```

[House Report 106-803]
[From the U.S. Government Publishing Office]

106th Congress                                            Rept. 106-803
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

======================================================================

 
              UNITED STATES-PANAMA PARTNERSHIP ACT OF 2000

                                _______
                                

                 July 27, 2000.--Ordered to be printed

                                _______
                                

 Mr. Gilman, from the Committee on International Relations, submitted 
                             the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                      [To accompany H. Res. 3673]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on International Relations, to whom was 
referred the bill (H.R. 3673) to provide certain benefits to 
Panama if Panama agrees to permit the United States to maintain 
a presence there sufficient to carry out counternarcotics and 
related missions, having considered the same, report favorably 
thereon without amendment and recommend that the bill do pass.

                         Background and Purpose

    In accordance with the Panama Canal Treaties of 1977, the 
United States terminated its military presence in Panama at the 
end of 1999, and Panama assumed full control of the Panama 
Canal and all former U.S. military installations.
    The loss of U.S. access to facilities in Panama, especially 
Howard Air Force Base, has had a devastating effect on the 
ability of the United States to protect its interests in Latin 
America and the Caribbean. Counternarcotics operations have 
been particularly hard hit. With regard to aerial interdiction 
operations, the Commander-in-Chief of the United States 
Southern Command, General Charles Wilhelm, stated in a letter 
dated June 8, 2000, that until the facilities at Howard Air 
Force Base are replaced, ``we estimate that our capability will 
continue to be approximately a third of what it was in 
Panama.''
    The following chart, prepared by the General Accounting 
Office for a December, 1999 report to Congress illustrates 
graphically the effect on counternarcotics operations of the 
closure of Howard Air Force Base in mid-1999:

    A 1977 protocol to the Treaties provides that the United 
States and Panama may agree to a U.S. presence in Panama after 
1999. For three years, U.S. and Panamanian negotiators sought 
to reach just such an agreement. On September 24, 1998, 
however, it was announced that these negotiations had failed 
and that the U.S. military would withdraw from Panama as 
scheduled.
    This was a regrettable turn of events for both of our 
countries. The United States and Panama both benefitted in many 
ways from the U.S. presence in Panama. For the United States, 
that presence provided a forward platform from which to combat 
narcotrafficking and interdict the flow of drugs, which 
threatens all countries in this hemisphere. These benefits to 
the United States cannot be duplicated at the so-called 
``forward operating locations'' that the Administration has 
sought with limited success to set up in several countries in 
Latin America and the Caribbean.
    For Panama, the U.S. presence added an estimated $300 
million per year to the local economy, fostered economic growth 
by contributing to a stable investment climate, and helped 
deter narcoterrorism from spilling over into Panama.
    In retrospect, the United States should have responded more 
favorably to Panama's proposal in 1995 to negotiate an 
extension of our traditional presence in exchange for a package 
of benefits to be mutually agreed upon. In the wake of the 
Clinton Administration's decision to reject that proposal, the 
effort to establish a Multinational Counternarcotics Center 
failed to gain broad support across Panama's political 
spectrum.
    H.R. 3673 returns to, and builds upon, the concept proposed 
by Panama in 1995 of permitting a U.S. presence in Panama 
beyond 1999 in exchange for a package of benefits. The 
legislation also accepts the idea first proposed by Panama of 
permitting counternarcotics operations from Panama to take 
place under multinational auspices.
    The purpose of H.R. 3673 is to give the President 
authorities that he can use to seek an agreement with Panama to 
permit the United States to maintain a presence there 
sufficient to carry out counternarcotics and related missions.
    H.R. 3673 offers Panama the opportunity to join Canada and 
Mexico in forging a new, more mature, mutually beneficial 
relationship with the United States. In exchange, the 
legislation asks Panama to remain our partner in the war on 
drugs by agreeing to host a U.S. presence, alone or in 
conjunction with other friendly countries, sufficient to carry 
out counternarcotics and related missions.
    H.R. 3673 is merely a grant of authority to the President. 
It seeks to provide him with tools that he can use to negotiate 
an agreement with Panama regarding a matter of vital concern to 
both countries. The President will be free to use or not use 
the tools provided by H.R. 3673. If the President chooses to 
use them, Panama will be free to accept or reject any proposal 
the President makes.
    The Committee hopes that Panama will accept the invitation 
extended by H.R. 3673 to reinvigorate the special relationship 
between our two peoples.

                            Committee Action

    H.R. 3673 was introduced on February 16, 2000, by Mr. 
Gilman. It was referred to the Committee on International 
Relations, and in addition to the Committee on Ways and Means, 
for a period to be subsequently determined by the Speaker, in 
each case for consideration of suchprovisions as fall within 
the jurisdiction of the Committee concerned.
    On July 28, 1999, the Committee held a hearing on ``Post-
1999 U.S. Security and Counter-Drug Interests in Panama.'' 
Testimony was received from Ambassador Thomas E. McNamara, 
formerly the Clinton Administration's chief negotiator with 
Panama in the negotiations aimed at reaching an agreement 
regarding a post-1999 U.S. presence in Panama, and General 
George Joulwan, former Commander-in-Chief of the United States 
Southern Command in Panama.
    In addition, the Committee has held numerous staff 
briefings with Administration officials and others regarding 
the negotiations with Panama and efforts to replace Howard Air 
Force Base and other U.S. facilities in Panama. Several members 
of the Committee have traveled to Panama to explore these 
issues first-hand, as have members of the Committee staff.

                           Markup of the Bill

    The Committee on International Relations marked up H.R. 
3673 on June 29, 2000. The Full Committee considered the bill 
and agreed by voice vote to a motion to favorably report the 
bill to the House of Representatives, a quorum being present. 
No amendments were offered during the Committee markup.

            record votes on amendments and motion to report

    Clause (3)(b) of rule XIII of the Rules of the House of 
Representatives requires that the results of each record vote 
on an amendment or motion to report, together with the names of 
those voting for or against, be printed in the committee 
report. No record votes were taken during the consideration of 
H.R. 3673.

                             Other Matters

                      committee oversight findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee reports the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

                committee on government reform findings

    Clause 3(c)(4) of rule XIII of the Rules of the House of 
Representatives requires each committee report to contain a 
summary of the oversight findings and recommendations made by 
the Government Reform Committee pursuant to clause (4)(c)(2) of 
rule X of those Rules. The Committee on International Relations 
has received no such findings or recommendations from the 
Committee on Government Reform.

                      advisory committee statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act are created by this 
legislation.

                applicability to the legislative branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                   constitutional authority statement

    In compliance with clause 3(d)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee cites the 
following specific powers granted to the Congress in the 
Constitution as authority for enactment of H.R. 3673 as 
reported by the Committee: Article I, section 8, clause 1 
(relating to providing for the common defense and general 
welfare of the United States); Article I, section 8, clause 3 
(relating to the regulation of commerce with foreign nations); 
and Article I, section 8, clause 18 (relating to making all 
laws necessary and proper for carrying into execution powers 
vested by the Constitution in the Government of the United 
States or in any Department or Officer thereof).

                        preemption clarification

    Section 423 of the Congressional Budget Act of 1974 
requires the report of any committee on a bill or joint 
resolution to include a committee statement on the extent to 
which the bill or joint resolution is intended to preempt state 
or local law. The Committee states that H.R. 3673 is not 
intended to preempt any state or local law.

new budget authority and tax expenditures, congressional budget office 
             cost estimate, and federal mandates statements

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives requires each committee report that accompanies 
a measure providing new budget authority, new spending 
authority, or new credit authority or changing revenues or tax 
expenditures to contain a cost estimate, as required by section 
308(a)(1) of the Congressional Budget Act of 1974, as amended, 
and, when practicable with respect to estimates of new budget 
authority, a comparison of the estimated funding level for the 
relevant program (or programs) to the appropriate levels under 
current law.
    Clause 3(d) of rule XIII of the Rules of the House of 
Representatives requires committees to include their own cost 
estimates in certain committee reports, which include, when 
practicable, a comparison of the total estimated funding level 
for the relevant program (or programs) with the appropriate 
levels under current law.
    Clause 3(c)(3) of rule XIII of the Rules of the House of 
Representatives requires thereport of any committee on a 
measure which has been approved by the Committee to include a cost 
estimate prepared by the Director of the Congressional Budget Office, 
pursuant to section 403 of the Congressional Budget Act of 1974, if the 
cost estimate is timely submitted.
    Section 423 of the Congressional Budget Act requires the 
report of any committee on a bill or joint resolution that 
includes any Federal mandate to include specific information 
about such mandates. The Committee states that H.R. 3673 does 
not include any Federal mandate.
    The Committee adopts the cost estimate of the Congressional 
Budget Office as its own submission of any new required 
information with respect to H.R. 3673 on new budget authority, 
new spending authority, new credit authority, or an increase or 
decrease in the national debt. It also adopts the estimate of 
Federal mandates prepared by the Director of the Congressional 
Budget Office pursuant to section 423 of the Unfunded Mandates 
Reform Act. The estimate and report which has been received is 
set out below.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 13, 2000.
Hon. Benjamin A. Gilman,
Chairman, Committee on International Relations,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3673, the United 
States-Panama Partnership Act of 2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Joseph C. 
Whitehill (for federal spending), and Hester Grippando (for 
federal receipts).
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

H.R. 3673--United States-Panama Partnership Act of 2000

    Summary: H.R. 3673 would authorize certain financial 
benefits for Panama upon the certification by the President 
that the governments of the United States and Panama have 
reached an agreement that would permit the United States to 
maintain a presence at certain facilities in Panama for a 
period of at least 15 years. The benefits would include 
preferential tariff treatment for certain Panamanian imports, 
which would reduce governmental receipts by $1 million to $2 
million a year, up to $2 million in scholarships for Panamanian 
students, and two small grants. No negotiations for U.S. access 
to Panamanian facilities are currently underway. CBO does not 
expect an agreement in the next five years, and we therefore 
estimate that the bill would have no cost during that period. 
CBO has no basis for estimating when or if an agreement might 
occur after then. Because the bill could affect governmental 
receipts, the bill would be subject to pay-as-you-go 
procedures.
    H.R. 3673 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA) 
and would not affect the budgets of state, local, or tribal 
governments.
    Estimated cost to the Federal Government: According to 
information from the State Department, no negotiations between 
Panama and the United States are underway and none are likely 
in the near future. Therefore, CBO estimates that the bill 
would have no budgetary impact over the 2000-2005 period. If 
the bill were enacted and if Panama would agree to a U.S. 
presence, then the bill could affect both receipts and spending 
subject to appropriation.

Revenues

    H.R. 3673 would provide trade preferences for certain 
imports from Panama, including textiles, apparel, luggage and 
handbags, certain leather goods, footwear, tuna, petroleum, 
watches, and watch parts. Most of the provisions in the bill 
affecting customs receipts were enacted in the Trade and 
Development act of 2000 (Public Law 106-200).
    One major exception is a provision that would offer ``in-
preference-level tariff treatment'' to certain textile and 
apparel articles that do not originate in Panama. The tariff 
treatment accorded to those goods would be equivalent to the 
tariff treatment of similar goods from Mexico. Imports of 
textile and apparel goods under this provision would be limited 
to approximately 11 million square meter equivalents in a 
calendar year. Based on recent data on import collections, CBO 
estimates that if this provision were to take effect, 
governmental receipts would be reduced by approximately $1 
million a year through 2008, while the provisions of Public Law 
106-200 are in effect. After 2008, when Public Law 106-200 
expires, the potential cost of the bill would rise to $2 
million a year.

Spending subject to appropriation

    For each year an agreement is in force, H.R. 3673 would 
authorize up to $2 million for scholarships for Panamanian 
students. Thus, spending for scholarships would increase by 
that amount, assuming the appropriation of the authorized 
amounts.
    The bill also would direct the Trade and Development Agency 
(TDA) to consider making grants for the planning of a new 
bridge across the Panama Canal and for a sewage-treatment plant 
in Panama City. TDA has already extended a grant to study the 
feasibility of a second canal bridge and is considering 
extending grants for water and sewage projects in Panama using 
available resources. CBO therefore estimates that H.R. 3673 
would not affect spending by TDA.
    The bill would require several reports, including one on 
the extent to which Panama complies with U.S. trade laws. CBO 
estimates that the costs of preparing those reports would be 
insignificant.
    Pay-as-you-go considerations: The Balanced Budget and 
Emergency Deficit Control Act sets up pay-as-you-go procedures 
for legislation affecting direct spending or receipts. While 
H.R. 3673 could affect receipts, CBO does not anticipate any 
loss of receipts over the 2000-2005 period.
    Intergovernmental and private-sector impact: H.R. 3673 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would not affect the budgets of state, 
local, or tribal governments.
    Estimate prepared by: Federal Costs: Joseph C. Whitehill. 
Federal Revenues: Hester Grippando. Impact on State, Local, and 
Tribal Governments: Leo Lex. Impact on the Private Sector: 
Lauren Marks.
    Estimate approved by: Robert A. Sunshine, Assistant 
Director for Budget Analysis. G. Thomas Woodward, Assistant 
Director for Tax Analysis.

                      Section-by-Section Analysis

Section 1. Short title

    Provides that the Act may be cited as the ``United States-
Panama Partnership Act of 2000''.

Section 2. Findings

    Contains congressional findings regarding the history and 
purpose of the U.S. presence in Panama, negotiations to extend 
that presence beyond 1999, and the strong shared interest that 
the United States and Panama continue to have in maintaining a 
U.S. presence in Panama.

Section 3. Certification and report regarding agreement to maintain a 
        United States presence in Panama

    Authorizes the President to submit a certification and 
report to the Committee on International Relations of the House 
of Representatives and the Committee on Foreign Relations of 
the Senate at any time after the date of enactment. The 
certification would affirm that the United States and the 
Government of Panama have reached an agreement permitting the 
United States, for a period of not less than 15 years, to 
maintain a presence, alone or in conjunction with other 
friendly countries, sufficient to carry out necessary 
counternarcotics, search and rescue, logistical, training, and 
related missions at Howard Air Force Base, Fort Kobbe, Rodman 
Naval Station, and Fort Sherman, under terms and conditions 
substantially similar to those applied to the United States 
presence at those facilities during the period beginning on 
October 1, 1979 and ending on December 31, 1999. The report 
would contain, among other matters, the text of the agreement 
and a detailed description of the terms and conditions which 
will apply to the U.S. presence permitted under the agreement. 
To the degree necessary, the report may be submitted in 
classified form.

Section 4. Benefits

    Subsection (a) provides that if the President submits the 
certification and report under section 3, then various benefits 
described in subsections (b), (c), (d), (e), (f), (g), and (h) 
will be extended to Panama.
    Subsection (b) directs the Director of the Trade and 
Development Agency to consider a grant or grants to assist the 
design, financial planning, training, and other preparatory 
steps for the construction of a new bridge across the Panama 
Canal, and requires the Director of the Trade and Development 
Agency to submit a report to the Committee on International 
Relations of the House of Representatives and the Committee on 
Foreign Relations of the Senate, not later than one year after 
the date of submission of the certification and report under 
section 3, regarding the steps taken pursuant to this 
subsection.
    Subsection (c) directs the Director of the Trade and 
Development Agency to consider a grant or grants to assist the 
design, financial planning, training, and other preparatory 
steps for the construction of a new sewage treatment plant for 
Panama City, and requires the Director of the Trade and 
Development Agency to submit a report to the Committee on 
International Relations of the House of Representatives and the 
Committee on Foreign Relations of the Senate, not later than 
one year after the date of submission of the certification and 
report under section 3, regarding the steps taken pursuant to 
this subsection.
    Subsection (d) directs the Administrator of the Agency for 
International Development to ensure that up to $2 million of 
the funds made available each year to the Cooperative 
Association of States for Scholarships program are made 
available for deserving students from Panama to study in the 
United States, and requires the Administrator of the Agency for 
International Development to submit a report to the Committee 
on International Relations of the House of Representatives and 
the Committee on Foreign Relations of the Senate, not later 
than one year after the date of submission of the certification 
and report under section 3, regarding the steps taken pursuant 
to this subsection.
    Subsections (e), (f), (g), and (h) contain provisions 
within the jurisdiction of the Committee on Ways and Means 
relating to a trade benefit that shall be available to Panama 
if the President submits the certification and report under 
section 3.

Section 5. Applicability of benefits

    Contains a provision within the jurisdiction of the 
Committee on Ways and Means relating to the availability of the 
trade benefit provided under section 4.

Section 6. Conforming amendment

    Contains a conforming amendment to the Caribbean Basin 
Economic Recovery Act within the jurisdiction of the Committee 
on Ways and Means.

          Changes in Exiting Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italic and existing law in which no change is 
proposed is shown in roman):

        SECTION 213 OF THE CARIBBEAN BASIN ECONOMIC RECOVERY ACT

SEC. 213. ELIGIBLE ARTICLES.

    (a)(1) Unless otherwise excluded from eligibility by this 
title, and subject to section 423 of the Tax Reform Act of 
1986, and except as provided in section 4 of the United States-
Panama Partnership Act of 2000, and except as provided in 
subsection (b)(2) and (3), the duty-free treatment provided 
under this title shall apply to any article which is the 
growth, product, or manufacture of a beneficiary country if--
          (A) * * *

           *       *       *       *       *       *       *

                             MINORITY VIEWS

    We oppose H.R. 3673, the United States-Panama Partnership 
Act, as ordered reported by the Committee on International 
Relations. We share concern about the situation in Panama and 
would support a presence there under the right circumstances. 
This bill, on the other hand, moves the situation in the 
opposite direction.
    The bill amounts to no more than a statement by the authors 
that they are tough on drugs and want to regain U.S. influence 
in Panama. The bill will do little to practically affect either 
U.S. counter-narcotics objectives or help create an atmosphere 
under which Panamanians would consider a U.S. presence. It is 
poorly timed, threatens to inhibit rather than assist in 
achieving the goal of a U.S. presence in Panama, sets a 
dangerous precedent on trading favors for basing rights, 
includes significant hidden costs, and is unnecessary given 
progress on other U.S. sites in the region. The Panamanians 
have said clearly that they are not interested in the kind of 
presence this bill envisions. If it were to become law, this 
legislation would hurt bilateral relations with Panama and set 
back the objectives it intends to advance.

                       h.r. 3673 is poorly timed

    In December 1997, United States and Panamanian negotiators 
reached tentative agreement on a formula that would have 
allowed a continued US presence in Panama after the treaty-
imposed December 31, 1999 deadline. That agreement was 
comprehensive and would have allowed a U.S. presence on 
counter-narcotics and a host of other issues that had been 
determined to be critical to U.S. national security. It was, in 
short, an arrangement that many of us were ready to support.
    Prior to initialing this agreement, however, the Panamanian 
negotiators walked away from the deal. It was their assessment 
that the political climate in Panama was not conducive to 
finalizing an arrangement allowing a U.S. presence to remain. 
An influential group of political elites opposed the agreement 
based on nationalist concerns, and the conditions that they 
were set to impose on a continued U.S. presence called for too 
many compromises and raised security concerns for U.S. 
personnel. A presence in that climate and under those 
conditions was not in the United States national interest.
    That climate has not significantly changed, and this bill 
threatens to worsen it. The chief negotiator for the United 
States, testifying before the House International Relations 
Committee last summer, made clear that pushing for a full U.S. 
presence was counter-productive. He said, ``Having failed to 
reach an agreement, I strongly recommend that both countries 
adopt a cooling-off period of several years.'' He went on to 
say, ``I would say that if the Panamanians came to us, then 
that would be one set of circumstances. But for us to take an 
initiative at this juncture I think would simply open wounds in 
Panama.''
    The Panamanians have not approached the U.S. about an 
expanded presence. On the contrary, they have continued to make 
it clear that they are not interested in a U.S. military 
presence. In order to convince the Panamanians that they need a 
U.S. presence, the bill fashions severalbenefits for Panama. 
The chief benefit, NAFTA parity, threatens to exacerbate a problem 
between our two countries, a situation that is described further below. 
One of the three other benefits--a Trade and Development Agency study 
of a new sewage treatment plant in Panama City--is already being 
undertaken. The bill offers limited benefits and will delay the day 
that Panamanians approach us about re-opening talks.
    This bill also stands to threaten the little progress we 
have been able to make with the Panamanians. The U.S. and 
Panama are negotiating a very minimal ``Visiting Forces 
Agreement'' and it is the belief of our negotiators of this 
agreement that moving this bill for a wider presence would in 
fact hamper those discussions. If we cannot get agreement on a 
minimal agreement now, we are sure to dirty the waters for a 
wider agreement even after a cooling off period of several 
years. This bill may threaten our ability to ever reach 
agreement with the Panamanians over a U.S. military presence 
there.

     H.R. 3673 sets a dangerous precedent and includes hidden costs

    The bill, in offering a costly trade agreement for a deal 
on a U.S. presence in Panama, sets a risky precedent for U.S. 
military presence in basing agreements across the globe. As we 
drive up the price for Panama, other host countries for U.S. 
military personnel elsewhere in the world look on. They too 
will hold out for a sweetheart deal in exchange for basing 
agreements.
    But these are not the only costs that this bill carries 
with it. Over the course of the last decade the U.S. military 
has been preparing the turnover of former U.S. assets in 
Panama. Construction that would have otherwise been required 
was canceled and military construction funds dedicated to other 
priorities. Re-establishing a U.S. military presence in Panama 
will bring with it significant military construction costs--by 
some estimates more than $100 million--costs that have not yet 
been budgeted for.
    There are also significant diplomatic costs associated with 
this bill. If it appears that we are not honoring our 
commitments to the Canal Treaties of 1977, we will face 
increased skepticism and decreased cooperation throughout the 
rest of the Hemisphere.

                        H.R. 3673 is not needed

    The military construction funds for alternative sites--in 
Aruba/Curacao, Ecuador and El Salvador--have been budgeted for 
and are ready to be put to use. The Administration has 
negotiated forward operating locations in Aruba, Ecuador and El 
Salvador and with the recently passed military construction 
funds those sites will be up and running--and giving us, at 
full implementation, 130% of the aerial counter-narcotics 
coverage we were able to generate out of Panama.
    These alternative sites have the added benefit of 
diversifying U.S. counter-narcotics operations in the region. 
Rather than being solely dependent on the political 
machinations of Panama, these three forward operating locations 
give us greater coverage and more cooperation from our friends 
in the region. These arrangements are already negotiated and 
ready to be implemented. Movingforward on just Panama, on the 
other hand, further delays critical action in the region and comes at a 
far greater political cost in the region. The existing arrangements are 
the way to address our concerns for counter-narcotics operations in the 
region, not through the well-intentioned but misguided H.R. 3673, a 
costly and unnecessary gamble that will risk present and future 
cooperation with Panama and slow down our operations in the region.

                           Concerns on Trade

    Understanding that the trade sections of this bill do not 
fall within the jurisdiction of our Committee, we nonetheless 
want to underscore our concerns on how this trade agreement 
affects two major concerns as they relate to Panama. One, the 
bill contains no safeguards for U.S. workers who will be 
affected by the agreement. Two, the bill runs the risk of 
exacerbating a problem that the U.S. has had with Panama since 
the passage of the Caribbean Basin Initiative in the early 
1980s. Panama, in comparison with its Central American 
neighbors, has a relatively small textile industry--the main 
beneficiary of the trade benefits in H.R. 3673--and has, in the 
past, re-exported to the United States textiles assembled in 
China, labeling them as Panamanian products. Transshipment of 
Chinese goods through Panama into the United States is 
consistently an issue of contention between Panama and the 
United States. This bill not only does not address this problem 
but stands to exacerbate it.
    H.R. 3673 will not fulfill its intended goal. It 
complicates efforts to cooperate with the Panamanians and will 
exacerbate problems on trade. For these reasons we oppose the 
bill.

                                   Sam Gejdenson.
                                   Donald M. Payne.
                                   Alcee L. Hastings.
                                   Joseph Hoeffel.
                                   Steven R. Rothman.
                                   Joseph Crowley.
                                   Bill Delahunt.
                                   Jim Davis.
                                   Robert Wexler.
                                   Gary Ackerman.
                                   Earl Pomeroy.
                                   Eni Faleomavaega.
                                   Tom Lantos.

                                

```