II

104TH CONGRESS

2D SESSION S. 2016

To assess the impact of the NAFTA, to require further negotiation of certain

provisions of the NAFTA, and to provide for the withdrawal from the

NAFTA unless certain conditions are met.

IN THE SENATE OF THE UNITED STATES

AUGUST 1, 1996

Mr. DORGAN (for himself, Mr. BYRD, Mr. HEFLIN, Mr. CAMPBELL, Mr.

WELLSTONE, Mr. HOLLINGS, Mr. INOUYE, and Mr. D’AMATO) introduced the following bill; which was read twice and referred to the Committee on Finance

A BILL

To assess the impact of the NAFTA, to require further

negotiation of certain provisions of the NAFTA, and

to provide for the withdrawal from the NAFTA unless

certain conditions are met.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘NAFTA Accountability

5 Act’’.

6 SEC. 2. FINDINGS.

7 The Congress makes the following findings:
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1 (1) EXPANDED MARKETS.—One of the purposes

2 of the NAFTA, as stated in the preamble, is to ‘‘cre3 ate an expanded and secure market’’ for goods and

4 services. Instead, the NAFTA has resulted in a spi5 raling merchandise trade deficit with Mexico and

6 Canada that totaled $33,550,000,000 in 1995.

7 Rather than harmonious development and expansion

8 as envisioned, the NAFTA has resulted in trade

9 deficits which have been draining over

10 $3,000,000,000 a month from the United States

11 economy this year.

12 (2) CURRENCY STABILITY.—One of the pur13 poses of the NAFTA is to ‘‘ensure a predictable

14 commercial framework for business planning and in15 vestment’’. However, the NAFTA contains no safe16 guards to minimize the negative economic impacts of

17 severe shifts in currency exchange rates among the

18 NAFTA Parties. To protect its own economy the

19 United States has sought to bolster the Mexican

20 peso which is now being supported by

21 $30,000,000,000 in loans, mostly from unwilling

22 United States taxpayers. The devaluation of the

23 Mexican peso has more than offset tariff reductions

24 and other trade benefits the United States expected

25 to achieve from the agreement.
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1 (3) FAIR AGRICULTURAL TRADE.—One of the

2 purposes of the NAFTA is to reduce distortions to

3 trade. In addition, the NAFTA is supposed to pro4 mote conditions of fair competition and to establish

5 mutually advantageous rules governing trade. How6 ever, since the NAFTA, there has been a rapid esca7 lation of one-way trade of Canadian grain exports of

8 wheat, durum wheat, and barley to the United

9 States, disrupting markets and marketing channels.

10 Surges in the importation of certain Mexican fruits

11 and vegetables threaten domestic production and the

12 importation of livestock and meat products from the

13 NAFTA Parties has exacerbated the severe problems

14 facing United States livestock producers. Pref15 erential treatment under NAFTA has allowed the

16 United States market to be unfairly targeted by Ca17 nadian makers of certain woolen apparel products.

18 (4) JOBS, WAGES, AND LIVING STANDARDS.—

19 One of the purposes of the NAFTA is to ‘‘create

20 new employment opportunities and improve working

21 conditions and living standards’’ in the respective

22 territories of the NAFTA Parties. Instead, there has

23 been a substantial loss of over 483,600 jobs in the

24 United States. A survey of United States companies

25 conducted 20 months after the implementation of
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1 the NAFTA found that 90 percent of the companies

2 that had anticipated an increased number of jobs

3 from the NAFTA have, in fact, not increased em4 ployment since the NAFTA was implemented. In the

5 first year of the NAFTA’s implementation, United

6 States workers had the sharpest drop of real hourly

7 wages on record. More than 2,000,000 workers have

8 become unemployed in Mexico since the implementa9 tion of the NAFTA and real wages of Mexican work10 ers have been slashed 50 percent. In addition to the

11 loss of purchasing power, there has been an erosion

12 in the standards of living in the United States, Can13 ada, and Mexico.

14 (5) MANUFACTURING BASE.—One of the pur15 poses of the NAFTA is to enhance the competitive16 ness of firms in the global market. However, rather

17 than increase the ability of the manufacturing sector

18 in the United States to compete in the world mar19 ket, the NAFTA has facilitated the movement of

20 United States manufacturing facilities and jobs to

21 Mexico. The NAFTA has contributed to a net loss

22 of manufacturing jobs in the United States and an

23 unprecedented flood of imports of manufactured

24 goods into the United States.
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1 (6) HEALTH AND ENVIRONMENT.—Other pur2 poses of the NAFTA are ‘‘to safeguard the public

3 welfare’’ and ‘‘to strengthen the development and

4 enforcement of environmental laws and regulations’’.

5 Yet, since the implementation of the NAFTA, the

6 public welfare has been undermined by increased im7 ports of food products that do not meet United

8 States health standards. In addition, the NAFTA

9 has accelerated the relocation of United States man10 ufacturing facilities to the United States-Mexico bor11 der zone, where hundreds of new manufacturing

12 plants have been added. Without adequate environ13 mental safeguards, the uncontrolled industrial and

14 population growth in the border zone has aggravated

15 pollution and health hazards, increasing the inci16 dence of infectious diseases and human exposure to

17 toxins.

18 (7) HIGHWAY SAFETY.—The NAFTA is sup19 posed to preserve the flexibility of each nation to

20 safeguard its public welfare. To ensure high stand21 ards of highway safety, Congress specifically pro22 vided that Mexican motor carriers must fully comply

23 with all United States motor carrier safety laws in

24 order to operate in the United States. Studies by

25 law enforcement officials and independent agencies
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1 effectively document the underlying compliance prob2 lem. Mexican motor carriers and drivers do not have

3 to meet United States safety standards when operat4 ing in Mexico. This fundamental difference in safety

5 standards makes it practically impossible to develop

6 effective United States enforcement programs for

7 bringing all Mexican motor carriers and drivers into

8 compliance with United States laws. Therefore, the

9 opening of United States border States and eventu10 ally all States to Mexican commercial vehicles, as

11 scheduled under the NAFTA, poses a serious threat

12 to highway safety in the United States.

13 (8) ILLEGAL DRUGS.—Rather than safeguard14 ing the public welfare, the NAFTA has allowed the

15 increased flow of illegal drugs and controlled sub16 stances into the United States from Mexico. More

17 than half of all cocaine and marijuana illegally en18 tering the United States now comes through Mexico,

19 with an increasing portion carried by trucks which

20 undergo more limited inspection under the NAFTA.

21 (9) PROTECT RIGHTS.—The promotion of sus22 tainable development as well as the protection and

23 enhancement of basic rights are stated objectives of

24 the NAFTA. As envisioned, the NAFTA is to in25 crease economic opportunity together with expansion
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1 of political freedoms and human rights. Yet these

2 objectives are not being fulfilled, especially in Mex3 ico, where some citizens continue to experience in4 fringements of such rights and freedoms.

5 (10) NAFTA SHOULD NOT BE EXPANDED.—

6 The Congress approved the NAFTA in order to

7 achieve economic, social, and environmental benefits

8 for the people of the United States. Based on cur9 rently available information, the goals and objectives

10 of the NAFTA are not being achieved. Therefore,

11 the NAFTA should not be expanded to include any

12 other country.

13 (11) NAFTA TO BE RENEGOTIATED AND BEN14 EFITS CERTIFIED.—Based on the experience with

15 the NAFTA since its implementation, it has become

16 evident that further negotiation is required to re17 solve fundamental inadequacies within the NAFTA

18 with respect to trade balances, currency differentials,

19 and agricultural provisions. If the NAFTA is to con20 tinue, responsible public officials must be able to

21 certify specific measures of economic, social, and en22 vironmental progress. Otherwise Congress has no

23 choice but to withdraw its approval of the NAFTA.
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1 SEC. 3. CONDITIONS FOR CONTINUED PARTICIPATION IN

2 THE NAFTA.

3 (a) IN GENERAL.—

4 (1) WITHDRAWAL OF APPROVAL.—Notwith5 standing any other provision of law, unless each of

6 the conditions described in paragraph (2) is met—

7 (A) the approval of the NAFTA by the

8 Congress provided for in section 101(a) of the

9 North American Free Trade Agreement Imple10 mentation Act shall cease to be effective on Oc11 tober 1, 1997, and

12 (B) not later than April 1, 1997, the

13 President shall provide written notice of with14 drawal to the Governments of Canada and Mex15 ico in accordance with Article 2205 of the

16 NAFTA.

17 (2) CONDITIONS FOR CONTINUING PARTICIPA18 TION IN NAFTA.—The conditions described in this

19 paragraph are that before December 31, 1996—

20 (A) the President—

21 (i) renegotiate the terms of the

22 NAFTA in accordance with paragraphs

23 (1), (2), and (3) of subsection (b), and

24 (ii) provide the certification to the

25 Congress described in subsection (b)(9),
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1 (B) the Secretary of Labor provide the cer2 tification described in subsection (b)(4),

3 (C) the Secretary of Commerce provide the

4 certification described in subsection (b)(5),

5 (D) the Secretary of Agriculture and the

6 Administrator of the Food and Drug Adminis7 tration provide the certification described in

8 subsection (b)(6)(A),

9 (E) the Administrator of the Environ10 mental Protection Agency submit the certifi11 cation and report described in subsection

12 (b)(6)(B),

13 (F) the Secretary of Transportation pro14 vide the certification described in subsection

15 (b)(7), and

16 (G) the Attorney General of the United

17 States provide the certification described in

18 subsection (b)(8).

19 (b) AREAS OF RENEGOTIATION AND CERTIFI20 CATION.—The areas of renegotiation and certification de21 scribed in this subsection are as follows:

22 (1) RENEGOTIATE THE NAFTA TO CORRECT

23 TRADE DEFICITS.—The President is authorized and

24 directed to confer with the Governments of Canada

25 and Mexico and to renegotiate the terms of the
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1 NAFTA to provide for implementation of emergency

2 adjustments of tariffs, quotas, and other measures

3 to stabilize the flow of trade among the NAFTA

4 Parties when the United States has an annual defi5 cit in trade of goods and services with another

6 NAFTA Party that exceeds 10 percent of United

7 States exports to that Party.

8 (2) RENEGOTIATE THE NAFTA TO CORRECT

9 CURRENCY DISTORTIONS.—The President is author10 ized and directed to confer with the Governments of

11 Canada and Mexico and to renegotiate the terms of

12 the NAFTA to provide for the implementation of

13 emergency adjustments of tariffs, quotas, and other

14 measures to mitigate the adverse effects of rapid or

15 substantial changes in exchange rates between the

16 United States dollar and the currency of another

17 NAFTA Party.

18 (3) RENEGOTIATE THE NAFTA TO CORRECT AG19 RICULTURAL PROVISIONS.—The President is author20 ized and directed to confer with the Governments of

21 Canada and Mexico and to renegotiate the terms of

22 the NAFTA to provide for the implementation of

23 emergency tariffs, quotas, and other measures to

24 bring the levels of wheat, durum wheat, and barley

25 imported from Canada to levels that are comparable
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1 to the levels of these products imported during the

2 10-year period before the date the NAFTA entered

3 into force with respect to the United States. The

4 President is further authorized and directed to re5 negotiate the NAFTA to establish and strengthen

6 provisions to prevent imports of agricultural com7 modities or products from any NAFTA Party (in8 cluding woolen apparel products from Canada) that

9 unfairly displace United States production and to

10 provide improved mechanisms for relief for United

11 States producers that are adversely impacted by

12 such imports.

13 (4) CERTIFICATION OF GAINS IN UNITED

14 STATES JOBS AND LIVING STANDARDS.—If the Sec15 retary of Labor, after consultation with appropriate

16 government agencies and citizen organizations, de17 termines that—

18 (A) the number of jobs resulting from in19 creased exports of United States manufactured

20 goods to other NAFTA Parties exceeds the

21 number of jobs lost because of imports of man22 ufactured goods from other NAFTA Parties

23 since January 1, 1994, and
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1 (B) the purchasing power of wage-earners

2 in the United States has increased since Janu3 ary 1, 1994,

4 the Secretary shall so certify to the Congress.

5 (5) CERTIFICATION OF INCREASED DOMESTIC

6 MANUFACTURING.—If the Secretary of Commerce,

7 after consultation with the appropriate government

8 agencies and citizen organizations, determines that

9 the export of United States manufactured goods to

10 the NAFTA Parties exceeds the imports of manufac11 tured goods from NAFTA Parties, the Secretary

12 shall so certify to the Congress. In making the de13 termination, the Secretary shall not include any

14 goods originating outside the United States that are

15 exported to another NAFTA Party, nor imports

16 from another NAFTA Party that are destined for

17 other countries.

18 (6) CERTIFICATION RELATING TO HEALTH AND

19 ENVIRONMENTAL STANDARDS.—

20 (A) IN GENERAL.—If the Secretary of Ag21 riculture and the Administrator of the Food

22 and Drug Administration, after consultation

23 with appropriate government agencies and citi24 zen organizations, determine, with respect to

25 imports from NAFTA Parties, that since Janu-
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1 ary 1, 1994, there has been a reduced incidence

2 of contaminated and adulterated food, food con3 taining additives or pesticide residues exceeding

4 United States standards, or food containing ad5 ditives or pesticide residues which cannot be le6 gally used in the United States, the Secretary

7 and Administrator shall so certify to the Con8 gress. In making this determination, all foods

9 and food products, including fruits, vegetables,

10 grains, oilseeds, and meats, both fresh and

11 processed, shall be reviewed. Special attention

12 shall be given to foods which have had a history

13 of violations.

14 (B) BORDER AREA POLLUTION.—If the

15 Administrator of the Environmental Protection

16 Agency determines that conditions affecting

17 public health in the United States-Mexico bor18 der zone have not worsened since January 1,

19 1994, the Administrator shall so certify to the

20 Congress. In addition, the Administrator, in

21 consultation with the Secretariat for the

22 NAFTA Commission on Environmental Co23 operation, shall report to the Congress on the

24 outcomes of the Administration’s investigations

25 on pollution and health hazards in and around
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1 the United States-Mexico border zone since the

2 implementation of the NAFTA. The report

3 shall include—

4 (i) a description and status report of

5 all industrial site cleanup and environ6 mental improvement projects begun in the

7 border zone since January 1, 1994;

8 (ii) information available from local,

9 State, and Federal health agencies reflect10 ing the incidence since January 1, 1990, in

11 and around the border zone of hepatitis,

12 neural stem birth defects, lupus, chronic

13 adolescent diarrhea, tuberculosis, non14 neural birth defects, cholera, botulism, and

15 other disorders commonly related to indus16 trial pollution, inadequate infrastructures,

17 and hazardous waste; and

18 (iii) information on the incidence of

19 air and water pollution since January 1,

20 1990, and the causes, levels, and types of

21 pollution which have occurred.

22 (7) CERTIFICATION RELATING TO HIGHWAY

23 SAFETY.—If the Secretary of Transportation after

24 consultation with State attorneys general, law en25 forcement officials, and State highway safety agen-
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1 cies, other appropriate government agencies and citi2 zen organizations, determines that a comprehensive

3 enforcement system is in place to ensure that every

4 Mexican commercial truck or bus is properly in5 spected so that the vehicle and its driver are in com6 pliance with United States transportation safety

7 standards before crossing the border into the United

8 States, the Secretary shall so certify to the Con9 gress. In making such determination, the Secretary

10 shall review and document the results of border in11 spections of Mexican vehicles coming into the United

12 States since January 1, 1994. The Secretary shall

13 further document the procedures that must be com14 pleted during inspection to achieve full compliance

15 within such a comprehensive enforcement system.

16 (8) CERTIFICATION RELATING TO ILLEGAL

17 DRUGS.—If the Attorney General of the United

18 States determines, after a review by the Drug En19 forcement Administration and consultation with ap20 propriate government agencies and citizen organiza21 tions, that increased imports from the NAFTA Par22 ties are not resulting in an increase in illegal drugs

23 or other controlled substances from Mexico or Can24 ada, the Attorney General shall so certify to the

25 Congress. The Attorney General through the Drug
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1 Enforcement Administration shall conduct a thor2 ough review and report to the Congress regarding

3 the flow of illegal drugs from Mexico and Canada

4 and the relationship of such flow to trade of other

5 commodities and services with the NAFTA Parties.

6 (9) CERTIFICATION RELATING TO DEMOCRACY

7 AND HUMAN FREEDOMS.—If the President, after

8 consultation with appropriate government agencies,

9 international organizations, and citizen organiza10 tions, determines that the Government of Mexico—

11 (A) is elected in free and fair elections,

12 (B) protects the rights of its citizens to or13 ganize into political parties,

14 (C) protects the rights of its citizens to

15 free speech and the right of the news media to

16 operate without fear of government control or

17 reprisal, and

18 (D) protects the rights of its citizens to as19 semble and to organize associations to advance

20 human rights and economic opportunities,

21 the President shall so certify to the Congress.

22 SEC. 4. CONSULTATION WITH CONGRESS.

23 The President shall consult regularly with the Con24 gress regarding the negotiations described in section 3(b)

25 (1), (2), and (3). The United States Trade Representative
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1 shall consult with the appropriate committees of Congress

2 in the development of any technical and conforming

3 amendments that may be required to carry out the provi4 sions of this Act.

5 SEC. 5. NO EXPANSION OF NAFTA.

6 Until such time as the conditions described in section

7 3(b) are met, it is the sense of the Congress that the Presi8 dent should not engage in negotiations to expand the

9 NAFTA to include other countries and that fast-track au10 thority should not be renewed with respect to the approval

11 of any such expansion of the NAFTA.

12 SEC. 6. DEFINITIONS.

13 As used in this Act:

14 (1) NAFTA.—The term ‘‘NAFTA’’ means the

15 North American Free Trade Agreement entered into

16 between the United States, Canada, and Mexico on

17 December 17, 1992.

18 (2) NAFTA PARTY.—The term ‘‘NAFTA

19 Party’’ means the United States, Canada, or Mexico.

20 (3) UNITED STATES-MEXICO BORDER ZONE.—

21 The term ‘‘United States-Mexico border zone’’

22 means the area that comprises the 12-mile zone on

23 the Mexican side of the United States-Mexico border
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1 and the counties within any State of the United

2 States that are contiguous with Mexico.

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