March 04,2003

Baucus Comments on the Adminstrations Trade Agenda

Thank you, Ambassador Zoellick, for appearing before the Committee. I want tostart out today by reflecting on where we’ve been – it’s an important starting point forwhere we should go. In the last Congress, we passed the most comprehensive tradepackage in fourteen years. The legislation included trade promotion authority and anexpansion and improvement of the trade adjustment assistance program.

We were successful because we all worked together – Democrats andRepublicans; Congress and the Administration. We worked to develop legislation thatpassed overwhelmingly out of this Committee and with tremendous bipartisan support onthe Senate floor.

Today I want to look ahead at three areas where I think all of us – this Committee,this Congress, and this Administration – can move forward in a bipartisan way.

Setting Priorities for Trade Negotiations

Let me begin with trade promotion authority. As we begin to put TPA to use, wemust do so with two important constraints in mind – One: time and Two: resources.Time is a constraint because Congress granted TPA for only three years – with a possibletwo-year extension.

Our other constraint is resources. We have a limited number of trade negotiators.They can only be in one place at one time. If we are negotiating with one country, we aredoing it at the expense of another. So we must choose agreements carefully. With theAdministration now engaged in WTO and FTAA negotiations, as well as in negotiationsinvolving four regional and bilateral free trade agreeements – now is the time to reviewour priorities. Now is also the time to begin the selection process for the next wave ofcountries.

That is why, Mr. Chairman, I would like to work with you to get a process startedthat will map out our goals in order to make the best use of our negotiating resources inthe future.

I have heard complaints – particularly from some in the business community –that the U.S. approach to new free trade agreements lacks clear direction. Let’s ge t thesefolks involved and get everyone talking constructively.

When thinking about future trade agreements, our first consideration shouldalways be the potential economic benefits. How much do American companies, workers,and farmers stand to gain from the agreement, and how does that compare with otherpossibilities? Of course, it’s always tough to balance foreign policy considerations – andcertainly foreign policy has a role to play in trade policy. But there are other ways –outside of free trade agreements – where we can use trade to achieve foreign policyobjectives.

As we move forward, we must always keep in mind that there are plenty ofcountries that will go to great lengths to have a free trade agreement with the UnitedStates. Access to our market is a prize for which many will make significantconcessions. I would like to see us make the best use of the opportunity in front of us –and get the best deal we can for our workers, farmers, and businesses.

Cuba

Now – as we talk about the strained resources at USTR, and how we are allstruggling to create opportunities for Americans, let me address one opportunity thatrequires no negotiations at all – that is, trade with Cuba.

Here is a nation of people just 90 miles off our southern shore, possessing amarket that is admittedly small – but that teems with potential, and that is ready to dobusiness.

Here is a market offering investment and development opportunities that could beexplored, not through years of tense negotiations, but with the mere stroke of a pen.With the mere stroke of a pen, the futile, failed policy of the embargo could be ended anda new era of engagement could begin.

I have heard the counter-arguments on this issue. Opponents contend thatincreased trade would do little to help the Cuban people but would only, instead, help toprop up the Castro regime. They argue that it would be immoral to engage in trade with aregime that denies its people even the most basic of human and democratic freedoms.But this argument calls into question the fundamental role of American engagement.

For the past two years, Ambassador Zoellick, you and President Bush havepreached about the important role that open trade plays in encouraging democraticreform. Rightly, I might add.

For example, you and others have noted that NAFTA was a fundamentalcomponent to the political transformation of Mexico. During the debate to increase tradewith China, proponents repeatedly pointed out that the best way to encourage democraticand human rights reform in China was through engagement and open trade.

Since September 11, the Administration has emphad time and again that ournation’s foreign policy must address one of the root causes of political instability in theleast developed countries – poverty and the hopelessness that comes from isolation.

In fact, in his speech at the signing of last year’s Trade Act, the president saidsimply, "Trade is an enemy of poverty, and a friend of liberty." I agree. And if it’s truefor Mexico, if it’s true for China, and if it’s true for developing countries all around theworld, why isn’t it also true for Cuba?

Mr. Ambassador, you speak constantly and persuasively about the importance ofopenness. Another word for openness is engagement. I believe it is time to engageCuba.

Last month, I introduced legislation to end the embargo and to allow Americansto travel to Cuba. I hope this Committee will hold a hearing to examine our policy onCuba – and I hope that we can all take a serious look at ending forty years of failedpolicy.

Trade and the Middle East

Our policy of engagement and increased opportunity should also be expanded to aregion largely neglected by the global trading system, the Middle East.

Last week, the President talked about his vision for political and economicfreedom in a post-war Iraq. This speech was important, but it seems to me that it had oneobvious flaw: the President did not address the importance of securing economic freedomin the surrounding region.

I believe our goals must be comprehensive - we must help encourage economicstability throughout the entire Middle East and the Muslim world. Trade is an importantpart of the solution.

Now – do I think we should be negotiating free trade agreements with everycountry in the Middle East? No, of course not. Many countries are not ready. USTRdoesn’t have the resources. And as I said before, we can’t reduce trade policy to simplyone more tool that we use to effect foreign policy. We did that during the Cold War –and we saw U.S. competitiveness pay the price.

So what can we do? First, I think we should look at a preference program – muchlike the ones we have passed for the Caribbean, African, and Andean nations. We will ofcourse want to carefully evaluate which countries and products are covered. And like

other preference programs, there should be conditions. Clearly, countries must becooperating with us on the war against terrorism. And countries should also be movingtoward economic reform – for example, progress toward WTO membership, appropriateanti-corruption measures, and adequate transparency. At the same time, the United Statesshould be working with the international community and with the region to encouragemembership in the WTO.

Of course, this will require some hard work on the part of those countries thatwant to join. But the United States should do everything we can to help those countriesthat want more economic stability – it is in our interest, just as much as it is in theirs.

Conclusion

Mr. Chairman, Ambassador Zoellick – working together we accomplished a lotlast year, and I thank you both for all your hard work. But there is more to be done. Ilook forward to working with both of you, and this Committee, as we keep movingforward on an aggressive trade agenda.