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American Morning
Summit of the America: Focus on Trade
Aired April 20, 2001 - 10:25 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Heads of state from two continents are gathering in Quebec City for this weekend's Summit of the Americas. Thirty-four leaders will be there, including President Bush, and they're expected to focus much of their attention on a key money matter. That would be trade.
CNN's Kitty Pilgrim has the story.
(BEGIN VIDEOTAPE)
KITTY PILGRIM, CNN CORRESPONDENT (voice-over): Picture 800 million consumers buying and trading $11.5 trillion worth of goods, everything from American cars to Brazilian oranges, Argentine leather goods, Peruvian fish to Chilean wine, all of those goods being sold without significant tariffs or quotas or price supports, making everything much more affordable and boosting trade.
That's the way it would work in theory.
FRANK VARGO, NATIONAL MANUFACTURERS ASSOCIATION: I think that the concept is not only valid, it is crucial. We have to have a free trade zone for the entire western hemisphere because the Europeans are creating free trade zones all over on that side of the Atlantic. The Japanese are starting now in the Pacific, and South America has to have a free trade zone and we have to have one with them.
PILGRIM: It couldn't come at a better time. As world leaders worry about a global economic slowdown, any boost to trade may be critical to keep some economies afloat. Advocates point to the NAFTA trade agreement as an example of how beneficial a trade zone can be.
GARY HUFBAUER, INSTITUTE FOR INTERNATIONAL ECONOMICS: Nobody thought that trade with Mexico, you know, would triple in five years at the time of NAFTA. No forecast said that. Well, you know, when it happens in one place you kind of believe it in another and maybe that will galvanize at least some corporate leaders.
PILGRIM: Two thirds of good imported into the United States enter without tariffs, yet tariffs and duties on goods the United States ships to Latin America are high. American businesses such as technology, chemicals, consumer goods and autos, for example, stand to benefit. Yet others, such as agriculture and simpler products like ceramics and basic industrial products, may face stiffer competition because they are produced at lower cost outside the United States, as U.S. businesses are saddled with tougher labor and environmental regulation. That has generated some resistance to any trade zone from specialized trade groups.
(on camera): For that reason, the toughest sell of a trade agreement won't come in the corner store, be it in Brasilia or Boston. The toughest sell will come in Congress.
Kitty Pilgrim, CNN Financial News, New York.
(END VIDEOTAPE)
KAGAN: And for more now on the Summit of the Americas, we're going to go to Washington and our Jeanne Meserve -- Jeanne, good morning.
JEANNE MESERVE, CNN CORRESPONDENT: Good morning, Daryn.
And I'm joined by a man who knows as much about hemispheric trade issues as just about anyone. He is Mickey Kantor, U.S. trade representative from 1993 to '96 until he became commerce secretary in the Clinton administration. And we should note that it was the Clinton administration that first proposed a free trade zone in the Americas.
MICKEY KANTOR, FORMER TRADE REPRESENTATIVE: Yeah, at Miami in December 1994.
KAGAN: Congress, Kitty Pilgrim mentioned as a problem. The crux of the problem with Congress is fast track authority, which, as I understand it, means Congress votes quickly on trade agreements.
KANTOR: They have to vote up or down.
KAGAN: They have to vote up or down without amendment.
KANTOR: Right. Exactly. Yeah.
KAGAN: And it's been very controversial. Why is it so important to have that fast track authority?
KANTOR: When you negotiate with another country, or, in this case, with 33 other countries -- there are 34 countries who are members of the FTAA, who signed on in 1994 -- no one wants to negotiate with a U.S. trade representative unless they feel certain that their trade deal is not going to be amended in the Congress. Therefore, what they agreed to at the table is going to actually be the final agreement.
Without trade negotiating authority, or what we used to call "fast track," you can't assure them of that because it's not an up-or- down vote. And so it's very important for a trade representative or negotiator to have that authority.
MESERVE: Is Congress going to give it to the president?
KANTOR: I don't know. It's going to be very difficult. The Congress wants to make sure two things happen. One, our trade policy is bipartisan, and No. 2, that our trade policy has credibility.
We address issues that are extremely important, Jeanne, like labor and environment. They are critical issues in trade. They affect trade profoundly. And unless we move forward, we're not going to get votes, frankly, out of the Democrats, to get a trade negotiating authority through.
MESERVE: But if you meet the Congressional concerns on the environment and on labor, do you risk alienating some of the countries with whom you want to negotiate the deal?
KANTOR: We're going to have to move forward, you know. And -- 30 years ago, no one thought that investment or intellectual property should be protected under trade agreements -- didn't see them as trade deals. They thought trade was just lowering tariffs in an ever more and ever faster fashion.
That's no longer the case. We now understand that investment, that intellectual property, the labor, environment, bribery and corruption all affect trade. Some positively, some not so positively, and we're going to have to address those issues.
MESERVE: Address for me the complaints that many demonstrators will be voicing during this upcoming meeting, that this agreement could lead to degradation of environmental standards, and that it undermines labor.
KANTOR: It could, unless we address those issues. What we want to do is make sure we raise standards throughout the hemisphere, not harmonize down, as some would say we might do.
I believe it's important to have trade -- to have labor and environmental issues covered under trade agreements. Why? Because economically, it raises the level of the societies we deal with there, builds a bigger market for us, and of course, helps them as well.
But No. 2, it makes a level playing field for American workers. Clearly, not having higher standards in these markets hurts American workers. It's an unfair competitive advantage, or comparative advantage.
MESERVE: Now, one of the groups, Jobs for Justice, is pointing out that NAFTA, according to them, has cost 3/4 of a million jobs in the United States.
KANTOR: Absolutely wrong. Just absolutely wrong. NAFTA has, as you know, labor and environmental side agreements. NAFTA raised the level of jobs in this country. Remember, our exports were half what they were when NAFTA went into effect. Mexico was not our second- largest trading partner when NAFTA went into effect.
We've had the largest economic expansion in all of American history since NAFTA went into affect. Now, did NAFTA have everything to do with it? Of course not. But it helped tremendously.
MESERVE: Now, there is some opposition within the hemisphere to an idea of this large trade zone, some of from countries like Brazil. How large are those obstacles?
KANTOR: It's not really opposition. It is: Can we get a trade agreement we think we can live with? Can we be competitive with the United States and Canada and Mexico, who are more developed countries, versus Brazil, who is not as developed. If we open our markets, are we just going to lose market share and not be able to impact the U.S. market or the Canadian market as much as they will impact our market?
These are serious questions. We need to deal with them. But the fact is, under President Cardoso, Brazil has tried to move forward with this agreement. We're just going to have to be sensitive to their needs.
MESERVE: Mickey Kantor, thanks so much.
KANTOR: Thank you, Jeanne. Nice to see you.
MESERVE: And it looks like it'll be a delicate act, to pull this off. We'll watch what happens in the summit.
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