April 02,2001

Grassley Releases Report on Free Trade Area of the Americas

Sen. Chuck Grassley, chairman of the Committee on Finance, today released a GeneralAccounting Office report, “Free Trade Area of the Americas/Negotiations at Key Juncture on Eveof April Meetings” and made the following comment on the report. Note: The report will beavailable at http://finance.senate.gov/ under “press office.”

“Today, I am releasing a U.S. General Accounting Office report on the status of the FreeTrade Area of the Americas negotiations. These regional trade negotiations, which are aimed ateliminating tariffs, opening markets, and agreeing on a common set of trading rules with our WesternHemisphere neighbors, are extremely important to America’s economy. The 34 democracies of theFTAA region purchased about 36 percent of all U.S. exports of goods and services in 1999. In mystate of Iowa, about one-third of all the goods sold in international commerce, or about $1 billionworth of exports, are shipped to the FTAA region.

“Because the stakes for the FTAA negotiations are so high for America’s farmers, businessentrepreneurs, and service providers, last September I asked Congress’ nonpartisan GeneralAccounting Office to evaluate the progress of the FTAA talks, and to report back to me prior to theApril 7, 2001, FTAA Ministerial in Buenos Aires, and the April 20-22 Summit of the Americas inQuebec City. I asked GAO to examine the progress of the negotiations because I was concerned thatthe negotiations have stalled, and that lack of agreement on major issues may mean that we may notbe able to resolve more contentious matters before the negotiations are set to conclude in 2005.

“A team of GAO’s professional evaluators and trade specialists have spent the past sixmonths interviewing key participants in the FTAA process, including foreign government officialsand lead U.S. government negotiators. They have sifted through an extensive collection of officialFTAA documents. This report is the result of that effort.

“Three related factors revealed in the GAO report give me a great deal of concern.“The first is that, according to GAO’s findings, the negotiations have a long way to go interms of achieving their key market access objectives. In fact, the GAO reports that FTAAnegotiators have not even begun to discuss market access concessions, which are the heart of theFTAA negotiations.

“The second is that some of the FTAA participants interviewed by the GAO believe that theUnited States lacks the political will to successfully conclude a market-opening agreement because,according to these participants, there does not appear to be a consensus in the United States on thebenefits of international trade, and on how to handle the issues of labor rights and the environmentin the context of trade agreements.

“Finally, the GAO reports that some FTAA participants believe that the President’s absenceof trade promotion authority has thwarted the negotiations, to the extent that some countries are notwilling to make the necessary concessions to move the negotiations forward. According to the GAO,some FTAA participants feel that the President’s lack of trade promotion authority gives othernations an excuse to slow the negotiating process.

“These three findings indicate to me the undeniable truth of international trade policy in the21st century: If America does not lead, others will not follow. This is true whether we are talkingabout multilateral negotiations with 140 countries in the World Trade Organization, or regional tradetalks like the FTAA.

“To that end, every day that goes by without renewing the President’s trade promotionauthority while our officials sit at the negotiating table is a lost opportunity for America. Every tradenegotiation has its own momentum. When it is lost, that momentum is terribly difficult to recover.“That is why I am more determined than ever to push for legislation this year to renew thePresident’s trade promotion authority with the broadest possible scope, so the President can negotiatemarket-opening trade deals on a multilateral or a regional basis.

“The GAO report shows that the FTAA negotiations have yielded some positiveaccomplishments since they started in 1994. For example, participants have agreed to adopt eightcustoms-related business facilitation measures that will expedite commerce among the FTAAnations.

“However, on the broader and more significant market access issues, we clearly need to domore now in the United States to get these important negotiations back on track. We can start byrenewing the President’s trade negotiating authority this year, along the same strongly bipartisanlines that we did in 1988.”