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Remarks to San Antonio Free Trade Alliance

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Remarks to San Antonio Free Trade Alliance
May 9, 2005

Berto, thank you for that generous introduction. It's an honor to be hosted by the San Antonio Free Trade Alliance. And I very much appreciate the Loeffler Tuggey Powerstein Rosenthal law firm being the prime sponsor of this event.

International trade with partners who value freedom, security, open markets and fair business practices is beneficial to everyone involved.

Giving U.S. businesses the opportunity to offer their products and services to other nations means far more than profits. It means jobs. And it ensures global competitiveness.

In 1993, Congress approved the North American Free Trade agreement. Here in Texas, the result was a 150 percent increase in combined exports to Canada and Mexico. In fact, more than 80 percent of Mexico's trade with the Unites States and Canada passes through Texas along the I-35 corridor.

Since the passage of NAFTA, Congress and the Administration have worked to build on its success. The U.S. now has trade agreements with Australia, Morocco, Singapore and Chile.

In the first year of the Chile Free Trade Agreement, Texas exports more than doubled.

This year, Congress will consider the U.S.-Dominican Republic-Central America Free Trade Agreement, better known as CAFTA?DR. This agreement will eliminate barriers to U.S. exports to Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. It is critical that Congress approve CAFTA?DR and allow American workers, companies, farmers and ranchers to prosper.

The United States now is at a disadvantage when it comes to trade with the six Central American countries that make up the CAFTA agreement. Most of the region's exports enter the United States duty-free, while the U.S. goods exported to the CAFTA?DR countries face significant tariffs. When CAFTA is implemented, 90 percent of our exports to these areas will receive duty-free treatment.

For the San Antonio area, elimination of the auto tariff in Central American countries will have a positive impact on the new Toyota manufacturing plant and its suppliers.

Technology is another industry that stands to benefit from CAFTA. Computers and electronics are the primary global export of Texas. These products also will receive duty-free treatment. For Texas, this could translate into thousands of new jobs and millions of dollars for local economies. Over half of current U.S. farm exports to Central America would also become duty-free immediately.

Approving CAFTA will result in significant opportunities for U.S. exporters and businesses. But we must make sure that increased commerce, which results in more cross-border traffic, does not compromise our homeland security. In fact, finding this balance is the greatest challenge of cross-border trade.

We share over 7,000 miles of border with Canada and Mexico. Texas alone makes up 1200 miles of the U.S. border with Mexico, has 11 border ports of entry, and 24 actual border crossings. It is impossible to secure our border and maintain trade routes using personnel alone. The only answer is technology.

The Department of Homeland Security has already implemented several technologies at ports of entry to ensure security and the free flow of legitimate goods. Those technologies are collectively known as Non-Intrusive Inspections technology and include large-scale x-ray and gamma imaging systems, portable and handheld technology, and radiation detection technology.

The Vehicle and Cargo Inspection System, which only takes seconds to scan a vehicle or cargo container, uses non-intrusive gamma ray imaging and produces radiographic images to evaluate the contents of trucks, containers, cargo, and passenger vehicles.

The Department also has expanded the use of Free and Secure Trade (FAST) and Secure Electronic Network for Travelers Rapid Inspection (SENTRI) lanes at southern border ports of entry.

FAST lanes developed out of an agreement between the U.S. and Mexican governments aimed at promoting free and secure trade. Under the agreement, while crossing the border, certified carriers use a paperless processing system to let inspectors know their identity and what cargo they are carrying. The program has reduced congestion at our land borders. FAST lanes are already operational at six southern border ports of entry and by the end of this summer will be operational at eight more.

SENTRI lanes are automated dedicated commuter lanes that use Automatic Vehicle Identification technology to reduce border congestion by scanning pre-enrolled travelers who cross the border frequently. The SENTRI system identifies travelers who pose little risk to border security, verifies their low risk status through extensive record checks, and screens approved participants and their vehicles every time they enter the United States.

Data contained in the SENTRI enrollment system and an inspector's visual comparison of the vehicle and its passengers with data on the computer screen automatically help identify a visitor and the vehicle approaching the border. Because identifying information is supplied prior to border inspection, the time for inspection has decreased from an average of 30 to 40 seconds to 10.

These technologies have set the groundwork for expedited trade across our borders. And several emerging technologies already being tested for the future include a sonogram system designed to search large or small vehicles, regardless of contents, for hidden persons by detecting their heartbeats. It is accurate and reliable and provides the officer with the capability of rapidly searching fully loaded vehicles without moving or disturbing the vehicle's contents.

Another new technology will integrate the U.S. Customs and Border Protection's Automated Commercial Environment and an International Trade Data System to provide a secure government-wide database containing trade and transportation data. The system will enable over 100 federal agencies to coordinate their roles for targeting high-risk cargo while allowing low-risk cargo to pass more freely.

Finally, Radio Frequency Identification consists of wireless systems that read information contained in a wireless device or "tag" from a distance without making any physical contact or requiring a line of sight between the two. It provides a method to transmit and receive data from one point to another.

It has established itself in a wide range of markets because of its ability to track moving objects. This type of technology works well when used in conjunction with cargo information provided to us from our international partners. While the technology has been in use on the border for many years, we are still discovering new applications for it.

Technology is the answer to facilitating trade and protecting our nation from those who wish to do us harm. However, there can be no homeland security unless we know who is entering our country, why they are here, and how long they stay.

A provision in the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 that I authored requires the development and installation of a system to document the entry and exit of individuals who come to the United States.

The system is known as the United States Visitor and Immigrant Status Indicator Technology or US-VISIT. US-VISIT allows the U.S. government to conduct security checks of visitors against appropriate databases, such as the Terrorist Screening Database.

It helps identify criminals, security threats, and immigration law violators, biometrically matches a visitor's identity and travel document to ensure that the traveler is the person to whom the travel document was issued and ensures that visitors have not exceeded their approved length of time in the United States.

Prior to US-VISIT's implementation, many groups and individuals predicted it would disrupt trade and devastate the economy in border states. Some stated that the number of tourists, shoppers, homeowners and business people who cross the border would drop dramatically.

For instance, a 2004 study determined that US-VISIT would result in a loss to the U.S. economy of 1.4 million jobs and $229 billion when implemented at border crossings. The study also predicted reduced competitiveness, losses in sales and inventory problems for border communities from Brownsville to San Diego.

Those studies and dire predictions were off the mark, to put it nicely. According to the Department of Commerce, the U.S. did $235 billion in trade with Mexico in 2003, before US?VISIT. In 2004, after the program was implemented at many points of entry, the U.S. did over $267 billion in trade with Mexico, a 14 percent increase.

The reality is that US-VISIT is working better than expected and will continue to do so. Right now DHS is processing individuals through US-VISIT at airports, seaports, and the 50 busiest land border ports of entry in the country ? without negatively impacting border crossing wait times. There's another major plus: since January 2004, over 570 criminals have been denied entry.

Some in Congress believe that the best way to secure the border and reduce illegal immigration is to enact a guest worker program. But many questions about the consequences of such programs need to be answered.

First, nearly every study shows that competition from cheap foreign labor displaces American workers or depresses their wages. Particularly hard hit are blue-collar workers, legal immigrants and citizens alike. They lose up to $2,000 in wages every year.

Rather than legalize illegal immigrants through a guest worker program, why not increase wages and make the jobs that illegal workers now take more attractive to American workers? Why not let the free market work?

Another question involves homeland security. Why wouldn't a guest worker program be an open invitation to potential terrorists? They could enter the country legally, get a job, and use their legitimate status under the program as a cover to plan and carry out terrorist attacks.

It has happened before. One of the terrorists who bombed the World Trade Center in 1993 entered the United States as a guest worker. And we also know that terrorists are looking for ways to enter the country. Last February, CIA Director Porter Goss testified that evidence "strongly suggests" that al Qaeda operatives plan to enter the United States by crossing the U.S.-Mexico border.

Another question relates to costs. Guest workers usually do not earn enough to pay income taxes. If they stay in the United States and pay Social Security taxes on their wages, they will get back $100,000 more than they paid into the system, further jeopardizing Social Security's future.

Guest workers also use government services, such as education and emergency medical care. Trauma centers at hospitals in some of our border states are closing because of the costs of providing free medical care to illegal immigrants. Why is this good for American taxpayers?

One additional question needs to be asked about claims that a guest worker program will end illegal immigration. Illegal immigrants, though, will continue to come across our borders to obtain government benefits, seek other jobs, and gain automatic citizenship for their children born in the United States. Many others will enter illegally because they think they will be eligible for the present or a future guest worker program. So why would a guest worker program stop illegal immigration?

The issues we face today are among the most difficult, yet most important, confronting our nation. And as impossible as it may seem at times, we can find the right balance between protecting our borders and ensuring the free flow of commerce.

Thank you for the opportunity to be with you. It's always good to be back home in San Antonio.

http://lamarsmith.house.gov/News.asp?FormMode=Detail&ID=631

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