TRADING PRIORITIES September 10, 1997 TRANSCRIPT

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The President has asked the Congress to grant him so-called "Fast Track" authority to negotiate new trade deals with other countries. The authority would limit Congress' ability to amend the traety and only allow an up or down vote. Following a background report on the growing debate, Margaret Warner discusses the proposal with House Minority Whip David Bonior (D-MI) and Congressman Jim Kolbe (R-AZ).

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A RealAudio version of this segment is available. NEWSHOUR LINKS: July 11, 1997 Will NAFTA have a positive impact on the U.S. economy? May 6, 1997 The governor of Tlaxcala, Mexico talks about how NAFTA is affecting his area. February 26, 1997 Charles Krouse examines the effects of NAFTA on Chile's economy. December 13, 1996: Shields & Gigot discuss the President's stance on NAFTA. February 21, 1996: Trade experts discuss the effects of NAFTA.

MARGARET WARNER: The President chose the historic White House East room today to kick off his campaign for one of the top items on his fall agenda.

PRESIDENT CLINTON: I'm asking the Congress to renew the President's traditional authority to negotiate trade deals, to open more American markets for goods and services from our country, and to restore the partnership between the Congress and the President in the trade arena necessary to keep our economy strong. The global economy is on a very fast track to the 21st century. The question is whether we are going to lead the way, or follow. This is not the time to shrink from the future. This is the time to lead to the future.

MARGARET WARNER: The President is seeking so-called "fast track" authority that would free him to negotiate trade agreements with foreign countries without fear that Congress would reopen those agreements afterwards. Congress would have 90 days to accept or reject an accord but no power to amend it. Administration officials say that without fast track authority, they won't have the credibility and flexibility they need to succeed at the negotiating table.

PRESIDENT CLINTON: If we don't have this authority, we will leave the field to our competitors to break down more trade barriers for their own products at our expense. Since 1992 in Latin America and Asia alone, our competitors have negotiated over 20 agreements that don't include the United States.

MARGARET WARNER: American presidents enjoyed fast-track negotiating authority for 20 years, until the legislative authorization for it expired in 1994. During those 20 years, administrations negotiated a series of major agreements to reduce tariffs and other trade barriers. They included the 1992 North American Free trade agreement among the U.S., Mexico, and Canada, and, in 1994, a set of worldwide tariff reductions under the General Agreement On Tariffs & Trade, or GATT. Now, the President would like to expand NAFTA to include Chile, and he also wants to explore negotiating other free trade areas in the hemisphere and beyond.

But Mr. Clinton faces some fierce opposition, primarily from the same forces that fought NAFTA three years ago. Among the host vociferous opponents are labor and environmental groups. They fault NAFTA and other recent trade agreements, for not requiring America's trading partners to raise wages and environmental safeguards to levels closer to those of the U.S.. Labor and consumers activists held a rally in front of the White House today to protest the President's bid for fast-track renewal. And several leaders of the President's own party in Congress , including House Minority Leader Richard Gephardt, held a news conference this afternoon to air their objections. The President said he was sensitive to labor and environmental concerns. But the White House has not released the wording of its proposed fast-track bill.

Why does the President need fast track authority.

MARGARET WARNER: Now, two members of Congress--Democratic House Whip David Bonior of Michigan, Republican Jim Kolbe of Arizona. Congressman Kolbe, be a little more specific than the President was today. Why does a President need this fast-track authority to negotiate them without it?

REP. JIM KOLBE, (R) Arizona: Well, he can go in and negotiate it without it, but the problem is if he does that, what happens is what happened last year to the shipbuilding proposal and gets picked apart in Congress with amendments and so forth, and then you have no agreement. You have to go back to your people that you negotiated with. It's like any negotiation. They want to know that when they negotiate it what's done when the deal is done it's done, and it's going to be signed or not signed by Congress or approved or not approved by Congress. That's why the President has to have this fast-track authority. No country is going to enter serious trade negotiations without it.

MARGARET WARNER: Do you agree with that basic point?

REP. DAVID BONIOR, (D) Michigan: I do not. The President likes to argue and say that he's conducted 200 trade deals since this administration. If you look at those trade deals, only two of them have been done under fast track. And that was a jab in the NAFTA deal that we just saw. I think there's not credibility in the argument that the other side won't negotiate with us if we don't have that authority to do the deal under a fast track provision because we have, indeed, the biggest, the best market in the world. Everybody wants into our market today. And the fact that the President and his administration has done 200 deals, 198, without fast track, indicates that.

REP. JIM KOLBE: But the difference is that most of those do not require legislation. Almost all of them didn't require legislation. If it requires legislation, which is what we're talking about here, with an extension of NAFTA, or if we're talking about the agricultural negotiations critical to the United States, which are to take place in 1999, the intellectual property negotiations, the things on computer technology software, all of those things, legislation is required. That's what--if you don't have fast track, it gets picked apart.

Democratic opposition.

MARGARET WARNER: Let me go on now to you at the press conference with Mr. Gephardt. What is it exactly that you all want?

REP. DAVID BONIOR: This isn't really a question about trading. Everyone understands the need for expanding trade. It's a very important part of our international economic strategy. The question is who is going to get the benefits of the trade. Is it going to be the elite, the people at the top, or are the people who make the products going to share in this? And what we're suggesting is that there needs to be some basic environmental and worker standards in these provisions in order for us to accept them.

MARGARET WARNER: All right. Be even more specific if you can. Are you looking for the trade agreements to, what, guarantee worker standards in the other countries?

REP. DAVID BONIOR: Yes. We want our negotiators to be able to go to the table and say to those people that agree to, for instance, intellectual property. In many countries when we do a trade agreement, we insist that intellectual property, compact discs and other things of that nature, that those countries abide by the rules that we want. But we don't do that for the workers who make those products. And we're saying we want workers--for instance in Mexico--we want the workers in Mexico to be able to form organizations, so they can bargain collectively. They want the right to assemble. We want to make sure that there is no labor, child labor provisions. We want to raise the standards of other countries, so our workers here in the United States aren't competing against people in Mexico, for instance, who are making $1 or 70 cents an hour.

MARGARET WARNER: So you want the fast-track bill to actually require the administration to negotiate those things?

REP. DAVID BONIOR: Negotiating environmental standards and negotiate labor standards.

MARGARET WARNER: All right. What's wrong with that?

REP. JIM KOLBE: Well, we say if it's related to trade, yes. If it's specifically related to the trade agreement, to trade provisions, and, yes, they should negotiate that. And we offered to include that in the fast-track legislation. But fast track and trade negotiations are complicated enough it doesn't need to have all these other things laid into it. As we found in countries like Korea or Taiwan as the economy improves, so do the workers' stands, so do the environmental standards begin to improve as countries begin to focus on that. So the best way we can help the living standards of the people of Mexico is the same way we've done it in Korea and Taiwan, and that's to trade with them. We need to trade more with these people. It also helps our people, of course. We've created more jobs in this country since with trade agreements than anything else, more than half of our--the growth, the economic growth we're having in this country comes from our exports and our trade, not just in manufacturing but in services.

MARGARET WARNER: But are your objections to including this in the fast-track bill is the question of doability, or do you actually think it's a bad idea in terms of economic theory and practice?

REP. JIM KOLBE: It's a bad idea to weight down, to load down a trade agreement with what are really extraneous procedures. Let's just take an example. The first thing you mentioned here in your earlier piece, that Chile might be the first thing that we negotiate a trade agreement with, the first country. To take that and to negotiate an Amazon rain forest agreement in the context of an agreement to bring Chile under the NAFTA umbrella just simply doesn't make any sense.

MARGARET WARNER: What about something like--as the Congressman suggested--say that workers in Chile can organize?

REP. JIM KOLBE: We're not going to permit Chile to tell us what our labor laws should be, and similarly, we shouldn't tell them we have international labor--we have the ILO specifically for that. And Chile's a signatory to more of those ILO agreements than we are.

MARGARET WARNER: Explain the ILO.

REP. JIM KOLBE: International Labor Organization. Those are your international standards.

REP. DAVID BONIOR: We've not used the ILO, and you know that, for years, and we've not been sympathetic to using the ILO. The problem here is, is that the folks on the other side--and Jim is a good friend of mine and I respect his views on this--but they're not adverse at all to using--going to Chile or to Mexico or where have you and saying an intellectual property, you know, protecting Walt Disney, protecting Mickey Mouse and compact disc. You've got to do this, and trade sanctions. But when it comes to the people who make those products, when we're trying to provide them with some protections, no way.

The problem is that in Mexico the productivity of the Mexican workers has gone up tremendously over the last--particularly the four years, and their wages have gone down. Now, what does that mean to an American worker? What that means to that American worker is that corporations go into negotiations with American workers and they say, if you don't take a freeze in pay or in wages or in benefits or if you don't take a cut, we're moving to Mexico. We have lost close to 200,000 jobs in this country. More importantly even than that, because most of these people have gotten work, although they've gotten it at less pay, more importantly than that, there's been a downward pressure on wages and benefits. And 80 percent of America hasn't really experienced the wonderful growth in income and benefits that's the top 20 percent. And we want to protect that 80 percent.

MARGARET WARNER: You're talking about since NAFTA was adopted.

REP. JIM KOLBE: And we've created more than 1.7 million jobs since NAFTA, so I mean the net has been much greater than the small number that might have been lost as a result of NAFTA.

MARGARET WARNER: I want to prevent--

REP. JIM KOLBE: I mean, if he is going to say all those were lost by NAFTA, I'm going to say every one that's been created since NAFTA was created because of NAFTA. It doesn't make any sense either way.

How is NAFTA coloring the fast track debate?

MARGARET WARNER: To what degree--I don't want this to turn into a NAFTA debate--to what degree is NAFTA and differing views, differing perceptions about NAFTA, coloring this debate about fast track?

REP. JIM KOLBE: Well, it does color it. There's no question about it. Because of the peso devaluation, the opponents have latched onto that and have said that that was the fault of NAFTA, which, of course, it wasn't at all. And, in fact, NAFTA has worked exactly as we intended it to work, which was to stabilize the economy. We're now back at way over 37 percent over our exports prior to NAFTA, so it's working.

MARGARET WARNER: The President was expected to come out actually with his language today and he did not. And that was reportedly because--it was reported to be because he and the White House were negotiating with you all to try to come up with language that might satisfy you. Do you think you're going to get language from the White House that satisfies you?

REP. DAVID BONIOR: Well, I would hope so, but my sense is that it's probably not going to happen. What we want is in the core agreement for fast track we want these protections for workers and protection for the environment. And without them it's going to be very, very difficult for us to support this provision. We're asking for something that I think would correct the mistakes of NAFTA. And if you look at NAFTA--and I think this is--NAFTA is important to look at because this is really an extension. This is expanding NAFTA--you will find, for instance, on the environmental front and the food safety front--I mean, I have 179 schoolchildren who were contaminated with strawberries that had pesticides on them and other things. I've got a number of people who have lost jobs in my district because of plants that have moved out to Mexico. This is happening all over the country, and I think there's a real concern on the environment and on health and safety and on food safety.

Three quarters of the Democrats may oppose fast track...

MARGARET WARNER: And if you don't get the language you want, then are you and how many Democrats do you think will oppose this?

REP. DAVID BONIOR: I think--well, we had 62 percent of the Democrats in the House oppose him on NAFTA, the President. And I think if we don't get these guarantees on the environment and on workers' wages, and safety standards, I think we're probably--and food safety--I think we're talking anywhere in the neighborhood of three quarters of the Democratic Caucus.

MARGARET WARNER: All right. If the President were to include these guarantees, what would that do to the Republican majority who gave him NAFTA?

REP. JIM KOLBE: There won't be Republican support, and with all due respect, I don't think there's anything the President can offer that's going to get the support of David Bonior and Richard Gephardt. I just don't think it's going to be there. I think the real issue down at the White House is not the negotiations with the Hill but the internal negotiations between Al Gore and the President's people. I think Al Gore is backing away from his 19-strong defense--defense of 1993--remember when he clobbered Ross Perot in the debate--I think he's backing away from that because he's looking to the year 2000, he's looking to his base, his labor environmental base. And I think that's basic conflict that's going on down at the White House.

REP. DAVID BONIOR: He's looking to the base of the Democratic Party, which is the working people and the people who care about a clean and a safe environment.

MARGARET WARNER: Okay. We have to leave it there, but thank you, gentlemen.

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