UNITED STATES-MOROCCO FREE-TRADE AGREEMENT IMPLEMENTATION ACT
Mr. ALLEN. Mr. President, I rise today to speak on the pending measure before the Senate, the U.S.-Morocco free-trade agreement. Soon this body will likely pass the implementing legislation and send it to the President for signature and subsequent enactment. Before that takes place, I believe it is important to outline to the people of the Commonwealth of Virginia my position on this matter and why I will vote in favor of its passage though it is not a perfect agreement.
The enactment of free trade agreements have the potential to increase the profitability of U.S. companies, increase U.S. jobs, open new markets for U.S. products and services and engender stronger relationships with other nations. However, the central tenet of such agreements must be fairness, clear benefit to all parties and a relatively equitable number and degree of concessions. Understanding that in any negotiation there must be some give and take, it is counterproductive and damaging for the U.S. to agree to provisions within these agreements that leave U.S. industries susceptible to loopholes that allow a non-party country duty free access to our market.
In the case of the Morocco free-trade agreement I am speaking of the textile provisions. This agreement, while in many ways better than previous free trade agreements, would still allow for non-party countries to export yarn or fabric to Morocco and upon production into apparel, be imported into the United States duty-free. If our government is going to negotiate an agreement with another country and make concessions to secure an equally beneficial arrangement, I cannot comprehend why loopholes would be included to permit a third party to benefit from the agreement without having to meet the requirements or make the concessions of those party to the trade pact.
Under a tariff preference level, the Morocco agreement will allow the use of fabric and yarn from a non-party of up to thirty million square meters equivalent. It is difficult to understand why such an exception is necessary, given that the total Moroccan trade in fabric and yarn with the U.S. in 2003 was 16.477 million square meters equivalent. I have been in contact with many in the domestic textile industry and have to sincerely agree with them that such a provision appears to be a substantial loophole that will ultimately allow a country other than the U.S. or Morocco to benefit from the U.S.-Morocco free-trade agreement.
The U.S. government has an obligation to the American worker to do away with the practice of providing exceptions like tariff preference levels. A third-party country that would provide yarn and fabric under these loopholes will have conceded nothing nor offered greater access to its market as it benefits from the agreement negotiated between the U.S. and Morocco. Make no mistake, concessions like this can adversely affect American jobs. Domestic textile production has provided Americans stable, well-paying jobs for generations; however the enactment of free trade agreements that allow a party to go outside of the agreement but enjoy duty-free access has contributed to the growing number of unemployed textile workers in this country.
Going forward, I would strongly recommend to those negotiating trade agreements on behalf of the American people to visit Southside Virginia and gain a first-hand perspective on how the concessions made in trade pacts can impact not only a few families, but entire communities. We must make sure that when we are opening our markets to other countries through trade agreements that we do not allow a third party to benefit without being party to the requirements and concessions of that trade agreement.
Even with the grave concerns I have with the textile provisions of this agreement, I believe that on balance, it provides a net-plus for the working people of the United States. The reduction in tariffs and protection of intellectual property and trademarks will provide great benefit to hundreds of thousands of U.S. jobs and further the global market share of their enterprises. Additionally, the relatively balanced nature of the U.S.-Morocco free-trade agreement sets a valuable example with the other developing countries around the world.
The removal of tariffs on 95 percent of bilateral trade on the day of enactment should greatly benefit the majority of U.S. industries and their employees. Given that Morocco currently places a 20 percent duty on U.S. exports while the U.S. only assigns a four percent tariff on Moroccan exports this agreement makes a strong initial push for free and open trade. With strong U.S. industries like information technology, machinery and construction equipment poised to gain immediate duty-free access to Morocco; the U.S. should see positive gains in exports to Morocco in the near future.
The domestic farming community will see tariffs on a large number of agriculture products cut significantly or eliminated immediately. The reduction of tariffs and the implementation of new tariff-rate quotas on products like beef, poultry and wheat will likely result in a tremendous growth in the amount of U.S. agriculture products exported to Morocco.
The U.S. has had a difficult time convincing its trading partners to actively protect intellectual property and fully prosecute those found to be pirating or counterfeiting U.S. software, movies and music. I am pleased the Morocco agreement establishes new protections for intellectual property rights and increases penalties for those found to engage in the piracy and counterfeiting of U.S. products.
Finally, the enactment of the U.S.-Morocco free-trade agreement sends a powerful message to developing nations around the world. It is a clear indication that the U.S. is interested in developing mutually beneficial economic and trade relationships that can result in greater access to the U.S. market and hopefully closer ties with the U.S. Agreements like the Morocco trade pact provide a clear example for those countries in Africa and the Middle East willing to make political and economic reforms.
In closing, I will vote in favor of the U.S.-Morocco free-trade agreement because comprehensively, it is beneficial to the U.S. business community. The reduction of tariffs and increased access to markets will improve the profitability of many U.S. companies and provide an example for future agreements with tolerant, reform-minded, developing nations. This could have been an outstanding, purely positive agreement, rather than a good agreement on balance.