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Fast Track – Current (9/97) [4]
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Fast Track – Current (9/97) [4]
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Records of the Office of the Special Envoy for the Americas (Clinton Administration)
General Files
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FOIA Number: 2017-0401-F
FOIA
MARKER
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
Subseries:
OA/ID Number:
11851
FolderID:
Folder Title:
Fast Track - Current (9/97) [4]
Stack:
Row:
Section:
Shelf:
Position:
S
66
3
9
3
Withdrawal/Redaction Sheet
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. letter
President Violeta Barrios de Chamorro, et al. to President Clinton; RE:
12/06/1996
P1/b(1)
North America Free Trade Agreement (4 pages)
002. letter
President Violeta Barrios de Chamorro, et al. to President Clinton; RE:
12/06/1996
P1/b(1)
North America Free Trade Agreement [duplicate of 001 in Spanish]
(2 pages)
003. memo
Samuel Berger, et al. to the President; RE: Fast Track Negotiating
01/06/1997
P1/b(1)
Authority (4 pages)
COLLECTION:
Clinton Presidential Records
Special Envoy for the Americas
General Files
OA/Box Number: 11851
FOLDER TITLE:
Fast Track - Current (9/97) [4]
2017-0401-F
db4735
RESTRICTION CODES
Presidential Records Act - [44 U.S.C. 2204(a)|
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information [(a)(1) of the PRAJ
b(1) National security classified information [(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRAJ
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRAJ
an agency |(b)(2) of the FOIAJ
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information |(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRA]
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRAJ
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells |(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
MEMORANDUM
MEMORANDUM
OF CALL
Previous editions usable
OF CALL
Previous editions usable
TO:
TO:
Mack
YOU WERE CALLED BY-
YOU WERE VISITED BY-
YOU WERE CALLED BY-
YOU WERE VISITED BY-
Steve Champlin
OF (Organization) 728-1100
OF (Organization)
PLEASE PHONE
FTS
AUTOVON
PLEASE PHONE
FTS
AUTOVON
WILL CALL AGAIN
IS WAITING TO SEE YOU
WILL CALL AGAIN
IS WAITING TO SEE YOU
RETURNED YOUR CALL
WISHES AN APPOINTMENT
RETURNED YOUR CALL
WISHES AN APPOINTMENT
MESSAGE
MESSAGE
va 728-1100 meets neemy weds. Debenting Myre an?
DATE
TIME
RECEIVED,BY
RECEIVED BY
DATE
TIME
molly Vary
2/7/97
9:15am
50363-111 NSN 7540-00-634-4018
OPTIONAL FORM 363 (Rev. 1-94)
rescribed by GSA
50363-111 NSN 7540-00-634-4018 OPTIONAL FORM 363 (Rev. 1-94)
'U.S. G.P.O.:1994-300-891/0003
*U.S. G.P.O.:1994-300-891/00003
Prescribed by GSA
MEMORANDUM
OF CALL
Previous editions usable
TO:
Mack
YOU WERE CALLED BY-
YOU WERE VISITED BY-
OF (Organization)
Doug Bulcao
Amer Textiles Many Institute
PLEASE PHONE
FTS
AUTOVON
862 0523 862 0523
WILL CALL AGAIN
IS WAITING TO SEE YOU
RETURNED YOUR CALL
WISHES AN APPOINTMENT
MESSAGE
Unifil position
Apparec
DATE
TIME
RECEIVED BY Gen
2/20
4:40
50363-111 NSN 7540-00-634-4018 OPTIONAL FORM 363 (Rev. 1-94)
*U.S. G.P.O.:1994-300-891/00003
Prescribed by GSA
EMBASSY OF EL SALVADOR TEL 202-234-3834
Feb 10,97 21:21 No.033 P.01
Embassy of El Salvador
2308 California Street, N.W.
Washington, D.C. 20008
Peter A
Ana Cristina Sol
Ambassador
I Need tAzbirs
points os how to
respond.
February 10, 1997
my
Dear Mack:
pest
I know how busy you are and that is why I originally requested a
telephone conversation with you, to hear your views on the new Trade Bill for
the region.
Now a new matter has arisen, and I would greatly appreciate a meeting
or a telephone conversation with you, at your earliest convenience, to discuss
matters related to the visit of President Clinton to Central America.
The Foreign Ministers of the Region have called the Ambassadors for a
meeting this Friday, February 14th. It would be of great help to me if ! could
talk to you before then.
Sincerely,
are Custina
Ana Cristina Sol
Mr. Thomas F. McLarty
Counselor to the President
The White House
Peter Johnson
AAMA /UNite
CLAA
CLAA Retunt
466- 7464
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A3L Malsure January 5, 1997
elwant thelf of The
President in any way Call
on me - clim right acenoss the striet
from start! you - eager and ready to
asth "Father" of all of the Irade acts
for the last 25 years Ice prove the
nopes. Call In me please! Aan
GIBBONS & COMPANY
Washington, D.C.
is pleased to announce that
1
SAM M. GIBBONS
I
Former Member of the United States Congress
has become Chairman of the firm
January, 1997
GIBBONS & COMPANY
THE FIRM
GIBBONS & COMPANY provides counsel and
assistance in government relations and public affairs to
U.S. and international businesses, trade associations,
coalitions, individuals, and government entities on a broad
range of federal and international policy issues.
The firm is an advocate for clients before the
Congress, The White House, Federal departments and
agencies, and state governments.
GIBBONS & COMPANY represents clients on a
broad range of issues. Areas of expertise include: federal
taxation, international trade, higher education,
environmental policy, communications, energy, health
care, product and food safety, transportation, insurance
and financial services.
GIBBONS & COMPANY provides responsive,
personalized attention to clients by the principals of the
firm who are experienced in the legislative process and
the politics of Washington. The firm has, by intent,
remained small. As needed, the firm utilizes additional
technical experts and legal specialists to provide a full
range of the highest-quality professional services to clients
in an efficient and cost-effective manner.
1455 PENNSYLVANIA AVENUE, N.W.
The firm has an accomplished record in
THE WILLARD OFFICE BUILDING
Washington and is committed to obtaining successful
SUITE 525
WASHINGTON, D.C. 20004
results for its clients.
TELEPHONE (202) 783-6000
FACSIMILE (202) 783-4171
CLINTON LIBRARY PHOTOCOPY
Mr. Gibbons served as Chairman of the Trade and Economic
Committee of the U.S./Canada Interparliamentary Group, the
U.S./Mexico Interparliamentary Group, and Co-Chairman of the U.S.
SAM M. GIBBONS
delegation to the U.S./European Parliament Interparliamentary
Group. He counseled numerous U.S. Trade Representatives on
international trade negotiations and legislation.
Sam Gibbons, Chairman of Gibbons & Company, provides
Throughout, his 28 years on the House Ways and Means
advice and counsel to multinational businesses, trade associations,
Committee, Mr. Gibbons advocated reform of the Federal income
and coalitions on a wide range of issues including international
and payroll tax systems. In addition, he drafted and vigorously.
trade, tax policy, healthcare financing, retirement income policy, and
advocated legislation to repeal these systems and replace them with
federal funding for higher education.
a simplified, broad-based, border-adjustable, value-added tax. He
Before joining the firm Mr. Gibbons served as a Member of
was also involved in the development of every Federal healthcare
the United States Congress in the House of Representatives for 34
financing law since the inception of Medicare in 1966.
years (1962-1996). He was Chairman of the Ways and Means
Before election to the United States Congress, Mr. Gibbons
Committee and its Subcommittee on Trade, Vice-Chairman of the
served for 10 years in the Florida Legislature, where one of his major
Joint Committee on Taxation, and U.S. Advisor to the General
accomplishments was to establish the University of South Florida,
Agreement on Tariffs and Trade and the World Trade Organization.
now the 13th largest university in the United States. He received his
Mr. Gibbons worked closely on a bipartisan basis with eight
undergraduate and law degrees from the University of Florida, and
U.S. Presidents in the development, passage, and implementation of
is admitted to practice law in Washington, D.C., Florida, and before
major domestic and international policy initiatives. He has extensive
the United States Supreme Court.
legislative expertise in the areas of international trade, taxation,
Mr. Gibbons served as an officer for 5 years during World
healthcare, public and private pensions, budget, and education.
War II with the U.S. Army's 101st Airborne Division. He led
As a leading architect of American trade policy for more than
parachute infantry forces in major combat actions including the pre-
25 years, he is widely recognized as one of the foremost proponents
dawn assault on D-Day in Normandy, the invasion of Holland, the
of open markets and free trade. Mr. Gibbons was a primary advocate
Battle of Bastogne, and operations in central Germany. He was
and sponsor of every major trade law enacted during this period,
awarded the Bronze Star.
including The Trade Acts of 1984 and 1988, legislation implementing
Utilizing his experience and insight, the firm provides
the Tokyo and the Uruguay Rounds of the General Agreement of
political consultation and advocacy, strategic planning, risk
Tariffs and Trade, the Caribbean Basin Initiative, the U.S./Israel Free
assessment, support on trade and investment initiatives, and advice
Trade Agreement, the U.S./Canada Free Trade Agreement, the
on acquisition of state-owned enterprises.
Andean Trade Preference Act, and the North American Free Trade
Agreement.
While Chairman of the Ways and Means Subcommittee on
Trade, Mr. Gibbons frequently led trade and interparliamentary
delegations throughout Europe, Latin America, the Middle East, and
Asia, including the former Soviet Union, Japan, China, Australia, and
Vietnam. He conferred regularly with heads of Governments, their
principal trade and economic officials, and business leaders both in
the United States and abroad.
THE WHITE HOUSE
WASHINGTON
January 9, 1997
The Honorable Sam M. Gibbons
Gibbons & Company
1455 Pennsylvania Avenue, NW
The Willard Office Building
Suite 525
Washington, DC 20004
Dear Sam:
Congratulations and all good wishes on your new endeavor with
Cliff and his colleagues. I saw Cliff Tuesday when he was in the
White House, and he is genuinely excited about having the
opportunity to work closely with you. Being a fourth generation
member of a family business and having worked with my father, I
can attest that it is a special kind of relationship.
Your offer to be supportive of our Administration's efforts to
expand opportunity and fair trade are noted and much appreciated.
We will be in touch, and soon.
Personally,
May Mack McLarty
bcc: air
Steve
Desk
GIBBONS & COMPANY
Q
Steen
1455 PENNSYLVANIA AVENUE, N.W.
THE WILLARD OFFICE BUILDING
Q
SUITE 525
WASHINGTON, D.C. 20004
yes
2
TEL (202) 783-6000
FAX (202) 783-4171
January 21, 1997
Not to
Twill,
Mr. Thomas F. McLarty, III
OBI sutring
Senior Counselor to the President
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mack:
Thank you for your personal note. Your friendship and kind words
mean a great deal to me.
I want to reiterate my interest in helping you and the President in
your efforts to obtain fast track negotiating authority. I have been through
the process numerous times and I am intimately familiar with the vote
counting process in both the House and the Senate.
I could compliment your efforts in one of two ways. I could work
with you directly, similar to what Bill Daley and Bill Frenzel did during
NAFTA. Or, I could organize and coordinate a coalition of businesses on
behalf of the Administration to obtain the necessary support to pass the
legislation.
I would like to walk over and meet with you soon to discuss how I
can be of assistance to you and the President on this very important trade
policy initiative.
Sam Warm Regards,
Sam M. Gibbons
MACK MCLARTY
Jan. 27, 1997
To: Dan Tarullo
You might want to consider using Sam in your
efforts. From what I understand, he still
enjoys a fine reputation on the Hill.
was
Attachments
bcc: Eric
Stone
CBI
(besk)
THE WHITE HOUSE
WASHINGTON
January 27, 1997
The Honorable Sam M. Gibbons
Gibbons & Company
1455 Pennsylvania Avenue, NW
The Willard Office Building
Suite 525
Washington, DC 20004
Dear Sam:
Your letter of January 21st is received.
We will be in touch shortly despite the
early second term press of business,
including the upcoming State of the Union.
Personally,
My
Lool clawmu to seeds you
good. An good wishes
bcc: Eric
see Steve
CBI (Desh)
Row School JN15197
(Ame Potus'
Before a After
ENARGUE message
meeties tris weeked it
Hondunn
Papers trip
(not printed at government expense)
Mack McLarty
CAme Prpers' Rond
5 show no: NA7TA -
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pAND in U.S.
1
I langed later
POTV, 415.7 + Came TWB
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for cow up W possible
Means, Potas UPOTS
134
To
Mack
Date
12/16
Time 10:10
WHILE YOU WERE OUT
M
Margie Sullivan
of
Phone
395-6850
Area Code
Number
Extension
TELEPHONED
PLEASE CALL
CALLED TO SEE YOU
WILL CALL AGAIN
WANTS TO SEE YOU
URGENT
RETURNED YOUR CALL
Message ne CBI / Party
- Dhe of Charlene
have a question.
Charlese Needs to have
outstand to
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AMPAD
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EFFICIENCY@
23-023 CARBONLESS
Brin
POINT person
12/18/96
18:24
202 736 7618
AMERISUMMIT DOS
002/002
PARITY WITH NAFTA FOR CBI COUNTRIES
How much will it cost?
Scoring has not been completed, but OMB informally estimates
about $300 million in lost tariff revenue annually, or roughly
$2.4 billion. USTR tentatively is planning for an eight-year
Too mine
bill (1997-2004) to bridge to the 2005 date for the FTAA (Free
Trade Area of the Americas).
How do we justify it?
1) The Administration's credibility: The President, Vice
President, Secretary of State and USTR are all on record as
supporting it. In February, Secretary Christopher explicitly
committed the Administration to introduce parity legislation as
Instructions
part of the Omnibus Budget bill. Funding was included in the
FY 1997 budget but the Administration did not introduce a bill.
NOT
2) Assistance for a strategically important region: This
is
proposal would erase the duty disadvantage which CBI countries
DOA
now experience vis-a-vis Mexico on several important exports to
the U.S. (particularly apparel). This is a key issue in our
relationship with many CBI leaders; they are concerned that the
duty disadvantage, combined with reduced Mexican costs
resulting from the devalued peso, is a disincentive to
investment, exports and job creation. with increasing
unemployment, we can expect more illegal immigrants from the
region as well as pressure to fall back on more profitable drug
cultivation and trafficking. In fact, U.S. imports of CBI
apparel, while continuing to grow from most CBI countries, are
increasing at rates substantially below that of Mexico.
How do we get it?
A parity bil introduced by Cong. Crane and Sen. Graham in the
last Congress was most strongly opposed By Cubor Cand parts of
the U.S. textile industry. The Administration version would
probably need to require CBI countries to provide some form of
reciprocit to the U.S. to benefit business (e.g. in investment
and/or intellectual property) and labor (e.g. stronger
conditions regarding labor rights).
Alternatives
We could propose a\narrower bill than previously considered, to
benefit only apparel assembled from U.S.-formed and U.S.-cut
LACC'S
components, The duty disparity between NAFTA and CBI exists in
five areas (textiles and apparel; some footwear; petroleum;
point
canned tuna; certain watches and watch parts), but apparel
assembly accounts for the vast majority of the trade -- $5.4
billion in 1995. This would likely ensure the support of the
U.S. fabric and design/cutting industry, and eliminate
opposition from footwear and petroleum interests.
Couldouched AS G Step
12/17/96 15:16
202 736 7618
AMERISUMMIT DOS
002/002
December 17, 1996
MEMORANDUM FOR MACK MCLARTY
FROM:
ERIC FARNSWORTH
SUBJECT: CBI PARITY
The Vice President's office was unaware of any recent moves by
OMB to keep CBI parity out of the budget, but agrees the issue
is important and will weigh in.
Aide to the Vice President Mike Orfini promised to raise the
issue this afternoon with Leon Fuerth, with a view to
contacting OMB directly concerning the Vice President's
interest.
?
Nancy Schwartz continues to work the issue with OMB; I've
passed her name to Orfini and have mentioned to her your own
continued interest in keeping CBI parity in the budget.
Dobbies
Desk
MACK MCLARTY
December 16, 1996
To: Jim Dobbins
Relevant to our recent discussions and wanted
to be sure you had a copy.
we
Attachment
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
001. letter
President Violeta Barrios de Chamorro, et al. to President Clinton; RE:
12/06/1996
P1/b(1)
North America Free Trade Agreement (4 pages)
COLLECTION:
Clinton Presidential Records
Special Envoy for the Americas
General Files
OA/Box Number: 11851
FOLDER TITLE:
Fast Track - Current (9/97) [4]
2017-0401-F
db4735
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)|
PI National Security Classified Information [(a)(1) of the PRA]
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office |(a)(2) of the PRAJ
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRAJ
an agency |(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute [(b)(3) of the FOIA]
financial information |(a)(4) of the PRA|
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information |(b)(4) of the FOIA]
and his advisors, or between such advisors |a)(5) of the PRA|
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy |(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA|
b(7) Release would disclose information compiled for law enforcement
purposes l(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions [(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells |(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
002. letter
President Violeta Barrios de Chamorro, et al. to President Clinton; RE:
12/06/1996
P1/b(1)
North America Free Trade Agreement [duplicate of 001 in Spanish]
(2 pages)
COLLECTION:
Clinton Presidential Records
Special Envoy for the Americas
General Files
OA/Box Number: 11851
FOLDER TITLE:
Fast Track - Current (9/97) [4]
2017-0401-F
db4735
RESTRICTION CODES
Presidential Records Act - 144 U.S.C. 2204(a)]
Freedom of Information Act - 15 U.S.C. 552(b)|
PI National Security Classified Information [(a)(1) of the PRA|
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office |(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute [(a)(3) of the PRA]
an agency |(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information [(a)(4) of the PRA]
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information [(b)(4) of the FOIA]
and his advisors, or between such advisors [a)(5) of the PRAI
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy |(a)(6) of the PRAJ
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions |(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells [(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
12/20/96
13:40
202 3959675
IAPL/USTR
002
EXECUTIVE OFFICE OF THE PRESIDENT
OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
WASHINGTON, D.C. 20508
Thank you for your letter, conveyed through Vice-President Gore on the occasion of the
Summit on Sustainable Development, expressing your concerns regarding enhanced
trade preferences for Central America. We appreciate the economic vulnerabilities of
the region and the need to attract investment. Concern for such economic
development was at the heart of the Caribbean Economic Recovery Act of 1984 and
the subsequent legislation that amplified the original preferences. This Act was also
intended to encourage changes in trade and economic policy among countries in the
Caribbean and Central America. We are gratified to note that many Central American
countries have begun to make policy changes to create the legal and economic
framework needed to attract investment and develop the domestic economy.
Let me assure you that we remain committed to appropriate NAFTA parity legislation for
all countries included in the Caribbean Basin Economic Recovery Act. We intend to
work with interested members of Congress to craft legislation that will extend additional
trade preferences to Caribbean Basin countries. At the same time we will continue to
encourage the adoption of sound policies in areas such as investment, intellectual
property rights, worker rights, and other policies that will facilitate participation in the
Free Trade Area of the Americas. While we are working toward this goal, we hope to
see countries in the region continue to strive to reduce trade barriers.
The promise of the Summit of the Americas depends on partners committed to one
another and on relationships based on our willingness to work together. Our joint
commitment to the spirit and letter of the Summit of the Americas has not wavered. We
look forward to our continued collaboration in building a democratic hemisphere with
open economies that will permit our citizens to live in freedom and prosperity.
wrstes
02/21/97 FRI 15:46 FAX 202 783 4171
GIBBONS & CO.
002
GIBBONS & COMPANY
1455 PENNSYLVANIA AVENUE, N.W.
THE WILLARD OFFICE BUILDING
SUITE 525
WASHINGTON, D.C. 20004
TEL (202) 783-6000
FAX (202) 783-4171
February 21, 1997
A
Thomas F. McLarty, III
Senior Counselor to the President
The White House
7nst
1600 Pennsylvania Avenue, NW
Treel
/ Pre cat
Washington, DC 20500
Bill
Dear Mack:
Armonal
Bill Frenzel and I thoroughly enjoyed meeting with you this afternoon
to discuss our efforts to help the President obtain trade negotiating
authority. It was particularly good to hear your thoughts are similar to
ours. We believe time is of the essence and we are prepared to work
aggressively with the Congress to secure passage of this very important
legislation. We will begin discussions on assembling an enthusiastic
support group. Your willingness to kickoff the organizational meeting will
be helpful in our efforts.
We look forward to working with you and please let us know when
you want us to get to work.
For Bill and Sam, your bipartisan team!
Gibbons
FEBRUARY 1997
MARCH 1997
APRIL 1997
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$
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5
2
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APPOINTMENTS & SCHEDULED EVENTS
9
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TWO PAGE-PER-DAY ORIGINAL
Washington Outlook
EDITED BY OWEN ULLMANN
Street
ENCE
THE LATEST TRADE WAR:
FAST Treel 76 DUE
Dosse
DEMOCRAT VS. DEMOCRAT
L
ately, it seems as if all the intraparty bloodletting has
"Our credibility is strained to the breaking point," warns
been among Republicans. But Democrats are about to get
David J. Rothkopf, managing director of Kissinger Associates.
back to their usual bickering as they brace for a con-
Tired of waiting, nations in the region such as Brazil and Ar-
tentious battle over trade-with strong overtones for Cam-
gentina have already formed smaller trade blocs.
paign 2000. On one side: Vice-President Al Gore, point man
Trade is a divisive issue for the GOP, too, because of its
for the Administration's push to expand the North American
growing wing of economic nationalists. But for now, many Re-
Free Trade Agreement. On the other: House Minority Leader
publicans, including House Speaker Newt Gingrich, hint that
Richard A. Gephardt (D-Mo.), implacable NAFTA foe.
they're prepared to meet Clinton halfway: The GOP would ex-
At issue is congressional renewal of the Administration's
tend a fast-track mandate that is silent on labor and envi-
expired authority to negotiate "fast-track" trade accords that
ronmental issues if Clinton limits side deals on those subjects.
prevent lawmakers' tinkering. The brawl will set the stage for
The Clintonites are inclined to bite, but Gephardt and the
a showdown between the two longtime ri-
AFL-CIO insist that NAFTA-expansion ac-
vals for the Presidency. "It may not be
cords include commitments on those is-
the first primary of 2000, but it's the first
sues. "This is not negotiable. Trade, labor,
contest," says one Democratic operative.
and the environment are inextricably in-
It's also a fight that exposes the fault
tertwined," says Gephardt. If he rallies
lines of the Democratic Party. Gephardt is
enough of the 205 House Democrats to
the champion of liberals who believe mar-
his side, GOP ardor for fast-track authori-
ket-opening pacts are exporting U.S. jobs
ty may cool. They want political cover.
to low-wage nations. Gore hopes to be
"This won't pass if only 50 to 60 Democ-
heir to Bill Clinton's New Democrat
rats come to the altar," warns one GOP
canon that expanded trade spurs growth
Hill staffer. It may be tough to muster
and high-wage jobs. "This is a defining is-
many more. Two issues-payoffs by drug
sue for the party," says Representative
lords to a Mexican general and the $39
Robert T. Matsui (D-Calif.).
GEPHARDT AND GORE: "Defining issue"
billion U.S. trade deficit with NAFTA part-
Since fast-track authority lapsed in
ners Canada and Mexico-are sure to
1994, the Administration has only been able to complete ne-
rile House protectionists. And fast-track renewal faces tougher
gotiations that started before then. As a practical matter, it
going in the Senate, which chafes at curbs on its powers.
cannot launch talks on new deals such as Chile's inclusion in
The Clintonites will have to start dealing soon. Action
NAFTA because Congress might cripple them with amend-
can't be pushed into 1998 because lawmakers won't touch
ments. Congress can only approve or reject fast-track deals.
such a controversial issue in a midterm election year. "If we
RESOLVE QUESTIONED. The loss of fast-track authority has
don't do this by August, it isn't going to get done," says
raised doubts about the U.S. commitment to expanding free
Representative Jim Kolbe (R-Ariz.), a leading free-trader.
trade throughout the Americas. Alarm bells are also going off
That means Gore and Gephardt will be squaring off in com-
in Mexico City, which President Clinton will visit in April
ing months as Democrats struggle over the future of trade-
(page 51), about Gephardt's use of the fast-track debate to try
and the leadership of their party.
to stiffen NAFTA'S worker and environmental protections.
By Amy Borrus
CAPITAL WRAPUP
REPUBLICANS FOR GORE
sues that push Gore to the left, the
2000 election could be an uphill fight
NEW SCIENCE GURU
It's a fact of political life that Re-
for GOP Presidential aspirants.
The White House Office of Science
publican voters detest Bill Clinton.
Not true with Vice-President Al Gore,
THE TAX MAN RESPONDETH
& Technology Policy, which is sup-
posed to shape Administration science
according to a new Républican survey.
The Internal Revenue Service's
initiatives, is taking a backseat these
Tony Fabrizio, Bob Dole's chief poll-
troubled toll-free 800 telephone num-
days to President Clinton's new
ster in the 1996 campaign, found that
ber is working better this year, though
deputy chief of staff, John D. Podesta.
a respectable 41% of Republicans view
many taxpayers are still getting busy
"He wants to be the science adviser,"
Gore favorably, while just 47% don't.
signals. This tax season, two-thirds of
says one source. A former consultant
Among all voters, Gore boasts impres-
callers are getting through to ask
to high-tech clients, Podesta wants to
sive 62%-to-27% approval-ratings. The
questions. That's up from less than
shift money from basic science to high-
Veep's appeal is that he has seized the
half in '96, says IRS Taxpayer Advo-
tech projects. His fingerprints can be
political center. Fabrizio's somber bot-
cate Lee Monks. His goal is an 85%
seen on a White House plan to boost
tom line for the GOP: Unless it finds is-
response rate.
education via the Internet.
ROBERT TRIPPETT/SIPA
BUSINESS WEEK / MARCH 10, 1997 43
PHOTOCOPY
PRESERVATION
International Outlook
EDITED BY JOHN TEMPLEMAN
Stree
Enc
Inst Trad 26
MEXICO'S DRUG PROBLEMS
Dosse
ARE ALSO NAFTA'S
P
resident Bill Clinton's first official visit to Mexico on
governors from Zedillo's ruling party also have links to major
Apr. 11-12 was planned as a triumphal tour. It was in-
traffickers. Others allege that the father of disgraced former
tended to trumpet the success of the three-year-old
President Carlos Salinas de Gortari, as well his brother and
North American Free Trade Agreement that has boosted
other kin, were deeply implicated in drug corruption.
U. S.-Mexican trade 20% annually since 1994. Clinton also
The scandals are engulfing Mexico in a big election year.
planned to celebrate, with President Ernesto Zedillo Ponce de
Half of its congressional seats, six governorships, and the
León, his winning $20 billion gamble to bail out the Mexican
mayorship of Mexico City are up for grabs in July. Polls
peso two years ago over objections in the U.S. Congress.
show Zedillo's Institutional Revolutionary Party (PRI), which
But a string of drug corruption scandals in Mexico has
has dominated Mexican politics for seven decades, stands to
suddenly turned Clinton's dream trip into a diplomatic night-
lose control of Mexico City and several governorships. With
mare. He is now fighting to stop his Latin America policy
an eight-point nationwide lead, however, the PRI may still hold
from unraveling altogether. Even the
on to its congressional majority.
future of NAFTA itself is on the line.
HILL CAMPAIGN. Zedillo, a technocrat who
Congressional opponents from both par-
is not implicated in the scandals,
ties may introduce legislation to alter
promised to attack corruption vigorous-
or undo the pact after the Administra-
ly. But his first attempt to do so by in-
tion issues a mandatory report on it in
volving the Army, long considered Mex-
July. "People who felt we were validat-
ico's least corrupt institution, backfired.
ing a corrupt system by embracing NAF-
Analysts believe he must now com-
TA now feel their views have been rati-
pletely overhaul Mexico's legal and ju-
fied," says a senior congressional staffer.
dicial system. Zedillo snaps that it's ab-
BLIND EYE. Any hope Clinton had of us-
surd to claim that Mexico is "a corrupt
ing Mexico as a lever to spread NAFTA
country full of criminals."
membership is in tatters as Congress
But that's now the way it looks from
loses enthusiasm for close ties with the
ZEDILLO: Can he mollify Capitol Hill?
Capitol Hill. So Mexico is moving to
region. "We ignore drug trafficking by
shore up its badly battered reputation
Mexican government officials as long as we can sell more
there. It is beefing up the congressional liaison staff at its em-
McDonald's hamburgers," complains Representative Fortney
bassy. And it will use its 41 consular offices around the U.S.
"Pete" Stark (D-Calif.)
to relay positive news about NAFTA to local legislators. The
The trouble began Feb. 18 when Mexico abruptly dis-
trouble, warns Javier Treviño, undersecretary for international
missed Army General Jesús Gutiérrez Rebollo, who headed
cooperation at the Mexican foreign ministry, is that as Zedil-
the national antidrug agency, accusing him and 36 aides of be-
lo acts to clean house, the stink of corruption may get worse.
ing in the pocket of traffickers. Mexican officials failed to warn
At this stage, though, Mexico doesn't have any alternative.
the Administration of their suspicions about Gutierrez, who
And it must produce quick results, otherwise America's trade
weeks earlier had received high-level intelligence briefings in
courtship with Mexico could end up on the rocks.
Washington. A torrent of U.S. and Mexican press revelations
By Geri Smith in Mexico City, with Richard S. Dunham
worsen the picture by the day. Some reports allege that two
in Washington
GLOBAL WRAPUP
KREMLIN HEADS TO ROLL?
Kremlin watchers say a more likely
IDFC Chairman Deepak Parekh, a
scenario is that Yeltsin will slash the
high-profile mortgage banker in the
Eager to prove that he's back in
ranks of other ministers after his Mar 6.
private sector, figures that's the best
charge after seven months of illness,
state of the union message Labor Min-
way of avoiding the bureaucracy and
Russian President Boris N. Yeltsin is
ister Gennady G. Melikyan, Defense
political meddling that have long
mulling a Cabinet reshuffle Local
Minister Igor Radionov, Economics
bedeviled India's efforts to finance
newspapers predict that Prime Minis-
Minister Yevgeny G. Yasin, and Pension
infrastructure-from telecommunica-
ter Viktor S. Chernomyrdin will be
Fund head Vasily Barchuk could go,
tions to ports and roads.
replaced soon by Yeltsin's chief of
along with several deputy ministers.
The Madras-based agency, due-to
staff, Anatoly B. Chubais. But Cher-
A FANNIE MAE FOR INDIA
open for business on July 1. will focus
nomyrdin, 59, a survivor of other
on credit enhancement and refinancing
shakeups, could well beat the odds
India's new $500 million Infrastruc-
rather than direct lending The Indian
again-even though Yeltsin pinned
ture Development Finance Corp.
government, a minority 40% share-
blame for the government's failure to
(IDFC) will be modeled on the U.
holder in IDFC, will provide loan guar-
pay wages and pensions on him.
Federal National Mortgage Assn.
antees for projects
PETER STONE/BLACK STAR
BUSINESS WEEK / MARCH 10, 1997 51
PHOTOCOPY
PRESERVATION
return
FAST Tre 72l
Union Leaders Oppose Expanding Trade Treaty Without Modifications
tal guarantees are included in the
pushed the accord with Canada
By STEVEN GREENHOUSE
trademarks, for instance, than when
co were hurt not by Nafta, but by the
wiping out American jobs and bleed-
main agreement, rather than in a
and Mexico through Congress de-
it violates labor laws.
economic downturn caused by the
ing some unions to death.
side agreement that Congress could
spite labor's fervent lobbying.
The resolution was approved a day
peso's devaluation.
dilute.
The debate over Nafta comes
LOS ANGELES, Feb. 19 - Putting
"American, Mexican and Canadi-
after two possible Presidential can-
He said that "the impact of Nafta
the labor movement on a potential
"The labor movement's strongest
an workers have all suffered because
didates in 2000 - Vice President Al
shortly before Congress is expected
has been quite positive" in all three
collision course with President Clin-
disagreement with the Clinton Ad-
of Nafta," said Jay Mazur, chairman
Gore and Richard Gephardt, the
countries if the effects of the devalu-
to take up legislation that would give
Mr. Clinton fast-track authority to
ton, A.F.L.-C.I.O. leaders voted today
ministration in the first term was
of the A.F.L.-C.I.O.'s trade subcom-
House Democratic leader - staked
ation are separated out.
to oppose extending the North Amer-
over Nafta," John J. Sweeney, the
mittee and president of the Union of
out contrary positions on trade while
He said any accord adding other
negotiate with other countries to join
ican Free Trade Agreement to other
president of the American Federa-
Needletrade, Industrial and Textile
appearing before the labor leaders.
countries to the agreement should
the trade agreement. With such au-
countries unless it includes protec-
tion of Labor and Congress of Indus-
Employees. "We should rethink
Striving to show that there was no
include labor and environmental pro-
thority, he can negotiate an agree-
tions on labor and the environment
trial Organizations, said. "Our posi-
Nafta and adjust it so that at the very
ideological daylight between him and
tections, but added, "The precise
ment, and Congress then has to vote
tion has not changed in terms of what
that the Administration has previ-
least no future trade agreement
labor, Mr. Gephardt, the House Dem-
form that it takes will have to be
it up or down, without being able to
we are fighting for in the Nafta
should be signed without incorporat-
ously rejected.
ocratic leader, said he would oppose
worked out over time." In the past,
pick it apart with amendments.
agreement. We will continue to fight
ing strong worker rights and strong
extending Nafta to other nations un-
The labor leaders approved a reso-
the Administration has rejected la-
In approving a series of resolu-
over labor standards, human rights
enforcement mechanisms for such
less there were stronger worker and
bor's demand that labor and environ-
lution saying that Nafta has hurt
tions, A.F.L.-C.I.O. leaders reiterated
and environmental protection."
rights."
environmental protections.
mental guarantees be included in the
American, Mexican and Canadian
their endorsement of Mr. Clinton's
The combative stand by the 54-
One of labor's complaints is that
"We should not simply extend a
main agreement.
workers and that other countries
member executive council, at the
stronger enforcement mechanisms
embattled nominee for Secretary of
treaty that in my view is not working
The Administration's trade policy
should not be added to the accord
federation's winter meeting here, re-
Labor, Alexis Herman. The federa-
come into play under Nafta when
properly," Mr. Gephardt said. "In a
came under heavy criticism while
unless strong labor and environmen-
called the battles when Mr. Clinton
Mexico violates commercial laws, on
way, Nafta has validated a govern-
Mr. Gore appeared here. According
tion called for immediate hearings
mental and business system that
to labor leaders, Stephen P. Yokich,
on her nomination, praising her
does not allow workers to have the
president of the United Automobile
"commitment to a working families
ability to get paid and compensated
Workers, put Mr. Gore on the defen-
agenda and her superb ability to
The New York Times
for their hard work."
sive at Tuesday's meeting by assert-
advance such an agenda."
Praising Nafta, Mr. Gore voiced
ing that last year's $165 billion mer-
Their resolution said, "It is unfair
confidence that the Administration
chandise trade deficit showed that
to working families to have the prin-
and the labor movement could work
Mr. Clinton's trade policy was a fail-
cipal Federal department responsi-
THURSDAY, FEBRUARY 20, 1997
out their differences.
ure. Not only that, he asserted that
ble for worker protections to be sin-
Mr. Gore said that wages in Mexi-
the President's trade policies were
gled out and held hostage."
Continued From First Business Page
Balance of Trau
lier this month that he felt the dollar
had risen far enough. The latest
$85
Trade Deficit
trade deficit figures were unlikely to
80
affect that position, analysts said.
The Government tally showed the
75
Imports
Grew Sharply
December deficit swelled to nearly
70
$10.3 billion from a November total
that was revised downward to $7.9
65
Exports
billion, or $500 million less than the
60
1995
1996
Last Year
department initially reported.
Imports of goods and services
JASOND
0
surged to a record $81.7 billion, $1.2
billion higher than in November, the
2
DEFICIT
Strong Dollar Was a Big
bulk of the increase going for crude
4
oil and petroleum products. This re-
flected both greater volumes and
6
Factor in December Gap
higher prices, the latter, at least,
8
subsequently subsiding.
10
Exports, which hit a record in No-
vember, eased $1.1 billion, much of
12
12-month
By ROBERT D. HERSHEY Jr.
the decline reflecting lower foreign
moving average
$14
sales of soybeans and corn at the end
$
WASHINGTON, Feb. 19 - The nation's
of a year when early prospects of
December 1996
trade deficit widened substantially in De-
tight supplies gave way to bountiful
Balance
-$10.29
harvests.
cember, bringing the imbalance for the full
Imports
81.68
But even as the overall deficit wid-
year to $114.2 billion, the largest gap since
Exports
71.40
1988, the Commerce Department reported
ened by nearly 30 percent in Decem-
today,
ber, there was a narrowing with both
Deficit is the excess of imports
Lower exports and higher imports con-
China and Japan, the sources of
over exports for goods and
much of this country's trade friction.
services. Amounts are
tributed about equally to the December
The gap with China shrank $400
rounded, in billions of dollars,
expansion, which analysts said partly re-
million, to $2.6 billion, in December,
seasonally adjusted
flected the sharp rise in the international
while surging 16.9 percent for the
value of the dollar. Treasury Secretary
Source: Commerce Department
year, to $39.5 billion, or slightly high-
Robert E. Rubin and the finance ministers
er than with Canada and Mexico
of other major countries began an effort
combined. The United States buys
The New York Times
earlier this month to restrain the dollar's
more than four times as much from
rise.
China as it sells there and exported
lated Mexican economic problems,
The strong dollar makes foreign goods
slightly less last year to China than
including peso devaluation in late
more affordable for American consumers
to Australia.
1994. The devaluation spurred a se-
but makes this country's products less
In June, Congress will be called
vere recession, which drastically cut
competitive abroad. Detroit's auto makers
upon to extend China's trading rights
the market for American imports.
have been complaining about inroads into
for another year, a process not now
Michael Strauss, chief economist
their markets made by Japanese produc-
expected to prove difficult but that is
for Sanwa Securities in New York,
ers who are taking advantage of the cheap-
nevertheless likely to at least be de-
was not bothered by today's report,
er yen to keep prices down.
ferred until after China's takeover of
declaring that the dollar's strength
Today's report, though unlikely to
Hong Kong at midyear.
"has not had a dramatic impact" on
prompt even a subtle policy response, nev-
As for Japan, the American deficit
trade flows and contending that a
ertheless did put a fresh focus on the
edged down a slight $50 million, to
resurgence of exports would risk ex-
question of how the trade sector will affect
$4.3 billion, in December but shrank
cessive demand pressures in this
the economy's performance this year. Ex-
markedly for the year. The 1996 defi-
country.
ports, though accounting for only about an
cit was $47.7 billion, or 19.4 percent
But Lawrence Chimerine, manag-
eighth of United States economic activity,
below the 1995 total. This was the
ing director and chief economist for
have long been a big contributor. But
second consecutive decline, and the
the Economic Strategy Institute,
growth in exports slowed to 6.2 percent last
smallest gap since 1991.
took a dim view of what he called a
year, half the 1994 advance.
Unlike the aggregate statistics,
"largely structural" trade deficit
"This is probably the biggest wild card,"
those for individual countries are not
that is likely to rise another $10 bil-
William C. Dudley, a senior economist at
adjusted for seasonal variation, nor
lion to $15 billion this year.
Goldman, Sachs, said. "When the gap is
do they include services, which gen-
He said that the deficit with Japan
widening, it's a drain on incomes" that has
erally offset a large part of the defi-
had bottomed out, that the gap with
a dampening effect similar to a tax in-
cit in merchandise.
China was still rising rapidly, that
crease.
The Coalition of Service Industries
European growth remained sluggish
Largely reflecting a swing in the trade
estimated that travel, transporta-
and that the nation's oil bill would
account, magnified by statistical deficien-
tion, royalties and other services
keep rising.
cies, Goldman, Sachs projects a 1.8 percent
generated a United States surplus
He concluded that 1997 looked
increase in economic growth for the cur-
last year equal to about 40 percent of
"awfully bad on trade."
rentiquarter, compared with 4.7 percent in
this country's goods deficit with Ja-
the final three months of 1996.
pan but only about 2 percent of the
The research department at Merrill
goods deficit with China.
Lynch said trade was currently having a
The overall deficit with Canada
negative impact on the economy and its
widened in December by $600 mil-
impact would be "neutral at best through
lion, to $2.3 billion, while the deficit
the rest of 1997."
with Mexico was halved, to $700 mil-
Mr. Rubin, after publicly supporting a
lion.
stronger dollar for months, announced ear-
For the full year, however, the
shortfall with Mexico climbed to a
Continued on Page 4
record $16.2 billion, a development
seen by critics as a failure of the
North American Free Trade Agree-
ment and by the Clinton Administra-
tion as temporary fallout from unre-
The New York Times
THURSDAY, FEBRUARY 20, 1997
0000
1
Enic
7
February 8, 1997
Stree
INFORMATION
3
7k os dish
MEMORANDUM FOR GENE SPERLING
DAN TARULLO
Discuss w Kigle
JIM STEINBERG
FROM:
BOB KYLE
SUBJECT:
Fast Track Meeting
This small Principals meeting on fast track is should begin addressing some of the big issues
involved in the effort and to bring additional agencies into the process. I recommend we cover
five topics:
Status
You might begin by letting Charlene update on talks with Congress, labor, business and others.
Ira Shapiro and I have met with staffs from Gingrich and both sides of Ways & Means and
Finance. The mood has been highly cooperative, with little posturing. Charlene's talk with
Sweeney went well, although AFL staff (Mark Anderson) called Ira on Friday to say that
Sweeney's affability toward Charlene's initial thoughts on labor/environment should not be taken
as acceptance. At the staff level, it seems AFL is talking to Gephardt and moving more toward a
harder line. Business reaction to the State of the Union was favorable, with a wait-and-see
attitude toward labor/environment.
Labor/Environment
Regarding our substantive approach, Charlene is considering a Presidential Statement of
Intentions regarding labor/environment that would spell out our objectives. Some Administration
key
statement (after finding a bipartisan consensus) is probably wise. Earlier efforts to resolve this
issue devolved too quickly into a search for statutory language that could mean all things to all
support to RAdge
people. As a result, no compromise ever stuck because parties interpreted the language
differently. This time, all parties agree we need a more solid understanding of our approach, with
mitusn
specific language to follow.
Regardless what vehicle enunciates our policy, there are several issues we should address: 1) our
position toward future labor/environment side agreements; 2) our position toward multilateral
efforts in the WTO, OECD, etc.; 3) other international efforts that might advance our agenda.
Charlene seems to want to channel our policy into some type of global effort (category 3). You
might explore what she has in mind. My sense is that much of this debate will return to our
2
position toward side agreements and specifically whether we will accept or forswear the use of
trade sanctions to enforce the agreements.
More fundamentally, we need to develop and articulate a more coherent statement of our policy in
this area. This could include: 1) reiteration that labor/environment has long been a bipartisan part
of our trade policy (e.g., GSP/labor rights); 2) that pressing this agenda can be pro-trade (e.g.,
more equal distribution of worker income creates a more lucrative market); and 3) a statement of
our agenda and what we will not do. You might ask USTR to take a first cut at such a document.
I can work with them.
Tactically, I support Charlene's strategy of working quietly at first with all parties (labor,
business, environmental groups, both parties on the Hill) to develop a consensus. Rather than
have the Administration then float a proposal (which might simply become a target) we might
seek an Archer-Rangel compromise. (Charlene hopes this might include Roth-Moynihan too;
great if you can get it, but difficult). During this process, all parties should keep their rhetoric
muted. You might reiterate that Charlene should be our chief spokesperson on this issue, with
others simply saying we will work in a bipartisan manner with all parties to find a solution. We
also need to underscore to business, labor and the Hill to avoid taking hardline public positions.
Other Substantive Issues
You might discuss Hill concerns that future implementing legislation contain only provisions
Ancher
"necessary" (not "necessary and appropriate") to implement the trade agreement. Our Hill
trssue
discussions reflected general agreement that the legislative process needs some flexibility to
secure votes, but some limit on dealmaking too. I suggest we agree to this principle, consider any
ideas Charlene may present, then leave it to be negotiated.
You might also consider Congress' likely request that any future free trade negotiation be subject
to a vote by the full House and Senate before negotiations start. Currently, the Ways & Means
and Finance committees have authority to deny an individual negotiation. Full body envy of this
imp
privilege is likely to lead to a full body veto. However, this is a substantial concession and we
point
should move there only over time. If we do, we can use it to justify less Administration precision
on what future agreements we will negotiate.
Message/Communications Strategy
USTR has prepared a draft message document (attached), which needs work. You might ask Ira
and I to work on a redraft. My general sense is we should take a fairly low-key approach to this
initiative, now that the President has spoken. But we should: 1) have Charlene give a speech
sounding our themes (which would provide a good document for use by allies); 2) quietly contact
economic and foreign policy elites to build a base of support; 3) develop good documents (e.g.,
general message, fact sheets).
Uses of Fast Track
3
?
The attached document also purports to set forth the agreements we seek, but it is short on
specifics. It references upcoming GATT negotiations: agriculture (1999), services (2000) and
intellectual property (2000), and more near-term reviews in many areas. Chile is the only Latin
country referenced, APEC lists no specific agreements and Russia and Africa are referenced more
generally as long-term free trade candidates.
You might address several issues. How specific should we be? What other candidates could we
reference? What regions should we emphasize or not emphasize? Given that Congress may insert
greater pre-negotiation vetoes, we can afford less specificity but this risks losing business support
as the bill picks up barnacles. At the least, we need to look carefully at potential candidates
(Singapore, Australia), then have a better answer about what agreements we favor and what
criteria we would use to pursue further agreements.
Attachment
for In
Free Trade Goes South With or Without U.S.
By LARRY ROHTER
spread of regional agreements that
W. Aronson, who was Assistant Sec-
MIAMI, Jan. 5 - Just over two
excluded Washington not as a chal-
retary of State for Inter-American
years ago, President Clinton
lenge to American leadership but as
Affairs during the Bush Administra-
emerged from a meeting with 33
something that can be very helpful
tion. "After a while, to maintain your
Western Hemisphere leaders and
to the Free Trade Area of the Ameri-
own dignity, you take off the wedding
made an ambitious pledge. By 2005,
cas process."
dress and go find another boy-
he promised, a "Free Trade Area of
When Latin American nations link
friend
the Americas would stretch from
up among themselves, he added, "it
With Mr. Clinton about to begin a
Alaska to Argentina" and "will be
makes it easier for them to go the
second term, the next few months
the world's largest market."
last step," when the time comes to
will be crucial to bringing the United
Since then barriers to trade and
deal with the United States.
States back into the process, govern-
investment have indeed begun to top-
"Frankly," the official continued,
ment officials and economists
ple, thanks to the dozens of agree-
"we would be doing that ourselves if
throughout the hemisphere said.
ments that Latin American and Ca-
we had the authority. We are not as
"We can no longer postpone taking
ribbean countries are signing with
far along in the process as we would
decisions on certain important
one another.
like to have been."
things," said Ambassador Bernal of
For its part, though, the United
Chile, which has emerged from
Jamaica.
States has mostly been sitting on the
military dictatorship to have the
Latin American and Caribbean
sidelines, hobbled by what Latin
fastest-growing economy in Latin
countries will be looking, their lead-
American officials and trade experts
America, provides perhaps the best
ers make clear, for evidence of
describe as a lack of will, leadership
example of United States disengage-
American commitment to reviving
and commitment.
ment and the resulting shifts in eco-
the fast-track process, either in the
'What we are seeing is the conse
nomic strategy.
President's State of the Union Ad-
quences of two years of drift.' said
At the 1994 Summit of the Ameri-
dress or when President Frei visits
Robert A. Pastor, director of the
cas meeting here in Miami, the lead-
the United States in late February.
Latin America and Caribbean pro-
ers of the three Nafta countries an-
"If you say no to Chile, you have
grams at the Carter Center in Atlan-
nounced plans to expand their group
said no to free trade," said the For-
a. "Every previous administration
to include Chile through a "fast
eign Minister of one medium-sized
was hungry for an opportunity like
Latin American country. "It is a
this, but Latin America wasn't ripe
litmus test." The 2005 deadline re-
f
for it. Now that Latin America is
mains attainable, the official added,
a
genuinely interested, the United
Latin American and
"that is, if you are still interested."
r
States has been out of focus.'
At a conference in Miami on
The resulting vacuum, largely the
Caribbean countries
Thursday, Thomas F. McLarty, the
=
product American electoral poli-
former White House chief of staff
tics and the Mexican financial crisis,
are forming trade
who is Mr. Clinton's point man on
has quickly been filled by countries
Latin American issues, said the Ad-
like Brazil and Argentina.
blocs on their own.
ministration remained committed to
Putting aside their historic ri-
free trade and would "continue to lay
valry, South America's two giants
the legal and economic framework
have aggressively taken the lead by
for Chile's accession to Nafta, includ-
forging a four-nation market called
track" process, with that country's
ing fast-track."
Mercosur - a Spanish contraction of
President, Eduardo Frei Ruiz-Tagle,
If the hemisphere fails to build on
Common Market of the South with
looking on.
the principles of the Miami confer-
more than 240 million people, a total
"We have been the Three Ami-
ence, he said, "we may lose this
annual output of $1 trillion and a
gos," Prime Minister Jean Chrétien
moment forever.
definition of free trade somewhat
of Canada proclaimed. Now we will
But Foreign Minister José Miguel
different from Washington's.
be the Four Amigos.'
Insulza of Chile said membership in
Already the world's fourth-largest
But a week later, the Mexican peso
Nafta no longer "has either the ur-
unified market, Mercosur is deep in
collapsed. That forced the United
gency or the importance it had in
negotiations with the European
States into a controversial bailout of
1994 Over the last two years, he
Union and with neighboring groups
its Nafta partner and made fast-
added, "our country's position has
in Latin America.
track membership for Chile political-
consolidated internationally and we
In addition, the Prime Ministers of
ly unpalatable. Then the American
have signed agreements of great
Japan and China and the President
election cycle began, killing any
scope.
of South Korea have all made state
chance for bold measures on trade.
As a result, government officials
visits to Latin America in the last
In response to what it perceived as
and trade analysts say, it is more
few months, looking for opportunities
America's lack of interest, Chile has
likely that negotiations will take
in an area they long viewed as a
negotiated a free trade agreement
place between two or more blocs or
United States preserve. Taiwan's
with Mercosur and revived its ties
regions than that Latin American
Prime Minister is scheduled to do the
with the five-member Andean Pact,
countries will come hat in hand, one
same soon.
which this fall began separate talks
after another, asking permission to
"What is in fact in the making is a
with Mercosur. Chile recently signed
join Nafta.
South American Free Trade Area,"
a free trade agreement with Canada
One indication of Latin America's
said Marcos Rodríguez Mendoza, a
to supplement a similar accord it has
growing confidence came recently
Venezuelan economist who is the
with Mexico, which had already
when President Carlos Saúl Menem
chief trade adviser to the Organiza-
reached free trade agreements with
of Argentina jokingly said before
tion of American States. Economic
Colombia and Venezuela.
heading off for a visit to Washington
integration is becoming a "reality,"
'The Chileans have been kept
that if the United States and its Nafta
he said, with or without Washington.
standing at the church, waiting for
partners wished to join Mercosur,
In Central America and the Carib-
the groom to arrive, said Bernard
they would be welcome to do SO.
bean, a similar process is under way,
a
driven largely by the Clinton Admin-
istration's failure to keep its promise
to extend to those regions the bene-
fits enjoyed by Mexico and Canada,
VIRT E and TIC E
1
Washington's partners in the North
American Free Trade Agreement.
A COURSE AT THE SCHOOL OF PRACTICAL PHILOSOPHY
As a result of Washington's inac-
tion, the regional groups to which
those small countries belong are now
Enjoy ten evenings of conversation in the Socratic style
seeking agreements of their own
examining timeless questions and current conditions.
with Canada and Mexico, as well as
with Mercosur, the European Union
Hear and discuss what some of the great figures of Western civiliza-
and East Asia.
"I think everybody in the hemi-
tion have said about virtue and justice. The course encourages ques-
sphere is keeping all options open,"
tioning how these fine principles may be known and experienced in
said Richard Bernal, Jamaica's Am-
practice.
bassador to the United States and
THE FOLLOWING TOPICS ARE INCLUDED:
chairman of the working group for
small nations set up at the Miami
Plato on what moves us: reason, spirit, and appetite
meeting. "While the United States is
the main trade partner, if Nafta does
Plato on the four virtues: wisdom, courage, temperance, and justice
not look like it's going to permit
accession in the foreseeable future,
Sir William Blackstone on goodness, wisdom, and power - the basis
then countries have to keep other
for the three branches of government
countries in mind, including rela-
tions outside the hemisphere
Law: a rule of action.
Even a cursory glance at trade
Levels of law: justice, natural law. man-made law, statistical law
figures reveals that Washington's
economic stake-in-Latin American
and the Caribbean, the
The Winter Term begins Monday, January 13, 1997.
ing market for American exports,
enormous. United States trade with
Class meets on Mondays, 7:00-9:15 p.in. Tuition is $100 ($50 for full-time slu-
in the Western Hemispheresis not
dents). Enroll by phone with your MC/Visa, or 45 minutes prior to the first class.
only much Targer than trade with
Europe or Asia, but consistently reg-
THE SCHOOL OF PRACTICAL PHILOSOPHY
liters a surplus that helps offset
12 East 79th Street, N.Y., N.Y. 10021
deficits elsewhere
An trade official who
Tel. (212) 744-0764
PHOTOCOPY
deals with Latin America said the
The School of Practical ['il Josophy is chartered by the Regents of the University of the State of New York.
Clinton Administration viewed the
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Dole this a.m. Dole, asked by NBC's Myers if he could imagine
taking a job or assignment in the administration: "If the
President of the United States asked me to do something, say some
foreign policy or to help in some way, you know I'd certainly
look at it very seriously, if he did it in a non-partisan, non-
political, genuine effort." Asked if he'll do any more
commercials: "I don't know. I mean, I'm sitting by the phone
waiting for the Maytag call." Asked about a possible run by
Elizabeth in 2000: "She might
I'd like to see her do what
she thinks she can do to make a difference" ("Today," 2/3).
WHITMAN: Appearing on NBC's "Meet the Press, NJ Gov.
Enic
Christine Whitman was asked if she'd be open to running for nat'
2
5 hm
office in 2000: "I don't have that burning in my gut. I want to
be governor,
and that's where my focus is, and I intend to
CL.le tast Tab
serve my entire term" (2/2).
Resl
WH 2000 (D) : AFL-CIO CONFERENCE LOOMS LARGE FOR GEPHARDT
TIME's Carney writes the race for the Dem 2000 nomination
"begins next week," when the AFL-CIO gathers for its annual
conference. "The featured entertainment: back-to back speeches"
on 2/18 by VP Gore and House Min. Leader Dick Gephardt.
"Already, tension" between the WH and Hill Dems, "and Gore and
Gephardt especially, is infecting" Pres. Clinton's second term.
"Certain to be a central topic" at the conference is Clinton's
offer to curb Medicare spending by $14B more than he proposed
last winter. Gore "will have to defend the larger cut.' But
Gephardt "can say the White House is giving away too much." Last
week, WH CoS Erskine Bowles called and apologized to both
Gephardt and Senate Min. Leader Tom Daschle "for failing to
consult them" on either the Medicare plan or Clinton's choice of
CO Gov. Roy Romer as the new DNC chair. Bowles "promised he
would meet with them regularly from now on. But no amount of
cajoling" from the WH "will keep Gephardt from laying more
groundwork" for a pres. run. "Just days before" the AFL-CIO
conference Gephardt plans to visit Mexico to highlight, according
to an aide, "the unmet promise of NAFTA." Gephardt has also
7
hired a new deputy CoS, David Plouffe, who has "extensive
IA
experience. And Gephardt is "doing what all would-be
presidential contenders must do these days: he's writing a book"
(2/10 issue).
BRADLEY: Bob Novak reports ex-Sen. Bill Bradley (NJ) "has
been turning up" in IA lately, "giving the impression" that his
retirement from the Senate "by no means extinguishes his
presidential ambitions." Also visiting IA "recently" was
Gephardt. A "no-show" SO far in IA: Sen. Chris Dodd (CT)
(CHICAGO SUN-TIMES, 2/2).
GORE: Appearing on NBC's "Meet the Press, NH Gov. Jeanne
Shaheen (D) was asked if VP Gore had any opposition for the Dem
nomination: "It's way too early to look at 2000.
Anything can
happen in a campaign. I'm the perfect example of that. II
Shaheen, asked if she supports Gore: "I certainly support all the
help the vice president's given New Hampshire, as I support the
help that Dick Gephardt and all the other people have given.'
Then she added, "I still have to run for re-election before 2000"
(2/2). In a profile on the UN Ambassador-designate, NEWSWEEK's
Bogert writes that DC friends of Bill Richardson "think he may
have other posts in mind: secretary of state, say, or even Al
Gore's running mate in 2000" (2/10 issue).
1
Street
7лят Tral
Gingrich pledges
to help Clinton
reprose
broaden NAFTA
"You have to balance all the in-
He also supports
terests," Mr. Kerry said. "Our al-
lies have been all too ready to let
paying U.N. dues
the United States be tough [toward
China] while they hold our coat
and get the contracts."
By Andrew J. Glass
The Gingrich-Kerry dialogue -
COX NEWS SERVICE
it was in no way a debate - was
billed on the program at this Swiss
DAVOS, Switzerland - House
Alpine resort as "Toward a New
Speaker Newt Gingrich defended
American Era? What Can the
U.S. foreign policy yesterday be-
fore an international audience and
World Expect from the USA?"
pledged to pave the way for Pres-
As Mr. Gingrich nodded in as-
ident Clinton to expand trade with
sent, and the chief executives from
Latin America.
a score of nations took notes, Mr.
Speaking to the World Economic
Kerry said: "We actually agree on
Forum, an elite group of business
a lot more than most people imag-
leaders, Mr. Gingrich said the Re-
ine. I think you can throw away all
publican hierarchy in the House
the rules. The old labels on the left
would work as a team with the
and right don't work anymore."
Clinton White House to grant the
Mr. Gingrich spoke up for the
president "fast track" authority to
U.S. trade embargo against Cuba
broaden the 1993 North American
and favored taking a tough stance
Free Trade Agreement (NAFTA)
toward both Iraq and Iran.
with Mexico and Canada to include
He was promptly challenged by
other Latin nations, notably Chile.
Mohammed Larijani, vice presi-
If enacted, the legislation would
dent of Iran's Foreign Relations
allow Mr. Clinton to send Congress
Commission, who said, "Amer-
a new trade package, which would
icans want to exert their power ev-
then either be adopted or rejected
erywhere in the world."
The Washington Times
MONDAY, FEBRUARY 3, 1997
- but not amended in any way.
Mr. Gingrich shot back that
"We'll probably pass it before
Iran's sponsorship of terrorism
[Mr. Clinton] goes to South Amer-
was "broadly accepted." When Mr.
ica," Mr. Gingrich said.
Larijani, who is also a member of
A date for Mr. Clinton's trip to
the Iranian parliament, sought to
Latin America has not been set,
continue the exchange, several
though administration officials
members of the audience told him
have said it likely will be made this
to sit down while others applauded
Mr. Gingrich.
year.
The Georgia Republican also
Mr. Gingrich and his wife, Mari-
backed Mr. Clinton's effort to make
anne, planned to spend four days
up the more than $1 billion the
at the forum, leaving today, a day
United States owes the United Na-
before it concludes, so that the
tions. Speaking of new U.N.
speaker could return for Mr. Clin-
Secretary-General Kofi Annan,
ton's State of the Union address to-
Mr. Gingrich said, "He'll probably
morrow night.
get the money he's insisting upon
In brilliant sunshine, the Gin-
and we'll get the reforms we're in-
griches also spent part of the day
sisting upon."
going for a sleigh ride and riding
Congress has held up payment
in cable cars and ski lifts through
of the money until the United Na-
the snow-covered mountains,
tions slashes its spending and re-
which rise above 14,000 feet.
duces the size of its bureaucracy.
Distributed by the New York Times
While Mr. Gingrich spoke favor-
News Service
ably of U.S. policy in such areas as
Cuba, Iraq and Iran, his fellow
panelist, Sen. John Kerry, Massa-
chusetts Democrat, criticized the
Clinton administration's policy to-
ward China, calling it "simply non-
sense."
Commerce, Energy likely GOP targets
Lack of popular programs, scent of scandal leaves them most vulnerable
By Nancy E. Roman
the 105th Congress, Miss Davis
THE WASHINGTON TIMES
said:
"Probably not this year, and it is
Republicans in both houses have
hard to look past this year."
given up their zealous efforts dur-
The Energy Department was es-
ing the last Congress to eliminate
tablished in the 1970s to develop
four Cabinet agencies, but they
alternative energy sources so that
plan to mount a scaled-back attack
on the two departments they find
the country would not be so depen-
MONDAY, FEBRUARY 3, 1997
The Washington Times
most expendable: Commerce and
dent on foreign oil. Since then,
however, the United States has
Energy.
Some will propose killing the de-
gone from importing 35 percent of
its oil to importing 66 percent of it.
partments outright, while others
Mr. Grams said his bill would
plan to try to cut the amount of
save taxpayers $19 billion to $23
money allocated to the agencies.
billion over five years, and $5 bil-
The latter group hopes that killing
lion to $7 billion every year after
off bits of the departments will
that, by shifting the department's
prove fatal to the departments
core responsibilities to other parts
themselves.
of government and eliminating
"You're going to see us focus on
overhead.
Energy and Commerce," said Rep.
But some conservative Republi-
Joe Scarborough, Florida Republi-
cans are not optimistic about his
can and co-chairman of the New
approach.
Federalists, the group of freshmen
Sen. Rod Grams
Federico F. Pena
For now, pragmatists in the
who launched the attack on the de-
House believe the first step in the
partments of Education, Housing
Armey, said that while Republi-
much to raw political emotion.
goal of eliminating Commerce and
and Urban Development, Com-
cans remain passionate about
They are also viewed as more vul-
Energy may be to rid them of some
merce, and Energy.
downsizing government, they are
nerable because they have been
of their functions.
The attack has already begun.
more realistic about the political
sullied by scandal. The Depart-
Rep. John R. Kasich, chairman
Sen. Rod Grams, Minnesota Re-
realities of eliminating entire
ment of Energy was run by Hazel
of the Budget Committee, has been
publican, recently challenged the
agencies.
R. O'Leary, who came under fire
working with a coalition to single
nominee for energy secretary,
"We can sit in Washington and
for misusing her travel budget.
out $11 billion in corporate welfare
Federico F. Pena, to defend his
see the wasteful bureaucracy; but
The Commerce Department has
he believes the country could live
prospective agency.
when you are talking about elimi-
been under a cloud since Secre-
without. In the next five years, the
"The department has become a
nating an entire agency, you've got
tary Ronald H. Brown, before his
coalition wants to eliminate from
patchwork quilt of government ini-
to explain it," she said.
death in a plane crash last April,
the targeted departments:
tiatives haphazardly stitched to-
She said they learned the hard
was accused of misusing trade
Pyro-reprocessing of nuclear
gether - lacking any theme," he
way about the public relations
missions to reward the Democrats'
fuel, saving $100 million.
said during Mr. Pena's confirma-
problems of going after the Educa-
big corporate donors. It remains in
Fossil, coal, oil and gas re-
tion hearing. The first-term sen-
tion Department, which delivers
the news today as illegal and ques-
search, $1.37 billion.
ator has introduced a bill that
student loans and Head Start, and
tionable fund-raising by President
The clean-coal technology
eliminates the department, which
HUD, which delivers housing to
Clinton and the Democratic Na-
program, $500 million.
he says has not fulfilled its mission
the poor.
tional Committee involve a former
The Overseas Private Invest-
and wastes taxpayer money.
Commerce and Energy are
top-level department employee.
ment Corp., $281 million.
Michele Davis, spokeswoman
more attractive targets. The ser-
But asked whether any agency
The Market Access program,
for House Majority Leader Dick
vices they provide do not appeal as
was likely to be eliminated during
$347 million.
Fast track must be done on our
Latin
terms," said a Gingrich aide.
There's concern that III not be
loaded down with a lot of domestic
social issues."
trade is
Administration officials said the
debate is still very fluid but they
are committed to labor and envi-
ronmental concerns as they relate
focus of
to trade.
We re not abandoning those is-
sues. Those are important con-
cerns where we feel we've made
some progress." said Jay Ziegler, a
new push
spokesman at the U.S. Trade Rep-
see TRADE, page A20
Gingrich backs
TRADE
'fast-track' effort
From page Al
resentative's Office.
And the fast-track debate itself
By Lorraine Woellert
THE WASHINGTON TIMES
Al
might not be on a fast track, at least
in the Senate. With the debate on
the balanced-budget amendment
After having benched itself for
looming and the president's State
The process has been used for
more than two years, the United
of the Union speech scheduled for
every major piece of trade legisla-
States is again poised to jump into
tion considered by Congress since
tonight, "it's not even on the radar
World War II. The administration
the free-trade arena with a bill that
screen" for the Senate agenda, said
used the last of its fast-track
would give the White House new
an aide to Senate Majority Leader
authority to negotiate market-
authority most recently to close an
Trent Lott, Mississippi Republi-
opening deals throughout the
international accord to phase out
can.
import taxes on computers, soft-
hemisphere.
Despite the lingering disagree-
ware and telecommunications
The legislation, expected to fo-
ment, fast-track legislation seems
cus on opening up Latin American
equipment by the year 2000.
to have staying power this year.
But the Clinton administration
markets with Chile as a stepping-
But the new-found momentum
stone, looms as the first major test
and GOP congressional leaders
might be too little, too late for the
have been at odds for more than
of support for free trade in the new
United States, which has watched
Congress. A huge contingent of
two years over administration at-
idly as Latin American nations ne-
legislators weren't even around for
tempts to include environmental
gotiated free-trade pacts among
and labor standards in future free-
the bitter fights over the North
themselves and with other eco-
American Free Trade Agreement
nomic blocs around the world.
trade deals, an approach opposed
(NAFTA) in 1993 or the General
Chile, whose 2-year-old bid to
by U.S. businesses and many devel-
Agreement on Tariffs and Trade
join the United States, Mexico and
oping countries.
(GATT) a year later, and many of
Canada in NAFTA fell victim to
That standoff could have long-
term ramifications. U.S. brands
the new Republican lawmakers
partisan politics and bad timing,
are much more suspicious of the
has since staked out free-trade
are popular in Latin America and
benefits of open trade.
deals with Mexico, Canada, and
Spanish-speaking Americans have
Speaking at an international
the emerging South American
strong ties to the region, making
economic forum in Switzerland
free-trade bloc that includes Ar-
U.S. companies natural economic
over the weekend, House Speaker
gentina, Brazil, Paraguay and
powerhouses in the region. But
Newt Gingrich, Georgia Republi-
lack of trade agreements has hurt
Uruguay.
U.S. market access.
can, said GOP leaders want to
"We're kind of playing catch-up,
work with President Clinton to
The policy of drift has worked
and whether we actually catch up
give him "fast-track" authority to
I don't know," said Gary Hufbauer,
against the United States in other
negotiate new trade deals - an
a senior fellow at the Institute for
ways. Now that Chile, for example,
authority that largely lapsed soon
International Economics. "Clearly
has signed agreements with other
after the GATT deal was struck.
countries, it's more difficult for the
the momentum is in Latin Amer-
A bill to do just that could be
United States to make demands
ica."
introduced as soon as next month,
Under the fast-track process,
that could adversely affect those
with the House taking the lead and
Congress would agree to a simple
pacts.
the Senate, traditionally more.
up-or-down vote on trade deals
"Right now we're in a period
amenable to open trade, following|
where the Latin Americans are
with no amendments permitted.
suit.
The rationale for such an approach
coming to us. Four years from now
Mr. Gingrich's pledge, however,
t'Il be the reverse," Mr. Hufbauer
is that no country would be willing
said.
doesn't mean the speaker has sof-
to negotiate with the United States
tened on sticking points in the leg-
if Congress were free to change the
islation, such as labor standards
agreement after the negotiations
and environmental issues.
have concluded.
The Washington Times
TUESDAY, FEBRUARY 4, 1997
Al
expected to be $1.5 billion.
Lawmakers such as Reps. Al-
By Paul Bedard
bert R. Wynn, Maryland Demo-
THE WASHINGTON TIMES
crat, and James P. Moran, Virginia
The White House, under pres-
Democrat, have demanded that
sure from the governors of Mary-
the federal government pay 90
land and Virginia, won't support a
percent of the cost, or $1.35 billion.
D.C. commuter tax on suburban-
The Transportation Department
ites but is considering funding
has balked and failed to meet a
more of the two-span, 12-lane
deadline late last year to provide
Woodrow Wilson Bridge replace-
Congress with its final funding
ment.
recommendations.
"The commuter tax won't pass
Administration officials said the
on the Hill, so why should we get
Office of Management and Budget
Clinton rejects commuter tax
involved? We won't. It's dead," a
opposes spending the extra money
senior administration official said
even though the bridge is the only
of a tax pushed by Andrew F.
one of its kind fully owned by the
Brimmer, chairman of the D.C. fi-
federal government.
nancial control board, and Senate
But new Transportation Secre-
Minority Leader Tom Daschle,
tary Rodney E. Slater has indi-
South Dakota Democrat.
cated in discussions with the gov-
Mr. Brimmer said the tax is
ernors and local lawmakers that he
needed because the District will
is open to more federal funding for
lose its annual $660 million federal
the project.
More bridge money possible
The Wilson Bridge, which car-
payment if President Clinton wins
congressional approval of his $3.9
ries the Capital Beltway across the
billion bailout plan.
Potomac, is used heavily by travel-
ers and truckers as well as com-
Mr. Brimmer was not available
muters.
for comment yesterday.
It has been cited as one of the
A tax on Maryland and Virginia
residents who work in the District
most dangerous bridges in the na-
faces opposition in the House and
tion and is not expected to last
more than another eight years. "It
Senate committees that oversee
is a ticking transportation time
the city's budget.
bomb," said Lon Anderson, a
In an unexpected move - and a
spokesman for the local branch of
rare show of unity - Maryland
Gov. Parris N. Glendening and Vir-
the American Automobile Associ-
ginia Gov. George F. Allen used a
ation.
The two governors pressed Mr.
see TAX, page A12
Slater on Sunday during the Na-
tional Governors' Association's an-
TAX
nual meeting and during dinner at
the White House. They also made
From page Al
their case for the bridge funding
directly to Budget Director Frank-
lin Raines.
series of National Governors' As-
sociation meetings with Mr. Clin-
Mr. Glendening and Mr. Allen
said they would accept 80 percent
ton yesterday and Sunday to make
the case for suburbanites.
federal funding, but anything less
Mr. Allen, a Republican, called
would strain state budgets.
"If they own it, they ought to pay
a commuter tax, which would need
for it," said Mr. Allen, who opposes
congressional approval, "very ter-
rible
putting tolls on the bridge.
a ludicrous idea." He said
the tax would force D.C. compa-
Mr. Glendening said that forcing
Maryland and Virginia to pay for
nies to pay suburbanites more and
would scare away new businesses.
the bulk of the new spans would
amount to a double tax on their
"We agree," said Mr. Glenden-
residents, who already pay the fed-
ing, a Democrat and former
eral gasoline tax.
county executive in Prince
"Why should our citizens have to
George's. "I am very much op-
pay twice?" Mr. Glendening said.
posed to the commuter tax."
The Maryland governor joked
The two governors said they will
that while Mr. Clinton was cam-
press their congressional del-
paigning on a plan to "build a
egations to fight the tax and to seek
bridge to the future," he has "been
greater federal funding of the Wil-
son Bridge project.
more practical about our bridge
from state to state."
"It will be nice to fight for some-
Mr. Anderson said, "The admin-
thing instead of against it," Mr.
istration shouldn't be so worried
Glendening, drawing laughter
from Mr. Allen. The two discussed
about building a bridge to the new
their fight for suburbanites after
millennium as it is about building
a bridge over the Potomac River."
joining the nation's other gover-
nors at a morning White House
meeting with the president.
The administration has pledged
to spend $400 million on the Wil-
son Bridge project, but the cost is
The Washington Times
TUESDAY, FEBRUARY 4, 1997
Chile 7nst Trad 7ilc/ Steve
1
( or desh)
ENIC
2
Dorne
3
Senate panel: Barshefsky
on fast track to approval
By Lorraine Woellert
THE WASHINGTON TIMES
TRADE
CHARLENE
Senate Finance Committee mem-
From page B7
BARSHEFSKY
bers yesterday assured Charlene Bar-
ception from the panel, whose
Nominee for U.S. trade
shefsky of her near-certain confirma-
members praised her for her
representative
tion as U.S. trade representative and
toughness and tenacity and at-
called for the repeal of a law that could
Born: Aug. 11, 1950, Chicago
tacked a law that briefly had com-
have tripped up her nomination.
plicated her confirmation.
Education: B.A., University of
In a cordial hearing that lasted about
That law, a 1995 amendment to
Wisconsin, 1972; J.D., Catholic
two hours, Mrs. Barshefsky pushed the
the Trade Act of 1974, prevents
University Columbus School of
need for negotiating authority to bring
anyone who has aided a foreign
Law, 1975
Chile into the North American Free
government on a trade issue
Family: Husband, Edward B.
Trade Agreement and criticized Chi-
against the United States from
Cohen; two daughters
na's progress toward lowering trade
holding a top position at the office
Career highlights: Lawyer,
barriers.
of U.S. trade representative.
Steptoe & Johnson, 1975-1993;
Mrs. Barshefsky said her tenure as
Mrs. Barshefksy, as a lawyer
deputy U.S. trade
acting U.S. trade representative since
with Steptoe & Johnson, had done
representative, 1993-1996;
Mickey Kantor left the post to lead the
work for the Quebec government
acting U.S. trade
Commerce Department a year ago had
and Canadian lumber interests be-
representative, 1996
given her a taste for the job.
fore joining the office in 1993.
The Washington Times
"I relish the challenges of this job
"The total time spent by me rep-
and the battles," said Mrs. Barshefsky,
resented approximately eight-
tus for China, inasmuch as we're in
who was accompanied by her husband,
tenths of 1 percent of my legal
the process now of negotiating
daughters and other family members.
practice," Mrs. Barshefsky said.
with China for WTO accession,"
In another pending confirmation,
Committee Chairman William V.
she said. "On the other hand, the
the Senate Commerce Committee
Roth, Delaware Republican, said
administration is looking at the
voted 15-1 yesterday to recommend the
the law would be waived to allow
question of this yearly annual
nomination of Chicago lawyer William
her nomination. He was supported
debate, which, as you know, is cor-
M. Daley to be secretary of commerce.
by the rest of the panel.
rosive."
Only Sen. Sam Brownback, Kansas Re-
"It's ridiculous to put you
She also stressed the need for
publican, voted no, saying Mr. Daley
through a waiver," said Sen. Orrin
lawmakers to grant the adminis-
has shown insufficient commitment to
Hatch, Utah Republican. "I know
tration the right to negotiate trade
reducing the department and cutting
that you're loyal to this country."
deals without subjecting them to
government subsidies to business.
Sen. John Chafee, Rhode Island
congressional amendments.
Mrs. Barshefsky drew a warm re-
Republican, called the 1995 law
"If the United States cannot ne-
"draconian" and Sen. Phil Gramm,
gotiate comprehensive agree-
see TRADE, page B12
Texas Republican, called for its re-
ments with countries, we will re-
peal.
main on the sidelines while other
Mrs. Barshefsky, 46, empha-
nations move ahead, as they al-
sized the importance of free trade
ready have, to create new eco-
in an era of global economics and
nomic alliances and advance their
listed Chile's NAFTA ascension, a
own economic interests, often to
global telecommunications agree-
the detriment of the U.S.," she said.
ment and China's admission to the
But the administration's goal to
World Trade Organization as top
include environmental and labor
priorities.
provisions in that negotiating
China, she said, is not yet ready
authority won't get a warm wel-
to join the 124-nation WTO, nor has
come from Congress, Mr. Roth
it earned permanent trading
warned.
rights, known as most-favored-
"As long as fast track is tied to
nation status, from the United
labor and to environmental ques-
States.
tions, that makes it very difficult,
"It is, in all likelihood, prema-
if not impossible, to get through,"
ture to seek permanent MFN sta-
Mr. Roth said.
Kemp
makes
Some conservatives express
concerns that Mr. Kemp's reluc-
tance to address such social issues
as race and sex quotas and prefer-
moves
ences, "race norming" in school
and job testing, immigration lim-
its, crime, and drugs would make
it hard to distinguish him from a
for 2000
Democratic candidate.
"Jack has some hurdles to over-
come," said Tom Pauken, the con-
servative Texas GOP chairman.
GOP not certain
"He's got to show that he can get
the support of traditional-values
conservatives and has the disci-
to support him
pline to run a presidential cam-
paign and stay on message. Did he
do that in '96? He was a good sol-
By Ralph Z. Hallow
dier who did what the Dole team
THE WASHINGTON TIMES
asked him to do."
"Is Jack a credible candidate?"
Jack Kemp is laying the ground-
work to run for the Republican
said Steve Forbes, the magazine
publisher who sought the 1996
presidential nomination in 2000,
GOP presidential nomination and
but some of his supporters worry
is preparing to run in 2000.
that even this early might be too
"If he wants to be, he can be,"
late for Bob Dole's always-smiling
Mr. Forbes said. "Others have told
running mate of last year.
me that the perception is Jack
Throughout his quarter-century
didn't do well in the debate with
in politics as a congressman, Cabi-
Gore, but Clinton survived a disas-
net secretary and think-tank den-
trous speech at the Democratic
izen, Mr. Kemp played Moses to
convention in 1988."
the tribe of supply-siders - "Mr.
Tax Cut" to his friends - and the
David Carmen, a GOP activist,
leader of happy-face "progressive
agreed. "Without a doubt, Jack was
the brightest spot in the '96 cam-
conservatism" in the Republican
paign, and if he wants the nomina-
Party.
tion in 2000, it will be his."
But, to the consternation of his
legions of supporters around the
Quineta Wylie of Oklahoma, one
of the most conservative state
country, he passed up chances to
chairmen in the GOP, isn't so sure.
run for the U.S. Senate, governor of
"Forbes is a strong contender, and
New York, and, in 1992 and 1996,
Kemp is also a contender, but I'm
president.
not sure how strong," she said. "He
He failed to win the GOP pres-
needs to show he can deal with
idential nomination in 1988, but
some of the social issues."
The Washington Times
THURSDAY, JANUARY 30, 1997
that campaign only left his disci-
Mr. Forbes has set out method-
ples hungering all the more to be
able to address him as "President
ically to build relationships with
influential Republicans and con-
Jack."
servatives, something he did not
He may try to give them that
have time to do last year.
opportunity. "The paperwork on a
Mike Duncan, a Republican Na-
multicandidate PAC should be
tional Committee member from
completed by the first half of next
Kentucky, doesn't think it's too late
month," Kemp aide Christian
for Mr. Kemp. "He will have to
Pinkston said. "The PAC will fund
work harder.
He'll have more
Jack's political activities, and the
people to convince that he has the
lion's share for the next two years
will be go to campaign and do
fire in the belly to make the long
race," Mr. Duncan said.
fund-raisers for House, Senate and
Ohio GOP Chairman Bob Ben-
gubernatorial candidates."
The idea is to collect chits for a
nett said: "Jack was a team player
in '96 and generally is still popular
run for the GOP presidential nomi-
in the party. And if there are any
Kristen E. Panerali
-
02/06/97 02:55:58 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
cmccarthy @ ustr.gov @ INET @ LNGTWY, Elisa Millsap/WHO/EOP
Subject: NEC Principals -Fast Track
Dan Tarullo will chair a NEC Principles on Fast Track on Monday, 2/10 at 10:30 in room 231.
Invitees only, no substitutes. Please confirm attendance w/me. thanks, kp
Invitees include:
Ambassador Barshefsky
John Hilley
Secretary Rubin
Secretary Daley
Jim Steinberg
Don Baer
M. McClarty
Doug Sosnick
Gene Sperling
Rahm Emmanuel
7nst Trad next Taill,
1
offre
Ina
705.10/57 705. 10/57
Positives
DAS WE
3
positive re. moving shert
Moyin had /LABA ? liyle response re:
CN Be L Bis help
No large problems pe Inn
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NO comlings No tande Against don't adona
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Sware, oper
mare Address Her of a Tigh'
Create Hexabut to Tisune this OCT
Sweevey / Insupe we leght 1- him / we're
150/min state wall in: LYE
Charles / In a
Cless Bin per Charlese no. LdT
Ld En Pres letter a street 1 polic,
For nt is the grestin
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@ the
InA
2
Frn JB.b to wal Sumething OUT In your consident
Peter / Rahm
"Nave going to get cron "
How fAr CN you go to get Ar-her I get Reps.
Explain LABa rights to Modertis Dears / Rept
hyle hyle was Lacid or this
Rahm From Tride, T
X
walas Are reals to
I
seize then
Resolve I'me polition good problems IN our PMD
what And doing domestic
Giver
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SH 155ue BUT manageable per are
Let then Brin, it to you
NOT JOB loss BUT Se 30 to orps
Vouche Approach I Need to understand
Xtrpfrist prohasies for OVERALL 206005 pe DNT
ENVIOWS unhappy is the table Ane per dra
BUT Need to cool @ overn e surnos aged.
NoBody will evalorse fast truck is edvinodmetr groups
Trade Spections aspect
NOT much to cite or Buda
No good history or Side Agreements 7 7505 step ,re Adaca
W
Pek 5 Commestre: 725 Treel re: LAB-DEVU.
I Need to understrud
Use trude requirement levense w Chile to get Some-
this Le: LABa d Evvironment
How do we WNT to proceed ?
USTN to proceed quietly in order to Build
Coughsus
In / Bob to was together
In PACINS question / CAr live a couple of more
weeks W/OLT a 6.LL
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.. Low hey you Next couple 1 weels' ,re Dr T
Steve
2
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for. + , consulto, Brondly 1. conses
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that
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HCLL
Conntrt
tirsi Step + Hamishee
other country Are do., 2 CL.C
Peter
Hnbin
won't Be 01 Sidelises
Just
1' Anseclute drive" or the Hill pe Jset
Need to understand
4
PANERALI_K @ A1
01/24/97 04:46:00 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
Subject: fast track
Dan Tarullo and John Hilley will hold a meeting on fast track in Dan's office
(rm 231 OEOB) at 4 pm on Monday 1/27.
Invitees only:
Hilley
Barshfsky
Steinberg
Baer
McLarty
Sosnick
Sperling
Message Sent To:
Elisa Millsap
Kevin Moran
Molly Varney
Daniel E. Bernal
GREEN MG @ A1@CD@LNGTWY
cchernish @ustr.gov@INET@LNGTWY
cmccarthy @ ustr.gov@INET@LNGTWY
JA. 27197
* Thurs Night / the in muties w POTUS / 5 pealer
I weed to LNOW about tris. BOLLOCT By Poper
* Sou ??
Questious win Besis sl will
7re: visit
pu- LATIV Ame
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(our)
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you - corcern per Gere / Dems W.W. Be Negative ,1 ftan 504.
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Gephrolt has No choice BUT to trsbe a shit
A7L-C C CO
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Charles to put it Jawne
LAS
Likes education Lirt 4 FAST Trad
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friday 116 overtry
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+
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*
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" MOST 12 plasues Are more popular this 7AST Tree."
uphice BAHLE.
XXX
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"
What '5 tris you' Good storm what Are we goirs
to use this 1% ? Hilleve
NAZM EXPANS
Bilate-or degreentrus
10 ASIN
Swielen/ Need to ten him h bet we Are doing
1 Steve
2
Enic
PANERALI_K @ A1
3
7.L Rest
01/13/97 07:08:00 PM
Record Type:
Record
To:
See the distribution list at the bottom of this message
CC:
Subject: Fast Track Mtg
Dan Tarullo will chair a meeting on Fast Track in room 231 OEOB on Thursday at
2pm. Invitees are:
Hilley
Divergent messages CONCEN BY TANULLO
Barshevsky
Steinberg
Baer
McClarty
Sosnick
Sperling.
Call me w/questions, kp
Sylvix joined us- - COS.
Message Sent To:
Elisa Millsap
Kevin Moran
Molly Varney
Daniel E. Bernal
cchernish @ ustr.gov@INET@LNGTWY
GREEN_MG @ A1@CD@LNGTWY
JAN, 16 197
We Are goirs to do it / EveryBody UNOWS we Are goirs to doit.
How ?? whe ?? Are the questions
SOU
yes it will Be there per Jim Steirbers
LABa Al Environment
Business to Now nou this LABa per Charlese
DNT
In Agreement, we And going Tawnl Potus CormHed
(our)
1
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2
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4
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3
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3
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imp
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me w
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ENVIRE
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Charlese / Besioning position NEXT werk /
BACLS
NAFTA
I'm ASAINST
EveryBody histes NAFTA
re-exAmine NAFTA ish.s
owr state
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free Tn-de 71 joB flight
Competitive wespons " jOB erective
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we keep up w Pers /pocciv's -
Does to weep up
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3
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oppt. trude policy 7 An the tools AUAILABLE
to
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7лят Trud Cabiver JA. 13197
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priorities So that they don't
clash. "
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x
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goirs 01
CHIEF OF STAFF TO THE PRESIDENT
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j John me: tas Trank
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I
CLINTON LIBRARY PHOTOCOPY
Imp
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MACK MCLARTY
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fusdies ?
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BASICALLY NAZM
Withdrawal/Redaction Marker
Clinton Library
DOCUMENT NO.
SUBJECT/TITLE
DATE
RESTRICTION
AND TYPE
003. memo
Samuel Berger, et al. to the President; RE: Fast Track Negotiating
01/06/1997
P1/b(1)
Authority (4 pages)
COLLECTION:
Clinton Presidential Records
Special Envoy for the Americas
General Files
OA/Box Number: 11851
FOLDER TITLE:
Fast Track - Current (9/97) [4]
2017-0401-F
db4735
RESTRICTION CODES
Presidential Records Act - |44 U.S.C. 2204(a)]
Freedom of Information Act - [5 U.S.C. 552(b)]
P1 National Security Classified Information |(a)(1) of the PRA|
b(1) National security classified information |(b)(1) of the FOIA]
P2 Relating to the appointment to Federal office [(a)(2) of the PRA]
b(2) Release would disclose internal personnel rules and practices of
P3 Release would violate a Federal statute |(a)(3) of the PRA]
an agency [(b)(2) of the FOIA]
P4 Release would disclose trade secrets or confidential commercial or
b(3) Release would violate a Federal statute |(b)(3) of the FOIA]
financial information [(a)(4) of the PRA|
b(4) Release would disclose trade secrets or confidential or financial
P5 Release would disclose confidential advice between the President
information ((b)(4) of the FOIA]
and his advisors, or between such advisors |a)(5) of the PRA|
b(6) Release would constitute a clearly unwarranted invasion of
P6 Release would constitute a clearly unwarranted invasion of
personal privacy [(b)(6) of the FOIA]
personal privacy [(a)(6) of the PRA|
b(7) Release would disclose information compiled for law enforcement
purposes [(b)(7) of the FOIA]
C. Closed in accordance with restrictions contained in donor's deed
b(8) Release would disclose information concerning the regulation of
of gift.
financial institutions |(b)(8) of the FOIA]
PRM. Personal record misfile defined in accordance with 44 U.S.C.
b(9) Release would disclose geological or geophysical information
2201(3).
concerning wells I(b)(9) of the FOIA]
RR. Document will be reviewed upon request.
Street
37AST Trol
FAST TRACK LEGISLATION
Issue
The manner in which we approach fast track trade negotiating legislation will be one of the most
very
significant economic decisions of the second term. Key issues include whether to seek the
well
stated
authority, the breadth of the agreements we seek to pursue, the manner in which we resolve key
legislative issues (e.g., labor/environment) and the timing and profile of any initiative.
Background
Our chief purpose in obtaining fast track would be to advance the initiatives we have begun
during the first term: the Free Trade Area of the Americas (FTAA), Asia (APEC), Europe (the
Transatlantic Initiative) and continued global barrier reduction (WTO). The opportunities are
significant, particularly in the emerging markets. In 1995, our exports to Latin America were
greater than our sales to Japan and Germany combined. Between 1998 and 2001, Latin America
is expected to grow at 4.6% and Asia at 7.5% on average annually, compared to 2.6% for
industrialized countries.
Without fast track, we risk being sidelined, as other countries pursue trade arrangements without
our leadership. These arrangements can be harmful to U.S. interests. In Latin America, Brazil
has formed MERCOSUR (a customs union with Argentina, Paraguay and Uruguay) which
imposes free trade requirements substandard to NAFTA (e.g., no rules on intellectual property
or services trade). MERCOSUR threatens to become the template for free trade in this
hemisphere if we cannot continue to expand NAFTA. Without fast track, we have less capacity
to influence these developments.
Excellent
Fast track also has a significance beyond trade. In Latin America, it is seen as a symbol of
America's commitment to the region and of support for the free market reforms occurring in most
point
countries. In Asia APEC has put the U.S. at the center of the Asian trade reform process, a
statement about continued U.S. engagement in Asia that has important political and security
ramifications. In Europe, the Transatlantic Initiative is seen as tangible proof of America's
continued interest at a time when Europe fears our focus is Asia.
Having said this, we should restate the obvious: obtaining fast track legislation will not be easy.
Any Congressional coalition is likely to consist of moderate Democrats and Republicans, similar
to the NAFTA coalition. That coalition probably has deteriorated; 76 NAFTA House supporters
have left, but only 38 opponents. About 26% of the House has been elected since the NAFTA
vote. A winning coalition will need to attract many of these members. As in NAFTA, many
Republican leaders may be supportive (assuming we can resolve the labor/environment issue) and
a fast track bill could benefit by a Republican desire to show at least one area of bipartisanship.
The Democratic leadership will be split at best. Early attention to labor is important.
Perhaps the biggest risk is delay. Typically, Congress gives an administration fast track legislation
only as part of a larger trade bill containing provisions Congress favors, a process that can take
Need to fully understand why larger
Trade Biu is the case
2
several years. The process leading to the 1988 Trade Act, which granted the Reagan
Administration authority to negotiate the Uruguay Round, began in 1984. If we fail to move
now, it could be difficult to get fast track in this Congress, thereby stalling our trade agenda for
several years.
Issues for Consideration
1. Scope of Authority: Even if we receive generic authority, we will need to state the
specific agreements we intend to pursue. Although initiatives like the FTAA and APEC are
significant, the individual agreements we are likely to negotiate in the medium term are not as
striking. We already have free trade agreements with two of our largest trading partners, Canada
and Mexico. Agreements with other large economies probably would be either too controversial
(Japan, China) or not feasible (Europe, largely because it is not ready to negotiate on agriculture).
This leaves agreements with other economies (e.g., Chile) which, while not insignificant, are not
as meaningful economically as most of those we have negotiated in the past.
For this reason, any request for fast track authority must be cast in terms of the broader initiatives
we are pursuing (e.g., hemispheric free trade). We will need credibly to argue that at stake is the
direction of America's international economic future, not merely free trade with Chile. As in
NAFTA, the debate needs to be presented in large terms. If less is at stake, it will be difficult to
retain business support through the many hurdles and amendments this process will entail. That
said, specific agreements we envision could include:
Latin America. Fulfilling the commitment to negotiate a free trade agreement
with Chile is important, not only to Chile, but also because it signals tosthe Latins our
commitment to the region and the Free Trade Area of the Americas process. Beyond Chile, the
chief issue is our approach to Brazil and Argentina, the only other Latin economies of meaningful
size. Brazil is one country that could help define a larger fast track agenda. It would be attractive
to much of U.S. business, but it is unclear if either country is ready for free trade negotiations
(partly because they are absorbed in the MERCOSUR process). Also, Brazil could also heighten
Congressional opposition.
Multilateral: The Uruguay Round agreement scheduled future negotiations in
key areas, including financial services, intellectual property, agriculture and services. Sectoral
negotiations, like the Information Technology Agreement (ITA) negotiations, are also possible.
Some, like the agriculture talks, could be controversial domestically. In the OECD, negotiations
continue on a Multilateral Agreement on Investment. All of these could require fast track
authority.
(Asia: Past track is not really needed for APEC negotiations now, but it could be
useful the longer the authority extends. Free trade agreements with individual countries (e.g.,
Singapore, Australia) are possible.
Europe: We have avoided endorsing a free trade agreement with Europe,
believing they are not ready to take the necessary steps in difficult areas (e.g., agriculture), among
3
other reasons. Other agreements between the U.S. and the EU might be possible, particularly in
the context of a U.S.-EU agreement driving a larger WTO or OECD agreement (as was the case
with the recent Information Technology Agreement).
Africa: Bipartisan House support already exists for some sort of Africa trade
initiative. South Africa and Botswana would be the most likely candidates for free trade
agreements and could attract otherwise hostile Congressional constituencies.
Some have suggested we call for a new "round" of global WTO negotiations (like the Uruguay
Round) that would include virtually all trade. Whatever the merits of this idea, to date the
groundwork for such a round has not been laid, so it would be difficult to proceed at this time. At
some point in the second term, we may want to propose a new round. Those negotiations would
require fast track authority as well.
2. Labor/Environment: We should work out the labor/environmental issue as early as
possible. With the election over, business now realizes that it must either deal with you or lose
fast track for another four years. Labor may not want another bruising, NAFTA-type loss. Any
compromise must meet three conditions: 1) preserve the Clinton/Gore commitment to
labor/environment; 2) gain the support (or at least moderate the opposition) of labor and
moderate environmental groups; and 3) retain sufficient Republican and business community
support.
3. Timing/Profile: Any fast track effort would need to begin early to maximize chances
of enacting legislation in the 105th Congress. An early Presidential statement supporting fast
track legislation would signal our position to the Republican leadership (most of whom are
waiting for the Administration's lead), put Democrats on notice of our position, give the business
community the certainty they need to begin organizing and signal our view to labor.
Charlve men's
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR CHARLENE BARSHEFSKY
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
Your discussions with Chairman Archer will, I believe, freshen
the dialogue and provide a good opportunity to reach a workable
agreement. Of course, you have my full support as we move
forward in this very important effort to bring Chile into the
NAFTA.
Mal
Attachment
bcc: Eric
Steve
Chile Fast Thank
Deah file
4
Chc
2
Street
01-03-97 09:47A P.01
2 To: FR: MACKMAE FAX LARTY -FMI
3
Business
Friday, January 3, 1997
© 1997, The Dallas Morning News
The Dallas Morning Nelus
DIGEST
TODAY'S NEWS
Trade agreement
Dow Jones
expansion sought
Most stock measures suffered
sizable losses Thursday. The
Dow tell 5.78 points.
FAX NO.: 7575
Please see story on Page 11D.
Archer wants fast-track on NAFTA
6600
an expedited basis.
6303:71
6400
By Robert Dodge
"We are going to make an
Washington Bureau of The Dallas Morning Nine
effort to renew fast-track author-
6442.49
6200
WASHINGTON - Rep. Bill
ity SO that we can negotiate the
121318 17 18 19 2] 24 2527 3331 2
Archer, chairman of the House
opening of opportunities to
December
January
committee with jurisdiction over
export our products to other
30-year Treasury bond
trade, said Thursday he wants to
countries around the world," Mr.
approve legislation this year to
Archer said.
Bill Archer
Ways and
The Treasury's main 30-year
extend the North American Free
Mr. Archer said Congress,
Means chairman supports
bond fell $11.88 per $1,000
Trade Agreement
which opens its 105th session
extending NAFTA to Chile
invested, and the yield rose 9
The Texas Republican, who
next week, might not be able to
basis points to 6.73 percent.
and beyond.
leads the Ways and Means Com-
take up the issue until March,
6.8%
mittee, said he is ready to con-
noting there are few actual legis-
authority limited to just one
6.57%
6.73%
sider legislation that would give
lative days in January and Febru-
country.
6.65
President Clinton fast-track
ary. He said NAFTA was most
In an interview, Mr. Archer
authority the power to strike a
likely to be extended to Chile, but
also said he foresees the
6.50
trade deal with new countries on
he did not want fast-track
Please see ARCHER on Page 11D.
13 16 17 18 18 20 23 24 28 27 30 31 2
FROM: LONE STAR ENERGY
December
January
The Dallas Morning News
09:47A
01-03-97
Archer supports fast-track legislation for NAFTA
But Mr. Archer said taxpayers
During the 1995 budget debate,
Mr. Clinton is scheduled to submit
Continued from Page ID.
need far more education on the need
Mr. Clinton and Republicans both
his budget Feb. 3. The tax-cutting
possibility of striking a bipartisan
for wholesale revisions of the tax
offered child tax credits. But they
proposals in his plan are expected to
agreement with the president and
code, and he said he does not expect
failed to agree on who would qualify
cost about $130 billion over five
Democrats to cut taxes. A bipartisan
legislation to come up before 1998. He
for the tax break, with Republicans
years.
tax package might include a child tax
favors replacing the income tax with
wanting the benefit to extend to
GOP leaders and the White House
credit, a cut in the capital gains tax
a consumption tax and opposes the
wealthier families than the Demo-
already are planning to embark on a
and benefits to help pay for educa-
flat tax pushed by House Majority
crats proposed.
new set of negotiations to balance the
tion expenses.
Leader Dick Armey, R-Irving.
Mr. Archer said he would be will-
budget by 2002. Any tax cuts would
Mr. Archer acknowledged that
As chairman of the Ways and
ing to open negotiations with the
have to be paid for with additional
cutting a deal with the White House
Means Committee, Mr. Archer has
GOP's last 1995 offer, phasing out the
cuts in future spending, including
7575
on expanding NAFTA might pose dif-
substantial influence on setting the
tax credit for families earning
popular entitlement programs such
ficulties. An earlier effort to expand
agenda on trade, tax and health care
$110,000. Mr. Clinton proposed a
as Medicare and Medicaid.
the pact beyond Canada and Mexico
legislation. He is expected to have
lower income level for phasing out
Mr. Archer said he also was hope-
fell apart because Democrats insisted
even greater power in the 105th Con-
benefits.
ful a tax bill would include at least
that restrictions protecting U.S. labor
gress because many decisions in the
He also said a tax bill would be
short-term reforms to save Medicare
and the environment be required up
last session were made by House
likely to include a cut in the capital
from its anticipated bankrupicy in
front.
Speaker Newt Gingrich and other
gains tax, which is now about 28
2001. He also pushed Mr. Clinton to
But Mr. Archer was hopeful that
GOP leaders as the House labored to
percent.
appoint a bipartisan commission to
in a nonelection year, Democrats
implement the Contract With Amer-
During the campaign, Mr. Clinton
deal with the financial problems of
might feel less pressure from orga-
ica after the 1994 takeover of Con-
proposed to cut the capital gains tax
Social Security.
nized labor and environmentalists.
gress by Republicans.
on the sale of primary residences. Mr.
Mr. Archer said the was hopeful
"I am inclined to believe they will
"It will be different in this Con-
Archer wants a broader cut in the
that a new mood of bipartisanship
have an easier time now, Mr. Archer
gress," Mr. Archer said. "There will
tax, extending a lower rate to all
would not be spoiled by Mr.
said. "It is not a presidential election
be more originating and coming out
types of capital investments, such as
Gingrich's ethics controversy or by
year."
of the committee, rather than being
stocks and bonds.
campaign finance issues with the
Mr. Archer visited the president a
originated in a collegial way and
"[ am talking about any capital
White House and the Democratic
week ago at the White House, where
assigned by the leadership."
investment," Mr. Archer said.
National Committee.
the two also discussed tax cuts and
Mr. Archer, who sought the meet-
The chief House tax writer would
"The entire tenor of this Congress
the prospects for major tax reform.
ing with Mr. Clinton, said he was
not speculate about the overall size of
will be different than the last one,"
"We did talk about fundamental
willing to accommodate the
a tax bill. Mr. Archer said he wanted
he said, noting voters sent a message
tax "reform," Mr. Archer said. "He lis-
president's 1996 campaign proposals
to wait until Mr. Clinton submits his
in the November elections that the
tened, I asked questions, and I am
for a $500 child tax credit and initia-
budget to Congress and Republican
president and Congress should work
going to send him more
tives to help pay for college and post-
budget writers have a chance to draft
together. "They want us to gel things
information."
secondary education.
their proposal.
done.'
FROM:
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR AMBASSADOR JEFF DAVIDOW
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
m.d
Attachment
CC: Brian Samuel
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR JOHN HILLEY
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
will
Attachment
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR DAN TARULLO
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
w.p
Attachment
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR GENE SPERLING
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
my
Attachment
cc: Lael Brainard
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR BOB KYLE
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
may
Attachment
THE WHITE HOUSE
WASHINGTON
January 6, 1997
MEMORANDUM FOR AMBASSADOR JEFF DAVIDOW
FROM:
MACK McLARTY
I thought you would want to see the attached article that reports
on an interview with Chairman Bill Archer. Given the holiday
season and the fact that it appeared in The Dallas Morning News,
I thought you might have missed it. I found it gave some insight
into Chairman Archer's thinking and, on balance, I thought it was
encouraging.
my
Attachment
cc: Brian Samuel
CRANE, ARCHER PREDICT RENEWED FAST-TRACK EFFORT THIS YEAR
Ways and Means trade subcommittee Chairman Philip Crane (R-IN) predicted last month that Congress and the
Clinton Administration have a: good chance to agree on a renewal of fast-track trade negotiating authority this year.
"I'm guardedly optimistic we can get fast track," he said. "If we can, we could easily get Chile in [to the North
American Free Trade Agreement] by the end of the year and then move on to Argentina."
Crane's optimism was seconded last week by Ways and Means Chairman Bill Archer (R-TX). Ina Jan. 3 interview in the
Dallas Morning News, Archer said a renewed effort to move fast track legislation could come as early as March.
Negotiations between House Republicans and the Administration broke down in 1995 because then-U.S. Trade Represen-
tative Mickey Kantor insisted that the authority be a straight renewal of the expired language in the 1988 trade act, which
would have given the Administration flexibility to deal with labor and environmental issues, Crane said.
The feeling among Republicans was that Kantor took that position so that the Administration could look after the
interests of "unions and environmental extremists," he said. The possibility of a deal this year may be better because
Acting USTR Charlene Barshefsky "does not think first and foremost about politics," he added.
But other sources speculated that the Administration will find it hard to scale back its demands for including labor
provisions in the fast-track bill because the issue is not being successfully addressed in the World Trade Organization.
The first WTO ministerial did not endorse the U.S. demand for a working party on labor rights, and approved a
declaration that establishes the primacy of the International Labor Organization on the issue, with at most a minimal
role for the WTO.
Crane said that he would also be pushing other trade legislation, such as NAFTA-parity for Caribbean Basin
Initiative countries and a renewal of the Generalized System of Preferences, but that he would not recommend
packaging those measures with fast track into a big trade bill. Each of the trade measures has foes, who would oppose
the entire package of bills even though they would support some of its components if handled separately. Therefore,
considering each one, "on its merits," is the best way to pass them, he said.
Crane sounded optimistic about renewing GSP. which expires at the end of May, noting that the only obstacle is
finding the funding to offset the revenue lost from tariff cuts. Otherwise, the renewal does not have any "political
overtones," he said.
CBI, however, is "a question mark," he said. The textile industry is "very resistant," but there is still a chance the
bill can be passed, he added.
There will also be new efforts to pass legislation allowing for temporary exemptions of products from
antidumping orders in cases of short supply, even though the proposal continue to generate "paranoia" in
Congress, he said.
The lack of progress on trade legislation in the last Congress was "very frustrating," he said. The prospects
this year are "infinitely better," now that political problems caused by the elections have been removed, accord-
ing to Crane. But many members who supported trade initiatives have left Congress and the leadership has yet
to poll the new members about their views on trade. The first test of the new Congress is likely to be China's
MFN renewal, he said.
A lot will also depend on the Administration, he said. The congressional leadership is not planning to set the
agenda on trade, but instead will wait for the Administration's proposals and then try to build bipartisan support.
Administration support is especially important because most of the opposition to trade measures in Congress is on the
Democratic side, he added.
Crane added that he hopes Barshefsky can be confirmed to become the permanent USTR, but said that there
is now a "wait and see" attitude in the House because of the possible conflict between her appointment and the 1995
lobbying reform bill. If the Administration is able to push a waiver of the law for Barshefsky through the Senate, such
legislation would likely be approved easily in the House, he predicted. But the Senate would have to move first,
because it has exclusive jurisdiction for confirming appointments, he said.
In a related development, the Office of Legal Counsel of the Dept. of Justice has sent the White House an assess-
ment that the so-called Dole provision of the lobbying bill is unconstitutional, according to a Justice spokesman.
Informed sources speculated that the provision might be vulnerable to a court challenge on constitutional
grounds because it restrains the President's ability to nominate cabinet officials. These sources also said they
expected quick action on Barshefsky's nomination, in advance of a serious debate on fast-track negotiating
authority.
Trade Forum to Take Note
Of Issue of Labor Standards
Eric
Deak
SINGAPORE, Dec. 12 (Reuters)
the declaration unless labor rights
- As the end of the World Trade
were mentioned. Washington argued
Organization's first meeting neared,
that a key area of human rights had
national représentatives compro-
to be mentioned in connection with
mised today over the question of
world trade, aware of rising concern
whether the group should be involved
at home about sweatshops and child
in improving standards for workers,
labor, mostly in the third world.
officials said.
But nations like Pakistan, India
They said the ministers had
and Malaysia, which led the argu-
agreed to include a mention of labor
ments, said the push to link labor
rights, the most contentious issue at
rights and trade was merely a dis-
the five-day conference, in the
guised attempt to use the trade or-
group's final declaration on Friday.
ganization to undermine their low-
Earlier today, the United States
cost labor advantage.
and the European Union reached
They said that the International
agreement on a deal to liberalize
Labor Organization, a United Na-
trade in information technology. The
tions specialized agency, was the
agreement removed the last barrier
right forum for the issue and that the
to extending the pact to Asian na-
World Trade Organization had no
tions, some of which still object to its
role.
provisions. The trade pact would
Officials at the conference said the
phase out tariffs on a range of goods
final declaration would refer to the
like computers, software and tele-
labor organization as "the compe-
communications equipment.
tent body" to set and promote good
But on labor standards, the talks
labor standards and that it and the
were in doubt. Early in the day,
World Trade Organization would
Pakistan declared victory in its ef-
"continue their existing collabora-
fort to keep the trade group's com-
tion" on the issue. The message, they
muniqué free of a statement on the
said, would "reject the use of labor
matter. But Commerce Minister Mo-
standards for protectionist pur-
hammed Zubair Khan, conceded lat-
poses." The ministers will also de-
er that it would be mentioned.
clare that they "agree that the com-
That would be a success for the
parative advantage of countries, par-
United States, which, conference offi-
ticularly developing countries, must
cials said, had threatened to block
be in no way put into question."
The New York Times
for
FRIDAY, DECEMBER 13, 1996
pit
PHOTOCOPY
PRESERVATION
Economic Viewpoint
BY ROBERT KUTTNER
Ence a,
3
Chile 7nst True
HOW CLINTON'S TRADE POLICY
HAMSTRINGS AMERICA
4
Discuss
allsier 1Bral
A
dministration officials have trumpet-
inclusion, is prepared to offer much stronger
ed the recent ministerial agreement
labor provisions than Mexico. But the Ad-
negotiated at the World Trade Orga-
ministration has infuriated its labor allies by
nization meeting in Singapore to cut tariffs on
refusing to tie trade expansion to labor rights.
information-technology products. But the Sin-
At Singapore, acting U.S. Trade Repre-
gapore deal actually suggests the weakness
sentative Charlene Barshefsky made a tough-
both of U.S. diplomatic priorities for trade
sounding speech on the importance of adding
and of the WTO as an institution. The next
basic labor standards, such as the right to
round of Administration trade initiatives will
organize unions and a ban on child labor, to
be vulnerable, both as politics and as policy.
the WTO regime. But word was leaked im-
For two decades, cutting tariffs has been,
mediately that this was not a serious U.S. ne-
the easy part of liberalization. Most of the
gotiating priority. Barshefsky might as well
obstacles to American exports, of course, are
have said: "Treat this as merely a bone we
nontariff barriers. Mercantilist nations such as
need to throw the AFL-CIO."
China, Japan, and Korea can accept lower
BLIND EYE. Finally, there is the dilemma of
tariffs, knowing that the more subtle barriers
China-and the larger questions of trade pri-
to market access are untouched.
orities that China reflects. Although China
NAIVE:
A related problem, paradoxically, is the WTO
has replaced Japan as the world's leading
itself. Most of the real progress in recent
mercantilist nation and is currently running
years on market access has been made via
the largest bilateral trade deficit with the
Washington
aggressive bilateralism-conditioning access
U.S., the Clinton Administration is committed
to the huge U.S. consumer market on genuine
to mostly unilateral liberalization of trade
must now
market-opening by trading partners. But the
with Beijing. The White House successfully
agreement creating the WTO, as well as the
promoted extension of most-favored-nation
abide by WTO
norms and procedures of multilateralism, make
status for China despite China's human- and
it more difficult for the U.S. to apply unilat-
labor-rights violations, failure to deliver on
rules, which
eral pressures. Instead of using America's im-
prior market-opening agreements, and con-
mense global economic weight to bargain hard
tinued theft of intellectual property. The Clin-
don't outlaw
for reciprocal access, the U.S. is now sup-
ton Administration will pursue essentially the
posed to politely take complaints to the WTO,
same soft-line strategy when it presses for
protectionist
whose "due process' is a horrific blend of bu-
China's membership in the WTO.
reaucratic ambiguity and plain politics. As
The Administration retains an oddly altru-
practices but
Asia scholar Chalmers Johnson observes, the
istic conception of free trade. It fails to ac-
WTO does not outlaw the main protectionist
knowledge the world's different brands of
do prohibit
practices of East Asian semi-capitalist nations,
capitalism and negotiate accordingly for reci-
but it does prohibit the U.S. from defending
procal market access The Administration be-
the U.S. from
itself against those practices through bilateral
lieves, wishfully, that by promoting the norms
bargaining over market access.
of liberal trade and setting a good example,
BURNED ONCE. Unlike tariff reduction, which
the U.S. will encourage other nations to be-
defending itself
is relatively easy diplomatically and uncon-
come more like it. But even the partial
troversial domestically, the next set of trade
progress the U.S. has achieved in opening
issues are far thornier. First, there's the pro-
Japanese markets was not won by pursuing
posed expansion of the North American Free
the Golden Rule but by tough, bilateral ne-
Trade Agreement. Most Democrats in Con-
gotiation now prohibited by the WTO.
gress, as well as Republican economic na-
American businesses interested in expand-
tionalists, felt seriously burned by NAFTA. Of-
ing exports want a harder line on market-
ficial predictions turned out to be far too rosy.
opening, but they are drowned out by busi-
House Democratic leader Richard A.
ness lobbies more interested in exporting
Gephardt will oppose NAFTA expansion un-
capital and importing products. At the same
less it is coupled with enforceable labor rights
time, organized labor's pressure for greater
far tougher than NAFTA'S token provisions.
global worker rights and a strategy of ex-
Second, the White House faces double trou-
porting products rather than capital and jobs
ble in Congress over new negotiating author-
is no match for organized business. So U.S.
Robert Kuttner is co-editor of The
American Prospect and author of The
ity as well as the substance of a NAFTA ex-
trade policy will continue to be both con-
End of Laissez-Faire
pansion. Chile, the first candidate for NAFTA
tentious and naive.
PHOTOCOPY
26 BUSINESS WEEK / DECEMBER 30, 1996
PRESERVATION
OFMA
@Enic Peter to Expland Desc
2
Chile that Tu-d
ing American policy toward econom-
Continued From First Business Page
ic nationalism - a kinder, gentler
version of what Pat Buchanan and
Trade Pacts
versity economist, has been a "spa-
Ross Perot have advocated, to be
ghetti bowl of tangled, inconsistent
sure, but still a subtle form of mer-
trade standards that just can't be
cantilism that threatens to under-
good for efficiency."
mine efforts to knit the global econ-
By Regions:
It's a safe bet that the doubters
omy together.
will not remain on the sidelines much
The new mantra of opening foreign
longer. For while much-ballyhooed
markets while defending our own,
Not the Elixir
trans-Atlantic and trans-Pacific
they suggest, points toward a "hub
trade initiatives have met consider-
and spoke" trading order in which
able resistance both overseas and in
the United States dominates numer-
Congress, President Clinton is ask-
As Advertised
ous regional preferential trade
ing lawmakers for the right to pur-
areas, rather than a worldwide sys-
sue "fast track" negotiations toward
tem in which the American economy
a preferential trade area for all the
is merely first among equals. Within
Americas, starting with Chile. More-
Nafta, for example, Washington can
By PETER PASSELL
over, some Administration officials
muscle preferences for Florida to-
still hope to extend Nafta to the Pa-
mato growers that would never pass
When efforts to liberalize world trade
cific, admitting, say, South Korea, in
muster with the more independent
stalled in the early 1980's, Washington
hope of putting pressure on the rest
bureaucrats at the World Trade Or-
turned its attention to opening trade on a
of Asia to join.
ganization
regional basis as the second-best choice.
Every college text on international
"People have begun to wake up to
That produced the North American Free
trade offers grounds to be skeptical
the U.S. policy of pressing regional
Trade Agreement and a dozen
of regional trade agreements. If, for
arrangements as an end in them-
similar pacts among other na-
example, Mexico trades freely with
Economic
selves," said Gary Saxonhouse, an
tions. And most economists,
the United States but maintains bar-
economist at the University of Michi-
Analysis
who hold that free trade is
riers against imports from Japan
gan.
close to heaven on earth, wide-
and Europe, it may lose more from
The skeptics are also influenced by
ly applauded. The regional agreements,
the loss of access to Toyotas and
new research examining the risk
they argued, would not just prod reluctant
Fiats than it gains from easier ac-
that productivity-sapping trade di-
nations like Japan and France to drop their
cess to Fords and Chryslers.
version will outweigh productivity-
opposition to open markets to global trade,
But most economists put aside
enhancing trade creation. In the
but they would also help developing coun-
such worries almost four decades
study that the World Bank has thus
tries lock in free market initiatives and
ago to celebrate the creation of the
far refused to release, Alexander
improve the climate for foreign invest-
European Economic Community,
Yeats, principal economist of the or-
ment.
now the European Union. "Economic
integration was seen as a bulwark
ganization's International Trade Di-
But this pragmatic consensus is fraying
vision, draws disturbing conclusions
as the Clinton Administration's drive to
against Communism," Mr. Bhagwati
create preferential trade areas reaching
recalled. And while the rationale has
about Mércosur, the preferential
across the Pacific and Atlantic, as well as
changed, economists continued to de-
trade pact linking Argentina. Brazil,
throughout the Americas, takes on a life of
fer to political strategists on issues of
Chile and Uruguay. The most- traded
economic regionalism.
products within Mercosur "general-
its own. Some economists are no longer
convinced that all roads to open markets
When Nafta was being negotiated,
ly are highly capital-intensive goods
really do lead toward the economic Valhal-
policy strategists for President
which members have not been able
la of a world without trading barriers.
George Bush and Mr. Clinton were
to export competitively to outside
never very serious about the argu-
markets," he wrote.
"It's time to raise the warning flag,"
ment that a regional pact with Mexi
Arvind Panagariya co-director of
said Claude Barfield, an economist at the
American Enterprise Institute in Washing-
CO was needed to foster exports of
the University of Maryland's Center
ton
American corn and computers. But
for International Economics, voices
The latest evidence that regional trade
they agreed that the pact would com-
related concerns about the proposed
pacts like Nafta can have harmful effects
mit future Mexican governments to
Free Trade Area of the Americas.
economic modernization that would
Even if it would help other Latin
on those excluded from the zone comes
from the Caribbean Basin, where a World
reinforce the political stability of the
American countries and Caribbean
continent. And history, they say, has
islands avoid excessive losses to
Bank study recently warned that Mexico
proved them right: "The Mexican
Mexico, virtually all the gains would
could grab as much as one-third of the
Caribbean's $12.5 billion in exports to the
currency crisis in 1995 would have
go to the United States, he concluded.
had catastrophic consequences" if
And South American countries with
United States.
But the impact could be considerably
Mexico had not been treaty-bound to
high barriers against imports would
keep its borders open to trade and
risk serious losses from reduced
broader. An unpublished study by a senior
investment, said Lawrence H. Sum-
trade with Europe.
economist at the World Bank suggests that
Mercosur, the preferential trade agree-
mers, Deputy Secretary of the Treas-
Mr. Summers dismisses such
ment intended to eliminate national barri-
ury.
doubts, suggesting that the Adminis-
ers at the southern end of South America,
C. Fred Bergsten, the head of the
tration's aggressive pro-regionalism
Institute for International Econom-
has diverted substantial trade from more
is a kind of policy maker's jujitsu
efficient producers outside the region.
ics, argues that the Administration
one that redirects dangerous protec-
still sees regional zones as advanc-
The result of preferential trade areas,
tionist impulses into benign market-
ing world trade: "The idea has
said Jagdish Bhagwati, a Columbia Uni-
opening initiatives. Regionalism is
ways been globai liberalization initi-
not just good mercantilism, it's good
ated by regional agreement."
economics." he said.
Continued on Page D21
Why, then, have many other econo-
Trouble is, Mr. Barfield of the
mists grown skeptical? For one
American Enterprise Institute said,
thing, they worry that President
is that the argument is no longer so
Clinton's casual but often repeated
convincing to economists them-
equation of trade and warfare is tilt-
selves.
The New York Times
TUESDAY, FEBRUARY 4, 1997
On a Street
In Hebron,
Change Has
mained hopeful that the region can
be a place where "all together, Jews,
Christians and Muslims, Israelis and
Arabs, believers and nonbelievers,
can create and consolidate a con-
crete peace in respect of everyone's
rights and dignity."
Both the Pope and Mr. Netanyahu
appeared in good form today, as they
A Slow Pace
greeted each other before reporters.
Sara Netanyahu accompanied her
husband, and the Pope, who was born
in Poland, told her, "You look like a
Polish girl," recalling the Polish ori-
gins of several former Israeli lead-
"I am," she replied.
And her husband added, "Af'
generations in Jerusalem."
A renovation project financed by
the United States is supposed to
ers.
By JOEL GREENBERG
transform the road with a security
HEBRON, West Bank, Feb. 3 -
wall and parking near the Jewish
About 8 this morning, after three
enclaves, sidewalks and sandblasted
years of waiting, Abdallah Uweiwi
and repainted Arab storefronts - all
went with his partners to try to re-
set off with awnings, cast-iron fenc-
open the People's Taxi stand on Mar-
ing, trees, shrubs and flowers.
tyrs Street in downtown Hebron.
But this morning all that seemed a
Their last day of business there
long way off. Aside from the occa-
was Feb. 26, 1994, when Dr. Baruch
sional Arab car and the now-re-
Goldstein, a Jewish settler, gunned
opened gas station, the street was
down 29 Muslims at prayer in the
mostly filled with Israeli Army and
Cave of the Patriarchs shrine near-
police jeeps, settlers' vehicles and
by. After the killings, the Israeli
held by Israel to be its "united and
eternal capital," while the Vatican
has pressed for recognition of its
special status as a city holy to Chris-
tians, Jews and Muslims alike.
In an interview with the Italian
groups of curious Palestinians who
newspaper Il Messaggero last week,
Mr. Netanyahau said his position on
Jerusalem was unshakable. "Jersua-
lem has to stay united," he said. "We
are ready to give guarantees to
Christians and Muslims, but we do
not intend to discuss the city's politi-
A statement issued by the Vatican
Army closed Martyrs Street to Pal-
after the meeting did not mention the
Jerusalem issue. The statement did
say the Pope had followed recent
developments in the Middle East
with "particular attention" and re-
had come to see the new arrange-
estinian motorists to prevent re-
ments.
cal sovereignty."
venge attacks on Jewish enclaves
It seems that despite the handover
along the road.
of most-of Hebron to the Palestinian
Under the terms of last month's
authorities, life has not changed
Israeli-Palestinian accord on He-
much in the 20 percent of town still
bron, the army began a phased re-
under Israeli control.
opening of the street today as part of
On the walls of the cemetery, graf-
a gradual restoration of normal traf-
fiti sprayed by militant settlers
fic within the next four months.
vowed "Revenge" and "Transfer,"
But only a section of the street was
meaning the expulsion of Hebron's
opened, in one direction, solely to
Arabs. Nearby, another Hebrew slo-
taxis and municipal vehicles. So only
gan said, "Death to Arabs."
a handful of Arab cars entered Mar-
In a settlement compound, Jews
tyrs Street today, and Mr. Uweiwi
worked on a new housing project
and his partners were barred from
abutting Hebron's old city, where
Pope and Netanyahu Meet, Looking to Jerusalem
Prime Minister Yitzhak Rabin in
"We look forward to receiving you
in Jerusalem," Mr. Netanyahu said
as he was leaving the Pope's study
after a 20-minute audience.
The Pope responded, "God bless
Israel and the Vatican established
formal diplomatic relations in late
1993, starting a new chapter in the
2,000 year history of often hostile
Catholic-Jewish relations.
One obstacle to papal visits to Je-
reopening their stand on the ground
Paiestinians have been renovating
rusalem is the long debate over the
status of the ancient city, which is
that only through traffic would be
crumbling buildings to resettle them
allowed.
and prevent them from falling into
1994.
Israel."
"They tell the world that Martyrs
Jewish hands.
Street is open, but here we see some-
A new Israeli military order bars
thing," Mr. Uweiwi said after an
Arab renovations adjacent to the
Israeli officer ordered him to move
Jewish enclave for security reasons,
the parked taxis from the stand.
and laborers have been arrested. But
"Nothing has changed. But this is our
Emad Hamdan, the director of the
street, despite the settlements and
project, vowed to continue the work,
the military restrictions."
which is sponsored by the Palestin-
"We will stay here, die here and be
ian Authority. "We will ignore the
buried here," he added, glancing at a
order," he said. "Every stone in this
sprawling cemetery on the other side
town here has political meaning."
of the road.
The Palestinian cabinet, in a meet-
The once-bustling thoroughfare
ing in Gaza on Saturday, condemned
was a Bishop in Cracow, Poland.
The 2,000th anniversary of the
birth of Jesus has been declared a
Holy Year for the world's Roman
Catholics, with both Rome and the
Holy Land designated as pilgrimage
sites. Last year the Palestinian lead-
er, Yasir Arafat, extended an invita-
tion for the Pope to visit in the year
2000 to travel to Christ's birthplace,
Bethlehem, which is now under Pa-
lestianian control.
For Mr. Netanyahu, in Italy on an
has been largely deserted for three
the order and said it contradicted the
official trip, the visit to the Vatican
was a chance to renew Israel's open
invitation to the Pope, first made by
years, except for settlers and a trick-
Hebron agreement. The settlers, for
le of Arab pedestrians who have
their part, complained that the re-
braved Israeli Army checkpoints
opening of Martyrs Street, which
scattered along the road to protect
runs by their homes, had begun with-
the Jewish compounds.
out any new security arrangements
Shops, a gas station and taxi
to protect them. With 80 percent of
stands closed down, and Arab driv-
Hebron now under Palestinian con-
ers have been forced to make long
trol, they said, the only street linking
detours around the street to get from
their enclaves was now being opened
one side of town to the other.
to a hostile Arab population.
The street lies in an area still
"We're being turned into a ghet-
controlled by Israeli forces after
to," said David Wilder, a spokesman
their withdrawal from most of He-
for the settlers.
bron last month.
By CELESTINE BOHLEN
ROME, Feb. 3 - After meeting for
the first time, Pope John Paul II and
Prime Minister Benjamin Netan-
yahu of Israel promised today in the
Vatican to meet again "as soon as
possible" in Jerusalem.
For the Pope, whose travels have
taken him around the world several
times, a journey to the Holy Land has
been a long-held, still unfulfilled
hope, and one that he has voiced
more often as Christianity's third
millennium approaches. The Pope
told Mr. Netanyahu today that he
visited the Holy Land in 1963 when he
The New York Times
TUESDAY, FEBRUARY 4, 1997
JAN-29-1997 15:18
O'MELVENY & MYERS LLP-DC
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Counselor to the President &
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Steve
Enic
Desl
Chile 7rst Trial
FROM: Amanda DeBusk
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DATE: January 29, 1997
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JAN-29-1997 15:19
O'MELVENY & MYERS LLP-DC
202 383 5414
P.02
January 28, 1997
The President
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20500
Dear Mr. President:
We, members of your Advisory Committee for Trade Policy
and Negotiations, are writing to urge that you identify trade
expansion as a top priority in your State of the Union address
and expeditiously submit a request for trade expansion authority
to the Congress.
Trade expansion is a vital engine for economic growth.
Authority to negotiate trade agreements is necessary to further
strengthen the competitive position of the United States around
the world and maintain U.S. leadership within the global economic
community.
We are concerned that the Free Trade Agreement of the
Americas, with the commitment to free trade by 2005, cannot
comprehensively move forward unless trade expansion authority is
passed by Congress prior to the May meeting of trade ministers.
We do not want the FTAA and other important trade expansion
initiatives to stall.
We look forward to continuing to work with you to open
markets and advance U.S. economic interests.
Sincerely,
Jusan Hammer
Susan Hammer
Mayor, City of San Jose
Chair, President's Advisory
Committee for Trade Policy &
Negotiations
Robert E. Allen
Chairman and Chief Executive
Officer
AT&T
The Honorable George Ariyoshi
Counsel
Watanabe, Ing & Kawashima
JAN-29-1997 15:19
O'MELVENY & MYERS LLP-DC
202 383 5414
P.03
Letter to the President - Page 2 - January 28, 1997
Roger J. Baccigaluppi
Chief Executive Officer
RB International
Curtis H. Barnette
Chairman and Chief Executive
Officer
Bethlehem Steel Corporation
John E. Bryson
Chief Executive Officer
Southern California Edison Co.
Robert Crandall
Chairman and Chief Executive
Officer
AMR and American Airlines
Robert J. Eaton
Chairman and Chief Executive
Officer
Chrysler Corporation
Walter Y. Elisha
Chairman and Chief Executive
Officer
Springs Industries, Inc.
George M.C. Fisher
Chairman, President and Chief
Executive Officer
Eastman Kodak Company
Donald V. Fites
Chairman and Chief Executive
Officer
Caterpillar, Inc.
Ralph J. Gerson
President and Chief Executive
Officer
Guardian International Corp.
Louis Gerstner
Chairman and Chief Executive
Officer
IBM Corporation
Maurice R. Greenberg
Chairman
American International Group, Inc.
JAN-29-1997 15:19
U'MELVENY & MYERS LLP-DC
202 383 5414
P.04
Letter to the President - Page 3 - January 28, 1997
D. George Harris
Chairman
Harris Chemical Group, Inc.
Dean Kleckner
President
American Farm Bureau Federation
Charles P. Lazarus
Chief Executive Officer
Toys "R" Us
W. David Leak, M.D.
Chairman and Chief Executive
Officer
Pain Net Education, Inc.
Bruce Llewellyn
Chairman and Chief Executive
Officer
The Philadelphia Coca-Cola Bottling
Company
John E. Pepper
Chairman and CEO
The Procter and Gamble Company
Lewis E. Platt
Chairman, President, and Chief
Executive Officer
Hewlett-Packard Company
Bernard Rapoport
Chairman and Chief Executive
officer
American Income Life Insurance
Company
Robert B. Shapiro
Chairman and Chief Executive
Officer
The Monsanto Company
Jerome A. Siegel
Chairman of the Board
The Titan Industrial Corporation
Paula Stern
President
The Stern Group, Inc.
02:5I 266I-6Z-NHC
U'MELVENT
&
Letter to the President - Page 4 - January 28, 1997
Jack J. Valenti
President and Chief Executive
Officer
Motion Picture Association of
America, Inc.
Linda J. Wachner
Chairman, President and Chief
Executive Officer
Warnaco, Inc.
Jeanette Sarkisian Wagner
President
Estee Lauder International, Inc.
J. McDonald Williams
President and Chief Executive
Officer
The Trammell Crow Company
TOTAL P.05
Enic
Inst True
Street
3
Lyle B.L
ER
MONDAY FEBRUARY 24, 1997
THE J O N A o F COMMERCE
OPINION
dling US trade policy
n.
in
the
И
some
it
see
fast lane
a
BY DA
BY GARY HUFBAUER
in Washington politics. On the
ROM
When presidential words are
one hand, Mr. Clinton may be
ington,
at odds with presidential deeds,
repeating a familiar error, en-
object (
we are entitled to ask "what's
gaging in endless consultations
with thi
up?" Among Washington insid-
with adversaries, making no
tal, who
ers, this is the key question
converts and losing valuable
shamele
about President Clinton's ap-
time. The adversaries don't
The
proach to seeking congressional
want to enlarge Nafta, negotiate
that on
authority to negotiate trade
a Free Trade Agreement of the
will fall
agreements.
Americas, admit China into the
from no
In 1993, Mr. Clinton called
World Trade Organization or
graph
on America to "compete, not
even mention a new round of
among
retreat." In his 1997 State of
WTO trade talks.
of Linco
the Union message, he again
On the other hand, the expla-
tolus.
challenged the United States to
nation may be found in Demo-
And
march into global markets.
cratic presidential politics. House
Rome's
That's the rhetoric. What's the
Minority Leader Richard Gep-
the hull
reality?
hardt, D-Mo., one of the key
silica M.
To open markets abroad, Mr.
presidential contenders, was op-
nian is
Clinton must reciprocate by
posed to Nafta and makes no se-
that COI
dismantling U.S. trade and in-
cret of his doubts over Asian ties.
Trade C
vestment barriers. To do that,
Vice President Al Gore, the other
With
he needs negotiating authority
leading Democratic contender,
man-like
from Congress the so-called
may worry about handing Mr.
intact fr
fast-track authority that enables
Gephardt a wedge issue in 2000.
ington
him to negotiate and place be-
Should the economy reverse
Rayburn
fore Congress for an up-or-
trend, unemployment rise above
Vice President AL GORE
what th.
down vote a balanced package
6% or the stock market decline,
tator B
of trade liberalization measures.
free trade advocacy could cause
have bu
Every U.S. president since Rich-
severe political damage to presi-
ing on strong environmental
who is running Mr. Clinton's
money a
ard Nixon has launched global
dential ambitions.
and labor language. That en-
trade policy. Is it his "klutzes"
Muss
or regional trade talks with fast
Mr. Gore certainly does not
sures a standoff, at least for a
engaging in consultations with
ly a uni-
track authority in his pocket.
want to be identified with isola-
couple of years.
the Republican opposition or
only na
Mr. Clinton's wallet is now
tionist politics. After all, he
Beyond the labor and envi-
Mr. Gore's "saboteurs," unwill-
sides in
empty.
scored against Ross Perot in the
ronment question, a more seri-
ing to get saddled with a trade
is anoth
That's too bad. because U.S.
1993 Nafta debate. But, at the
ous issue bedevils Mr. Clinton's
agenda they might not like in
Washing
trade and investment barriers
same time, he is worried about
trade experts. What's fast track
the next primary season?
been sp:
are very low compared to barri-
trade politics in 2000. If he, as
for? Enlarging Nafta? Striking a
No Nero
ers blocking U.S. exports to
Mr. Clinton's successor, delayed
deal with Asia-Pacific countries?
We might find out pretty
A key
booming markets in Latin
any major trade negotiation until
Launching new global trade lib-
soon. This week, Chilean Presi-
allow 0
America and Asia. Trade talks
after the next election, he could
eralization talks? The logical
dent Edouardo Frei will visit
houses
are the closest thing to a free
still present himself to history as
answer is "all of the above."
Washington and address a joint
public n
lunch that most congressmen
a free trader. The easiest way to
Within limits, the U.S. can
session of Congress. In April,
ace, the
will ever see: In return for re-
delay major negotiations is to de-
drive a better bargain if it is
Canada's Prime Minister Jean
them to
moving a few brambles at
lay fast-track legislation. And the
negotiating with more than one
Chretien is coming to Washing-
ton. If a
home, the United States can
easiest way to do that is to insist
partner. Here logic and politics
ton, and then Mr. Clinton will
palace, ]
hack down thickets abroad.
that any fast track bill should
coincide: In Mr. Clinton's sec-
swing down to visit Mexican
honestly:
In his State of the Union
contain strong language mandat-
ond term, he might enlarge
President Ernesto Zedillo. In
Japanese
message, Mr. Clinton all but
ing environmental and labor
Nafta to include Chile and the
May, Mr. Clinton is visiting
urehead
asked for fast track. A few days
talks.
Caribbean Basin countries, he
Costa Rica, Barbados, Brazil
Nero 1
later, House Speaker Newt Gin-
The Republicans will not put
might start the FTAA process,
and Argentina.
so large
grich endorsed a new round of
these topics in fast-track legis-
1
and he might even get China to
rassed e'
global talks. So why didn't fast
lation because they fear what
accept WTO disciplines. These
If this high-level travel
ty. Wh
track make the short list of bi-
Mr. Clinton might do with
would be trade measures ac-
doesn't prompt the administra-
Romans
partisan action items agreed
broad authority over environ-
ceptable to most congressmen.
tion to submit a serious trade
did a
between the White House and
mental and labor questions.
But if Mr. Clinton launches
bill to Congress, we may be
They us
Congress in early February?
This is well known to just
bold new initiatives in APEC or
seeing the saboteurs at work.
build a
Why hasn't Mr. Clinton sent
about everyone who has dealt
the WTO, their conclusion will
the Colis
draft legislation to Congress.?
in trade affairs. Naysayers with-
almost certainly await the next
Two explanations are possi-
in Mr. Clinton's inner circle can
president
Gary Hufbauer is the Reginald Jones
The R
senior fellow at the Institute for Inter-
lot of re
ble, and both have their roots
play to these realities by insist-
So the crucial question is
national Economics in Washington.
romantic
MACK MCLARTY
April 15, 1997
To: Dan Tarullo
The President's comments on fast track
played a little more prominently in some
parts of the heartland than they did inside
the Beltway.
my
Attachment
CC: Lael Brainard
Desk
SOA
MACK MCLARTY
April 15, 1997
To: Charlene Barshefsky
The President's comments on fast track
played a little more prominently in some
parts of the heartland than they did inside
the Beltway.
we
Attachment
CC: Peter Allgeier
Desk
DNT
Chrlopest
76
@Stur
Business
3
Desl
Apr. 14. 1997
day, April 12, 1997
H
Section F
Clinton seeks.
Europe, U.S. call
4:03PM
fast track for
uba trade truce
SANUS
Chile talks
Clinton to seek Helms-Burton changes
President says inaction
Ilm Landers
both aides of the Atlentic worried that a
could harm U.S. trade
Sar - # The Date Marating Form
US response ignoring the court would
ASHINGTON A-potentially srip
wreck It.
By Kethy Lewis
Now to the worlds trade court was
Friday's understanding suspends the
Washington Invoice of The Morning New
Friday when the European Union
European Union's sult but does not with
WASHINGTON - President Clinton on.
TI would suspend I sult against U.S.
draw it. European officials stressed that il
Friday orged Congress to give him expe-
inti-Cubasanctions.
can be activated aguin if the United States
dited authority tonegotiate trade pacts with
In return, the Clinton administration
does not live up to end of the deal.
Chile and possibly other Latin American
in a speech to the American Society
said h would seek to amend the Helms-
The understanding calls for negotic-
nations
of Newspaper Editors, President
Burton Act, which passed last year soon
tions on another U.S. law angering U.S.
Re warned that If the United States
Clinton said he also wants the Sen
After Cuban jets downed two U.S. civilian
allies, the Iran-Libya Sanctions Art
doesn't seins the opportunity, other nations
aircraft over international waters.
authored by Sen. Alfonse D'Amete, R-N.Y.
ate to approve a treaty banning
will.
The amendment would let President
It, too, punishes foreign companies deal-
"Last year, for the first time ever, Latin
chemical wespons.
Clinton waive a ben on travel to the
ing with nations the United States is try-
American nations had more trade with
United States by foreign executives whose
inj to isolate with Irade senctions.
April
Europe then the United States. There is no
the
establish
companies hold properties in Cube that
The deal hommered out In Washing-
remon to think that others will wait while
an international ban against chemical:
were seised from Americans by Cube's
ton on Friday came after months of
we alt idle," Mr. Clintro told the American
communist regime.
intense negotiations led by Undersecro
wespons. Now, W have to ratily as
Society of Newspaper Editors.
remain OF the right alie of history, be said.
Priday's announcement ael aside the
tary of Commerce Stuart Bisenitat and Sir
The speech began what White House
said trade authority is the
Union's challenge to the US
Leon Brittein, the European Union's
officials have said will be a sustained effort
matter
World Trade Organization in
trade commissioner.
that
to get Congress to grant Mr. Clinton
ficials had vowed to ignore
Mr. Visanstal stressed the 15-nation
same authority his prodecessors have
properation in the coming
dog U.S. foreign policy was
European Union's agreement to work
negotiale
genents.
The
authority would
buyond the world trade countie
toward global standards covering invest-
Mr. Clints
the editors that
him to
as agreement that Con-
juridiction
ments In properties confiscaled by for-
of the upcomls
pressing tests."
also
Monday was the deadline for the Euro-
eign governments.
No.
illication of the
gress could
assend but only accept or
called for Senate
Union to submit its formal brief
Mr. Britain stressed the U.S. side's
cal weapons ban
before It tal
Please see
on Page 3F.
the court, and trade officials on
Please see BURGPEANS OR Page &F.
1041
P.
2/4
Apr. 14. 1997 4:03PM
SANUS
No.
1041
P.
3/4
Clinton urges fast track on Chile talks
Continued from Page IF.
reject as a package.
GOP congressional leaders also support fast track
"It is unacceptable for us to sit on the
authority but insist that Mr. Clinton not be given the
sidelines while other nations forge
leeway to include labor and environmental issues.
bonds of trade."
Some Democrats, including House Minority Leader
Dick Gephardt, D-Mo., want those issues included Mr.
President Clinton
Clinton believes the legislation need not address the
issues at all, as was the case when President Bush
negotiated the North American Free Trade Agree-
Mr. Clinton would send a request to Congress when
ment with Canada and Mexico.
"it's developed sufficient bipartisan" support.
But Republicans have said that is unacceptable
"We've got a lot of work to do on that, we recog-
because of Mr. Clinton's history on such issues.
nize," he said.
Unlike Mr. Bush, be used the authority to negotiate
Mr. Clinton's emphasis on trade issues has re-
additional labor and environmental provisions to
emerged as he plans to make three trips to Latin
NAFTA.
America during the next 12 months. He will travel to
Balls à
House Speaker Newt Gingrich, R-Ga, wrote Mr.
Mexico, Costa Rica and Barbados in May and to Brazil,
Clinton earlier this week urging him to agree to leg-
Argentina and Verezuela in October. Next spring, he
(slation that "appropriately" limits the authority to
will attend the Summit of the Americas in Chile.
cover only issues directly related to trade.
"We do not need to be afraid of global trade. But in
Mr. Gingrich called further progress in reducing
a world where we have only 4 percent of the popula-
trade barriers critical for the 21st century. but he also
tion, and where the fastest-growing markets for our
said there is a "deep disagreement with the efforts of
products and services are Asia and Latin America,
some to include social issues in formal trade
where export-related jobs pay 13 to 16 percent more
Saturday, April 12, 1997
agreements."
than other American jobs, we don't have a choice," he
He told Mr. Clinton that "you cannot continue to
said. "We have to export!
allow those who Insist on incorporating those issues
He said the record of NAFTA and new International
into trade authority to halt our progress toward
trade agreements is something to build on.
reaching good trade agreements."
"It is unaccoptable for us to alt, on the aidellnes
White House press secretary Mike McCurry said
while other national forge bonds of trade," he said.
Europeans drop trade sanction lawsuit
Continued from Page 1F.
"This understanding
been offered targeting Nigeria and
agreement to work toward a stan-
Indonesia, and Congress is once
dard covering extraterritoriality,
represents the beginning
again threatening to withhold
the practice of applying one
and not the end. An
trade privileges from China.
nation's law against companies and
A coalition of more than 300
individuals of another country.
agreement on concrete,
small and large businesses called
Mr. Eizenstat said the two sides
detailed principles will
"USA-Engage," which is trying to
pledged "best efforts" to seek an
promote alternatives to trade sanc-
agreement on international prop-
require enormous efforts by
tions, has scheduled a Washington
erty safeguards by Oct. 15.
"This understanding represents
U.S. and E.U. negotiators."
kickoff meeting next week.
Friday's announcements cover-
the beginning and not the end,"
- Stuart Eixenstat,
ing anti-Cuba sanctions were
Mr. Eizenstat said. "An agreement
undersecretary of commerce
hedged substantially by both sides.
on concrete, detailed principles
"Congress will have an opportu-
will require enormous efforts by
nity to judge the merits of any
U.S. and E.U. negotiators, as well as
Many large U.S. companies have
agreement reached - and I will
continual consultations with the
pleaded with Congress to shift
reserve judgment on the outcome
Congress."
away from enacting trade sanc-
of these discussions until that
Initial congressional reaction to
tions that punish both U.S. and for-
time," Mr. Coverdell said.
the announcement was favorable.
eign firms doing business with
Mr. Brittain was also keeping
Sen. Paul Coverdell. R-Ga, who
nations considered "rogue
his powder dry.
played a role in authoring the com-
regimes," such as Iran, Libya and
"Despite the success of our talks,
promise, said the negotiations
Cuba.
both Helms-Burton and D'Amato
could "ensure that rules against
Last year, Congress also passed
are still on the U.S. statute book,"
trafficking in stolen property will
legislation threatening sanctions
he said. "We continue to oppose the
become the international norm."
against Burma. Other bills have
principle of extraterritorial laws."
Chile Fast Thank
(Desk)
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
Attachment
bcc: Eric
Nelson
MACK MCLARTY
April 22, 1997
To: John Podesta
I understand our fast track position and
agree with it, as you and I have discussed.
However, the world is continuing to move at
a fast pace, per the attached cable that I
thought you would find of interest.
was
Attachment
bcc: Eric
Nelson
IMMEDIATE
UNCLASSIFIED
WHITE HOUSE SITUATION ROOM
PAGE 01 OF 03
PRT: MCLARTY
SIT: ARMSTRONG DESOUZA DOBBINS KYLE LEE NATOLI PETERS PICCONE PYATT
TARULLO VERSHBOW WALSH
SIT: NSC
<PREC> IMMEDIATE <CLAS> UNCLASSIFIED <DTG> 181852Z APR 97
FM AMEMBASSY SANTIAGO
TO RUEHC/SECSTATE WASHDC IMMEDIATE 3584
1
End
RUCPDOC/USDOC WASHDC
INFO RUEHAC/AMEMBASSY ASUNCION 0420
RUEHLP/AMEMBASSY LA PAZ 510
RUCNFTA/NAFTA COLLECTIVE
2
RUEHFR/AMEMBASSY PARIS 0015
Souls Chile JUST Tred Desl
RUEHBR/AMEMBASSY BRASILIA 0398
RUEHPE/AMEMBASSY LIMA 0379
RUEHMN/AMEMBASSY MONTEVIDEO 0317
RUEHOL/AMEMBASSY BONN 0025
RUEHBO/AMEMBASSY BOGOTA 0127
3 4 j.w podern
RUEHQT/AMEMBASSY QUITO 0150
RUEHCV/AMEMBASSY CARACAS 0095
RUEHBU/AMEMBASSY BUENOS AIRES 0802
RUEHBS/USEU BRUSSELS
UNCLAS SECTION 01 OF 02 SANTIAGO 001432
USDOC FOR UNDERSECRETARY EIZENSTAT
WHITE HOUSE FOR COUNSELOR MCLARTY
DEPT PASS USTR FOR BARSHEFSKY
NEC FOR TARULLO
ARA FOR DAVIDOW
E.O. 12958: N/A
TAGS: ETRD, PREL, NAFTA, CI, EU
SUBJECT: CHILE-EU FTA ON THE FAST TRACK
REF: A) SANTIAGO 1206, B) SANTIAGO 1123
SENSITIVE BUT UNCLASSIFIED
1. SUMMARY: PRESIDENT FREI'S VISIT TO EUROPE
HIGHLIGHTS ONCE AGAIN THE SPEED WITH WHICH GLOBAL
INTEGRATION IS OCCURRING AND THE IMPORTANCE TO U.S.
INTERESTS OF ACCELERATING OUR OWN EFFORTS TO BRING
DOWN BARRIERS TO TRADE IN GENERAL AND TO U.S.
EXPORTS IN PARTICULAR. ACCORDING TO CONTACTS IN
THE MINISTRY OF FOREIGN AFFAIRS AND IN EUROPEAN
EMBASSIES THE EU AND CHILE INTEND TO COMPLETE WORK
UNCLASSIFIED
IMMEDIATE
UNCLASSIFIED
WHITE HOUSE SITUATION ROOM
PAGE 02 OF 03
ON A FREE TRADE AGREEMENT BY 1999. THE SAME TIME
FRAME IS INTENDED FOR PARALLEL EU TALKS WITH MEXICO
AND MERCOSUR. ONCE AGAIN, WE SEEM TO BE THE ODD
MAN OUT. END SUMMARY.
2. PRESIDENT FREI RETURNED FROM HIS EUROPEAN TRIP
VICTORIOUS ONCE AGAIN. THE CHILEAN BUSINESS
COMMUNITY IS EXCITED WITH THE PROSPECT OF A FREE
TRADE AGREEMENT WITH THE EUROPEAN UNION ON A MUCH
ACCELERATED SCHEDULE.
3. MINISTER OF FOREIGN AFFAIRS INSULZA TOLD A
CONFERENCE OF INSTITUTIONAL INVESTORS ON THE DAY OF
HIS RETURN FROM PARIS AND BONN THAT THE WORK PLAN
THE EU IS LOOKING AT FOR ITS NEGOTIATIONS WITH
LATIN AMERICA IS MUCH SHORTER THAN HE HAD EXPECTED.
THE NEW TIMETABLE FOR THREE PARALLEL NEGOTIATIONS
THE EUROPEANS ARE PROPOSING (WITH MERCOSUR, MEXICO
AND CHILE) WOULD HAVE THE AGREEMENTS ON TRADE IN
GOODS AND SERVICES SIGNED BY 1999. OUR CONTACTS AT
THE FRENCH AND BRITISH EMBASSIES AGREE.
4. THE CHILEANS REMAIN VERY INTERESTED IN NAFTA OR
A BILATERAL FTA WITH THE U.S., INSULZA MADE CLEAR
TO HIS AUDIENCE, THOUGH "CHILE PLAYS INDIFFERENT IN
THE PRESS." THE U.S. IS STILL CHILE'S LARGEST
TRADING PARTNER (IF THE EU IS NOT COUNTED AS A
SINGLE MARKET). PERHAPS EVEN MORE IMPORTANTLY,
NAFTA'S HIGHER DISCIPLINES AND ITS BROADER COVERAGE
ARE WHAT CHILE SEEKS.
5. DESPITE THIS PROFESSION OF INTEREST, INSULZA
GAVE NO INDICATION THAT HE BELIEVED TALKS WITH THE
U.S. ARE IMMINENT. IN FACT, HE NOTED THAT CHILE
HAS BEEN POSTPONING NEGOTIATING DOUBLE TAXATION AND
INVESTMENT TREATIES WITH THE U.S. ON THE GROUNDS
THAT THESE ISSUES COULD BEST BE DEALT WITH DURING
THE NAFTA TALKS. PERHAPS, HE SAID, IT IS NOW TIME
TO PROCEED ON THESE SUBJECTS.
6. INSULZA DID NOT GIVE SHORT SHRIFT TO CHILE'S
NEIGHBORS, EITHER, NOTING THAT LATIN AMERICA IS A
"STRATEGIC ISSUE FOR CHILE." CHILE CAN NOT DO WELL
IF THE REST OF THE CONTINENT DOES POORLY, HE
ARGUED. HE NOTED THAT CHILE IMPORTS MORE FROM
LATIN AMERICAN COUNTRIES (AS A PERCENT OF GDP) THAN
DOES ANY OTHER LATIN AMERICAN COUNTRY. FURTHER,
CHILE HAS MORE MONEY INVESTED IN THE REST OF LATIN
AMERICA THAN ANY OTHER COUNTRY IN THE REGION.
7. COMMENT: AS RECENTLY AS DECEMBER, CHIEF TRADE
NEGOTIATOR FOR CHILE JUAN GABRIEL VALDES TOLD US
THAT HE SAW AN AGREEMENT WITH THE EU "IN THE MEDIUM
UNCLASSIFIED
IMMEDIATE
UNCLASSIFIED
WHITE HOUSE SITUATION ROOM
PAGE 03 OF 03
TERM, AT BEST." THE GREAT VICTORY OF FREI'S TRIP
TO EUROPE WAS MOVING NEGOTIATIONS TO THE IMMEDIATE
FUTURE. THIS JUST SERVES ONCE AGAIN TO HIGHLIGHT
THE SPEED WITH WHICH GLOBALIZATION IS MOVING IN
THIS CORNER OF THE GLOBE. HAVING POCKETED
AGREEMENTS WITH MERCOSUR AND CANADA LAST YEAR,
UNCLAS SECTION 02 OF 02 SANTIAGO 001432
USDOC FOR UNDERSECRETARY EIZENSTAT
WHITE HOUSE FOR COUNSELOR MCLARTY
DEPT PASS USTR FOR BARSHEFSKY
NEC FOR TARULLO
ARA FOR DAVIDOW
E.O. 12958: N/A
TAGS: ETRD, PREL, NAFTA, CI, EU
SUBJECT: CHILE-EU FTA ON THE FAST TRACK
CHILE IS MOVING FORWARD BY DEEPENING ITS TRADE
RELATIONSHIP WITH MEXICO (EXTENDING ITS CURRENT FA
TO SERVICES BY OCTOBER OF THIS YEAR), BROADENING
ITS LATTICEWORK OF FTAS TO INCLUDE THE EU, AND
CASTING THE WIDEST POSSIBLE OF NETS BY UNILATERALLY
REDUCING TARIFFS. WE ARE BEING LEFT BEHIND.
8. WHILE WE CANNOT JUDGE THE OPTIMAL TIMING IN
U.S. POLITICAL TERMS, THE PERSPECTIVE FROM SANTIAGO
IS THAT SECRETARY DALEY WILL CERTAINLY FEEL THE
HEAT IF FAST TRACK LEGISLATION IS NOT SUBMITTED
BEFORE HE ARRIVES HERE IN MID-MAY.
SHAPIRO
<^SECT>SECTION: 01 OF 02
<^SSN>1432
<^TOR>970418180935 M2722056
<^SECT>SECTION: 02 OF 02
<^SSN>1432
<MSGID> M2722056
UNCLASSIFIED
MACK MCLARTY
March 6, 1997
To: Bob Kyle
Bryan Samuel
I need another tutoring session regarding
Dick Gephard S commentary, in light of his
letter to his Democratic colleagues.
We will try to schedule next week if
possible.
wed
Attachment
CC: Eric Farnsworth
FEB 27 '97 03:59PM
P.1/13
Oine
THE DUBERSTEIN GROUP, INC.
@Sthu
Nul discuss hyle P Brind w Pick H.WH
2 Pest
FAX TRANSMISSION
They
DATE: 2/27/97
NUMBER OF PAGES 13
(including cover)
TO: Mack McLarty
COMPANY:
FAX NUMBER: 456-2215 DIRECT NUMBER:
FROM:
Steve Champlin
MESSAGE/INSTRUCTIONS: in case you have not
seen this.
MACK- STEVE TOLD Mr He WOULD
Aiso FAX THIS To ERIC.
+
If you have any questions or problems with this transmission,
please call (202) 728-1100
FAX NUMBER (202) 728-1123
2100 PENNSYLVANIA AVENUE, N.W., SUITE 500, WASHINGTON, D.C. 20037
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FAX (202) 728-1123
FEB 27 '97 031 59PM
FEB
RICHARD A. GEPHARDT
H-204 U.S. CAPITOL
203-225-0103
MISSOURI
DEMOCRATIC LEADER
Congress of the United States
House of Representatives
Office of the Democratic Keaber
USlasbington, BC 20515-6537
February 26, 1996
Dear Democratic Colleague:
Shortly, President Clinton is expected to request that Congress grant new fast track trade
negotiating authority. I am writing to seek your support for a forward looking agenda that will
ensure that future trade agreements promote progress in living standards, environment and
human rights here in the U.S. and around the globe.
This is an important topic. Article One, Section Eight of our Constitution vests exclusive
authority over international commerce in the legislative branch. In recent years, Congress has
delegated more authority to the Executive Branch as our trade negotiating agenda has expanded
beyond tariff and quotas issues.
However. delegating trade negotiating authority should not be an abdication of the
important role that Congress has in this matter. The Constitution demands, and the American
people - our constituents - expect that we will fight for their rights and interests in all venues.
Any delegation of legislative authority over international trade that occurs should be based on a
complete and thorough debate of the issues and a positive grant of authority.
In my view, the broad delegation of legislative authority involved in fast track isn't a
privilege to be granted lightly: it has to be earned.
Need to
In 1991, I supported President Bush's request for fast track authority because I believed,
lawy
as I do now. that we should seek to expand trade. We can't shy away from the world trading
Exports support millions of jobs here in the U.S. We've got to continue our efforts to
foreign markets to ensure that American farmers, workers and businesses will have the
Discuss
opportunity to sell their competitive products abroad.
However, focusing on exports alone fails to recognize that our nation's trade deficit has
reached historic levels fueled by an increasing flood of Imports. Too many ideologues of the old
status quo are not willing to address the impact of imports. The fact is that imports are having a
tremendous impact on U.S. jobs and living standards. Last year. our nation's trade deficit
reached a new record with a $166.6 billion deficit in goods. Many Americans see themselves as
victims rather than beneficiaries, of recent trade agreements.
As well. many of our nation's corporations are using the prossure of international
competition and the threat of moving jobs out of our country to limit wage and salary increases
and as a tool in fighting union organization efforts. During the debate over NAFTA, a Wall
Street Journal poll of executives found that a majority of executives from large companies
intended to shift some production to Mexico and that a large number intended to use NAFTA "as
a bargaining chip to kcep down wages in the U.S." This trend continues: A recent survey
provided to the U.S. Department of Labor found that in more than half of union organizing drives
the threat of moving jobs to Mexico or closing plants was used to limit organizing success.
FEB 27 '97 04:00PM
P.3/13
February 26, 1997
Page 2
We must not negotiate away our jobs and our living standard based on outdated theories and
assumptions about trade and international economics. Defenders of the status quo seek to define
the debate on trade as being about either protectionism or free trade. Labels denigrate the debate
and short-sell the interests of our people. What's needed is an honest debate about the real issue.
We need a debate about the facts and our future, not motives and past theories.
The debate should be about how we continue the process of economic integration in a way
that is truly a force for progress for all involved. We must continue to provide U.S. leadership
without selling out average Americans who work hard, play by the rules and simply want a fair
chance to succeed.
We must be unwilling to compromise or negotiate away the economic interests of our
people. According to a recent survey, the public is growing increasingly frustrated with trade
treatics and agreements which a majority believes are sacrificing our jobs, opportunity and
economic future based on elite establishment projections that, in the long term, we'll all be better
off. Used in this way, the long-term is simply a debating point: a point in time that may never come.
The primary focus of the current debate over fast track negotiating authority is the goal of
expanding the North American Free Trade Agreement (NAFTA) first to Chile and, ultimately,
throughout all of South and Central America.
During the debate over NAFTA. I traveled around my District and across the U.S. talking to
farmers, workers and businesspeople to understand what competitive pressures faced our country. I
visited Mexico several times to see for myself what was happening on the ground. I flew to the U.S.
side of the border and drove across unannounced so that I could get an unvarnished view. I talked to
hundreds of average people. I walked through scenes of environmental and health devastation. I
knocked on the doors of many companies asking to see and understand their operations. I didn't
want to rely simply on statistics or theories. I wanted to really understand what was necessary for
everyone to benefit.
I supported fast track in 1991 because I believe that we needed a NAFTA. We can't ignore
Mexico. Closing off our borders isn't an option. The question then, and now, is how do we make
NAFTA a real force for progress. How do we ensure that an agreement promotes, not undermines
living standards, health and safety for all our people. I believed that it was in the deep self-interest
of the U.S. to reach an agreement that addressed the issues in a way that would promote
fundamental, long-term change.
Recently David Bonior and I had the opportunity to visit Mexico to review first hand the
results of NAFTA. Rather than improving conditions, the NAFTA has validated Mexico's system
of labor relations, wage setting mechanisms and environmental enforcement that has damaged the
standard of living, health and safety of the Mexican people. We saw 21" century technology
combined with 19th century living and working conditions. The wages and living conditions of
our
response
average hard-working Mexicans haven't improved. They've declined. Real manufacturing wages
are now 25% lower than they were when NAFTA began.
FEB 27 '97 04:00PM
P.4/13
February 26. 1997
Page 3
Since 1980. real manufacturing wages have dropped by about 50%. Everyone clearly agrees
that real wage declines have accelerated due to the peso crisis. However, it's important to recognize
that real wages were stagnating prior to the peso crisis while at the same time worker productivity
continued to grow. Workers simply aren't being compensated in relation to their efforts. The peso
crisis exacerbated the real wage declines but the problem of inadequate compensation has much
deeper roots in the Mexican economic and legal system.
There has been a tremendous increase in the number of maquiladora plants and an almost
50% increase in the maquiladora work force along the border since NAFTA began - plants that are
almost exclusively created to send their exports into the U.S. During the 1993 debate on NAFTA's
passage, proponents in Mexico and the United States said that NAFTA would eliminate the
incentive to create maquiladoras. Investment in maquiladoras in the state of Baja California has
surged by more than 35% over the past year alone. Since the start of NAFTA, hundreds of
thousands of jobs have been shifted to maquiladora plants. These jobs pay wages on which it's
almost impossible to raise a family. We met family after family who said that they simply couldn't
make ends meet - a gallon of milk costs almost three hours of wages. One mother told me her
children were lucky if they got to drink milk once a week. Almost everyone in the family is forced
to work simply to get by.
Mexican workers are viewed simply as producers, not consumers. Many of the
maquiladoras experience turnover rates of 100% or more. As wage increases are virtually
nonexistent, workers have little recourse - many act like economic nomads going from plant to
plant hoping for the slightest advantage to survive. Some return home. Many decide that the only
ticket to a better life is to cross the border into the U.S. No one can live on much more than a
survival basis working in these plants.
We drove by industrial parks where the companies continue to dump their toxic wastes at
night into the rivers where people bathe. We saw furniture plants using highly toxic solvents and
finishes that once operated in California and throughout the U.S. which had moved to Mexico
because, as the General Accounting Office pointed out, of lax environmental enforcement. We
revisited an abandoned lead recycling facility that I had visited on an earlier trip to the area. Tarps
now covered the huge mounds of waste, yet nothing has been done to really clean up the site. Just
feet away a dairy farm continues to operate. The milk from these cows is drunk by the kids in the
area - those that can afford it. High blood levels of lead continue to plague the surrounding
communities.
Not only have things not improved in the border area, but since NAFTA they've gotten
worse. The only positive sign for me was that the Mexican people continue to have hope. They are
proud people who simply want a chance to provide for themselves and their families. While the
border is only miles away, and it beckons far too many people, most want to stay in Mexico because
they love their country. Yet. many find that the pressures of daily life along the border and
throughout the country are too great. Countless people continue to cross the border into the U.S.
every day with the hope of a better life.
FEB 27 '97 04:01PM
P.5/13
February 26, 1997
Page 4
Some are pointing to the fact that we need to recognize the Impact that the peso crisis has
had in Mexico. I agree that the impact has been devastating. But, the negative trends under
NAFTA in our trade balance and in real wages for Mexican workers were in place before the peso
crisis hit. Months before the December 1994 peso crash, the U.S. trade surplus with Mexico had
already turned into a monthly deficit. And, as I wrote to the President before the peso crisis
occurred, the crisis was foresecable. I warned, as many others did, about the overvalued peso and
the threat to our economy that would result If the issue was not dealt with during the negotiations.
Some are also highlighting the repayment of the billions of dollars in loans that we made to
Mexico as part of the peso bailout as & real sign of success. Clearly. we're all pleased that Mexico
has refinanced these loans. But let's recognize that Mexico has repaid this loan in two ways. First,
they've shifted some of their borrowing to other countries. Second, we ran a more than $16 billion
trade deficit with Mexico last year alone and have amassed more than $33.6 billion in trade deficits
our
with Mexico since the peso crisis began. In other words, many American workers have repaid
Arswer
Mexico's loans with their jobs and living standard.
As I said, I supported President Bush's request because I believed that we should seek to
Dick G
negotiate new trade agreements that expand opportunity. I spent several months negotiating with
position
President Bush and his Administration about what our objectives should be. I believed then, as I
believe now, that President Kennedy was right when he said in his first inaugural address: "Let us
The
never negotiate out of fear, but let us never fear to negotiate." I'm confident that if we understand
right hosh of
and fight for our objectives, we can reach good new agreements.
Agreements
But there is a key difference between the debate in 1991 and today. In 1991 we were dealing
with abstract ideas. Now we have had three years of real life experience under a specific set of rules
embodied in the NAFTA. I believe that it would be a fundamental mistake to simply extend the
current NAFTA. It simply isn't working.
Why isn't NAFTA working?
The single biggest flaw in the NAFTA was its failure to adequately address industrial
relations the right to strike, the right to organize and the right to freely associate. We've seen
clearly that the failure to adequately enforce such core labor laws in Mexico means that Mexican
wages have failed to rise. Nationally, wages are basically capped under the agreement known as "El
Pacto." Additionally, as numerous workers in Tijuana told David Bonior and me recently. the
maquiladora owners also privately set minimum and maximum wages so that they don't compete
for workers on this basis.
While U.S. businesses were able to demand a provision in the NAFTA that requires that
Mexico enforce it's intellectual property laws, and is able to use trade sanctions, criminal penalties
and impoundment of goods to enforce these measures, there is no similar provision for enforcement
of Mexico's labor laws or, for that matter, Mexico's environmental laws. Thus, if Mexico's failure
to enforce it's labor laws results in Mexican worker wages being held down and their rights
abrogated, there is little that we can do other than complain. So far, the few complaints that have
been brought under the labor side agreement have made little or no impact.
FEB 27 '97 04:02PM
P.6/13
February 26, 1997
Page 5
Five cases concerning Mexico have been brought under the labor side agreement for labor
violations in Mexico. As a result of these cases, no union has been recognized in Mexico. There
has been no noticeable change on the ground. Take for example the cases at General Electric in
Ciudad Juarez or Honeywell in Chihuahua where workers were fired trying to organize independent
unions. Those unions remain unrecognized. Those workers have not been reinstated.
The workers that David and I talked to told stories very similar to the ones we heard during
the NAFTA negotiations. Worker after worker told us how there was no ability to try and fight for
better working conditions. If you complained, you were fired. Many told how the maquiladora
owners kept lists of "problem" employees who were blacklisted because of their complaints. Many
are arrested for their activities on trumped up charges.
Several workers told us they didn't oven know if there was a union contract or, if there was,
they had no idea who their union representative was. The union was a sham, but there wasn't
anything they could do about it.
If we don't have an effective way of addressing this problem, Mexican workers aren't going
our
to get a fair deal. They won't be fairly compensated for their hard work. We won't create and
response
expand the middle class that can buy our products and alleviate the downward pressure on our
people's wages. Labor rights is a trade issue. It has an impact on Mexican workers and our
workers. The only truly effective way of dealing with this issue is being able to resort to trade
sanctions if all else fails.
I
don't
The promise of NAFTA was to be greater opportunity and increased standards of living in
all three countries. That has not been the case. If Mexican workers can't bargain for higher wages,
Agree
they won't expand the middle class that can purchase U.S. products. Indeed, since NAFTA, the
But
our
percentage of Mexicans considered "extremely poor" rose from 31% in 1993 to 50% in 1996. Two
out of three Mexicans now report that their personal economic situation is worse than before
Nswa
NAFTA. And, the downward pressure on our wages will continue.
As we seek to ensure adequate enforcement of labor laws, we need to seriously examine the
need to provide for cross-border organizational rights for our labor organizations. Because of
government dominated labor movements, coercion, and inadequate enforcement structures, it may
be that the situation could be materially improved through the assistance of U.S. or other
international labor organizations. As our businesses are able to form new alliances and have access
to the enforcement process, our labor unions should have the same rights as well.
In the area of the environment, the increase in post-NAFTA border production has increased
our
the border population and industrial and toxic emissions and waste. Yet, the promised
improvements to the existing serious border health and environmental damage have not occurred.
siswers
The NAFTA environmental side agreement is simply inadequate to the task.
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Page 6
To date, less than a handful of projects have been approved for funding by the NADBank
and through the BECC. While projects have languished before these organizations, the health and
safety of people on both sides of the border deteriorates. These organizations must begin to really
fulfill their intended purpose and focus on the needs of the people live on and near the border - not
just companies that are seeking to have their costs underwritten and defrayed by public funds.
We also need to be able to fully understand the potential impact of future trade-agreements
on the world's environment. We must carefully balance economic development and environmental
protection. To do this, we must have complete environmental impact statements conducted as
negotiations proceed.
I am unwilling to support new trade negotiations that do not address these fundamental flaws
by including labor rights and the environment as chapters in the core of the agreement equal in
stature and force and linked to provisions on investment and trade. And, such labor and
environmental provisions must be fully enforceable with access to trade sanctions where necessary.
Access to the enforcement process for average citizens and non-governmental organizations must be
provided. Transparency throughout the process must also be assured.
These issues must not be covered in separate side agreements that can later be rejected by the
Republicans, but as integral parts of the agreement itself. For me, this is not negotiable. Trade,
labor and the environment are inextricably intertwined. Trade agreements should not become
vehicles to undermine progress in these important areas.
Scope of authority
Over the past four years we have signed more than 200 new trade agreements - NAFTA
and the GATT among them. While I support expanding our export opportunities and enhancing the
rules of trade, I do not believe that a case has yet been made for broad fast track authority.
Last year I joined with then Secretary of Commerce Kantor and Senator Hollings in calling
for dramatically expanded trade monitoring and enforcement capabilities. It was my:belief - and
continues to be my belief - that we should seck to capitalize on and learn from existing trade
agreements before we haphazardly seek to engage in new negotiations simply for the sake of
negotiating.
In the first six months of its operation the trade monitoring and enforcement unit at the
Department of Commerce has already begun to root out substantial problems in the carrying out of
our trade policy. I commend the Department for its attention to this area. It would be unwise to
proceed in new areas before we understand what has and hasn't worked.
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Accordingly, I believe that we should limit any grant of fast track authority - if the issues
that I have raised are addressed - to bilateral negotiations with Chile or to remedy the flaws in the
NAFTA before we proceed on any accession agreements. Indeed, our former colleague Bill
Richardson, now serving as U.S. Ambassador to the United Nations, and I introduced Chile-only
fast track legislation in 1994. While the legislative language is out-of-date, the approach of moving
forward only with Chile, with significant changes from the 1994 NAFTA, should be the basis for
any new trade negotiating authority. This proposal, and one I made later that year, provided trade
negotiating authority while including significant procedural safeguards to protect Congress'
interests.
1 have been frustrated by the Administration's reluctance to provide factual analysis on our
trade agreements and ongoing negotiations. Let me give you a few examples. Authority is being
requested to expand NAFTA even before the congressionally-mandated July 1997 review is
complete. I requested that the International Trade Commission do an analysis of the potential
impact of allowing China to join the World Trade Organization. The ITC refused this request. As
well, I requested that the USTR endorse my request, as provided for under current law, to force the
ITC into acting. My understanding is that the USTR wants to limit the scope of the ITC's
examination of these issues. Our Department of Labor has not released the survey it commissioned,
which I mentioned earlier, that shows how companies are using the threat of moving jobs out of the
country to limit union organizing success. There are many other areas where the debate is not being
joined or is being stifled.
A case has not been made for providing trade negotiating authority in an open-ended way.
That would be an overly broad delegation of Congressional power. Let's review where we are.
what's been accomplished, and what needs to be accomplished before we provide broad trade
negotiating authority. I believe that there will be broad bipartisan support on this point.
Upward Harmonization:
Our first step in reaching new trade agreements must be to require that all signatories enforce
their basic laws. We should expect that as we engage in negotiations, the rule of law that a country
has on its books - in its Constitution, statutory and regulatory manifestations - be fully enforced.
But this is the starting point, not the end, of our efforts. I commended the Mexicans during
the negotiations for many of the laws that they have had on their books - especially those
represented in Article 123 of their Constitution pertaining to basic labor rights. The first and most
fundamental problem we faced, and continue to face, with Mexico is inadequate enforcement.
FEB 27 '97 04:03PM
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Chile, on the other hand, has not made similar progress in terms of its basic body of labor
laws. While Chile's efforts at democratic and political reform deserve our recognition and support,
Chile's progress in advancing labor rights has fallen short of the mark. The labor law put in place
during the Pinochet dictatorship remains in effect, thwarting organizing efforts. Large groups of
Chilean workers are effectively barred from being able to engage in collective bargaining: rural,
forestry, construction, and fisheries workers. Where the Chilean labor law even allows contracts to
be collectively negotiated, they are limited in scope to plant or enterprise bargaining with a ban on
industry-wide organizing.
It's important to recognize that President Frei's government has offered a number of
important labor law reforms that would improve Chile's legal foundation. But these reforms have
been blocked by business interests and the Pinochet faction in the Chilean Senate. A precondition
for reaching an agreement with Chile should be the passage of these and other reforms. As we have
demanded that other countries improve their intellectual property protection laws prior to entering
into agreements with them. we should require the same approach with regard to labor laws.
There also are improvements necessary in Chile's environmental laws. The most glaring
problem is that regulations have yet to be issued to implement Chile's 1994 environmental law. In a
resource rich economy where four categories of natural resources - agriculture. forestry, fisheries,
and mining - comprise 80% of all exports, this is a fundamental problem.
Clearly Chile has made great strides in advancing democracy - strides that I and many
others applaud. We need to work towards further enhancing and deepening the progress that has
been made. We have the opportunity to reach a good agreement with Chile. But, before we sit
down at the bargaining table, we have an obligation to consider what a "good agreement" really
means. And we have a right to say to the people of Chile: we'll start a new trade partnership - but
not if it means trading away our values. Not if it means lowering our labor and environmental
standards or standard of living, instead of raising yours.
Let's recognize that what we're talking about is comprehensive economic integration
between our countries: This is more comprehensive than the average trade agreement which simply
don't address these important issues. We're talking about a form of economic marriage. As such,
we can, and must, expect to have a comprehensive discussion of these issues. If the agreement is to
be a force for progress, it must address more than minimal standards. It has to ensure that the
opportunity growth and economic advancement are possible. If we limit the debate by failing to
address all the important issues we put our people's standard of living at risk.
During the NAFTA negotiations I and many others were told that we would be able to
change the agreement once it had been signed into law. We were told that a process existed that
would allow for negotiation and renegotiation of various changes.
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This was essentially a false promise. The ability to achieve results exists during the
negotiating phase - not afterwards when our negotiating leverage has been lost. Rather than set an
arbitrary deadline for completing negotiations, or being willing to accept a less than desirable result,
we should remain at the negotiating table, or be willing to leave that table, if our national interests
aren't furthered by the text of the agreement.
But in addition to the changes that should be made as part of any agreement, we need to
recognize that further upward harmonization is necessary in labor and the environment and other
important areas. We need to find a process that will ensure further progress, over time. A process
that ties further trade liberalization — possibly within the context of the agreement - to other
important improvements would further our interests in these vital areas.
Monetary Flows:
I pointed out earlier that I and others had raised during the NAFTA debate the threat that a.
devaluation of Mexico's peso could have on the U.S. and on the potential benefits that could result
from any trade agreement with Mexico. Terms to counter major current fluctuations is an
appropriate area for negotiation as part of any trade agreement.
During the peso crisis Administration officials pointed out the contagious effect that
Mexico's problems could have on world financial markets. They pointed out that currencies and
markets around the globe - from the Thai baht to the Italian lire - were effected. The bipartisan
leadership on both sides of the Capitol supported the President's call for action.
But that call for action might have been avoided had we been aggressive with Mexico in
addressing their economic policies during the course of the NAFTA debate. We must not allow
this mistake to be made again. Congress' reluctance to support the peso bailout was a harbinger of
future reluctance. The international financial system is not yet fully equipped to deal with a similar
threat in the future. New trade agreements must address the issue of capital flight and currency
stability.
Why must certain Issues be covered in the core of the agreement
Coverage of labor and environmental issues must be included as a chapter in the core
agreement, rather than included as side agreements as was donc in NAFTA. Given the expansion of
the impact of trade disciplines into the realm of domestic standards, coverage of labor and
environmental issues is now as important to the success of a trade agreement as "traditional" trade
issues.
A number of Republican members have indicated that they are willing to allow the
commercial components of a trade agreement to be considered under fast track, but that other issues
- labor and the environment and possibly others - might be subject to amendment. We cannot
allow for some issues to be considered under procedural rules favoring passage and others under
more cumbersome procedures. These Republicans want to try to delink labor and environmental
issues from the trade agreement. This is simply unacceptable.
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It's important to understand that any changes to the core agreement would require
symmetrical changes in other countries. If we were to accept coverage of labor and environment
and other issues under side agreements and these provisions were not agreed to by either the U.S. or
other countries, the core of the agreement could still stand. Only by including these issues in the
core of the agreement can we ensure that they will either be part of the law, or the entire agreement
will fall. The rules of the game must be as fair and effective for our workers as for our patents.
Human Rights - Rule of Law
The adequate protection of human rights should be a basic standard we apply to our trade
relations with any country. Our basic values and interests should not be auctioned off to the highest
bidder. The moral leadership of the United States has acted to promote change around the globe.
We must not debase this basic interest.
It's also important to understand that advocacy of human rights promotes, not undermines,
our economic interests. A country that does not protect human rights does not afford its people the
ability to demand fair compensation for their efforts. The result is that we fail to lift up the standard
of living of people in other countries. This means that we are not expanding the class of consumers
who can purchase our exports and we are putting downward pressure on our living standard simply
to compete.
Our business community also needs to understand that promotion of human rights is a
question of the rule of law. A country that fails to enforce its laws in this important area may refuse
to adequately enforce its laws that protect our business interests as well. We have clearly seen this
in China where the disdain for the basic rule of law as it relates to human rights has a parallel in
China's failure to adequately protect intellectual property, failure to adequately abide by its market
access commitments and its failure to follow the rule of law in many other areas.
Trade in narcotics
I believe that we must address narcotics flows as part of any future trade negotiations. As
we seek to enhance the flow of goods and services through casier access between and among our
trading partners, we must recognize the risk of increased drug trafficking. As we ease the way for
products to come to our shores, we increase the ability of drug traffickers to take advantage of
relaxed customs procedures.
It's appropriate and, indeed, vital that we address this issue as part of our trade negotiations.
Failure to aggressively address this issue will undermine our ability to stem the flow of drugs.
We've already seen the impact of the failure to address this issue as part of the NAFTA. Estimates
indicate a dramatic rise in the drug trade with Mexico.
Clearly enhancing economic opportunity in other countries through greater trade will help to
ease the pressure on the population to engage in drug production and trafficking as growth and
opportunity rise. But it would be naive to believe that this will occur quickly and that there will be a
wholesale replacement of the financial benefits in the drug trade.
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Drug use by our nation's children is on the rise. While we must do all that we can to reduce
the demand for drugs here in this country, we must also take advantage of every opportunity to
reduce the supply of drugs. This is not a problem to be swept under the rug.
Transition
The American people know that our future lies in expanding economic engagement, not
shying away from it. Given fair trade rules, American farmers, workers and businesses can out
compete anyone.
But even with further economic integration under fair rules, we've got to recognize that there
will be a price to pay for some Americans. While observers focus on the big winners, as elected
public officials, we've got to focus on making ordinary people winners as well.
During the NAFTA debate I argued strenuously on this point. On two occasions I invited
officials from the European Union to meet with me and other members of the Democratic Caucus to
learn how they had addressed the integration of Spain, Portugal and Greece into the EU. To this
day, the EU continues to focus on structural adjustment issues as a vital public policy issue. Since
the integration of these countries into the EU, well over $100 billion has been spent on integration
efforts. The leaders understood the need to seriously address the impact of integration and address
any dislocation or disruption in the economy. Clearly, any program we look at would, at best, only
spend a fraction of this amount, but it's clear that we just haven't been serious about this issue. We
need to have a comprehensive debate about this issue.
To date, over 109,000 people have been certified for NAFTA Trade Adjustment Assistance
benefits. Many, many more were disqualified because of the difficulty in qualifying for assistance.
And, many others never applied because of inadequate information or understanding about the
current program. And, the program needs to be expanded to increase individual eligibility and to
cover firms that need assistance as well. Employees should not have to relocate themselves and
their families because their firm and community has been adversely affected - we should also find
ways of helping firms shift their focus to new product lines and ondeavors so that we prepare for
change, rather than protect against it.
In the past, transition assistance here in the U.S. has been an afterthought rather than an
integral part of our trade policy formulation. This is a fundamental mistake. If we are to build
public support for further trade expansion efforts we've got to seriously address this issue.
I believe that now is the time for a comprehensive trade adjustment assistance program to be
put in place that will provide the foundation for any future trade expansion efforts. We must not
allow future trade agreements to proceed without an adequate transition program being adopted that
is directly linked to the consideration of the trade agreement in Congress.
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Page 12
Foreign Corrupt Practices
At the Miami Summit of the Americas in December, 1994 the issue of foreign corruption
was highlighted. Former Commerce Secretary Mickey Kantor spent a great deal of effort
highlighting this issue and secking to promote positive solutions.
Across the globe U.S. business interests are prohibited from offering bribes or engaging in
other corrupt practices, rightfully so, to expand their business interests. Rather than handcuffing our
businesspeople as they seek to do business, we need to aggressively seek ways to rein in foreign
corrupt practices that seek to pit one business against another to win a contract. Future trade
agreements must seek to address this issue.
Length of authority
If trade negoriating authority is to be granted, it will essentially be a contract with President
Clinton as to what powers and authority are delegated to him and his administration by Congress.
While I believe that this grant should be as specific as possible, we must recognize that the authority
will also depend on the intent and beliefs of the President.
Accordingly, I believe that Congress should be extremely reluctant to grant fast track
authority beyond the current term of the President. Each President should have to make his or her
case to the Congress and the American people as to how the authority is to be used.
Conclusion
I know that this letter is long, but the issues are important and complex. And, believe it or
not, there are many other trade-related issues that demand attention - the treatment of indigenous
peoples, and money laundering to name just two.
We need to have an engaged national debate on these issues in the country, not limit them to
the back rooms in Congress. I hope that you will join with me in this debate so that we can ensure
that future trade agreements enhance opportunity for all our people.
We must not be bound by arbitrary deadlines or the threat of lost opportunities. The United
States is still the most open market in the world. And, it is the most desirable consumer market.
We should be willing to use the leverage of access to our market to ensure that the rights and
interests of our farmers. workers, businesses, public health and the environment are advanced, not
undermined, by economic integration. I'm confident that an open, honest debate can yield positive
results here at home and around the world.
Sincerely,
Did Gesharder
Richard A. Gephardt
House Democratic Leader
Bob-bank I Need to m.p discuss
The Washington Times
pase
OMMENTARY
Need to discuss
122 Nolyze
PATRICK BUCHANAN
he U.S. government this
T
week will release final trade
figures for 1996. Before they
Economic winners and losers
disappear into the Cuisi-
narts of the spin doctors, Ameri-
workers that the Asian economies
cans would do well to focus on what
are riding so high. U.S. lobbyists for
they portend.
Asian interests have done their
Since 1992, exports have indeed
work well. Last year, our merchan-
grown, as President Clinton boasts,
dise trade deficit with all of East
by 6 percent a year. But imports
Asia was $115 billion, a net trans-
have exploded by more than 9 per-
fer of U.S. jobs, factories and wealth
cent a year. In 1996, the U.S. mer-
equal to the gross national product
chandise trade deficit hit $170 bil-
of many foreign countries.
lion, perhaps the largest wealth
America's elites have not gone
transfer in history. Under Mr. Clin-
unrewarded for the sellout of our
ton's trade policy, the U.S. deficit in
working people. Corporate profits
goods has more than doubled!
are soaring; the stock market is
Big winner: China. In 1996,
booming; the 401k pension plans
China's merchandise trade surplus
TRADE
are flush; and America's downsized
with the United States hit $41 bil-
DEFICIT
companies run the laggards of
lion, second only to Japan's $47 bil-
Europe off the road.
lion. What will the Chinese be buy-
How did America's companies
ing with that hoard of dollars?
become the most competitive? By
A September story in Defense
ceasing to be so "American," by
News - "France Opens Arsenal
becoming "global companies." By
Door for Chinese" - reports that a
equals 20,000 jobs, as Mr. Clinton
ran a graph titled, "End of a
closing down plants and factories in
32-man Chinese delegation was in
claims, U.S. workers last year lost
Drought?" It was based on real
the United States, getting rid of
Paris shopping for air-to-air missile
340,000 production jobs to Mexico.
hourly wages paid to U.S. workers
those high-paid American workers
and submarine technology. Said
Included in those "exports" to
in private industry and contained
and siting new plants overseas,
one expert, there have been
Mexico is machinery for the new
dramatic news: In 1996, the real
where labor is productive, inex-
reports, "that France has already
plants being opened there at the
wages of U.S. workers rose to the
pensive, appreciative and docile.
provided some systems for China's
rate of two a day, as factories are
same level they were at - in 1965!
The success of the new transna-
new Song-class submarines, and
being closed and shuttered in the
In 1996, real wages were $11.98
tional companies has been paid for
submarine technology is near the
United States.
an hour, almost $2 below the $13.78
by the shrinkage of the U.S. manu-
top of China's shopping list."
The combined U.S. trade deficit
per hour of 1973, America's best
facturing labor force, the ripping
Whose Pacific fleet do-you sup-
with NAFTA partners Mexico and
year. That year was about the same
up of the old social contract and the
pose those Chinese submarines will
Canada is now $40.5 billion - with
time America's traditional trade
compression in wages.
be tracking and targeting? Rick
$21 billion of that deficit in "road
surpluses began to vanish and our
In Europe, they are paying in
Fisher, an analyst at the Heritage
vehicles." Watching United Auto
enormous trade deficits began to
record unemployment. Unemploy-
Foundation, was quoted, "European
Workers officials work to re-elect
appear.
ment is nearly 12 percent in France
aircraft and ships will never be put
Bill Clinton was like watching chick-
Let it be said directly: Between
and Germany. The last time it was
at risk in a future Asian conflict
ens work on a fund-raiser for Frank
the collapse of U.S. wages and the
that high in Germany - 1933.
with China. But European-derived
Perdue.
booming prosperity of Asia, the cor-
The great game of "Global Econ-
weapons could conceivably be
A new winner in the trade statis-
relation is absolute.
omy" will continue, until the losers
aimed at Americans."
tics: Indonesia. In 1996, the U.S. mer-
American workers can thank the
come to understand that it is a fixed
Runner up in the trade lottery:
chandise trade deficit with Jakarta
cheerleaders of the "global econo-
game they cannot win.
Mexico.
was $4.6 billion, triple what it was
my" and the champions of "global
Then, the table will be upended.
In 1992, America ran a $5 billion
when Mr. Clinton took office. The
free trade" for the fact that they
trade surplus in goods with Mexico.
Riadys, Mochtar and James, made a
make 13 percent less than what
In 1996, post-NAFTA, we had a $17
wise investment in Bill Clinton.
their fathers did. It is upon the
Patrick Buchanan is a national-
billion deficit. If $1 billion in exports
Last week, the New York Times
backs of America's manufacturing
ly syndicated columnist.
PHOTOCOPY
PRESERVATION
Examples Side the
FROM
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other
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RAINMAKER & ASSOCIATES
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PHONE NO.
THE TIMES, GAINESVILLE, GEORGIA
MONDAY, FEBRUARY 24, 1997
NAFTA headed back to Congress
TS66 505 022
critics aren't on Capitol
Nathan
longer profitable, GE was
push the North American
what have we lost anc
Deal 'undecided'
Hill. They're the thou-
Deal
shutting it down and mov-
Free Trade Agreement
what our projection:
sands of Americans
ing the work to Monte-
through Congress. The
are," Deal said.
on including Chile
Said review
whose jobs have gone
rrey, Mexico.
1997 replay promises an
Opponents have armed
south to Mexico.
of NAFTA
"They put us out to pas-
even tougher fight.
themselves with statistic
should
From staff, wire reports
The question on a new
ture because we were
U.S. Rep. Nathan Deal,
showing swollen trad.
look at
NAFTA is whether Con-
making $15 hourly wages
a Lula Republican who
deficits with Mexico and
Including Chile under
gress will listen to Ed-
what jobs
Canada since NAFTA'
and They could get the
voted for NAFTA when it
Feb.
NAFTA could be a step
uardo Frei, its Chilean
gained and
work done in Mexico for
passed in 1993, said Sun-
birth.
toward creating a West-
lost
guest this week, or to
day he hasn't made a de-
Clinton blames factor
83 cents an hour," Hefner
ern hemisphere free-
unrelated to NAFTA. H 26
folks like Gary Hefner,
said.
cision on expanding
trade zone. And the Clin-
unemployed American.
electric transformers to
Opponents of free trade
NAFTA to include Chile.
argues that unless Con,
ton administration is
Hefner was laid off last
power America.
have made similar
"I'd be reluctant to in-
gress quickly renews hi 1997
counting on Chile's presi-
authority to expan-
dent to push Congress in
month after a 30-year ca-
Last year, Heiner and
charges since President
clude Chile until we get
NAFTA, the Unite.
that direction.
reer at a General Electric
300 co-workers received
Clinton went against la
more statistics on NAFTA
States risks losing t
plant in Hickory, N.C. For
notice: Operating the
bor unions and many in
in its current state. What
European and Asian con
But the idea's harshest
40 years, the plant made
Hickory factory was no
his own party in 1993 to
jobs have we gained,
petitors.
P2