THE WASHINGTON POST

MONDAY, MAY 13, 1991

Henry Kissinger and Cyrus Vance

Yes to the Fast Track

Rejection would be a disaster.

Within a few weeks Congress will
face a seminal decision: whether to
approve the so-called fast-track leg-
islation enabling the administration
to negotiate for a free trade agree-
ment with Mexico. We strongly urge
Congress to grant this authority. In
our opinion, such an agreement
would be the most constructive
measure the United States would
have undertaken in our hemisphere
in this century.

The agreement is part of the En-
terprise for the Americas Initiative,
which looks ahead to a community of
neighbors united by free trade and
strengthened by expanded investment
flows, environmental protection and a
reduced official debt burden.

The proposal is well timed. The nations of Latin America are moving forward in rare harmony and through remarkably free and democratic processes to open their economies, stamp out inflation and expand economic output. The Enterprise Initiative is the right response by the United States to such dramatic progress in Latin America.

A free trade agreement with Mexi-
co would contribute to a closer and
more cooperative relationship with
our neighbor to the south, whose pop-
ulation is approaching 100 million and
with whom we share a border of some
2,000 miles. The destinies of our two
countries are being increasingly
linked, and the free trade agreement
would accelerate the trend.

Mexico is already becoming a ma-
jor market for U.S. goods and servic-
es. It is our third largest trading
partner—behind only Canada and Ja-
pan. In 1990 U.S. exports to Mexico
approached $27 billion, while exports
to all of Latin America were larger
than those to Japan. This growth in
U.S. exports to Mexico is largely the
result of the dramatic reduction of
Mexican import barriers and to the
dynamic leadership of President Car-
los Salinas de Gortari, under whose
administration Mexico has turned in-
creasingly toward market economies.
The free trade agreement would only
accelerate these opportunities.

We take most seriously the issues
that have been raised in connection
with Mexico's environmental protec-
tion and labor standards. Consider-
able progress has been made, as

evidenced by the closing of the oil
refinery in Mexico City. Neverthe-
less, we agree that it is appropriate
for Congress to register a special
concern that the eventual agreement
be accompanied by appropriate
measures in these areas.

The free trade agreement with
Mexico would therefore be an essen-
tial first step toward building a more
enduring relationship with Latin Amer-
ica. Such a relationship will enable our
country to compete more effectively in
the new global environment. It cannot
but be helpful to find global solutions to
such problems as the environment and
nuclear proliferation.

We are convinced that if our nation
turns its back on the Enterprise Ini-
tiative, a grievous blow to democracy
and economic reform in the hemi-
sphere will have been dealt. For it
will surely be taken as a sign that the
United States is not really prepared
to participate decisively in support-
ing what is a historic effort in Latin
America to turn the corner toward
prosperity. The consequences will
reverberate throughout Latin Ameri-
ca, where a U.S.-Mexican agreement
is being seen everywhere as the
opening of a new chapter in U.S.-Lat-
in American relations.

We see no incompatibility between
free trade within the Americas, on
the one hand, and a strengthened
multilateral system—the objective of
the Uruguay Round of negotiations in
the GATT—on the other. We en-
dorse the dual strategy reflected in
the request for fast-track authority
for both. Enhanced free trade be-
tween the United States and its re-
gional partners does not raise barri-
ers to non-regional trade. Indeed, the
Enterprise Initiative will add measur-
ably to the constituency of nations
committed to liberalized trade.

This is an issue that transcends
partisanship, and that is why we urge
from both parties extension of the
fast-track authority. The Enterprise
Initiative, with its opening round of a
Mexico Free Trade Agreement, is an
extraordinary opportunity to build a
new sense of community in the
Americas. Our country is once again
at a historic turning point in its rela-
tions with the other nations of this
hemisphere. The issue hangs on Con-
gress's decision.

KISSINGER/VANCE STATEMENT ON THE FREE TRADE AGREEMENT 5/9/91

Within a few weeks the Congress will face a seminal decision: whether to approve the so-called fast-track legislation enabling the Administration to negotiate for a free trade agreement with Mexico. We strongly urge the Congress to grant this authority. In our opinion, such an agreement would be the most constructive measure the United States would have undertaken in our Hemisphere in this century.

The agreement is part of the Enterprise for the Americas Initiative which looks ahead to a community of neighbors united by free trade and strengthened by expanded investment flows, environmental protection and a reduced official debt burden.

The proposal is well timed. At present, the nations of Latin America are moving forward in rare harmony and through remarkably free and democratic processes to open their economies, stamp out inflation and expand economic output. The Enterprise Initiative is

A free trade agreement with Mexico would contribute to a
closer and more cooperative relationship with our neighbor to the
south whose population is approaching 100 million and with whom we
share a border of some 2000 miles. The destinies of our two
countries are being increasingly linked and the free trade
agreement would accelerate the trend. Mexico is already becoming
a major market for US goods and services - it is our third largest
trading partner behind only Canada and Japan. In 1990, US exports
to Mexico approached $27 billion while exports to all of Latin
America were larger than those to Japan. This growth in US exports
to Mexico is due importantly to the dramatic reduction of Mexican
import barriers and to the dynamic leadership of President Salinas,
under whose administration Mexico has turned increasingly toward

3

We take most seriously the issues which have been raised in
connection with Mexico's environmental protection and labor
standards. Considerable progress has been made, as evidenced by the
closing of the oil refinery in Mexico City. Nevertheless, we agree
that it is appropriate for Congress to register a special concern
that the eventual agreement be accompanied by appropriate measures
in these areas.

The free trade agreement with Mexico would therefore be an
essential first step toward building a more enduring relationship
with Latin America. Such a relationship will enable our country to
compete more effectively in the new global environment. It cannot
but be helpful to find global solutions to such problems as the
environment and nuclear proliferation.

We are persuaded that if our nation turns its back on the
Enterprise Initiative, a grievous blow to democracy and economic

4

reform in the Hemisphere will have been dealt. For it will surely
be taken as a sign that the United States is not really prepared
to participate decisively in supporting what is a historic effort
in Latin America to turn the corner toward prosperity. The
consequences will reverberate throughout Latin America, where a US-
Mexican agreement is being seen everywhere as the opening of a new
chapter in US-Latin American relations.

We see no incompatibility between free trade within the
Americas, on the one hand, and a strengthened multilateral system,
the objective of the Uruguay Round of negotiations in the GATT, on
the other. We endorse the dual strategy reflected in the request
for fast-track authority for both. Enhanced free trade between the
United States and its regional partners does not raise barriers to
non-regional trade. Indeed, the Enterprise Initiative will add
measurably to the constituency of nations committed to liberalized
trade.

5

This is an issue which transcends partisanship and that is why we urge from both parties extension of the fast-track authority. The Enterprise Initiative, with its opening round of a Mexican Free Trade Agreement, is an extraordinary opportunity to build a new sense of community in the Americas. Our country is once again at an historic turning point in its relations with the other nations of this Hemisphere; the issue hangs on Congress's decision.

Within a few weeks the Congress will face a seminal decision, which is whether to approve the so-called fast-track legislation enabling the Administration to ~~negotiate~~ conclude an agreement for a free trade act with Mexico. We urge the Congress to pass that legislation. In our opinion, this agreement is the most constructive measure the United States has undertaken in our Hemisphere in a quarter century.

The proposal is well timed. The nations of Latin America are moving forward in a rare harmony and through remarkably free and democratic processes to open their economies, stamp out inflation and expand economic output. The Enterprise Initiative is the right

more effectively in the new global environment. It is also needed
~~global~~
to find solutions to such global problems as the environment, arms
sales and nuclear proliferation.

A free trade agreement with Mexico is the essential first step, and we therefore urge emphatically that Congress endorse the President's request for fast-track authority for the Mexican negotiations. We are persuaded that if our nation turns its back on the Enterprise Initiative, it will deal a grievous blow to democracy and economic reform in the Hemisphere. For this will be taken as a sign that the United States is not really prepared to participate decisively in supporting the historic effort in Latin America to turn the corner toward prosperity. The consequences will reverberate throughout Latin America, where a US-Mexican agreement is seen everywhere as the opening of a new chapter in US-Latin American relations.

We take seriously the issues which have been raised in
connection with Mexico's environmental protection and its labor

standards. Considerable progress has been made, under the leadership of the girl refining in residue city, of President Salinas. Nevertheless, we feel it is appropriate for Congress to indicate its concern that the eventual agreement be accompanied by appropriate measures in these areas.

We see no incompatibility between free trade within the Americas, on the one hand, and the strengthened multilateral system which is the objective of the Uruguay Round of negotiations in the GATT, on the other. We endorse the dual strategy reflected in the request for fast-track authority for both. Enhanced free trade between the United States and its regional partners does not raise barriers to non-regional trade. Indeed, the Enterprise Initiative will add measurably to the constituency of nations committed to liberalized trade.

This is an issue which transcends partisanship and this is why we who have had the honor to serve as Secretaries of State for both of our major parties urge extension of the fast-track authority.

Trade Agreement, is an extraordinary opportunity to build a new
sense of community in the Americas. Our country is once again at
an historic turning point in its relations with the nations of this
Hemisphere. The issue hangs in the balance of Congress's decision.
We strongly urge that Mexico fast-track authority be extended.

MAY 07 '91 17:46 SENT BY ARNOLD & PORTER

DC

P.2

May 7, 1991

Chairman

Dear Mr. Chairman:

We are profoundly concerned by the prospect that will face a seminal decision which is the Congress may block the U.S. - Mexico free trade negotiations by refusing to pass the bill so-called farm trade legislation until after the Administration includes an agreement for a free trade deal with Mexico. This agreement is the vital first step in the Enterprise for the Americas Initiative. In our opinion, it is the most constructive measure this country has undertaken in our Hemisphere in a quarter century.

It looks toward a community of neighbors united by free trade, and strengthened by expanded investment flows, environmental protection, and a reduced official debt burden.

DC

P.2

May 7, 1991

Chairman

Dear Mr. Chairman:

We are profoundly concerned by the prospect that the Congress may block the U.S. - Mexico free trade negotiations.

A U.S. - Mexico trade agreement is the vital first step in the Enterprise for the Americas Initiative. The Initiative, in our opinion, is the most constructive measure this country has undertaken in our Hemisphere in a quarter century.

MAY 07 '91 17:47 SENT BY ARNOLD & PORTER

DC

P.3

The proposal is ~~exquisitely~~ timed. The nations of Latin America are moving in remarkable harmony, and through remarkably free and democratic processes, to open their economies, stamp out inflation, and expand their economic output. The Enterprise Initiative is the right response by the United States to this encouraging & dramatic progress in Latin America.

~~As~~ a free trade agreement with Mexico is the essential first step, we urge as emphatically as we can ~~and~~ to Congress that Congress endorse the President's request for fast-track authority for the Mexican negotiations. We are persuaded that if this nation ~~and~~ now turns its back on the Enterprise Initiative, it will deal a grievous blow to democracy and economic reform in the Hemisphere. For this will be taken as a sign that the United States is ~~really~~ the process of participating deliberately not indeed prepared to play its role in supporting the historic effort in Latin America to turn the corner ~~toward~~ to-day prosperity. The consequences will be felt far beyond Mexico. A U.S. Mexican agreement is seen everywhere in the Americas as the opening of a new chapter in U.S. - Latin American relations, a defeat of ~~fast-track~~ would have consequences far south of Mexico.

DC

P.4

protection and its labor standards. We think it is appropriate for Congress to indicate its interest that the eventual agreement, which will, of course, be subject to Congress' approval, be accompanied by appropriate measures in these areas.

We see no incompatibility between free trade within the Americas, on the one hand, and the strengthened multilateral system which is the objective of the Uruguay Round of negotiations in the GATT, on the other. We endorse the dual strategy reflected in the request for fast-track authority for both. Enhanced free trade between the United States and its regional partners does not raise barriers to nonregional trade. Nor does it enhance the risk of trade wars. Indeed, the Enterprise Initiative will add measurably to the constituency of nations committed to liberalized trade in the multilateral system.

The issue is beyond partisanship. The Enterprise Initiative, with its opening round of a Mexican Free Trade Agreement, is an opportunity to reorient the new sense of Americas into a true community. Our country is once again at an historic turning point in its relations with the nations of the Hemisphere. The issue hangs in the

SOL M. LINOWITZ

1627 I STREET, N. W.
WASHINGTON, D. C. 20006

April 24, 1991

Dear Chris:

I am writing to convey my strong support for a free trade agreement among the United States, Canada, and Mexico and to endorse the Administration's request for "fast track" authority to negotiate such an agreement. I hope you will agree that the "fast track" authority request deserves support.

As you know, I have been actively involved in and deeply concerned about our country's relations with Latin America for more than a generation. During this entire period, I have seen few more promising opportunities both to strengthen our political and economic ties with our hemispheric neighbors and directly to serve our own national interests.

My support for free trade with Mexico and ultimately for the extension of similar trading arrangements with other Latin American countries is based on three fundamental considerations.

First, I am convinced that a free trade agreement with Mexico is in the best economic interests of the United States. Mexico is currently our third largest trading partner -- trailing only Canada and Japan. And our exports to all of Latin America exceed those to Japan.

The Honorable Christopher J. Dodd
United States Senate
Washington, D. C. 20510

2

Last year, U.S. sales to Mexico exceeded $25 billion -- more than double what they were only four years ago; this surge in U.S.-Mexican trade is a direct result of Mexico's decision to reduce tariffs and other barriers to imports. The removal of remaining barriers would boost U.S. exports even further, at a time when we need to exploit every opportunity to cut our trade deficit. For each dollar that Mexico spends on imported merchandise, some 70 cents comes to the United States. There are few other countries in the world where we enjoy that kind of advantage.

Moreover, free trade with Mexico would also help to stabilize and expand the Mexican economy. Increased Mexican exports to the United States will add to the country's wealth and produce new job opportunities. The prospect of a growing Mexican economy with a vigorous export sector will, in turn, draw new investment capital -- from the United States and elsewhere -- which will reinforce the benefits of trade.

The people of Mexico have suffered a deep economic depression for the past eight years. They have seen their wages fall by about 50 percent, their public services deteriorate, and their education and health systems decline. After a long and painful period of economic austerity and adjustment, the Mexican people deserve the opportunity of a better life for themselves and for their families.

Second, the successful negotiation of a free trade agreement with Mexico will contribute to the building of closer and more cooperative ties between our two nations -- which, in turn, should facilitate common efforts to deal with our shared problems.

As long as I can remember, U.S.-Mexican relations have been difficult. At times, they have been highly conflictive. Our relations have gradually improved over the past few years, and the achievement of a free trade agreement will reinforce this welcome trend and clearly advance U.S. national interests.

3

Mexico, after all, shares a 2,000 mile border with the United States. We need active Mexican cooperation to deal with a host of critical problems that affect both countries: the large-scale migration of Mexican workers to this country, the massive continuing flow of dangerous drugs from Mexico, and severe environmental problems on both sides of the border. This is no time to reject cooperation with Mexico.

Third, a free trade agreement with Mexico would be the first vital step toward the building of closer and more productive economic relations with the rest of the Hemisphere -- as called for in President Bush's announcement last June of the Enterprise for the Americas Initiative. If we are unable to strike a free trade deal with Mexico, which is far and away our most significant economic partner in Latin America, we will surely lose our best chance ever to develop strong economic ties with the region as a whole.

For the first time in my memory, we have a genuine opportunity to forge an enduring and responsible partnership with Latin America. The region's decisive turn in recent years toward democratic politics and market economics have together produced a new convergence of interests and values between our societies. That convergence now makes Latin America a far more compatible partner for the United States.

By their overwhelmingly positive response to President Bush's Initiative, the countries of Latin America made plain their desire for economic partnership with the United States. The benefits to this country of such a partnership are clear. Stronger economic links with Latin America will over the longer term help to strengthen our economy and enable it to compete more effectively in a new global economic order that may be dominated by regional trading blocs. Sustained cooperation with Latin America is also needed to find solutions to such global problems as environmental deterioration, arms trafficking, and nuclear proliferation. Regional cooperation would help us as well to address some pressing domestic concerns -- the drug

4

trade and illegal migration, for example. Finally, it is in Latin America where we can most effectively demonstrate our national commitment to democracy and human rights. A free trade agreement with Mexico would be a critical step on the way toward achieving a responsible Western Hemisphere partnership. Its rejection might well close the door for many years.

There are, in short, powerful reasons for the United States to proceed forthrightly toward free trade with Mexico. But there are also some legitimate concerns that should be addressed as we move forward:

- Although free trade will produce significant economic and employment gains in this country, it is also clear that some U.S.-based industries will relocate to Mexico, some workers will lose their jobs, and some communities will be adversely affected. The U.S. Government should give serious attention to mitigating these effects through, for example, worker retraining programs and the gradual phasing in of a trade agreement with Mexico.

- Expanded U.S.-Mexico trade is likely to produce longer term environmental benefits for Mexico and the U.S. border region -- because it will strengthen Mexico's economy and allow for greater attention and resources to be devoted to environmental protection. Nonetheless, this is the right time for both Mexico and the United States to begin systematically to address mutual environmental concerns and reach understandings on key ecological issues.

- Many Americans are appropriately concerned about the continuing reports of electoral fraud, other restrictions on democratic freedoms, and violations of human rights in Mexico. The U.S. Government should make clear to Mexican authorities -- in respectful and discreet ways -- that we as a nation are troubled by these practices, and that, unless they are frontally addressed, they will be a

5

continuing source of friction in our relations
with Mexico. The free trade agreement should
not, however, be held hostage to Mexico's
making improvements in these areas; that is
likely to be counterproductive. It is closer
economic and political ties with the United
States -- coupled with sustained diplomatic
pressure -- that will be most effective in
encouraging Mexico toward greater democracy
and respect for human rights.

Free trade with Mexico -- and its subsequent
extension throughout the Americas -- will set the
basis for a constructive recasting of U.S. rela-
tions with our hemispheric neighbors. In a world
that is daily being transformed, I believe Latin
America and the United States need each other more
than ever before. It will not be easy for us to
forge responsible and enduring partnerships in the
Americas. But we must try. If we succeed, our
ability to confront the challenges of global
economic and political change will be dramatically
enhanced. And we will be stronger as a nation.

MAY 02 '91 16:04 212-759-0042

NORTH AMERICAN FREE TRADE AGREEMENT

On March 1, President Bush requested that Congress extend the "Fast Track" negotiating authority to allow the Administration to complete the Uruguay Round of GATT negotiations and initiate negotiations with Mexico and Canada that may lead to a North American Free Trade Agreement (NAFTA).

A failure by Congress to grant the Administration this negotiating authority could have a seriously detrimental effect on the United States' goals of liberalized international trade. More significantly, the ability of the United States to pursue its political, economic, and national security interests with its allies, and particularly those in Latin America, would be severely diminished.

The Fast Track procedure is essential if the United States is to undertake any international trade negotiations. Enacted by Congress in 1974, and renewed several times, the procedure assures negotiating partners that an agreement reached with the Executive Branch will not be amended beyond recognition by Congress. The Fast Track process requires that there be close consultations between the President, the private sector, and the Congress so that all views can be reflected in the negotiations. Congress, however, retains its full permissive to vote to approve or reject a final agreement.

Since 1986, the United States has been involved in the Uruguay Round of GATT negotiations. These multilateral trade talks have covered a variety of specific issues such as the reduction and elimination of both tariff and non-tariff barriers and the expansion of the GATT to include trade in services, agriculture, and the protection of intellectual property. Most importantly, the negotiating goals in these and other areas have been to create a liberalized international economic environment which will bring greater economic prosperity to all. The importance of exports to the economy of the United States is becoming increasingly apparent. Without a good multilateral agreement, our ability to continue our economic growth will be severely impaired.

The United States is also hoping to commence negotiations with Mexico and Canada. One of the most exciting events unfolding today in the North American scene is the prospect a free trade area linking the United States, Canada, and Mexico. As President Bush has stated, the North American Free Trade Area would become the world's largest market, with over 360 million potential consumers and a joint GNP of about 6 trillion dollars. However, certain sectors and

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05-02-91 04:03 PM

MAY 02 '91 16:05 212-759-0042

P.4

interest groups in the U.S. have launched a campaign to effectively block this agreement, by means of persuading Congress to deny the extension of Fast Track authority for an agreement with Mexico.

If the opponents of an FTA with Mexico are allowed to succeed in their campaign, the U.S.A. will lose a historic opportunity to lock in Mexican-American relations at their current, unprecedented peak. The success of President Salinas' courageous program of economic reforms would greatly benefit from the added boost that an open, secure access to the U.S. market would provide. In turn, such success in the economic front will provide a solid basis for further progress in the opening of Mexico's political process, building upon the reforms that the Salinas' Administration has promoted already.

Should these developments take place in Mexico, an important model will be established to strengthen U.S. leadership throughout the Western Hemisphere. Most importantly, this goal would be achieved not by means of foreign aid, which involves the spending of taxpayers money, but by opening up a wide array of business opportunities for American firms.

Today, Mexico is the fastest growing market for U.S. exports: the 16 billion increase in our sales to our southern neighbor since 1985 has already generated over 350,000 new jobs in this country, a figure that would certainly increase under a free trade arrangement. Additional gains can be secured by setting up a favorable framework for production sharing ventures with Mexico which, as the maquiladora experience suggests, would enhance the competitiveness of American goods and services on a global basis.

A North American Free Trade Agreement would assist the U.S. in facing the competitive challenges from the European Community and the Far East. In fact, the proposed Agreement represents a strategic response from the U.S. at a time when trade blocks are emerging in other regions of the world, and the outcome of the Uruguay Round in GATT is still uncertain.

The extension of the Fast Track negotiating authority is more than just part of an economic initiative. It is an integral element in our relationship with the rest of the world, and particularly with Latin America. At a time when the United States has demonstrated its leadership role in the Persian Gulf, it would be a grave mistake to abdicate our role through an inability to constructively engage in international economic negotiations.

The extension of the President's negotiating authority is crucial to the United States' ability to provide international leadership. Yet unfortunately, parochial

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P.O.