared to accept an inadequate
agreement for the sake of an agreement; but we are prepared
to continue to negotiate to obtain a good result.
A Successful Uruguay Round Would Bring Substantial Benefits to
the U.S. and World Economies
O
Exports have become a vital source of strength to the U.S.
economy. Since the Round was launched in 1986, export
expansion has been responsible for 40 percent of total
growth in U.S. GNP. In 1990, export growth accounted for 88
percent of U.S. GNP growth.
o
An open multilateral trading system is the best guarantee
that U.S. export opportunities continue to expand into the
next century. The Uruguay Round is the most important
initiative to expand these opportunities.
Specifically, a successful Uruguay Round would provide
substantial benefits to the U.S. economy, including:
Lower tariff and non-tariff barriers to manufactured
products and other goods, which could increase world
output by $5 trillion and U.S. output by over
$1 trillion over the next 10 years, meaning an
additional $16, 000 for every American family of four;
Rules to protect the intellectual property of U.S.
entrepreneurs, who lose $60 billion annually through
theft and counterfeiting of their ideas;
New markets for U.S. services firms, which export
$115 billion annually and generate 90 percent of new
U.S. jobs;
7
An agreement opening world markets to investment, which
helps generate $240 billion, or two-thirds of total
U.S. exports in goods;
Fair competition and open markets in agriculture,
creating new opportunities for American farmers, who
lead the world with more than $40 billion in annual
exports;
The full participation of developing countries in the
global trading system, which could increase U.S.
exports by $200 billion over the next 10 years; and
Strengthened rules on dispute settlement, antidumping,
subsidies and trade remedy provisions, which should
provide predictability and certainty in access to
foreign markets and ensure fair trade at home.
Conversely, failure to extend fast track authority will end
the Uruguay Round negotiations, damaging prospects for world
economic growth and cooperation.
A collapse of the Round brought about by removal of U.S.
fast track authority would increase worldwide pressures to
raise trade and investment barriers. A sufficiently sharp
movement away from open markets could contribute to a global
recession, as it did in the 1930s.
Although the ultimate success of the Uruguay Round cannot be
guaranteed, the United States should continue negotiations
because a successful Round is overwhelmingly in our long-
term economic interests.
IMPORTANCE OF A NORTH AMERICAN FREE TRADE AGREEMENT
A NAFTA Would Create One of the World's Largest Free Trade Areas
A NAFTA would create an enormous market, encompassing some
360 million consumers and total output of $6 trillion.
The progressive elimination of barriers to the flow of
goods, services, and investment and strengthened protection
of intellectual property rights would benefit a broad
spectrum of businesses, workers, farmers, and consumers.
Creation of a NAFTA would be a catalyst for economic growth
and development in the United States, Mexico and Canada
through increased trade, investment, and jobs.
8
The Importance of North American Trade
Canada and Mexico are America's first and third largest
trading partners, respectively. In turn, the United States
accounts for over two-thirds of their total trade. In 1990,
three-way trade came to about $237 billion.
Since 1980, U.S. exports to Mexico and Canada have doubled,
rising from $55.3 billion to $111.4 billion. Our exports to
our neighbors have grown substantially faster than those to
the rest of the world.
Removal of Barriers Would Create New Trade and Investment
Opportunities
o
Since Mexico joined the GATT in 1986 and started its
unilateral policy of lowering trade barriers, U.S. exports
have more than doubled, growing from $12.4 billion to $28.4
billion.
--
U.S. agricultural exports to Mexico totalled
$2.5 billion in 1990, our third largest market.
--
Consumer goods exports from the United States to Mexico
have tripled since 1986, rising from
$1 billion to $3 billion.
--
U.S. exports of capital goods have grown from
$5 billion in 1986 to about $9.5 billion last year.
We can do better. Mexico has greater barriers to U.S.
exports than we impose on Mexican shipments to the United
States. For example:
--
Mexican tariffs average 10 percent, compared to the
average tariff of 4 percent we impose on Mexican
exports to us.
:
Mexico still maintains a restrictive import licensing
regime, one that affects 40 percent of U.S.
agricultural exports to Mexico.
o
In addition, while Mexico has liberalized its investment
regime, it is still closed to many U.S. investments, both in
manufacturing and in services, and performance requirements
distort export opportunities for U.S. products.
o
Mexico has already pledged to improve its protection for
intellectual property rights, and we expect action on those
pledges in the near future. A NAFTA will make those reforms
secure.
9
A NAFTA Offers Benefits to U.S. Producers, Workers and Consumers
Economic analyses show that a NAFTA will have a positive
impact on the U.S. economy and U.S. employment.
U.S. producers and workers will benefit from a NAFTA through
increased sales opportunities, improved operating
efficiencies, and strengthened competitiveness vis-a-vis
Asia and Europe.
U.S. consumers will enjoy increased access to lower cost,
higher quality products.
A NAFTA Strengthens the Broader North American Relationship
A NAFTA would help cement the extensive historical,
familial, cultural, and language links the United States has
with both Mexico and Canada.
More prosperous neighbors are better neighbors and better
customers for U.S. goods and services.
We have a broad agenda with both Mexico and Canada that goes
well beyond trade, economic, and investment links. By
boosting economic prosperity in all three nations, a NAFTA
will help us make progress on issues such as the
environment, drugs, and immigration.
#
#
#
David P. Goldman
Senior Economist
86 Maple Avenue
Morristown, NJ 07960
Tel. 201-267-4640
Home 212-866-3671
POLYCONOMICS, INC.
Political and Economic Communications
Mike Wilson
546- 4400
Return your
CALL.
HollY William
tal Mex pop 1940 86 million
US
1990 249 mill
(1987) Review - US 77,1000 eng/lyr
Mex 25,300
both = .03% per capita basis
2% of all graduating engs. in U.S.
op = = 10%
To Peggy
Date 4-1
Time 9:45
WHILE YOU WERE OUT
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David Beightal
of
Phone
Area Code
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WILL CALL AGAIN
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Message
Operator
AMPAD
EFFICIENCY®
23-023 CARBONLESS
MEXICO
647-9292
I Sales .ract Aunt
GilbertA
Aguello
1988
now not time to turn back on coop.
intl. relations
THE WHITE HOUSE
WASHINGTON
Miles Frechette
395-6135
Charlie Reese 4800 - Generic Fast
Track Rackage
U5- U5-Canada-8 serious mos
rayrs. 2 yrs.
Rowe or Bob 21/2, Bruzzica yrs.
Chip 4866
27
Dec 88
finished leg negs- til July Aug +Sept 88
submit passed
90.1. longress
trade agreement # treaty
Grant/Dooley
econ= David Walters 3583
April 1, 1991
A:Mextrade / Draft six
PRESIDENTIAL REMARKS: HISPANIC FREE TRADE BREAKFAST
THE HOUSTONIAN
MONDAY, APRIL 8, 1991
TIME? 8:00 a.m.
Host Committee, Lionel Sosa (produces)
((Acknowledgements)) Mayor Whitmire, Judge Lindsay
Good morning. I've been looking forward to meeting with
you today, because I want to discuss two issues important to us
all: America's ability to compete in the global marketplace and
our ability to negotiate with our trading partners. I've said
many times that the hard work of freedom awaits us. Today, I've
come to ask your help in that challenge.
Last month, I asked Congress to extend our "fast track"
authority in trade negotiations. This mechanism lets our
negotiators assure their counterparts that agreements they reach
at the bargaining table will be the same ones voted on at home.
It makes us good for our word.
Fast-track doesn't affect Congress' power to accept or
reject treaties. It just prevents changing agreements we have
trade agreements
reached, and forcing everyone involved to start from scratch.
We need fast track now to pursue vital trade pacts -- the
North American Free Trade Agreement, the Uruguay Round and the
Enterprise for the Americas Initiative. If we lose our fast
track authority, we lose all three of those agreements. We lose
trade. We surrender our role as a world leader and role model.
Those who oppose fast track cite a variety of issues --
wage rates, environmental quality, health and safety concerns.
2
We care about those, too. And we're working on them, with a
USTR
step-by-step plan to resolve each and every challenge.
Here's the key: A vote against fast-track is a vote against
things we all hold dear -- growth in other lands -- prosperity at
home. It ignores the dramatic and wonderful changes in the world
economy.
We want to play a leading role in that emerging, exciting
world; we don't want to hide from it. We want to join in the
thrilling business of innovation; we don't want to chain people
to outmoded technologies and ideas.
Right now, we have the chance to expand opportunity and
economic growth from the Yukon the the Yucatan. The North
American Free Trade Agreement would link us with our largest
trading partner, Canada, and our third-largest partner, Mexico.
USTR
It would create the largest, richest trade zone on earth -- 360
million consumers in a market that generates $6 trillion in
output a year.
A unified North American market would let us all build on
our strengths. It would provide more and better jobs for U.S.
workers. It would stimulate price competition, lower consumer
prices, improve product quality. If you want to talk about a
compelling fairness issue, consider this: The agreement would
make necessities such as food and clothing more affordable, and
more available to our poorest citizens. It would raise
productivity and produce a higher standard of living throughout
the continent.
Total us
since 1986,
xaren
Kizer
3
Treasury, OMB, 4594 USTR
Let me illustrate the stakes involved in the fast-track
debate by discussing the Mexican component of the North American
Free Trade Agreement. Trade with Mexico has helped both our
x
4.9 billion
countries. Just four years ago, we had a $91 million trade
deficit with Mexico. Today, we enjoy a $28 billion surplus.
def. 1.8 billion $
2% 2 billio,
This turnaround took place because Mexican President Carlos
surplus
Salinas believes in free trade. He has slashed tariff rates for
some goods from 100 percent to 10 percent. As a result, our
X
130% - more than
12.46-7
xMef
exports to Mexico have doubled in the past four years. That
28.4b
300,000
export boom has created 320,000 new jobs in the United States,
USTR
most in the areas of design, manufacturing and engineering. Each
additional billion dollars in exports creates 20,000 new jobs
here in the United States.
Now, I don't have to tell anyone in this room about Mexico's
85
x
market potential -- 80 million consumers who want to buy our
86 million
Mex
goods. Nor do I have to tell you that as Mexico grows and
state Dept.
July 1980
by
prospers, it will need even more of the goods we're best at
producing -- computers, manufacturing equipment, high-tech and
high-value products.
Unfortunately, we have a tough fight ahead of us. One of
our Congressional opponents said the other day, "My concern is
that our trade negotiators keep uppermost in their mind the
impact of this agreement on American jobs, American companies,
and American exports." ///
I couldn't agree more.
4
Let's talk about his concerns. We've already seen what the
reduction in Mexican tariffs has done for American exports. A
free-trade agreement would eliminate the remaining tariffs
entirely. That would stimulate exports, create new jobs,
generate wealth and hope on both sides of the border.
Let's take a look at the impact on American companies. When
trade barriers vanish, goods flow freely across borders.
Investment flows freely across borders. And everybody --
businessmen and workers, to farmers and consumers -- reaps the
benefits of growth.
Consider the environment: The North American Free Trade
Agreement fits into a winning strategy for improving
environmental quality. Opponents of fast-track and the trade
pacts forget that prosperity offers the surest road to worker
safety, public health and environmental quality.
This Administration wants to ensure that Mexican economic
growth goes hand in hand with environmental protection. Our
Ted Garmey
EPA
E.P.A. is already the Salinas government with its
working working.w/
382-7961 7969
EPA
environmental programs. President Salinas has shown he's serious
about cleaning up the environment -- by requiring all new cars to
Mex
have catalytic converters and recently by shutting down Mexico's
largest oil refinery for pollution violations. I believe that
President Salinas cares deeply about his nation and its people,
and that he means business when he says he wants to clean up
Mexico's air and water.
Javier Maldonado
2-way trade 9
non-oil
215/667-7716
wages a
mfr-
5
Finally, consider the matter of working conditions in
Mexico. The trade surplus has caused Mexican wages to rise very
Met
quickly over the last few years, and produced no tangible
reduction in American wages. That being the case, someone ought
to ask the opponents of fast track why they oppose prosperity in
Mexico. Someone should ask why they oppose letting our neighbors
enjoy the benefits of progress. Ask them what is wrong with
20c. of Hisp.
increased productivity throughout the continent.
rof Engineers 3970
213 725-3970
And ask them what's wrong with a more stable Mexico. As you
Margarita
colmenares
medicine medicine-close - close
know, Mexico is in the midst of a brain drain. It already
all
graduates more engineers per capita than the U.S. does -- yet
prnando Laclette
more and more good workers who can't find jobs head for the
NHI. For
border every day. A free-trade pact would encourage investment,
jose Tello
14/699-9878
create jobs, lift wages and give talented Mexican citizens
415/866 -556
opportunites they don't enjoy today. A stronger Mexico, in turn,
means a stronger United States, and a stronger North American
alliance.
So you see, we have much to gain from extending fast track
-- a new era of open, free and fair trade -- a future of
unprecedented economic growth and regional harmony.
The vote on fast-track and on the trade agreements
really is a vote on what kind of America we want to build. A
"yes" vote expresses confidence in American know-how and
ingenuity. It says we believe in Mexico's ability to adapt to a
level economic playing field. Free and open markets let people
OSTP
NSF
6
pursue their dreams by competing against other dreamers,
entrepreneurs.
As with most good things in life, competition involves risk.
But we always have been a nation of risk-takers, adventurers.
Our forefathers transformed a rough wilderness into an industrial
superpower. We have created technologies and products unlike any
others produced in human history. We have placed the wisdom of
the ages within reach of anyone who can operate a computer.
We are the world's largest trader, and we have nothing to
USTR
fear but the fear-mongers themselves. //
Opponents of fast track and the Free Trade Agreement like
to focus on envy, suspicion, fear -- sentiments unworthy of us as
a people. They like to pretend that the world has not moved into
a new era of international competition and cooperation. They
seem to be the only ones who haven't learned that defeatism
produces defeat, while confidence and self-reliance produce
greatness.
We stand ready to seize the opportunities that the new world
economy offers us. With your help, I know we can conquer the
demagogues of defeat. //
Thank you for your support, and God bless our great country.
# # #
A20
WSJ 4/2/91
REVIEW & OUTLOOK
Mexican Reveille
House Majority Leader Richard
ciples in fear of fresh Mexican toma-
Gephardt said last week he'll only
toes. Roger Milliken and the textile in-
support a U.S.-Mexico free-trade
dustry keep shoving campaign money
agreement with conditions-so many
at protectionists in Congress. They
conditions that it wouldn't be worth a
know that if they can defeat fast-track
devalued peso. It looks like it's time
they can keep charging monopoly
to blow reveille/a a White House still
profits of up to 58% on every towel,
sleeping after its post-Iraq victory
shirt, dress and pair of underwear
party. Indeed, we wonder if Mr. Bush
(according to the Federal Trade Com-
knows just how much trouble his
mission).
trade agenda is in on Capitol Hill. A
These protectionists have been
motley crew of special-interest oppo-
joined by the familiar anti-growth
nents is lining up Democrats and Re-
zealots. Sierra Club Chairman Mi-
publicans alike, while the White House
chael McCloskey told Congress last
admires its poll ratings.
month that "areas being rapidly in-
It's not as if President Bush has
-dustrialized as a result of freer trade
anything more important on his
agreements are usually environmen-
agenda. With a capital-gains tax cut
tal disaster areas." He also endorsed
on the back burner, the North Ameri-
higher tariffs to achieve "certain so-
can free-trade agreement is Mr.
cial goals," presumably his own. Mr.
Bush's only pro-gròwth economic pro-
McCloskey clearly hasn't compared
posal. It's also his most important for-
free-trade Hong Kong with the air
eign-policy priority, given the uncer-
over Beijing lately.
tainties in Moscow and the Middle
Spokesman Paul Speck says the
East. A defeat in Congress on either
National Wildlife Federation opposes
the Mexico pact or the Uruguay round
any agreement that doesn't "produce
of world trade-opening talks would
sustainable development," which
also be a political humiliation.
means no development. Mexico's
Trade rep Carla Hills could use
leadership clearly has other higher
some lobbying help against the motley
priorities, such as raising the coun-
crew, but John Sununu and Dick Dar-
try's average wage above 1989's $2.32
man seem distracted with a continu-
an hour. President Salinas knows free
ing defense of last year's budget deal.
trade didn't produce the environmen-
And the Secretary of State prefers to
tal catastrophe now evident in the
spend his time banging up against the
command-and-control economies of
Arab-Israeli conflict.
the former Soviet bloc.
It's true President Bush has given
The Child Labor Coalition wants
a speech or two on trade, but an issue
any agreement to cover "sweatshops"
of this importance requires a higher
in Mexico, as if faster economic
profile. Members of Congress have to
growth flowing from freer trade won't
know they'll pay a price for opposi-
do far more for child welfare. Ralph
tion. Otherwise they'll take the easy
Nader's' omnipresent Public Citizen
way and side with the special
seems afraid that lower prices may
pleaders. A public campaign for open
do more for consumers than his own
trade risks cutting into Mr. Bush's
lawyers-enrichment lobby ever has.
postwar political capital, but it'd be
All of this opposition has coalesced
spent securing an historic agreement.
in Mr. Gephardt, who vows to oppose
The point of a 90% approval rating is
any agreement unless it fights for
to accomplish something with it.
American jobs, preserves the world's
The protectionists aren't waiting
environment and defends the rights of
for the White House to wake up. The
Mexican workers." Freer trade would
"fast-track" negotiating process-an
do all three, but Mr. Gephardt will get
authority Congress has granted Presi-
away with this line of demagogy un-
dents since the 1970s-is especially
less the White House speaks up,
vulnerable this time because it would
The analogy worth recalling here is
cover both the GATT and Mexican
"fairness" and taxes. Tax fairness
free-trade talks. All opponents need is
was a nonstarter throughout the 1980s,
a simple majority in either house of
until Mr. Bush abandoned his pro-
Congress before June 1 and the pro-
growth, anti-tax platform last fall.
cess goes down.
Then Democrats made hay. They'll do
The AFL-CIO is mounting one of
it again on the trade issue if the White
its largest lobbying campaigns ever,
House doesn't start aggressively
buttonholing Members one by one. Ag-
framing the debate on its real
riculture interests that used to support
merits-namely growth or no-growth,
free trade are abandoning their prin-
trade or no-trade.
CIEMEX-WEFA
Apr 3,91 15:12 No. .004 P.01
CIEMEX-WEFA
PROJECT
DATE:
April 3, 1991
TO:
FAX No. (202) 456-6218
COMPANY NAME THE WHITE HOUSE
ATTENTION MS. PEGGY DOOLEY
PHONE No. (202) 456-7750
FROM: NAME JAVIER MALDONADO
91 APR 3 P2: 59
PHONE No. (215) 667-7716
Message: If you need further information, please do not hesitate to
contact us.
Regards.
Number of pages Including cover sheet 2
150 Monument Road Suite 101 Bala Cynwyd, PA 19004 a (215) 667-7740
FAX: (215) 667-7806 - Telex: 9102505496 CIEMEX-WEFA
CIEMEX-WEFA
Apr 3,91 15:13 No.004 P.O
INDEX OF MANUFACTURING COMPENSATIONS PER
WORKER
ANNUAL % CHA REAL ANNUAL %
NGE
CHANGE
1989
JAN
40.874
4.689
FEB
34.254
6.644
MAR
29.725
7.117
APR
29.299
8.476
MAY
29.617
9.341
JUN
28.690
9.444
JUL
29.979
11.274
AUG
30.683
11.839
SEP
29.238
10.181
OCT
31.068
10.953
NOV
29.852
9.853
DEC
30.391
8.934
ANNUAL % CHA REAL ANNUAL &
NGE
CHANGE
1990
JAN
29.911
6.071
FEB
28.721
4.166
MAR
29.651
4.262
APR
29.532
4.096
MAY
30.691
4.647
JUN
29.662
2.820
JUL
30.703
2.807
AUG
31.558
2.715
SEP
29.631
0.742
SOURCE: National Institute of Statistics (INEGI)
MEMORANDUM
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FPMR (41 CFR) 101-11.6
What other nation in history, when it became supremely powerful,
has had no thought of territorial aggrandizement, no ambition but
to use its resources for the good of the world.
-- Churchill, to Lord Moran, his doctor, The
Diaries of Lord Moran, January 10, 1952
possibly in speech to Congress in 1952
25/WHRTON
ECONOMETRICS
Swarthmore-
8531
LeeAnn Quincy Pl.Apts pl.
215/328-8600
til 6 pm
703/528
Jacob 215/328-8452 KUANA 11600
9:10
Lisa Battuglia - Greater Host Comm. Chief State School
John kwam -
Gordon Ambach -
NSX White
351 Dr., 2832
buence 434- Resource 4640
pressigned litho
Mary Ingals
4 Dirk Blansfield mil.
Harrison Wenzel
total us exports to mex 1990 28.3 b
of that, .5 b was petroleum (or related products)
total us imports from mex 1990 30.2 b
of that, 5.1 b was petroleum
all trade, def. of 1.8 b
excluding petro, surplus of about 2.7 b
1986 us expo to mex 12.4 b
of that, .3 b petro
1986 us impo fr 17.3 b
of that, 3.7 b petro
total trade def 1986 4.9 b
ex petro, trade def 1.5 b
trade def cut by 2/3
exclu petro, 1.5 def to 2.7 sur
don't want to and measuge that we have
surplus
Commerce Roger 377-3917 Wallace DUS Trade
718/545-7108 (n)
David Goldman / Poleconomics
Narrow argument Mexico 1.6 billion/year trade deficit mostly to
US; mostly in manufacturing and non-oil. There is no way we can
lose jobs when we have a trade surplus with them and will
continue it. Rebut Gep, who says we want to improve relations
with Japan (they have surplus with us) and not Mexico (they ahve
deficit with us).
They will be a hugely expanding market. 80 million people getting
richer by the minute who want to buy our goods. 200 % tarrifs
down to 20% top; proposing to elminate all tarriffs. No lose
win-win for us. Staggering markets.
Environmental: Salinas just shut down largest oil refinery in
Mexico for pollution. He's serious. Shown determination.
Labor: Greater efficiency means more product means higher wages.
Higher productivity will cause wage rates to rise in both
countries. Meixcan wage rates are already rising very quickly
during last few years.
Mexico has already liberalized tarriff structure; trade surplus
has caused their wages to rise, not ours to fall.
Broader point: World revolution toward human freedom; Mexico is
successful case study. However, much less statist-controlled
economy than EAst Europe but people have decided to privatize
industry, cut taxes, 150 % inflation to 14% by end of this year;
negative economic growth to strong economic growth. Wave of
freedom
Mexico is leading edge toward free market economy.
Not merely a matter of economic advantage to US; it's cutting
edge of whole process. Our appeal to the world to adopt free
enterprise has been listened to by countries in Third World.
Mexico is not their model. All other countries in Lat Am are
looking to Mexican revolution, Eastern Europe to follow. Shining
example of what the economic component of what the New World
Order. Exemplary role in this new world order.
Bob Fisher -USTR 5443
chip Rowe
Suarez-
Manuel Mier-Mier
728-1464
MAR 28 '91 15:00 FROM USTR PUBLIC AFFAIRS
PAGE. 001
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OFFICE OF THE UNITEDISTATES TRADE REPRESENTATIVE
Executive Office of the President
MAR 29 P3: 20
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Section #
Clearance (to Geneva)
Date
Time Sent
3/28/91
C.D. Log Number
Number of Pages Excluding Cover
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AGENCY
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SUBJECT:
MAR 28 '91 15:01
FROM USTR PUBLIC AFFAIRS
PAGE 002
TESTIMONY OF
BASSADOR CARLA A. HILLS
UNITED STATES TRADE REPRESENTATIVE
BEFORE THE
COMMITTEE ON WAYS AND MEANS
UNITED TATES HOUSE OF REPRESENTATIVES
MARCH 12, 1991
Introduction
Thank you, Mr. Ghairman, for the invitation to testify about
the President's request to extend fast track procedures.
Fast track is crucial to United States leadership in the
global economy. The procedure enables us together to pursue and
implement United States trade policy, a policy which has been
developed and implemented in a close working partnership with
Congress and the prigate sector.
Overview of Fast Track
Still, there is a widespread misunderstanding about what
fast track is and what it isn't; about its origins and its
application today.
For more than 50 years, Congress and the Executive Branch
have worked together in close coordination and consultation to
negotiate and implement trade agreements.
In the aftermate of the disastrous Smoot-Hawley Tariff Act
of 1930 and the Great Depression it helped fuel, your
predecessors and mine realized that we, the Legislative and
Executive Branches, must work together to craft a national trade
policy that opens markets and promotes U.S. exports.
That meant insgitutionalizing a system of trust and
partnership which WAS first reflected in the Reciprocal Trade
Agreements Act of 1934. Congress delegated to the President the
power to negotiate pariff-cutting agreements with other nations
and to implement them by proclamation without the need for
subsequent legislation. In the years after its enactment, the
Reciprocal Trade Agreements Act proved a great success.
Congress's action in passing the 1934 Act can be credited with
helping make possible the extraordinary economic growth after
World War II, both in the United States and around the world.
Our partnership in developing and implementing U.S. trade
policy evolved in later years as trading nations began to rely
less on tariffs to protect their markets and more on non-tariff
MAR 28 '91 15:01
FROM USTR PUBLIC AFFAIRS
PAGE. 003
2
trade barriers. consequently, the scope of trade negotiations,
was broadened to include new areas previously uncovered by
international rules.
The fast track procedures were created by Congress as the
necessary complement bo this broader trade agenda. Fast track
procedures for approval of trade agreements were included by
Congress in trade legislation in 1974, 1979, and again in the
Omnibus Trade and competitiveness Act of 1988. While giving
Congress the assurance of meaningful participation throughout the
negotiating process, East track also provides two guarantees
essential to the successful negotiation of trade agreements:
First, a vote on implementing legislation within a fixed period
of time; and, second, no amendments to that legislation.
These procedures reflect an understanding that trade
agreements, in which results in one area are often linked to
results in others, are particularly vulnerable to multiple
amendments that, while possibly small in themselves, could
unravel entire agreements. Whether the balance of benefits
contained in any trade agreement is in the overall interest of
the United States can only be determined by looking at the whole
package.
Through the fast track, Congress has given the President the
same bargaining power possessed by his counterparts: The ability
to ensure that the agreement reached internationally would be the
agreement voted on at home. Without that assurance, foreign
governments are reluctant to negotiate with the United States and
will not make the tough concessions necessary to reach agreements
the United States would be willing to sign. No negotiating
partner will give its bottom line knowing that the bargain could
be re-opened.
Myths of Fast Track
Let me take a New moments to dispel two myths about fast
track:
Fast track procedures are not "fast" and are not an
inevitable "track." The process is actually quite deliberate and
relatively slow and the outcome is not assured.
To be more specific, fast track procedures have absolutely
nothing to do with the pace at which we conduct negotiations.
Let me reiterate and assurance that I have given to this
Committee: We will not rush to conclude any agreement, merely
for the sake of any agreement. We proved that in Brussels and
our high standards have not changed. While we are eager to
secure as soon as possible the benefits that trade agreements
promise, we will take whatever time is needed to arrive at
MAR 28 '91 15:02
FROM USTR PUBLIC AFFAIRS
PAGE. 004
3
agreements that are truly in the economic interest of the United
States. We will consider all relevant issues in a negotiation
and consult fully with you and the private sector. Until we
arrive at good agreements -- ones that we believe you will agree
are good - there simply will be no agreements.
Your vote to approve fast track extension does not mean that
whatever the Administration negotiates afterward is
automatically, or even rapidly, approved. Fast track procedures
preserve Congress's role during the negotiation, approval, and
implementation of trade agreements. The fast track statute
includes extensive notification and consultation requirements
with both Congress and the private sector throughout the process.
Each step of the way this Administration will continue its close
consultation with Congress and the private sector.
For example, we started formal and informal consultations
with Congress on an FTA with Mexico almost a year ago, well
before our formal notification of negotiations. We have been
talking to a range of Committees and members about their
objectives and advice, and will continue to do so once
negotiations commence,
Once an agreement is reached, Congress and the
Administration work in close consultation to formulate
implementing legislation. The process has been open to all
committees of jurisdiction. If the agreement and its
implementing legislation are still not acceptable, they can be
rejected by majority vote of either house.
Economic Reasons for Extending Fast Track
The United States has much to gain through trade agreements
that open markets and provide rules for free and fair trade.
Maintaining the fast track will preserve our ability to continue
efforts to liberalize trade and open markets through the GATT,
through other multilateral agreements, and through bilateral
agreements.
Opening markets and expanding trade is at the top of the
President's agenda.
As 1991 begins international trade is more important than
ever to the United States. our economy has enjoyed six years of
record expansion. the engine of this expansion was U.S. exports.
Over the past three years, exports of goods and services
contributed more than 50 percent of the growth of GNP. And while
exports expanded at a rate of 16 percent from 1987 through 1990,
imports grew less than half as fast.
MAR 28 '91 15:03 FROM USTR PUBLIC AFFAIRS
PAGE. 005
4
The U.S. economy now has entered a temporary recession.
But the vitality of U.S. trade has not been interrupted. As the
President said in his State of the Union Address, "Exports are
running solid and strong."
In 1990, the rate of growth of U.S. exports was twice as
fast as the rise in imports. The nearly 8.5 percent growth in
exports generated 88 percent of our total economic growth last
year.
This is because the global economy remains strong, and U.S.
goods are in great demand around the world.
The flow of U.S. goods must be maintained and expanded lest
exports -- our vital engine of growth -- sputter or stall. More
than ever, we need the billions of dollars a year of economic
stimulus that greater access to foreign markets could provide.
As Dr. Michael Boskin, chairman of the Council of Economic
Advisers, said last week: "Fast track is integral to a strategy
of American economic growth and success."
Opening markets and expanding trade also will enhance the
economic growth of poorer nations, including the emerging
democracies of Eastern Europe and Latin America. Such growth not
only promotes political stability, but will also make those
countries much better customers for U.S. products.
Without the impetus of a more open trading system, these
nations will be drained by the massive costs of protections now
imposed on them -- costs that now total two-and-a-half times all
the aid they receive from industrialized countries.
We find ourselles at this critical time with real
opportunities to open markets in areas that will expand our
trade. It was precisely to take advantage of such opportunities
that Congress contemplated in the 1988 Trade Act a two-year
extension of the fast track procedures that would otherwise have
expired in June of this year.
Fast Track is Crucial to Concluding a Successful Uruguay Round
our top priority is to complete a comprehensive agreement in
the Uruguay Round of global trade talks and in so doing to
strengthen and broaden the General Agreement on Tariffs and
Trade, or GATT. The GATT is without doubt the world's most
important trade agreement. Indeed, it is the Constitution of
World Trade.
Under GATT spensorship, the world's trading nations have
held seven successful rounds of negotiations since World War II
MAR 28 '91 15:03 FROM USTR PUBLIC AFFAIRS
PAGE 006
5
in which tariff rates were slashed by more than 75 percent. As a
result, trade exploded from just $60 billion in 1950 to nudge the
$4 trillion mark this year.
This enormous expansion in global commerce has fueled a
spectacular surge of the world and U.S. economies. Both have
grown faster in the last 40 years than in any four decades of
world prosperity. history. Consequently, we have enjoyed unparalleled global
The GATT has opened new markets for business, increased
choices and lowered prices for consumers, and led to higher
incomes and more jobs for workers.
But just as a thriving family outgrows its first house, so
too has the family of 100 nations, who make up the GATT and
account for 85 percent of world trade, outgrown the rules that
have served us so well for so long.
Today, a third of world trade -- more than $1 trillion of
international commetce a year -- is not adequately covered by
internationally agreed rules.
Areas inadequately covered by GATT rules, like agriculture,
or not covered at all like services, investment, and intellectual
property have taken on an enormous importance in global trade
generally and to the United States in particular.
The United States led the call for the far-reaching agenda
of issues in the Uraguay Round. Congress and the private sector
supported this effort. Congress laid out the negotiating
objectives for the Druguay Round in the 1988 Trade Act.
Several members of this Committee, and your staffs, were
with us in Brussels last December. Rather than conceding our
goal of an ambitious agreement, together we agreed that no
agreement solution. was far better than a hastily negotiated face-saving
After a threemonth suspension, the countries that brought
the talks to a halt returned to the table with a new-found
willingness to negotiate specific commitments in the critical
area of agricultural trade reform. As you know, this area is the
linchpin of the Roand; without real reform, many of the countries
participating in the talks are not willing to negotiate in many
of the Round's other important areas.
The prospects for a successful conclusion are better now,
but we have tough negotiating ahead. We will continue to work
with you to bring these talks to fruition.
MAR 28 '91 15:04
FROM USTR PUBLIC AFFAIRS
PAGE 007
6
The benefits the Uruguay Round could bring to America are
encrmous:
©
Lower tariff and non-tariff barriers to
manufactured products and other goods could
increase world output by $5 trillion, and
U.S. output by more than $1 trillion over the
next 10 years, meaning an additional $17,000
for every American family of four;
Rules to protect the intellectual property of
America's antrepreneurs, ending the $60
billion lost each year through theft and
counterfeising;
New markets for U.S. service firms, which
today export $115 billion annually and create
9-out-of-10 of our new jobs;
Broader market opportunities for
international investment, creating expanded
opportunities in a sector that already helps
generate more than $240 billion of U.S.
exports, or two-thirds of total U.S. exports
in goods;
Fair competition and open markets for U.S.
farmers, the lead the world with more than
$40 billion in annual exports;
Full participation of developing countries in
our global trading system, which could
increase G.S. exports 50 percent, or $200
billion, RY the year 2000;
And, strengthened rules on dispute settlement,
antidumping, subsidies, and trade remedy provisions,
that should provide predictability and certainty in
access to foreign markets and ensure fair trade at
home.
The fact is that a failure to extend fast track authority
will effectively end the Uruguay Round negotiations. It will
damage prospects for world economic growth and cooperation. A
collapse of the Roand brought about by the removal of fast track
would increase worldwide pressures to raise trade and investment
barriers. And, of course, the unraveling of the international
trading system would deny U.S. consumers and workers the enormous
benefits of open markets.
MAR 28 '91 15:04
FROM USTR PUBLIC AFFAIRS
PAGE. 008
7
Fast Track is Essential to Negotiate a North American FTA
Beyond the Uruguay Round negotiations, we continue to press
for open markets.
A North American Free Trade Agreement more closely linking
the economies of the United States, Mexico, and Canada could be a
potent force for regional growth and prosperity. We expect these
discussions to lead to market opening agreements that will create
new and improved opportunities for U.S. exports across the entire
spectrum of American industry.
The United States is Mexico's principal trading partner;
Mexico is our third largest customer. Canada is our largest
trading partner. Lisking our complementary economies through
free trade will strengthen these economic bonds and increase
regional political stability. Ultimately, the creation of a
North American Free Trade Area will create the largest, richest
market in the world with 360 million consumers and $6 trillion
annual output.
Also, a North American Free Trade Agreement also will
support our broader him of open markets and expanded trade
globally, for other countries will have greater incentive to seek
open markets with us. It also can serve as a starting point for
the pursuit of a hemispheric free trade area -- the long-term
objective of the Enterprise for the Americas Initiative.
Despite these Benefits, some critics claim that an FTA will
be a "one-way street" with inexpensive Mexican goods flowing into
the United States and few of ours going the other way. The
evidence disproves this notion. Since 1986, when Mexico joined
the General Agreement on Tariffs and Trade, and reduced its
tariff protections from 100 percent to roughly 10 percent, U.S.
exports to Mexico have more than doubled rising from $12.4
billion to an annualized rate of $28.4 billion in 1990. The
doubling of U.S. exports created 320,000 U.S. jobs. Each
additional $1 billion of U.S. exports will mean more than 20,000
new U.S. jobs.
All sectors of the U.S. economy have benefited from this
market opening: exports of automobiles and auto parts have
quadrupled; exports of corn have tripled; and exports of
telecommunications equipment have doubled. Exports of iron and
steel, that were running a $12 million deficit four years ago,
now are tallying a $300 million surplus. Just four years ago, we
had a $91 million deficit in textiles and apparel trade with
Mexico. Today, we are running a surplus.
A free trade agreement would not only lock in these gains,
but also spread them throughout the U.S. economy.
MAR 28 '91 15:05 FROM USTR PUBLIC AFFAIRS
PAGE. 009
8
There is also a Bear that a free trade agreement will export
U.S. jobs to Mexico. But again, the experience of the last
decade disproves this speculation.
During the 1980s U.S. firms set up factories in Mexico at a
record pace under the maquiladora program. As a result,
thousands jobs were created and retained on the U.S. side of the
border to support those facilities, according to some studies.
A good example in Deltec, a San Diego electronics
manufacturer. Since Lit started a maquiladora five years ago,
its sales have quadrupled and its workforce has tripled with
employment in San Diego rising by 50 percent.
Neisinki Finland
Many of its San Diego workers were retrained to fill higher-
skill and higher-paying jobs. Deltec' added business also
generated new jobs in and around San Diego as its spending for
raw materials and services there grew four-and-a-half times.
Indeed, the availability of Mexico as a factory site is
saving U.S. jobs. Kondall Co., a Massachusetts-based medical
equipment maker, says that were it not for the maquiladora
program its ability to compete effectively in certain segments of
the health-care market would have been significantly impacted.
This fact could very well have jeopardized the approximately
3,000 jobs which currently exist within the United States. Other
companies that would have been forced to relocate operations
offshore to remain competitive instead are setting up operations
in Mexico.
While the benefits of an FTA are apparent, the
Administration recognizes that some groups worry about the
consequences of increased competition from Mexico. We are
sensitive to these concerns and want to work with Congress and
the private sector to ensure that our negotiating objectives take
these concerns into account.
In this regard, nothing we negotiate will be implemented
overnight. We know that business, labor, and farmers on both
sides of the border will need time to adjust. We will ensure
that any agreement be phased in over time and provide an
effective mechanism to protect against import surges. In the
end, we will have a new economic regime that will benefit all.
Progress in the trade area also will support and reinforce
progress in our broader bilateral agenda with Mexico. Long
before there was any talk about an FTA with Mexico or a North
American FTA, the United States and Mexico were discussing and
acting upon a broad bilateral agenda extending far beyond trade.
Our countries share a common goal of an improved way of life,
both economically and socially, for our people. Agencies such as
the EPA and the Departments of State, Justice, and Labor, have
MAR 28 '91 15:06 FROM USTR PUBLIC AFFAIRS
PAGE. 010
9
been working in their area of expertise to promote our broader
bilateral agenda. Welhave worked with Mexico to support and
enhance its own efforts to address pressing social needs.
Progress in North American free trade negotiations would
assist efforts on our broader agenda. Conversely, rejection of
fast track would hinder our efforts in all areas.
The goal of United States trade policy is to open markets
and expand trade for U.S. goods throughout the world and so
provide a powerful stimulus for economic growth. A North
American Free Trade Agreement will do just that and create on the
North American continent a new era of opportunity and prosperity.
Conclusion
Supporting fast track will allow these important initiatives
to go forward without in any way detracting from Congress's
ability approval. to assess each agreement on its merits when presented for
We have much to gain from extending fast track: an era of
extraordinary economic growth, geopolitical stability, lower
prices and greater choices for consumers, more jobs for workers,
and a better standard of living for our people.
We have all this to lose, and more: after the enormous
international respect and goodwill we have gained from our role
in the liberation 02 Kuwait, to deny the President the ability to
negotiate trade agreements would be a severe set back. For the
United States, the world's biggest market, its largest exporter,
the leader of the free world, not to be a real participant at the
bargaining table would be an abdication of responsibility to the
world trading system, the U.S. economy, and, above all, to the
American people.
Congress and the Executive Branch must continue to work
together. Fast trank will facilitate that partnership.
# # #
LANE KIRKLAND,
WASH. :03-25-91
Highballing on the fast track
I
t is no accident that the Bush
development that has occurred in
tions. The Europeans have also cre-
administration and its allies
want the U.S.-Mexico free-
the Pacific Rim countries. Instead, it
ated a $68 billion Regional Develop-
has turned the Mexican border re-
ment Fund to narrow the gap in per
trade agreement to be consid-
ered on the congressional fast track,
gion into an economic, environmen-
capita income between rich and poor.
tal and social disaster.
countries in the market - a gap that
a procedure that prohibits amend-
A free-trade agreement with
is only one-fifth as wide as the one
ments and significantly limits
Mexico would expand this program
between the United States and
debate.
beyond the border area to include
Mexico.
Otherwise, the American people
might learn the facts about this
the entire country. It would undoubt-
As currently described, the pro-
edly mean more factory relocations
posed U.S.-Mexico free-trade agree-
agreement, particularly its disas-
and more job losses in the United
ment would contain none of these
trous potential for workers on both
States.
social dimensions. And fast-track
sides of the border.
There are those who still argue
consideration would prevent Con-
What, specifically, do proponents
that the jobs it has brought to Mexi-
gress from insisting that such provi-
of a free-trade agreement have to
can workers are better than no jobs
sions be included.
fear from public debate? For start-
at all. But are they really?
In this way, the insistence on fast-
ers, we might get a full airing of
A few years ago, when Mexican
track consideration speaks volumes
what is going on with the maquila-
wages were actually higher in dollar
about who this agreement is really
dora program, a miniature version
terms than they are today, an article
intended to help.
of free trade that currently enables
in the pro-maquiladora Twin Plant
The fact is that trade is good for
American firms to set up factories
workers on both sides of the border
News advised U.S. parent compa-
on the Mexican side of the border
nies that they could keep their mini-
only when it is carried out side-by-
and export products back to this
side with minimum standards on
mum wage people at the minimum
country with minimal duty charges.
wage by collecting donated clothing
wages, benefits, safety and environ-
The maquiladoras were touted as
and blankets for their Mexican em-
ment. Without them, it merely
a godsend to Mexican workers - a
ployees, because many of their
serves as a vehicle for capital to lo-
source of desperately needed jobs
houses are poorly heated, if heated
cate where labor is cheap and gov-
and economic development for an
at all, and warm clothing and blan-
ernment governs least.
kets feel good on those cold nights.
The problems of poverty and eco-
As for food, the magazine sug-
nomic development in both the
United States and Mexico are too se-
GLOBA
gested a free kilo of tortillas each
week or a few kilos of frijoles.
rious to be left solely to the interests
If these jobs are so good for Mexi-
of private capital. And the proposed
can workers, why do workers need
free-trade agreement between the
handouts to survive?
two countries is far too serious a
And to those who talk glowingly
matter to be kept from the realm of
of the Mexican market of 88 million
public debate and left largely to
these same interests.
people that a free-trade agreement
would open to American producers,
We need a full airing of views so
what do they propose be sold to peo-
that the American people can decide
impoverished region. What actually
ple who earn $25 for a 48-hour week?
for themselves whether this agree-
happened, though, is that hundreds
These are the kinds of issues that
ment is in their long-term interests.
of U.S. companies, lured by Mexico's
proponents of the U.S.-Mexico free-
Undoubtedly, they will see it for
comparative advantages of rock-
bottom wages and lack of effective
trade agreement want to avoid. Fast-
what it is - a golden opportunity for
track authority would help them do
the rich to get richer at the expense
government regulations, have shut
down factories north of the border
it by limiting the debate before Con-
of the working poor.
and relocated them in the maquila-
gress to one simple question: Are
dora areas.
you for free trade or against it?
In this scenario, proponents are
sure to argue that the agreement is
During the past decade, while
a necessary step for America to com-
hundreds of thousands of American
pete in an era when Europe is head-
workers were losing their jobs to this
ing rapidly-toward a single market.
form of dislocation, more than a
But the proposed Yukon-to-Yucatan
half-million Mexicans working in
common market, which would also
maquiladora plants were joining the
include Canada, has little in common
humans on the planet.
ranks of the most crudely exploited
with that of the European Commu-
nity.
Earning 60 to 80 cents an hour,
For instance, the European Com-
many of these workers live in card-
mon Market contains a social
board shacks with no heat, electric-
charter establishing rights to a mini-
ity or running water. Independent
mum wage, social assistance, col-
sources have documented wide-
lective bargaining, vocational train-
spread instances of child labor, il-
ing and health and safetv protec-
legal dumping of toxic wastes and
the use of old chemical drums to
hold drinking water.
The Wall Street Journal noted
that the maquiladoras' very success
is helping turn much of the border
region into a sinkhole of abysmal liv-
degradation. ing conditions and environmental
Clearly, the maquiladora pro-
gram has not brought the kind of
WASH TIMES 03-05-91
No Mexican standoff
33/184
I
t's a long way from the Yukon the to Yucatan, but
submit such a pact to a yes-or-no vote. There would be
U.S. citizens may find that distance shortened
no death by amendments.
considerably in the years to come. Last week, the
As might be expected, groups that have enjoyed the
Bush administration sent Congress a request for
fruits of protectionism aren't thrilled about the pros-
"fast-track" procedures for congressional approval of
pect of competition. The United Auto Workers fears
international trade agreements, including a free-trade
low-wage Mexican workers. Growers fear low-cost
pact with Mexico. If the pact eventually becomes law,
produce from across the border. And so on. "A lot of
it could open all kinds of roads long closed to busi-
workers will simply lose their jobs as whole factories
nesses and the consumers they serve.
are shipped down to Mexico," one lawmaker told the
The administration initiative comes at a time when
Congressional Quarterly. No one knows for sure
most of the world is showing less interest in trade than
whether the future would bear out these hair-raising
in trade wars. The General Agreement on Tariffs and
warnings. But critics should remember that compa-
Trade, which has been floating around international
nies already can pull up stakes and head for Mexico if
conference rooms since 1986, was taking on lots of
the place is all that great. A free-trade agreement won't
water when last seen in December. The European
change that fact.
Community and the Japanese didn't want to cut their
high-priced agriculture subsidies. American groups
The weakness of these complaints is the more obvi-
were concerned about having to give up textile and
ous for the ones protectionists have turned to in des-
other quotas. In the end, consumers who would have
peration since. Some argue that a free-trade pact
benefited from freer trade and cheaper prices got
would spur the flow of illegal drugs, as though existing
little more than an expensive stalemate.
import barriers on, say, steel have somehow stemmed
The administration hasn't given up on GATT, but it
the flow where border patrols could not. Others are
wouldn't mind setting up a North American free-trade
warning of a plague of Mexican pesticides, a variation
zone incorporating the United States, Mexico and
on the good old killer-apple theme.
Canada in the meantime, one with 360 million people
There must be a zillion ways to try to defend protec-
and a $6 trillion economy. The United States already
tionism. But in the end, they all reduce to the sugges-
enjoys a free-trade agreement with Canada. The fast
tion that the government has to protect consumers
track President Bush is proposing to Congress would
from the likes of cheap avocados and inexpensive
let him seek speedy congressional approval of a simi-
shirts. Mr. Bush, fortunately, isn't buying that argu-
lar agreement with Mexico: Lawmakers would have to
ment. Consumers shouldn't either.
WASH. POST 03-14-91
-Free Trade With Mexico-
Thomas R. Donahue
184/30/53
Conspiracy for the Rich
There are always a good many
Farther up the ladder, large corpo-
If the administration wants a conti-
schemes floating around to help the
rations would hit the jackpot. Mexican
nental arrangement to compete with
rich get richer and the poor get poor-
plants are already a bonanza for them.
the EC Single Market, it's doing it all
er, but the one currently being con-
They can take advantage of the terri-
wrong. The Single Market includes a
sidered here-the proposed North
ble poverty in Mexico and pay work-
Social Charter. It sets out rights to a
American free trade agreement-is
ers a small fraction of average U.S.
minimum wage, social assistance, col-
in a class by itself.
wages, and they don't have to pay for
lective bargaining, vocational training
Its scale is vast-Yukon to Yuca-
workmen's compensation, unemploy-
and health and safety protection in all
tan. It would profoundly disrupt the
ment insurance, health insurance or
of the member countries, partly to
$6 trillion North American economy
other essentials of civilized life.
discourage runaway plants. Besides,
and throw 90 million Mexicans into
Would Mexican workers benefit
workers have recourse to such insti-
cutthroat competition with 270 mil-
from an FTA? Again, the maquilador-
tutions as the European Parliament
lion Canadians and U.S. citizens. In
as are a gruesome preview. They pay
and Court of Justice.
fact, the list of FTA victims in all
employees about 60 to 80 cents an
The FTA's worker protections can
three nations would be colossal. In
hour, hardly enough for subsistence.
be summarized in two words: "Tough
this country and Canada it would in-
Workers in many maquiladoras live
luck."
clude hundreds of thousands of work-
in shacks made of packing materials.
The Europeans have a $68 billion
ers whose jobs would be exported to
Their drinking water is sometimes in
Regional Development Fund to nar-
Mexico.
large 50-gallon drums that previously
row the gap between rich areas such
We have a preview of an FTA in
contained toxic materials. The Wall
as western Germany and poor areas
the maquiladoras, the U.S.-owned
Street Journal noted that the maqui-
such as Portugal. Here, the per-capita
plants that operate south of the bor-
ladoras' "very success is helping turn
income ratio of the United States and
der and exploit about 500,000 Mexi-
much of the border region into a
Mexico is a staggering 10 to 1-far
can workers. Plenty of U.S. employ-
sinkhole of abysmal living conditions
larger than anything in Western Eu-
ees of Electrolux, Zenith, GE, Ford,
and environmental degradation."
rope. In a free-trade area, that would
AT&T, Chrysler and other companies
When the maquiladoras started,
be an economic time bomb, but the
have seen their jobs vanish, then sud-
they were supposed to help Mexico
FTA wouldn't provide a nickel to
denly reappear among the maquila-
join Hong Kong, Singapore, South
defuse it.
doras. Under an FTA, their numbers
Korea and Taiwan. But years later,
No matter. The administration has
would mushroom.
northern Mexico remains an environ-
its FTA scenario all worked out.
How many people in the United
mental, economic and social inferno.
First, Congress will hand it "fast-track
States would be hurt by the upheav-
Small wonder. The original purpose of
authority." In other words, the House
als? An International Trade Commis-
maquiladoras-their "comparative
and the Senate will forfeit their right
sion report admits that "unskilled
advantage" in international trade—
to change anything in the final agree-
workers" would suffer a "slight de-
was providing multinational corpora-
ment. The administration will be firm-
cline" in real income, but it happily
tions with a poor, frightened work
ly, in control of negotiations. In the
reports that "skilled workers and
force. That's never changed.
end, members of Congress will vote
owners of capital services" would ben-
An FTA would turn much of Mexi-
only on the full package. They can
efit. For millions, the decline would
CO into a huge maquiladora. Mexico's
take it or leave it-but the adminis-
actually be more than "slight"-but
wealthiest classes would cash in, but
tration is confident that they will take
the important point here is that peo-
most workers would suffer the fate
it.
ple on the bottom economic rungs
their sisters and brothers along the
All this could happen. If it does, a
would lose and those on the top rungs
border have endured for years.
good many of the working people of
would win.
So what keeps the FTA idea going?
North America will find themselves
The commission mysteriously re-
A glitzy brand name has something to
on the "fast track" to being either laid
fuses to say whom it counts as "un-
do with it. The "free trade" label has
off or exploited.
skilled workers," but it reportedly
political clout these days, especially
includes all workers with four years of
with the European Community's 1992
The writer is secretary-treasurer of
high school or less. This would mean
Single Market on the horizon. But
the AFL-CIO and chairman of the
that a majority of the working popula-
using "free-trade" to justify an FTA is
Labor Advisory Committee for U.S.
tion-52.5 percent-would be hurt
like using "the sanctity of the family"
Trade Policy and Trade
by an FTA.
to justify beating the children.
Negotiations.
WASH. POST 03-03-91
Free Trade With Mexico
1844
O
PPOSITION to the future free trade
trying to block the much broader-and entirely
agreement with Mexico is rising with star-
separate-worldwide trade negotiations called
tling speed. When the similar agreement
the Uruguay Round. To get through Congress,
establishing free trade with Canada was being
both of these agreements will need the fast-track
negotiated three years ago, it stirred few feelings
procedure. In return for giving Congress extraor-
one way or the other in this country-but the
dinary influence over the negotiating process,
Canadian standard of living is very close to the
this procedure assures the final deal a prompt
American. Now that the three countries propose
up-or-down vote without being eroded by spe-
to extend the continental free trade zone south-
cial-interest amendments. The fast-track legisla-
ward, it would join economies with very different
tion expires shortly, but President Bush can
wage levels. A number of industries and, espe-
extend it-unless either house of Congress pass-
cially, trade unions are protesting vehemently.
es a resolution preventing it. The votes on those
Disinterested economists say that tariffs be-
resolutions will probably come in the late spring.
tween the two countries have already been cut so
Without fast-track, the chances of getting either
low that the further step to free trade would have
the Mexican agreement or the Uruguay Round
little immediate effect in this country. But it's not
approved drop close to zero, and American for-
the disinterested economists who are carrying
eign economic policy collapses.
their fears to Congress.
While the Mexican agreement may have little
The opponents are widening their objections to
immediate effect on jobs here, in Mexico it will
include the differences in environmental protec-
tion in the two countries. They ask whether it's
encourage investment, create jobs and lift wages.
That, rather than more armed men on the
fair to let producers go south to escape costly
border, is the way to discourage illegal immigra-
environmental requirements. The answer is that
tion into this country's labor market. As for the
the agreement, when it's finally written, will
Uruguay Round, it will open new markets for
probably have to try to reconcile some of the
dozens of American industries.
differences in pollution control standards.
The politics of the Mexican agreement is
A recession is never a good time to try to get
trade legislation through Congress. But the coun-
getting complicated. The people fighting it are
try is counting on rising exports to pull its
working in close alliance with those who are
economy into recovery.
THE WHITE HOUSE
WASHINGTON
(anada Free Trade -
finished negotiations-
Dec. 1987
Submit legislation - 1
July 1988
passed Aug + Sept. 1988
90% langress
ederal Deposit Insurance Corp.
THE WASHINGTON POST
volved a publishing company, Feist
test.
Publications Inc., that specializes in
"It is not only unoriginal, it is prac-
area-wide telephone directories.
ly would delay other as-
tically inevitable," O'Connor said of
ised that FDIC Chairman L. William
Feist asked the Rural Telephone
plan.
this arrangement. "This time-
Seidman "will go to the hill and try to
Service Co., which operates in
IC had not discussed any
honored tradition does not possess
unconfuse the situation."
northwest Kansas, to purchase the
rrow money until earlier
the minimal creative spark required
He said the FDIC does not plan to
Gonzalez noted. Then the
right to use its local listings in com-
by the Copyright Act and the Consti-
borrow $70 billion to pay for bank fail-
piling its broader regional directory.
tution."
ted a plan to borrow $15
ures, but has outlined borrowing plans
in a month it raised that
Rural refused, but Feist used the
O'Connor said a number of lower
that could provide that much money in
$25 billion and then only a
information anyway, copying at least
courts were wrong when they decid-
case the nation should fall into a se-
er asked for power to bor-
1,309 names, towns and telephone
ed compilations or other works were
vere recession.
n as $70 billion.
numbers of Rural subscribers. Rural
entitled to copyright protection by a
e numbers shift by $45 bil-
Gonzalez said the banking commit-
then filed a copyright infringement
"sweat of the brow" test in which the
gle week, it is time to nar-
tee will begin hearings immediately af-
suit.
amount of effort that went into gath-
essing game," said Gonza-
ter the Easter break on FDIC financ-
A basic principle of copyright law
ering the data is taken into account.
ople are beginning to smell
es, splitting that issue off from the
is that facts themselves cannot be
Originality, not effort, is the
yer bailout."
300-page proposed rewrite of banking
copyrighted because they are not
"touchstone of copyright protection,"
kesman Alan Whitney said
laws sent to Congress last week.
"original works of authorship." How-
she said, noting that copyright "is
is gotten confused over the
"It would be a mistake for Congress
ever, compilations of facts can be
not a tool by which a compilation au-
rrowing plans and prom-
See FDIC, B15, Col. 5
copyrighted, under the 1976 copy-
See COPYRIGHT, B12, Col. 3
Gephardt: Safeguards Needed
478483
In Trade Pact With Mexico
If
this
DR
SINTAL 044639
By John Burgess
questions about the pact, which
Washington Post Staff Writer
would lower many trade and invest-
ment barriers between the two
House Majority Leader Richard
countries.
The
478347
A. Gephardt (D-Mo.) yesterday
-
Combined with a similar free-
joined the chorus on Capitol Hill
trade agreement already signed with
questioning President Bush's pro-
Canada, a pact with Mexico would
posed free-trade pact with Mexico,
move North America toward a single
now
254992
saying he wanted safeguards against
large numbers of American jobs
market of 360 million people with an
annual output of about $6 trillion.
moving across the border.
"My concern is that our trade ne-
The administration proposed the
478097
gotiators keep uppermost in their
accord a year ago after concluding
mind the impact of this agreement
the Canada agreement. "We believe
on American jobs, American compa-
that by reducing trade barriers mu-
nies and American exports," Gep-
tually that we will sponsor growth
18
BERN 293862
hardt told reporters.
and jobs and economic develop-
Gephardt said he also wanted pro-
ment," U.S. Trade Representative
visions to aid displaced American
Carla A. Hills told a gathering at the
workers and to assure that any
Brookings Institution on Tuesday.
American companies making the
Hills also said U.S. companies
move would have to comply in Mexi-
stand to increase exports to Mexico
082961
CO with strict standards for pollution
under such a pact. She cited tariff
control, job safety and workers'
reductions and other reforms that
rights.
Mexico has already made on its own
BY FRANK JOHNSTON-THE WASHINGTON POST
Other influential members of Con-
as the reason U.S. exports to the
rol's name may not disappear from smaller outlets in the area.
gress have already raised similar
See GEPHARDT, B14, Col. 4
WP
3/28/91
fused to confirm or deny the link with
y-vs Business
Technoimpex or the proposal to buy
the Thomet House.
Gephardt
1 for Hotel
Even if an accord between the
councils is worked out and Marriott
Calls for
buys the property, it would face an-
LUXURY FOR LESS
other hurdle: the tenants. City offi-
ed out by the swamped government
cials say that under communist laws
oureaucracy.
Safeguards
1991
Air Cond., Air Bog, ABS, Power Windows
Cassette,
still in force, individual tenants cannot
16 Valve performance of 27 MPG Highway
Poland's situation is similar to Hun-
36
month
lease
'299
per
be evicted. They must be coaxed out
me.
gary's. The Polish parliament is set to
Closed end lease 10% cop cost reduction
of the building through compensation
GEPHARDT, From B11
fees & taxes due with BMW approved cre
lebate a land ownership law but no
packages that could total $500,000 or
consensus has yet emerged on the ex-
country rose from $12 billion in
COLLEGE GRAD PROGRA
more for each tenant.
No previous car credit necessary
ent of reprivatization or the type of
1986 to $28 billion in 1990.
ompensation. Because a large por-
"It would cost a fortune," Juhasz ad-
But some members of Congress
2.9%
8.9%
FACTORY
FINANCIN
mitted.
and U.S. labor unions believe it
Call for Detail
ion of Polish farmland remained in
rivate hands under communist rule,
There's more. Like many buildings
would lead large numbers of Ameri-
1991 525i
Fully Loaded, Leather, Air Bog, ABS Auto
irban land is the key element.
in Eastern Europe, the Thomet
can companies to shift production to
30 Mo.
$439
Per
House's interior is in bad shape and
Mexico, where workers earn as little
Lease
Month
In Germany, where the unification
Closed end lease 10% cap cost reduction
reaty set out procedures to deal with
virtually beyond hope for renovation.
as one-tenth what Americans in
fees & taxes due with BMW approved CR
he problem of land claims stemming
Juhasz said everything except the fa-
comparable jobs do.
1991 535i
rom the communist and Nazi eras,
cade would be razed for construction
Environmentalists have said that
Fully Loaded, Leather, Air Bog, ABS
30 Mo.
companies might go so as to avoid
Lease
$475
Per
nore than 1 million property claims
of an entirely new building. That
Month
ave been filed and many investors
would take two to three years.
tougher U.S. standards for pollution.
Closed and lease 10% cap cost reduction
fees & taxes due with BMW approved CTY
are waiting for the courts to decide
Marriott is not alone in trying to
Gephardt suggested that the trea-
of this price, plus tax, tog & freig
he issue.
find a site in Hungary. About 15 major
ty should be implemented over many
MARTENS BMW
In Bethesda-based Marriott's ef-
firms are "aggressively" searching for
years to soften the impact and
The Closest BMW Dealer to the Bel
orts to find a hotel site, the problem
sites, according to Jeremy Holder, a
should contain provisions that would
(301) 423-270
allow the United States to back out if
5050 Auth Way, Exit 78, Silver
loes not involve a pre-communist
director of the London-based Interna-
Marlow Heights, Md.
tional Hotel and Leisure Associates.
large numbers of jobs made the
wner's claim for the building, but be-
ause the Budapest city council and
Few have come close to striking a deal
move.
In a letter to President Bush out-
Coming Sunday
he neighborhood council are squab-
and one of the successful firms, Oberoi
Hotels International, has mixed feel-
lining his position, he also expressed
DINING GUIDE
ling over ownership rights, accord-
ng to Juhasz and officials in the gov-
ings.
concern that large numbers of Mexi-
Issue of The Magazine
rnment and hotel industry, the
Vijay Raina, a vice president of Ob-
can workers might enter the U.S. la-
vinning council stands to gain a finan-
eroi, is unsure whether the firm would
bor market.
ial windfall, either from Marriott or
have embarked on its planned $70 mil-
erhaps from another bidder offering
lion acquisition of the Gresham Palace
ALL
nore money.
building if it had known how difficult
Juhasz said Technoimpex submit-
the process would be. Even though it
TISCHER
MODELS
ed a memorandum to city officials
has received a green light from the
ast year proposing the land purchase.
city and neighborhood councils, Oberoi
He said the firm is trying to persuade
faces the daunting prospect of getting
Audi
he warring councils to come to terms
rid of the building's tenants.
AUTOM
ver the Thomet House instead of
"It has sapped a lot of our energy,"
vaiting for a new land law from Par-
he said.
EVERY
91 AUDI 100
&
ament. He gives the deal a 50-50
But Raina, echoing many financial
EVERY
AUDI 200
ROCKVILLE, MD
(301)
hance of becoming a reality.
experts, said firms that turn their
AT
TYSONS CORNER
A Marriott spokeswoman in Be-
backs on Eastern Europe during these
(703)
hesda refused to comment on the ne-
confusing, almost lawless days may
FACTORY INVOICE
gotiations, saying only that the firm is
lose a crucial opportunity. "The time
(PURCHASE ONLY)
serious about development" of an ap-
to get in is now," he said. "It's tough to
Borrow
proximately 500-room hotel in Hun-
negotiate. But the cost of entry later
gary and is involved in talks. She re-
will be much, much higher."
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Percentage Rate for a ten-y
Mexico Becoming a Window of Opportunity for Central America
172
SAN JOSE, Costa Rica-Long known in
Honduras, El Salvador and Nicaragua to
protection faces resistance from the re-
ico. But we must be realistic. For exam-
Central America as a champion of the rad-
meet during two days in Tuxtla Gutierrez,
gion's industrialists who are accustomed to
ple, while Costa Rica has taken the lead in
WALL ST.J:03-15-91
ical left and a strong advocate of big gov-
the capital of the Mexican state of
protective barriers. Local producers would
signing a framework agreement with
ernment, Mexico has made a full turn-
Chiapas. The summit produced a new ar-
prefer duty-free access to foreign mar-
Washington, protectionist pressures on
about to become a promoter of free trade
rangement concerning the payment of
kets-as provided by the U.S. Caribbean
Capitol Hill and existing limitations might
and private enterprise. This remarkable
Mexican oil and formalized the plan for a
Basin Initiative-while enjoying tariff pro-
not be so easy to overcome. Moreover, as a
transformation, thanks to the policies of
free-trade zone with the Isthmus.
tection at home. However, all but the most
top U.S. diplomat told an audience here re-
President Carlos Salinas de Gortari, has
Mexico and Venezuela are the main
rigid protectionists seem to understand
cently, Costa Rica and other small nations
won praise from public officials as well as
providers of petroleum to Central Amer-
that the price to be paid for falling trade
will have "to queue up" in order to negoti-
business leaders in the north. But little no-
ica. (Oil imports of the five nations totaled
barriers is more than offset by the oppor-
ate a lengthy process in which the larger
ticed has been Mexico's positive influence
some $400 million last year. Pursuant to
tunities of entering the global economy.
Latin American countries will, no doubt,
on the countries south of its border. The
the 1980 Pact of San Jose, importing na-
The views of Samuel Yankelewitz, pres-
take precedence. The new trade arrange-
nations of Central America today seek
tions pay 20% of their bill in local currency
ident of the Costa Rican Chamber of Indus-
ments with Mexico will be much faster and
Mexico's advice and cooperation in their
into their own central banks and use such
less difficult to achieve than bilateral
own transitions to more open economies.
funds in development projects. From now
agreements with the U.S. under the Bush
And one stimulus to such discussions is
on, according to the new Chiapas declara-
initiative.
Gulf of Mexico
Mexico's push for a free-trade zone with
tion, Mexico and Venezuela will apply the
CUBA
Of course, by itself access to larger
Central America.
remaining 80% to finance regional projects
markets does not guarantee expanded ex-
Two weeks ago, Costa Rican President
through the Interamerican Development
ports or sustained economic growth. To
Rafael Angel Calderon went to Mexico-his
Bank. In addition, if international oil
succeed in the new international environ-
prices exceed $27 a barrel, the percentage
Mexico City
BELIZE
ment, local entrepreneurs must be un-
The Americas
kept by each country in local currency will
shackled from oversized state bureaucra-
increase to 30%.
MEXICO
cies, red tape and high taxes. Costa Rica
More important, the presidents also
HONDURAS
and its neighbors have pursued programs
By Jaime Daremblum
committed to create a free-trade zone by
GUATEMALA
the end of 1996, possibly extending to Co-
Tegucigalpa
in conjunction with the International Mone-
tary Fund and the World Bank meant to
lombia and Venezuela. This is to be accom-
Guatemala
San Salvador
/
Managua
balance their governments' accounts. But
second visit this year conclude a wide
plished through a gradual reduction of tar-
EL SALVADOR
little can be achieved in this regard if, at
range of agreements that will eliminate
iffs, accompanied by measures to elimi-
some trade barriers to Costa Rican goods,
nate domestic subsidies and other unfair
NICARAGUA
the same time, taxes are raised to wash
Pacific Ocean
away mounting government expenses and
increase air and land transportation be-
practices. Mexico's tariffs top off at about
San Jose
fiscal deficits.
tween the two countries and encourage
20%, compared with a 40% average top
0
200
COSTA RICA
Mexican firms to invest in Costa Rica. One
Mexico's current revolution goes far be-
rate in Central America, a substantial dif-
major Mexican financial organization-
ference that should cushion the shock of
Miles
yond foreign trade. It involves a wide and
Serfin-already announced plans to open a
competition for protected industries.
unprecedented liberalization of the econ-
bank in San Jose, and a group of promi-
Although trade with Mexico has been
omy. Undoubtedly, it has a long stretch
try, are typical. He expresses concern
nent Mexican executives will come to
ahead, and its economic liberalization still
relatively modest so far, the planned com-
about "Costa Rican producers becoming
Costa Rica in June to define investment
mercial integration holds a huge potential
needs to be coupled with a more deter-
overdependent on Mexican suppliers of
plans. Mr. Calderon also obtained from his
for Central America. Currently, Central
mined commitment to political democracy.
raw materials." However, he anticipates
host promises of support for programs de-
American imports from Mexico consist
that the elimination of barriers is bound to
But the dynamic is right, and it just may
signed to assist industries in becoming
mostly of oil, and exports to that country
stimulate Central American exports, par-
help to pull prospective Central American
more competitive and to cope with de-
are largely foodstuffs and some finished
ticularly agricultural ones, for which there
commercial partners in the direction of
creasing levels of protection.
products. Costa Rica, for instance, last
open markets.
is increasing demand in Mexico. In addi-
President Calderon has not been the
year imported $100 million of goods-half
tion, investment facilities may encourage
only Central American head of state trying
of it oil-and exported to Mexico only $15
Mexican firms to establish operations in
to enhance economic ties with Mexico. In
million worth, a third of which were food-
Central America.
Mr. Daremblum is a Costa Rican busi-
mid-January. Mr. Salinas invited Mr. Cal-
stuffs.
Central American nations would love to
ness lawyer and a columnist for La Nation
deron and the presidents of Guatemala,
As could be expected, the lowering of
expand open export markets beyond Mex-
newspaper.
N.Y.TIMES 02-21-91
Concerns Raised on Mexican Trade
189/53/20
as companies struggled to meet the
will have successful negotiations."
By CLYDE H. FARNSWORTH
low-wage Mexican competition.
A number of other concerns, involv-
Representative Frank J. Guarini,
ing items ranging from steel and beer
Special to The New York Times
Democrat of Jersey City, said Mexico
to fruits and vegetables, were high-
WASHINGTON, Feb. 20 - The
had a "lax track record" in enforce-
lighted as the committee, which has
United States trade representative,
ment of environmental regulations
jurisdiction over trade matters in the
Carla A. Hills, today ran into a fusil-
and that as a result more American
House, held its first hearing on Presi-
lade of hostile questions at a House
companies might move south of the
dent Bush's request for authority to
Ways and Means Committee hearing
border to cut regulatory and other
negotiate a trade agreement with
on a projected free trade agreement
costs.
Mexico.
with Mexico, signaling a tough battle
While expressing their concerns,
North American Trade Zone
ahead in selling an accord to Con-
many of the lawmakers still voiced
gress.
general support for the free trade
The goal is a comprehensive North
The principal concerns were about
idea. As Representative Richard T.
American trade agreement linking
weaker Mexican environmental rules
Schulze, Republican of Pennsylvania,
360 million people who produce $6
put it: "While I have said at this early
trillion of goods and services a year in
and lower Mexican wages that under
stage that I support a U.S.-Mexico
what would become the largest free
free trade conditions, several law-
Free Trade Agreement, I cannot
trade zone in the world. Canada
makers said, might erode standards
stress enough that my support is not
would participate in the negotiations,
in this country.
unconditional."
which could lead to certain modifica-
Representative Donald J. Pease, a
Sam Gibbons, Democrat of Florida,
tions - what officials are calling "en-
Democrat representing an industrial
chairman of the Ways and Means
hancements" - in its two-year-old
area outside of Cleveland, said he
Committee's Trade subcommittee,
free trade agreement with the United
feared the agreement would cause
told Mrs. Hills that despite the an-
States.
factory wages to slide in his district
tagonistic questioning, "I think you
Provided the Bush Administration
gets the authority to negotiate a pact
that would be submitted to Congress
for approval or disapproval without
amendments, the United States would
start talks with Mexico in June and
expects to wind them up by the end of
the year.
Mrs. Hills, who spent nearly four
hours fielding questions at the packed
hearing, said those who do not sup-
port freer exchanges with Mexico
view trade as a "zero sum game" and
did not take into account mutually
reinforced growth that would make
both Mexico and the United States
more prosperous.
'Win-Win Situation'
"Reduced barriers will improve
the efficiency and productivity of U.S.
and Mexican industry and enhance
their competitiveness in international
markets,' she stressed, calling a free
trade agreement a "win-win situa-
tion."
arguments
She strongly disputed assertions
that jobs would be lost or standards
slide in the United States as a result
of a trade agreement.
A number of Government studies,
including ones published by the Labor
Department and the International
Trade Commission, have projected
overall benefits for the economy.
On the question of environmental
standards, she said environmental
issues might needlessly complicate
an agreement about lowering tariffs
and other trade matters, but stressed
that the Administration still "wants
to insure that Mexico does as much as
is humanly possible to protect the en-
vironment."
She pointed to commitments on en-
vironmental improvement made by
President Carlos Salinas de Gortari
of Mexico, including a requirement
that all new cars be equipped with
catalytic converters this year, and
noted that the Environmental Protec-
tion Agency was already assisting the
Mexicans with their environmental
programs.