Phil Gramm

Mr. GRAMM

Mr. GRAMM. With that understanding, I have no objection.

Mr. GRAMM

Mr. GRAMM. Mr. President, I have a second-degree amendment at the desk, amendment No. 1168. I call up this amendment on behalf of myself and Senator McCain and ask for its immediate consideration. I ask it be read.

Mr. GRAMM. Mr. President, what is the pending business?

Mr. GRAMM. Will the Senator yield?

Mr. GRAMM. I will when I get through. I am not just concerned about starting a trade war with Mexico. I am concerned about what we are doing to President Fox when we are taking action that violates the treaty we entered into with Mexico. I don't know what kind of position we put him in with his own people when the most important agreement we have ever entered into with Mexico is being abrogated by an action on an appropriations bill in the Senate. What I do in the pending amendment is make it clear that in implementing the provisions of the Murray amendment, nothing in that amendment will apply in a manner that the President finds will violate the North American Free Trade Agreement. Now, our colleagues who support the Murray amendment say the amendment does not violate NAFTA. If the amendment does not violate NAFTA, then this amendment will do it no violence. But if, in fact, the amendment does violate NAFTA, and I believe it is obvious to any objective observer that it does, then this amendment will say that those provisions that violate NAFTA will not be enforced. That is what the amendment does. Let me try to explain further, because this is a very complicated issue. What often happens in any great deliberative body is that people cloak objectives in very noble garb. What we have before the Senate is an amendment that claims to be about safety, when most of the amendment is about protectionism and about preventing America from living up to the obligation that it made under NAFTA. Let me outline what I want to do. First, let me outline what NAFTA says, what it commits us to. Then I will draw a clear distinction in four or five examples about what violates NAFTA and what does not violate NAFTA. Then I will go through the provisions in this bill that violates NAFTA. Then I will conclude by reserving the remainder of my time and letting other people speak. First, in Chapter 12 of the North American Free Trade Agreement as signed by the President and approved by Congress, reference is made to America's and Mexico's and Canada's obligation on cross-border trade and services. Our agreement was not just about goods coming across the border, but it was about services coming across the border. Obviously, the service we are talking about today is trucking. Here are the two obligations to which we agreed in the NAFTA. I will read them because it is important people understand exactly what we are talking about. The first article is called ``National Treaty.'' What it says in English, and in Spanish, too, is that when we enter into this agreement, we are going to give Mexican companies and Canadian companies the same treatment we give to our own nationals. In other words, they are going to be treated the same. Hence the term ``national treatment.'' Specifically, it says ``Each party shall accord the service providers of another party treatment no less favorable than that it accords in like circumstances to its own service providers.'' That is the exact language of NAFTA. Now, what does that language mean? It says if you are a Mexican trucking company, you will face the same requirements, the same obligations, the same rules, the same laws, as you would face if you were an American trucking company and the same rules, the same laws, the same obligations, the same regulations that you would face if you were a Canadian trucking company. There is another provision which is very similar to the national treatment provision, but called the most-favored-nation treatment provision. When we entered into this agreement with Canada and Mexico, we not only said we were going to treat them as we treat ourselves in this cross-border trade and services, but we committed we would treat them as well as we treated any other nation. That language is as follows: ``Each party shall accord to service providers of another party treatment no less favorable than it accords in like circumstances to service providers of any other party or of a nonparty.'' In other words, what we committed to Mexico on that day in the mid- 1990s was they could provide services on a competitive basis with services provided by American providers and by Canadian providers, and that they would be treated the same in like circumstances. Now, we did have a proviso, a reservation. That reservation is in Annex I. I want to make sure that people understand that reservation in no way applies to the bill we are talking about here. The first reservation said that within 3 years of the date of the signature of the agreement, cross-border truck services to or from border States would be allowed to California, Arizona, New Mexico, and Texas. That is where trucks are currently operating today. Then, within 3 years there would be an agreement concerning cross-border bus service. And finally, within 6 years after the agreement went into force--and it went into force in 1994--cross-border trucking services would be allowed. So that is the agreement we entered into. There is a distinction that needs to be drawn to explain the problem with the Murray amendment. The distinction is as follows: If circumstances in Mexico are different than they are in Canada or the United States, so long as the standards we apply are the same, we don't have to enforce them exactly in the same way. For example, we have had a long association with Canada. As a result you can apply on the Internet for a license in Canada to operate a truck in the United States. You can pay $300 and you are in business. Because we are beginning a new process with Mexico, obviously we have to have a more stringent regimentation than that. Senator McCain and I have proposed--and it is perfectly within the NAFTA agreement's purview--that to begin with, we inspect every single Mexican truck; inspect every single Mexican truck, and require that they meet every standard American trucks have to meet with regard to safety. There is no debate here about safety. Everybody is for safety. I will just say that Senator McCain and I both have numerous Mexican trucks operating in our States today. The chairman and ranking member of the Transportation Appropriations Committee have no Mexican trucks operating in their States. I would say, since my people are affected more today and will be affected more when NAFTA is fully implemented than either of the States that are represented by the chairman and ranking member, I am obviously at least as concerned about safety as they are. But there is a difference between safety and protectionism. Here is where the difference lies. Under NAFTA, we have every right to set standards and every obligation to set safety standards so Mexican trucks have to meet the same standards as trucks of the United States. Because the situation in Mexico is different, we can have differences in how they are implemented. In fact, today we inspect Canadian trucks. We inspect about 48 percent of the Canadian trucks that come into the United States. We inspect 28 percent of U.S. trucks. In fact, today, even though trucks are limited to the border area, we inspect 73 percent of Mexican trucks. Today we are inspecting Mexican trucks at a rate almost three times the rate we are inspecting American trucks, and that is eminently reasonable because we are establishing the safety of Mexican trucks. There is no argument that we should have the right initially to inspect every single Mexican truck until we establish the quality of those trucks. But here is where the line is drawn. We can inspect them differently. We can inspect them initially, as long as there is any reason to believe they are different, more intensely. But we cannot apply different standards. That is where the Murray amendment runs afoul of NAFTA. Let me talk about four ways the amendment clearly violates NAFTA. The first is a fairly simple measure, but it tells you what is going on in this amendment. Today most Canadian trucks are insured by London companies such as Lloyd's of London. Today some Canadian trucks are insured by Canadian insurance companies, and some by American insurance companies. Most American trucks are insured by American insurance companies; some are insured by foreign insurance companies. The plain truth is, many of the companies we know are located all over the world, so the insurance domicile distinction really doesn't mean as much as it once did. Under NAFTA, we have the right to require that Mexican trucks have insurance. I believe with regard to the health and safety of our own people we have an obligation to require that they have insurance. But we cannot put a requirement on them that is different from the requirement we put on ourselves or on Canada. The Murray amendment violates that principle by saying Mexican truck operators have to carry insurance from companies that are domiciled in the United States of America. American companies do not have to have insurance from companies domiciled in the United States of America. Canadian companies do not have to have insurance from companies domiciled in the United States of America. Most of them have insurance from companies domiciled in Great Britain. But the Murray amendment says Mexican trucks have to be insured by companies domiciled in the United States of America. That is a clear violation of NAFTA. NAFTA says we have to treat Mexico and Canada the way we treat our own providers. We do not require our providers to have American insurance, and indeed some of them do not. They have insurance from companies domiciled elsewhere. We do not require Canadian trucks to have American insurance, and very few of them do. They have British insurance, and they have Canadian insurance. And we have no right under NAFTA to require Mexican trucks to meet a requirement that our trucks and Canadian trucks do not have to meet. Second, if a company finds itself unable to operate for some reason-- maybe it has lost business, maybe it is subject to some suspension of a license, maybe there is some restriction imposed on it--it has the right to lease its trucks. If you are in the trucking business and you have these rigs that cost huge amounts of money sitting in your parking lot, and for some reason you cannot serve your customer and you cannot use this rig, it is a standard business procedure in the United States and in Canada to lease those trucks to somebody who can put them to use. That obviously is trying to protect your business from going broke. We would have the right, under NAFTA, to say that Mexican trucks cannot be leased under a certain set of circumstances to another provider, as long as we did the same thing to our own trucks and to Canadian trucks. We have every right in the world to say to a trucking company that if they are subject to suspension, restriction, or limitations, they cannot lease their trucks. We have the national sovereign right, under NAFTA, to do that. But we do not have the right to say American companies can lease their trucks, Canadian companies can lease their trucks, but Mexican companies cannot lease their trucks under exactly the same circumstances. That is a clear violation of NAFTA--no ifs, ands or buts about it. You cannot have two different standards: One standard applies to the United States and to Canada and another standard applies to Mexico. Under this amendment, if a Mexican company is found to be in violation of this provision, they can be barred from operating in the United States. In reading the language, this apparently could be a permanent ban. We have the right to ban any trucking company in America from having the right to operate if it should have a violation. And if we did that, since any big trucking company at any one time certainly will have a violation--maybe many violations--we could then we could apply it to Canada and Mexico and it would be NAFTA-legal. Of course we would all go hungry if we did that. It would be a crazy policy to do that, but we could do it. But what we cannot do under NAFTA is say: OK, we have a regime of penalties for American companies and we apply that regime to Canadian companies, but for Mexican companies, we will apply a different regime even though we entered into a treaty--signed by the President and ratified by Congress--where we said we would treat them exactly as we treat ourselves. We can't now come along and say that if you are an American trucking company or a Canadian trucking company these are your penalties, but if you are a Mexican trucking company the only penalty is the death penalty--i.e., we are going to put you out of business. That is a clear violation of NAFTA. There are no ifs, ands, or buts about it. It is a clear violation of NAFTA. In 1999 we wrote a law that dealt with truck safety: the Motor Carrier Safety Improvement Act of 1999. When we wrote that law, we asked the Department of Transportation to promulgate regulations for its implementation. It turned out that it wasn't easy to do. The Clinton administration didn't get it done, and the Bush administration hasn't gotten it done yet. We could say that until these regulations called for in this law are written and implemented, we will not allow any truck to operate in America. We could say that. That would not violate NAFTA. We could say the Federal Government has not written a regulation and, therefore, we are not going to let trucks operate in America. It would not violate NAFTA, because we wouldn't let Mexican trucks operate, we wouldn't let American trucks operate, and we wouldn't let Canadian trucks operate. We could do that. It would be crazy. I suspect people would be marching on the Capitol and the Senate would change it very quickly. But we could do it. It would not violate NAFTA. But that is not what we are doing here. What we are saying here is that until the regulations that are called for in this act are written and implemented, American and Canadian trucks can operate freely. American trucks can roll right up and down the road with the radio going full blast, everybody happy. Canadian trucks can operate, come across the border, come and go wherever they want to. But until this law is implemented, Mexican trucks cannot come into the United States. By saying that, we would be violating the national treatment standard of NAFTA. NAFTA says if you want to do something--no matter how crazy it is--as long as you do it to yourself, you can do it to Mexico and you can do it to Canada. But what you cannot do under NAFTA is simply say, arbitrarily: I don't want Mexican trucks operating in the United States. Until February 29 falls on a Thursday, we are not going to let Mexican trucks operate in the United States. That is about as arbitrary as the provisions of this amendment. There is no basis for doing that. It is arbitrary and it violates NAFTA. There are many other things that could be violations. I have outlined just four. My amendment very simply does the following: It says that the Murray amendment would stand unless its provisions violate NAFTA. If they did violate NAFTA and remember that ratified treaties under the Constitution, to quote the Constitution, are the ``supreme law of the land'' then they would not be enforced. And I have outlined four examples of where the Murray amendment violates NAFTA. I will conclude and reserve the remainder of my time, and let others speak. Here is the principle at issue: We can, should, and must require that Mexicans meet the same standard. We don't have to enforce them exactly in the same way. For an example of something that would not be a violation to begin with but might become a violation: the checking of the driver's license of every trucker coming into the United States from Mexico. We don't do that for people coming in from Canada. We don't do that for every truck operating in the United States. We might choose to do that for people coming in from Mexico, until we establish the pattern for Mexican drivers. Interestingly enough, so far our inspections show that the failure rate--the number of times that you don't let the driver on the road, you take them out of the truck--for American truckdrivers is 9 percent, and for Canadian truckdrivers it is 8.4 percent. Interestingly enough, only 6 percent of Mexican drivers are found to be in violation. The plain truth is that most Mexicans who are driving big rigs are college graduates. The truth is, at least so far it appears, is that Mexican drivers are safer in terms of meeting our regimentation and requirements--if that in fact those requirements measure safety, and supposedly that is what they do--than our own drivers. That is data based just on trucks operating in our border States. We would have every right to initially stop every truck and check every driver's license. But once we had established that there is no particular problem, then stopping every Mexican truck when we don't do it with our own trucks and we don't do it with Canadian trucks after we have established the pattern that Mexican drivers are just as qualified and licensed as ours would be a violation of NAFTA. Basically, the requirements don't have to be the same, but they do have to be reasonable in terms of burden relative to the problem. I would think if our colleagues want to pass this bill, if they want to move this process forward, and if they don't want to violate NAFTA, they would simply accept this amendment. This would be a major step forward in fixing the problems we have with the bill. I wish they would accept it. They should accept it. They say this provision does not violate NAFTA, but then if they are right, the adoption of the amendment would have no impact on them. Why is the amendment important? The amendment is important because we made an agreement with our neighbor to the south. We are in the process on the floor of the Senate, whether it is our intention or whether it is not our intention, of discriminating against Mexico, of saying to them that you are not really an equal partner in NAFTA. We said we were going to give you these rights, but we have decided we are not going to give you the same rights we give to Americans and we are not going to give you the same rights we give to Canadians. Quite frankly, I think it is outrageous. I remind my colleagues that we are not saying you can't have different ways of enforcing our safety rules. We are simply saying in NAFTA you can't have a different set of rules. Senator McCain and I and the President support inspecting every Mexican truck and checking the license of every Mexican driver as they come across the border. But at some point when the patterns are set and we are through this transition period, we are going to have to treat them as we treat our own trucking companies when they have proven themselves. Why are we going to have to do that? We are going to have to do it because that is what NAFTA says. I know there is a powerful special interest involved here. I know the Teamsters Union does not want Mexican trucks to operate in the United States. They are not out saying we don't want trucks operating in the United States because we are greedy, we are self-interested, and we do not want competition. They are not saying that. I don't remember anybody ever coming to my office saying: Protect me from competition. I don't want to have to compete. I want to sell at a higher price. I want to make more money. I want to have a place in Colorado. And I want you to cheat the consumer to protect me. Nobody ever came into my office and said that. But they do come into my office and say: Protect me from this unfair competition. Protect me from these products that are not safe. Protect me from this. Protect me from that. What the Teamsters are against is competition. You can argue that we ought not to have Mexican trucks in America because we ought not to allow competition. But the point is, it is too late. We signed an agreement. We ratified the agreement. Now it is time to live up to the agreement. Under the Murray amendment, we are going back on our agreement. The proponents of this amendment can say until they are blue in the face that it does not violate NAFTA. But if it does not, accept this amendment. But I do not believe they are going to do that, because I believe their amendment does violate NAFTA. That is why Mexico is talking about retaliation today. That is why the President said that he is going to veto this bill. In the end, we are going to have to fix this situation. We are going to spend weeks now, it looks to me, fooling around with this issue, when everybody knows in the end that it is going to have to be worked out. But we don't have any recourse now except to do it the way we are doing it. I am not going to let the President be run over on this. I am not going to let Mexico be discriminated against. I do not think this is right. I do not think it is fair. And I think it destroys the credibility of the United States of America. So I am not going away. We have four more cloture votes. I want to say to my colleagues, don't feel that you have to vote with me against cloture. Vote for cloture. It is obvious that the forces who are against putting NAFTA into effect with regard to trucks have the votes. So I am not asking anybody to vote with me. But I am just saying that we are going to end up having to vote on cloture four times to get this bill to conference. It can be fixed very easily. Simply take out the parts of the Murray amendment that violate NAFTA. That is what we are going to have to do. We can do it now. We obviously are not going to, but we could. We can do it next week. We can do it in September. But we are going to do it eventually. I reserve the remainder of my time and yield the floor. I suggest the absence of a quorum.

Mr. GRAMM. I yield to Senator Stevens.

Mr. GRAMM

Mr. GRAMM. Reserving the right to object. Posing a question to the Chair, the time that is being used this evening will not count against any individual Senator's time; is that right?

Mr. GRAMM. I have no objection.

Mr. GRAMM

Mr. GRAMM. Madam President, I thank the distinguished Democratic floor leader for working with me as he so often does in helping the Senate move forward in an efficient fashion.

Mr. GRAMM. Mr. President, how much time do we have on our side?

Mr. GRAMM. Mr. President, first, I want to read a statement made earlier today by the President related to this issue. This is what the President said: I urge Congress to deal fairly with Mexico and to not treat the Mexican truck industry in an unfair fashion. I believe strongly we can have safety measures in place that will make sure our highways are safe. Mexico is our close friend and ally, and we must treat them with respect and uphold NAFTA and the spirit of NAFTA. The issue before us is not safety. There is agreement in the Senate that we want to inspect Mexican trucks, and there is a commitment to inspect every single Mexican truck. We only inspect 36 percent of the Canadian trucks. No one disagrees that in starting up a new system with Mexico it is proper, to begin with, to inspect every single truck. The issue is not safety; the issue is discrimination. Basically, when we signed NAFTA, the President made the commitment and we ratified it, and that commitment said with regard to trucks coming across the border, going in both directions, all three nations committed that ``each party shall accord the service providers of another party treatment no less favorable than that it accords, in like circumstances, with its own service providers.'' That is what we committed. Convert it into simple English, we committed to treat Mexican trucking companies operating in the United States exactly as we treat American trucking companies, and exactly as we treat Canadian trucking companies. The issue before us is not safety. The issue before us is discrimination and protectionism. We have every right to inspect Mexican trucks. If you look at the agreement, we do not have to--in implementing uniform standards, we can implement them differently with regard to Mexican trucks if circumstances are different. Senator McCain and I, and the President, have said in our initial implementation it is proper to inspect every Mexican truck, whereas we inspect only one out of three Canadian trucks and only one out of four American trucks each year. But what we cannot do and what the Murray amendment does is set different standards for Mexican trucks than it sets for American trucks and for Canadian trucks. It is one thing to say we are going to have safety standards and Mexican trucks have to live up to those standards, but it is quite another thing to set totally different standards. Let me give four examples. It is very simple. Today we have trucks operating all over America, 100,000 of them from Canada, and virtually none of those trucks are insured by American insurance companies. We have American trucks operating in the United States that are not insured by American insurance companies. Many Canadian trucks are insured by Canadian companies, or by Lloyd's of London. American trucks in some cases are insured by Canadian companies and by British companies. But the Murray amendment puts a requirement on Mexico that we do not put on ourselves, that we do not put on Canada. That requirement is having to have insurance from companies domiciled in America. That is a flatout violation of NAFTA. No denial can change that fact. That is a clear violation of the treaty into which we entered. It is illegal and it is unfair. We have, in the Murray amendment, three other provisions that clearly violate NAFTA. It is one thing to say we are going to have penalties and that those penalties are going to apply to anybody operating a truck in the United States of America. I want penalties because I want safe roads and highways. We have more Mexican trucks operating in Texas than any other State in the Union. I want safety. But to say that while we have various penalties for American trucks and truckers, for Canadian trucks and truckers, that we are going to have an entirely different penalty regime for Mexican truckers, so that a violation can forever ban a Mexican trucking company from operating in the United States is discrimination. It is illegal, it violates NAFTA. If we wanted to say if you are an American trucking company and a Canadian trucking company and you have a single violation that you are forever banned from being in the trucking business, that would be GATT legal. It would be crazy because you can not operate a big trucking company without some violations. But we could do it, and it would be legal. But what you cannot do under NAFTA is you cannot say we are going to have one set of penalties with regard to American trucks and Canadian trucks, and a totally different set of penalties with regard to Mexican trucks. Under our current trade agreements, United States companies and Canadian companies can lease trucks to each other. In fact, that is necessary for good business. If you do not have the business, you own the trucks, they are sitting there, they meet safety requirements, you lease them to somebody else. If you do not have that right, you do not stay in the trucking business long. But the Murray amendment has a unique provision that relates only to Mexico. Only Mexican truck operators are forbidden the right to lease trucks if they are in violation in any way. We might want to say, if you have any violation, you cannot lease trucks. If we apply that to Americans and to Canadians, we can apply it to Mexicans. But what you cannot do is have different standards in a free trade agreement, where we committed to treat Mexican producers exactly the way we do our own. Finally, on safety standards, we passed a law in 1999 changing safety standards with regard to trucks. I want to implement that bill. The regulations have not been written and it has not been implemented. The Murray amendment says because it has not been implemented, that Mexican trucks cannot come into the United States even though we have entered into a treaty, which has been ratified, saying they can. If the Murray amendment had said because we have not promulgated regulations, because we have not implemented these new rules, that Canadian trucks cannot operate in the United States, that American trucks cannot operate in the United States, and Mexican trucks cannot operate, we would all go hungry tonight, but that would be legal with regard to the agreement that we entered into called NAFTA. But to say that because we have not promulgated the rules and because we are not at this point therefore enforcing these rules, that Canadian trucks can operate and American trucks can operate but Mexican trucks cannot operate, is a clear, irrefutable, indisputable violation of NAFTA. Basically what we are seeing here is a choice between special interest groups and high on the list is the Teamsters Union. They don't want Mexican trucks because they don't want competition. My point is we should have thought about that when we approved this trade agreement because we made a solemn national commitment to allow Mexican trucks to operate in the United States, American trucks and Canadian trucks to operate in Mexico. Our credibility all over the world in hundreds of trade agreements is on the line. If we go back on the commitment we made to our neighbor, if we discriminate against Mexico, how are we going to have any moral standing in asking other countries to comply with the agreements they negotiated with the United States? It is my understanding, while I think we should have more time to debate this--one of the authors of the amendment, Senator Domenici, has not had an opportunity to speak--and while I would like to have more time, it is my understanding there is going to be a motion to table. It is also my understanding that there may be a cloture motion tomorrow. I want to assure my colleagues that I am not sure where the votes are, but I am sure what my rights as a Senator are. I want to assure you that I am going to use every power that I have as a Member of the U.S. Senate to see that we do not discriminate against a country that has a 1,200-mile border with my State. I am going to use every power I have as a United States Senator to see that we do not violate NAFTA, to see that we do not destroy the credibility of the United States in trade relations around the world. What that means is we will have, not one cloture vote, we will have five cloture votes. At some point here people are going to want to go on to other business. I want to assure my colleagues if there is not some compromise here that produces a bill the President can sign, we are not going to other business. Finally, let me conclude by saying this bill is not going to become law until we comply with the treaty. The President is not going to sign the bill. We can fool around and have five cloture votes and hold up all other business until we get back from Labor Day. We can stay in August. We are going to see the full rules and protections of the Senate here because this is a critically important agreement. When you start not living up to agreements that you made with your neighbor, you start to get into trouble, whether you are a person or whether you are the greatest nation in the history of the world. I think the Murray amendment is wrong. Senator McCain and I have been willing to compromise. The President is willing to compromise. But we are not going to compromise on violating NAFTA. That is a compromise that is not going to occur. We can come up with a safety regime. It doesn't have to be identical with Canada and Mexico, but the requirements have to be identical. That is what the trade agreement says. The Murray amendment in four different areas violates NAFTA. This has to be fixed if we are going to go forward. I urge my colleagues to vote for the pending amendment, which I have offered with Senator McCain and Senator Domenici. I urge them to oppose a motion to table. I assure them that this issue is not going to go away. The Senate may vote to discriminate against Mexico, but they are going to get to vote on it on many occasions. I yield the floor.

Mr. GRAMM. Reserving the right to object, I just ask for one clarification. My amendment would be a second-degree amendment to the pending Murray amendment. With that change, I would have no objection.

Mr. GRAMM. Madam President, I send an amendment to the desk on behalf of myself, Senator McCain, and Senator Domenici and I ask for its immediate consideration and I ask it be read.

Mr. GRAMM. We thank the Senator.

Mr. GRAMM. Madam President, I think the amendment is fairly self- explanatory. But since this is somewhat of a complicated issue in that it has to do with a Transportation appropriations bill and a rider which is now pending to it, which I am trying to amend, and in that it relates to NAFTA, what I would like to do in the next few minutes is try to go back to the beginning and explain what the NAFTA agreement said, what the obligations are that we have undertaken--the President signing NAFTA, cosigning it with the President of Mexico and the Prime Minister of Canada--and what obligations we undertook as a Congress when we ratified that agreement by adopting enabling legislation, thereby committing not only the executive branch but the American Government to NAFTA. Much has been said about truck safety. I want to make it clear to my colleagues and anybody who is following this debate that so far as I am concerned there is no disagreement about safety. In fact, I would argue that I am more concerned and with better reason about truck safety than any other Member of the Senate except my colleague from Texas, Mrs. Hutchison, since we have more Mexican trucks operating in Texas than any other State in the Union and the implementation of NAFTA will in and of itself assure that more Mexican trucks transit highways in Texas than in any other State in the Union. What I want and what NAFTA calls for--and I believe that I will show convincingly what it calls for--is that Mexican trucks under NAFTA have to be subject to the same safety standards that we apply to our own trucks and to Canadian trucks, no more and no less. There are some circumstances where the inspection regime and the enforcement regime might be different, but the standards and the impact cannot be different. Let me begin with a document. This thick, brown document I have here is the North American Free Trade Agreement. This is the agreement that was signed by the President of the United States, the President of Mexico, and the Prime Minister of Canada. It is the agreement through legislation that we ratified. I want to read from this agreement as it relates to cross-border trade in services. Transportation is a service. The basic two commitments we made under this NAFTA trade agreement are embodied in the following two articles: Article 1202, national treatment, says: Each party shall accord the service providers of another party treatment no less favorable than that it accords in like circumstances, to its own service providers. Let me read that again ``each party''--obviously that is the United States, Mexico, and Canada--``shall accord the service providers of another party''--that is our trading partners, so ``we'' are the United States, that is Mexico and Canada--``treatment no less favorable than that it accords in like circumstances to its own service providers.'' The second provision is a most-favored-nation treatment, and it says basically the same thing, but for completeness let me read both: Each party shall accord the service providers of another party treatment no less favorable than that it accords, in like circumstances, to the service providers of any other party or nonparty. What is our obligation under this trade agreement that the President signed and we ratified by passing legislation which was signed into law, making this agreement the law of the land? Our obligation is with regard to cross-border trade in services and, in this particular case, trucks. We are going to treat Mexican trucks the same as we treat our own trucks, and we are going to treat our own trucks the same as we treat Canadian trucks. The basic commitment we made when we ratified this agreement was that we were going to treat Mexican trucks no less favorably than we treated trucks in the United States. We were going to allow in a free trade agreement the free provision of trucking services in North America, whether those trucking services were provided by an American company, a Mexican company, or a Canadian company. Each of those companies would be subject to safety standards, but the safety standards would have to be the same. They would not have to be implemented identically, but the standards would have to be the same. There is a proviso. I want to be sure that I talk about this proviso. The United States has a proviso in the agreement. That proviso is on page 1,631. It consists basically of three provisions. The first provision says that 3 years after the date of signatory of this agreement, cross-border truck services to or from the border States of California, Arizona, New Mexico, and Texas, such persons will be permitted to enter and depart the territory of the United States through different ports of entry. In other words, the first reservation or proviso was that for 3 years we were going to allow Mexican trucks only in these border States. Three years after we entered into the agreement and it was in force, we were going to allow cross-border scheduled bus services. That was the second reservation or proviso. The third was that 6 years after the date of entry into force of this agreement we would have cross-border trucking services provided on a nationwide basis. What does the treaty say that the President signed and that we ratified with an act of Congress? It says, subject to phasing in a policy for 3 years where the trucks operate only in border areas, after the treaty was in force for 6 years we would have free trade in trucking. Those are the only provisos. We had no other reservations in this trade agreement. The basic principle of the trade agreement was that we would have national treatment for Mexican trucks. Converted into simple, understandable words, that means Mexican trucks would be treated for regulatory purposes as if they were American trucks--no better, no worse. That is the law of the land. This is a ratified trade agreement which is now the law of the United States of America. Let me try to explain what would be allowed under this law and what would not be allowed under this law. There has been a lot of discussion about whether or not the pending Murray amendment violates NAFTA. Let me go over, within the provisions of what I have just read, what constitutes a violation. First of all, the provision makes it very clear that you have to have the same standards. You cannot have discriminatory standards. But, obviously, it also makes it clear that you don't have to enforce them in exactly the same way. For example, it would not be a violation of NAFTA for us to begin our new relationship with Mexico by inspecting Mexican trucks that come into the United States. I note that would be substantially different than what we do now. Currently, in the year 2000, 28 percent of all American trucks operating in our country were inspected. Forty-eight percent of all Canadian trucks operating in America were inspected. Seventy-three percent of all Mexican trucks were inspected. It would not be a violation of NAFTA in admitting Mexican trucks to operate nationwide, for the first time for us to inspect every truck until standards were established and until a pattern was developed where it became clear that Mexican trucks were meeting American standards. After the point where the disqualification rate was similar on American trucks, Canadian trucks, and Mexican trucks, then continuing to require an inspection of all Mexican trucks without any evidence that such inspection was required to meet the standards, at some point that would become a violation of NAFTA, but it would not be a violation in the implementation phases. Senator McCain has proposed--and I support--a safety regime that initially would inspect every truck coming into the United States from Mexico. If the way the Mexican Government keeps its records is different than the way the Canadian Government keeps its records or the way the United States Government keeps its records, it would not be a violation of NAFTA for us to set up a separate regime in how we interface with the Mexican Government to enforce uniform standards. That would not be a violation. But where violations come is not in enforcing under different circumstances. Where violations come is when the standard is different. It is perfectly within the bounds of NAFTA that you can have a different inspection regime because of the difference in circumstance. But it is a violation of NAFTA, a violation of the law, and a violation of the letter and the spirit of an international obligation that we undertook and we willingly ratified when you have different standards for Mexican trucks as compared to American trucks and Canadian trucks. Let me give you four examples of provisions in the Murray amendment that violate NAFTA. Again, why do they violate NAFTA? It is not a violation of NAFTA if you have a different inspection regime to achieve the same result. That is contemplated in NAFTA. In fact, the North American Free Trade Agreement arbitration panel has noted that there is nothing wrong with enforcing the same standards differently depending on the circumstances. Let me cite four violations. Under the Murray amendment, it is illegal for Mexican trucks to operate in the United States unless they have purchased American insurance. That is a flat-out violation of NAFTA. Why do I say that? Because it is not required in the United States that Canadian trucks purchase American insurance. In fact, the great majority of trucks that operate in the United States from Canada--100,685 trucks last year--the great preponderance of those trucks had either Canadian insurance or British insurance. Many of them are insured by Lloyd's of London. Requiring that Mexican trucks have American insurance is a violation of NAFTA because we do not require that our own trucks have American insurance. We require that they have insurance, but we do not require that the insurance company be domiciled in the United States of America. We require that Canadian trucks have insurance, but we don't require that the insurance company be domiciled in the United States of America. But the Murray amendment requires that Mexican trucks have insurance from insurance companies that are domiciled in the United States of America. And that is as clear a violation of NAFTA as you can have a violation of NAFTA. It violates the basic principle of national treatment. Let me give you a second example. We have regulations related to companies leasing their trucks. We have laws and regulations in the United States. We enforce those laws on American trucks. We enforce those laws as they relate to Canadian trucks. But the Murray amendment has a special provision that applies only to Mexican trucking companies. That provision is that Mexican trucking companies, if they are under suspension or restriction or limitations, cannot lease their trucks to another company. I am not arguing that we should not have such a provision in the United States. Quite frankly, I would be opposed to it. Why would we force a trucking company that cannot provide a certain service to simply let its trucks sit idle when the trucks can pass a safety standard and some other trucking company might use them? For our own trucks, we have deemed that to be inefficient. For our own trucking companies, we have deemed that to be destructive of their economic welfare. We have the same standard for Canadian trucks. But under the Murray amendment, we do not have the same provision with regard to Mexican trucks. Therefore, the Murray amendment violates NAFTA. It violates NAFTA because you cannot say that an American company that is subject to suspension, restriction, or limitation can lease its trucks, that a Canadian company that is subject to the same restrictions can lease its trucks, but that a Mexican company, that is subject to the same restrictions, cannot lease its trucks. You can treat Mexican trucks any way you treat your own trucks, but you cannot, under NAFTA, treat them any differently. I made that clear when I read the two provisions directly related to trucking. Another clear violation is a violation with regard to penalties. We have penalties in the United States. If you are a bad actor, if you do not maintain your trucks, if you do not operate them safely, if you violate other provisions, we, in the name of public safety, do--and we should--impose penalties. But the penalties that we apply to our own truckers and we apply to Canadian truckers, under this bill we would have a different penalty regime, and that penalty regime would prohibit foreign carriers from operating--reading the language--apparently, permanently, based on violations. Look, we would have every right, under NAFTA, to say, if you violate the law, you are permanently banned from ever being in the trucking business again. We very quickly would have nobody in the trucking business. But we can do that. If we did that to our own trucking companies, we could do it to Mexican trucking companies; we could do it to Canadian trucking companies. But what we cannot do--the line over which we cannot step, and which this pending measure, the Murray amendment, does step--is treat Mexican trucks and Mexican trucking companies differently than you treat American trucking companies and than you treat Canadian trucking companies. Let me give one more example, and then I will sum up, because I see my dear colleague, Senator McCain, is in the Chamber. Another provision of the pending Murray amendment makes reference to the Motor Carrier Safety Improvement Act of 1999. This was a provision of law adopted by the Congress, signed by the President, in 1999, that made revisions relative to safety. This bill was adopted, and it applies to every American trucking company, and it applies to every Canadian trucking company. And it can apply to every Mexican trucking company. But that is not what the provision in the Murray amendment does. The Murray amendment says, until the regulations that are contained in this 1999 law are written, and fully implemented, Mexican trucks cannot operate in the United States. If the bill said, American trucks cannot operate until it is implemented and Canadian trucks cannot operate until it is implemented, we might all go hungry, but that would not violate NAFTA. What violates NAFTA is, while we have not written the regulations and implemented this act, we have 100,000 Canadian trucks operating in the United States. And by singling out Mexican trucks and saying they cannot come in until these regulations are written and implemented-- which probably cannot be done for 2 years, according to the administration; and I am for the implementation of this law; I am for the regulations--but you cannot say, under a national treatment standard, which we entered into--signed and ratified--you cannot say, American trucks can operate without this law being implemented, Canadian trucks can operate without this law being implemented, but Mexican trucks cannot operate without this law being implemented. That violates NAFTA. And it is clearly illegal under the treaty. Let me sum up by saying I have a letter from the Secretary of the Economy in Mexico. Let me conclude by reading just a couple sentences, and then I want to yield to Senator McCain. I quote the letter: Mexico expects nondiscriminatory treatment from the U.S. as stipulated under the NAFTA. . . . Each and every truck company from Mexico ought to be given the opportunity to show it complies fully with U.S. standards at the state and federal levels. . . . We are very concerned after regarding-- I am sure they mean ``looking at''-- the Murray amendment and the Administration's position regarding it that the legislative outcome may . . . constitute a violation of the agreement. This amendment would guarantee that we do not discriminate against Mexico. That is what this issue is about. This is not about safety; this is about the question of whether or not Mexican trucks, in a free trade agreement, where we committed to equal treatment, will in fact be treated equally. Madam President, it is my understanding that we have the floor for another 6 minutes, and then the Senator from Washington will be recognized. Didn't the unanimous consent agreement say 12:25?

Mr. GRAMM. Was it 12:20? Let me ask unanimous consent that Senator McCain have 5 minutes and then Senator Murray have as much time as she would like.

Mr. GRAMM

Mr. GRAMM. Will the Senator yield 3 minutes?

Mr. GRAMM. I yield myself such time as I might consume. Mr. President, first of all, I congratulate Chairman Sarbanes on this bill. This is a bipartisan bill. I think it is a good bill. I think it is justified. I am not unaware of the fact that things are happening in Iran. I continue to hope that a great country with a very proud history, with 67 million people, will have an awakening of freedom, and that Iran will rejoin the community of nations at some point. But while our committee is not unaware of the fact that there are some promising signs in Iran, the policy of the Government is still a policy that we find objectionable. Therefore, I support this bill. If something changes in Iran, if there is a change in policy, produced either by a change in the Government or a change in the policy of the Government, I think there is strong support in our committee, in the Congress, and in the country to change the current policy. But it is up to Iran and its people as to what course they are going to follow, whether they are going to be one of the responsible nations in the world or whether they are going to support terrorism. Let me also say that I see no sign that any similar hope is present in Libya. The bottom line is that we have to judge nations as we judge people, based on how they behave. When they behave irresponsibly, we can take note of it if we want to discourage that behavior. I hope we will get a strong vote. I have to say that when our committee debated this issue, while there was an overwhelming vote of support, we had a very good debate. Many important points were raised, and I was quite proud of how seriously we took this issue. I don't have any intention to use my 30 minutes. I don't know if anyone else on my side wishes to speak, so maybe for the time being I will reserve my time and see if anybody comes over. Let me conclude my remarks and see if there is anyone on the Democrat side who wants to speak. I hope my colleagues will vote for the Iran-Libya Sanctions Act. I believe that, unfortunately, it is needed. I hope things will change so that we can lift these sanctions some day, and I hope it is soon. But something has to change to make that happen.

Mr. GRAMM. I will yield the Senator from Oregon as much time as he might require.

Mr. GRAMM

Mr. GRAMM. I ask unanimous consent I might have 5 additional minutes.

Mr. GRAMM. I have asked for 5 additional minutes.

Mr. GRAMM. Let me review the three areas that are clear violations of NAFTA in this provision before us. The first is a provision requiring companies to buy American insurance. It is one thing to say they have to have insurance licensed in the United States. That would conform with NAFTA. But to say they have to buy insurance from companies domiciled in the United States is a clear violation of NAFTA, it is a clear violation of GATT, and it violates the national treatment standards that we have set out in trade. This is critically important to America because all over the world we have American business interests that would be jeopardized if other countries engaged in similar activities against America. Another provision which clearly singles out Mexican truckers, where American truckers are not affected by a similar provision and neither are Canadian truckers, is a punitive provision that says if you are subject to suspension or restriction or limitations, you can't lease trucks to anybody else. No such requirement exists in American law. No such requirement exists with regard to Canadian trucks. But there is such a limitation in this amendment, and that limitation clearly violates NAFTA by denying Mexican economic interests the same protection of the law that American economic interests and Canadian economic interests have. Another provision of the law which is totally different from the way we treat American trucks and the way we treat Canadian trucks is that if a foreign carrier is in violation, a foreign carrier can be permanently banned from doing business in the United States. Where is a similar provision with regard to Canadian trucks and American trucks? Let me summarize, since I am running out of time, by making the following points: No. 1, I am for safety. I have more Mexican trucks operating in my State than any other person in the Senate, other than Senator Hutchison, who represents the same State I do. I am concerned about safety, but I do not believe we can sustain in world public opinion a provision that discriminates against our neighbors in Mexico, a provision that treats Canadians under one standard and Mexicans under another. If we want temporary measures whereby we can get Mexican trucks up to standard, that is something with which I can live. But permanent provisions where we are treating Mexico different than Canada, that is something with which I cannot live. I think it is important that we try to work out a compromise. But I can assure you, given that the administration believes this issue is critical to the credibility of the United States in negotiating trade agreements and enforcing our trade agreements around the world, Senator McCain and I and Senator Lott intend to fight to preserve the President's position. Some suggestion has been made that we just would do a cloture on the amendment of Senator Murray. I remind my colleagues, the amendment is amendable. If it were clotured, we would have 30 hours of debate on cloture, and there would then be three other cloture votes on this bill. I do not think that is a road we want to go down. What is the solution? The solution is to have strong safety standards, but you have to apply the same safety standards to Canadian trucks that you do to Mexican trucks. We do not have second-class citizens in America, and we are not going to have second-class trading partners. We cannot set one standard for Mexicans and one standard for Canadians in a free trade agreement that involves all three countries. So Senator McCain and I are for safety, but we are not for protectionism. We are not for provisions that make it impossible for the President to provide leadership to comply with NAFTA, and we are willing to fight to preserve the President's ability to live up to our trade agreements. I hope something can be worked out. I am not sure where the votes are. What I see happening is that protectionism is being couched in the cloak of safety. We are willing to have every legitimate safety provision for Mexican trucks that we have for Canadian trucks and for American trucks. We are willing to have a transition period where we have more intensive inspection. But in the end, in a free trade agreement involving three countries, we have to treat all three countries the same. What we cannot live with is discrimination against our trading partner to the south. I appreciate the Chair's indulgence.

Mr. GRAMM. Let me give an outline of where we are and how we got here. I will be happy to yield the floor and let the distinguished subcommittee chairman speak. The House of Representatives, following a policy of the Clinton administration, voted to deny the President the ability to implement NAFTA. I remind my colleagues that we entered into an agreement with Mexico and Canada to form the North American Free Trade Agreement and to form the largest free trade area in the world. Part of that agreement was to have free trade not just in goods but in services. Part of that agreement is we set a timetable during which we would allow trucks to cross the border within a certain distance for border- type trade and then we would set up a phase-in process whereby trucks could go back and forth across the border between Mexico and Canada, Mexico and the United States, the same way they do between the United States and Canada. The deadline for that agreement to be fully implemented was on the verge of passing when George Bush became President. He made it clear in the campaign and he made it clear when he became President that he felt obligated to live up to the agreements we had made with Mexico and Canada in NAFTA. Those agreements gave us the ability to set safety standards with regard to Mexican trucks that basically were similar to what we have with Canadian trucks and our own trucks. It did not give us the ability to have discriminatory standards. The Teamsters Union had consistently opposed the implementation of this agreement. They opposed it, and President Clinton refused to begin the phase-in process, refused to start the inspection process, and now we are down to the moment of truth as to whether we are going to live up to the agreement we made in NAFTA. I remind my colleagues, as tempting as it is for our own advantage, at least our perceived political advantage, to go back on the commitment we made to NAFTA--first of all, in doing so we are discriminating against our Mexican neighbor because we are treating them differently than we are treating our Canadian neighbors. Secondly, all over the world, legislative bodies are debating whether or not to go back on agreements they have made with the United States. One of reasons I feel so strongly about this issue, I believe the credibility of the American nation is on the line as to whether we will live up to the agreement we have made. Now, there is no question about the fact that the White House, after having an absolute prohibition on the implementation of the treaty in the House, the White House was delighted to see a similar action not taken in the Appropriations Committee. In that case, it was the lesser of what they perceived to be the two evils. The problem is, when we look at the amendment currently in this bill, there are several provisions that clearly violate NAFTA, several of them violate GATT, and all of them represent a procedure whereby we treat Mexico very differently than we treat Canada. Let me give three examples of provisions in the bill that clearly violate NAFTA. The first is a provision in the bill that requires that Mexican trucks be insured by American insurers--not just insurers who are licensed in the United States but insurers who are domiciled in the United States. That is a clear violation of NAFTA and a clear violation of GATT because it basically denies national treatment standards to which we agreed.

Mr. GRAMM. I am happy to yield.

Mr. GRAMM

Mr. GRAMM. Mr. President, I wasn't planning on speaking more than 5 or 10 minutes.