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News Conference - Council of the Americas Conference

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Location: Washington, DC

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HEADLINE: DELIVERS REMARKS AT COUNCIL OF THE AMERICAS CONFERENCE; SENATE COMMERCE, SCIENCE AND TRANSPORTATION COMMITTEE; WASHINGTON, D.C.

SPEAKER: U.S. SENATOR JOHN MCCAIN (R-AZ)

*

MCCAIN: Thank you Bob, and thank you for the kind introduction and our relationship and friendship goes back many years, and I'm grateful for it, not to mention Ted Briggs and Ambassador Price also, who I've had the opportunity of fight previous wars and battles with over the years and I'm grateful for the invitation to be here today.

The Council of the Americas has done extremely impressive work in pulling leaders of the our hemisphere together and setting our intellectual agenda.

By the way, I hope there's no smoking going on here today. I'm—it's an inside the Beltway joke.

(LAUGHTER).

I'm honored to have the chance to contribute to these efforts today. I'm especially pleased that this conference is about the role of business. While governments can and must create the conditions for progress, it is business with economic flow that dwarf those of governments, that actually make progress happen.

The companies represented here in this room have annual revenues that exceed, and in many cases far exceed, the gross national product of the majority of countries represented by the flags on the wall behind me. There are responsibilities and challenges that face those of us in government who deal with public policy, but the responsibilities that rest on the shoulders of business are at least as great. I hope we both rise to the challenges and opportunities ahead.

We're meeting today at a time of renewed hope. This is all the more important because the history of our hemisphere is often been one of missed opportunities, dashed hopes and disappointment. Real second chances seldom come along, but we know have a second chance for this hemisphere, and I believe we have to act decisively to make sure that this opportunity, in contrast to others that came before, doesn't slip through our fingers.

Several factors make this a period of unprecedented opportunity. You know them all very well. More people in Americas live under democracy than ever before. Our hemisphere is wealthier and it's economies growing more steadily than ever before. The North American Free Trade Agreement forms a solid base for trade and growth in the northern hemisphere. This and other arrangements such as MERCOSUR and the U.S.-Chile free trade area, the Canadian-Chile free trade area and several other regional initiatives are pointing the way towards hemisphere wide free trade.

None of the countries in our hemisphere is at war, and internal security threats, though still a very serious challenge, are at their lowest level in modern times. To be sure, there are still major problems to be tackled. I'll come to these in a minute. But we mustn't lose sight of the fact that we're in a better position now to deal with these problems than ever before. It's essential that we take advantage of the opportunity that now exists to institutionalize the positive developments that have taken place over the past several years, to lock in these gains and set out a frame work for making further progress.

I would offer a challenge to you, as leaders of business, and to all of us, as shapers of public policy, I challenge all of us to keep in mind one great vision for our hemisphere, it is within our grasp over the course of a generation to make this a hemisphere where all people live under democratic rule, where human rights are respected, where the rule of law is fairly and consistently applied, where people have faith in their government institutions, where corruption and organized crime are on the decline, where our economies are trading freely, and where rising prosperity and expanding educational opportu-nities are improving the living standards of all of our people.

This vision sounds like a pipe dream, but for the first time in decades the conditions are right to make this vision a reality. It would be a tragedy if we failed to realized our visions simply because we failed to set our goals high enough. To achieve this vision will require the nation's of this hemisphere, particularly in Latin American, to overcome old stereotypes and stand up solidly in support of our common values.

It will require business to play a responsible and thoughtful role as the primary agent of change in our hemisphere, and it will require the United States to live up to the leadership role that only it is capable of playing. This means passing fast track legislation, taking leads in efforts to create a hemispheric free trade zone. It means supporting the IMF quota increase, and working together with our southern neighbors as a partner in the war on drugs.

MCCAIN: It means leading the way in ensuring that our shared democratic values are truly reflected in the day-to-day reality of our hemisphere. With these thoughts in mind, I must admit that I was pleasantly surprised by the outcome of the Santiago Summit a few weeks ago. While the proof will be in how we follow through over the next several years, it appears that real strides were made toward establishing this vision for the hemisphere as our common purpose.

Against the public backdrop, it focused almost solely on free trade in which the U.S. president does not current possess fast track negotiating authority, the summit succeeded both in launching the negotiations on a free trade area of the Americas and in making concrete steps on the many other issues that go beyond mere free trade. When I say mere free trade, let me first state that I am a strong supporter of free trade. I'm committed to working towards the goal of a free trade area of the Americas. It is one of the indispensable conditions for progress in our hemisphere. I was one of 69 senators who voted last year on a procedural bill that would have cleared the way for a strong Senate endorsement of fast track legislation. In the House of Representatives, as you know, however, a large number of Democratic congressmen failed to provide the support necessary to assure passage, and the legislation was pulled off the floor.

The reason for this lack of support are many. But I believe that one of the underlying reasons is that fast track authority was not presented as part of any broader vision. Fast track authority was portrayed as an end in itself, or even more unhelpfully as NAFTA expansion. This allowed opponents to stoke old fears and misperceptions about NAFTA, and to counter economic arguments in favor of fast track with labor and environmental arguments against fast track.

Make no mistake, the economic arguments in favor of fast track are sound. But in the political environment we face, that's not enough. Too narrow a focus on trade alone makes the importance of our other values, such as reinforcing democracy, security, human rights, the rule of law, education, market reform, anti-corruption, judicial reform and law enforcement where a great deal of work still lies ahead. It is these other values, more than free trade, that matter most to the people of our hemisphere to win support for fast track authority, we need to clearly make the case that free trade is an integral part of a broader strategy for positively, dramatically and permanently changing the face of the hemisphere we live in.

While economic arguments may make sense, it is our values that can move us to action. Moreover, failure to integrate our human values into our strategy has a real price. As we all know very well, the forces of the global financial markets imposes strict penalties on countries that fail to maintain economic and political stability. If the EU, NATO, and OSCE have successfully found in Europe, and as the Asian Tigers have found to their chagrin in the Pacific Rim, progress in the trade and macroeconomics areas must be accompanied by progress in all other areas as well.

To leave anything out is to sew the seeds of future instability. This should be a lesson to business in the hemisphere. While business lobbying in support of fast track is important to establish the sheer business rationale for free trade, it is also important that business take the initiative to address the troubling questions of labor standards, environmental standards, rule of law issues, and public education. These are the political hot buttons. If it can be shown that business in the hemisphere is working to deal with these key problems, independent of any government mandate, it will make it easier for Congress to vote in favor of fast track. It will also be the best thing for our societies.

As we look at the challenges apart from free trade, I would highlight four areas I was pleased to see that each of these areas was addressed at the Santiago Summit. First, (AUDIO GAP) do more to reinforce democracy. Elections are only a precon-dition for a successful democracy. In many countries, much more needs to be done to guarantee a free press, to guarantee free expansion of political views and to strengthen confidence in the just and impartial rule of law.

This leads to the second challenge which is strengthening of the judiciary and law enforcement systems. Corruption can hold back an entire country. Not only does it ensure that the public has no confidence in government in a just society, it prevents the creation of a marketplace where businesses can feel confident about predictable and fair treatment. In the world of global markets, (AUDIO GAP) businesses will go elsewhere. And of course corruption severely impedes our efforts to combat drug trafficking and other illegal activities.

MCCAIN: Third is the imperative to improve the level of education in our hemisphere. Here I was particularly pleased to see this issue receive top billing at the Santiago Summit. Raising the level of education is an essential condition for future economic growth. It is the key to overcoming grading disparities that now exist in many countries, and will help broaden and stabilize democratic systems.

Finally, it is essential that government foster open, competitive markets at home. There is a fundamental parallel between freeing up trade between countries, and freeing up competition within a country. In both cases, government intervention interferes with the most natural and efficient use of resources. Removing such intervention results in increased productivity, efficiency and wealth creation. It is key to future economic growth.

In the past some Latin American countries objected to U.S. calls for progress in many of these areas as an infringement on their sovereignty. That is the same argument we used to hear from the generals in Korea, and what we still here from Indonesia. In a post Cold War world shaped by truly global markets, such objections miss the point. If countries do not maintain open and stable economic and political systems, the market will exact their price. Yet by working together for balanced progress in all areas, including hemispheric free trade, we have a real chance, for the first time, of achieving our vision of a free, democratic and prosperous hemisphere. I challenge us all to make that vision a reality. Thank you very much.

(APPLAUSE)

Could I respond to any questions, comments or insults that you might have at this time? Mr. Rockefeller.

QUESTION: Senator, I was very encouraged with what you said about fast track, and it's importance and I agree with you, and I think everyone in this room feels the same way. I've been getting a little more encouragement even from, well the high level people in the House that there's a possibility that it might be passed by September of this year, and I wonder if you'd like to comment on that, and also if—what are the ingredients that are needed to get it passed, and to what extent and how can this group help?

MCCAIN: Well, first of all this group has helped and is critical. There's not a business in this room that doesn't have substantial number of employees inside the United States of America. That affects the opinion of members of Congress, and to some companies and corporations, they're financial health is directly related to their ability to export goods and services to other countries in the hemisphere. So I think they can help.

I'm not as optimistic as some who've told you by September because the administration has made it fairly clear that they have no plans to bring it up, unless there's been some change in the last few days or weeks. But I do have great optimism about early next year, and I hold that optimism because I've had enough conversations with the president of the United States to know of his dedication to and belief in free trade. And I am convinced that this president, with the support of the business community and Republicans as well as many enlightened Democrats, has the ability to bring enough public pressure to bear that we pass an expanded NAFTA.

The numbers are there my friends. The numbers and figures are there. I'll never forget several months ago seeing an article in the Wall Street, it said, mid west economy, not Arizona economy, mid west economy strong because of NAFTA. I mean it's there. The numbers and facts are there. And what is happening in these countries in some ways is remarkable. Big problem obviously is drugs, and that's, I hope, the subject of another convening of this organization.

But also as I said in my prepared remarks, I think we have to make the argument based on broader values than just free trade. We have to convince our constituents that healthy economies breed democracy and freedom. Healthy economies and free trade help the living of the very poorest and lower income people of these countries.

MCCAIN: And that the permanent barriers that have been erected within nations and between nations in our hemisphere has been one of the major impediments to the kind of progress that we want to see.

So, I hope we can broaden the debate and make people understand that one of the reasons why we are seeing an enhancement of freedom and democracy in the world frankly, is because of a healthy economy. Example, I argue that Senator George Mitchell, the Clinton Administration and most of all the Irish people themselves deserve enormous credit for what appeared to be an intractable and insoluble problem.

But I would also argue David, that the economy of Ireland by being uplifted so much and brought a lot of these people who are the habitual commiters of atrocity and murder out of this terrible situation that they were in and gave them some hope and opportunity, and gave them some idea that perhaps a peaceful country was the best answer to their problems. I would attribute the growing economy in Ireland, the burgeoning economy in Ireland as a major contributing factor. I would make that argument about Guatemala, Honduras, El Salvador, Costa Rica, Bolivia and the list goes on.

So, I think we expand the debate. We get everybody behind it, and we come up the, NAFTA agreement has been in long enough that we have a remarkable chance for results. There's some smart people in this room. Not many up here, but in this room. And who amongst us here would have predicted 10 years ago, that we were doing a billion dollars a day in trade with Canada? Who is in this room would have predicted that? No one. Now, we would have said, we'll have expanded trade between—a billion dollars a day. The traffic that's going back and forth, not to mention just the goods and services is remarkable. And look at the Canadian economy.

So, I'm just saying we've got a record now that we can stand on. And we can go back to the debate before where the predictions of the loss of jobs, movement of businesses to Mexico, blah, blah, blah didn't happen. They didn't happen. So, I think we can do it, David. But, I think it has to... I'm sorry for a very long answer. But, it's going to require presidential leadership.

QUESTION: But if the president were to change his mind and support it, do you think it then could be passed in Septem-

MCCAIN: I don't think the Democrats very frankly would let him do that this close to an election. I just don't think they would agree to it, even if he changed his mind. Because I think they're going to say, look, we've got to in all candor, I think the Democrats with some justifications think they have a chance to retake the House of Representatives in this election. And I think that they think it may cause them problems with labor.

Look my friends, everybody has the right to lobby. Everybody has the right to influence their elected representatives. That's what democracy is all about although we badly need campaign finance reform, as you know. But, I mean, we all know what labor did, and ...

(APPLAUSE)

Thank you. That applause comes from people who are regularly dunned (ph) by both parties. And...

(LAUGHTER)

Can I say that, it is well known that organized labor, and I don't begrudge them this, because that's their right. But they went in and literally threatened some Democratic members with retaliation this fall. That's why I think that they're going to take a pass until—the administration is going to take a pass until next January. Any more? Yes sir.

QUESTION: (OFF-MIKE) free trade, how much of the environmental and labor gets packaged with it, and therefore appeals to less of an audience. You know what I mean I can see. Is there the threat in broadening the debate that we would play into the hands of those that want to include more issues of fast track and give it more chances to kill it?

MCCAIN: I think that's a danger. But I do believe that most rational people believe that side agreements, again going back to the past NAFTA agreement have been very effective. I live in a border state as you know. We've still got horrendous problems along the border with waste, pollution, blah, blah, blah. But I'll tell you, if conditions are remarkably better than they were before we passed NAFTA. I think we'd have make that argument and frankly I think we have to take that risk. Because I do believe we need to broaden out the debate. Yes sir.

QUESTION: Senator, we had the opportunity to listen to Mr. Sweeney speak this morning, and it appears that labor is locked in a, quote, "intractable position." Can you—do you think you can realistically pass fast track without getting some support from labor?

MCCAIN: Yes, because we did last time, and we had a Democrat dominated Congress at that time. I do believe that presi-dential leadership can prevail there. And I'm not sure, to be honest with you, that NAFTA is their number one priority, and also with all due respect, some of those labor people are going to be spending a lot of time in court.

QUESTION: Given the track record that NAFTA has shown, what do you think is the basis for the opposition to not only NAFTA, but fast track in general?

MCCAIN: I just beat up on—perhaps was maybe too critical of both labor and some Democrats. Within my own party there is a strong element of isolationism. We all know that the last campaign, Pat Buchanan articulated that view of the world and America's role in the world in the most compelling fashion, back where he became a very viable presidential contender. There has always been within the Republican Party a certain isolationist element, and I believe that is a very serious problem.

When they ran the campaign in California and won the ballot propositions, there was this picture of gray figures coming over a wall, and it said they keep coming and coming and coming, playing on the fears of people about illegal immigration in this country. There's no one in this country, least of all Hispanics, who have most recently arrived legally, that dislike illegal immigration than we do. I mean it's the new legal immigrant that is knocked off first by the illegal immigrant, off the economic ladder, but it is given voice to many fears that people have who are very conservative. They tie illegal immigration to free trade. That's one problem. Also there's the usual fact, and the reality is there's winners and losers with free trade. There are winners and losers. Whenever there's competition in deregulation there's winners and losers. So they point out one company, or one corporation or one business that suffered rather than look at the macro figures.

Finally, could I end up with one brief anecdote? As you probably remember, Bob Dole came into South Carolina in a very tenuous position. Pat Buchanan had won in New Hampshire, Forbes had won in Arizona, and I forgotten who won in Iowa, I think we barely won—any way very tenuous position, and I was down their campaigning for Senator Dole for about a week and a half before the election. On the front page of the South Carolina newspapers, one day was two pictures. One was a picture of Pat Buchanan standing in front of a textile mill that as shut down, the other picture was a picture of Bob Dole and the governor of South Carolina riding around in a BMW convertible at the BMW plant in South Carolina. I mean no greater contrast could you be given. Bob Dole, as you know, won that primary and I was on the way back to the airplane to fly back to Washington the night of the election, and one of the commentators, there was two commentators, one of them said, and isn't that amazing, Bob Dole won 50 percent of the vote of the Christian Right. And the other guy said yes, they must work at the BMW plant.

(LAUGHTER)

So our decision was made in the Republican party in the 1996 election as to which way the Republican Party is going to go, but that fight is still alive and well. That element is still alive and well, and it resonates obviously, quite often, and frankly all too often in my view, and we have to keep our focus on that problem.

I'm forced to go back and cast another vote for freedom, democracy, and an issue that I'm not very clear on, but I would be glad to...

(LAUGHTER)

I want to thank you all for all of your efforts. Don't smoke, and clean up this campaign finance system and we'll all have a happier life.

Thank you very much.

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