Energy Policy Act of 2003

July 31, 2003

ENERGY POLICY ACT OF 2003

Mr. HARKIN. Mr. President, I am a long-time supporter of policies designed to open foreign markets to our Nation's exports through new trade agreements. I have fought to break down the barriers that many other countries have erected to block our exports, and I have sought to reduce the practices by which many of them seek to compete unfairly in world markets. More fair trade can create jobs here at home, and American consumers can benefit from the resulting competition.

    In 1991, I took a trip to Chile to gauge the prospects of entering into a free trade agreement with Chile, and I returned favorably disposed. I thought that we should negotiate a free trade agreement with Chile before doing so with Mexico, and I communicated that to the President at the time.

    However, trade is not just about commercial transactions and whether or not imported products become cheaper and exporting companies increase their profits. Trade policy and the consequences of trade are linked with the preservation of the natural environment in both countries that are party to an agreement, as well as the legal rights and working conditions of workers. I take these matters into consideration when I determine whether or not to support a given trade agreement, as well as the economic gains that may be generated.

    I am aware that U.S. groups representing a considerable variety of agricultural products support the Chile FTA. A total of 32 farm groups, producer groups, and agribusiness interests signed a letter in July, urging support for the agreement. Even some of those organizations have concerns about market access for specific products, or about addressing trade reform through a bilateral, rather than a multilateral agreement.

    Over the 1998-2001 period, U.S. companies shipped an average of $125 million worth of agricultural goods to Chile, accounting for about 10 percent of their total agricultural imports. Until now, or major competitors in the hemisphere, Argentina and Brazil, have had an advantage in the Chile market because of their proximity and Chile's status as an associate member of Mercosur, the South American regional trade agreement. This FTA should help to level the playing field, although the cost of shipping goods more than 5,000 miles to the Chile market will always be a factor in determining the attractiveness of U.S. products.

    Both of the trade agreements we are considering—the Chile and the Singapore agreements—also are good for the U.S. financial services sector. The president of Principal International, Norman Sorensen, testified recently before the Senate Finance Committee, and he listed a number of benefits for Principal and for other financial services companies. I note that Principal Financial Group is a major private employer in my State of Iowa.

    Trade agreements—on the right terms—promise many benefits and opportunities. Notwithstanding these benefits, we have increasingly come to realize in recent years that issues previously not considered to be trade issues in fact are trade issues intellectual property being one of those most prominent. That is why I have worked hard to improve the labor provisions in various trade measures, concentrating particularly on abusive and exploitative child labor. I want trade agreements to promote fair trade, fair competition, environmental protection and good labor conditions in all countries. That means trade agreements that support and reinforce existing international child-labor standards, not undercut them.

    In examining any trade agreement, we must weigh the balance of these considerations. In the cases of the agreements now before us, I have reluctantly concluded that the benefits do not outweigh the potential harm.

    As many of my colleagues know, I have been working on reducing abusive and exploitative child labor around the world for over a decade. I first introduced a bill on this issue in 1992. According to the best estimates by the International Labor Organization—ILO—there are at least 352 million child laborers between the ages of 5 and 17 who are engaged in today's global economy.

    Of these 352 million child laborers, 246 million have never seen the inside of a classroom. These 246 million powerless children are working in the most hazardous conditions in mines in fishing operations and on plantations. It is appalling that this is still occurring in the 21st century. These children are robbed of their childhoods. Many are denied any hope for a brighter future. In this new century, they will grow up illiterate and exploited, creating a wellspring of future social conflict and strife.

    We have made some progress over the years by increasing funds for programs to rehabilitate child laborers through our contribution to the ILO's International Programme for the Elimination of Child Labor—IPEC. In 2000, I and Senator Helms successfully amended the Trade and Development Act with a provision directing that no trade benefits under the Generalized System of Preferences—GSP—be granted to any country that does not live up to its commitments to eliminate the worst forms of child labor. We required that the President submit a yearly report to Congress on the steps being taken by each GSP beneficiary country to carry out its commitments to end abusive and exploitative child labor.

    I want to explain clearly to my colleagues what I mean when I refer to abusive and exploitative child labor. It is not children who work part-time after school or on weekends. There is nothing wrong with that. That is not the issue. What I am referring to is the definition set out by ILO Convention 182 on the Worst Forms of Child Labor.

    This is not just a Western or a developed world standard; it is a global standard that has been ratified by 138 countries. It has been ratified by Chile. It has been ratified by Singapore. The United States, I am proud to say, was the third country to ratify this convention. Unfortunately, the implementing legislation now before the Senate for free trade with Chile and Singapore actually would take us and the world a step backward when it comes to protecting children. That is right. This freetrade agreement with Chile, which replaces GSP provisions in governing the trade between our two countries, will take us backward with respect to abusive and exploitative child labor.

    Under GSP, the President must report to Congress annually regarding Chile's child labor practices. And under GSP, if Chile is not meeting the obligations that Chile undertook as a signatory to the ILO Convention 182, if Chile is not acting to eliminate the worst forms of child labor, then trade sanctions are available to us to require enforcement in Chile of internationally recognized child labor standards. That is so that our companies, and our workers here in America, are not subjected to the unfair competition that abusive exploitation of children allows.

    Under this new implementing legislation for free trade that we have before us now, if it is enacted, neither of those things I just mentioned will be true. The President will not be required to report on Chile's practices or Singapore's. And even if egregious violations of international child labor standards are reported, no trade remedy will be available. This new agreement merely allows voluntary cooperation between the two countries on issues such as abusive and exploitative child labor.

    Our trade negotiators, for some reason, in this agreement before us, explicitly weaken existing protections against abusive and exploitative child labor.

    They took us from mandatory Presidential reporting, with trade sanctions available, to the mere possibility of voluntary cooperation with no recourse to trade sanctions as enforcement.

    My colleagues, we voted here in the Senate 96 to 0 in the year 2000 to include these protections. Senator Helms and I offered that amendment to the GSP. This Senate voted—with our eyes open, ears open—96 to 0 to include these protections in the GSP. It received unanimous, bipartisan support.

    None of us in this body have voted for, and I am sure none of us have sought to have, those child labor protections undercut by our trade negotiators in an agreement with Chile or Singapore or any other country. But that is what they have done. And now, thanks to fast-track rules, which don't allow us to amend this legislation, we will not even be able to restore the protections we voted for 3 years ago in this agreement. If we vote for this trade agreement, we are voting to remove the protections that all of us here—96 Senators—voted 3 years ago to put into place to end the practice of abusive and exploitive child labor.

    I would like to support a free-trade agreement with Chile. As I said, I went there 11 years ago to help promote a free-trade agreement. But I cannot vote for this because our negotiators took away from us the one thing we put in 3 years ago to end abusive and exploitative child labor.

    This takes us in the wrong direction with respect to the world's children. Supporting abusive and exploitative child labor abroad does not help create jobs in America, it is just the opposite; it hurts that effort. Our workers and our local businesses should not be competing with the worst forms of child labor abroad. Our trade negotiators should not be weakening protections that we in Congress put in place to ensure that free trade can be consistent with respect for international child labor standards. What our negotiators did is wrong.

    It has been said that these trade agreements with Chile and Singapore can be a model for future trade agreements, for example, with Central American countries. In the area of abusive and exploitative child labor, I hope that is not the case. A better model would be the free-trade agreement with Jordan, which we adopted in September of 2001. That agreement had broad support from business and labor. I supported it. In that case, we successfully moved the issue of abusive and exploitative child labor and other labor rights right into the body of the agreement where they rightfully belong. I cannot understand why we would turn back from that agreement and from the GSP provisions.

    I am sorry to say this is not an academic or rhetorical issue in the case of labor practices in Chile. Chile is far from the worst government, even in our hemisphere, when it comes to meeting its international obligations to protect its children.

    I don't mean to single Chile out. In fact, Chile has done a great thing in getting rid of the Pinochet dictatorship and returning democracy and free markets to Chile. But there is broad agreement among international observers—our own Department of Labor, the Department of State, UNICEF, the International Labor Organization—that the problem of abusive child labor persists in Chile. Approximately 65,000 Chilean children between the ages of 12 and 17 are working rather than attending school as they should. This is according to the ILO, UNICEF, and our own State Department. These kids are engaged in mining, agriculture, including street children, domestic workers.

    The Government of Chile may be seeking to reduce the problem, as it should. But we should not be weakening our sole existing trade mechanism that allows us to monitor their progress and to back up the international standard with trade action. That is not the way forward for free and fair trade. That is not the way to lift up the Chilean economy or working families in the United States. Abusive child labor perpetuates the cycle of poverty across generations. No country has achieved broad-based economic prosperity on the backs of working kids. Weakening our existing protections against the worst forms of child labor certainly should not occur in an agreement that might be a model for free trade with Central America.

    Lastly, I am also concerned about the selective changes in immigration law on these trade agreements. These trade agreements would allow 1,400 foreign workers from Chile per year and 5,400 workers from Singapore per year to obtain 1-year visas to work in the United States, visas which are renewable indefinitely. That is a significant change from our current H-1B visa policy, where workers are granted 3-year visas that can be renewed only once. We should not be promoting the importation of skilled foreign workers for indefinite stays in the United States when there are 9 million Americans currently out of work.

    I have a further concern with a provision inserted in the Singapore free-trade agreement. The integrated sourcing initiative, or ISI, allows predominantly information technology goods produced in third countries to be treated as if they had been produced in Singapore for the purpose of satisfying rules-of-origin provisions.

    This ISI provision could allow goods produced in countries that routinely violate workers' rights, such as Indonesia, and possibly Burma, to be transshipped through Singapore in order to avoid United States limitations and bans. That is in the Singapore free-trade agreement.

    I regret that our negotiators have presented us with flawed agreements. In the case of Chile, it is either sloppy work or they deliberately changed the child labor provisions. By allowing third countries to transship through Singapore, again, it is either sloppy work or deliberately trying to undercut United States limitations and bans on certain countries.

    I particularly hoped that I could support an agreement for free trade with Chile. I started working for that over 10 years ago. But I do not believe trade can be called free when it promotes the exploitation and abuse of children by weakening our existing protections against the worst forms of child labor.

    I yield the floor.