I

105TH CONGRESS

1ST SESSION H. R. 978

To assess the impact of NAFTA, to require the renegotiation of certain

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

unless certain conditions are met.

IN THE HOUSE OF REPRESENTATIVES

MARCH 6, 1997

Ms. KAPTUR (for herself, Mr. BROWN of Ohio, Ms. DANNER, Mr. MILLER of

California, Mrs. MEEK of Florida, Ms. MCKINNEY, Mr. CONYERS, Mr.

SANDERS, Mr. RAHALL, Mr. EVANS, Mrs. CARSON, Mr. PALLONE, Mr.

BONIOR, Mr. COSTELLO, Mr. KLINK, Mr. TRAFICANT, Mr. PASCRELL,

Mr. LEWIS of Georgia, Mr. TIERNEY, Mr. STUPAK, Mr. VISCLOSKY, Mr.

DOYLE, Mr. DELLUMS, Mr. LIPINSKI, Mr. KUCINICH, Mr. DEFAZIO, Mr.

LANTOS, Mr. SABO, Ms. WATERS, Mr. DAVIS of Illinois, Mr. OBEY, Mr.

VENTO, Mr. OBERSTAR, Mr. RUSH, Mr. CLAY, Mr. KLECZKA, Mr.

HILLIARD, Mr. HUNTER, Mr. QUINN, Mr. WATTS of Oklahoma, Mr.

STEARNS, Mr. WAMP, Mr. BONO, Mr. METCALF, Mr. SOUDER, and Mr.

TIAHRT) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To assess the impact of NAFTA, to require the renegotiation

of certain provisions of NAFTA, and to 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,
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1 SECTION 1. SHORT TITLE.

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

3 Act’’.

4 SEC. 2. FINDINGS.

5 The Congress makes the following findings:

6 (1) EXPANDED MARKETS.—One of the purposes

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

8 an expanded and secure market’’ for United States

9 goods and services. Instead, NAFTA has resulted in

10 an enormous increase in imports to the United

11 States from Mexico and Canada and a spiraling

12 trade deficit with Mexico and Canada that has ex13 ceeded $30,000,000,000 in both 1995 and 1996. Be14 fore NAFTA, the United States had a

15 $1,700,000,000 trade surplus with Mexico. Rather

16 than harmonious development and expansion in all 3

17 NAFTA countries as envisioned, NAFTA has re18 sulted in United States trade deficits which are

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

20 States economy and causing greater economic insta21 bility in Mexico.

22 (2) CURRENCY STABILITY.—One of the pur23 poses of NAFTA, as stated in its preamble, is to

24 ‘‘ensure a predictable commercial framework for

25 business planning and investment’’. However,

26 NAFTA contains no safeguards to minimize the
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1 negative economic impacts of severe shifts in cur2 rency exchange rates among the NAFTA Parties.

3 Mexico’s sudden devaluation of its peso in December

4 1994 has more than offset tariff reductions and

5 other trade benefits the United States expected to

6 achieve from the agreement. The dollar-peso ex7 change rate when NAFTA passed was 1:3.5. It is

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

9 to its previous value. Indeed, economic experts are

10 stating that conditions are building for another se11 vere Mexican currency crisis.

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

13 One of the purposes of NAFTA, as stated in its pre14 amble, is to ‘‘create new employment opportunities

15 and improve working conditions and living stand16 ards’’ in the respective territories of the NAFTA

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

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

19 A survey of United States companies conducted 3

20 years after the implementation of NAFTA found

21 that 90 percent of the companies that had antici22 pated creating United States jobs through NAFTA

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

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

25 United States workers have seen steady drops in
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1 real hourly wages. In Mexico employment in the bor2 der Maquiladora zone has increased by more than

3 46 percent under NAFTA. However, Mexico has

4 seen much greater job losses in the agricultural,

5 small retail, and small industrial sectors. Thus, more

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

7 Mexico since the implementation of NAFTA, and

8 real wages of Mexican workers have been slashed 50

9 percent.

10 (4) MANUFACTURING BASE.—One of the pur11 poses of NAFTA is to enhance the competitiveness

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

13 increase the ability of the manufacturing sector in

14 the United States to compete in the world market,

15 NAFTA has facilitated the movement of United

16 States manufacturing facilities and jobs to Mexico.

17 NAFTA has contributed to a net loss of approxi18 mately 400,000 manufacturing jobs in the United

19 States and an unprecedented flood of imports of

20 manufactured goods into the United States.

21 (5) HEALTH AND ENVIRONMENT.—Other pur22 poses of NAFTA, as stated in its preamble, are ‘‘to

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

24 development and enforcement of environmental laws

25 and regulations’’. Yet, since the implementation of
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1 NAFTA, the public welfare has been undermined by

2 increased imports of food products that do not meet

3 United States health standards. In addition,

4 NAFTA has accelerated the relocation of United

5 States manufacturing facilities to the United States6 Mexico border zone. Without adequate environ7 mental safeguards, the uncontrolled industrial and

8 population growth in the border zone has aggravated

9 pollution and health hazards, increasing the inci10 dence of infectious diseases and human exposure to

11 toxins.

12 (6) ILLEGAL DRUGS.—Rather than safeguard13 ing the public welfare, NAFTA has allowed the in14 creased flow of illegal drugs and controlled sub15 stances into the United States from Mexico. More

16 than half of all marijuana and 70 percent of cocaine

17 entering the United States now comes through Mex18 ico. NAFTA’s rules limit inspection of trucks cross19 ing the border into the United States, and the major

20 increase of Mexico to United States truck traffic has

21 provided a new route for drug smuggling. The Gen22 eral Accounting Office has reported that interdiction

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

24 flow of drugs through Mexico into the United States.
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1 (7) PROTECT RIGHTS.—The promotion of sus2 tainable development as well as the protection and

3 enhancement of basic rights are stated objectives of

4 NAFTA. As envisioned, NAFTA was to increase

5 economic opportunity together with expansion of po6 litical freedoms and human rights. Yet these objec7 tives are not being fulfilled, especially in Mexico,

8 where many citizens continue to experience infringe9 ments of such rights and freedoms.

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

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

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

13 is supposed to promote conditions of fair competition

14 and to establish mutually advantageous rules govern15 ing trade. However, since NAFTA, there have been

16 sharp drops and escalations of one-way agricultural

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

18 wheat, durum wheat, and barley to the United

19 States has disrupted markets and marketing chan20 nels. Surges in the importation of certain Mexican

21 fruits and vegetables have damaged United States

22 domestic production. The importation of livestock

23 and meat products from the NAFTA Parties raises
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1 serious health concerns and has exacerbated the se2 vere problems facing United States livestock produc3 ers. NAFTA’s destabilization of the Mexican small

4 agricultural sector has undermined the country’s

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

6 led to an unprecedented migration of landless peas7 ants and an increase in emigration to Mexican cities

8 and to the United States.

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

10 preserve the flexibility of each nation to safeguard

11 its public welfare. Mexican motor carriers and driv12 ers do not have to meet the more stringent United

13 States safety standards when operating in Mexico.

14 Canadian law allows significantly longer and heavier

15 trucks than permitted by United States law. These

16 fundamental differences in safety standards make it

17 practically impossible to develop effective enforce18 ment programs in the United States to bring all

19 Mexican or Canadian motor carriers and drivers into

20 compliance with United States laws. Yet, NAFTA

21 would allow Mexican and Canadian trucks to operate

22 in United States border States and eventually all

23 States, posing a serious threat to highway safety in

24 the United States.
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1 (10) NAFTA SHOULD NOT BE EXPANDED.—

2 The Congress approved NAFTA in order to achieve

3 economic, social, and environmental benefits for the

4 people of the United States. Based on currently

5 available information, the goals and objectives of

6 NAFTA are not being achieved. Therefore, until the

7 certifications of NAFTA’s effect, required in section

8 3, are made, NAFTA should not be expanded to in9 clude any other country. It is also inappropriate,

10 prior to the certification of NAFTA’s effects, to con11 sider any request for ‘‘fast track’’ negotiating au12 thority to expand NAFTA.

13 SEC. 3. CONDITIONS FOR CONTINUED PARTICIPATION IN

14 NAFTA.

15 (a) IN GENERAL.—

16 (1) WITHDRAWAL OF APPROVAL.—Notwith17 standing any other provision of law, unless each of

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

19 (A) the approval of NAFTA by the Con20 gress provided for in section 101(a) of the

21 North American Free Trade Agreement Imple22 mentation Act shall cease to be effective on

23 January 1, 1999; and

24 (B) not later than July 1, 1998, the Presi25 dent shall provide 6 months written notice of
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1 withdrawal to the Governments of Canada and

2 Mexico in accordance with Article 2205 of

3 NAFTA.

4 (2) CONDITIONS FOR CONTINUING PARTICIPA5 TION IN NAFTA.—The conditions described in this

6 paragraph are that before March 31, 1998—

7 (A) the President—

8 (i) provide the certification to the

9 Congress described in subsection (b)(6);

10 and

11 (ii) renegotiate the terms of NAFTA

12 in accordance with section 4;

13 (B) the Secretary of Commerce provide the

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

15 (C) the Secretary of the Treasury provide

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

17 (D) the Secretary of Labor provide the cer18 tification described in subsection (b)(3);

19 (E) the Secretary of Agriculture and the

20 Administrator of the Food and Drug Adminis21 tration provide the certification described in

22 subsection (b)(4)(A);
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1 (F) the Administrator of the Environ2 mental Protection Agency submit the certifi3 cation and report described in subsection

4 (b)(4)(B);

5 (G) the Attorney General of the United

6 States provide the certification described in

7 subsection (b)(5);

8 (H) the Secretary of Agriculture provide

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

10 and

11 (I) the Secretary of Transportation provide

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

13 (b) AREAS OF CERTIFICATION.—The areas of certifi14 cation described in this subsection are as follows:

15 (1) CERTIFICATION OF THE NAFTA BALANCE

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

17 consulting with appropriate government agencies

18 and citizen organizations, determines that the cumu19 lative trade balance between the United States and

20 Mexico and the United States and Canada during

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

22 least as positive as in the 3 years before NAFTA

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

24 show a greater overall deficit, the Secretary shall so

25 certify.
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1 (2) CERTIFICATION OF CURRENCY VALUES.—If

2 the Secretary of the Treasury, after consulting with

3 appropriate government agencies and citizen organi4 zations, determines that the exchange rates between

5 the United States dollar and both the Canadian dol6 lar and the Mexican peso are within 10 percent of

7 the exchange rates when NAFTA took effect, the

8 Secretary shall so certify.

9 (3) CERTIFICATION OF NAFTA’S EFFECTS ON

10 UNITED STATES JOBS AND LIVING STANDARDS.— If

11 the Secretary of Labor, after consultation with ap12 propriate government agencies and citizen organiza13 tions, determines that—

14 (A) the number of specific United States

15 jobs resulting from increased exports of United

16 States manufactured goods to other NAFTA

17 Parties exceeds the number of specific jobs lost

18 because of imports of manufactured goods from

19 other NAFTA Parties since January 1, 1994,

20 by comparing jobs created with jobs lost, and

21 (B) the hourly real wage rate of wage

22 earners in the United States has not decreased

23 since January 1, 1994,

24 the Secretary shall so certify to the Congress.
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1 (4) CERTIFICATION RELATING TO HEALTH AND

2 ENVIRONMENTAL STANDARDS.—

3 (A) IN GENERAL.—If the Secretary of Ag4 riculture and the Administrator of the Food

5 and Drug Administration, after consultation

6 with appropriate government agencies and citi7 zen organizations, determine, with respect to

8 imports from NAFTA Parties, that since Janu9 ary 1, 1994, there has been a reduced incidence

10 of contaminated and adulterated food, food con11 taining additives or pesticide residues exceeding

12 United States standards, or food containing ad13 ditives or pesticide residues which cannot be le14 gally used in the United States, the Secretary

15 and Administrator shall so certify to the Con16 gress. In making this determination, all foods

17 and food products, including fruits, vegetables,

18 grains, oilseeds, and meats, both fresh and

19 processed, shall be reviewed. Special attention

20 shall be given to foods which have had a history

21 of violations of United States standards or laws

22 described in this subparagraph.

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

24 Administrator of the Environmental Protection

25 Agency determines, taking into account the
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1 matters required to be included in the report

2 under clause (ii), that conditions affecting pub3 lic health and the environment in the United

4 States-Mexico border zone have not worsened

5 since January 1, 1994, the Administrator shall

6 so certify to the Congress.

7 (ii) In addition, the Administrator, in con8 sultation with the Secretariat for the NAFTA

9 Commission on Environmental Cooperation,

10 shall report to the Congress on the outcomes of

11 the investigations by the Environmental Protec12 tion Agency on pollution and health hazards in

13 and around the United States-Mexico border

14 zone since NAFTA went into effect. The report

15 shall include—

16 (I) a description and status report of

17 all industrial site cleanup and environ18 mental improvement projects begun in the

19 border zone since January 1, 1994;

20 (II) information available from local,

21 State, and Federal health agencies reflect22 ing the incidence since January 1, 1990, in

23 and around the border zone of hepatitis,

24 neural stem birth defects, lupus, chronic
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1 diarrhea, tuberculosis, nonneural birth de2 fects, cholera, botulism, and other dis3 orders commonly related to industrial pol4 lution, inadequate infrastructures, and

5 hazardous waste; and

6 (III) information on the incidence of

7 air and water pollution since January 1,

8 1990, and the causes, levels, and types of

9 pollution which have occurred.

10 (5) CERTIFICATION RELATING TO ILLEGAL

11 DRUGS.—If the Attorney General of the United

12 States determines, after a review by the Drug En13 forcement Administration and consultation with ap14 propriate government agencies and citizen organiza15 tions, that the importation into the United States of

16 illegal drugs or other controlled substances from

17 Mexico or Canada has not increased since NAFTA

18 went into effect, the Attorney General shall so cer19 tify to the Congress. The Attorney General, through

20 the Drug Enforcement Administration, shall conduct

21 a thorough review and report to the Congress re22 garding the flow of illegal drugs from Mexico and

23 Canada and the relationship of such flow to trade of

24 other commodities and services with the NAFTA

25 Parties.
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1 (6) CERTIFICATION RELATING TO DEMOCRACY

2 AND HUMAN FREEDOMS.—If the President, after

3 consultation with appropriate government agencies,

4 international organizations, and citizen organiza5 tions, determines that each NAFTA Party—

6 (A) elects its government in free and fair

7 elections;

8 (B) protects the rights of its citizens to or9 ganize into political parties;

10 (C) protects the rights of its citizens to

11 free speech and the right of the news media to

12 operate without fear of government control or

13 reprisal; and

14 (D) protects the rights of its citizens to as15 semble and to organize associations to advance

16 human rights and economic opportunities,

17 the President shall so certify to the Congress.

18 (7) CERTIFICATION RELATING TO NAFTA’S EF19 FECT ON UNITED STATES AGRICULTURE.—If the

20 Secretary of Agriculture, after consultation with ap21 propriate government agencies and citizen organiza22 tions, determines that United States agricultural in23 terests have been left in at least as good a position

24 as before NAFTA, the Secretary shall so certify to

25 the Congress.
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1 (8) CERTIFICATION RELATING TO HIGHWAY

2 SAFETY.—If the Secretary of Transportation, after

3 consultation with attorneys general of the States,

4 law enforcement officials, State highway safety agen5 cies, other appropriate government agencies, and cit6 izen organizations, determines that a comprehensive

7 enforcement system is in place to ensure that every

8 Mexican commercial truck or bus is properly in9 spected so that the vehicle and its driver are in com10 pliance with United States transportation safety

11 standards before crossing the border into the United

12 States, the Secretary shall so certify to the Con13 gress. In making such determination, the Secretary

14 shall review and take into account the results of bor15 der inspections of Mexican vehicles coming into the

16 United States since January 1, 1994.

17 SEC. 4. RENEGOTIATIONS.

18 (a) RENEGOTIATE NAFTA TO CORRECT TRADE

19 DEFICITS.—The President is authorized and directed to

20 confer with the Governments of Canada and Mexico and

21 to renegotiate the terms of NAFTA to provide for imple22 mentation of adjustments of tariffs, quotas, and other

23 measures to stabilize the flow of trade among the NAFTA

24 Parties when the dollar value of United States imports

25 of goods and services from another NAFTA Party exceeds
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1 10 percent of the dollar value of United States exports

2 to that Party.

3 (b) RENEGOTIATE NAFTA TO CORRECT CURRENCY

4 DISTORTIONS.—The President is authorized and directed

5 to confer with the Governments of Canada and Mexico and

6 to renegotiate the terms of NAFTA to provide for the im7 plementation of adjustments of tariffs, quotas, and other

8 measures to mitigate the adverse effects of rapid or sub9 stantial changes in exchange rates between the United

10 States dollar and the currency of another NAFTA Party.

11 (c) RENEGOTIATE NAFTA TO CORRECT JOB

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

13 with the Governments of Canada and Mexico and to re14 negotiate the terms of NAFTA to ensure that under

15 NAFTA trade with Mexico and Canada creates at least

16 as many United States jobs as it costs United States jobs

17 as measured by specific jobs created since January 1,

18 1994, compared to specific jobs lost since January 1,

19 1994, in United States trade with Mexico and Canada.

20 (d) RENEGOTIATE NAFTA TO PROTECT PUBLIC

21 HEALTH AND THE ENVIRONMENT.—The President is au22 thorized and directed to confer with the Governments of

23 Canada and Mexico and to renegotiate the terms of

24 NAFTA to ensure that—

25 (1) under NAFTA—
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1 (A) the rate of importation of food failing

2 United States safety standards from Mexico

3 and Canada,

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

5 and other pollution-related diseases along the

6 United States-Mexico border, and

7 (C) the rate of toxic waste dumping and

8 other improper disposal along the United

9 States-Mexico and United States-Canada bor10 ders,

11 are no higher than before NAFTA went into effect;

12 and

13 (2) under NAFTA the air and water quality in

14 the United States-Mexico border zone, and along

15 and near the border between the United States and

16 Canada, as determined under the Clean Air Act and

17 the Federal Water Pollution Control Act, are no

18 worse than before NAFTA went into effect.

19 (e) RENEGOTIATE NAFTA TO INTERDICT DRUG

20 TRAFFIC.—The President is authorized and directed to

21 confer with the Governments of Canada and Mexico and

22 to renegotiate the terms of NAFTA, including those relat23 ing to increasing border inspection of all cargoes coming

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

25 to ensure that the flow of illegal drugs into the United
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1 States from Mexico or Canada is no greater than such

2 illegal drug flow before NAFTA went into effect.

3 (f) RENEGOTIATE NAFTA TO CORRECT AGRICUL4 TURAL PROVISIONS.—The President is authorized and di5 rected to confer with the Governments of Canada and

6 Mexico and to renegotiate the terms of NAFTA to provide

7 for the implementation of tariffs, quotas, and other meas8 ures to bring the levels of wheat, durum wheat, and barley

9 imported from Canada to levels that are comparable to

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

11 period before the date NAFTA went into effect. The Presi12 dent is further authorized and directed to renegotiate

13 NAFTA to establish and strengthen provisions to prevent

14 imports of agricultural commodities from any NAFTA

15 Party from unfairly displacing United States production

16 and to provide improved mechanisms for relief for United

17 States producers that are adversely affected by such im18 ports.

19 (g) RENEGOTIATE NAFTA TO ENSURE COMPLI20 ANCE WITH UNITED STATES TRANSPORTATION STAND21 ARDS.—The President is authorized and directed to confer

22 with the Governments of Canada and Mexico and to re23 negotiate the terms of NAFTA and other relevant agree24 ments to provide for implementation of a comprehensive

25 enforcement system to ensure that every commercial truck
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1 or bus entering the United States is properly inspected

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

3 United States transportation standards before entering

4 the United States.

5 SEC. 5. CONSULTATION WITH CONGRESS.

6 The President shall consult regularly with the Con7 gress regarding the certifications described in section 3(b)

8 and the renegotiations described in section 4. The United

9 States Trade Representative shall consult with the appro10 priate committees of Congress in the development of any

11 technical and conforming amendments that may be re12 quired to carry out the provisions of this Act.

13 SEC. 6. NO EXPANSION OF NAFTA.

14 Until such time as the conditions described in section

15 3 are met, it is the sense of the Congress that the Presi16 dent should not engage in negotiations to expand NAFTA

17 to include other countries and that fast-track authority

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

19 such expansion of NAFTA.

20 SEC. 7. DEFINITIONS.

21 As used in this Act:

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

23 North American Free Trade Agreement entered into

24 between the United States, Canada, and Mexico on
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1 December 17, 1992, and effective as of January 1,

2 1994.

3 (2) NAFTA PARTY.—The term ‘‘NAFTA

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

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

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

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

8 the Mexican side of the United States-Mexico border

9 and the counties within any State of the United

10 States that are contiguous with Mexico.

Æ