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105TH CONGRESS

1ST SESSION S. 1514

To assess the impact of NAFTA, require the renegotiation of certain provisions of NAFTA, and provide for the withdrawal from NAFTA unless

certain conditions are met.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 10, 1997

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

INOUYE, Mr. WELLSTONE, and Ms. SNOWE) introduced the following bill;

which was read twice and referred to the Committee on Finance

A BILL

To assess the impact of NAFTA, require the renegotiation

of certain provisions of NAFTA, and provide for the

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

2 of NAFTA, as stated in its preamble, is to ‘‘create

3 an expanded and secure market’’ for United States

4 goods and services. Instead, NAFTA has resulted in

5 an enormous increase in imports to the United

6 States from Mexico and Canada and a spiraling

7 trade deficit with Mexico and Canada that has ex8 ceeded $30,000,000,000 in both 1995 and 1996. Be9 fore NAFTA, the United States had a

10 $1,700,000,000 trade surplus with Mexico. Rather

11 than harmonious development and expansion in all 3

12 NAFTA countries as envisioned, NAFTA has re13 sulted in United States trade deficits which are

14 draining $2,500,000,000 a month from the United

15 States economy and causing greater economic insta16 bility in Mexico.

17 (2) CURRENCY STABILITY.—One of the pur18 poses of NAFTA, as stated in its preamble, is to

19 ‘‘ensure a predictable commercial framework for

20 business planning and investment’’. However,

21 NAFTA contains no safeguards to minimize the

22 negative economic impacts of severe shifts in cur23 rency exchange rates among the NAFTA Parties.

24 Mexico’s sudden devaluation of its peso in December

25 1994 has more than offset tariff reductions and
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1 other trade benefits the United States expected to

2 achieve from the agreement. The dollar-peso ex3 change rate when NAFTA passed was 1:3.5. It is

4 now approximately 1:8 and is not expected to return

5 to its previous value. Indeed, economic experts are

6 stating that conditions are building for another se7 vere Mexican currency crisis.

8 (3) JOBS, WAGES, AND LIVING STANDARDS.—

9 One of the purposes of NAFTA, as stated in its pre10 amble, is to ‘‘create new employment opportunities

11 and improve working conditions and living stand12 ards’’ in the respective territories of the NAFTA

13 Parties. Instead, there has been a substantial loss of

14 a half million high paying jobs in the United States.

15 A survey of United States companies conducted 3

16 years after the implementation of NAFTA found

17 that 90 percent of the companies that had antici18 pated creating United States jobs through NAFTA

19 have, in fact, not created jobs because of NAFTA.

20 In the first 3 years of NAFTA’s implementation,

21 United States workers have seen steady drops in

22 real hourly wages. In Mexico employment in the bor23 der Maquiladora zone has increased by more than

24 46 percent under NAFTA. However, Mexico has

25 seen much greater job losses in the agricultural,
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1 small retail, and small industrial sectors. Thus, more

2 than 2,000,000 workers have become unemployed in

3 Mexico since the implementation of NAFTA, and

4 real wages of Mexican workers have been slashed 50

5 percent.

6 (4) MANUFACTURING BASE.—One of the pur7 poses of NAFTA is to enhance the competitiveness

8 of firms in the global market. However, rather than

9 increase the ability of the manufacturing sector in

10 the United States to compete in the world market,

11 NAFTA has facilitated the movement of United

12 States manufacturing facilities and jobs to Mexico.

13 NAFTA has contributed to a net loss of approxi14 mately 400,000 manufacturing jobs in the United

15 States and an unprecedented flood of imports of

16 manufactured goods into the United States.

17 (5) HEALTH AND ENVIRONMENT.—Other pur18 poses of NAFTA, as stated in its preamble, are ‘‘to

19 safeguard the public welfare’’ and ‘‘to strengthen the

20 development and enforcement of environmental laws

21 and regulations’’. Yet, since the implementation of

22 NAFTA, the public welfare has been undermined by

23 increased imports of food products that do not meet

24 United States health standards. In addition,

25 NAFTA has accelerated the relocation of United
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1 States manufacturing facilities to the United States2 Mexico border zone. Without adequate environ3 mental safeguards, the uncontrolled industrial and

4 population growth in the border zone has aggravated

5 pollution and health hazards, increasing the inci6 dence of infectious diseases and human exposure to

7 toxins.

8 (6) ILLEGAL DRUGS.—Rather than safeguard9 ing the public welfare, NAFTA has allowed the in10 creased flow of illegal drugs and controlled sub11 stances into the United States from Mexico. More

12 than half of all marijuana and 70 percent of cocaine

13 entering the United States now comes through Mex14 ico. NAFTA’s rules limit inspection of trucks cross15 ing the border into the United States, and the major

16 increase of Mexico to United States truck traffic has

17 provided a new route for drug smuggling. The Gen18 eral Accounting Office has reported that interdiction

19 efforts have had little, if any, impact on the overall

20 flow of drugs through Mexico into the United States.

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

23 enhancement of basic rights are stated objectives of

24 NAFTA. As envisioned, NAFTA was to increase

25 economic opportunity together with expansion of po-
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1 litical freedoms and human rights. Yet these objec2 tives are not being fulfilled, especially in Mexico,

3 where many citizens continue to experience infringe4 ments of such rights and freedoms.

5 (8) FAIR AGRICULTURAL TRADE.—One of the

6 purposes of NAFTA, as stated in its preamble, is to

7 ‘‘reduce distortions to trade’’. In addition, NAFTA

8 is supposed to promote conditions of fair competition

9 and to establish mutually advantageous rules govern10 ing trade. However, since NAFTA, there have been

11 sharp drops and escalations of one-way agricultural

12 trade. One-way trade of Canadian grain exports of

13 wheat, durum wheat, and barley to the United

14 States has disrupted markets and marketing chan15 nels. Surges in the importation of certain Mexican

16 fruits and vegetables have damaged United States

17 domestic production. The importation of livestock

18 and meat products from the NAFTA Parties raises

19 serious health concerns and has exacerbated the se20 vere problems facing United States livestock produc21 ers. NAFTA’s destabilization of the Mexican small

22 agricultural sector has undermined the country’s

23 ability to ensure a stable supply of food, which has

24 led to an unprecedented migration of landless peas-
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1 ants and an increase in emigration to Mexican cities

2 and to the United States.

3 (9) HIGHWAY SAFETY.—NAFTA is intended to

4 preserve the flexibility of each nation to safeguard

5 its public welfare. Mexican motor carriers and driv6 ers do not have to meet the more stringent United

7 States safety standards when operating in Mexico.

8 Canadian law allows significantly longer and heavier

9 trucks than permitted by United States law. These

10 fundamental differences in safety standards make it

11 practically impossible to develop effective enforce12 ment programs in the United States to bring all

13 Mexican or Canadian motor carriers and drivers into

14 compliance with United States laws. Yet, NAFTA

15 would allow Mexican and Canadian trucks to operate

16 in United States border States and eventually all

17 States, posing a serious threat to highway safety in

18 the United States.

19 (10) NAFTA SHOULD NOT BE EXPANDED.—

20 Congress approved NAFTA in order to achieve eco21 nomic, social, and environmental benefits for the

22 people of the United States. Based on currently

23 available information, the goals and objectives of

24 NAFTA are not being achieved. Therefore, until the

25 certifications of NAFTA’s effect, required in section
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1 3, are made, NAFTA should not be expanded to in2 clude any other country. It is also inappropriate,

3 prior to the certification of NAFTA’s effects, to con4 sider any request for ‘‘fast track’’ negotiating au5 thority to expand NAFTA.

6 SEC. 3. CONDITIONS FOR CONTINUED PARTICIPATION IN

7 NAFTA.

8 (a) IN GENERAL.—

9 (1) WITHDRAWAL OF APPROVAL.—Notwith10 standing any other provision of law, unless each of

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

12 (A) the approval of NAFTA by Congress

13 provided for in section 101(a) of the North

14 American Free Trade Agreement Implementa15 tion Act shall cease to be effective on January

16 1, 1999; and

17 (B) not later than July 1, 1998, the Presi18 dent shall provide 6 months written notice of

19 withdrawal to the Governments of Canada and

20 Mexico in accordance with Article 2205 of

21 NAFTA.

22 (2) CONDITIONS FOR CONTINUING PARTICIPA23 TION IN NAFTA.—The conditions described in this

24 paragraph are that before March 31, 1998—

25 (A) the President—
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1 (i) provide the certification to Con2 gress described in subsection (b)(6); and

3 (ii) renegotiate the terms of NAFTA

4 in accordance with section 4;

5 (B) the Secretary of Commerce provide the

6 certification described in subsection (b)(1);

7 (C) the Secretary of the Treasury provide

8 the certification described in subsection (b)(2);

9 (D) the Secretary of Labor provide the cer10 tification described in subsection (b)(3);

11 (E) the Secretary of Agriculture and the

12 Administrator of the Food and Drug Adminis13 tration provide the certification described in

14 subsection (b)(4)(A);

15 (F) the Administrator of the Environ16 mental Protection Agency submit the certifi17 cation and report described in subsection

18 (b)(4)(B);

19 (G) the Attorney General of the United

20 States provide the certification described in

21 subsection (b)(5);

22 (H) the Secretary of Agriculture provide

23 the certification described in subsection (b)(7);

24 and
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1 (I) the Secretary of Transportation provide

2 the certification described in subsection (b)(8).

3 (b) AREAS OF CERTIFICATION.—The areas of certifi4 cation described in this subsection are as follows:

5 (1) CERTIFICATION OF THE NAFTA BALANCE

6 OF TRADE.—If the Secretary of Commerce, after

7 consulting with appropriate government agencies

8 and citizen organizations, determines that the cumu9 lative trade balance between the United States and

10 Mexico and the United States and Canada during

11 the first 3 years that NAFTA was in effect is at

12 least as positive as in the 3 years before NAFTA

13 took effect, so that the net trade balance does not

14 show a greater overall deficit, the Secretary shall so

15 certify.

16 (2) CERTIFICATION OF CURRENCY VALUES.—If

17 the Secretary of the Treasury, after consulting with

18 appropriate government agencies and citizen organi19 zations, determines that the exchange rates between

20 the United States dollar and both the Canadian dol21 lar and the Mexican peso are within 10 percent of

22 the exchange rates when NAFTA took effect, the

23 Secretary shall so certify.

24 (3) CERTIFICATION OF NAFTA’S EFFECTS ON

25 UNITED STATES JOBS AND LIVING STANDARDS.—If
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1 the Secretary of Labor, after consultation with ap2 propriate government agencies and citizen organiza3 tions, determines that—

4 (A) the number of specific United States

5 jobs resulting from increased exports of United

6 States manufactured goods to other NAFTA

7 Parties exceeds the number of specific jobs lost

8 because of imports of manufactured goods from

9 other NAFTA Parties since January 1, 1994,

10 by comparing jobs created with jobs lost, and

11 (B) the hourly real wage rate of wage

12 earners in the United States has not decreased

13 since January 1, 1994,

14 the Secretary shall so certify to Congress.

15 (4) CERTIFICATION RELATING TO HEALTH AND

16 ENVIRONMENTAL STANDARDS.—

17 (A) IN GENERAL.—If the Secretary of Ag18 riculture and the Administrator of the Food

19 and Drug Administration, after consultation

20 with appropriate government agencies and citi21 zen organizations, determine, with respect to

22 imports from NAFTA Parties, that since Janu23 ary 1, 1994, there has been a reduced incidence

24 of contaminated and adulterated food, food con25 taining additives or pesticide residues exceeding
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1 United States standards, or food containing ad2 ditives or pesticide residues which cannot be le3 gally used in the United States, the Secretary

4 and Administrator shall so certify to Congress.

5 In making this determination, all foods and

6 food products, including fruits, vegetables,

7 grains, oilseeds, and meats, both fresh and

8 processed, shall be reviewed. Special attention

9 shall be given to foods which have had a history

10 of violations of United States standards or laws

11 described in this subparagraph.

12 (B) BORDER AREA POLLUTION.—(i) If the

13 Administrator of the Environmental Protection

14 Agency determines, taking into account the

15 matters required to be included in the report

16 under clause (ii), that conditions affecting pub17 lic health and the environment in the United

18 States-Mexico border zone have not worsened

19 since January 1, 1994, the Administrator shall

20 so certify to Congress.

21 (ii) In addition, the Administrator, in con22 sultation with the Secretariat for the NAFTA

23 Commission on Environmental Cooperation,

24 shall report to Congress on the outcomes of the

25 investigations by the Environmental Protection
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1 Agency on pollution and health hazards in and

2 around the United States-Mexico border zone

3 since NAFTA went into effect. The report shall

4 include—

5 (I) a description and status report of

6 all industrial site cleanup and environ7 mental improvement projects begun in the

8 border zone since January 1, 1994;

9 (II) information available from local,

10 State, and Federal health agencies reflect11 ing the incidence since January 1, 1990, in

12 and around the border zone of hepatitis,

13 neural stem birth defects, lupus, chronic

14 diarrhea, tuberculosis, nonneural birth de15 fects, cholera, botulism, and other dis16 orders commonly related to industrial pol17 lution, inadequate infrastructures, and

18 hazardous waste; and

19 (III) information on the incidence of

20 air and water pollution since January 1,

21 1990, and the causes, levels, and types of

22 pollution which have occurred.

23 (5) CERTIFICATION RELATING TO ILLEGAL

24 DRUGS.—If the Attorney General of the United

25 States determines, after a review by the Drug En-
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1 forcement Administration and consultation with ap2 propriate government agencies and citizen organiza3 tions, that the importation into the United States of

4 illegal drugs or other controlled substances from

5 Mexico or Canada has not increased since NAFTA

6 went into effect, the Attorney General shall so cer7 tify to Congress. The Attorney General, through the

8 Drug Enforcement Administration, shall conduct a

9 thorough review and report to Congress regarding

10 the flow of illegal drugs from Mexico and Canada

11 and the relationship of such flow to trade of other

12 commodities and services with the NAFTA Parties.

13 (6) CERTIFICATION RELATING TO DEMOCRACY

14 AND HUMAN FREEDOMS.—If the President, after

15 consultation with appropriate government agencies,

16 international organizations, and citizen organiza17 tions, determines that each NAFTA Party—

18 (A) elects its government in free and fair

19 elections;

20 (B) protects the rights of its citizens to or21 ganize into political parties;

22 (C) protects the rights of its citizens to

23 free speech and the right of the news media to

24 operate without fear of government control or

25 reprisal; and
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1 (D) protects the rights of its citizens to as2 semble and to organize associations to advance

3 human rights and economic opportunities,

4 the President shall so certify to Congress.

5 (7) CERTIFICATION RELATING TO NAFTA’S EF6 FECT ON UNITED STATES AGRICULTURE.—If the

7 Secretary of Agriculture, after consultation with ap8 propriate government agencies and citizen organiza9 tions, determines that United States agricultural in10 terests have been left in at least as good a position

11 as before NAFTA, the Secretary shall so certify to

12 Congress.

13 (8) CERTIFICATION RELATING TO HIGHWAY

14 SAFETY.—If the Secretary of Transportation, after

15 consultation with attorneys general of the States,

16 law enforcement officials, State highway safety agen17 cies, other appropriate government agencies, and cit18 izen organizations, determines that a comprehensive

19 enforcement system is in place to ensure that every

20 Mexican commercial truck or bus is properly in21 spected so that the vehicle and its driver are in com22 pliance with United States transportation safety

23 standards before crossing the border into the United

24 States, the Secretary shall so certify to Congress. In

25 making such determination, the Secretary shall re-
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1 view and take into account the results of border in2 spections of Mexican vehicles coming into the United

3 States since January 1, 1994.

4 SEC. 4. RENEGOTIATIONS.

5 (a) RENEGOTIATE NAFTA TO CORRECT TRADE

6 DEFICITS.—The President is authorized and directed to

7 confer with the Governments of Canada and Mexico and

8 to renegotiate the terms of NAFTA to provide for imple9 mentation of adjustments of tariffs, quotas, and other

10 measures to stabilize the flow of trade among the NAFTA

11 Parties when the dollar value of United States imports

12 of goods and services from another NAFTA Party exceeds

13 10 percent of the dollar value of United States exports

14 to that Party.

15 (b) RENEGOTIATE NAFTA TO CORRECT CURRENCY

16 DISTORTIONS.—The President is authorized and directed

17 to confer with the Governments of Canada and Mexico and

18 to renegotiate the terms of NAFTA to provide for the im19 plementation of adjustments of tariffs, quotas, and other

20 measures to mitigate the adverse effects of rapid or sub21 stantial changes in exchange rates between the United

22 States dollar and the currency of another NAFTA Party.

23 (c) RENEGOTIATE NAFTA TO CORRECT JOB

24 LOSS.—The President is authorized and directed to confer

25 with the Governments of Canada and Mexico and to re-
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1 negotiate the terms of NAFTA to ensure that under

2 NAFTA trade with Mexico and Canada creates at least

3 as many United States jobs as it costs United States jobs

4 as measured by specific jobs created since January 1,

5 1994, compared to specific jobs lost since January 1,

6 1994, in United States trade with Mexico and Canada.

7 (d) RENEGOTIATE NAFTA TO PROTECT PUBLIC

8 HEALTH AND THE ENVIRONMENT.—The President is au9 thorized and directed to confer with the Governments of

10 Canada and Mexico and to renegotiate the terms of

11 NAFTA to ensure that—

12 (1) under NAFTA—

13 (A) the rate of importation of food failing

14 United States safety standards from Mexico

15 and Canada,

16 (B) the rate of hepatitis, chronic diarrhea,

17 and other pollution-related diseases along the

18 United States-Mexico border, and

19 (C) the rate of toxic waste dumping and

20 other improper disposal along the United

21 States-Mexico and United States-Canada bor22 ders,

23 are no higher than before NAFTA went into effect;

24 and
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1 (2) under NAFTA the air and water quality in

2 the United States-Mexico border zone, and along

3 and near the border between the United States and

4 Canada, as determined under the Clean Air Act and

5 the Federal Water Pollution Control Act, are no

6 worse than before NAFTA went into effect.

7 (e) RENEGOTIATE NAFTA TO INTERDICT DRUG

8 TRAFFIC.—The President is authorized and directed to

9 confer with the Governments of Canada and Mexico and

10 to renegotiate the terms of NAFTA, including those relat11 ing to increasing border inspection of all cargoes coming

12 from Mexico and Canada carried by truck, rail, or ship,

13 to ensure that the flow of illegal drugs into the United

14 States from Mexico or Canada is no greater than such

15 illegal drug flow before NAFTA went into effect.

16 (f) RENEGOTIATE NAFTA TO CORRECT AGRICUL17 TURAL PROVISIONS.—The President is authorized and di18 rected to confer with the Governments of Canada and

19 Mexico and to renegotiate the terms of NAFTA to provide

20 for the implementation of tariffs, quotas, and other meas21 ures to bring the levels of wheat, durum wheat, and barley

22 imported from Canada to levels that are comparable to

23 the levels of these products imported during the 10-year

24 period before the date NAFTA went into effect. The Presi25 dent is further authorized and directed to renegotiate
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1 NAFTA to establish and strengthen provisions to prevent

2 imports of agricultural commodities from any NAFTA

3 Party from unfairly displacing United States production

4 and to provide improved mechanisms for relief for United

5 States producers that are adversely affected by such im6 ports.

7 (g) RENEGOTIATE NAFTA TO ENSURE COMPLI8 ANCE WITH UNITED STATES TRANSPORTATION STAND9 ARDS.—The President is authorized and directed to confer

10 with the Governments of Canada and Mexico and to re11 negotiate the terms of NAFTA and other relevant agree12 ments to provide for implementation of a comprehensive

13 enforcement system to ensure that every commercial truck

14 or bus entering the United States is properly inspected

15 so that the vehicle and its driver are in compliance with

16 United States transportation standards before entering

17 the United States.

18 SEC. 5. CONSULTATION WITH CONGRESS.

19 The President shall consult regularly with Congress

20 regarding the certifications described in section 3(b) and

21 the renegotiations described in section 4. The United

22 States Trade Representative shall consult with the appro23 priate committees of Congress in the development of any

24 technical and conforming amendments that may be re25 quired to carry out the provisions of this Act.
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1 SEC. 6. NO EXPANSION OF NAFTA.

2 Until such time as the conditions described in section

3 3 are met, it is the sense of Congress that the President

4 should not engage in negotiations to expand NAFTA to

5 include other countries and that fast-track authority

6 should not be renewed with respect to the approval of any

7 such expansion of NAFTA.

8 SEC. 7. DEFINITIONS.

9 As used in this Act:

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

11 North American Free Trade Agreement entered into

12 between the United States, Canada, and Mexico on

13 December 17, 1992, and effective as of January 1,

14 1994.

15 (2) NAFTA PARTY.—The term ‘‘NAFTA

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

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

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

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

20 the Mexican side of the United States-Mexico border

21 and the counties within any State of the United

22 States that are contiguous with Mexico.

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