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Fast Track – Current (9/97) [3]
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Fast Track – Current (9/97) [3]
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Records of the Office of the Special Envoy for the Americas (Clinton Administration)
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FOIA Number: 2017-0401-F
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This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Special Envoy for the Americas
Series/Staff Member:
General Files
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11851
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Folder Title:
Fast Track - Current (9/97) [3]
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S
66
3
9
3
05/16/97
FRI
47
FAX
202
736
7618
SUMMIT OF THE AMERICAS
002
CRP has made growing wheat in America uncompedive.
In 10 of the last 11 years, the United States has had to
import wheat, mainly from Canada, riling U.S. wheat pro-
Shifting land
ducers and creating ill-tempered trade disputes with our
northern neighbor.
BY KENDELL W. KEITH
The undersupplies dra
The economic situation in rural America has changed
The future competitiveness
escalated production
dramatically since the mid-1980s. Except for wheat, U.S.
of U.S. agriculture may well be
livestock and poultry,
farmers are the most competitive grain producers in the
decided in a matter of days.
growth in demand,
world and have become the country's single biggest ex-
At stake is the 10-year fate of
U.S. exports and curte
more than 25 million acres of
duction of corn-based
porters. Stocks are depleted and prices sturdy. There is
U.S. farmland, about 9% of our
for industrial uses, suc
no reason landowners should be receiving government
total cultivated acreage for field
anol.
handouts just for the asking.
crops like wheat, com and soy-
If a similar mistake
CRP is the only unfinished business from last year's
beans.
with the Conservation
overhaul of the 1930s farm subsidies program. Mr. Glick-
One day next week, Secretary
Program, it will las¹
man deserves credit for redirecting the program. He
of Agriculture Dan Glickman
years. And the dama
will render his decision con-
nomic side effects will
should take one step further and begin returning arable
cerning the number of acres to
beyond that.
land into production.
be idled in the Conservation
If productive farml:
Reserve Program. The outcome
lowed to be re-enroll-
will largely determine whether
program, the most d
Retreating on trade
U.S. agriculture will be posi-
impact will be on t
tioned to capture the burgeon-
and meat sectors.
ing growth in world markets.
Already, wheat is
resident Clinton, who has exhorted Americans to
peting very effectivel
P
Last year, the USDA pledged
compete and not retreat" on free trade, seems head-
to create a "new" reserve pro-
other crops for the
ed toward a historic retreat of his own. White House
gram, one focused on enrolling
base because of yield
spokesman Mike McCurry said this week that final passage
truly environmentally sensitive
ease problems.
of "fast track" legislation to give the president trade negoti-
land. Gone, it said, were the
ating authority may have to wait until next year.
days of using the program to
idle productive farmland.
If productive farm
Delaying until 1998 would be a huge mistake. In an
But in January, it issued a fi-
allowed to be re-en
election year, with House Minority Leader Dick Gephardt
nal rule that qualified nearly
trying to retake the House and also kick off his 2000
two-thirds of U.S. cropland.
the program, the
presidential campaign, passing such a controversial bill
So what happened when Ag-
devastating impact ?
will be next to impossible.
riculture conducted the first
the wheat and mea.
Mr. Clinton is being prodded into action by Republi-
sign-up under its "new" Con-
cans who know time is running out for the fast track leg-
servation Reserve Program? Of
the 25.6 million acres offered,
islation. His own advisers tell him to wait until the fall in
18.1 million were already en-
order to get budget legislation and fight over trade rela-
Restoring to produ
rolled in the "old" program.
million wheat acres
tions with China off the agenda. That would mean court-
The USDA's own data show
enrolled in the CO
ing defeat. As his disastrous efforts to pass new authority
that more than 50% of acreage
program would be
in 1994 and 1995 showed, such waiting only allows oppo-
enrolled in the "old" program
step, reversing the
nents of fast track to organize and stall.
is productive farmland that can
trend of declining L
President Clinton's dithering over fast track exemplifies
be cropped using proper con-
exports, which is ca
servation practices. About 25%
his weakness as president. Unwilling to challenge Demo-
shortage of wheat.
of land in the "old" conserva-
The U.S. wheat
crats and unsure of his own priorities, he twists in the
tion program is of such good
would also gain vali
wind and lets historic opportunities pass. In this case,
quality that it would not even
to invest in researc
huge gains for U.S. exporters and workers are being sacri-
require a conservation-compli-
hance wheat output
ficed. Europe now trades more with Latin America than
ance plan to be farmed.
ease resistance.
does the United States, and Japan is gaining ground fast.
Now, the question is wheth-
Conversely, if th
er the USDA will have the po-
States continues to
Cynics in the White House say Republicans are trying
litical fortitude to follow
amounts of product
to lure Mr. Clinton into a debilitating trade fight within
through on its pledge to reform
land, U.S. imports of
his own party. Even if that is so, he should not retreat.
the program by saying no to
continue to increase.
Trade is one of the few areas where Bill Clinton could
bids that represent productive
ports currently a)
make his mark in history. Another free-trader who made
farmland.
about 6% of domesti
that mark, John F. Kennedy, is said to be a model for Mr.
The enormity of this pending
Hopefully, we W(
Clinton. In 1962, JFK exhorted a crowd of 100,000 in New
decision dwarfs the ill-fated
the situation we nov
Orleans to embrace trade and resist the temptation to
USDA decision in 1995 that
oats, in which 40% (
idled 7.5% of U.S. corn acreage.
use is supplied with
"pull back from the world." Thirty-five years later, his
That decision, coupled with ad-
Further, if meat
warning should be heeded by Bill Clinton: The United
verse weather, caused acute
exports are to con
States must either trade, or fade."
shortages of U.S. feed grains.
current double-dig
/16/97 FRI 18:46 FAX 202 736 7618
SUMMIT OF THE AMERICAS
001
THEJOURNALO COMMERCE
WORLD TRADE
Continued from Page 1A
Slow going
ILO
White House again delays
In a biting aside, he
Americans who want the
action on fast-track
authority
to link free trade and
rights "are still dreaming.'
Those dreams, howeve
at the heart of a disagre
Democrats on the House
control of the House.
President eyeing
that has split the Clinto
Ways and Means Committee at-
But there are signs that
ministration down the r
September push
tacked the proposal immediate-
some progress on building sup-
as it seeks to win congres
ly, and administration officials
port for "fast track" authority
support for new trade ne{
condemned the move as parti-
could continue in the interim.
ing authority to expan
BY JOHN MAGGS
san and unproductive.
For one, Mr. McCurry's com-
North American Free
OURNAL OF COMMERCE STAFF
Meanwhile, Treasury Secre-
ments on postponing fast track
Agreement to Chile.
tary Robert Rubin said on
publicly linked the fight for
WASHINGTON The Clinton
Thursday that President Clinton
trade authority to next March's
Pressure on administrat
administration has again put off
faced an uphill battle to win
meeting of Western hemisphere
action on securing new trade ne-
new trade negotiating authority
leaders in Chile.
Largely due to pressure
gotiating authority from Congress,
from Congress and the odds
While a similar link had
the AFL-CIO and Rep. Ge₁
but there are hints of progress
were running against him.
been made in the past between
the administration has be
despite this latest setback
Mr. Rubin told an invest-
fast track and Mr. Clinton's
luctant to introduce that
President Clinton is suppos-
ment group that although the
tour of Latin America this
tion in Congress. Tha
edly considering two options
administration was trying to
spring, the McCurry comments
drawn criticism from R
from his Cabinet: Act now on
work with lawmakers to win
provide a clear target.
cans, who threatened this
the trade bill or let it slide until
support for so-called fast track
Second, the Senate is finally
to introduce their own bi
September.
legislation, it "is going to be
showing signs of leadership on
On the global front, th
But White House spokesman
very difficult and the odds
the issue after letting the House
demands to include a
Mike McCurry said Wednesday
clearly are not in our favor."
drive the process.
rights clause in the WI
that the president would not
The three-month delay in
Jolted to life by Senate Com-
December caused dee₁
act until after Congress' August
seeking fast track rights further
merce Committee Chairman
with developing countr
recess. He said a struggle on
lengthens the odds that Presi-
John McCain, R-Ariz., who
Asia and Africa, who view
trade authority could "overload
dent Clinton will obtain authori-
would like to take over respon-
U.S. strategy as an a
the circuits" when the presi-
ty to cut tariffs and expand free
sibility for trade matters, Fi-
power play and a thin
dent is also pushing Congress
trade to Latin America.
nance Committee Chairman Bill
guised form of protectio:
to finalize the budget deal and
Most Democrats oppose this
Roth, R-Del., has finally
Over the next yea
renew normal trade treatment
idea, and a divisive fight lies
planned a hearing on new
members states and its
for China.
ahead on the role of labor and
trade authority in early June.
ing body will seek to b
This statement was prompt-
environmental provisions in fu-
Even if Sen. Roth does no
international consensus
ed by House Republicans, who
ture trade accords. It is widely
more than this, Sen. McCain al-
force seven core ILO
tried to push the White House
believed that final passage of
ready has announced plans to
standards through a sys
to act this week by putting for-
the bill will be even harder in
work with Sen. Bob Graham,
monitoring, product lab
ward their own proposal for
1998, when Democrats and Re-
D-Fla., to put forward a trade-
political pressure rathe
trade authority.
publicans will be fighting over
authority bill.
trade sanctions.
In his interview, Mr. H
described the ILO's appr
OPTIONAL FORM 99 (7-90)
a delicate compromise.
FAX TRANSMITTAL
# of pages
2
moral sanctions have
of waiting,
uscful for enforcing labo
To
mack
From
Eren
ards because compani
countries "operating in
on Iraq trade
Dept./Agency
Phone
context need more than
Fax #
fyr
Fax #
have a good image."
the
At the conference, Se
Mr. Erkovan said. "But rather
NSN 7540-01-317-7368
5099-101
GENERAL SERVICES ADMINISTRATION
iel Patrick Moynihan,
than wasting time and losing
:ee-
former chairman of the
more money, I decided to find
trade area, anu secondly, recog-
Finance Committee,
an alternate route."
NEW DELHI Leaders of a
nition of the need to encourage
that the ILO's role in
seven-nation South Asian
political consultation among
On the black market, Mr. Er-
members.
ing the labor issue CI
kovan and other Turkish trad-
group, pledging to hasten the
solve "the crisis in U.S.
ers in the same position are
creation of a free-trade area,
When Saarc was formed in
tional trade policy" ca
paying Jordanian merchants for
are asking developed countries
1985, the objective was to con-
the rift over labor right
licenses they received from the
to cut tariff and non-tariff bar-
centrate on economic coopera-
By introducing "labc
United Nations months ago.
riers and stop restrictive trade
tion.
ards to trade agreeme
practices.
way acceptable
did
allow
05/16/97 FRI 08:25 FAX 202 736 7618
SUMMIT OF THE AMERICAS
4001
1 justification for the possible
advertises northern Chinese prostitutes
Democrats urge two well-regarded
network S amans.
nonstrations and the registra-
"recommended by Fat Dragon" (false ad-
governors - Colorado's Romer and Geor-
react to a slew of high-leve
oups. (Article on Page A14)
vertising, the columnist says).
gia's Miller - to challenge GOP Senate
departures at the network. An
incumbents.
harnessing the talent and er
Success has made him brash enough to
r prosecutors will seek the
two organizations, Disney ar
tackle political themes in a city that is, for
against Theodore Kaczynski,
TOE DIPPING? Former Clinton political
cials are still haggling over
the moment anyway, obsessed with poli-
rials in California and New
adviser Dick Morris may be turning his
question of who the network
tics. He regularly lambastes the Chinese
suspected of killing three and
Communist Party and ridicules Hong Kong
sights to presidential candidates abroad. He
should be: the hip, young ,
ith mail bombs. Attorney Gen-
talks with Venezuelan presidential candi-
have been corralled by NBC
politicians for cozying up to Beijing. Under
leared the move, saying his
the recent headline, "Sex Industry More
date Lewis Perez about signing on to his
ABC's more traditional, main
ed premeditation in two cases.
Prosperous Post-1997," Fat Dragon
campaign. But a contract seems unlikely at
ily audience.
the moment.
"So far, I think this synerg
taunted the overlords who will soon take
huttle was launched on a mis-
over his beloved anything-goes district.
says William Ryan, owner 0
r a new oxygen generator and a
"You may try to clean it up, but I will have
GEPHARDT MULLS a competing tax-
ates in Miami and San Antoni
astronaut to the Russian Mir
fun anyway." he wrote.
cut bill for the balanced-budget plan, focus-
In other parts of its empire
1. It is to dock late tonight for a
ing "on the people who need it." The House
seemingly made synergy wor
In another column, he suggested that
1. The two cosmonauts and one
Democratic leader would target tax breaks
ter created in an animated m
I the 11-year-old Mir have relied
Hong Kong police will be for sale after
to middle-income Americans and forgo a
Aladdin can generate hundred
Britain hands back the colony on June 30
oxygen system since March.
broad-based capital-gains cut. But Demo-
of dollars as it spins through
because, he says. China's police are easily
crats on the tax-writing Ways and Means
consumer products and them
bribed. "One country, two systems. who
Archbishop Tutu said he found it
panel are leery.
such synergy is really just the
believes that?" he asked, referring to
eve former South African Presi-
of one idea in several channel
erk's testimony that he was
Deng Xiaoping's famous formula for pre-
HELP WANTED: White House econo-
tion. What Disney has passe
murder and torture by his
serving Hong Kong's way of life after
mist Alicia Munnell quits, opening a spot on
ergy at ABC is more like cros
its return to Chinese rule.
egime's security forces. Tutu, in
the three-member Council of Economic Ad-
it has yet to come up with ar
al statement, said de Klerk's
'It's Quite an Achievement'
visers. Munnell, who did a stint at the
new ideas or programming
in
made his apology meaningless.
The irreverent ton
Clinton's
work
OPTIONAL FORM 99 (7-90)
*
Dragon a celebrity. A
y's promotional atte
tice Department is weighing an
columns. called the Fat
FAX TRANSMITTAL
# of pages
en forced and gimn
ruling by a U.S. judge in Florida
is in its second printil
To
Mack
Gree
yers from Disney's M
From
d deportation of 14,000 Nicara-
weekly magazine based
Hockey League tea
er the new immigration law. The
70,000 copies each issi
S "Boy Meets World
Dept./Agency
Phone
the Nicaraguans, many of whom
achievement in my life,
idea was to plug the 1
the U.S.-backed contra war of the
phone. He says he is nei
Fax #
friend with two product
NSN 7540 fyi -7368
Fax #
WSJ 5/16
es a ratings boost.
be sent home without hearings.
players aren't well-
want to make Fat Drago
5099-101
GENERAL SERVICES ADMINISTRATION
ne Gretzky who can (
of an African food crop increased
his smuggling activities
by Meets World," a
ub-Saharan nations following the
also helped produce a pornographic mavie
as hardly a publicity
on of a South American insect that
that will be available on video compact
CLINTON PONDERS how fast to move
for the Anaheim, Calif., team
ests that damage cassava plants,
disk soon.
on 'fast-track' trade legislation.
what benefit Disney or ABC
said. Cassava is a staple for many
For such a busy man, Fat Dragon is
Trade Representative Barshefsky and
Disney's idea of setting a f
id's poor. (Article on Page A14)
surprisingly invisible. "Many people/want
Staff Chief Bowles send Clinton a decision
night TV movie in the Tow
to find me out," he says in moding,
memo on Wednesday. The options: send a
thrill ride at Walt Disney W
S. will apologize today for the
halting English during a three-hour ate-
bill in June or September for fast-track,
Still, there is some evide
nt's Tuskegee syphilis study, in
night phone conversation. The police, who
which lets the president expand Nafta and
ney's other operations bene
black men from Alabama were left
read him religiously, say they wouldlove
negotiate future trade deals. Barshefsky,
association with ABC. Thou:
from 1932 to 1972 to see how the
to catch him and put him away.
and Treasury's Rubin and Summers push
dpera fans flocked to Disney
rogressed. Four survivors, ages 91
So far, it seems no one but his editors
for June in order to move ahead quickly on
in Orlando, Fla., last fall to
due at a White House ceremony.
Please Turn to Page A9, Column
global initiatives.
such ABC shows as "All My
But Clinton adviser Gene Sperling frets
One Life to Live." And Dis
that moving on fast track now will make It
ESPN-themed restaurant
AY'S CONTENTS
harder to win renewal of favored-nation
that has become a big draw
TO BUSINESSES APPEARS ON PAGE B2
trade status for China. Gore also resists
resort property.
pushing fast track; the trade policy could
BAD PRESCRIPTION:
POLITICS & POLICY: Effect of weifare
make him vulnerable to attacks from Nafta
Scrambling for New Slat
UR
Seniors on Medicare
overhaul on largest states, A20.
foe Gephardt, a potential presidential rival
But for ABC, all the cros
the world can't help if the
can be left with huge
in 2000.
NEY
INTERNATIONAL: U.S. decides not to
"Clinton is being held hostage to
isn't good, something the ne
bills when certain
press Mexico on radar system, A14.
Gore," one official fumes. "I thought the
cally trying to fix. ABC
TERS
drugs aren't covered
second term was when you were sup-
President Jamie Tarses 1
REVIEW & OUTLOOK: U.S. deals with
by an HMO's drug
Moscow deserve scrutiny, A18.
posed to govern.
unveil her fall schedule, un
REPORT
plan. Page C1.
scrutiny and persistent run
OPINION: How to keep the regulatory
MINOR MEMOS: The Gore years? Sen.
is already in jeopardy at
ON THE STREET: Study shows
branch in check, A18.
McCain says Clintonites consider spending
year on the job. Favoring 1
Drs make wrong moves, C2.
LEISURE & ARTS: Joe Morgenstern
increases after the year 2000 as the "let-Al-
she will replace aging favor
do-it budget.
Not boring: Newly en-
anne" and "Coach" W
NG: Customers resist the
on 'Night Falls on Manhattan,' A16.
gaged Gore daughter, Karenna, wears such
unnamed slate of newcom
; of staffed branches, B1.
a big engagement ring that some friends
ABC executives will CO
20518>
who had lunch with her simply say they
ing their fall schedule OVE
OME FRONT: Sellers of show
lunched
with
"the
Rock.
Ex-Texas Rep.
Shows currently expected
; do well, and good, B8.
Charles Wilson, now a Washington lobbyist,
include "Cracker," a dete
S: The Daily Racing Form
calls himself "a FIP former important per-
ported from Britain; "The
78908
son."
version of the Robert Alti
or a new owner (again). B7.
0.
63140
4
RONALD G. SHAFER
Please Turn to Page A
05/15/97 THU 11:53 FAX 202 736 7618
SUMMIT OF THE AMERICAS
001
OnStore-BrandSales
Qtr. to May 3
1997
1996
%Ch
For periods shown. In parenthesis,
operatt
the first one to five letters before the
Sales
3,409,091,000
3,300,665,000
+3.3
Result:
By Bloomberg News
comma are the company's stock tick-
forma I
Net Inc.
24,059,000
b37,946,000
er symbol. N after the comms Indi-
tems W
Federated Department Stores Inc.
Sh. earn
.12
(.18)
cates stock Is listed on the Hew York
Stock Exchange, A the American
merger
reported robust first-quarter earn-
Sh.
out.
208,235,000
206,710,000
Stock Exchange, NNM Nasdaq Na-
Corpor
Interna
Ings yesterday, helped by higher
b-Net loss
tional Market System. NSC Nasdaq
Small Capitalization and ECM
Revenue
sales of store-brand clothing and low-
(Loss)
Emerging Company Marketplace.
Federated Department Stores said that its
Great
er expenses.
year-ago net operating income was $9.3 mil-
American Israell Paper Mills
1st qtr "
The company, which operates
lion, or 4 cents a share, excluding inventory
Ltd.(AIP,A)
Revenue
Macy's, Bloomingdale's and other
valuation adjustments and business integration
1st qtr to Mar 31
1997
1996
Net Inc
30-year
Sales
87,800,000
90,000,000
Share ea
7.55%
department store chains, earned
and consolidation expenses related primarily
Net Inc
3,700,000
4,100,000
b-Incluc
the integration of Broadway Stores.
Share earns
98
1.08
20 cents
$24.1 million, or 12 cents a share,
The results are for the first quarter.
Shares outst
3,700,000
4,100,000
compan
Brascan
compared with a loss of $37.9 million
American Re Corp.
Great L
or 18 cents a share, in the quarter a
Yesterday's closing price:
$38.75
1st gtr to Mar 31
1997
1996
Toronto
year earlier.
Revenue
536,800,000
488,600,000
ticker $1
$2
Net Inc
629,900,000
b49,100,000
Results
In the 1996 quarter, Federated
b-Included net realized capital losses
of $1.2 million for the latest quarter
GS Tec
took a pretax charge of $77 million
and net realized capital gains of $1.3
1st qir to
for integrating the Broadway retail
ing how It distributes merchandise
million for the year-ago period.
Sales
Nei loss
chain into its operations and adjust-
and orders inventory; the changes
Atmos Energy Corp.(ATO,N)
b-Includ
ing inventory. Before the charge,
reduced sales, general and adminis-
2nd gtr to Mar 31
1997
1996
operatio
15-year
Revenue
199,847,000
191,104,000
flected
OPTIONAL FORM 99 (7-90)
t of
Nel Inc
614,511,000
18,383,000
West Co.
7.18%
Share earns
90
1.15
arli-
Shares outst
16,140,000
15,927,000
c-Net Inc
FAX TRANSMITTAL
2
from d.
b-Included an after-tax charge of $2.8
are # of pages
$44,000 at
million, or 17 cents a share, on one-
Mack
ay 3
change in
To
From
time payments made in satisfaction
of certain contractual benefits to two
and supp
rom
former executives.
Hallwo
Phone #
a at
Dept./Agency
Berkshire Hathaway
1st gtr to
me-
Inc.(BRK.A,N)
Revenue
The New York Times
Net inc
Fax #
Fax #
per-
1st gir to Mar 31
1997
1996
NYT
Share ear
ent
Net Inc
284,400,000
1,668,700,000
Shares our
Share earns
231.00
1,398.00
NSN 7540-01-317-7368
5099-101
GENERAL SERVICES ADMINISTRATION
Shares outst
1,232,245
1,193,512
b-Include
from the
Borkshire Hathaway reported Invest
Key Rates
vestment
ment gains of $21.3 million for the
company
Previous
Year
latest quarter and $1,508,500,000 for
partially
n percent
Yesterday
Day
Ago
the year-ago period.
fax char
The company sold It had earnings
current 1.
PRIME RATE
8.50
8.50
8.25
Clinton Now Sees Nafta Extension in '98
from operations of $263.1 million, or
$214 a share, for the latest quarter,
Healths
DISCOUNT RATE
5.00
5.00
5.00
compared with $160.2 million, or $134
1st atr to
FEDERAL FUNDS*
5.44
5.42
5.47
a share, for the year-age period.
By Bloomberg News
Revenue
Mr. Clinton has identified as his
Net Inc
I-MO. TREAS. BILLS
5.01
5.05
4.99
WASHINGTON, May 14 -
Borders Group (BGP,N)
top priority - the President
Share ear
3-MO. TREAS. BILLS
5.28
5.31
5.09
1st qtr to Apr 27
1997
1996
Shares ou
President Clinton does not expect
hopes to get fast-track authority
Sales
463,600,000
404,000,000
b-Include
10-YR. TREAS. INFL."
3.57
3.58
N.A.
Net Inc
400,000
b3,400,000
Congress to grant him the negoti-
approved "before he goes to San-
related 1.
Share earns
(.04)
10-YR. TREAS. NOTES
6.66
6.71
6.63
announce
ating authority to expand the
tiago, Chile, for the second Sum-
Shares outst
81,868,000
81,834,000
Corp.
10-YR. TREAS. BONDS
6.88
6.92
6.83
b-Net loss
North American Free Trade
Share ea
mit of the Americas" early in
TELEPHONE BONDS
7.95
8.03
7.97
The year-ago period ended April 28.
Ing for "
Agreement to Chile and other
5.98
1998, Mr. McCurry said.
(Loss)
a preferr
MUNICIPAL BONDS***
5.79
5.82
Latin American countries until
Representative Bill Archer, Re-
Estimated daily average, Dow Jones Markets
Carson Pirie Scott & Co.
Hughes
*Reatized dollar amount rises with inflation
next year. his press secretary
publican of Texas and chairman
(CRP.N)
1st qtr to
**Municipal Bond Index, The Bond Buyer
said today.
1997
1996
Sales
of the House Ways and Means
1st afr to May 3
Net Inc
Sources: Salomon Brothers and Dow Jones Markets
Sales
258,134,000
236,769,000
"We are frying a lot of fish
c9,686,000
Share ear
Committee, in a statement follow-
Net Inc
b2,609,000
or Treasury's beltwether bonds, notes and bills
Share earns
58
Shares ou
16
right now and the kettle is only so
ing Mr. McCurry's remarks,
Results 1
b-Included . charge of $400,000, or 2
been adj
big," the White House spokes-
urged the President to "reverse
cents a share, on costs associated
with addressing the year-2000 prob-
poolings
man, Michael D. McCurry, told
this decision to delay." Mr. Arch-
tem and . gain of $100,000 on the sale
week, and one of the main questions
Interna
reporters when asked why efforts
er had sought to get fast-track
of Investment. The gain did not have
an effect on share earnings. Exclud-
Entert
n the bond-market has been whether
to renew the President's fast-
authority renewed quickly, but
ing one-time items, net Income was
1st qtr to
t will raise rates again.
$2.9 million, or 18 cents a share.
Revenue
track trade negotiating authority,
key Democrats earlier this week
e-After a gain of $9 million, of 53
Net inc
Though the Fed has made It clear
which limits Congress to accept-
rejected a compromise bill that
cents a share, on sale of Proffitt's
Share ear
Inc. stock; a charge of $1.5 million, or
Shares or
Hat the main concern in setting.'
ing or rejecting broad trade
included only trade-related labor
9 cents a share, on a charitable con-
Revenue
nonetary policy is the pace of de-
agreeents, appeared to be stalled.
and environment clauses.
tribution; and $200,000. or 1 cent a
share, on write-off of loan fees. Ex-
Interns
nand growth, not necessarily actual
"Realistically, we would have
Mr. Archer said a delay would
cluding one-time Items, net Income
Inc.
vidence of inflation, the new num-
was $2.4 million, or 15 cents a share.
to take a look at the Congression-
mean that "many trade opportu-
1st atr to
ers must have given the central
nitics, amounting to billions of
Canadian Occidental
Sales
al calendar," Mr. McCurry said.
Net Inc
ank pause, Mr. McCarthy said.
Petroleum Ltd.(CXY,A)
In light of the debate over a bal-
dollars and thousands of Ameri-
1st qtr to Mar 31
1997
1996 Intimal
The net result is an economic envi-
anced Federal budget - which
can jobs, will be lost."
Sales
363,000,000
319,000,000
1st atr TO
onment that certainly does not war-
Net Inc
73,000,000
50,000.000
Sales
Share earns
53
37
Net Inc
ant further increases in interest
Results are In Canadian dollars.
Share ear
ates," he said, "and we expect the
Shares a
Canadian Utilities Ltd.
ed to refrain from raising rates in
Foreign Sales Vital to French Auto Makers
4st qtr to Mar 31
1997
1996
Leon's
lay and indeed through the rest of
Revenue-
644,300,000
563,000,000
1st gir to
Net Inc
65,300,000
b66,400,000
Sales
te year."
Share earns
1.02
1.04
Net Inc
By Bloomberg News
In yesterday's huge corporate of-
Peugeot's sales rose six-tenths of a
b-Included a gain of $1.5 million, or 2
Share ea
PARIS, May 14 - France's car
percent, to 43.51 billion francs ($7.61
cents a share from the sale of AT-
The com
:ring. Norfolk Southern sold debt in
COR, and a gain of $5.2 million, or 8
quarter,
ght levels, ranging from $400 mil-
makers posted higher sales in the
billion), with a 19 percent rise in
cents a share, as a result of colder
erations
weather.
pared A
on of three-year notes, at a price to
first quarter as growth from foreign
sales outside France offsetting a 30
Canadian Utilities is listed on the
period.
eld 6.75 percent, to $350 million of
activities offset a slumping domestic
percent domestic dive. The compa-
Toronto Stock Exchange with the
Leon's I
ticker symbol CU.
rento St
0-year bonds, priced to yield 7.911
market.
ny's unit sales in Western Europe
Results are in Canadian dollars.
bol LNF
ercent. The three-year yield is
PSA Peugeot Citroën S.A., the
excluding France rose 16 percent
Results
Clark USA Inc.
out 36-hundredths of a percentage
country's largest car maker, said
and rose 34 percent in the rest of the
1st gfr to Mar 31
1997
1996
MacD
int higher than that of a compara-
today that worldwide sales rose six-
world.
Revenue
999,200,000
1,140,200,000
Inc,(M
Net loss
47,400,000
24,400,000
e Treasury. The 100-year yield is
tenths of 1 percent while Renault
Renault said "gains in Western
Qtr to M
Clark USA said special Items re-
Sales
out 97-hundredths higher than a
S.A., the No. 2, said global sales
European sales outside France were
duced prelax earnings by $47 million
Net inc
in the latest quarter, while the year-
-year Treasury. Those higher
jumped 3 percent. The sales reports
slightly higher than expected."
Share et
ago first quarter included a pretax
Shares 0
elds were one reason the corporate
came as European Union figures
Renault's 47.20 billion francs of
gain of $9.3 million.
Yr sales
Net INC
sue siphoned off some of the
showed French car registrations
sales reflected a 23 percent plunge in
Donaldson Co.(DCI,N)
Share ed
rength of the rally in Treasuries.'
were the only ones in Western Eu-
domestic sales and a rise of 5 percent
3rd afr to Apr 30
1997
1996
Shares 0
Sales
213.876.000
IRI
05/15/97 THU 11:55 FAX 202 736 7618
SUMMIT OF THE AMERICAS
002
Washington Post Staff Writer
istration] regulations on the part of 1
industry, business in, general a
The House Judiciary Committee yesterday
groups across the spectrum," Goo
approved by voice vote a bill that would loosen
He predicted that support for hi
the government's control of one of the most
continue to grow as people under
arcane yet crucial technologies of the informa-
important encryption is to so many 1
tion age-"encryption" technology, or the
means for scrambling information to keep it
Also yesterday, a group called
private.
Democratic Coalition, led by Reps.
In approving the bill, introduced by Rep.
Dooley (D-Calif.), James P. Moran
Robert W. Goodlatte (R-Va.), the House took a
and Timothy J. Roemer (D-Ind.), ser
step toward a showdown with the administra-
Clinton signed by 43 members of 1
tion, which has worked hard since the start of
calling for the administration to lift
President Clinton's first term to check the
restrictions on encryption technolog
spread of sophisticated encryption technology.
See ENCRYPTION, E5, Col.
DIGEST
Washington
to start drafting a bill today were
scrapped, but Rep. Philip M. Crane
DOW
(R-IIL), chairman of the House trade
7286.16
subcommittee, said that unless bill
post
UP 11.95
writing starts by May 22, no
legislation is likely to pass before
DETAILS ON
next year's congressional election
PAGE 2
campaign begins.
Amazon.com Inc. bumped up the
size and price of its Initial public
BONDS
offering, a sign of healthy demand
30-YEAR TREASURIES
for shares in the Internet book
6.88% YIELD
seller. The Seattle-based company
-0.04
plans to sell 3 million common
shares at $14 to $16 each, according
DOLLAR
to a regulatory filing. Amazon.com
vs. JAPANESE YEN (N.Y.)
initially planned to sell 2.5 million
117.20 YEN
shares for $12 to $14 each.
- 1.30 YEN
Striking workers at General Motors'
electrical components plants in
Warren, Ohio, began to resume
President Clinton is considering
production following a tentative
two dates, June and September, for
contract deal that provides them
introducing a "fast track" bill
with improved job security. The
authorizing new trade negotiations,
agreement ended a daylong strike
Clinton administration officials said.
by 8,200 members of the
Plans by congressional Republicans
See DIGEST, E2, Col. 2
Rudolph A. Pyatt Jr. on black-owned firms' future.
Page E3
Union official criticizes US Airways' downsizing.
Page E5
MACK- FXI - Per
Nelson. P.
Date: 05/15/97 Time: 10:42
CWhite House to push ahead for fast-track authority in trade talks
WASHINGTON (AP) After a key congressman accused President
Clinton of backpedaling, the White House today reaffirmed its
commitment to push Congress this year for authority to negotiate a
hemisphere-wide free trade agreement.
'We've always said we will try to get it this year, it's just
not clear when we're going to try to get it, White House
spokesman Mike McCurry said today.
A day earlier, McCurry had indicated that Clinton wants the
''fast-track'' authority in place before he goes to Chile next
spring for the second Summit of the Americas. That remark prompted
Rep. Bill Archer, R-Texas, chairman of the House Ways and Means
Committee, to accuse the administration of backpedaling on its
timetable.
'`Many trade opportunities amounting to billions of dollars and
thousands of American jobs will be lost because the administration
has failed to pursue this vital legislation,' Archer said.
McCurry said today that his comments on Chile had been
misinterpreted, and that fast-track trade negotiations had to be in
place well before that 1998 summit.
'`In order to have that happen the president needs fast-track
authority and we're going to seek and hopefully obtain it this
year, he said.
Clinton has pledged to ask Congress for "'fast-track'' authority
to negotiate trade agreements under expedited procedures that
require Congress to accept or reject them without amendments.
Asked on Wednesday why the administration was not pursing the
legislation right now, McCurry said, 'Because we are frying a lot
of fish right now and the kettle is only so big.
APNP-05-15-97 1056EDT
agenda. 72
Page 1
NEC Principals Meeting
July 1, 1997
Agenda
I.
Tobacco Settlement
CBI
Carbron Aln Bin
RNSEL
II.
Race Initiative
Textle s Arpance 155ue
III.
Climate Change
Have NOT Gone to grips
Brd report
w our strategy
11
IV.
New Ideas
Newor
Srude's Cummers repat M d info
Trade
XIX
DAMASINS
V.
Discuss W Neeson
NAFTA Report
panis Are stin Beids written ??
Fast Track
NANCY CAned Hiu Chamr
Africa
No are pushed Bad ov
VI.
Updates
The dnte
Budget and Tax
Section 108 report
Products Liability Reform
Trade Agreements
Give Sperliss Covt cAn
7
or Suiden
Uyk mutivss
to mmori to get
PUT section 108 Li Inst
trives Stranted
Truch
WAST until Sept
Al / AM some of
DN these put together in the
The groundwal
House
Bob hyle to Chan
or policy Al
Outrench to Business community
communication
~~~~~~~~~~~~~~~~~~~~~~~~~
Cojtours Are B.G developed W 3
L
policy Strikment
That yr A.J5 meetivs
Sandy B Mecirs Jure 25197
Devive
/
Corgrats or Chivi man
/
has Lehitin / Cuba
2
Trade Agerd / SUA vision
/
Lesacy
2
LAme - jobs
3
NAFTA review
4
7nst Truel
3
LAme trips / Chile JOA- -
3
ons -
I
Start from where you are
2
PAT
3
David Johnson
4 Rotrooff.
4
other
5
Indi updnt
/
THE WHITE HOUSE
Dous -
-
I have AV Idea We Need to
discuss. today re: you. CAr we get
I
together A fta to 8. 15 im ?
your older tried
sid supporter-
was
0202 000 4000
USIR CUNG APPRO
8001 008
j
Steve
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
2
Dan
OFFICE OF CONGRESSIONAL AFFAIRS
600 17TH STREET, N.W.
3
Andrew
WASHINGTON, DC 20508
4
Fric
DATE June 27, 1997
}
Mack
NUMBER OF PAGES EXCLUDING COVER: 6
AGENCY
PHONE#
FAX#
Michael Claussen
State
647-1050
647-2762
Nelson Cunningham
X5126967575 X62464
Mike Williams
X66493
X66468 62604
Todd MENOTHI
Commerce
482-3372
482-4420
PROM:
Liz Arky
Assistant U.S. Trade Representative
NNONE:
(202) 395-6951
FAX:
(202)395-4656
RUSCT
Congressional Rollaut of NAFTA Report list
TYMENTS: IN preparation for today's conference CAll At 2:45pm.
Q202 395 +630
USTR CONG AFPRS
1
004/009
CONGRESSIONAL ROLL-OUT OF NAFTA REPORT
To keeping with the overall press strategy, the goal of our Hill strategy should be to present a low-
key positive message about the NAFTA in the context of overall trade policy Members who are
ONE advocates on trade policy in general, and specifically fast track. will need to be armed with
positive arguments. While we do not want to link NAFTA with fast track, our opponents will and
therefore our advocates need to be able to respond to the charges that NAFTA is a failure.
Members who have been willing to "keep their powder dry" will also need positive reinforcement,
particularly with sectoral-specific and state-specific information (where possible). This strategy
assumes release of the report on July 1st (or at least before the 4th, during the Congressional
recess).
Pre-Announcement
Provide Members willing to be validators with Executive Summary and sectoral specific
information. Preliminary list includes:
House:
Crane - Chicago
Matsui - Sacramento
Dooley Fresno/Bakersfield
Kolbe - Tucson
Dreier - Claremont
Ortiz- Corpus Christi
Senate:
Roth - Wilmington
McCain - Phoenix
Breaux - New Orleans
Lugar - Indianapolis
Harkin - Des Moines
Grassley - Des Moines
Chafee - Rhode Island
0
Ask these Members to issue press statements and/or do talk radio in their districts (where
they will be during recess).
Matsui's office has offered to do a Dear Colleague prior to recess to send around the Wall
Street Journal article
Announcement
Provide Executive Summary, Presidential transmittal letter and press release to every
Congressional office by faxpop. Only 200 copies of full report will be available on date of
transmission, to be sent to attached list (since Bonior and several colleagues made a
COIR APPRO
0005
document request, these Members will be among the first 200 to get the full report). Once
GPO printing is complete, every office will receive a copy.
C
Send targetted sector-specific transmittal letters to "keep your powder dry" Members.
Post-Announcement
Congressional staff briefings for: Ways and Means, Finance, House and Senate
Commerce, House International Relations, Senate Foreign Relations, House and Senate
Agriculture. leadership. New Democrats
Member briefing for House Fast Track whip group
Congressional hearings: Ways and Means Trade Subcommittee (July 15th?); Senate
Commerce (week of July 8th, however, may just invite private sector); House
International Trade Subcommittee (date needs to be changed from July 9th)
Coordinate Dear Colleagues on pro-NAFTA articles
Coordinate letters from Browner, Babbitt and Herman regarding labor and environment to
"keep your powder dry" group
14:00
202 395 4000
USTR CONG AFFRS
4.
006/009
First 200 Copies of NAFTA Report
House Advocates
Rep. Matsui
Rep. Eshoo
Rep. Dooley
Rep. Ortiz
Rep. Stenholm
Rep. Tauscher
Rep. Jim Davis
Rep. McCarthy
Rep. Jim Moran
Rep. Dicks
Rep. Archer
Rep. Crane
Rep. Kolbe
Rep. Dreier
Rep. Manzullo
Rep. Bereuter
House Keep Powder Dry
Rep. Rangel
Rep. Kennelly
Rep. Cardin
Rep. Levin
Rep. Jefferson
Rep. McNulty
Rep. Neal
Rep. Thurman
Rep. Becerra
Rep. McDermott
Rep. Lewis
Rep. Fazio
Rep. Sawyer
Rep. Frost
Rep. Chet Edwards
Rep. Dingell
Rep. Harman
Rep. Visclosky
Rep. Johnson
Rep. Snyder
Rep. Stabenow
Rep. Clement
Rep. Luther
USTR CONG AFFRS
007/009
Rep. Price
Rep Sanchez
Rep. Pomeroy
Rep. Serrano
Rep. Boswell
Rep. Kind
Rep. Berry
Rep. John
Rep. Roemer
Rep. Tanner
Rep. Lowey
Other House Offices with NAFTA Interest
Rep. Gephardt
Rep. Bonior (sent letter requesting documents relating to report)
Rep. Kaptur (Benior letter)
Rep. Brown, Sherrod (Bonior letter)
Rep. Klink (Bonior letter)
Rep Meek (Bonior letter)
Rep Hinchey (Bonior letter)
Rep. Sanders (Bonior letter)
Rep. Miller (Bonior letter)
Rep. DeLauro (Bonior letter)
Rep. DeFazio (Bonior letter)
Rep. Kucinich (Bonior letter)
Rep. Obey (Bonior letter)
Rep Mink (Bonior letter)
Rep Pascarell (Bonior letter)
Rep. Stupak (Bonior letter)
Rep. Waters
Rep. Armey
Rep. Cox
Rep. Boehner
Rep. DeLay
Rep. Upton
Rep. Young
Rep. Morella
Rep. Hastert
Rep. Barrett
Rep. Ewing
-Rep. Gilchrest
Rep. Boehlert
Rep. Campbell
06/27/97
14:06
202 395 4656
USTR CONG AFFRS
008/009
Senate Advocates
Sen. Roth
Sen. McCain
Sen. Grassley
Sen. Lugar
Sec. Breaux
Sen. Harkin
Sen. Chafee
Sen. Gramm
Sen. Hatch
Senate Keep Powder Dry
Sen. Baucus
Sen. Brownback
Sen. Bryan
Sen Cochran
Sen. Collins
Sen. Craig
Sen. Daschie
Sen. Dodd
Sen. Domenici
Sen. Durbin
Sen. Feinstein
Sen. Graham
Sen Gregg
Sen. Hutchison, Kay
Sen. Jeffords
Sen. Kennedy
Sen. Kerrey
Sen. Kerry
Sen. Kyl
Sen Landrieu
Sen. Leahy
Sen. Lieberman
Sen. Lott
Sen. Mack
Sen. Moseley-Braun
Sen. Murkowski
Sen. Murray
Sen. Nickles
Sen. Robb
Sen. Roberts
Sen. Rockefeller
Sen Thomas
Sen. Torricelli
USIR
Arriko
See Wyden
The Big 8 Trade Staff (3 Copies)
Bride Wilson, House Ways and Means Committee, Democratic Staff
Theima Askey, House Ways and Means Committee
Deboie Lamb, Senate Finance Committee, Democratic Staff
Brik Autor, Senate Finance Committee, Democatic Staff
Milks Wessel, Office of Minority Leader
Gardner Peckham, Office of Speaker Gingrich
Rolf Lundberg, Office of Senate Majority Leader
Mik Samans, Office of the Senate Democratic Leader
Other Primary Trade Staff (60 copies)
Cynthia Johnson, Rep. Matsui, Ranking on WM Trade Subcommittee
Meredith Broadbent, Rep. Crane, Chair on WM Trade Subcommittee
Teremy Preiss, Senate Finance Committee
Londa Menghetti, Senate Finance Committee, Democratic Staff
sill Froymoyer, Office of Minority Leader
WM Committee LA's (37 copies)
Finance Committee LA's (18 copies)
Chair and Ranking Members for Relevant Committees (35 copies)
House International Relations Committee
Subcommittee on Economic Policy and Trade
Subcommittee on Western Hemisphere
House Agriculture Committee
House Commerce Committee
House Appropriations Committee
Subcommittee on Commerce, State, and Justice
House Banking Committee
Flouse Judiciary Committee
Senate Agriculture Committee
Sunate Foreign Relations Committee
Subcommittee on Economic Policy, Export, and Trade Promotion
Subcommittee on Western Hemisphere
Signate Commerce Committee
Senate Judiciary Committee
Senate Appropriations Committee
Subcommittee on Commerce, State, and Justice
Ensh.se
Jun 14/57
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LA Central
Enshire Visit
June 17/97
5 tratus 2 7AST Trad
Needs PLANNING
Thought / Condinction / ROLLOCT / ENENSY / Focus
PAT Griffil Support
Build support / Bill - - Hili - - / Bridge DLC to Repl.
LAme / Business
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Constribute
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Daley
Charlere
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THE WHITE HOUSE
WASHINGTON
June 10, 1997
MEMORANDUM FOR MACK McLARTY
FROM:
NELSON CUNNINGHAM my
ANDREW FRIENDLY
STEVE RONNEL
@
SUBJECT:
GOALS AND TALKING POINTS FOR FAST TRACK MEETING WITH
CHIEF OF STAFF
Per your request, here is a memo outlining specific goals and talking points for a conversation
with Erskine Bowles.
GOALS
1.
GET A STATUS REPORT FROM COS ON WHITE HOUSE STRUCTURE AND
ROLL OUT STRATEGY
Talking points:
Has Pat Griffin agreed to join the team? When do you want to announce your
team on fast track? Who will be the principals and what will be their roles? How
do you see my role as it relates to Pat Griffin and Charlene?
2.
GET A COMMITMENT FROM COS THAT YOU WILL BE A PART OF THE
INITIAL ANNOUNCEMENT AND A KEY FIGURE (CO-CHAIRMAN) ON THE
TEAM
Talking points:
As you know, I want to contribute to the fast track strategy as a principal. I hope
you will announce my involvement when you announce Pat Griffin and the rest of
our team. I would like to be a "co-chairman" of the WH task force.
In the region, I am expected as Special Envoy - to help lead the charge for fast
track.
Fast track is critical to our credibility in the hemisphere. As you know, the
President will take two more trips to Latin America. Our ability to advance the
ball on fast track will directly effect the outcome of the President's travel,
especially at the summit in Santiago next March -- where we promised to deliver
on fast track and make progress toward the FTAA.
Also, my standing in the business community, my contacts in the media, and my
relationships on the Hill, all should be seen as an additive to this team and should
make my serving as a co-chair a natural assignment.
Furthermore, I have resources in my Office of Special Envoy that I would be
willing to contribute to the task force staff.
2.
DEFINE WHAT YOUR ROLE SHOULD BE
Talking points:
I believe my role as a co-chair should be the following:
A public advocate, traveling the country (this summer and fall) and the
hemisphere (possible CODEL in August) with a clear message about the
importance of trade, NAFTA's success, the need for U.S. leadership in
international commerce, and the need for fast track.
A primary liaison to the business community, working to secure
endorsements and public support from business.
A primary spokesman, getting our message out in the media -- helping to
shape stories and respond quickly to false info and attacks from critics.
A Congressional lobbyist, supporting Pat Griffin and Charlene on the Hill
-- especially with Republican members. My ties are strong on both sides
of the aisle.
3.
PUSH COS FOR AN EARLY ANNOUNCEMENT OF FAST TRACK TEAM
Talking points:
As you know, the NAFTA review is due July 1. The perceived value of NAFTA
will directly impact our ability to win votes in Congress on fast track. We have
much work to do to convince others that NAFTA has been a good deal. As a
result, I believe our "fast track team" should be announced ASAP, certainly
before July 1, to help get our message out about the benefits of NAFTA and trade
in general.
Also, an early announcement will help stem the current criticism over our
"September strategy." We must fill the vacuum that currently exists with an early
announcement of the President's team.
We must begin putting our message out. Currently, 64% of Americans believe
trade is bad for the U.S. (According to US Dept. of Commerce). I believe that
much work can be done NOW to publicly define the value of trade and exports to
our economy. Frankly, I believe our opposition already has the upper hand. We
simply can not afford to wait -- we must begin delivering these messages
BEFORE we introduce our fast track legislation and before we reach consensus
on labor and environment.
Enshire
MAY 29/97
PAndol my in thest
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NOTIONAL PROGRAM FOR SPECIAL ENVOY MCLARTY
OAS GENERAL ASSEMBLY AND RELATED EVENTS
Friday, May 30
12:57 PM AMERICAN #813 DEPARTS NATIONAL EN ROUTE MIAMI
3:36 PM ARRIVE MIAMI
4:55 PM AMERICAN #917 DEPARTS MIAMI EN ROUTE LIMA, PERU
9:51 PM
ARRIVE LIMA
Note: Ambassador Dennis C. Jett will meet you
Check into Oro Verde Hotel
Av. Santo Toribio 173
San Isidro, Lima tel: (51-1-4-21-4400)
Saturday, May 31
MORNING OPEN (CAR AND DRIVER AVAILABLE)
1:00 PM
LUNCH
Location: Jose Antonio Restaurant
Attending: You, Donna, DCM and Mrs. Sheila Mack
Note: This will be followed by tour of Lima by car
3:30 PM
RETURN TO HOTEL
4:00 PM
OAS DELEGATION MEETING
Location: Sala "El Mirador" - El Olivar Hotel, 6th floor.
(optional)
6:00 PM
DEPART EN ROUTE AMBASSADOR'S RESIDENCE
6:30 PM
INFORMAL CHAT W/ AMBASSADOR JETT
7:00 PM
DINNER
Location: Ambassador's residence
Amb. Babbitt
Prime Minister and wife
Vice Foreign Minister
President of the Congress (invited)
(all English speakers)
RON
ORO VERDE HOTEL
Sunday, June 1
MORNING
PRE-BRIEFING FOR MEETINGS
9:45 AM
PULL ASIDE W/ INSULZA
10:00 AM
CO-CHAIR OF SUMMIT OF AMERICAS FOLLOW-UP MTG.
**LUNCH IS OPEN*****
2:15 PM
COURTESY CALL ON SEC. GEN. GAVIRIA
3:00 PM
INFORMAL DIALOGUE OF OAS FOREIGN MINISTERS
Location: Oro Verde Hotel
Note: you will make brief remarks focused on OAS and administration policy
towards hemisphere; adopt "Commitment of Lima" (text now under study)
4:00 PM
MEETING WITH FOREIGN MINISTER TUDELA
Location: Oro Verde Hotel; room will be prepared for Peruvian Delegation
Note: you will be accompanied by AS Davidow, Ambassadors Jett and Babbitt.
6:00 PM
ATTEND FORMAL OPENING CEREMONY
Location: Ursula (across street from hotel)
Note: you will be seated on stage with other heads of
delegation; speeches by President Fujimori, Sec. Gen Gaviria at Colegio Santa
7:00 PM
CALL ON PRESIDENT FUJIMORI
Location: Presidential Palace
Note: you will be accompanied by A/S Davidow, Ambassadors
Jett and Babbitt
8:00 PM
DINNER FOR HEADS OF DELEGATION
Location: Palacio de Gobierno
Note: will be hosted by President Fujimori
Monday, June 2
MORNING U.S. BASED PRESS ROUNDTABLE BREAKFAST
10:00 AM
OASGA PLENARY SESSION
Note: you will be the 4th speaker, speech focused on results of POTUS trip
*****LUNCH OPEN (POSSIBLE BILATERAL OR MULTILATERAL MTG.
TIME TBD BILATERALS
Note: with Mexico, El Salvador, Trinidad and Tobago, Panama.
8:00 PM
RECEPTION HOSTED BY AMBASSADOR JETT
Location: U.S. Embassy
RON
ORO VERDE HOTEL
Tuesday, June 3
8:00 AM
BREAKFAST SPEECH TO AMERICAN C.O.C.
Location: Club de la Banca, Banco de Santander - 18th floor, San Isidro.
9:00 AM
PRESS AVAILABILITY
10:00 AM
MEETING W/ JORGE SANTISTEVAN
Location: Oro Verde Hotel
Note: he is Peru's Human Rights Ombudsman
10:30 AM
TOUR OF USAID PROJECT
Note: you will be accompanied by Ambassador Jett, Hernan de Soto, AID
Director Don Boyd, and USAID Assistant Administrator Norma Parker. Donna
will join you and you will have lunch en route to Airport.
1:30 PM
DEPART EN ROUTE AIRPORT
3:00 PM
AVIANCA #78 DEPARTS EN ROUTE QUITO
5:00 PM
ARRIVE QUITO, ECUADOR
Note: you will be met by Ambassador Leslie Alexander and Control Officer.
Transfer to Ambassador's residence (Counselor and Mrs. McLarty and A/S
Davidow ) - and Hotel Colon (rest of delegation).
Hotel Colon
Avenidas Amazonas y Patria
Quito, Ecuador
Tels: 593-2-561-333 or
593-2-562-888
5:30 PM
ARRIVE RESIDENCE
7:00 PM
DEPART FOR PRESIDENCY
7:30 PM
MTG. W/ PRESIDENT FABIAN ALARCON
8:30 PM
DINNER
Location: Presidential Palace
Note: dinner will be hosted by President Alarcon and attended by Special Envoy
and Mrs. McLarty, Assistant Secretary Davidow and Ambassador Alexander
10:30 PM
DEPART PALACE EN ROUTE RESIDENCE
RON:
RESIDENCE
Wednesday, June 4
7:00 AM
BREAKFAST
Location: Residence
Note: rest of delegation has breakfast at Hotel Colon.
8:00 AM
POSSIBLE PRESS AVAILABILITY
8:30 AM
DEPART RESIDENCE EN ROUTE MILITARY AIRPORT
9:00 AM
DEPART QUITO VIA U.S. AIR FORCE C-21 FOR MACAS
09:40 AM
ARRIVE MACAS
Note: transfer to US Army Blackhawk helicopters
09:50 AM
DEPART FOR PATUCA (MOMEP BASE ON BORDER)
10:15 AM
ARRIVE PATUCA
10:30 AM
BRIEFING BY MOMEP
11:30 AM
DEPART FOR HELICOPTER OVERFLIGHT OF THE DMZ
(weather permitting)
12:30 PM
RETURN TO PATUCA
12:45 PM
LUNCH WITH U.S. TROOPS
1:45 PM
WALK-THROUGH MOMEP FACILITIES AND HOUSING FOR U.S.
TROOPS
2:00 PM
DEPART PATUCA VIA HELICOPTER FOR MACAS
2:25 PM
ARRIVE MACAS, TRANSFER TO C-21
2:35 PM
DEPART MACAS FOR QUITO
3:15 PM
ARRIVE QUITO MILITARY AIRPORT - TRANSFER TO RESIDENCE
3:30 PM
ARRIVE RESIDENCE
4:30 PM
COFFEE
Location: Residence
Note: American business leaders and selected Ecuadorian participants
6:00 PM
DINNER
Location: Residence
Note: the dinner will be with Foreign Minister Ayala Lasso and Border
Negotiator
Teran, hosted by Ambassador Alexander.
8:15 PM
DEPART FOR AIRPORT
9:15 PM
DEPART QUITO BY AIR FOR LIMA
11:15 PM
ARRIVE LIMA - PROCEED TO ORO VERDE HOTEL
Thursday, June 5
4:30 AM
DEPART HOTEL FOR AIRPORT
:
6:10 AM
DEPART BY AIR FOR CUZCO
7:15 AM
ARRIVE CUZCO
*****Free day for touring (Cuzco is historic and beautiful city)*****
Friday, June 6
ALL DAY TRAVEL TO MACCHU PICCHU AND BACK
RON:
CUZCO, PERU
Hotel Monasterio
Saturday, June 7
10:35 AM
AEROPERU #615 DEPARTS CUZCO EN ROUTE LIMA
11:45 AM ARRIVE LIMA
SIGHTSEEING IN LIMA*****
11:20 PM
AMERICAN #918 DEPARTS LIMA EN ROUTE MIAMI
Sunday, June 8
5:58 AM
ARRIVE MIAMI
7:55 AM
AMERICAN #214 DEPARTS EN ROUTE WASHINGTON NATIONAL
10:17 AM ARRIVE NATIONAL AIRPORT
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THE WHITE HOUSE
WASHINGTON
July 8, 1997
Mack,
Attached is my first cut at the Fast Track Game
Plan. I thought you might like to review it before our
3:30 p.m. meeting.
Bob
Attachment: Draft Fast Track Game Plan
-
FAST TRACK GAME PLAN
Phase One: Present -September
Summary: Our goals during this period are to: 1) establish a virtual war room, including a White
House coordinator and supporting resources; 2) finalize our substantive positions, particularly
regarding the uses of fast track and labor/environment; 3) implement an aggressive, early outreach
effort to staunch further attrition on the Hill; 4) work with key constituencies (e.g., business,
agriculture) to organize their efforts and push back against early opposition efforts; 5) lay the
groundwork for broader support among the press, state/local officials, think tanks, validators and
others; 6) develop a communications and legislative game plan for September and beyond.
The first step is to develop an interim organizational structure. Until a coordinator is chosen,
Sperling/Tarullo/Steinberg, working closely with Ambassador Barshefsky, should convene
regular Virtual Warroom meetings to assess progress and give overall direction, particularly as to
non-policy aspects of the effort. The coordinator would assume chairmanship of this group once
he is on board. A separate NSC/NEC Principal or Deputies group would address policy issues
and continue to operate even after the coordinator is chosen. (This follows the organizational
structure of the NAFTA effort.) Below these umbrella groups, we would form three interagency
working groups (Legislative, Communications/Outreach and Policy) to meet at least weekly.
USTR would be the lead agency in the effort.
The White House staff team should consist of officials largely dedicated to this effort from the
following disciplines: legislative, communications, policy, public liaison, political, Vice President's
office, McLarty's office, intergovernmental and cabinet affairs. In addition, we would assemble a
group of 4-5 agency detailees that would assist the effort generally and assist the coordinator once
he is on board. We will provide Erskine with proposed lists.
We also need to sharpen our message. USTR has produced a solid foundation, as reflected in its
main message document, substantial Q&A's, a defense of NAFTA and the NAFTA side
agreements and other documents. However, we need to resolve fundamental questions relating to
the scope of the agreements we would seek and labor/environment positions. (This needs to be
done soon to permit some quiet Hill consultations in late July, leading to a roll-out in early
September.) We also need to dramatize key arguments (e.g., the costs of inaction, the size and
extent of foreign trade barriers), develop better anecdotes, and build the geographic and sectoral
data to prove the case for expanded trade.
We also should use this period to assemble our coalition. The business community needs to step
up their fundraising efforts (they are raising $2-3 million; $3-5 million was raised for the Uruguay
Round fight, $10 million for NAFTA), broaden their coalition, create a grass roots operation
(including district efforts in August), mount an August advertising campaign and develop a fall
strategy. We should also engage the agriculture community, which became more active on China
MFN. Governors, local leaders, Hispanics, opinion leaders, validators and others also need to be
engaged.
2
Perhaps the most immediate challenge is to avoid losing more Hill votes during this interim
period. The President should hold one or two meetings with targeted House members prior to the
August recess, various Cabinet members should be active (both inside and outside Washington),
and the business community should be energized to launch an ad campaign to counter an expected
opposition campaign in August/September.
Administration/Internal
- Start regular meetings (Ongoing)
- NEC/NSC Principlals or Deputies policy meetings (as needed) (NSC/NEC)
- Regular WH Virtual War Room meetings (NEC/NSC/USTR)
- Weekly Interagency Working Group meetings
- Legislative (Brophy/Arky)
- Communications/Outreach (D. Johnson?/Ziegler)
- Policy (Kyle/Novick)
- Secure WH fast track coordinator (WH COS/USTR)(end of July)
- Assemble White House team (WH COS/NEC) (July 15) (proposed list being provide to
Erskine)
- Retain 4-5 agency detailees to assist effort (WH COS/NEC/NSC)(end of July) (proposed list to
be provided to Erskine)
- Develop plan for broader Cabinet role (WH Cabinet Affairs/USTR) (July 20)
Policy
- Finalize substantive positions (Tarullo/Barshefsky/Kyle)
- Uses of fast track (July 18)
- Labor/Environment (July 18)
- List of sectoral initiatives (July 18)
- Form of proposed legislation (notional plan by July 18; legislation by late July)
- Administration Statement of Intent (late July)
- Sharpen affirmative arguments (NEC/USTR/WH Communications)(July 25)
- Costs of Inaction
- Foreign barriers high than U.S.
- Other key arguments
- Sharpen key defensive arguments (NEC/USTR/WH Communications (July 25)
- Defense of NAFTA
- Defense of NAFTA side agreements
- Develop additional labor/environment border achievements
- Sharpen key Q&A's
- Other key defenses
- Develop anecdotes/data for use in effort (USTR/Commerce/NEC) (end of July)
- Sharpen state-by-state data
- Develop anecdotes (including Council of America examples)
- Other data/examples
3
Communications
- Develop overall communications action plan for July-September (USTR/NEC/NSC) (July 11)
- Sharpen main message (Sperling/Baer/USTR) (July 25)
- Coordinate other trade activities with fast track (NEC/USTR)
- NAFTA Report (Week of July 7)
- Section 108 (FTA Report) (USTR/NEC) (To be released in the fall
- Develop list of other events that might have impact on fast track and monitor (USTR) (July 20)
- Develop speaking calendar for Administration officials (USTR/NSC Communications) (July 15)
- Develop rapid response capability (USTR/NSC Communications) (July 15)
- Outreach to key reporters/editorial board writers to reinforce message and commitment
(USTR/NSC) (Ongoing)
- Begin validator outreach (USTR/NSC) (Ongoing; secure many by fall kick-off)
- Former Presidents
- Former Secretaries of State, Treasury, Commerce, USTR and NSC Advisors
(respective agencies responsible for securing)
- Other validators (Communications group to determine)
- Explore September POTUS kick-off event (NEC/WH Communications) (August)
- Develop action plan for fall communications campaign (Sperling/Baer/USTR)
- Develop strategy for responding to anticipated AFL-CIO August/fall ad campaign (NEC/WH
Communications/USTR) (July 25)
Legislative
(Provided separately by WH Legislative)
Outreach
- Business
- Meeting with senior Administration officials and Business Roundtable CEO's
(Sperling/Other Cabinet officials) (Week of July 14)
- Other Cabinet calls to CEO's, as appropriate (NEC/USTR) (by late July)
- Encourage desired business activity (USTR/WH Public Liaison) (late July):
- Raise sufficient funds
- Retain outside advisors (Wexler already retained)
- Organize grassroots efforts
- Start advertising campaign
- Share information on Congressional effort
- Develop small business participation (McLarty office/WH Public Liaison) (end of July)
- Attend weekly meetings of business fast track coalition (USTR/NEC)
- Counter August/Labor Day labor advertising campaign (USTR/WH
Communications/NEC) (Plan by July 25)
- Secure industry support for sectoral initiatives (USTR) (July 30)
- Agriculture
- Gain full support of all groups (USTR/Agriculture) (late July)
4
- Encourage organizational efforts (USTR/Agriculture) (Ongoing)
- Think Tanks/Policy Organizations (USTR) (Ongoing)
- Council of the Americas
- Inter-American Dialogue
- Heritage Foundation
- DLC/PPI
- Citizens for a Sound Economy
- AEI
- Brookings
- Others
- State/Local Officials/Hispanics (WH Intergovernmental/WH Political/USTR) (Ongoing)
- Develop expressions of support (governors, mayors, etc.)
- Develop broader plan for their assistance in this effort
- Manage various policy issues affecting these interests (e.g., Massachusetts
Burma sanctions legislation)
- Labor/Environmental Groups (USTR/Podesta/McGinty) (Ongoing)
- Continue consultations, as appropriate
- Consider other Administration initiatives responsive to labor/environmental concerns
July 9, 1997
MEMORANDUM FOR: Erskine Bowles
FROM: Susan Brophy
RE: Fast Track
The purpose of this memorandum is to provide you with a congressional strategy for the next
three months, with the greatest emphasis on July and August. We will provide a more specific
plan for September, October and November based upon the outcome of our activities over the
summer.
The objectives of the congressional strategy over the course of the next several months should be
twofold. First, we need to continue to set the foundation by providing a broader understanding
on the Hill about the elements of fast track and why it is necessary. Second, on a working-level
we need to be in a position to transmit a bill the first of September upon Congress' return from
the August recess. While continuing to educate Members we have not yet reached, we must go
back to key Members over the summer in order to prepare and negotiate our proposal.
To plan and implement these efforts, two legislative working groups have been formed, both of
which will be managed by me. A small working group within the Executive Office of the
President will develop strategies, consisting of representatives from the White House, NSC,
USTR Congressional Affairs and the Office of the Special Envoy for the Americas (SEA). A
large interagency group will focus on implementation, consisting of representatives from NSC,
USTR, Treasury, State, Commerce, USDA, DOD, Labor, EPA, HHS, and SEA.
I. Congress -- Educational Efforts on Fast Track and the Trade Agenda
Ambassador Barshefsky has already met with approximately 170 Members and has honed an
effective argument for the needs and uses of fast track. As part of this effort, Members have been
provided with a better sense of the trade agenda, the accomplishments of the Clinton
Administration and basic elements of the multilateral trading system. Members have appreciated
the oral briefings and the materials we have provided, although additional requests have been
made for information on the NAFTA (which will be satisfied by the NAFTA report) and basic
information about trade and the history of fast track (a "primer"). Members have also requested
talking points that could be used to explain the trade agenda and fast track to their constituents.
These materials should be developed before Members return to their districts in August. In
addition to providing materials, it should be noted that there is no substitute for Member to
Member and Principal to Member contact to reinforce our message.
We should continue efforts with House Members who voted 1). yes NAFTA; 2).
Freshman/Sophomores in districts where the previous member voted for NAFTA; 3).
Freshman/Sophomores in district where the previous member voted against NAFTA; 4). yes on
GATT, no on NAFTA.
We will meet with Members individually as well as in small and large groups. Whenever
Chairman Archer believes it is the appropriate time (probably in the fall), Cabinet Members will
begin meeting with House Republicans in groups (e.g., Freshmen). We have been informed by
Democratic leadership that at some point, probably in the fall, an Administration official will be
asked to appear before the House Democratic Caucus. Some of the larger groups with which we
will meet are as follows:
Large Groups
Senate Finance Committee
Senate Freshmen
House Freshmen
House Democratic Whip Group (particularly on the NAFTA report)
House Ways and Means Democrats
Other Committees' Democrats where appropriate, such as, House Small Business and Banking
Committee Democrats (who offered)
Black Caucus
Hispanic Caucus
New Democrats
Blue Dogs
Democratic Study Group
State Delegations
On both public and congressional outreach, in addition to Ambassador Barshefsky who is already
fully engaged, we should enlist Administration officials Albright, Daley, Rubin, Glickman,
Cohen, Berger, Shalala, Herman, Browner and McLarty in the effort to meet with Members to
make the case for fast track. Sub-cabinet Members will be asked to assist where appropriate. In
early July, staff calls will be made to every Congressional office on an interagency basis, in order
to get a very preliminary whip list developed.
There is no substitute for Presidential involvement prior to the recess, most effectively captured
in a few group meetings with Members. This list would include approximately 30-50 Members,
particularly those Democrats who will be targeted by labor in August. This group should include
some of the Democratic whip group, such as Matsui, Moran, Dooley, McCarthy (Dooley and
McCarthy are targeted); key players in the caucus who we want to be part of the whip effort such
as Rangel, Fazio and Murtha; Ways and Means Democrats such as Kennelly; and freshmen such
as Boswell and Kind who want to be with us but will be torn because of labor. We especially
need to step up outreach to the Senate.
II.
Possible Bill Progression Schedule
Generally, when we made the decision to postpone transmission of the bill until September we
received indications from Leadership that they expect to be able to move the bill expeditiously
2
once the bill is transmitted. The House is scheduled to return from the August recess on
Wednesday, September 3rd and the Senate returns on Tuesday the 2nd. The schedule will
obviously be determined by the relevant Committees and Leadership, but we can assume the
following:
Ways and Means Trade subcommittee markup could occur during the second week of
September with full Committee markup either the third or fourth week of September.
The proposed bill could reach the House floor by the first or second week in October.
The Senate Finance Committee held a hearing on June 3rd and could potentially mark up
during mid-September so that the Senate could act on the bill that comes over from the
House in early to mid October. Senator Lott noted that the Congress intends to adjourn
by November 14th and Thanksgiving at the latest. Please keep in mind the fact that this
bill will not proceed under the Fast Track. It will have to pass the House and Senate, go
to Conference and pass the House and Senate again. We will not be able to prevent
Amendments from being added in the Senate.
It is critical that by the third week of July, we must come to decisions on key policy issues such
as duration, scope, labor and environment in the legislation. Before Members leave for the
August recess we should have a good sense of where they are on these issues as well so that final
negotiations can take place upon their return in September. The first week of September we will
finalize consultations, begun prior to recess, with a broad range of Members. The goal is to
transmit a bill the first week of September, although it may be more realistic to expect
transmission the second week of September, so that it could be introduced in both Houses the
second week of September.
It should be noted that while the committees of primary jurisdiction are Ways and Means and
Finance, depending on how the bill is written, the Rules Committees may have jurisdiction as
well. In addition, because of the interest in the issue, multiple other committees will certainly
hold hearings as well (which was our experience with NAFTA).
III. Bill Preparation
In order to be in a position to transmit a bill in September, we must meet again with a number of
key Members, individually and in groups. From a substantive and tactical perspective, the first
groups should include Democrats who will form the whip group, and the Ways and Means
Democrats. Substantively, the Democratic whip group can provide an indication of what
language could garner the most votes, specifically with respect to labor and environment. The
Ways and Means Democrats must be consulted on the same issues (as promised), and tactically
this should occur in early to mid-July. We need to identify a core group of Democrats to join the
whip effort and who are willing to do so early, in the face of labor opposition; this list would
include Rangel, Matsui, Berman, Murtha, Dingell, Hoyer, Fazio, Gejdenson, Hamilton, Markey,
Eshoo, Roemer, Moran, McCarthy, Davis and Tauscher. There may be a few of these who the
President should phone and request their assistance (Murtha) or other cabinet members should
3
approach (Rubin call/meet with Rangel).
Once meetings with selected Democrats have taken place, meetings with key Republican House
staffers should take place so that meetings may occur with the key Republican leaders the third
and fourth weeks of July. These key Members include Gingrich, Armey, Archer, Crane, Dreier,
DeLay, Hastert, Boehner, Kaisich and Paxon.
At the same time, we need to have similar meetings on the Senate side -- with key Senators such
as Lott, Daschle, Roth, Moynihan, Grassley, Rockefeller, Baucus and Breaux -- in close
proximity to House meetings. An objective should be to ensure the creation of a Senate whip
operation. It should be noted that Senate Finance Committee staffers are meeting this week to
begin drafting their own language. This process can be helpful to our own and we should work
closely with them.
IV. Public Agenda: Public Affairs Planning
It is important to ensure that there is a nexus between the public affairs and congressional
strategies. The public affairs activities should be targeted to Members and their districts; we
should create the impetus in their districts that leads Members to the conclusion that they must
do the right thing and vote for the legislation.
The fast track talking points provide a more positive and aggressive cut on the trade agenda and
should be distributed to all members of the Cabinet that may become involved in discussion of
trade issues (see attached package); these materials have been provided to some friendly House
Democrats at their request. We will refine points, and develop new ones as issues are identified,
so that we can provide Q&A information to be reviewed by principals this week. During this
month we will have an opportunity to begin Cabinet outreach outside Washington, and inform
key reporters, editorial boards, and opinion writers about the trade agenda. We also need to
begin active involvement with the business community so that they can effectively communicate
with their constituencies about fast track and the trade agenda.
July and August: The Lead-Up to Fast Track Introduction
As part of the overall strategy, while Members are in town during July, our efforts should be
devoted to base-building and opinion leader outreach in July. We will focus on hands-on
discussions with all Members to get a baseline of support and to identify where our opportunities
for support lie. During July we should devote efforts to outreach in these Members' districts
through op-eds, talk-radio and satellite feeds.
In August, to solidify support among Members and offset the massive television campaign
planned by the AFL-CIO, several cabinet officials should travel to key areas of the country,
provide satellite feeds and do talk radio in targeted congressional districts as well. Outreach
4
would focus on Democratic and Republican vote-rich areas that benefit from trade; these targets
may change over time as we see where Members are lining up. Several cabinet members would
be involved in the trips and many will be responsive to Member interest and requests. The trips
should highlight at least a couple of different sectors including agriculture, manufacturing, high-
technology and services. The following is a list of potential media markets (this list will
undoubtedly expand once targets are finalized):
Northeast -- New York City, Albany, Hartford, Baltimore, Boston
Midwest -- Detroit, Lansing, Akron, Indianapolis, Milwaukee, LaCrosse, Green Bay, Bismarck,
Des Moines
Southeast -- Nashville, Little Rock, Memphis, Raleigh, New Orleans, Tampa, Tallahassee,
Atlanta, Dallas, El Paso
West -- Los Angeles, Santa Ana, Sacramento, Seattle, Portland, Phoenix, Denver
September: Bill Introduction
As stated above, the events surrounding the introduction of the bill will be determined in
conjunction with the Committee and Leadership. We will expand this section once we know
more about the make-up of the bill as well as the sense of the congress once the bill is about to be
introduced.
CODELs
It has been suggested by McLarty and others that a CODEL to South America would be helpful
to the effort. Our recommendation is that we let the Hill know we are available but let requests
come from the Hill.
5
WEEK-TO-WEEK PLAN
Week of July 7th
Finalize plan of action for July, August and September
Finalize message documents
Begin staff level interagency calls to all Congressional offices to create preliminary whip
list
Schedule principal meetings for month of July: Senate Finance; Senate Freshmen;
Democrats whips; W&M Democrats; key Republicans; various large and small groups
Transmission of NAFTA report; ensure Congressional, business and opinion maker
validators; plant seeds for supportive Dear Colleague letters
Contact staffs to House Democrats who would form core whip group and W&M trade
staff to ensure support and seek bill language guidance
Contact Senate Finance staff re. their bill
Cabinet Member and Administration official meetings with key opinion leaders in the
press/editorial boards, constituency leaders and business groups -- list determined by
legislative targets.
Week of July 14th
Complete interagency calls to create preliminary whip list
Possible W&M NAFTA Hearing on 16th
Senate Commerce NAFTA Hearing on 16th (no Admin. witnesses)
Organize positive Dear Colleagues on NAFTA Report
Cabinet Member meetings should be sought with Dems whip group and W&M Dems
first; individual, small and large group meetings as they can be scheduled
Targeted cabinet member meetings/calls (e.g., Rubin and Rangel)
Prepare fast track "primer" and talking points for Members
Meet with staffs to key Republicans re. bill language
Meet with Senate Finance staff re. bill language
Cabinet Member and Administration official meetings with key opinion leaders in the
press/editorial boards, constituency leaders and business groups
[end of week target for completion of tax and spending bill conferences]
Week of July 21st
Key internal decisions on scope, timing, etc. must be made in order to produce the bill in
a timely fashion
Cabinet Member and Administration official meetings continue
Seek Senate Finance Committee Executive Session
Seek meetings with key House Republican Members and Senate leadership re. bill
language
6
POTUS calls to selected Dems to join whip effort (e.g., Murtha)
POTUS meeting with 30-50 House and Senate Dems
Cabinet Member and Administration official meetings with key opinion leaders in the
press/editorial boards, constituency leaders and business groups
Week of July 28th
Preliminary base-touching with key Members on substance of the bill
Cabinet Member meetings continue
Second POTUS meeting with House and Senate Dems
Follow-up meetings with House and Senate key staff re. bill language
[end of week target for completion of action on tax and spending bills]
August Outreach
Cabinet Members and Administration officials begin outreach in targeted areas around
the country through travel, satellites, op/eds, talk radio
Business community begins outreach on importance of the trade agenda
Editorial and opinion leader outreach to continue
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The Business Roundtable
Chairman
1615 L Street, N.W.
Donald V. Fites
Suite 1100
Caterpillar
Washington, D.C. 20036-5610
Tel (202) 872-1260
Cochairmen
Fax (202) 466-3509
Ralph S. Larsen
Johnson & Johnson
Samuel L. Maury
President
Walter V. Shipley
Chase Manhattan
June 11, 1997
Patricia Hanahan Engman
Executive Director
John F. Smith Jr.
General Motors
The Honorable Thomas F. McLarty
Senior Counselor to the President and
Aider
Special Envoy to the Americas
The White House
Washington, DC 20500
701 und
Dear Mr. McLarty:
134
The Business Roundtable in May launched a congressional site visit program to inform
lawmakers of the importance of trade to their local business and to build support for fast
track, China MFN and other major 1997 trade measures.
Attached is a "Congressional Tool Kit" which was sent to all members of The Business
Roundtable in April to support the trade site visit program.
We are now following up with phone calls to individual companies to track the activity
and to ensure that participation in this program is at a high level throughout the summer
months.
We thought you would like to know about this initiative. If you have any questions about
our trade education project, feel free to contact me at (216) 291-7108, or my Washington
Representative, Jim Christy at (703) 276-5030.
Sincerely,
-)
Joseph T. Gorman
Chairman & CEO
TRW Inc.
Chairman, The Business Roundtable
International Trade and Investment
Task Force
DLC
Trade Project
11. memorial Leade shipt Council
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DLC
Democratic Leadership Council
PHOTOCOPY
PRESERVATION
PROGRESSIVE POLICY INSTITUTE
DLC PPi
Democratic Leadership Council
PROGRESSIVE POLICY INSTITUTE
PHOTOCOPY
518 C Street, NE
PRESERVATION
Washington, DC 20002-5810
E-mail [email protected] WWW.http://www.dlcppi.org/
Phone (202) 546-0007 Fax (202) 544-5002
DLC
DLC
ratio Leadership Council
Emily Fleschner
518 C Street, NE
Democratic Leadership Council
Senior Development Associate
Washington, DC 20002
202-608-1217
FAX: 202-544-5002
E-Mail: [email protected]
WWW: http://www.dlcppi.org/
The Democratic Leadership Council on Trade
The Democratic Leadership Council (DLC) believes that open and free trade
is essential to creating opportunity for ordinary Americans, and has been a strong
and consistent proponent of trade expansion since our founding in 1985. In our
view, the path of international engagement chosen by Woodrow Wilson, Franklin
D. Roosevelt, Harry S. Truman and John F. Kennedy, updated to new conditions,
charts the best course for America. We are committed to fighting both for new
trade agreements and, at the same time, ensuring that every American has the
tools to take advantage of the opportunities that come with U.S. leadership in the
global economy.
The DLC was a prominent advocate for granting "fast track" trade
negotiating authority in 1988 and 1991, for passage of the North American Free
Trade Agreement (NAFTA) in 1993, and argued for the passage of the Uruguay
round of the General Agreement on Trade and Tariffs (GATT) in 1994. The DLC
generally has advocated granting "most favored nation" status to China, the same
tariff treatment we accord our other trading partners.
The DLC's renewed emphasis on trade is in keeping with the challenge
issued by its former chairman, President Bill Clinton, at the DLC's 1996 policy
forum:
American trade is at an all time high, with over 200 new trade agreements
in the last four years alone: 21 with Japan where our exports in those 21 areas
have gone up 85 percent in four years; GATT, NAFTA, and many others. Our work
now is no less important than the work that was done by the generation after
World War II. We must create the structures of peace and security and the
partnerships for peace and security and prosperity that will permit the American
people to make the most of the 21st century.
Again, let me say the DLC can play an important role here
Sometimes one
of our most frustrating efforts as Democrats has been to convince our fellow
Democrats that trade, if it's free and fair, is good for all the American people and
essential for America's future. Another frustration we have had is trying to get the
public at large, that has shown so much interest and so much sophistication in
economic and social issues, to understand the connections between our foreign and
our domestic policies, our security policies and our economic policies.
518 C Street, NE
Washington, DC 20002
202-546-0007
Fax: 202-544-5002
E-mail: [email protected]
WWW: http://www.dlcppi.org/
There areno more simple dividing lines between foreign and
domestic in the world we're living in. We need your help to continue to raise public
awareness of these fundamental facts, so that when decisions have to be taken in
the area of foreign affairs they will resonate at home in the way that so many of the
DLC ideas have resonated with the American people in domestic policy. And I
hope you will pay some attention to that in the next year.
The DLC and its affiliated think tank, the Progressive Policy Institute
(PPI), are a unique force for advancing a new agenda on trade, an idea center and
an action arm. The Progressive Policy Institute's project on Trade in the New
Economy is articulating a new agenda to address both the economic and social
aspects of trade policy through research, forums, background papers and dialogue
with leading thinkers in the field. The DLC works to build a broader base of
public support for open trading policies through its training academy and other
briefings for political leaders, and through its publications, including The New
Democrat magazine, the DLC Update weekly fax and the DLC's web site.
In addition to these ongoing activities, the DLC Trade Project will:
Research public opinion on trade expansion
Organize elected officials and community leaders in key states to speak
out on behalf of expanded trade
Organize Congressional staff briefings on key trade issues
Reach out to news reporters and editorial writers
Conduct a public relations campaign, including advertising, specifically
in support of fast track authority
FOR RELEASE MONDAY, APRIL 28, 1997
CONTACT: John Deeken
PHONE:
202/546-0007
DLC ANNOUNCES NEW TRADE PROJECT, NAMES DIRECTOR
WASHINGTON, D.C. The Democratic Leadership Council will work
aggressively in Washington and around the country to promote a new open trade
policy, including giving President Clinton fast track negotiating authority, DLC
President Al From announced today. From also named Edith R. Wilson as Director
of the DLC trade project.
"In the tradition of Wilson, FDR, Truman, and Kennedy, the DLC has always
believed that expanding trade is essential to creating opportunity for ordinary
Americans to get ahead, said From. "We are committed to fighting both for new
trade agreements and for ensuring that every American has the tools to take
advantage of the opportunities that will come with our continued leadership in
the global economy.
The DLC was a prominent advocate for passage of the North American Free
Trade Agreement in 1993 and the Uruguay round of GATT in 1994.
Wilson, who has 25 years of experience in trade and international affairs in
the public and private sectors, will also be a Senior Fellow in the DLC's think
tank, the Progressive Policy Institute, and lead the PPI's Project for Trade in
the New Economy. PPI's trade project envisions a "third way" alternative to
both contemporary neo-protectionism and orthodox laissez faire by articulating a
new agenda of the economic policies to promote open trade in the new global
economy. That includes the need for public policy to ensure that all Americans
have the tools they need to succeed in the increasingly competitive international
economy.
Wilson served as Eastern Pennsylvania Director for Clinton/Gore '96 and
Chief of Staff to U.S. Senator Carol Moseley-Braun during the 104th Congress.
Previously, she was Senior Vice President for International Affairs at Burson
Marsteller, where she worked since 1983. She founded the Food Action Center in
1975, a non-profit outreach and training center focusing on world hunger and
development issues. She holds a Masters in Public Administration degree from
Harvard's Kennedy School of Government and a bachelor's degree from Bryn Mawr
College.
The DLC's renewed emphasis on trade is in keeping with the challenge issued
by its former chairman, President Bill Clinton, at the DLC's 1996 policy forum
last December. "Let me say the DLC can play an important role here, the
President said. "Sometimes one of our most frustrating efforts as Democrats has
been to convince our fellow Democrats that trade, if it's free and fair, is good
for all the American people and it's essential for America's future.
(
)
There
are no more simple dividing lines between foreign and domestic in the world we're
living in. We need your help to continue to raise public awareness of these
fundamental facts, so that when decisions have to be taken in the area of foreign
affairs they will resonate at home in the way that so many of the DLC ideas have
resonated with the American people in domestic policy. And I hope you will pay
some attention to that in the next year."
518 C Street, NE
Washington, DC 20002
202-546-0007
Fax: 202-544-5002
E-mail: [email protected]
WWW: http://www.dleppi.org/
DLC
Democratic Leadership Council
Edith R. Wilson
Edie Wilson is the Director of the DLC Trade Project, and as Senior Fellow at the
Progressive Policy Institute, runs the Trade in the New Economy Project. She
brings over twenty years of experience in international affairs, policy analysis,
management, politics and management for government, business and non-profit
organizations. She holds a master's in public adminstration from the Kennedy
School of Government at Harvard and a bachelor's degree in history from Bryn
Mawr College.
Edie served as chief of staff to U.S. Senator Carol Moseley-Braun of Illinois
during the 104th Congress, supervising a staff of 50 and a broad range of
legislative and political issues. She was Eastern Pennsylvania Political Director
for Clinton/Gore '96. Previously, Edie was Senior Vice President for International
Affairs at Burson-Marsteller, where she worked from 1983 to 1994. She is a
veteran of the 1991 campaign for "fast track" trade negotiating authority and the
1993 NAFTA campaign, and worked closely with environmental, business and
consumer groups.
In 1975, Edie founded the Food Action Center in Washington, D.C., a
non-profit outreach and training center focusing on world food and development
issues. In that role and later as senior associate at New Transcentury Foundation,
she worked extensively with non-governmental organizations working abroad and
with international aid agencies. She was part of a Transcentury women-in-
development project team for the Government of Morocco. From 1981 - 83, she was
director of communications for CARE, the international relief and development
group, where she launched a program to educate Americans about conditions in
developing countries. She was trained as a community organizer at the Midwest
Academy in Chicago in 1979.
Ms. Wilson has been a board member of the Kennedy School of Government
D.C. Alumni Council, of the United Nations Association-U.S.A., the U.S.
Committee for UNICEF, the Overseas Education Fund and the Hunger Policy
Coordinating Council of the National Council of Churches, among others. She
served on the National Policy Panel on Human Rights and U.S. Foreign Policy of
the United Nations Association from 1978-80. In 1979 she was one of 18 American
leaders to participate in a Transnational Dialogue on Food and Development in
India and Sri Lanka sponsored by the Overseas Development Council and the
Charles F. Kettering Foundation.
Edie grew up in White Plains, N.Y., and has lived in Ethiopia, Morocco,
England, France, and Costa Rica. She speaks French and some Spanish.
518 C Street. NE
Washington. DC 20002
202-546-0007
Fax: 202-544-5002
E-mail: [email protected]
WWW: http://www.dleppi.org/
POLITICAL MEMO
THE BATTLE AHEAD
This Is Not the Time for New Democrats To Rest on their Laurels
BY AL FROM
ast month's highly publicized
ers struggling to reconcile postwar
No matter how you massage the
and successful Presidents'
social welfare promises with the
polls, I cannot accept that Democrats
Summit on America's Future is
economic realities of the 1990s.
can build a political majority on a
just the latest example of the New
Given those examples of the suc-
foundation of big federal deficits,
Democrats' impact on national poli-
cess of the New Democrat formula,
empty promises to seniors, trade
tics. If we hadn't thrust voluntary
you might think that the internal
protection, and restoration of the
national service onto the political
battles waged within the Demo-
failed welfare state.
front burner several years ago, the
cratic Party since the late 1960s
The forces that brought us crush-
event probably would not have oc-
would be history, and that the party
ing defeats in the presidential elec-
curred.
would be firmly set on a New
tions of 1980, 1984, and 1988 are
There is plenty of other evidence
Democrat course. You might think
re-arming for battle. We can expect
of our impact as well, not the least of
that, but you would be wrong.
intra-party lines to be drawn sharply
which was President Clinton's elec-
on the issues described above and
tion and re-election on New Demo-
on many others. 1997 is no time for
crat themes. Then there's the current
The future of our move-
New Democrats to sit back and
drive for a balanced budget (a com-
savor our advances. We must re-
promise seemed imminent as we
ment and the legacy of
double our efforts, for this year's
went to press); last year's passage of
fights may well determine whether
welfare reform, the expansion of
the first New Democrat
or not our country begins the 21st
community policing and the birth of
century on its soundest fiscal basis
President are at stake.
the police corps; the approval of
in three decades; determined to
trade agreements like NAFTA and
make its major entitlement pro-
the GATT; and the Ford Founda-
grams secure for generations ahead;
tion's decision last month to spend
Many Democrats-including
committed to trade expansion and a
$15 million in support of individual
most party leaders in the House-
lead role in the global economy; and
development accounts.
believe the way to retake Congress
ready to tackle its most intransigent
All these ideas and many others
is to build a majority around non-
social problems with energy and
bear the New Democrat imprint,
college graduates at the lower end
innovation.
and President Clinton has advanced
of the economic spectrum. And the
The coming fights will determine
each one. Indeed, they are the defin-
way to do that, they believe, is to op-
whether the Democratic Party is
ing ideas of his presidency-and can
pose an agreement to balance the
ready to lead America forward with
be the cornerstones of his legacy.
federal budget and revise the
vision and innovation, or whether
The success of New Democrat
Consumer Price Index; to oppose
its most recalcitrant forces will re-
ideas hasn't stopped at the water's
the reform of Social Security and the
verse our progress to build a new
edge. In Britain, Tony Blair's New
health care entitlements; to oppose
political and governing majority.
Labour movement rode to power
giving the President authority to
These are fights New Democrats
last month on themes virtually iden-
enter into new trade agreements;
have to win. The future of our move-
tical to those of the New Democrats.
and to oppose doing what's neces-
ment and the legacy of the first New
And at a conference I attended re-
sary to complete the job of convert-
Democrat President are at stake.
cently in Berlin, it was difficult not
ing welfare into a work system.
to notice the influence of New
They're wrong in both their politi-
Al From is president of the Democratic
Democrat ideas on European lead-
cal analysis and in their substance.
Leadership Council.
36
MAY/JUNE 1997
To Fax or to E-Mail, that is the question. If you are currently
The DLC Update
receiving this DLC Update via fax but would prefer to have it e-mailed
to you, please notify us at: Email:[email protected]
The Democratic Leadership
Tuesday, May 13, 1997
Two Steps Forward, No Turning Back
On the brink of its first legislative test in the U.S. Senate,
It was a nice coincidence that the President embarked on
the budget agreement struck by President Clinton with the
a trip to Mexico, Central America, and the Caribbean
congressional leadership on May 2 looks more and more
immediately after concluding the budget agreement. It
like a defining moment for the Democratic Party. Despite
helped underscore the point that balancing the federal
mutinous rumblings on the left, it appears that public
budget is but one element in an overall economic policy
support for a balanced budget will keep traditional liberals
aimed at success in a global Information Age. And although
from declaring war on the agreement. If so, many congres-
drug and immigration issues dominated the news from the
sional Democrats could go into the 1998 elections virtually
President's trip, much of the private discussions revolved
invulnerable to the "tax and spend" label that has served as
around Latin American demands that the United States
the most powerful Republican weapon for a generation. As
resume its leadership in hemispheric commerce. To do
pollster Mark Penn has found, support for a balanced
that, the President's fast-track authority to conduct trade
budget agreement has a huge impact on the willingness of
negotiations needs to be renewed.
voters to keep incumbent Democrats in office.
Since the beginning of the 105th Congress,
Fiscal discipline is a very important theme of the New Dem-
Administration officials have said that a drive to secure fast-
ocrat economic message, but the performance of the economy
track, which expired in 1994, was the President's second
under this New Democrat President is the heart of the story.
most important legislative priority after the budget
agreement. But now that achievement of the first priority is
You do not have to believe the business cycle has been
in sight, some cautious souls in the Administration are
conquered to accept that the U.S. economy is now
reportedly arguing for continued delay in pushing fast-track,
performing in a manner reminiscent of the 1960s, with low
on grounds that fences must be mended with the
inflation, low unemployment, and low interest rates, along
Democratic left and organized labor before raising another
with steady if unspectacular growth. The "stagflation" of the
issue on which they disagree with the President. One step
1970s, and the boom-and-bust swings of the 1980s, are
forward, goes the argument, and then a half-step back.
rapidly receding into unhappy memory. Today's economy
seems to have achieved a plateau that makes efforts to
We cordially disagree. The President has beaten Old
increase growth and raise incomes entirely feasible.
Democrats into sullen passivity on the budget agreement,
and he'll have to beat them again on fast-track. There is no
From a political point of view, identifying the Democratic
power on earth that will make them happy about it, and
Party with broad economic growth through the private
therefore nothing to gain from holding back. More to the
sector has always been a key element of the New Democrat
point, fast-track is central to the economic success story
strategy, critical to our efforts to reach out to middle-class
that increasingly makes the retrograde message of class
Americans leery of government income redistribution
warfare and government redistribution obsolete. Why
schemes.
placate paleoliberals who are not-so-secretly praying for a
That is why the Administration-which has done so much
recession by adopting a tactic that could help make their
to change the economic message of the Democratic
dreams come true?
Party-should quickly follow up on its landmark budget
All New Democrats should let the President, and
agreement by advancing a broad agenda of growth and
congressional Democrats as well, know that the defining
upward mobility. And while that agenda should include new
moment of the budget agreement should lead to a defining
investments in education, a strong commitment to worker
moment on trade policy. While the President has the
training and retraining, a real employment system for
momentum, he should take two steps forward, and then,
former welfare recipients, and family tax relief, it must begin
with an election year just ahead, all Democrats will
with a robust new commitment to American economic
understand there is no turning back.
leadership through trade.
A National Conversation
elected officials and policy experts-the event will kick off a
more sustained, interactive dialogue with our growing network
In our continued effort to expand our national network of New
from around the country. Key issues such as education,
Democrat leaders, we will be hosting a special roundtable
entitlement reform, trade, and economic opportunity will be
discussion in Washington, DC on July 17th and 18th.
discussed. For more information about the event, please call
Featuring DLC/PPI principals as well as New Democrat rising
the DLC Development Department at 202-546-0007.
stars from around the country-including business leaders,
This Fax is broadcast to thousands of public officials, citizen activists, and supporters in the DLC network nationwide.
c/o The DLC Update, Democratic Leadership Council, 518 C Street NE, Washington, DC 20002
P: 800/546-0027 (202/544-6172 in DC) F:202/546-0628 E-MAIL:[email protected] WWW: http://www.dlcppi.org/
To Fax or to E-Mail, that is the question If you are currently
The DLC Update
receiving this DLC Update via fax but would prefer to have it e-mailed
to you, please notify us at: Email:[email protected]
The Democratic Leadership
Tuesday, May 20,1997
China MFN: Toward a Tough but Smart Policy
Monday, President Clinton announced the renewal of
even though they face U.S. economic sanctions.
China's "Most Favored Nation" trade status for
another year. It will be extended unless Congress
If we want to trade with China-one of the fastest
enacts a joint resolution of disapproval by Aug. 31.
growing economies in the world, and already the
source of 170,000 export-related U.S. jobs-then we
The President's announcement will also launch an
need MFN. If we want an updated China policy that
ugly, contentious debate in Congress and the news
encourages progress in that country toward economic
media about our overall relationship with China, and
and political freedom, and compliance with the
about China's overall performance on issues ranging
international standards of conduct, then let's have
from human rights to Hong Kong to Tibet, with MFN
that debate on a separate track that fully explores all
held hostage. That's a shame. MFN is the wrong
our interests-strategic, economic, and ideological.
instrument for pressuring China, and the wrong
subject for a general review of U.S.-China policy.
We can "get tough" with China without
endangering our own interests or abandoning a basic
MFN is really a misnomer. It is not foreign aid, and
posture of engagement that has taken decades to
does not extend any special privilege or favor to
develop. A tough but smart policy would begin by
China. It is the normal tariff status we extend to all but
treating the MFN extension as the routine chore it
a small handful of countries with which we trade. Iran,
actually is, and would proceed to a thorough review of
Iraq, Libya, Syria, and Burma all receive MFN status
U.S.-China relations.
Time for a Real Debate on U.S Defense Strategy
The Department of Defense Monday released its first
nearly a decade ago."
Quadrennial Defense Review (QDR), presenting the
Fortunately, says Blaker, Congress last year anticipated
Pentagon's view of the strategic underpinnings of U.S.
defense programs and budgets until the year 2005. Trying
a "stand pat" QDR, and adopted PPI's proposal to establish
a national defense panel that is required not only to review
to stay "ahead of the curve" on defense policy, we are
and assess the QDR, but to provide an alternative view,
pleased to announce publication of a Backgrounder on the
thus stimulating a real public debate over long-range
Quadrennial Review by PPI Fellow James Blaker, The
defense policy. In fact, as Blaker explains, one alternative
QDR: An Assessment.
view-to accelerate rather than to avoid the technology-
Blaker is a member of PPI's Defense Working Group,
based "revolution in military affairs"-has been articulated
and author of The Revolution in Military Affairs, a February
within the Pentagon by Joint Chiefs of Staff Chairman
1997 PPI Policy Report. In the new Backgrounder, Blaker
General Shalikashvili.
describes the QDR as a predictable Pentagon effort to
The QDR: An Assessment is essential reading for
"save as much of the past era's military as a flat budget will
anyone interested in the future of defense policy, and its
allow," without engaging in "the serious, in-depth discussion
implications for U.S. security and the federal budget. It is
demanded by the fact that we continue to hang onto a
available by calling (202) 546-0007 or by visiting the
military designed twenty years ago for an era that ended
DLC-PPI web page at http://www.dlcppi.org/.
The New Democrat Takes a Closer Look at Campaign Finance Reform
The May/June issue of The New Democrat features a
bipartisan consensus for any particular solution.
symposium on the complex problem of campaign finance
reform. Nine contributors-including Sen. Bob Kerrey (D-
This issue of The New Democrat also includes an article
NE), former Sen. Bill Bradley (D-NJ), and Rep. Marty
and editorial calling for new pollution control strategies as
Meehan (D-MA)-present distinct perspectives on the
part of a reconsideration of the Clean Air Act; a report on
issue, and on the legal and partisan obstacles to reform.
"community prosecution" by Harvard's Catherine Coles; a
This "closer look" symposium provides an excellent
front-line update on Wisconsin's welfare reform experiment
summary of fresh thinking on campaign finance reform; and
by state Rep. Antonio Riley; and an analysis of organized
together, the articles show why it is SO hard to get a
labor's plans for "wired workers" by former United Mine
Workers official Jim Grossfeld.
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The DLC Update
Visit the DLC-PPI Web site for more
information on foreign policy and trade:
http://www.dlcppi.org/.
The Democratic Council-
Wednesday, May 28, 1997
DLC Joins Fight For MFN,
"Tough But Smart" China Policy
In an event televised live on C-SPAN, the Democratic
our party's tradition of supporting free and fair trade, and are
Leadership Council and its think tank, the Progressive
again calling for protectionist measures If the protectionist
Policy Institute, weighed into the fight over trade relations
faction within the Democratic Party is successful, they could
with China on May 27, calling for the renewal of most
change the mix of policies that has brought about one of the
favored nation status for China as well as a new "tough but
longest, most sustained periods of non-inflationary
smart" China policy.
economic growth in American history. And that likely would
reduce, not enhance, the opportunities to get ahead for hard
The event featured DLC Chairman Sen. Joe
working Americans to whom the Democratic Party must
Lieberman of Connecticut; Rep. Robert Matsui of
give voice."
California, the ranking Democrat on the Ways & Means
Trade Subcommittee; DLC President AI From; and PPI
In a similar vein, Lieberman called it "an article of New
Senior Fellow Robert Manning, the author of a new PPI
Democratic faith that economic growth and new job creation
Report, Reality Check: From the MFN Debate to a Tough,
will not happen without free and vigorous trade throughout
but Smart China Policy. The event follows President
the world."
Clinton's announcement last week that he would renew
China's MFN status, which sets the stage for congressional
Just as important, Lieberman said, are the political
action this summer.
stakes. "Politically, this debate is really about the future of
the Democratic Party, about the unfinished revolution we
As Sen. Lieberman noted in his opening statement, the
began in 1985 to break the Party from old ideas and ways
timing of the news conference-held immediately after
that were not working for America's working families, and
House Minority Leader Rep. Richard Gephardt's
were not electing Democratic candidates to political office.
announcement that he will oppose MFN for China-was not
It is about having the guts to disagree with special interest
coincidental. DLC President AI From has called the
groups so that we can serve the national interest. And it is
pending votes in Congress on MFN renewal and fast-track
about standing boldly for growth and jobs, not defensively
trade negotiating authority for the President "defining
for tariffs and protectionism."
issues" for the Democratic Party, and crucial for New
Democrats. The DLC has launched a new trade advocacy
The new PPI report offers alternatives to MFN as the
project, while PPI has initiated a Project on Trade in the
focal point for China relations. "The singular challenge is to
New Economy.
find a bipartisan consensus on what priorities to emphasize,
"We are here to call on our fellow Democrats in both
what instruments provide real leverage, and what
benchmarks to apply in measuring progress-or the lack of
chambers to vote for MFN, not because it is good for China,
but because it is good for America; and not because it is
it-in China's behavior," Manning writes in the paper.
good for American business, but because it is good for
America's workers and consumers," Lieberman said.
Annual two-way trade with China has grown eightfold in
the last decade, from less than $8 billion in 1986 to $63
Matsui predicted that more than a majority of the House,
billion in 1996; there is more than $10 billion in cumulative
generally considered to be more protectionist-leaning for
U.S. direct investment in China; and nearly 200,000 U.S.
both parties, would ultimately support MFN for China by
jobs depend on China trade. Given this growing
voting down a resolution of disapproval. The problem with
relationship, Manning states that it "is not credible to
ending MFN status to China, Matsui said, is that it won't
annually threaten MFN withdrawal: it is one bullet, one time,
accomplish the policy objectives opponents seek. "If in fact
certain to result in mutual assured destruction."
we could actually advance the cause of human rights by
eliminating most favored nation status, I would agree with
Instead, he suggests a "tough, smart policy" tailored to
that," he said. "But the fact of the matter is it will do no good
advance America's economic, security, and human rights
at all. It will merely put China on a course that could result
interests in addressing China's domestic and foreign
in a Cold War over the next decade and a half."
policies. The PPI report is available from the Publications
Desk at 202- 546-0007, or 1-800-546-0027 outside the D.C.
DLC President From called expanding trade "one of the
calling area. It can also be downloaded from the DLC/PPI
comerstones of President Clinton's successful economic
website: http://www.dlcppi.org/texts/foreign/mfn0597.htm.
policy." Even so, he warned that "some Democrats oppose
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The DLC Briefing
A New Democrat Perspective on the Issues from the Democratic Leadership Council
May 22, 1997
The DLC Briefing is a new service providing a concise New Democrat perspective on national issues that are of immediate interest
to policymakers. Please contact 202-546-0007 with comments or suggestions.
Renewing China MFN
What's Happening
President Clinton this week announced his decision to renew China's most-favored nation (MFN) trade status
for another year-the same decision that has been reached every year since 1980 by Presidents Carter, Reagan,
Bush, and Clinton.
Despite its name, MFN is the normal trading status granted to all but a small handful of nations. The
annual renewal process flows from a 1970s law aimed at pressuring the Soviet Union to allow greater Jewish
emigration. That law bans MFN status for non-market economies unless the President each year waives the ban
by June 3. The ban can be reinstated and MFN denied if Congress passes a joint resolution of disapproval by
August 31. Since such a resolution can be vetoed, opponents of MFN would need a two-thirds vote in both
chambers to prevail. Clearly, denial of MFN would represent an abrupt termination of the bipartisan U.S. policy
toward China that first emerged in the 1970s.
U.S.-China trade was valued at $63 billion in 1996, and at least 170,000 U.S. jobs depend on exports to
China. American companies have $10 billion in cumulative direct investment in China.
New Democrat Principles
"Democratic realism" in foreign policy means that the United States should view its most important
relationships in the world through a careful balancing of all our interests-economic, strategic, and
ideological-instead of acting narrowly and precipitously in reaction to ongoing events that displease us.
Given China's size, strategic importance, and potential economic and political power, the United States
should seek a "new bargain" with China whereby we support modernization of its economy while drawing
it into international institutions and rules of conduct.
The Politics
This year's MFN debate occurs in a hothouse climate fueled by allegations of Chinese influence-buying in the
1996 election campaign, apprehension about the July reversion of Hong Kong to Chinese sovereignty, and an
array of single issue concerns from religious persecution to arms exports, galvanizing a new left-right, anti-China
coalition against MFN.
Especially hostile to MFN are: (1) labor-oriented "populists" on the left, led by House Minority Leader
Dick Gephardt, who not only attack China on human rights grounds but claim that our trading relationship with
China undermines American workers; (2) old-fashioned "cold warriors" on the right who view China as the new
The DLC Briefing, Democratic Leadership Council, 518 C Street, NE, Washington, DC 20002 P: 800-546-0027 (in DC: 202-
546-0007), F: 202-546-0628, E-mail: [email protected], WWW: http://www.dlcppi.org
"evil empire;" (3) a small but very active group (including the U.S. Conference of Catholic Bishops and
the conservative evangelical Family Research Council) that wants to protest China's mistreatment of
Christians; and, (4) an array of Republican partisans who are using the issue to highlight the "China
angle" in fundraising allegations against the President and the Democratic National Committee.
The New Democrat Take
There should be a vigorous national debate over China and the meaning of its emergence as a major
economic and military power. The singular challenge is to find a bipartisan consensus on what priorities
to emphasize, what instruments provide real leverage, and what benchmarks to insist on in regard to
China's behavior.
But MFN is the wrong arena for this debate. MFN is not foreign aid. It is not a favor to, or special
privilege for, China. Nearly a hundred countries receive special trade status from the United States
through agreements such as NAFTA or the Generalized System of Preferences (GSP). MFN is merely
normal tariff status, extended even to countries like Iran, Iraq, Libya, Syria, and Burma that face United
States economic sanctions. No other country puts conditions on MFN status for China, nor would any
country follow the U.S. in removing MFN for China.
Terminating China's MFN status would dramatically affect all bilateral trade, eliminate some of
it, substantially raise prices for U.S. consumers, and trigger a downward spiral of confrontation in U.S.-
China relations. It would also undercut the growth of the private sector in China which has reduced the
domain of the state and expanded individual freedom. Moreover, it would also cause serious damage to
the Hong Kong and Taiwan economies, which are deeply integrated into China's import and export
sectors. This explains why Hong Kong Governor Chris Patten and Martin Lee (leader of Hong Kong's
democratic opposition) have strongly supported MFN for China. Moreover, the China Service
Coordinating Office, an organization of Evangelical Christian missionary groups, argues that denying
MFN would put its missionary work inside China at risk.
Talking Points
As President Clinton pointed out, every President since 1980 has annually renewed MFN.
MFN is a misnomer. It is only normal trade status-not a favor, not a privilege, not foreign aid.
Removing MFN is too blunt an instrument to be an effective tool to change Chinese behavior.
An effective, alternative way to achieve demonstrable results with China would be to shift the focus
from MFN to China's accession to the World Trade Organization, which will shape China's economy
and its commercial relationship with the world for the next generation. Using a benefit that China
wants but does not currently have, instead of one it currently has that would be withdrawn, would
give us greater leverage at a much lower risk to U.S. interests.
NEWS NEWS NEWS NEWS NEWS NEWS NEWS NEWS
PPi
PROGRESSIVE POLICY INSTITUTE
FOR IMMEDIATE RELEASE
Contact: John Deeken
Tuesday, May 27, 1997
(202) 547-0001
PPI REPORT CHARTS NEW 'TOUGH, SMART' CHINA POLICY
As Congress gears up to debate President Clinton's decision to renew most favored
nation (MFN) trading status to China, the Progressive Policy Institute today released a policy
paper supporting MFN renewal and calling for a new, "tough but smart" China policy.
"The singular challenge is to find a bipartisan consensus on what priorities to emphasize,
what instruments provide real leverage, and what benchmarks to apply in measuring
progress-or the lack of it-in China's behavior," wrote PPI Senior Fellow and China expert,
Robert A Manning, in the new PPI report, entitled "Reality Check: From the MFN Debate to a
Tough, but Smart China Policy."
"MFN is simply the wrong arena for the China debate. MFN is not foreign aid. It is not a
favor to, or special privilege for, China. MFN is merely normal tariff status extended to all but a
handful of countries with which we trade (Cuba, North Korea, Afghanistan, Laos, and Vietnam).
Iran, Iraq, Libya, Syria and Burma all receive MFN treatment even as they face U.S. economic
sanctions. It is simply the basis upon which international trade is conducted."
Noting that U.S. annual two-way trade with China has grown eightfold in the last decade,
from less than $8 billion in 1986 to $63 billion in 1996, that there is more than $10 billion in
cumulative U.S. direct investment in China, and nearly 200,000 U.S. jobs depend on China trade,
Manning states "It is not credible to annually threaten MFN withdrawal: it is one bullet, one
time, certain to result in mutual assured destruction."
"The challenge to U.S. policy is to define our priorities and benchmark China's conduct
vis-a-vis American interests. We must face the reality that we can not have it all at once. We
must pick our issues and husband our leverage wisely, building coalitions when possible. It must
be led by the President, and a major policy review would be a useful place to start. The Executive
branch would be well advised to find ways to improve its consultation with Congress.
"Americans do have a long list of legitimate concerns about China's domestic and foreign
policies which fall into three broad baskets-economic, security, and human rights/values. A
tough, smart policy should be tailored to address all three."
On the economic front, Manning argues that the United States should shift the economic
focus from MFN to a far more important long-term issue: China's accession to the WTO.
"This will shape China's economy and its commercial relationship with the world for the
next generation, set the tone for the accession of Russia and others, and affect the very
credibility of the WTO. Congress should also demand that the Administration set up a
process of regular consultation on the China-WTO negotiations.
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On the strategic front, instead of the current "dialogue" the U.S. should pursue results-
oriented strategic talks with China on the future of nuclear weapons, their export controls,
and place a priority on curbing Chinese military and nuclear exports to Southwest Asia,
principally, Iran and Pakistan. The Administration could "get tough" with China by:
stepping up U.S. counter-intelligence against China, particularly against industrial spying
and attempts to acquire technology under false pretense; tightening export controls and
more closely monitoring end use of technology exports; demanding on-the-ground
monitoring for compliance with trade agreements; and by pressing for more cooperation
with U.S. anti-drug efforts in the heroin- producing Golden Triangle along the Thai-
Burma-China borders.
In developing a new policy to address U.S. concerns with China's human rights policies,
Manning argues for a three-pronged approach designed to facilitate change from within
rather than imposing it from the outside:
In areas where internal trends are moving in positive directions-expansion of
non-governmental organizations (NGOs), rule of law, local elections-the United
States should cooperate with China in facilitating these trends.
We could allow individual Americans to exercise their condemnation of
repression in China by, as the Heritage Foundation has proposed, enacting "Know
Your Trading Partner" legislation, which would identify all Chinese military-
owned companies and products, allowing consumers to make a choice.
Finally, U.S. human rights strategy must include quiet diplomacy, with our allies
as well as Beijing, to identify realizable goals for human rights-for example,
Beijing's recognition of the Pope and other moves towards more religious
freedom, Red Cross visits to jails, and release of leading dissidents. There should
be carefully targeted penalties, for example, cutting access to the International
Development Agency (IDA) and other concessional lending for particular human
rights abuses."
Manning notes that the case of Hong Kong, which reverts to Chinese sovereignty on
July 1, "is a difficult issue of special concern. We should benchmark three core issues: free and
fair elections in 1998; integrity of the courts and the civil service; and financial and commercial
autonomy.
"We must begin to define a tough, but smart approach to China that achieves results in
areas identified as top priority concerns. There is no silver bullet, no bumper sticker for a
workable China policy that satisfies the many deeply felt concerns about China. The emergence
of China is the biggest challenge facing the international economic and political system into the
21st century. It requires focused, sustained attention and leadership from the Executive Branch
and a working partnership with Congress."
###
DLCNEWS release
Democratic Leadership Council
518 C Street. NE
Washington. DC 20002
-
202-546-0007
FAX: 202-546-0628
FOR IMMEDIATE RELEASE
Tuesday, May 27, 1997
STATEMENT OF AL FROM, DLC PRESIDENT
ON RENEWING MFN TRADE STATUS TO CHINA
"President Clinton's economic policies have helped yield terrific results for our country
and for hard working Americans. More than 12 million net new jobs have been created in the
past four and one-half years, unemployment is under five percent for the first time in a quarter
century, inflation is running under three percent, and economic growth is the highest in nine
years. On top of all that, today there is news that consumer confidence is at a 28-year high.
American leadership in the global economy has been restored, and we have a firm foundation for
prosperity well into the 21st century.
"One of the cornerstones of President Clinton's spectacularly successful economic policy
is expanding trade. However, some Democrats oppose our party's tradition of supporting free
and fair trade, and are again calling for protectionist measures in the cases of renewing MFN and
the President's fast-track authority.
"If the protectionist faction within the Democratic Party is successful, they could change
the mix of policies that has brought about one of the longest, most sustained periods of non-
inflationary economic growth in American history. And that likely would reduce, not enhance,
the opportunities to get ahead for hard working Americans to whom the Democratic Party must
give voice.
"So Democrats face a choice. Will we complete the transformation of our party in
accordance with the New Democrat course President Clinton has laid out? Or will we reverse
course and fall victim again to the old politics that left us in the political wilderness for much of
the past quarter century? We don't have to wait until the year 2000. The outcomes of the battles
this year over the budget and trade will likely determine the answers to those questions."
###
The DLC Update
Visit the DLC-PPI Web site for more
information on recent DLC-PPI products:
http://www.dlcppi.org/.
he Democratic Leadership Council
1997
MATTERS OF PRINCIPLE
There is an increasingly vigorous, and ultimately healthy,
intact while making public investments, by slashing the
debate going on within the Democratic Party about how, in
defense budget, or soaking the rich with new taxes. New
the words of House Minority Leader Dick Gephardt, to
Democrats think that's wishful-and thus
"translate our values and beliefs in today's
irresponsible-thinking, and plays into the Republican
circumstances."
strategy of starving public investments to death. Ours is a
principled position.
But there is one recurring false note in this debate that
is insinuating itself into speeches by traditional liberals and
Trade: On this issue, the claim that New Democrats are
the op-ed columns of major newspapers: the assertion that
not principled is simply laughable. Support for open
Old Democrats are defending "principles," while President
markets and hostility to protectionism is the oldest
Clinton and New Democrats are motivated by purely
principle of the Democratic Party, uniting Democrats from
political considerations.
the Jackson Era to the late twentieth century, even when
the party was deeply divided on other issues. Every
Sure this New Democrat stuff works politically, goes the
twentieth-century Democratic President has promoted
familiar rap. Sure welfare reform, and fiscal discipline, and
freer international trade, and even the labor movement
fighting crime, and cutting taxes are popular, but they
was largely pro-trade until the late 1970s.
represent a betrayal of Democratic principles.
Open trade is a defining principle for Democrats for a
There's only one problem with this argument. It ain't
very simple reason: protectionism always has and forever
true.
will represent action by government to give a small
handful of industries fearing competition special
Consider three issues where the appeal to "principle" is
privileges, at the direct expense of everyone else in the
most often made to criticize New Democrats:
country. Protectionism also inherently fosters political
corruption, by inviting industries to bid for intervention to
Welfare Reform: Democrats are supposed to fight for
boost their profits.
upward mobility for low-income Americans. That's why
New Democrats are fighting to replace the old welfare
Today, Old Democrats argue that trade agreements
system with an employment system that lifts welfare
undermine job stability and income levels for some
recipients into the private-sector economy, by making
workers. New Democrats respond from principle that it is
work pay and by directly linking workers to job
unfair and un-Democratic to elevate the interests of
opportunities.
industries threatened by international competition above
the interests of workers in exporting industries, the
Some traditional liberals oppose this approach because
interests of consumers, the interests of communities that
they do not believe the jobs are there. New Democrats
benefit from foreign investment, and the interests of every
say we must find out by trying, instead of joining
American who benefits from the current conditions of
Republicans in giving up on welfare recipients. Ours is a
steady growth.
principled position.
Fighting for fast-track trade negotiating authority for the
Entitlements: Democrats are supposed to be concerned
President, and opposing efforts to cut off trade with China,
about keeping the promise of a decent living in retirement
represent fidelity to a principle embraced by the very
for Americans. We're also supposed to worry about
Democratic icons whose authority is so often cited by
finding the fiscal means to make public investments that
those opposing efforts to modernize the legacy of the New
contribute to economic growth and give working
Deal and the Great Society.
Americans the tools they need to succeed in the economy
of the future. That's why New Democrats think it's critical
On welfare, entitlements, trade, and a host of other
to modernize the Social Security and Medicare
issues, there remain sharp and defining differences
entitlements, because as currently constituted they will go
between all Democrats and all Republicans, and
bankrupt while squeezing public investments right out of
legitimate differences among Democrats that we should
the federal budget.
continue to debate.
Some traditional liberals oppose this approach because
But New Democrats should never for a moment
they think we can find the money to keep the entitlements
concede that the political viability of our ideas somehow
reduces their intellectual integrity or their moral power.
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From: Bulletin Broadfaxing Network To: John Deeken
Date: 5/27/97 Time: 12:43:30 PM
Page 1 of 9
THE WHITE HOUSE
BULLETIN
BULLETIN BROADFAXING NETWORK, 6260 GREENSBORO DRIVE, SUITE 320, MCLEAN, VA 22102 FAX 703/749-0060 TEL 703/749-0040
MEMORANDUM FOR SUBSCRIBER
SUBJECT:
TODAY'S BRIEFING
DATE:
TUESDAY, MAY 27, 1997
Democrats To Highlight MFN Today. While House Minority Leader Richard Gephardt is expected to
make a case today in Detroit against MFN for China, a group of moderate Democrats will be making a
case in favor of MFN.
In his speech today, Gephardt is expected to say, "The United States has no business playing
"business-as-usual" with a Chinese tyranny that persecutes Muslim leaders and leaders from many other
faiths, precludes tens of millions from practicing their religion, sells the most lethal weapons to the most
dangerous of nations, profits off slave labor, and engages in the utter evil of forced abortion." An
advance text of the speech also reveals a heavy emphasis on freedom and human rights. Gephardt is
expected to say, "Finally, human rights is a vital national security interest. As we saw with the Soviets,
the answer is not to shrink from the defense of our values, but to redouble it." Gephardt is expected to
conclude, "We cannot appease China's leaders into honoring human rights. But we do have the power
and potential incentives to seek and achieve change." Gephardt's speech is the second major recent
break with the Administration on policy, and Gephardt's speech text makes pointed references to his 1988
appearance at the Detroit Economic Club - which happened to be the last time he ran for president.
Asked about the text of the Gephardt speech, presidential spokesman Mike McCurry said this
morning, "Well, we'll charitably disagree. The suspension of normal trade relations with China would be,
in some sense, a declaration of economic war on China and would further isolate China from the world
community. And it's long been our policy view that engagement with China is much more likely to
produce the changes in behavior that the American people seek."
Meanwhile, Sen. Joseph Lieberman, head of the Democratic Leadership Council, Rep. Bob
Matsui, and DLC fellow Bob Manning are expected to contend this afternoon that MFN is "too narrow a
debate," according to a DLC official, and that the proper focus of the debate ought to be China's
accession to the World Trade Organization. According to a policy report prepared by the DLC's Manning,
"terminating China's MFN would dramatically affect all bilateral trade, eliminate some of it, substantially
raise prices for US consumers, and trigger a downward spiral of confrontation in US-China relations. It
would also undercut the growth of the private sector in China which has reduced the domain of the state
and expanded individual freedom. Moreover, it would also cause serious damage to the Hong Kong and
Taiwan economies which are deeply integrated into China's import and export sectors." The paper also
contends that revoking MFN would "worsen rather than ameliorate the problem of religious persecution"
in China, citing a report by an organization of evangelical Christian missionary groups active in China.
The paper supports the "proportionate, targeted sanctions" against Chinese efforts to provide military
capability to Iran and Pakistan, contending that is a better approach to some of the serious national
security concerns the US has with China. In addition, in arguing for making WTO membership the key
ground for debate, Manning says, "This will shape China's economy and its commercial relationship with
the world for the next generation, set the tone for the accession of Russia and others, and affect the very
credibility of the WTO." The Clinton Administration, which is in favor of MFN, has been lobbying quietly
for months in favor of Chinese accession to the WTO.
While Democrats are split on the issue of MFN, SQ are Republicans. A House GOP leadership
source said this morning that no whip count has been done on MFN approval in the House and one may
not be done "because we don't know if that's going to be the leadership position."
ROUTE TO:
NATIONAL JOURNAL'S
&
ongress Pg 1 of 5
3:02
PM Tursday, May 27, 1997
TRADE
Gephardt Will Oppose Extending China MFN Trade Status
Flatly declaring that "our trade policy with China has failed," House Minority Leader
Gephardt today said he will oppose renewal of most favored nation trade status for China
because "wo cannot appease China's leaders into honoring human rights" In the prepared text of
a speech to the Detroit Economic Club, Gephardt called on the United States to use its lucrative
market for Chinese exports as a more potent tool in forcing the Beijing government toward
consistent human rights and economic reforms. "It is not enough to issue mild condemnations of
Chinese actions," Gephardt said "Actions speak louder than words and our administration's
actions, as well as its words, have been far too weak when it comes to China"
Gephardt, who also broke with the administration on the issue of renewing fast track trade
negotiating authority, said access to the U.S. market "is a privilege, not a right," and China "has
forfeited that privilege" with its record on human rights, arms sales to "outlaw" nations and trads
practices. "It is time Fre revoke China's most favored nation status," he said. "China and every
other country must know that unlimited access to the U.S. market comes with certain responsi-
bilities.
We must use MFN as a tool to effect change." Gephardt acknowledged that many in
the business community will disagree with him. However, he said: "Trickle down did not work
in economics and it will not work in human rights. Economic growth for the elite will not lead to
basic human rights for billions" He added, "If we don't act, no one will"
In response, White House Press Secretary Michael McCurry said the administration will
"charitably disagree" with Gephardt's China MFN comments. Speaking from Paris, where he is
traveling with the president, McCurry said, "The suspension of nonnal trade relations with China
would be, in some sense, a declaration of economic war on China and would further isolate China
from the world community." Separately, House Ways and Means Trade Subcommittee
ranking member Robert Matsui, D-Calif., and Sen. Joseph Lieberman, D-Conn., held a
news conference along with the centrist Democratic Leadership Council to say renewing MFN
for China is in America's best interests. "Economic stability and growth, which renewing MFN
will promote, helps fuel China's transformation toward a democratically oriented, free-market
society," Lieberman said "If we interrupt trade with China, it will be many more long nights
before that great and large country becomes what we would like it to be."
REUTERS
Tuesday May 27 7:27 PM EDT
House Democratic Leader Wants China MFN Revoked
DETROIT (Reuter) - House Democratic Leader Richard Gephardt Tuesday said President Clinton
has been "far too weak" on China's human rights record and urged Congress to revoke Chinese
trading privileges.
"Our trade policy with China has failed," Gephardt said in a speech to the Economic Club of Detroit.
"It has failed not only on moral grounds, but economically as well. There is nothing 'free' about our
trade with China -- in fact it comes to us at great cost and little benefit."
Gephardt, a Missouri Democrat, denounced human rights violations by China's "totalitarian" leaders
and said they should be linked to a new U.S. policy of "firm engagement" with China that demands
improvements in human and worker rights.
He also noted that the U.S. trade deficit with China hit nearly $40 billion in 1996 and that it is likely
to exceed $50 billion this year.
Revocation of China's most favored nation (MFN) trading status with the United States would cause
duties on imports from China to soar to the high levels of the 1930s. Only a handful of countries do
not enjoy MFN status.
Clinton announced May 19 that he would renew MFN for China this year, and opponents are
expected to mount the fiercest congressional fight over the issue in years. The House last year voted
286-141 to renew the privileges.
News of Gephardt's position drew a swift response from White House spokesman Mike McCurry,
who said "we'll charitably disagree" with the 11-term congressman from St. Louis.
Speaking in Paris, where Clinton signed a pact between NATO and Russia on European security,
McCurry said, "The suspension of normal trade relations with China would be, in some sense, a
declaration of economic war with China and would further isolate China from the world community."
Two Democratic lawmakers, Sen. Joseph Lieberman of Connecticut, and Rep. Bob Matsui of
California, said they would support Clinton's renewal of MFN for China.
"The U.S.-China relationship is probably the most important bilateral relationship the United States
will have over the next 25 years," said Matsui, the senior Democrat on the Ways and Means Trade
subcommittee. "It is my opinion that if we cut off MFN with China it would be the equivalent of
cutting off diplomatic relations."
But Gephardt stopped short of advocating a boycott of Chinese goods and said he would continue
to encourage U.S. corporations to do business in China.
"I think that means we can continue to trade but on a different basis," he said at a news conference
prior to the speech. "In other words, they would not experience the same tariff basis as other
nations."
Gephardt, viewed as a leading contender to challenge Vice President Al Gore for his party's 2000
presidential nomination, also said China's trade policies, which include "blackmailing" companies into
giving China technology and trade secrets, will turn it into an economic powerhouse.
Gephardt said that he has made no decision to run for president and "won't for a long time."
Continued oppression in China will keep Chinese wages at poverty levels, which in turn will put
downward pressure on U.S. wages, Gephardt said. He said China should not be allowed to regain
MFN status until it ends the sale of goods made by millions of people in forced labor camps and
prisons.
"If you give normal trading status to a country that has no human rights and no worker rights, you are
ensuring that you're going to be competing with a country that has a very low standard of living and
no hope that that standard of living will go up," he said.
He acknowledged that U.S. companies would lose some business contracts with China if MFN
were revoked, but he urged business leaders in Detroit to "look beyond the short term" to encourage
democracy in China.
N
E
W
S
R
E
T
E
A
S
E
U.S. SENATOR JOE LIEBERMAN
CONNECTICUT
PRESS OFFICE: (202) 224-4041 or (202) 224-9965 (after 6 p.m.)
Actuality Line: (202) 224-6095
Kathie Scarrah (703) 845-2874 (H)
FOR RELEASE
Home Page: http://www.senate.gov/-lieberman/ email: [email protected]
May 27, 1997
Statement of Senator Joe Lieberman
Endorsing MFN Status for China
The timing of this news conference is not coincidental. It has been called to respond to
Dick Gephardt's announcement today that he will oppose MFN for China. We are here to call
on our fellow Democrats in both chambers to vote for MFN, not because it is good for China, but
because it is good for America; and not because it is good for American business, but because it
is good for America's workers and consumers.
For us, Dick Gephardt's announcement and our response to it is about economics and it is
about politics. Economically, we accept as an article of New Democratic faith that economic
growth and new job creation will not happen without free and vigorous trade throughout the
world. That faith has been vindicated by the millions of new jobs created during the last four-
and-one-half years of the Clinton-Gore pro-trade Administration.
Politically, this debate is really about the future of the Democratic Party, about the
unfinished revolution we began in 1985 to break the Party from old ideas and ways that were not
working for America's working families, and were not electing Democratic candidates to
political office. It is about having the guts to disagree with special interest groups so that we can
serve the national interest. And it is about standing boldly for growth and jobs, not defensively
for tariffs and protectionism.
We support renewing China's most favored nation status for another year. President
Clinton's recommendation to do so is the right one. Trade with China is simply a fact, a
-- More --
Lieberman MFN Statement
22222
desirable fact, of life. It means jobs and prosperity for workers in the U.S., and it means
continued pressure for democratic reform in China.
Numbers matter. Connecticut alone exported goods and services worth well more than
$100 million last year to China, and thousands of jobs in the state are either directly or indirectly
dependent on that trade. Overall in the United States, more than 200,000 jobs are directly related
to trade with China. And those figures will grow. Between 1985 and 1995, our bilateral trade
expanded by 643 percent. To reverse direction now by rejecting MFN and erecting barriers
which would only facilitate other nations' business with China at our expense, is both unrealistic
and unwise.
The numbers do tell a compelling story about why we should continue to trade with
China on the same terms we extend to almost every other nation on earth. But human rights
violations, illicit weapons deals, restrictions against Hong Kong's democracy, and refusal to
renounce the threat of force against Taiwan tell why China is, in fact, different than most other
countries. Capitalism may have come to China, but Beijing's rulers still do not trust the agents
of capitalism, the people themselves, to determine their own futures. We want to see China
change. That is what the debate is really about in Congress. And here, again, the President's
recommendation is the right one.
China's economy is its main engine of reform. Economic stability and growth, which
renewing MFN will promote, helps fuel China's transformation toward a more democratically
oriented, free market society. That is in our own best interest and it reflects our fundamental
values as a nation. We seek to expand freedom and the rule of law. A stable trade relationship
with China helps to do this. It brings to individuals within China increased freedom of choice,
better working conditions, respect for the rule of law in business transactions, and the
expectation that individual effort and initiative matter. In other words, trade with American
businesses that reflect American values brings with it respect for individual rights and dignity.
More
Lieberman MFN Statement
33333
China will not be transformed overnight. But if we interrupt trade, it will be many more long
nights before China changes.
I will support MFN renewal for China. That is the issue immediately at hand. But I also
think it is time to move beyond the annual MFN debate to a more comprehensive expression of
China policy, one that does not constantly find our moral values in conflict with our commercial
interests. A good first step is normalizing our economic relationship by brining China into the
World Trade Organization and thereby opening its markets more fully to American services and
products. It means bringing our anger about China's human rights and proliferation policies to
the center of our bilateral relationship and being willing to invoke sanctions when necessary, as
we did last week. But it does not mean denying MFN, which amounts to shooting not just the
Chinese, but ourselves in the foot, economically and politically.
Perhaps within our lifetimes, and almost certainly in the lives of our children, China will
become the premier Asian power. Whether that is a threat or a promise depends in large part on
how we treat China today. Building a stable, normal, honest, and demanding relationship with
China is an important step in that desired direction.
-- 30 --
The
Washington
Times
Anti-MFN
WEDNESDAY, MAY 28, 1997
forces gain
support of
MFN
Gephardt
From page A1
ident Al Gore for the Democratic
presidential nomination in 2000.
He hits 'tyranny'
"We aren't going to have to wait
to the year 2000 for the fight of the
with eye on 2000
soul of the Democratic Party," Mr.
From said. "It's already begun."
If the "protectionist faction
By Nancy E. Roman
within the Democratic Party" suc-
THE WASHINGTON TIMES
ceeds in revoking China's MFN'
status, he said, it could derail the
House Minority Leader Richard
long-running economic growth
A. Gephardt accused the Clinton
that has boosted Mr. Clinton and
administration yesterday of "traf-
other Democrats.
ficking in tyranny" for extending
Mr. Gephardt's opposition to
most-favored-nation trading status
China's trade privileges is not a
to China.
surprise. He represents a pro-
"It is not enough to issue mild
labor district in south St. Louis and
AP
condemnations of Chinese ac-
has long opposed MFN status. But
tions," Mr. Gephardt told the Eco-
House Minority Leader Richard A. Gephardt says the United States
his strategy was noteworthy.
nomic Club of Detroit. "Actions
should not play "business as usual" while China attacks religion.
Mr. Gephardt not only called at-
speak louder than words - and
tention to China's well-known hu-
our administration's actions, as
man rights abuses, but reached out
few," but he predicted that Con-
largest foreign market, with more
well as its words, have been far too
to conservative Republicans con-
gress will vote to extend the trade
than a third of Chinese exports
weak when it comes to China."
sidering MFN opposition because
status.
coming to the United States. China
The Missouri Democrat's ex-
of China's persecution of Chris-
Most U.S. trading partners have
buys about 2 percent of U.S. ex-
pected opposition combines with
tians and forced-abortion policy.
permanent MFN status, which ex-
ports. China recorded a $40 billion
other forces to make this the
"The United States has no busi-
tends favorable tariffs and trade
trade surplus with the United
toughest MFN vote ever. Demo-
ness playing 'business as usual'
preferences to imports ranging
States last year, and some project
crats and Republicans say the
with a Chinese tyranny that perse-
from toys to electronics. But China
that it will hit $50 billion this year.
House could vote this summer to
cutes Christian, Muslim leaders
must get its status renewed every
Mr. Clinton announced the re-
revoke China's coveted trading sta-
and leaders from many other
year.
newal of China's MFN status last
tus.
faiths, precludes tens of millions
While the House may vote to re-
week. Congress has 90 days to ap-
Allegations that China tried to
from practicing their religion, sells
voke MFN status, it appears un-
prove the decision, which is ex-
buy influence by funneling money
the most lethal weapons to the
likely opponents will muster the
pected to face a vote in July.
to U.S. political campaigns have
most dangerous of nations, profits
votes needed to override a Clinton
Last year 141 House members
eroded support for MFN status
off slave labor, and engages in the
veto.
voted against the MFN extension,
primarily among Republicans.
utter evil of forced abortion," Mr.
Mr. Matsui said that using MFN
citing China's violation of trade
The Christian Coalition has
Gephardt said.
as a tool to punish China would iso-
pacts, weapons proliferation, poor
latched onto the issue to communi-
Rep. Robert T. Matsui, Califor-
late the United States from 21 per-
human rights record, and anti-
cate disapproval of China's perse-
nia Democrat and ranking mem-
cent of the world's population.
democratic policies regarding Tai-
cution of Christians.
ber of the House Ways and Means
"It's very important not to have
wan, Hong Kong and Tibet.
"It'll be a close vote, there's no
trade subcommittee, said MFN
another cold war," he said.
Mr. Gephardt appealed to the
question about that," said Al From,
supporters will press the issue
Many free-traders argue that to
United States' sense of morality.
the president of the Democratic
when they get back Tuesday from
revoke MFN status would threaten
"What have we gained by traf-
Leadership Conference, who
the Memorial Day recess. He said
a trade war with one of the most
ficking with a tyranny that debases
called a news conference yester-
many Republicans will oppose it,
economically potent nations.
the dignity of one-fifth of the hu-
day to respond to Mr. Gephardt.
and Democrats "may have lost a
The United States is China's
man race?" he asked.
'Mr. Gephardt's speech was sig-
nificant for its location and its con-
tents.
Detroit is a key stop for any
presidential aspirant, and Michi-
gan is a critical electoral state that
delivered big for President Clinton
last year. Mr. Gephardt is laying a
foundation to challenge Vice Pres-
see MFN, page A16
MORNING EDITION -- MAY 29, 1997
This is Morning Edition. I'm Bob Edward. The annual debate on whether to renew China's Most
Favored Nation trade status is underway. President Clinton wants to renew China's MFN; there
is a strong movement in Congress not to. This year the debate is more volatile than usual
involving a wider range of interest groups. NPR's Ted Clark reports:
President Clinton has some powerful allies in his effort to renew MFN. Perhaps the most
powerful is American business, which hopes to expand trade with the most populous nation on
earth. Willard Workman at the U.S. Chamber of Commerce said his organization has already
visited 22 cities and urged business leaders there to contact members of Congress. (Workman)
"Let them know that Most Favored Nation status for China is important to their companies and to
their workers."
Workman says member of the American Chambers of Commerce in Beijing, Shanghai,
Guangzhou, and Hong Kong have all been in Washington in the last six weeks, (Workman) "and
have met with over 200 members of Congress again explaining what is actually happening on the
ground in China."
President Clinton has other powerful allies in the MFN debate. Former Presidents and Secretaries
of State stress the strategic importance of China. In his effort to renew MFN, President Clinton
has the support of some key Republicans like House Speaker Newt Gingrich, and he also has the
support of the centrist New Democrat movement within his own party.
Al From of the Democratic Leadership Council.
(From) "Heated rhetoric about China will not create opportunity for American workers. The kind
of economic policy that President Clinton has put forth will do that."
Support for extending MFN remains strong, but events have conspired this year to make MFN
more controversial than in the past. For example, China regains control of Hong Kong on July 1,
and has already begun to restrict political freedoms there. That has refocused attention on
China's poor human rights record. And then there are the allegations that China may have
planned to make illegal campaign contributions to President Clinton and several members of
Congress. This controversy has had a significant impact on the MFN debate according to
Congressman Robert Matsui, ranking Democrat on the Trade Subcommittee of Ways and Means.
(Matsui) "Frankly we thought that we were going to have a rather quiet year on the continuation
of Most Favored Nation status for China. That hit -- I think it turned it around and has made it
much more difficult."
Especially on the Republican side says Matsui, Allegations of illegal campaign contributions
have added a taint of possible corruption in the MFN debate which makes some members leery
of supporting MFN extension.
Politics of a different sort have also helped to rile the MFN debate. House (sic.) Majority Leader
Richard Gephardt is positioning himself for a possible run against Vice President Al Gore for the
Democratic Presidential nomination in the year 2000. This week, Gephardt criticized the
Clinton/Gore team for supporting China's MFN status.
(Gephardt) "The United States has no business playing business as usual with a Chinese tyranny
that precludes tens of millions from practicing their religion, sells the most lethal weapons to the
most dangerous of nations, profits off slave labor, and engages in the utter evil of forced
abortion."
Allegations of religious persecution and forced abortion have made the Christian right a bigger
player in this year's MFN debate, joining with liberal human rights groups in opposing MFN
renewal.
The Family Research Council is a conservative organization that has focused mostly on U.S.
domestic issues in the past. This year, the Council's Robert Morrison say this group is also
working against MFN for China.
(Morrison) "Previous to this what we saw is that many, what we designate as pro-family
Congressmen, were voting reflexively for MFN. That's not happening to such an extent any
more.
Religion, politics, the U.S. trade deficit with China, possible campaign scandals, Hong Kong --
all these make the MFN debate more emotional than usual this year. But China has always
elicited passionate responses from Americans.
According to Ezra Vogel, Director of the Fairbanks Center for East Asian research at Harvard.
(Vogel) "China, because it's on the other side of the world, because it's a great civilization,
because it has far more people than any other country in the world and because we know so little
about it has always aroused extreme responses from Americans and from Europeans as well."
Vogel says Americans vacillate between a fear of China and missionary impulse to help it. Some
of that vacillation is at play in the MFN debate today. What most analysts predict is that when all
the speeches are over on Capitol Hill that China's MFN status will be renewed.
This is Ted Clark in Washington.
PPi
Policy Report
May 27, 1997
PROGRESSIVE POLICY INSTITUTE
Reality Check: From the MFN Debate to a
Tough, But Smart, China Policy
Robert A. Manning
President Clinton's decision to renew China's most-favored nation (MFN) trade status
for another year launches the annual spring referendum on China, one which already
shows signs of being more acrimonious than usual. The debate occurs in a hothouse
climate fueled by allegations of Chinese influence-buying in the 1996 election campaign,
apprehension about the July reversion of Hong Kong to Chinese sovereignty, and an
array of single issue concerns from religious persecution to arms exports galvanizing a
new left-right anti-China coalition against MFN.
The MFN debate reflects a growing apprehension about China which has fueled
national discord since the June 4, 1989, Tiananmen massacre, when the televised specter
of Beijing's brutality and the end of the Cold War shattered the longstanding bipartisan
consensus on China policy. MFN has been the chosen instrument to express disapproval
of Beijing's domestic and international policies. As one prominent critic put it, "we
should deny MFN status as a way of putting pressure on Chinese leaders to open their
system.' 1
There should be a vigorous national debate over China and the meaning of its
emergence as a major economic and military power. The singular challenge is to find a
bipartisan consensus on what priorities to emphasize, what instruments provide real
leverage, and what benchmarks to apply in measuring progress-or the lack of it-in
China's behavior. This paper seeks to change the debate, suggesting a different way of
addressing American economic, human rights, and security concerns about China. Even
in the economic realm, for example, the MFN debate has diverted public attention from
where it should be sharply focused: the terms of China's accession to the World Trade
Organization (WTO), a crucial issue which will shape China's economic ties to the world
into the next century, set precedents for the entry of Russia and other countries into the
trade regime, and affect the very credibility of the WTO.
MFN is simply the wrong arena for the China debate. MFN is not foreign aid.
It is not a favor to, or special privilege for, China. Nearly one hundred countries do
receive special trade status from the United States through agreements such as NAFTA
or the Generalized System of Preferences (GSP). MFN is merely normal tariff status
extended to all but a handful of countries with which we trade (Cuba, North Korea,
Afghanistan, Laos, and Vietnam). 2 Iran, Iraq, Libya, Syria and Burma all receive MFN
treatment even as they face U.S. economic sanctions. It is simply the basis upon which
international trade is conducted. No other country conditions MFN for China, nor would
any country follow the U.S. in removing MFN for China.
518 ( Street, NE
Washington, DC 20002
202.547.0001
FAX 202.544.5014
INTERNET [email protected]
1
Some argue that MFN is animated by what one critic calls "the great China
market myth," the idea "that everything from human rights violations to weapons sales
is worth enduring because glorious riches await us in the People's Republic." 3 Since the
days of the Clipper ship Empress of China two hundred years ago, the allure of the China
market has led the West to overestimate its potential. Nonetheless, with the World Bank
and other forecasters projecting China likely to emerge as one of the largest-if not the
largest-economies in the world in the early decades of the 21st century, what U.S.
company is prepared to have the United States write off the China market entirely?
Since embarking on a course of market-oriented economic reform in 1979, China
has increasingly sought to attract foreign investment and pursue an export-oriented
economic growth strategy. China's dynamic economic growth during this period has
led to a mushrooming of its trade with the United States. Over the past decade, U.S.
annual two-way trade with China has grown eightfold, from less than $8 billion in 1986
to $63 billion in 1996. In addition, there is more than $10 billion in cumulative U.S. direct
investment in China. Nearly 200,000 U.S. jobs depend on China trade. It is not credible
to annually threaten MFN withdrawal: it is a one time bullet, certain to result in mutual
assured destruction.
Denying MFN Counterproductive
Eight years after Tiananmen, the annual MFN process has become counterproductive as
an instrument to advance American interests or values in regard to China. Under the
Jackson-Vanik Amendment to the 1974 Trade Act, in order for non-market economies
to receive MFN status, the President must determine that the country meets emigration
criteria or waive the ban on MFN annually by June 3. Jackson-Vanik is an outmoded
piece of Cold War legislation, originally intended to aid the emigration of Soviet Jews,
by holding out MFN to Moscow (with whom the United States had little trade). But it
is a convenient legislative vehicle for Congress to express post-Tiananmen outrage. As
Senator Connie Mack (R-Fla) said recently, "The reason we annually consider China's
trade, human rights and national security behavior during the MFN renewal debate is
because we do not have an acceptable alternative."
But terminating China's MFN would dramatically affect all bilateral trade,
eliminate some of it, substantially raise prices for U.S. consumers, and trigger a
downward spiral of confrontation in U.S.-China relations. It would also undercut the
growth of the private sector in China which has reduced the domain of the state and
expanded individual freedom. Moreover, it would also cause serious damage to the
Hong Kong and Taiwan economies which are deeply integrated into China's import and
export sectors. This explains why Hong Kong Governor Chris Patten and Martin Lee,
leader of Hong Kong's opposition democrats, have strongly supported MFN for China.
Moreover, denial of MFN could worsen rather than ameliorate the problem of
religious persecution, which has come more sharply into focus of late. The China Service
Coordinating Office (CSCO), an organization of Evangelical Christian missionary groups
-2-
active on the ground in China, argues that denying MFN would put their missionary
work at risk. Contrary to the views of some conservative religious activists, CSCO
argues:
Public shaming of the Chinese government and economic sanctions backed by American
Christians will only serve to strengthen the official Chinese perception that Christians are
a threat to China's political and social stability and to heighten mistrust of Christians by
the Chinese public. This will likely result in greater persecution of Christians inside
China and will close doors of opportunity for witness and service from outside China.4
Most of all, Beijing would view denial of MFN as evidence that the United States wants
to "contain" China, and seeks to thwart its modernization. Denying MFN would set back human
rights, fuel nationalism manipulated by China's Leninist elite, reinforce hardliners in the ongoing
leadership struggle, and destabilize and slow the privatization of the Chinese economy which
has expanded personal freedom. It would also have significant security implications, affecting
prospects for Chinese cooperation on a range of regional and global issues.
From MFN to a Real Debate
Americans do have a long list of legitimate concerns about China's domestic and foreign
policies which fall into three broad baskets-economic, security, and human
rights/values. China's policies which offend our values include: forced abortion,
religious persecution, political repression, and Han Chinese colonization of Tibet.
Chinese activities which run counter to our economic interests are mercantilistic trade
practices in the form of protectionist industrial policies, market access, and national
treatment for investment. U.S. concerns in regard to security issues center on military
and nuclear exports to Iran and Pakistan, and long-range regional military ambitions and
coercive tactics such as the March 1996 missile "tests" fired near Taiwan.
All of these issues are morally and politically compelling in their own right. But
can we realistically expect to change all these behaviors by the exercise of unilateral
outside pressure? Can we hold the complex relationship hostage to any one single issue
given the large and diverse interests we have in regard to China?
In devising an effective policy to advance our interests and values in regard to
China, our starting point must be an assessment of China. China is neither friend nor
foe. Nor is it a static political and economic entity. Rather, China is an emerging great
power, an ancient civilization undergoing unprecedented economic and social change.
Its Leninist leaders have made a huge bet on economic modernization from which they
derive what legitimacy they have. They are betting, in effect, that they can ride the tiger
of market reform and dependence on the international economy while maintaining their
political monopoly. Recent East Asian experience in countries such as South Korea,
Taiwan, and Thailand suggests that over time, as a sizeable urban middle class develops,
political change tends to follow. Nonetheless, the outcome of China's experiment is not
inevitable. But history argues for some measure of forbearance.
-3-
The way the present China debate is framed-"Engagement or
Containment,"-has itself become an obstacle to finding a new basis for the U.S.-China
relationship. Engagement is a tactic or a commitment to a process, not a policy;
containment is, at this stage, the wrong approach. Unlike the U.S.S.R., China is not an
ideological, expansionist military threat to the very existence of the United States, nor
an autarchic economic system. Rather, there is global competition for the China market,
and China has based its very modernization effort on joining the international economy.
In its efforts to join the WTO, in its ascension to the Non-Proliferation Treaty, the
Chemical Weapons Convention, and the Comprehensive Test Ban Treaty, there is clear
evidence that it is seeking to integrate itself into the international system, not to upend
that system. No regional ally will support Soviet-type containment, though all seek a
counter-balance. The real issue is defining the character of engagement with China.
The reality of China is that it will be ambiguous in its behavior for perhaps
another generation. Its interests will overlap in some areas and conflict in others. The
challenge to U.S. policy is to define our priorities and benchmark China's conduct vis-a-
vis American interests. We must face the reality that we can not have it all at once. We
must pick our issues and husband our leverage wisely, building coalitions when
possible. We must be tough, but smart.
Roadmap for a China Policy
We need a new national debate in order to rebuild a bipartisan consensus on
China-one that existed from Nixon opening in 1971-72 until 1989. It must be led by the
President, and a major policy review would be a useful place to start. The Executive
branch would be well to find ways to improve its mechanisms of consultation with
Congress.
There are various strategies for getting out of the MFN trap permanently. China
could simply be declared a market economy (it is about 50 percent privatized), and thus,
exempt from Jackson-Vanik. Another approach would be to either repeal Jackson-Vanik
or adopt another legislative vehicle to govern the MFN process for non-members of the
WTO while automatically granting MFN to WTO members. In the interim, Sec.301 and
Special 301 (of the 1974 Trade Act) tools could be used to open Chinese markets in a
more targeted fashion.
At present, it appears that an ugly, contentious debate looms in coming weeks.
It is unlikely that there will ultimately be veto-proof majorities sufficient to override the
President on MFN. But the price of MFN renewal may be essentially a vote of no
confidence in the Administration's China policy. Various pieces of alternative legislation
aimed at punishing China are likely to emerge. The net result would be continued
volatile U.S.-China relations, and persisting political opposition which will undercut
U.S.-China policy.
-4-
Regardless of the outcome of the MFN debate in Congress, the President must
lead a new national debate aimed at finding the balance in advancing U.S. interests and
values in regard to China. Along with a policy review, the President needs to
communicate clearly to the American people-as he did in the NAFTA debate and on
Bosnia policy when the decision to intervene was made-the goals, priorities,
benchmarks for success or failure, and logic of his China policy. (Future PPI policy
papers in this series will address the full range of policy issues.) The following is an
outline of suggested priorities, effective ways to achieve demonstrable results, and
benchmarks for progress:
The United States should shift the economic focus from MFN to a far more
important long-term issue: China's accession to the WTO. This will shape
China's economy and its commercial relationship with the world for the
next generation, set the tone for the accession of Russia and others, and
affect the very credibility of the WTO. This is the issue on which to build
a coalition with the European Union and Japan to jointly press for
subjecting China to firm commercial disciplines; e.g., to lock in enforceable
sanctions on sectors in which Beijing will phase in market disciplines, etc.
Congress should also demand that the Administration set up a process of
regular consultation on the China-WTO negotiations.
Along with these economic interests, security issues are a high priority.
Instead of "dialogue," we should pursue results-oriented strategic talks
with China on the future of nuclear weapons, their export controls, and
place a priority on curbing Chinese military and nuclear exports to
Southwest Asia, principally, Iran and Pakistan. Stopping C-802 missile
exports to Iran is a sensible priority of some urgency. These sophisticated
missiles pose a new threat to U.S. naval forces in the Gulf where we have
vital interests. Chinese collaboration with Iran's military ambitions is
against our interests (and theirs). The Administration has imposed
sanctions against Chinese firms for selling chemical precursors (which
could be used to make weapons) to Iran. This is a smart use of
proportionate, targeted sanctions. Other steps might be considered such as:
cut off export-import financing for state-owned firms
suspected of violating non-proliferation commitments;
bar firms owned by the People's Liberation Army (PLA) from
doing business in the United States until Beijing complies
with treaties it has signed.
There are a number of other ways in which the Administration could "get
tough" with China: by stepping up U.S. counter-intelligence against China,
-5-
particularly against industrial spying and attempts to acquire technology
under false pretense; by tightening export controls and more closely
monitoring end use of technology exports; by demanding on-the-ground
monitoring for compliance with trade agreements; and by pressing for
more cooperation with U.S. Drug Enforcement Agency efforts in the
Golden Triangle (along the Thai-Burma-China borders) from which the
majority of heroin comes to the United States.
Hong Kong, which reverts to Chinese sovereignty on July 1, 1997, is a
difficult issue of special concern. We should benchmark three core issues:
free and fair elections in '98; integrity of the courts and the civil service;
and financial and commercial autonomy. We should stress that the issue
in Hong Kong is not just one of human rights. Rather, it is Beijing's
credibility as an interlocutor. In the 1984 Sino-British Joint Declaration
(which China submitted to the U.N. as an international agreement) and in
its own Basic Law governing Hong Kong, Beijing committed itself to allow
"a high degree of autonomy," maintaining "Hong Kong's way of life for
fifty years." If China now interprets these agreements any way it sees fit,
will it do the same with WTO agreements or arms control accords? We
should explore ways of taking action to rescind the separate legal and
economic treatment mandated in U.S. law if China fails to abide by its
commitment to Hong Kong's autonomy. Congressionally mandated State
Department reports on Hong Kong offer a ready means to measure China's
performance. If it is behaving as one political and economic system,
perhaps we should treat it as one.
Rethinking Human Rights
Finally, we need to rethink our strategy for enhancing human rights in China. This
begins with its very definition. We need to understand that the most important forces
for change in China are coming from within, not from without. The spread of economic
freedom has expanded the realm of individual autonomy and shrunk the realm of the
State. Most fundamentally, the role of the dan-wei, the work unit, in the lives of Chinese
citizens has sharply diminished as the economy has privatized. Economic freedom is an
aspect of human rights. We should not forget that MFN and U.S. economic involvement
in China has expanded personal freedom and decreased state intrusiveness in the lives
of millions of Chinese.
There are some modest signs of positive movement in regard to rule of law. It is
worth noting that in March 1996, China adopted new criminal codes, a modest but
significant step toward rule of law. Citizens now can and have successfully sued the
government. Moreover, Beijing has indicated it will sign and ratify the International
Covenant on Economic, Social, and Cultural Rights of the U.N. Universal Declaration of
Human Rights. This is normative behavior to be welcomed. The United States and other
-6-
G-7 countries should also press China to sign the International Covenant on Civil and
Political Rights.
We should pursue a three-pronged approach to human rights designed to
facilitate change from within rather than imposing it from the outside. In areas where
internal trends are moving in positive directions-expansion of non-governmental
organizations (NGOs), rule of law, local elections-the United States should cooperate
with China in facilitating these trends. We should expand efforts of groups such as the
National Endowment for Democracy (NED), the National Democratic Institute (NDI),
and the International Republican Institute (IRI) to promote civil society. Already the IRI
has helped China organize village elections (to be extended to county government).
Promoting exchange programs, supporting NGOs and civil society, and aiding rule of
law via NED and private sector programs all can have an impact on human rights. We
should step up hortatory pressure articulating our values through the Voice of America
and Radio Free Asia. In addition, we should use U.S. Congress-National People's
Congress and/or NGO-NGO dialogue as forums to make these points.
One way to allow individuals to exercise their condemnation of repression in
China would be, as the Heritage Foundation has proposed, to enact "Know Your Trading
Partner" legislation. Such legislation would require the Administration to identify all
Chinese military-owned companies and products, allowing consumers to make a choice.
Another aspect of U.S. human rights strategy must be quiet diplomacy (with our
allies as well as Beijing) to identify realizable goals for human rights-for example,
Beijing's recognition of the Pope and other moves towards more religious freedom, Red
Cross visits to jails, and release of leading dissidents. Finally, there should be carefully
targeted penalties, for example, cutting access to the International Development Agency
(IDA), and other concessional lending for particular human rights abuses.
Conclusion
The above are offered as notional ideas for how to break out of the confines of the MFN
debate, to offer a different way to think about China, and to identify appropriate policy
instruments to address the long list of American concerns in regard to China. We must
begin to define a tough, but smart approach to China that achieves results in areas
identified as top priority concerns. Economic and security issues should be at the top of
the list. There is no silver bullet, no bumper sticker for a workable China policy that
satisfies the many deeply felt concerns about China.
The emergence of China is the biggest challenge facing the international
economic and political system into the 21st century. It requires focused, sustained
attention and leadership from the Executive Branch and a working partnership with
Congress. There must be limits to partisanship and some consensus on the basics of a
relationship with China.
-7-
Endnotes
1. See Robert Kagan, "The Case For Containment of China," The Weekly Standard,
January 20, 1997, pps.23-27.
2. A recently completed U.S.-Vietnam trade accord will result in MFN for Vietnam.
3. See John Maggs, "The Myth of the China Market;" The New Republic, March 10,
1997, pps 15-17.
4. See, "Mission Agencies View MFN Pressure as Counter-Productive," Press Release
of the China Service Coordinating Office; Wheaton, Illinois; March 27, 1997.
-8-
Sandy / AAST True
FROM
THE WHITE HOUSE
WASHINGTON, D.C.
Bob Kyle is going home because
/he is sick. He would like you
-
to call him at home.
364 3004
MACK MCLARTY
April 22, 1997
To: Sandy Berger
While I do not disagree with our current
posture on fast track, I did read with some
concern the attached cable which I thought
you would find relevant to our recent
discussions regarding hemispheric trade. As
you stated on so many occasions with your
usual eloquence and clarity, the world
continues to change and move forward and is
not going to wait on us for very long.
way 4/28
on & 4
MACK
Attachment
Jhanas return they let's I'm I
cata.
Mexico, coming should to the srew
drass.
we move now. @
THE WHITE HOUSE
WASHINGTON
June 11, 1997
To: Lael Brainard
An unlikely ally, but a well done commentary
which I thought you would find of interest
and relevant to our recent discussions.
my
Attachment
Desk
MACK MCLARTY
June 9, 1997
To: Bob Kyle
An unlikely ally, but a well done commentary
which I thought you would find of interest
and relevant to our recent discussions.
w.p
Attachment
Desk
Steve
nelson
Heritage Foundation
andrew
A tax-exempt public policy research institute
Eric
May 21, 1997
Deak
The Honorable Mac McClarty
Counselor to the President
The White House
Washington, D.C.
Dear Mr. McClarty:
It was a pleasure to be able to share a common interest in promoting fast track and
expansion of NAFTA, and a continued expansion of MFN for China with you on the
flight from Miami to Washington today.
With the thought that you might find them of special interest, I am enclosing the
most recent paper we have done on NAFTA as a prelude to your official report due to the
Congress by June 30. I am also enclosing a recent study we did on continued MFN for
China.
As I indicated to you on the plane, we look forward to working with you and your
colleagues in every appropriate way to advance these common policy objectives which
we share.
Sincerely
Gar
Edwin J. Feulner, Jr.
President
EJF/ms
Phillip N. Truluck, Executive Vice President
Grace-Marie Arnett, Vice President
Edwin J. Feulner, Jr., President
Herbert B. Berkowitz, Vice President
Robert G. Blatz, Vice President
Stuart M. Butler, Vice President
Kim R. Holmes, Vice President
Michael G. Franc, Vice President
Lewis F. Gayner, Vice President
Adam Meyerson, Vice President
John Von Kannon, Vice President & Treasurer
Bernard Lomas, Counselor
Robert E. Russell, Jr., Counselor
David R. Brown, M.D., Chairman
Board of Trustees
J. Frederic Rench, Secretary
Richard M. Scaife, Vice Chairman
Midge Decter
Jeb Bush
Grover Coors
Hon. J. William Middendorf, II
Edwin J. Feulner, Jr.
Thomas L. Rhodes
Jerry Hume
Hon. Frank Shakespeare
Hon. William E. Simon
Thomas A. Roe
Barb Van Andel-Gaby
Preston A. Wells
Hon. Jay Van Andel
Honorary Trustees
Joseph Coors
Kathryn Davis, Ph.D.
Hon. Jack Eckerd
Hon. Henry H. Fowler
Robert H. Krieble, Ph.D.
Henry Salvatori
214 Massachusetts Avenue, N.E.
Washington, D.C. 20002-4999
(202) 546-4400
http://www.heritage.org
The T Backgrounder
Heritage Foundation
No. 1117
The Heritage Foundation
214 Massachusetts Avenue, N.E.
Washington, D.C. 20002-4999
(202) 546-4400
http://www.heritage.org
Share -
Nersy
May 16, 1997
Arder
Earn
per
NAFTA'S THREE-YEAR REPORT CARD:
AN "A" FOR NORTH AMERICA'S
ECONOMY
INTRODUCTION
P
resident Bill Clinton is legally required to provide Congress with a detailed
"report card" by July 1, 1997, covering the first three years of implementation of
the North American Free Trade Agreement (NAFTA), which includes the United
States, Mexico, and Canada. This report will come under intense congressional scrutiny
because many Members of Congress have indicated that their willingness to renew the
President's fast-track negotiating authority will depend on their perception of how well
NAFTA has performed during its first three years. If the Clinton Administration's report is
objective and accurate, it will show NAFTA to be a remarkable success.
Despite the doomsday warnings about what would happen under NAFTA, hundreds of
thousands of U.S. jobs have not been destroyed, the U.S. manufacturing base has not been
weakened, and U.S. sovereignty has not been undermined. Instead, total NAFTA trade has
increased, U.S. exports and employment levels have risen significantly, and the average
living standards of American workers have improved.
Indeed, if NAFTA were to be graded on its effects after only three years, it would
receive an "A+" for enhancing the level of trade between the United States and its North
American neighbors; an "A+" for increasing the number of U.S. jobs that support this
increased trade; an "A+" for its positive impact on manufacturing and on the personal
income of American workers; and a "B" both for encouraging U.S. compliance with
implementation of NAFTA's deadlines and for improving U.S. relations with Mexico in
general. Finally, although much more can be done, NAFTA has been instrumental in the
strides Mexico has made in liberalizing its economy, and is one reason Mexico is taking
steps to reform its political system. With this kind of report card, Congress should have no
doubts about the success that NAFTA has achieved.
Note: Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt
:o aid or hinder the passage of any bill before Congress.
THE NAFTA REPORT CARD
The Clinton Administration's three-year evaluation should rate the effects of the North
American Free Trade Agreement as follows:
Growth in Trade: A+
Total North American trade increased from $293 billion in 1993 to $420 billion
in 1996, a gain of $127 billion or 43 percent during NAFTA's first three years. 1
If that gain had been with a single country, it would have made that country the
fourth-largest trading partner of the United States. In 1996, U.S. exports to
Canada and Mexico, at $190 billion, exceeded U.S. exports to any other area of
the world, including the entire Pacific Rim or all of Europe. Mexico and
Canada purchased $3 of every $10 in U.S. exports and supplied $3 of every
$10 in U.S. imports in 1996. Overall, total U.S. exports of goods and services
grew from $602.5 billion in 1993-the last year before NAFTA was
implemented-to $825.9 billion in 1996, a gain of $223.4 billion. 2
Growth in U.S. Exports: A+
Thanks to NAFTA, Mexican tariffs-which had averaged 10 percent before the
trade agreement was implemented-now average less than 6 percent, while
average U.S. tariffs have fallen from 4 percent to about 2.5 percent. As a result,
U.S. exports to Mexico grew by 37 percent from 1993 to 1996, reaching a
record $57 billion. 3 During this period, U.S. exports to Canada also increased
by 33 percent, to $134 billion. Total two-way trade between the United States
and Canada was $290 billion in 1996, while total two-way trade between the
United States and Mexico was nearly $130 billion. According to the U.S.
Department of Commerce, U.S. exports to Mexico in the fourth quarter of 1996
were growing at an annualized rate of $64 billion. Moreover, U.S. market share
in Mexico increased from 69 percent of total Mexican imports in 1993 to 76
percent in 1996. 4 During NAFTA's first three years, 39 of the 50 states
increased their exports to Mexico; moreover, 44 states reported a growth in
exports to Mexico during 1996 as the pace of U.S. exports to that country
accelerated.
5
1
In 1996, U.S. global trade (exports plus imports) totaled $1.765 trillion-over 23 percent of U.S. GDP, compared with
10 percent in 1970. The Office of the U.S. Trade Representative (USTR) has estimated that by 2010, trade will repre-
sent about 36 percent of U.S. GDP. Since 1988, almost 70 percent of U.S. economic growth has been derived solely
from exports (roughly 25 percent since 1992). More than 11 million U.S. jobs depend on exports, 1.5 million more than
in 1992; 20 percent of American jobs are supported by trade and pay between 13 percent and 16 percent more, on
average, than non-export jobs.
2
The U.S. Department of Commerce estimates that every $1 billion increment in U.S. exports creates 22,800 new jobs
in the United States. This would mean that U.S. export growth from 1993 to 1996 was responsible for creating over 5
million U.S. jobs, or 57.7 percent of the 8.8 million net new payroll jobs created by the U.S. economy during this three-
year period.
3
Exports of U.S. components to Mexico's duty-free component assembly industry made up approximately 28 percent of
total U.S. exports to Mexico in 1996, according to a report for the USTR by the U.S. International Trade Commission
(ITC). The ITC found that the use of U.S. components in Mexican assembly plants had grown at an average yearly rate
of 15.8 percent since NAFTA was implemented in 1994.
4
Testimony of Regina Vargo, Deputy Assistant Secretary for the Western Hemisphere, U.S. Department of Commerce,
before the Subcommittee on International Economic Policy and Trade of the House Committee on International
Relations, March 5, 1997.
2
Growth in U.S. Employment: A+
NAFTA has shattered the myth that U.S. trade deficits destroy U.S. jobs. The
combined U.S. trade deficit with Canada and Mexico increased during the first
three years of NAFTA's implementation-from $9 billion in 1992 to $39.9 bil-
lion in 1996-because Canada and Mexico suffered economic recessions.
Since 1992, however, the U.S. economy has created 12 million net new jobs.
Moreover, manufacturing employment grew from 16.9 million jobs in 1992 to
18.3 million in 1993, an increase of 1.4 million net new jobs. 6 The general
unemployment rate declined from 7.5 percent in 1992 to 5.3 percent in 1996.
U.S. exports to NAFTA countries currently support 2.3 million U.S. jobs. 7
Output Gains for U.S. Manufacturing: A+
The largest post-NAFTA gains in U.S. exports to Mexico have been in such
high-technology manufacturing sectors as transportation and electronic equip-
ment, industrial machinery, plastics and rubber, fabricated metal products, and
chemicals. 8 NAFTA also has been a boon for major U.S. agricultural states like
Montana, Nebraska, and North Dakota, and traditional southern textile states
like North Carolina and Alabama. NAFTA has encouraged U.S. and foreign
investors with apparel and footwear factories in Asia to relocate their produc-
tion operations to Mexico. This diversion of investment from Asia to Mexico
"saved the heavier end of clothing manufacture in the U.S.: the textile mills,"
as Rich Nadler, a journalist who has covered NAFTA's progress since 1992,
recently observed.⁹
Improved Standards of Living for American Workers: A+
According to Nadler, who has reviewed pre- and post-NAFTA growth rates in
U.S. standards of living, the rate of increase in personal wealth has more than
tripled since NAFTA was implemented. 10 His review measured the improve-
ment in three ways: (1) inflation-adjusted gross domestic product (GDP) per
capita grew by 1.79 percent annually in 1994 and 1995, compared with only
0.23 percent from 1990 to 1993; (2) disposable personal income growth,
adjusted for inflation, averaged 1.89 percent annually in 1994 and 1995, com-
pared with 0.25 percent annually from 1990 to 1993; and (3) personal con-
sumption expenditures grew by an inflation-adjusted 1.76 percent annually
during 1994 and 1995, compared with 0.56 percent a year from 1990 to 1993.
5
Data from Massachusetts Institute of Social and Economic Research.
6
As of February 24, 1997, 110,408 U.S. workers had been certified as eligible for training assistance under NAFTA's
Trade Adjustment Assistance Program, administered by the U.S. Department of Labor. The U.S. economy, however,
currently creates this many net new jobs in about two weeks. The general U.S. unemployment rate declined from 7.5
percent in 1992 to 5.3 percent in 1996.
7
Office of the USTR, "NAFTA and Jobs," 1996.
8
Since 1992, U.S. industrial production has increased 18 percent. During this four-year period, U.S. manufactured
exports increased 42 percent, high-technology exports rose 45 percent, services exports were up 26 percent, and agri-
cultural exports expanded 40 percent. The Western Hemisphere and the Asian Pacific Rim now account for over 70
percent of total U.S. exports, up from 65 percent in 1992.
9
Rich Nadler, "NAFTA: Jobs, Jobs, Jobs," K. C. Jones, Overland Park, Kansas, April 1997.
10
Ibid.
3
U.S. Compliance with NAFTA: B
In December 1995, the Clinton Administration postponed indefinitely the
implementation of a NAFTA deadline to allow Mexican trucks to circulate in
the southwest United States. The Administration based its decision on concerns
relating to transport safety and the fight against drug traffickers. The President,
however, was acting in response to pressures from union and environmentalist
groups that joined forces with bipartisan anti-drug hawks to block implementa-
tion of that provision of NAFTA. The decision established a negative precedent
but did nothing to improve Mexican truck safety or diminish the flow of illegal
drugs across the porous and unguarded U.S.-Mexico border.
U.S.-Mexico Trade Relations: B
President Clinton's first official trip to Mexico this month came at a time in
which relations between the two countries were at their lowest point in years. 11
The trade and investment growth achieved during NAFTA's first three years has
been eclipsed by the peso crisis and political turmoil in Mexico and by growing
bilateral tensions over drug control policy, immigration, and the Helms-Burton
Act's tightening of economic sanctions against Cuba. These tensions in U.S.-
Mexico relations have surfaced because the Clinton Administration did not
assign a sufficiently high priority to Mexico during its first term in office. Pro-
tectionists have laid the blame for all of these problems at NAFTA's door.
NAFTA, however, was never intended to be anything other than a free trade
agreement-a three-way pact by the United States, Mexico, and Canada to
eliminate all tariff and non-tariff barriers to trade over a period of 10 to 15
years. NAFTA was designed to encourage faster growth in North American
trade and investment, which it has been doing successfully since January 1,
1994. It was not meant to solve other problems in U.S.-Mexico relations.
Reform Process in Mexico: A
Although Mexico has made great strides during the past decade in liberalizing
its economy and reforming its closed political system, it still is undergoing a
difficult transition from a closed economy and political system to an open capi-
talist democracy. Moreover, this transition will continue for at least another
decade or two. One of NAFTA's important achievements has been to "lock in"
the process of economic and political reform under way in Mexico for the past
decade. Mexico's membership in NAFTA, the World Trade Organization, the
Asia-Pacific Economic Cooperation forum, and the Organization for Economic
Cooperation and Development has created international commitments and link-
ages that it cannot ignore. Even though The Heritage Foundation's 1997 Index
of Economic Freedom still accords Mexico a ranking of 3.35, or "Mostly Not
Free, ,,12 Mexico has become a more democratic country since NAFTA was
implemented. Under President Ernesto Zedillo, Mexico's constitution was
amended in 1996 to make the electoral process more free, more transparent,
and more independent of the government. These reforms, in effect for Mexico's
11 Julia Preston, "U.S. Trying to Smooth Mexico Path for Clinton," The New York Times, April 20, 1997, p. 4.
12 Kim R. Holmes, Bryan T. Johnson, and Melanie Kirkpatrick, eds., 1997 Index of Economic Freedom (Washington,
D.C.: The Heritage Foundation and Dow Jones & Co., Inc., 1997), pp. 306-308.
4
July 6, 1997, elections to Congress, will accelerate both the demise of the one-
party system that has dominated Mexican politics for nearly 70 years and its
eventual replacement by a competitive multi-party democracy.
NAFTA: A SUCCESS BY ANY OBJECTIVE STANDARD
The data on trade, production, and employment growth for NAFTA's first three years
quantify objectively that NAFTA is good for the United States. Moreover, a recent eco-
nomic analysis published by the U.S. Federal Reserve Bank of Chicago concludes that
NAFTA will lead to output gains for all three participant countries. 13 These gains are
roughly twice as large as those predicted by previous forecasts of NAFTA's potential for
accelerated growth in North American trade, output, and employment growth.
The Federal Reserve study, based on a dynamic economic model, also predicts that the
adjustment to NAFTA should be virtually completed by 2004 (although NAFTA will not
be fully phased in until 2009) and that NAFTA will greatly expand the flow of all goods,
both from Canada and the United States to Mexico and from Mexico to the United States
and Canada. In general, bilateral Mexican-North American trade should increase about 20
percent as a result of NAFTA. 14 This projected growth also means more U.S. jobs and a
higher standard of living for American workers.
CONCLUSION
In his State of the Union speech on February 4, 1997, President Clinton called on
Congress to approve new fast-track negotiating authority in order to pursue new trade ini-
tiatives in Asia and Latin America during 1997 and 1998. "Now we must act to expand
our exports," the President said, "especially to Asia and Latin America-two of the fastest
growing regions on earth-or be left behind as these emerging economies forge new ties
with other nations. ,,15
The President is right to emphasize the importance of U.S. trade with Latin America.
The Western Hemisphere accounted for 39 percent of U.S. goods exports in 1996 and was
the only region in which the United States recorded a trade surplus in both 1995 and 1996.
As a market for U.S. goods, the Western Hemisphere already is nearly twice as large as
the European Union and nearly 50 percent larger than Asia. Moreover, while U.S. goods
exports to the world generally increased 57 percent from 1990 to 1996, U.S. exports to
Latin America and the Caribbean (excluding Mexico) increased by 110 percent during the
same period. 16 If current trends continue, Latin America alone will exceed Japan and
Western Europe combined as an export market for U.S. goods by the year 2010.
Congress should have no doubts about the success of NAFTA. Although only three
years old, this international trade agreement is growing with amazing speed. Even though
three years may seem like too little time to reach any final judgments about NAFTA, it
already is clear that critics of this agreement have been wrong on all counts. 17 Congress
13 See Michael A. Kouparitsas, "A dynamic macroeconomic analysis of NAFTA," Economic Perspectives, Federal
Reserve Bank of Chicago, January 1997. The study concluded that, under NAFTA, Mexico's GDP is predicted to rise
3.26 percent, U.S. GDP will rise 0.24 percent, and Canada's GDP will increase by 0.11 percent.
14 Ibid.
15 "Clinton calls for fast-track authority in State of the Union speech," Inside NAFTA, Vol. 4, No. 3 (February 6, 1997),
p. 1.
16
Office of the USTR.
5
will be acting in the U.S. national interest when it approves a new fast-track negotiating
authority so that the Clinton Administration can put U.S. trade policy back on track
around the world.
John Sweeney
Policy Analyst
HERITAGE STUDIES ON LINE
Heritage Foundation studies are available electronically at several online locations. On the Internet,
The Heritage Foundation's home page on the World Wide Web is www.heritage.org Bookmark this site and visit it daily
for new information.
17 See Sydney Weintraub, "NAFTA at Three: A Progress Report," Significant Issues Series, Vol. XIX, No. 1, Center for
Strategic and International Studies, Washington, D.C., 1997.
6
Eric
EDITOR'S NOTE
Nelson
YOUR LatinTrade BUSINESS SOURCE FOR LATIN AMERICA
New
Lynn H. Roberts Publisher and Editor-in-Chief
Street
Joachim Bamrud Editor
Joseph S. Sims Managing Editor
Samba Time?
Rege
Jeb Blount Senior Writer
Ive Barreiros Director of Statistics
Susie Picar Assistant Editor
RUMOR HAS IT THAT U.S. PRESIDENT BILL CLINTON WILL DEDICATE
Dina M. Carabelli Research Assistant
more time on foreign policy in his second term than what he managed in his first
four years. However, it remains to be seen just how much attention he'll shower on
Gabriela Calderon- Research Assistant
Latin America.
Luis Rigual Editorial Assistant
Although a Latin American country-Venezuela-is now the top provider of
Alex Franco Editorial Intern
oil to the United States, and Latin America provides U.S. companies the best
growth opportunities in the world after Asia, U.S. officials have paid only scant
Kevin Jolliffe Creative Director
attention to the region since the historic December 1994 Summit of the Americas
Adrian Fletes Production Director
in Miami. That summit promised to start creating a Free Trade Area of the Ameri-
Lourdes M. Lopez Graphic Artist
cas by the year 2005.
Eduardo C. Gomez Graphic Artist
However, things didn't quite work out as expected. While
Clinton officials and U.S. legislators have bickered about free
Virginia F. Bru Graphic Artist
trade and spent nearly two years distracted by the U.S. elec-
John Otis Senior Editor
tions, their Latin American counterparts signed several impor-
Alliance for Trade
tant trade agreements with each other as well as with the
Marilyn A. Moore Special Projects Editor
European Union.
SPANISH-LANGUAGE EDITION
The Latin American integration drive has been led by Mer-
Oscar Diaz Associate Editor
cosur, the South American Common Market of Argentina,
Andres Hernández Alende Senior Editor
Brazil, Uruguay and Paraguay. Chile, which has been waiting
CONTRIBUTING EDITORS
for NAFTA membership since 1994, has joined Mercosur as
Jim Freer, Carl Honoré (Europe)
an associate member, as has Bolivia. Andean Pact members
Colombia and Venezuela are next in line.
CORRESPONDENTS
Today, it is therefore Brazil's president Fernando Hen-
Adam Thomson Bogotá Raymond Colitt
Caracas Renee McGaw Geneva Fiona Ortiz
FLORIDA
rique Cardoso rather than Bill Clinton who symbolizes
Guatemala Sally Bowen Lima Carl Honoré London
the push for regional integration.
Tim Coone Mexico City John Glover Milan
Yet, Cardoso is by no means any free trade champion. He has on several occa-
Jim Welsh New Orleans Charles Thurston New
sions unilaterally imposed tariff hikes and other trade barriers, much to the dismay
York Mac Margolis Rio de Janeiro Thomas Long
San Salvador Jonathan Wheatley São Paulo
of Brazilian and foreign traders. His critics also charge that he has moved far too
slow on needed reforms necessary to transform Brazil into the modern economic
CONTRIBUTING PHOTOGRAPHERS
champion it long has had the potential to be. All the same, it is now clear that it is
Alejandro Balaguer, John Bunting, Sergio Dorantes,
John Maier, Jr., Helen Hughes, Matthew Pace,
thanks to Cardoso, that Latin America is any closer to a FTAA.
Juan Carlos Piovano, Chris Sharp
That being said, it is vital that the United States again resume a active role in the
process. Expanding Mercosur may be necessary, but not sufficient, to create a
EDITORIAL ADVISORY BOARD
FTAA. The other piece of the puzzle is the United States and NAFTA.
Gustave A. Cisneros
Ernesto de Lima L
In the interim, Latin America is fully entitled to move ahead with the European
Dr. Gabriel Gonzalez Molina
Union. The Europeans, long suffering from internal disputes on free trade and har-
Wolf Grabendorff
David Hirschmann
monization, are now pushing actively for increased commercial ties with Latin
G: Philip Hughes
America.
Anne 0: Krueger
Needless to say, the United States can only defend its interests by taking the
Pedro-Pablo Kuczynski
Felipe Larrain B.
same kind of concrete steps, instead of waiting on the sidelines.
Siegfried Marks
Although 2005 may seem far away. the negotiations for a FTAA will be complex
Jens Olesen
Felipe Ortiz de Zevallos
enough-easily requiring the remaining eight years to start the process. There are
Luis Pazos
big differences between Mercosur and NAFTA, between big and small nations and
Dr. Jorge Ramirez Ocampo
Luis Rubio
even the degree to which each nation wants to move towards liberalization.
Dennis Yau
Only by moving ahead, can these challenges be addressed in time.
The time has come for the hemisphere's leaders to once again show the kind of
The Editorial Advisory Board provides editorial advice to
Latin Trade. Views reflected in Latin Trade do not neces-
initiative and leadership they showed in Miami.
sarily reflect those of the Editorial Advisory Board.
Enough talk. Move ahead and create history.
Ryn
Member, InterAmerican
Press Association
-Joachim Bamrud
Latin Trade is exclusively syndicated by
PHOTOCOPY
[email protected]
The New York Times Syndication Service
8
LATIN TRADE
PRESERVATION
JUNE 1997
Questions /hyle
THE WHITE HOUSE
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45A
ing the president from negotiating trade
THE WALL STREET JOURNAL TUESDAY, APRIL 1. 1997 A3
agreements." said one top trade official.
President Clinton has been without
we wanted. said Peggy Taylor. leg-
fast-track negotiating power since 1994.
Clinton Seeks
islative director of the AFL-CIO. The only
when his authority expired after a new
way to protect workers in this country and
world-trade pact was completed. Since
in our trading partners is to have labor
then. the administration has been able to
More Leeway
agreements written into trade agree-
complete a few pacts - on telecommunica-
ments.
We would fight this vigor-
tions and technology. for example - under
ously. Added Steve Trossman. a spokes-
specific exemptions. But the U.S. has
man with the Teamsters Union: We don't
been unable to launch any major initia-
In Trade Pacts
accept that side-agreement part. We would
tives. because other countries are usually
definitely oppose this."
unwilling to negotiate a trade agreement
Gephardt's Ire
knowing Congress could tack on amend-
By HELENE COOPER
Dropping labor and environment from
ments and new requirements.
Staff Reporter of THE WALL STREET JOURNAL
fast track would also earn for Mr. Clinton
Without fast track. President Clinton
the ire of House Minority Leader Richard
has been unable to extend the North
WASHINGTON - The Clinton adminis-
tration. in a move certain to infuriate labor
Gephardt (D., Mo.). who has been staking
American Free Trade Agreement to Chile.
out a trade position for himself to the left of
or to negotiate a Free Trade Agreement of
unions. IS considering dropping labor and
the administration and of Vice President
the Americas. Moreover. without fast-
environment objectives from legislation
that would enable the president to negoti-
AI Gore. The two are likely rivals for
track. the U.S. can't take part in the
ate future trade deals.
the 2000 presidential nomination. Mr. Gep-
coming World Trade Organization talks on
hardt and House Minority Whip David
agriculture.
U.S. trade officials said they are seek-
ing to jump-start the floundering measure.
Bonior of Michigan have both indicated
which has meandered in and out of Con-
they won't support fast track if it doesn't
gress for the past three years. During that
include labor and environment.
time, President Clinton has slowly lost his
But administration officials say they
ability to negotiate "fast-track" trade
must bow to the political realities of a
deals abroad. Under fast track. Congress
Republican Congress. Republicans ada-
can accept or reject a trade agreement but
mantly oppose linking trade with labor and
not amend it - a necessary factor for U.S.
environment in trade pacts. and have
trading partners.
refused to budge from that stance. And
The new proposal being floated within
because so many Democrats don't like
the administration would seek fast-track
trade agreements and won't vote for them
negotiating authority for four years. with
anyway. the administration must appeal to
an option to renew for another four years.
Republicans to get a bill passed.
officials said. While no final decision has
Indeed. shortly after stating the Team-
MM-
been made. U.S. Trade Representative
sters' opposition to the administration pro-
Charlene Barshefsky is expected to take
posal. Mr. Trossman added: "I don't want
the proposal to congressional leaders be-
to leave the impression that we'd support
ginning this week. Administration officials
26)
fast track if it included labor and environ-
say they hope to have legislation ready for
ment either. We're opposed to it. Period."
Congress in three weeks.
Trade officials say that labor's hard
Issues in Side Agreements
line on fast track
ne reason the admin-
U.S. trade officials say they recog-
istration
may
cn
a its stance. While
nize that their one hope for getting fast-
advancing labor
ndards around the
track authority may be a coalition of
world
is
an
admir.
ration priority. "You
moderate Democrats and Republicans. So
don't advance those objectives by prevent-
they may drop Mr. Clinton's initial pro-
posal that would require U.S. officials to
negotiate labor and environment stan-
dards as a part of trade deals, backed by
trade sanctions. Instead. Mr. Clinton
would issue a separate presidential state-
ment calling for labor and environmental
issues to be negotiated in side agreements
that don't have to go to Congress.
Such a move would infuriate organized
labor. because side agreements don't have
the punitive punch of a trade pact. For
example. it's unlikely the administration
could negotiate a side agreement on labor
rights that would subject an offending
country to trade sanctions.
"This isn't anywhere close to what
Morton M. Kondracke
http://www.rollcall.com/commentary/kondracke.html
Commentary
Pennsylvania Avenue
Free-Trade Fight Threatens to Split Clinton, Hill
Dems
By Morton M. Kondracke
Worried about a split with labor and top Congressional Democrats, the White
House plans to delay action on its fast-track trade proposal until after a budget
deal, possibly endangering its chances of passage.
If budget negotiations drag into the fall, according to free-trade advocates in
Congress, the delay will give opponents time to organize and, possibly, doom
fast-track to defeat as an election year looms.
Fast-track is one of a series of issues, including Medicare savings;
cost-of-living adjustments; and Mexico, China, and NATO policy, on which
Clinton is in conflict with liberal Democrats and their organized labor allies.
At a top-level meeting of Clinton Cabinet members and White House staff on
Tuesday, sources said there was near-unanimous agreement that, against labor's
wishes, Clinton should recommend a "clean" fast-track bill in order to negotiate
new agreements to expand worldwide free trade.
Clinton, his Cabinet, and most of his top staff all are convinced -- correctly --
that free trade is one key to future US prosperity and that failure to reach new
agreements will put the US at a disadvantage as Latin America and Asia form
their own trading blocs.
But liberals are just as convinced that free trade costs US jobs and pushes down
wages, so House Democratic leaders Dick Gephardt (Mo) and David Bonior
(Mich) are adamant that any new trade bill require Clinton to include fair-labor
and environmental standards in future trade agreements. That, in turn, will be
unpalatable to majority Republicans.
The Administration needs authority from Congress to negotiate new trade
agreements. "Fast track" is Congress's commitment that any agreements will be
voted up or down without amendment.
Clinton plans to buck Gephardt and Bonior, White House aides say, but
officials at the Tuesday meeting want the fight postponed until after Clinton has
reached a budget deal with Republicans, which chief of staff Erskine Bowles
reported might come as early as June 1.
One participant at the meeting said "the plan is for Clinton to show what he's
for, but we have to figure out the sequencing." Clinton, this aide says, "wants to
have an ample number of Democrats voting with him on the budget."
Rep. Bob Matsui (Calif), the chief Democratic backer of Administration trade
legislation, said that, if asked, he would recommend that fast-track and the
budget be pushed on parallel tracks.
I of 3
04/03/97 15:51:03
Morton M. Kondracke
http://www.rollcall.com/commentary/kondracke.html
"I understand the importance of a balanced budget," he said, "but if you delay
[fast track], it'll make it much more difficult to pass."
The fast-track issue is caught up not only in budget politics, but also in the
already bubbling 2000 Democratic presidential race between Gephardt and
Vice President Al Gore. Also having an impact on the policy debate are White
House worries about how Democrats will respond during Congressional
investigation of the 1996 fundraising scandal.
Gephardt is laying down hard markers to secure the support of the AFL-CIO
and the seniors' lobby, while Gore tries to repeat Clinton's previously successful
strategy of holding liberal support while also occupying the political center.
Gephardt's insistence that new trade agreements contain strong environmental
standards is a foray onto Gore's home turf, the environmental movement. That
movement split during the 1993 fight over the North American Free Trade
Agreement, which Gore supported and Gephardt opposed.
This year, Gephardt has opposed the Administration's certification of Mexico's
drug enforcement program, warned that he might oppose Clinton's proposed
$100 billion reduction in Medicare growth, and indicated that he will seek to
block Clinton's plans to expand NATO and continue most-favored-nation trade
status for China.
Gephardt also joined other pro-Israel Members in criticizing Administration
attendance at an Arab conclave held in the Gaza Strip to strategize on Israeli
land grabs, and he forced Clinton to back away from Senate GOP Leader Trent
Lott's (Miss) plan to create a bipartisan commission on the Consumer Price
Index.
Clinton aides acknowledge there is concern in the White House that drifting too
far away from liberal policy might weaken Democratic support amid upcoming
GOP scandal probes.
While public polls indicate that Clinton's popular support remains strong
despite scandal stories in the newspapers, private White House "push polls"
indicate that his support falls the more voters are told about the scandals.
A study by the non-partisan Center for Media and Public Affairs indicates that
Clinton's approval rating might be holding in the mid-50s because network TV
newscasts have carried only a fifth of the number of scandal stories per week as
the major daily newspapers.
With the exception of the CPI adjustment -- anathema to the AARP and
AFL-CIO -- Clinton so far has stood up to liberal pressure reasonably well this
year on such issues as Medicare, NATO, Mexico, and MFN.
The scheduling delay on fast-track indicates another possible wobble, however.
Already, Clinton's leg injury has caused his trip to Argentina, Brazil, and
Paraguay to be rescheduled from May until the fall, reducing pressure for
action on fast-track.
Delay into 1998 could kill fast-track and damage the government's ability to
open up job-creating overseas markets for US products and services. Clinton
has to wage a fight for free trade sometime. It might as well be now.
More Information about Morton Kondracke
2 of 3
04/03/97 15:51:03
Trip thes F N.Y. -
fin up Restrigt
Dut cases Fast True / Lake - Patech
No ve
From
Document No.
WHITE HOUSE STAFFING MEMORANDUM
4-4
7
DATE:
ACTION/CONCURRENCE/COMMENT DUE BY:
Fast Track
SUBJECT:
ACTION FYI
ACTION FYI
VICE PRESIDENT
McCURRY
BOWLES
McGINTY
McLARTY
NASH
PODESTA
RUFF
MATHEWS
SMITH
RAINES
REED
BAER
SOSNIK
ECHAVESTE
LEWIS
EMANUEL
YELLEN
GIBBONS
STREETT
HALE
SPERLING
HERMAN
HAWLEY
HIGGINS
WILLIAMS
HILLEY
RADD
KLAIN
BERGER
LINDSEY
REMARKS:
This mime vent to Gothi last aight.
RESPONSE:
Staff Secretary
Ext. 6-2702
THE WHITE HOUSE
8
WASHINGTON
April 7, 1997
MEMORANDUM FOR THE PRESIDENT
From:
Samuel Berger
Daniel Tarullo
Gene Sperling
ge
Subject:
Fast Track
Purpose
To determine how to proceed on seeking fast track authority. Our credibility in Latin America
increasingly is eroding because we have not moved beyond rhetorical support. Moreover,
economic integration is proceeding in the hemisphere (e.g., MERCOSUR), but without us.
However, there is substantial Democratic opposition to any fast track bill that does not mandate
provisions in trade agreements that provide for trade restrictions on countries for failure to meet
labor and environmental standards. Republicans will not accept such provisions, but they have
also indicated they would insist on significant Democratic support for a fast track bill. The issue
is further complicated by the possibility of an early budget agreement, which may also involve a
break in party unity, and which will command the lion's share of our resources and time,
including your own, for at least the next month.
Background
Fast track has never been popular in the Congress. The House tends to be skeptical of trade
liberalizing agreements in general, while the Senate tends to be resistant to the constraints upon
floor debate and amendments. Prior enactments of fast track were contained in broad-ranging
trade bills in which support for fast track was accepted by some members in return for making
U.S. import laws more restrictive and market access laws such as section 301 more aggressive.
These bills also provided new programs for displaced workers.
The normal difficulties of obtaining fast track are compounded this year by several factors. First,
free trade agreements have become strongly associated by many in Congress and the public with
NAFTA. The peso crisis and resulting reversal in our trade balance, along with seemingly
extraneous issues such as drugs and corruption in Mexico, have made NAFTA unpopular in
many quarters. Second, budgetary constraints suggest little room for additional programs to ease
displacement anxieties of potentially affected groups of workers. Third, the substantial
resistance to fast track among House Democrats presents a very awkward situation as we try to
conclude a budget agreement that is already placing severe strains on party unity. A number of
your political and congressional advisors are particularly concerned that proceeding vigorously
with fast track now risks both alienating Democrats we need on the budget and sustaining an
early loss that would reduce our influence on the Hill.
On the other hand, there is political cost to delay: Gephardt and other opponents already are
lining up Members, our supporters are exposed and we may exacerbate the challenge facing us if
we don't proceed soon.
The most contentious issue is the role of labor and environmental standards in future trade
agreements. For NAFTA we negotiated "side agreements" for labor and the environment, which
provided a special form of dispute settlement where there had been a "persistent failure" by one
of the governments to enforce its own laws on some labor areas and the environment. If such a
failure is found, fines are to be imposed on the offending government, with trade sanctions
imposed only if the fine is not paid. These agreements were approved by the Congress. They
have not been frequently invoked.
There appears to be strong support among business and the Republican leadership for fast track
authority, but only if labor and environmental provisions are not included in any agreements
negotiated under fast track authority. This proviso seems to include side agreements approved
by the Congress, though perhaps not side agreements reached on the basis of Executive authority
alone. Representative Gephardt and the AFL-CIO, on the other hand, have indicated they will
actively oppose fast track unless the terms of the authority require that labor and environmental
provisions, backed by trade sanctions, be included in any future free trade agreements. Even the
environmental groups that eventually supported the NAFTA side agreement will be hard to win
over this time around, since they have been disappointed in environmental developments along
the border and believe that they had an understanding with the Administration that future trade
agreements would be "greener" than NAFTA. However, anything less than the side agreements
approach would surely elicit charges that we are backing off even a moderate commitment to the
environment.
When USTR consulted extensively with the AFL-CIO earlier in the year there were some hints
that labor might not strongly oppose fast track (there was never any hope they would support it).
However, at the AFL-CIO's annual meeting in Los Angeles in February there was a surge of
anti-trade sentiment from some constituent unions, and the leadership had to work hard to avoid
a resolution that would have essentially opposed new trade agreements under any circumstances.
There is only limited hope that further discussions would yield agreement on some intermediate
position. A major anti-fast track campaign from labor is more likely.
In the House, where any fast track bill must originate, and where it will be tougher to prevail, we
will need at least 120-140 Republican votes, which the Republican leadership seem to believe
they can secure in the absence of a problem with the labor and environmental provisions. Vote
counting is complicated by the fact that House freshmen and sophomores have not had to cast a
3
difficult vote on trade. Based on previous landmark trade votes, the House Republican profile is
as follows:
98
Yes on NAFTA/GATT
2
No on NAFTA, Yes on GATT
25
No on NAFTA/GATT
91
Freshmen/Sophomores with no past trade votes
As was the case with NAFTA, Republicans are likely to insist that we get a substantial number
of Democrats (perhaps 80-90) to support our position. Many House Democrats who are
potential supporters of fast track are clearly uncomfortable with being pulled from opposite sides
by their leadership and the White House. The House Democratic profile is as follows:
43
Yes on NAFTA/GATT
48
No on NAFTA, Yes on GATT
57
No on NAFTA/GATT
59
Freshmen/Sophomores with no past trade votes
Our challenge in the House is exacerbated by the departure of most of the key Democratic
members who provided the whip organization for NAFTA. Indeed, Matsui is the only remaining
member who performed that role. Our core of support should come from the 43 Democrats who
voted for both NAFTA and GATT. If forty or so additional votes are needed, the next best target
group is composed of the freshmen and sophomores, with some lesser possibility of picking up a
handful from the group that voted no on NAFTA but yes on GATT. We will have to pick up
these Democrats with an intermediate position on labor and environmental standards that gives
them something to vote for while not losing significant Republican support.
Our position would likely be a "clean" fast track bill that did not either require or exclude labor
and environment provisions of any sort. However, we will have to state our intentions on these
issues. Charlene has recommended that we support an approach that would include side
agreements with sufficiently strong labor and environment provisions to attract some Democrats.
However, these agreements would not be submitted to Congress (which would engender
wholesale Republican opposition) and thus would be Executive agreements only, which in theory
could be terminated by a later Administration even as the underlying trade agreement remained
in place. She also recommends that we formally state our intention to consider labor and
environmental circumstances, among other criteria, in selecting countries with which to
negotiate. Finally, she proposes a more active effort in non-trade fora to promote labor and
environmental standards.
Suggested Approach
There are three sets of considerations that need to be reconciled. First, it is important not to
4
exacerbate relations with House Democrats over fast track at the same time as budget
negotiations are placing strains on party unity. Since any fast track bill with a real chance of
passage will fall short of what labor and many House Democrats will demand, waging both
fights simultaneously could alienate at the worst moment some of those whose support we will
need on the budget.
Second, and related to the first point, our resources will be severely strained if we try to fight two
major legislative battles at once. The resource problem extends to your time, which will be
extensively required for meetings with Members on both issues. Until the budget situation
clarifies one way or the other, a major commitment of senior Administration resources does not
seem feasible. (There will also be demands on your time in connection with CWC ratification.)
The third set of considerations pulls in a different direction. Whether we like it or not, the fast-
track fight has already begun. Further delay in active Administration efforts to secure fast-track
will give opponents time to consolidate their position. Too much delay will leave you headed for
South America (October) without this critical trade authority.
In several discussions over the past week, we have concluded that the best approach for at least
the next month is to reaffirm visibly your commitment to fast track and to an activist trade
policy, while not taking steps that would join the battle over labor and environmental standards.
A corollary of this approach is that we would try to freeze any flow of support towards an anti-
fast track position by indicating a desire to see if consensus positions on labor and the
environment can be worked out.
The elements of this approach are as follows:
(1)
A speech by you that includes an affirmation of your support for fast track and our
trade policies and that calls on all sides to see if a consensus can be reached on
pursuing free trade agreements while respecting labor and environmental
standards. Such a speech is critical for publicly committing to make fast track a
priority. We could use your remarks at the American Society of Newspaper
Editors this Friday as the venue for this speech.
(2)
A single, early meeting between you and a bi-partisan group of about two dozen
Members, in which you make the same statements of support for fast track, and
indicate you are asking us to work with them to try to work out consensus
positions.
(3)
Charlene and others would continue consultations with others on the Hill in
pursuit of the same end.
(4)
We would also work individually with Members to urge that they not commit to
an opposing position while we are trying to work out a common view.
(5)
We would bring in labor and environmental groups to be sure they feel thoroughly
consulted.
(6)
If the budget process does not move forward rapidly, we would reassess our
5
position in May; if it does move forward, we would then proceed rapidly to
present a bill.
There are risks associated with this approach, to be sure. In particular, our unwillingness to offer
a bill or to state our positions on labor and environment may be criticized quickly as avoiding the
issue that matters, and our attempt at consensus seen as at best futile and at worst ceding the field
to those opposed to fast track. Yet, in the current circumstances, any approach risks harm to our
interests on the budget, fast track, or both. In general, your advisors believe that this approach
best balances both our interests and the risks.
RECOMMENDATION
That you approve the approach described above.
Approve
Disapprove
Discuss
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hilsue
002
1
Ence - Steve
4
It
Remarks Prepared for Delivery by
FUST
USTR CHARLENE BARSHEFSKY
5
Desl
before the
Council on Competitiveness
March 20, 1997
It is a pleasure to be with you tonight. As I look around the room I see many of you who were
instrumental in developing the partnerships that made the ITA and telecom agreements possible.
These two agreements will unlock billions in new opportunities for U.S. companies and
encompass the hardware, software, services and infrastructure package to dramatically expand
the reach of the Information Superhighway around the world.
Together these agreements encompass $1.1 billion in global trade. As you know, U.S.
technology companies are the most competitive in the world with IT product exports which
approached $100 billion in 1996. It is worth noting that our technology exports were up 44%
last year. For our companies and the 1.8 million high tech manufacturing workers in the United
States, the ITA amounts to a $5 billion annual tax cut because tariff barriers on technology
products overseas are $0 much higher than ours. At the end of the day an ITA agreement was
possible beause we had the tools -- fast track negotiating authority -- which strengthened our
hand. While the ITA was basically a tariff deal we specifically included the ability to go after
non-tariff barriers to expand the reach of this deal. We will need further negotiating authority to
make more progress.
Let's look at the larger picture of U.S. trade
We are the strongest and most competitive economy in the world, and expanded trade has played
an important role in building our strength. Over the past four years, we have created nearly 12
gurl states
million new jobs, while the G-7 combined created roughly 600,000. We are once again the
world's largest exporter, setting historic records. Over the last four years, our manufactured
pheotox
exports are up 42 percent, high technology exports jumped 45 percent, service exports climbed
26 percent, and farm exports rose 40 percent.
Along the way, we have negotiated more than 200 trade agreements, all designed to advance our
economic and trade interests. We pursued these agreements including GATT and the NAFTA
because we recognized that trade is increasingly important to the future of our nation. Trade is
now equivalent to nearly 30 percent of our GDP, up from 13 percent in 1970. Exports support an
estimated 11.3 million U.S. jobs, and over 1.4 million of these jobs were generated by increased
exports over the last four years.
Our economic expansion has been investment-led, building the foundation for even greater
economic strength. Our industrial production is up nearly 18 percent in real terms over the last
four years. Japan's production, by contrast, is up 5 percent and Germany's has declined 2 percent
1
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003
over this period. Growth of our industrial capacity is at its highest level since the 1970s.
In short, no country in the world is better positioned to take advantage of the enormous
opportunities presented by a growing global economy. Our competitors cannot beat us, but we
can lose if we put ourselves on the sidelines.
The Challenges Ahead
None of this is to suggest that we don't face challenges and continuing problems. Too many
Americans have been left behind in the current economic expansion, without the skills or
education to benefit from the increased opportunities. Neither government nor the private sector
should rest while that is the case. But we face a very clear choice. The choice is this:
We can recognize that the American economy is the model for the world, and continue to open
foreign markets and seize the initiative when it comes to international competition. To do so, we
must position ourselves to take advantage of the extraordinary opportunities presented by the
growing global economy.
This approach also calls for us to recognize that some Americans are being left behind by the
global economy. We can face up to this problem by working to put in place education, training.
and adjustment policies for workers in need; advancing core labor standards and protecting the
environment; and being vigilant to the consequences and potential threat of forced technology
transfer in foreign countries.
In short, we can start from the proposition that we have been basically on the right track and
should stay fully engaged, using all our tools, taking advantage of all opportunities.
Or, we can convince ourselves -- against the evidence -- that we are on the wrong track. We can
choose our course guided by a picture of economic decline and disinvestment that bears no
resemblance to what is happening in our country. We can let ourselves instead bog down in an
endless debate over NAFTA and Mexico. We can permit markets to stay closed and let others
seize the initiative from us. The choice is that clear.
The Threat of Inaction
We must recognize the dangers of inaction. In every region of the world, but particularly Asia
and Latin America, the two fastest growing regions in the world, governments are pursuing
strategic trade policies and preferential trade arrangements, creating trade alliances around us
rather than with us and the consequences of disengagement are unacceptably high for our
economy, Examples of such new exclusive alliances among our foreign competitors abound:
MERCOSUR (Argentina, Brazil, Paraguay, Uruguay) is a developing customs union with
ambitions to expand to all of South America. MERCOSUR has struck agreements with Chile
2
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004
and Bolivia, and is discussing agreements with a number of Andean countries (Colombia,
Venezuela) as well as countries within the Caribbean Basin.
The EU has begun a process aimed at reaching a free trade agreement with MERCOSUR.
They have concluded a framework agreement with Chile that is set up to lead to a free trade
agreement. The President of France, just in the region, said Latin America's "essential economic
interests. lie not with the United States but with Europe."
-
China has targeted Mexico, Argentina, Brazil, Chile and Venezuela as "strategic
priorities" in Latin America to ensure that key Latin countries are receptive to its broader global
agenda as a rising power, both in the WTO and other fora.
Japan has undertaken high level efforts throughout Asia and Latin America in country
after country.
Mexico wants to be the commercial hub between North and South America and serve as a
venue in which to enter North, Central and South America from Asia and Europe.
The cost of inaction is already upon us:
o
Southwest Bell selected Northern Telecom for a $180 million telecommunications project
it has in Chile to avoid paying $20 million in duties that if it had contracted with an American
company, thanks to the Chile-Canada free trade agreement.
Our Global Trading Agenda
We should respond to these global challenges with the full arsenal of trade policy tools at our
disposal including "fast track" negotiating authority. What are we looking for? The United
States must be positioned at the center of a global constellation of trade activity. To the extent
that our trading partners are engaged in the development of exclusive trade relationships around
us, that can only mean that our long term strategic interests will suffer around the world -- if we
cannot intervene to redirect those alliance in our favor. We have important work ahead of us:
Within four years, major WTO negotiations will occur in key areas where the United
States is again a top global competitor with much to gain: agriculture, services, and the
rules for intellectual property rights. This year we will be resuming WTO negotiations
on financial services. In the OECD, WC are in active negotiations over the Multilateral
Agreement on Investment to ensure equitable and fair treatment for U.S. investors.
With regards to the regional agenda, the United States is committed not only to concluding the
FTAA by 2005, but also to concrete progress by 2000. Chile should be our first step in this
process. The region views what we do with Chile as a litmus test for our future plans.
3
FRI 13:54 FAX 202 395 3911
U.S.T.R
005
Latin America and the Caribbean were the fastest growing market for U.S. exports in
1996. If trends continue, it will exceed the EU as a destination for U.S. exports by the
year 2000, and exceed Japan and the EU combined by the year 2010. It is also the
second fastest growing region in the world.
With building the FTAA very much in mind, the Administration remains committed to
Caribbean Basin Trade Enhancement.
The Asia Pacific region contains the fastest growing economies in the world,
encompassing nearly 3 billion people. Within APEC, we estimate that reaching the goal
of open markets would increase U.S. goods exports alone by 27 percent annually, or
almost $50 billion a year. Market-opening agreements with key APEC partners offers the
potential to catalyze this process and strengthen U.S. strategic relationships.
[With Europe, our focus will be on non-tariff barriers which continue to impede
transatlantic commerce, especially regulatory barriers and agricultural impediments. ]
Africa is a region rich in resources and potential, which we should engage with
determination to ensure its effective and sustainable development and democratic
governance.
There is no substitute for our ability to implement comprehensive trade agreements. The
absence of agreed procedural authority is the single most important factor limiting our capacity at
this time to open markets. Such authority is a prerequisite to U.S. negotiating credibility and
success on major trade fronts.
Trade, Labor, and the Environment
We can no longer allow our disagreements over the relationship between trade, labor standards
and environmental protection to prevent us from granting the President fast track authority. It is
important to recognize that a commitment to protection of core labor standards and their
relationship to trade, is not new, nor is it unique to the United States. Advancing worker rights
and labor standards is in our national interest and it is consistent with our deepest national values.
Conclusion
I want to thank all of you in this room for making helping us achieve the very important
agreements we reached on IT products and telecommunications. But I want to caution you that
those agreements are not an end but a beginning. The one lesson that we cannot afford to forget
is that if the United States is not leading the fight -- as we did with ITA and telecom -- these
agreements cannot happen. With the emergence of exclusive trade alliances around us, we must
continue our fight to eliminate foreign trade barriers. I look forward to your continuing
4
03/21/97 FRI 13:54 FAX 202 395 3911
U.S.T.R
006
engagement as we seek other sectoral trade pacts, and assure that the United States is always at
the center of a constellation of regional trade alliances whether they are in Asia or our own
hemisphere. Thank you.
5
TO: CIRCULATION
FR: WALDMAN
RE: Redraft of fast-track section 10am
For fifty years, America has led the world not only in building security but in promoting
prosperity. Now we must choose whether to continue to shape the international economy so that
it works for all our people -- or shrink from its challenges.
The rapidly growing and ever changing global economy is an inescapable fact of our time. Over
the past 50 years, global trade has increased 90-fold. Over the next decade, it is expected to grow
at three times the rate of the U.S. economy. Nations once divided by great gulfs of geography
and military rivalry are now linked by surging currents of commerce.
This world marketplace poses stiff challenges. It means constant change for our nation and for
our people. But it offers us the greatest opportunity for prosperity we have known.
Today, America stands alone as the world's strongest and most competitive economy. Our
exports have surged to record levels. Our budget deficit is now the smallest as a share of income
of any major economy. Basic American industries have revived; our auto industry is number one
in the world again for the first time since the 1970s. And from semiconductors to biotech to
Hollywood, American firms lead the industries that are remaking the world. We are uniquely
well-positioned to make the most of this new economic era.
But in a world where America has only 5% of the population -- where the fastest growing
markets for our goods and services are in Asia and Latin America -- where export related jobs
pay 17% more than other American jobs we have only one choice: we must export.
To do that, we must have higher skills, stronger productivity, deeper investment. We must
balance the budget. We must give our people the best education in the world, establishing
national school standards to enable us to compete internationally, opening the doors of college,
and passing my GI Bill for workers, which gives every unemployed and underemployed worker a
skills grant that can be used to obtain the training he or she needs. We must continue to expand
research and development in the public and private sector.
And at every opportunity, we must press forward in our struggle for open and competitive trade.
My administration has concluded more than 200 trade agreements, each of which opened
someone else's markets wider to American business. We fought for enactment of NAFTA,
creating a free market with our neighbors -- and today, despite the peso crisis, our exports to
Mexico are up TK over pre-NAFTA levels. We broke seven years of global gridlock and
successfully negotiated the new round of GATT, creating the World Trade Organization which
has lowered average tariffs on U.S. goods around the world by one-third. We have broken down
barriers and boosted exports to Japan -- up 40 percent since 1993, and 85 percent in sectors like
medical supplies and auto parts where we have won trade agreements.
This is a record to build on, not to rest on. History teaches us that when the momentum for open
markets falters, the world can easily slide backward. It is unacceptable for us to go backward. It
is unacceptable for us to stand still. It is unacceptable for us to sit on the sidelines while other
nations forge bonds of trade. This is a critical moment for us to forge our future, and we must
move to seize it.
American leadership created the prosperity of the past 50 years. Now only American leadership
can create prosperity -- for our people and for all the world -- in the next 50 years. And America
cannot lead if America -- and its leaders -- cannot act. Every American President since 1974,
Democrat and Republican alike, has had the authority to negotiate new trade agreements. That
fast track negotiating authority, every time, has been extended with the support of Members of
Congress of both parties. That is how America has exercised its most fundamental leadeship of
the world economy. So today I am renewing my call to Congress to give me fast track authority
to negotiate new trade agreements -- trade agreements that will create opportunities for our
workers and our businesses in the global economy -- and do it this year.
We have seen in the past six months what a strong trade agreement can bring to our people and
businesses. The International Telecommunications Agreement that we reached with 38 other
nations in December will eliminate tarrifs and unshackle trade on $500 billion of trade in
computers, semiconductors and telecommunications -- the high-tech sectors of the future in
which America already leads the way. This amounts to a $5 billion cut in tariffs on American
products exported to other nations.
Now, if Congress grants fast track authority, I can use it to open trade in the areas where
American firms are leading and America's future lies. We lead the world in high technology; in
years to come, we must press to tear down barriers around the world that keep out American
products such as computer software, medical equipment, and environmental technology. We
lead the world in agricultural exports; we must negotiate trade agreements to open even more
markets to our produce. We will follow through on the agreement we forged at the Summit of
the Americas in Miami, to build a Free Trade Area of the Americas by the Year 2005. We will
press aggressively to open markets to our products in Asia as well.
And if we do not seize the vast opportunities offered by the rising regions of the world, our
competitors will. Last year, Latin American nations had more trade with Europe than with the
United States. There is no reason to think that these nations will wait for us to move forward.
These nations are our neighbors; they are our partners; and we would be foolish to let this
opportunity pass us by.
All this expanded trade will enable us to create more jobs through higher exports. It will help us
to protect the 11 million jobs that are already dependent on trade. This is not about whether we
will open our markets to the world: They already are. It is about whether the world will continue
to open its markets to us.
By opening the world's markets, we help the standard of living grow everywhere. That's the
right thing to do. And it also helps turn the world's poor nations from being a threat to
international stability into a market for our goods and services.
I am determined that the new trade agreements we seek will be good for working people and for
the environment, here and around the globe. I have asked the U.S. Trade Representative,
Ambassador Charlene Barshefsky, to work with members of Congress of both parties, with labor
and business and environmentalists, to try to reach consensus on these issues.
But let me be clear: We cannot shrink from the challenge of the global economy. America is the
most competitive nation in the world. And I am certain that American workers and businesses,
given the chance, can outcompete anyone, anywhere in the world. I call on the Congress to work
with me to let them do just that.
The question we face is as old as our country. Whether to turn inward or reach outward, whether
to fear change or embrace it. Over the past fifty years -- and over the past four years -- we made
the choice that has always served America best.
Now [WE MUST -- AND WILL -- CONCLUDE THIS SPEECH IN ONE PARAGRAPH]
X
Stin Need to
1A
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See MArk Rest
Tomy BEni
THE WHITE HOUSE
w Emic Drd discuss
1
WASHINGTON
how to tack a boot
3
7rst Trad 29
torde issues And
Resl + discuss U Lyle
FAST TRACK
on l Air truds.
WHITE HOUSE DISTRIBUTION LIST
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WILL DAVIS
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April 23, 1997
FROM:
BOB KYLE
SUBJECT: Fast Track
Attached please find a document USTR and I prepared setting forth the Administration's main
message on Fast Track. I will distribute it to relevant agencies as well. I hope you will find it
useful as we continue this effort.
Attachment
FAST TRACK
MAIN MESSAGE
NOW, MORE THAN EVER, THE U.S. NEEDS AUTHORITY TO OPEN NEW
MARKETS AND BREAK DOWN BARRIERS TO U.S. EXPORTS.
Trade negotiating authority is essential. Every President since Ford has had fast track
authority for key periods with bipartisan support. That is because Congress has consistently
recognized the President must have the authority to break down foreign trade barriers and create
good jobs.
Fast track authority is even more essential today. The rapidly expanding global economy
presents enormous opportunities for our companies and workers. Over the next decade, the
Very
global economy is expected to grow at three times the rate of the U.S. economy. Growth will be
good
particularly powerful in the emerging markets - the fastest growing markets of the world. Our
BASIC
economic future will increasingly rest on tapping into these global opportunities. In a world
points
F
where over 95 percent of the world's consumers live outside the United States, we must export to
sustain economic growth at home.
Commercial competitiveness is critical to our global leadership. Europe, China, Japan and
Compon
others are forging preferential commercial alliances with emerging markets, which put American
exports at a disadvantage. Those trade alliances also play a vital role in defining strategic
yoe
competitor
relationships between countries and regions. Our commercial competitiveness is at stake, but so
is our leadership role in the world.
esems
percripate
Exports create American jobs. Today, more than 11 million American jobs are supported by
very
exports, including one in five manufacturing jobs - good jobs, paying 13-16 percent more than
income
good
non-trade-related jobs. Over the last four years one-quarter of our economic growth came from
growt
Basic Points
trade -- and exports created 1.4 million new jobs. If we are to raise our standard of living, we
point
must continue creating jobs through exports.
THE U.S. IS PERFECTLY POSITIONED TO SEIZE THESE OPPORTUNITIES.
The United States is the world's strongest competitor. We have enjoyed the longest period of
sustained growth of all of our G-7 partners. Over the last four years, we have created 12 million
new jobs, more than all of the other G-7 countries combined. We have the lowest budget deficit
as a percent of GDP of all the G-7 nations. We are once again the world's largest exporter, the
largest producer of semiconductors, the largest producer of automobiles. Over the last four
years, our manufactured exports are up 42%, high technology exports jumped 46%, service
exports climbed 26% and farm exports rose 43%. Independent studies, including the Institute for
Management Development in Switzerland, have found America to be the most competitive
economy in the world for the past five years. No country in the world is better positioned to
compete.
2
Our market is already open. Others are not. The United States is the most open, major
market in the world. When we reach trade agreements, we give up very little, while other
countries give up far more. When the Uruguay Round is phased in, our tariffs will average 2.8
percent. Other countries are far higher: India (31%); Thailand and Turkey (26%); Chile and
Indonesia (11%). It is not difficult to see that these deals make sense. It is difficult to
understand why we should let these barriers stand.
THE POTENTIAL GAINS ARE GREAT, IF WE SEIZE THEM.
Multilateral. For over 50 years, the U.S. has led the world in opening global markets. Our
persistent leadership has helped bring global tariffs down from an average of 40 percent at the
end of World War II to about 5 percent today, leading to a 90-fold increase in global trade. We
can continue that progress today. Because of our leadership, new WTO negotiations present the
opportunity to reduce trade barriers further in key sectors, such as:
Agriculture: Negotiations to cut barriers in the $526 billion global agriculture
market will attack such practices as export subsidies and domestic support
programs.
Services: A $1.2 trillion global market - where U.S. firms exported more than
$220 billion in 1996 with a surplus of $74 billion. Talks will address a wide
range of service sectors including health care, education, entertainment, tourism,
business consulting and advertising.
Global negotiations will address other key areas like intellectual property, customs and
government procurement rules. Talks in the OECD will ensure fair treatment for U.S. investors.
Sectoral. We would also use fast track to negotiate agreements in sectors where the U.S. is most
competitive. The recent Information Technology Agreement, for example, eliminated tariffs and
unshackled $500 billion of trade in semiconductors, computers, telecommunications equipment
and software, amounting to a $5 billion tax cut in tariffs on American exports. With fast track
authority, we can tear down more barriers in areas like medical equipment, environmental
technology, and computer software, areas where America leads the world.
Regional. Continuing regional initiatives present vast opportunities.
Latin America and the Caribbean. This area was the fastest growing market
for U.S. exports in 1996. If trends continue, Latin America and the Caribbean
will exceed the EU as a destination for U.S. exports by 2000 and exceed Japan
and the EU combined by 2010. We remain committed to conclude the Free Trade
Area of the Americas by 2005. Chile would be our first step in this process.
3
Asia. Contains the fastest growing economies in the world, with nearly 3 billion
people. Independent forecasters put 1996 GDP for the region at $2.8 trillion and
expect real growth of 6% to 7% annually for the next 15 years.
We will also continue efforts with Europe, Africa and other regions.
IF WE DON'T ACT, OUR COMPETITORS WILL.
Other countries are breaking down barriers for their companies and workers. We talk a lot
about leveling the playing field, but our competitors are leveling the field, while we sit on the
sidelines. Since 1992, our competitors have negotiated 20 regional trade pacts in Asia and the
Western Hemisphere. In every region of the world, this process will continue. MERCOSUR is a
developing customs union with ambitions to expand to all of South America; the EU has begun a
process to reach free trade with MERCOSUR (President Chirac recently declared "the future of
the region rests with Europe, not the United States"); China's "strategic priorities" include
Mexico, Argentina, Brazil, Chile and Venezuela; Japan has undertaken high-level efforts in Asia
and Latin America. Five years ago, the question was whether countries would reach regional
trading agreements. Today, the only question is whether the U.S. will be part of that process - or
whether it will sit on the sidelines.
The costs of inaction are high. For example, Canada has reached a free trade agreement with
Chile that will eliminate Canada's across-the-board 11 percent tariff for Canadian products.
Every time an American company competes to sell to Chile, it will face an immediate 11 percent
cost disadvantage vis-a-vis its Canadian competitors. The costs are already being felt. Canada's
Northern Telecom just won a $180 million telecommunications contract over three U.S.
companies in part because it could avoid paying $20 million worth of duties.
AS WE DEVELOP A FAST TRACK BILL, WE MUST DEVELOP A BIPARTISAN
APPROACH TO THE ISSUES OF LABOR AND THE ENVIRONMENT.
ven
sind
We must address these issues. ecannot sustain support among American people for market
opening policies without also addressing concerns about the effects of these agreements on labor
Need
to
and the environment. That is also necessary to build a bipartisan coalition for passage. The
Understand
President has asked Ambassador Barshefsky to consult with both parties in Congress -- and the
relevant interest groups -- to develop a bipartisan consensus. That process continues.
charles
points
Sitting on the sidelines does not help workers or promote a cleaner environment. Opening
rd
foreign markets does not mean retreating from our commitment to labor and the environment.
fact, it makes it easier to engage these countries on these issues. Denying the President authority
to negotiate trade agreements with them will not help advance their labor or environmental
protections. It will simply make it more likely that these countries will remain relatively poor
(keeping wages low and discouraging better environmental practices), while crippling our export
performance and denying job growth here at home.
4
WE FACE A CRITICAL CHOICE: WHETHER TO SEIZE THE INITIATIVE OR
HAVE OTHERS SEIZE IT FROM US.
The choice is clear. We can recognize that the American economy is the model for the world,
continue to open foreign markets and seize the initiative when it comes to international
good Spart
competition. Or we can convince ourselves - against the evidence - that we are on the wrong
track, that we cannot succeed and that we should not move forward. Four years from now, we
will either proudly recognize that we saw our opportunities and we took them. Or, we will have
become paralyzed by indecision, squandered our strong competitive advantage and let others
seize the initiative. The choice is that clear - and that important.
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MONDAY
DIARY AND WORK RECORD
14th Week
90th Day
MARCH, 1997
31
HOURS
FOR
SUBJECT
DESCRIPTION OF SERVICES
TIME
HRS. 1/10
06
12
8
18
24
30
36
42
48
0800
54
12
9
18
24
30
36
42
48
0900
54
06
12
10
18
24
30
36
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54
12
11
18
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1600
54
06
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5
18
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1700
SR. DESK (FOLIO) SIZE
TWO PAGE-PER-DAY ORIGINAL
IMMEDIATE
UNCLASSIFIED
WHITE HOUSE SITUATION ROOM
PAGE 01 OF 05
PRT: DOHSE HARMONPTR KERRICK MCLARTY NAPHIN SIT
SIT: ARMSTRONG BEDELL CLARKER DESOUZA DOBBINS HARMON NATOLI PASSDOWN
PICCONE PYATT SUM SUM2
SIT: NSC
<PREC> IMMEDIATE <CLAS> UNCLASSIFIED <DTG> 192143Z FEB 97
FM AMEMBASSY SAN JOSE
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9393
INFO RUEHWN/AMEMBASSY BRIDGETOWN 0151
RUEHBR/AMEMBASSY BRASILIA 0252
RHEHAAA/WHITE HOUSE WASHDC
RHLBAAA/USCINCSO QUARRY HEIGHTS PM
UNCLAS SECTION 01 OF 03 SAN JOSE 000534
1 CBI 70/= Desl Fale
E.O. 12958: N/A
TAGS: OVIP (CLINTON, WILLIAM J.), PREL, PGOV, CS
SUBJECT: PRESIDENT CLINTON'S TRIP TO COSTA RICA: THE
Trip
726
FIRST ROUND
REFS: (A) SAN JOSE 489, (B) SAN JOSE 2319
1. BEGIN SUMMARY: THE GOCR IS TAKING A PROACTIVE
APPROACH TO PRESIDENT CLINTON'S VISIT, AS PRESIDENT
FIGUERES SEEKS TO ENSURE THAT THE VISIT WILL RESONATE INTO
THE NEXT CENTURY. IN ORDER TO DEFLECT POTENTIAL
DISAPPOINTMENT AMONG THE CENTRAL AMERICAN PRESIDENTS OVER
PROBABLE LACK OF PROGRESS IN ACHIEVING FULL CBI
3 5peed
ENHANCEMENT, FIGUERES SUGGESTED THE USG PROPOSE A NEW
PRIVATE INVESTMENT PROGRAM FOR THE REGION. THE GOCR ALSO
WANTS TO CAPITALIZE ON THE TWIN THEMES OF EDUCATION AND
THE ENVIRONMENT IN ORDER TO BUILD A LASTING CLINTON LEGACY
Desl
IN LATIN AMERICA. END SUMMARY.
2. IN A FEBRUARY 18 MEETING WITH AMBASSADOR AND DCM,
PRESIDENT FIGUERES, FOREIGN MINISTER NARANJO, AND LUIS
DIEGO ESCALANTE, A PRIVATE BUSINESSMAN WHOM FIGUERES HAS
DESIGNATED AS THE GOCR COORDINATOR FOR PRESIDENT CLINTON'S
TRIP, OUTLINED THEIR PRELIMINARY THINKING CONCERNING
PRESIDENT CLINTON'S UPCOMING VISIT TO COSTA RICA.
MEETING WITH THE CENTRAL AMERICAN PRESIDENTS
WHO
3. THE GOCR ANTICIPATES THAT PRESIDENT CLINTON WILL SPEND
APPROXIMATELY A HALF DAY WITH THE CENTRAL AMERICAN
UNCLASSIFIED
IMMEDIATE
UNCLASSIFIED
WHITE HOUSE SITUATION ROOM
PAGE 02 OF 05
PRESIDENTS. PRESIDENT FIGURES HAS CONFERRED WITH ALL HIS
COUNTERPARTS AND EXPECTS PARTICIPATION TO INCLUDE THE
PRESIDENT OF PANAMA AND PRIME MINISTER OF BELIZE. THE
PLENARY WOULD BE PRECEDED OR FOLLOWED BY A MEAL, DEPENDING
ON THE ITINERARY.
WHERE
4. GOCR HAS YET TO DECIDE WHERE IN SAN JOSE THE MEETING
WITH THE PRESIDENTS WILL BE HELD. THE FINAL DETERMINATION
DEPENDS PARTIALLY ON LOGISTICAL REQUIREMENTS OF THE
PRESIDENT'S PARTY AND PRESS. HOWEVER, EFFORTS WILL BE
MADE TO INCLUDE SOME HISTORICAL SPOTS, SUCH AS THE
NATIONAL THEATER, THE CHILDREN'S MUSEUM, THE NATIONAL
HISTORICAL MUSEUM, ETC., AS VENUES FOR SOME OF PRESIDENT
CLINTON'S ACTIVITIES.
THE REGIONAL AGENDA
5. FOREIGN MINISTER NARANJO IDENTIFIED THREE PROPOSED
AGENDA ITEMS WHICH AROSE DURING RECENT DISCUSSION ABOUT
THE VISIT WITH HIS COUNTERPARTS IN GUATEMALA:
A) CARIBBEAN BASIN INITIATIVE (CBI) ENHANCEMENT WITHOUT
QUESTION WILL BE THE PRIMARY CONCERN OF THE CENTRAL
AMERICANS. THEY WANT TO SEE FOLLOW-UP ACTION ON PAST
PROMISES BY THE VICE PRESIDENT AND OTHER TOP USG
OFFICIALS. FEELING SQUEEZED BY EMERGING REGIONAL TRADING
BLOCS, INCLUDING NAFTA, THEY VIEW THE VISIT AS AN
OPPORTUNITY TO ADVANCE FREE TRADE NEGOTIATIONS WITH THE
USG. NARANJO SUGGESTED THE FOREIGN MINISTERS WILL PROPOSE
TO THEIR PRESIDENTS THAT CENTRAL AMERICA SEEK A SEPARATE
COMMON MARKET ARRANGEMENT WITH THE U.S., A CONCEPT THE
AMBASSADOR SOUGHT TO DISCOURAGE, ESPECIALLY IN VIEW OF THE
DIVERSITY OF THE INDIVIDUAL COUNTRY ECONOMIES. FIGUERES,
SENSING THAT NAFTA PARITY WAS NOT IN THE CARDS, PROFERRED
THE IDEA THAT THE U.S. PROPOSE A PRIVATE INVESTMENT FUND,
AND CHARGE ENRIQUE INGLESTAS AND THE IADB WITH STUDYING
THE PROPOSAL, TOGETHER WITH INCAE AND HARVARD PROFESSORS
PORTER AND SACHS. FIGUERES WANTS TO MINIMIZE
DISILLUSIONMENT ON THE PARITY ISSUE BY THE CREATION OF
SUCH AN INVESTMENT PROMOTION PROGRAM WITH THE IDB, A
VEHICLE TO INCREASE ACCESS TO MARKETS. HE SUGGESTED THAT
THIS BE BROACHED AS A USG PROPOSAL TO STEM THE ALLEGEDLY
DEMONSTRABLE FALL IN INVESTMENT SUBSEQUENT TO THE
IMPLEMENTATION OF NAFTA.
B) IMMIGRATION: EL SALVADOR AND NICARAGUA WANT TO RAISE
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THIS ISSUE; THE GOCR DOES NOT SEE IT AS A REGION-WIDE
CONCERN.
C) ENHANCEMENT AND FORWARD MOVEMENT ON THE ENVIRONMENTAL
AND ECONOMIC PORTIONS OF THE FRAMEWORK AGREEMENT DRAWN UP
IN MIAMI WITH A FOCUS ON THE ENVIRONMENT AND TRADE ("MOVE
MIAMI FORWARD BY CREATING AN ECONOMIC AND ENVIRONMENTAL
CONCAUSA II").
UNCLAS SECTION 02 OF 03 SAN JOSE 000534
E.O. 12958: N/A
TAGS: OVIP (CLINTON, WILLIAM J.), PREL, PGOV, CS
SUBJECT: PRESIDENT CLINTON'S TRIP TO COSTA RICA: THE
FIRST ROUND
6. ANOTHER POSSIBLE EVENT MIGHT BE THE JOINT SIGNING OF
INDIVIDUAL (OR A REGIONAL) OPEN SKIES AGREEMENTS.
BILATERAL PROGRAM: THEMES
7. PRESIDENT FIGUERES SEES PRESIDENT CLINTON'S FOCUS ON
THE IMPORTANCE OF EDUCATION AND THE ENVIRONMENT AS TWO
THEMES WHICH WOULD BE RECEIVED WELL BOTH IN COSTA RICA AND
IN THE US. SOME PRELIMINARY THINKING WHICH WOULD ENABLE
PRESIDENT CLINTON TO BE "IN TOUCH WITH PEOPLE" INCLUDE:
O A MASS AUDIENCE HIGH TECH INTERNET CONNECTION BETWEEN
THE TWO PRESIDENTS AND SCHOOL-AGE CHILDREN IN BOTH
COUNTRIES. OR, A VISIT TO A COMPUTERIZED GRADE SCHOOL
PARTICIPATING IN THE GLOBE PROGRAM (WE ENDORSE STRONGLY).
O MEETING WITH MEMBERS OF "WORLD TEACH, A GROUP OF
AMERICAN VOLUNTEER TEACHERS WHO PAY FOR THE OPPORTUNITY TO
ASSIST COSTA RICAN COUNTERPARTS IN LIVE CLASSROOM
INSTRUCTION. THE CONTINGENT IN COSTA RICA IS THE LARGEST
IN THE WORLD. (A POSSIBLE ALTERNATIVE)
O A VISIT TO THE EARTH GRADUATE FACILITY AT GUACIMO WHICH
WAS LAUNCHED WITH $116M FROM USAID, HAS 20 NATIONALITY
FACULTY AND 30 NATIONALITY STUDENT BODY. EARTH IS
CURRENTLY IN ITS SECOND YEAR OF WORK WITH NASA TO STUDY
CHAGAS, A DISEASE WHICH HAS CLAIMED 20 MILLION LATIN
AMERICAN LIVES. SUCH A VISIT WOULD INCLUDE A MEETING WITH
THE ONLY COSTA RICAN-BORN AMERICAN ASTRONAUT, FRANKLIN
CHANG. (GOOD IDEA)
O A VISIT TO THE LA SELVA BIOLOGICAL STATION: A VIRGIN
3,700 ACRE LOWLAND RAIN FOREST OPERATED BY THE
ORGANIZATION FOR TROPICAL STUDIES IN AFFILIATION WITH SOME
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50 U.S. UNIVERSITIES LED BY DUKE UNIVERSITY. IT IS
DEVOTED TO PRIMARILY SCIENTIFIC STUDY. LA SELVA HAS A
NETWORK OF MARKED TRAILS WHICH IDENTIFY ITS UNUSUALLY RICH
BIODIVERSITY. (WE STRONGLY ENDORSE)
O VISIT TO IMBIO, A TOP FLIGHT INSTITUTE CATELOGING THE
BIODIVERSITY OF COSTA RICA AND ASSISTING OTHER CENTRAL
AMERICAN COUNTRIES TO DO THE SAME. SCIENTISTS INCLUDE
AMERICANS. (IMBIO OFFERS LITTLE TO THE CASUAL VISITOR
OTHER THAN A SET OF BUILDINGS -- UNLIKE A VISIT TO LA
SELVA.)
O A REVIEW OF A PEACE CORPS-ASSISTED PROGRAM WHICH
TEACHES STREET CHILDREN HOW TO MAKE HANDICRAFTS FROM SCRAP
METAL AND OTHER MATERIALS PLUS ENCOURAGES BASIC
ENTREPRENURIAL SKILLS. (WE STRONGLY RECOMMEND)
CREATING A LEGACY
8. PRESIDENT FIGUERES ARGUES FORCEFULLY THAT PRESIDENT
CLINTON'S VISIT SHOULD BE USED TO CREATE A LASTING LEGACY
IN LATIN AMERICA, AKIN TO THE FOND MEMORIES LATIN
AMERICANS STILL HAVE OF PRESIDENT KENNEDY (ALLIANCE FOR
PROGRESS, PEACE CORPS). BEARING IN MIND THE TWIN THEMES
OF EDUCATION AND ENVIRONMENT, FIGUERES RECOMMENDED
LAUNCHING INITIATIVES (OTHER THAN THE INVESTMENT SCHEME IN
PARA 5A ABOVE) SUCH AS:
O DOUBLING THE WAVE BAND WIDTH OF PARABOLIC ANTENNAS AND
DEVOTING THE NEW CAPACITY EXCLUSIVELY FOR
EDUCATIONAL/INTERNET PURPOSES. IN THE PRESIDENT'S WORDS,
"IT IS MUCH CHEAPER TO MOVE INFORMATION THAN PEOPLE."
O CONVERTING OFFICIAL BILATERAL DEBT (SOME $360 MILLION)
INTO AN EDUCATIONAL FUND FOR PROGRAM OF EXCHANGES BETWEEN
SCHOLARS IN THE US AND LATIN AMERICA. (COMMENT: THIS IDEA
HAS BEEN FLOATED PREVIOUSLY SEE PARA 3C OF REF B. IT HAS
OBSTACLES AS TO FUNDING, BUT THEY COULD BE OVERCOME WITH
CREATIVE THINKING.)
SITE VISITS
9. IN THE EVENT THE PREIDENT HAS ADDITIONAL TIME FOR
ENVIRONMENTAL ACTIITIES OUTSIDE OF SAN JOSE, EXCURSIONS
BY HELO TOANY NUMBER OF THE FOLLOWING PLACES (IN ADDITION
T POSSIBLE LA SELVA AND EARTH INSTITUTE VISITS):
O ARENAL VOLCANO - THIS 1633M VOLCANO, ONE OF THEMOST
ACTIVE IN THE WORLD, HAS BEEN ERUPTING SINC 1968 (OR
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NEARBY POAS OR IRAZU--BOTH ARE DORMANT)
UNCLAS SECTION 03 OF 03 SAN JOSE 000534
E.O. 12958: N/A
TAGS: OVIP (CLINTON, WILLIAM J.), PREL, PGOV, CS
SUBJECT: PRESIDENT CLINTON'S TRIP TO COSTA RICA: THE
FIRST ROUND
O TORTUGUERO NATIONAL PARK - AN AREA ON THE NORTHERN
ATLANTIC COAST WHICH ABOUNDS WITH WILDLIFE VIEWED FROM A
BOAT (MONKEYS, TOUCANS, MACAWS, SLOTHS, ALLIGATORS, ETC.)
O CAHUITA NATIONAL PARK - FURTHER SOUTH ON THE ATLANTIC
COAST - SNORKELING OPPORTUNITY OFF REEF BY BOAT.
O VISIT THE SITE OF THE FUTURE EARTH COUNCIL COMPLEX, THE
PRIVATE ENVIRONMENTAL WATCH GROUP HEADED BY MAURICE STRONG
TO KEEP TABS ON THE 1992 RTD CONFERENCE FOLLOW-UP
(POSSIBLE)
OTHER: -- AMERICAN CHAMBER OF COMMERCE -- RECEPTION OR
DINNER
-- PRESS CONFERENCE
-- U.S. EMBASSY STAFF MEETING
-- TOWN MEETING WITH SELECTED COSTA RICANS FROM
DIVERSE SECTORS
10. COMMENT: GOCR IS CLEARLY ENTHUSIASTIC ABOUT THE
PRESIDENT'S VISIT AND WANTS IT TO RESONATE LONG AFTER HE
DEPARTS. WE HAVE ATTEMPTED TO STEER COCR THINKING TOWARDS
PRACTICABLE AND REALISTIC SUGGESTI_NS WHILE ENCOURAGING
INNOVATIVE SUGGESTIONS.
DE vos
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