Chuck Grassley

Mr. GRASSLEY

Mr. GRASSLEY. I suggest the absence of a quorum.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, as we are getting set under the unanimous consent agreement before the Senate to take up a Lieberman amendment, I will speak about what we have in the bill on workers' rights and how we deal therewith. The Trade Promotion Authority Act is a bipartisan bill that Senator Baucus and I have brought to the floor which contains the most comprehensive set of objectives on workers' rights and core International Labor Organization labor standards that have ever been included in any U.S. trade law dealing with international trade negotiations. Respect for workers' rights consistent with core International Labor Organization standards is a clearly stated U.S. trade objective. The President, in his contract with Congress, does our negotiating for us, since we cannot have 535 Members negotiating with 142 other countries. We have this contract with the President to do it. We direct the President through this contract, which is this bill we are considering, to seek greater cooperation between the International Labor Organization and the World Trade Organization. Furthermore, the President is directed to strengthen the capacity of foreign governments to achieve core labor standards. The Department of Labor will offer technical assistance to these foreign governments. The President will seek a commitment by other governments to effectively enforce labor laws. The labor provisions will encourage countries to improve their labor laws without infringing on their sovereignty. The labor negotiating objectives capture the key trade and labor provisions we have had before this Senate previously in the U.S.-Jordan Free Trade Agreement passed last summer. Our contract with the President to negotiate for us contains the strongest labor positions our Government has ever taken regarding bargaining in the history of World Trade Organization negotiations over the last 25 years. For the first time, U.S. trade law will include environment as a U.S. trade negotiating objective. The environmental provisions will encourage countries to improve their labor laws without infringing upon their sovereignty. Our President, through these directions, is to promote multilateral environmental agreements and consult with parties regarding consistency of such agreements with World Trade Organization rules. This addresses the widespread concern legitimately expressed that trade rules should not interfere with U.S. environmental treaties. This bill includes a requirement to conduct environmental reviews of future trade and investment agreements. This is where we are. The bill before the Senate provides this contract for the President to negotiate with these other countries for us. And by the way, it is something we must pass by majority vote once it is done or it never becomes law. In this contract we have the strongest labor and environmental provisions ever. The Senator from Connecticut will come to the floor and these will be under attack. He will try to amend these very strong provisions we have in this legislation because somehow the strongest provisions ever on labor and on environment, on trade legislation, are not good enough. These are very much a very delicate compromise--issues that have been worked out between Republicans and Democrats, not just in this body but also in the other body. As you can tell, that was a very tenuous sort of agreement that you don't want to mess with so much because it only passed by a 1-vote margin, 215 to 214. So when we have this sort of bipartisan approach on these very critical but sensitive issues such as labor and environment, we want to make sure we do not upset that. It is my view, as you will hear later on in debate when we get to the specifics of the amendment of the Senator from Connecticut, Mr. Lieberman, that his amendments will upset this very carefully crafted bipartisan agreement. I yield the floor.

Mr. GRASSLEY. Mr. President, I am not going to debate the Senator from Minnesota, but I am going to raise some questions he may want to answer. First of all, our bill, the bipartisan trade promotion bill that is before us, does provide for a study on the impact of trade on the economy and jobs and things of that nature. So, quite obviously, we are not opposed to studies that are within the bill. The Senator from Minnesota wants to be a little more specific, give direction to the study. And I suppose those directions and those studies are something that I will want to have him answer some questions about what his intent is. I also surmise that the Senator from Minnesota probably will not vote for trade promotion authority. That doesn't make his efforts to amend the bill illegitimate in any way, but there are a lot of amendments that could be adopted that probably will not get the support, in the final analysis, of the Senator from Minnesota. One of the things we need to remember is that trade is all about jobs. For instance, the whole movement of the last seven decades started with the bad economic impact of protectionism all over the world. It started in the United States with the Smoot-Hawley Act. I don't know that it was intended to be a bad piece of legislation. Probably the people who got it passed thought they were doing the right thing for the country. It bred protectionism all over the world. Everybody knows what happened in the 1930s, the tremendous movement toward protectionism. World trade shut down and, consequently, the world economy shut down. The Great Depression was a worldwide depression. It wasn't long afterward, a new President came in, Franklin Delano Roosevelt, and a new Congress, and they had a rude awakening to the bad impact of protectionism. We have heard Senators give the history, so I will not go into it. Starting in the mid-1930s, with the Trade Reciprocity Act that passed Congress and, under the President's authority, the ability to reduce tariffs when it was reciprocally done by other countries, it was a pattern from the mid-1930s until the present setup of the General Agreement on Tariffs and Trade that went into effect in 1947, followed by the World Trade Organization in 1994. But that whole regime that started in 1947 was building on what started in the mid-1930s with trade reciprocity to bring down tariff and nontariff trade barriers to enhance the world economy and to create jobs. Trade is all about jobs. I keep referring to what President Clinton said about the expansion of jobs in his 8 years as President: 22 million jobs. He said one-third of them came because of foreign trade. The reason he could say that is he negotiated the final agreements on the North American Free Trade Agreement and on the Uruguay Round of GATT. So 22 million jobs, one-third, approximately 7 million jobs--7 million jobs--President Clinton said, were created as a result of trade. I hope everybody understands that there are leaders in the Democratic Party and leaders in the Republican Party who think trade is good for America and it creates jobs. They are good-paying jobs that pay 15 percent above the national average; some people would say somewhere between 13 percent and 19 percent above the national average. We are not talking about flipping hamburgers at McDonald's; we are talking about good jobs. You have to put this debate in the context of what the history of the world economy has been in the last 70 years and what has happened in the United States to create jobs as well. In my State of Iowa, at John Deere, one out of every five jobs on the assembly line is related to trade. At 3M Company, Knoxville, IA, 40 percent is related to trade. I could go on and on. It is probably more true in Minnesota than my State of Iowa, jobs related to trade. The Senator's amendment doesn't undo anything we have in the bill. He asks for a study. There is nothing wrong with intellectually honest approaches to reviewing public policy. Senator Baucus and I believe that is important. We have a study in our bill. With that background, I would like to raise some questions with the Senator that he might want to answer or might not want to answer. As I understand it, the amendment would replace language in our bill which requires the President to review the impact of future trade agreements on U.S. employment and report to the Ways and Means Committee and to the Senate Finance Committee on these reviews. The amendment of the Senator from Minnesota expands upon this report, requiring the President to take into account the impact on job security, the level of compensation of new jobs and existing jobs, the displacement of employment, and the regional distribution of employment in conducting this review. The amendment requires the President to utilize experience from previous international trade agreements and to use, in the words of the amendment, ``alternative models of employment analysis.'' My question on that point would be: How is the President, in conducting the report, going to take into account the impact on job security? How is he going to take into account the level of compensation of new jobs and existing jobs? Obviously, there is some data for that, as I indicated by the 15 percent figure I used that trade-related jobs pay above the national average. But does the Senator from Minnesota want to take more than those things into account that are already out there? Whatever the Senator from Minnesota wants the President to take into account, is that data available? What is the relevance of requiring the President to take into account the regional distribution of employment? Is providing jobs in one part of the country more important than jobs in another part of the country, if the overall economic wealth of our Nation is enhanced? When President Clinton said one-third of the jobs created in the 8 years of his Presidency were related to trade, he didn't say it benefited Massachusetts much more than California, or much more Minnesota than it did the southern part of the United States. We are a national economy. I might also ask the Senator to explain, what are alternative models of employment analysis? In other words, how do his alternative models of employment analysis differ from what might be the present models of employment analysis or maybe what you might call other models that are in use, or maybe there is a standard model out there? And have these alternative models of employment analysis been used by other nations, or in any venue, for that matter, to evaluate trade agreements? I think it is important that we know how they have been used. The Senator would want answers to these questions to be part of the Record in case his amendment is adopted so that we can have a basis for the direction of the study. But we cannot be opposed to intellectually honest approaches to getting information and analyzing the policies we make. But we want to make sure there is a basis for producing the information that the Senator from Minnesota wants. I am going to stop there. I have raised some questions about it without taking a position for or against the amendment at this particular point.

Mr. GRASSLEY. Mr. President, I am going to go along with the amendment as well, but I want to make very clear that it seems to me it emphasizes the negative impact of trade, and we have 70 years that prove the positive impact of international trade. We also had President Clinton saying that out of 22 million jobs, a third of those, 7 million jobs, were a result of trade. So there are positive aspects of trade. Somewhere along the line in conference this has to be rewritten so it is balanced between what is negative with trade, which I have to admit there are always adjustments in the economy. With or without trade, there are adjustments in the economy. There are winners and losers. But there are positive benefits of trade and the positive benefits outweigh the negatives many times. We have to emphasize that. Also, before we leave this issue, there is an emphasis between the approach of the Senator from Minnesota, to what he calls a new international economy, and my approach to the new international economy. He says this is not a debate between protectionism and free trade. He puts it in terms of those who think you ought to manage the new international economy or let the marketplace have free flow. When the Senator from Minnesota uses the word ``manage''--I do not know whether he used the word ``manage''--we have to be able to manage the new international economy. There is a difference in approach. If we are going to have management, it is going to be the government doing the managing, as opposed to the free marketplace. Is there an unfettered use of the free marketplace? Absolutely not. There have always been rules. What is basic to this debate, center to this debate, is whether the United States is going to be at the table for the rulemaking of the international economy, and the rulemaking meaning we are not going to have an unfettered free market, but we are going to have a predictable free market. There are going to be certain rules that all competitors will follow in the international community. Trade promotion authority is whether or not the Congress of the United States, through our contract with the President to represent the people of the United States, will be at the negotiating table when the rules are made. That is why it is so darn important that this legislation pass because, as the Senator from Minnesota says, we need to give some direction. That has been the history of the General Agreement on Tariffs and Trade process since 1947. That has been the basis of the World Trade Organization process since 1994: to have the rule of law apply to international trade. Should the 270 million people of the United States be at the table to help write those rules? For that to happen, this bill must pass for the President to have the authority and the credibility to help write those rules that the Senator from Minnesota believes are so necessary. That is not managing the world economy; that is giving predictability to the players in the world economy, and rules of the game that must be followed and for a dispute settlement process when somebody is an outlaw in the international economy. I hope we make clear this legislation is very important to accomplish what the Senator from Minnesota wants to accomplish at least in the way of not having an unfettered free market, although in his statements he tends more toward the government managing the world economy.

Mr. GRASSLEY. I urge adoption of the amendment.

Mr. GRASSLEY. Mr. President, I support the three amendments offered by the Senator from North Carolina. He has been very accommodating in working with us to make sure these amendments could go very smoothly. I believe it is appropriate to establish principal negotiating objectives for textiles and for apparel. Neither the House trade promotion authority bill nor the bipartisan trade promotion authority bill that Senator Baucus and I now have before the Senate--and was approved by an 18-to-3 vote in our committee--contain negotiating objectives for this sector of our economy, textiles and apparel. The amendment of the Senator from North Carolina fills this gap by establishing principal negotiating objectives modeled after things I have supported for agriculture, such as we have agricultural negotiating objectives that emphasize the importance of reciprocal market opening commitments. These new textile negotiating objectives also recognize that it is important to promote market access opportunities abroad and to do it for U.S. producers and to reduce and/or eliminate nontariff trade- distorting measures which limit access for U.S. producers in markets overseas. Ultimately, the best way to help workers in the United States who are or may be displaced by trade is to create as many new market access opportunities overseas for U.S. producers as possible because the more trade and the more product we sell creates jobs in America, and we only have a trade bill before the Senate for one purpose: To help our economy. When we help our economy, we create jobs. This legislation does that, and the amendments by the Senator from North Carolina add to the objectives of this goal. I also support enhancing educational opportunities for displaced workers. Enhancing workers' educational opportunities is a very positive step forward and represents a strong investment in each individual worker's future. Finally, I support providing emergency assistance grant programs for community colleges that provide training programs for displaced workers. In fact, in my very State of Iowa, community colleges are right in the center of job opportunities, not just for displaced workers but even for the training of workers for specific jobs, of expanding businesses within our State or jobs that are moving into my State from another State. This puts on the community colleges a burden for which they are prepared. This assistance to the community colleges is consistent with the administration's efforts to increase and improve the quality of 2- year-degree institutions. Workers or families and their communities will benefit from this type of assistance. It is consistent with the social contract between dislocated workers and our country that is at the heart of trade adjustment assistance. Obviously, I urge all my colleagues on this side of the aisle to join me in supporting these amendments. I yield the floor.

Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I am pleased to join my colleague from Iowa, Senator Harkin, in introducing legislation to provide grants for the training of realtime reporters and captioners. Many Senators may not be aware of a looming problem related to a shortage of what are called ``realtime writers.'' Realtime writers are essentially trained court reporters, much like the official reporters of debates here in the Senate, who use a combination of additional specialized training and technology to transform words into text as they are spoken. This can allow deaf and hard of hearing individuals to understand live television as well as follow proceedings at a civic function or in a classroom. In the Telecommunications Act of 1996, Congress mandated that most television programming be fully captioned by 2006 in order to allow the 28 million Americans who are deaf or hard of hearing to have access to the same news and information that many of us take for granted. I know that most of us were glued to the television on and after September 11 in order to absorb every scrap of information we could about the events that took place. In order for those who are deaf and hard of hearing to receive the same information as it is broadcast on live television, groups of captioners must work around the clock transcribing words as they are spoken. As of this year, 2002, the required number of hours of captioned programming that must be provided by video-programming distributors increased from 450 to 900. In 2004, this will increase to 1350 hours. By 2006, 100 percent of new nonexempt programming must be provided with captions. At the same time, student enrollment in programs that provide essential training in captioning has decreased significantly, with programs closing on many campuses. In order to meet the growing demand for realtime writers caused by this mandate, we must do everything we can to increase the number of individuals receiving this very specialized training. The legislation that Senator Harkin and I are introducing, along with a number of other senators, will help address the shortage of individuals trained as realtime writers by providing grants to up to 20 court reporting programs to promote the training and placement of individuals as realtime writers. Specifically, court reporting programs could use these grants for items like recruitment of students for realtime writing programs, need-based scholarships, distance learning, education and training, job placement assistance, the encouragement of individuals with disabilities to pursue a career as a realtime writer, and personnel costs. The expansion of distance learning opportunities in particular will have an enormous impact by making training accessible to individuals who want to become realtime writers but do not live in metropolitan areas. Also, need based scholarships offered using these grant funds would be subject to an agreement with the National Telecommunications and Information Administration to provide realtime writing services for a period of time. Unless we act now, the shortage of individuals trained as realtime writers will only grow more severe. This would leave the 28 million deaf or hard of hearing Americans without the ability to fully participate in many of the professional, educational, and civic activities that other Americans enjoy. I would therefore urge my fellow Senators to support the swift passage of this legislation.

Mr. GRASSLEY

Mr. GRASSLEY. Yes. Amendment No. 3409 Withdrawn

Mr. GRASSLEY. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 3411 to Amendment No. 3401

Mr. GRASSLEY. Mr. President, it is my intention to back the amendment. This amendment makes an important contribution to the underlying trade promotion authority bill. Before addressing the substance of the amendment, I put it in context. The Doha ministerial held in Qatar last year was a profound breakthrough for the United States and the World Trade Organization. For the first time in many years, over 130 nations came together to launch a new round of international trade negotiations. This is no small achievement, as virtually every action taken during the Doha ministerial had to be done by consensus. These nations strongly believed a new round of international trade negotiations was in their best interests. I agree it is in their best interests, and it is in the best interests of the United States. I also think it is in our best interests to get these negotiations underway and give the President the authority he needs to negotiate the best deals for our workers and small and large businesses. During the WTO ministerial at Doha, the members of the organization adopted a political declaration that highlights the provisions in the TRIPS agreement that provide members with the flexibility to address public emergencies, such as the epidemics of HIV, tuberculosis, and malaria. The objectives on intellectual property, which are part of this bill, were drafted before completion of the Doha ministerial. Senator Kennedy's amendment updates these objectives to take into account the important declaration on public health made at the Doha meeting. It is a good addition to the bill. I am pleased to accept it.

Mr. GRASSLEY. Madam President, I ask unanimous consent to withdraw my amendment.

Mr. GRASSLEY

Mr. GRASSLEY. Madam President, at this time I am not going to address either my amendment or the amendment by the Senator from Minnesota and the Senator from Idaho. I do wish to speak generically about the issue before us, to which the amendment of the Senators from Minnesota and Idaho are very central, and to remind my colleagues what trade promotion authority is all about. First, as all my colleagues know, nothing can be done under the Constitution about trade unless the Congress of the United States does it, because one of our explicit powers in the Constitution is to regulate interstate and foreign commerce. It is our authority, and Congress rightfully and according to our oath of office ought to protect our constitutional responsibilities, and we ought to perform our constitutional responsibilities. For the first 150-year history of our country, when all Congress had to do in regard to trade was put on tariffs, up or down, and other business of that nature, it was very appropriate for Congress to initiate and finalize action as far as the regulation of interstate and foreign commerce was concerned. Since the 1930s, we have been involved in cooperative efforts with other countries to reduce tariff and nontariff trade barriers because it was seen then and today as mutually beneficial to all nations to do so. We have been involved in international agreements and international fora to accomplish those goals. One can imagine how impossible it would be then in an international forum to have 535 Members of Congress, in a meeting of 142 countries, negotiating trade agreements, with the Congress of the United States speaking for the United States. It is almost impossible for Congress to reach an agreement among its Members without, in the process, trying to negotiate with 142 other countries. So for the last 25 years, or some people would say in different ways since 1935, we have given the President permission to negotiate agreements with other countries. In a sense, the United States, through this legislation and previous legislation, has set up a contract with the President of the United States saying we would like to have him negotiate for the Congress of the United States, where the constitutional power lies, some agreements under strict authority that we would give the President, and with Congress having final authority to adopt what was negotiated if we agreed to it. We are talking about giving the President the power to negotiate for us because it is an impossibility for the Congress to enter such a forum. The basic question to our colleagues as they consider Dayton-Craig and other amendments is: Do they want the President of the United States to have this authority? This is not blanket authority given to the President of the United States. It is very confined to subject matter. It is very confined to the President reporting to the Congress of the United States on a regular basis what has been done and to get our feedback so that the President carries out the intent of Congress in the negotiations. Finally, the President of the United States has to come to an agreement with 142 countries. Remember, that is not done by a majority vote of those 142 countries. That is done by consensus. So if the President of the United States feels the interests of the United States are not adequately protected, all the President has to do is walk away, and there is no new WTO agreement. Eventually, if the President decides U.S. interests are being protected and he agrees to it and the other 142 countries agree to it, then it comes to us to make a decision whether or not the interests of the United States are adequately protected as the President negotiated with us, and it takes a majority vote in the House and Senate for that to become law of the land. The basic question before the Senate in the Dayton-Craig amendment is whether or not they want the President of the United States to be credible at the bargaining table. The issue is whether or not the President will be credible if, when he reaches an agreement, there is opportunity in the Senate to have separate votes on separate parts of the agreement so some can be dropped and others might be adopted. Do my colleagues think the other 142 countries of the WTO are going to negotiate with our country on that basis? Do you think there will be a final agreement? No. The Dayton-Craig amendment undoes the pattern of this contract between the President of the United States and the Congress over the last 25 years. So we all have to ask ourselves: Has the United States prospered by our international agreements over the last quarter of a century by the process that is once again before us to set up a contract with the President of the United States to negotiate? I have come to the conclusion this process has been good, but I am a Republican. Maybe Democrats would question my judgment of whether or not this is a good process. So I have said before in this debate, and I want to say again, listen to what President Clinton said as he correctly bragged about the agreements he finalized--that started in previous administrations-- during his first year in office. The North American Free Trade Agreement and the Uruguay Round of the General Agreement of Tariffs and Trades were finalized during his first months in office. He says as a result of those agreements, and I suppose he would say, too, predecessors to those agreements, that the United States has benefited very well by it. And he used, as I heard him say so many times, that there were, I think the figure was, 22 million jobs created during his administration, and one-third of those jobs were related to trade. If President Clinton says that, if President Bush believes this is a good process to continue, and you have one Democratic President and one Republican President who think proceeding down the road that we have gone for the last 25 years is the right road to go, I think it would carry some weight with people on both sides of the aisle and it would be a no-brainer that this process ought to be continued. Our colleagues are suggesting that would put a kink in this machine, and that might not be the thing to do. I raise those questions with my colleagues. I also raise the questions with my colleagues of whether or not the present trade remedies are working, which I heard a few minutes ago. Well, what do they think the steel agreement is all about? The President is looking out for our basic industry, to give it some help through transition. The President looked at that and decided that other countries dumping steel in the United States was not right, and our economy was being hurt by it. He stepped in, in a very strong way, to protect our interests. I think of the 201 process where the previous President stepped in, in the case of lamb coming into the United States from New Zealand and Australia. I suppose there are a lot of others I ought to refer to, but our Presidents, Republican and Democrat, have been willing to use the tools that are on the table. Other nations are beginning to learn from the United States and are willing to take action to protect their industries in a way that is going to eventually hurt us. We have been the pioneers of trade remedy legislation for a long period of time, and other nations have somewhat resented our using it, and they are beginning to learn from us and use it. Now they are doing it in a way that is not as transparent as the United States. They do it probably in a way that is less concerned about their using it on the world economy than what our Presidents have done in regard to our action and the world economy. Now, are we going to say we should not be looking out for our interests on trade remedy legislation? I think what they are saying is we ought to let the rest of the world adopt these measures, even if they hurt the United States. Some examples: South Africa imposing dumping duties on United States poultry, closing an important $14 million market; Mexico imposing dumping duties on United States high- fructose corn syrup, decreasing our exports by half, $30 million; Mexico imposing dumping duties on certain United States swine, formerly a $450 million market; Mexico imposing dumping duties on certain cuts of beef affecting companies' abilities to service and grow this $512 million market. Just this year, Canada imposed dumping duties on United States tomatoes, $115 million. In 1999, Canada imposed dumping duties on exports of United States corn, a $36 million market resulting in little United States corn exported to Canada for 4 months until a provisional duty was removed. These are examples of the rest of the world learning from the United States. Consequently, don't we in the United States think it would be better if our country or our President were at the table negotiating to see that these things did not happen? I think those are the issues before us. I probably have implied very much that Dayton-Craig is a bad approach. My point is to simply say I hope my 99 other colleagues will look at the practice of the last 25 years, which has been a credible approach for the United States to be at the negotiating table, and say: Do you really want to change that? Do you want to change the credibility of the President of the United States at the negotiating table? I yield the floor.

Mr. GRASSLEY. Mr. President, I have sent a second-degree amendment to the desk in place of the Dayton amendment. I am going to debate that in just a little while, but I want everybody to know the situation. Also, Senator Baucus and I are going to visit with various people to see if there is a smooth way of handling both the substitute as well as the original amendment. We may not be successful, but that is our desire. We are going to be talking while this debate is ongoing, and I will be back to give the specifics of my amendment in just a short period of time. I yield the floor.

Mr. GRASSLEY. I ask unanimous consent the reading of the amendment be dispensed with.

Mr. GRASSLEY. I move to lay that motion on the table. The motion to lay on the table was agreed to. Amendment No. 3408

Mr. GRASSLEY. Madam President, the amendment that is before us was introduced by Senator Baucus and myself and is designed to make it crystal clear that in pursuing these objectives, foreign investors are not to be granted any greater rights in the United States than our own U.S. investors have rights within the United States. This provision builds upon the already strong improvements to the investment objectives within this bill. These provisions strike a very careful balance between the needs to protect U.S. citizens from arbitrary takings of their property overseas and the need to ensure that the investor-State dispute settlement process is not abused. Critics of the investment provisions insist that the investor-State dispute settlement process has somehow run amok. Not true. The fact is that no U.S. environmental, health, or safety regulations have ever been overturned by the international investment arbitration. Only 13 investor-State claims have been filed under NAFTA chapter 11 in the entire 8 years of its existence. Meanwhile, U.S. investors continue to face discriminatory and arbitrary government action in most of the developing world. We need to maintain U.S. investors' ability to get redress in impartial tribunals while ensuring that the investor-State dispute settlement process continues to protect our own investors overseas. This simply is what the Baucus-Grassley amendment does. I urge support for this amendment and support for the Baucus-Grassley compromise. I yield the floor.

Mr. GRASSLEY. Mr. President, I send an amendment to the desk as a second-degree amendment, for Senator Baucus and myself.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I thank my distinguished colleague from Montana for offering this amendment. I think it helps improve what is already an excellent bill. First, I want to make it clear that the bipartisan trade promotion authority bill currently pending in the Senate goes further than any prior bill to address concerns about potential abuse of the investor- State dispute process. At the same time, the bill recognizes that protecting U.S. investors abroad is also an extremely important objective. In short, the bill is balanced. Some people are attempting to undermine that balance. I think that is a mistake. Foreign investment is closely interrelated to trade. Companies invest abroad to get closer to markets, acquire new technologies, form strategic alliances, and enhance competitiveness by integrating production and distribution. When they invest abroad, U.S. companies often become consumers of U.S. exports--either from affiliated entities or other U.S. companies. The importance of international investment to the U.S. economy is large and growing. The United States receives more than 30 percent of worldwide investment. According to the U.S. Bureau of Economic Analysis, foreign investment in the United States grew sevenfold between 1994 and 2000, reaching almost $317 billion last year. As of 1998, foreign companies had invested over $3.5 trillion in the United States. They employed 5.6 million people and paid average annual salaries of over $46,000, well above the average salary for U.S. workers as a whole. The ability of U.S. companies to invest abroad is also vital to U.S. economic growth and U.S. exports. Between 1994 and 2000, U.S. investment abroad doubled from $73 billion to $148 billion. U.S. investment abroad is critical to support a more dynamic and flexible U.S. economy, greater export flows and higher paying jobs for American workers. For the last 25 years, each successive administration has recognized that it is critical to negotiate strong, objective and fair investment protections in our international agreements to continue to promote such investment. These traditional investment protections are largely based on U.S. law and policy and established international law rules of which the U.S. has been the chief architect and advocate. The Senate Finance Committee gave very careful consideration to investment issues and some concerns expressed about NAFTA chapter 11 when we discussed H.R. 3005, the bipartisan Trade Promotion Authority Act. Both Republican and Democratic members of the committee agreed to several improvements to the U.S. negotiating position on investment, which include: providing a mechanism for the early dismissal of frivolous claims, injecting greater transparency into arbitration proceedings, and establishing a review mechanism. The bill and accompanying report also provide the committee's views on ensuring that U.S. investors abroad enjoy protections comparable to those available to foreign investors in the United States under existing U.S. law, while at the same time not making our own regulations unduly subject to treaty challenge on grounds that have no foundation in U.S. law and practice. The degree of support for the final product is demonstrated by a strong bipartisan committee vote of 18 to 3 in favor of the bill. These provisions represent a very careful balance between the political concerns raised by particular cases under the NAFTA chapter 11 process and the need to continue to provide U.S. citizens with strong investment protections overseas. Yet, some Members still have concerns that foreign investors in the United States will receive greater rights under these provisions than U.S. investors in the United States receive. The amendment we are offering today makes it clear that this is not the case. It is a good improvement to an already excellent bill. I urge my colleagues to support it.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to co-sponsor legislation, the ``Tax Shelter Transparency Act'' which will arrest the proliferation of tax shelters. We have known for many years that abusive tax shelters, which are structured to exploit unintended consequences of our complicated Federal income tax system, erode the Federal tax base and the public's confidence in the tax system. Such transactions are patently unfair to the vast majority of taxpayers who do their best to comply with the letter and spirit of the tax law. As a result, the Finance Committee has worked exceedingly hard over the past several years to develop three legislative discussion drafts for public review and comment. Thoughtful and well-considered comments on these drafts have been greatly appreciated by the staff and members of the Finance Committee. The collaborative efforts of those involved in the discussion drafts combined with the recent request for legislative assistance from the Treasury Department and IRS produced today's revised approach for dealing with abusive tax avoidance transactions. Above all, the Tax Shelter Transparency Act encourages taxpayer disclosure of potentially abusive tax avoidance transactions. It is surprising and unfortunate that taxpayers, though required to disclose tax shelter transactions under present law, have refused to comply. The Treasury Department and IRS report that the 2001 tax filing season produced a mere 272 tax shelter return disclosures from only 99 corporate taxpayers, a fraction of transactions requiring such disclosure. The Tax Shelter Transparency Act will curb non-compliance by providing clearer and more objective rules for the reporting of potential tax shelters and by providing strong penalties for anyone who refuses to comply with the revised disclosure requirements. The legislation has been carefully structured to reward those who are forthcoming with disclosure. I wholeheartedly agree with the remarks offered by the recent Treasury Assistant Secretary for Tax Policy, that ``if a taxpayer is comfortable entering into a transaction, a promoter is comfortable selling it, and an advisor is comfortable blessing it, they all should be comfortable disclosing it to the IRS.'' Transparency is essential to an evaluation by the IRS and ultimately by the Congress of the United States as to whether the tax benefits generated by complex business transactions are appropriate interpretations of existing tax law. To the extent such interpretations were unintended, the bill allows Congress to amend or clarify existing tax law. To the extent such interpretations are appropriate, all taxpayers, from the largest U.S. multinational conglomerate to the smallest local feedstore owner in Iowa, will benefit when transactions are publicly sanctioned in the form of an ``angel list'' of good transactions. This legislation accomplishes both of these objectives.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, I rise today to co-sponsor legislation, the ``Tax Shelter Transparency Act'' which will arrest the proliferation of tax shelters. We have known for many years that abusive tax shelters, which are structured to exploit unintended consequences of our complicated Federal income tax system, erode the Federal tax base and the public's confidence in the tax system. Such transactions are patently unfair to the vast majority of taxpayers who do their best to comply with the letter and spirit of the tax law. As a result, the Finance Committee has worked exceedingly hard over the past several years to develop three legislative discussion drafts for public review and comment. Thoughtful and well-considered comments on these drafts have been greatly appreciated by the staff and members of the Finance Committee. The collaborative efforts of those involved in the discussion drafts combined with the recent request for legislative assistance from the Treasury Department and IRS produced today's revised approach for dealing with abusive tax avoidance transactions. Above all, the Tax Shelter Transparency Act encourages taxpayer disclosure of potentially abusive tax avoidance transactions. It is surprising and unfortunate that taxpayers, though required to disclose tax shelter transactions under present law, have refused to comply. The Treasury Department and IRS report that the 2001 tax filing season produced a mere 272 tax shelter return disclosures from only 99 corporate taxpayers, a fraction of transactions requiring such disclosure. The Tax Shelter Transparency Act will curb non-compliance by providing clearer and more objective rules for the reporting of potential tax shelters and by providing strong penalties for anyone who refuses to comply with the revised disclosure requirements. The legislation has been carefully structured to reward those who are forthcoming with disclosure. I wholeheartedly agree with the remarks offered by the recent Treasury Assistant Secretary for Tax Policy, that ``if a taxpayer is comfortable entering into a transaction, a promoter is comfortable selling it, and an advisor is comfortable blessing it, they all should be comfortable disclosing it to the IRS.'' Transparency is essential to an evaluation by the IRS and ultimately by the Congress of the United States as to whether the tax benefits generated by complex business transactions are appropriate interpretations of existing tax law. To the extent such interpretations were unintended, the bill allows Congress to amend or clarify existing tax law. To the extent such interpretations are appropriate, all taxpayers, from the largest U.S. multinational conglomerate to the smallest local feedstore owner in Iowa, will benefit when transactions are publicly sanctioned in the form of an ``angel list'' of good transactions. This legislation accomplishes both of these objectives.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today the Senate will vote on and most likely pass a 6 year farm bill. Supporters of the bill say it will cushion family farmers and rural America from financial hardship. That may be true, but unless you are a big meatpacker or a cotton and/or rice producer in the South, the new farm bill is not what it is cracked up to be. I am afraid that for Iowa farmers, the bill's shortcomings outweigh its virtues. So I will cast my vote against the bill. There are two main reasons: No. 1, during the last year, farmers in Iowa made clear to me they wanted Washington to crack down on the sky-high payments going to large corporate farms. It is ridiculous that we shovel the lion's share of the farm benefits to a handful of large corporate farming operations. No. 2, Iowans also urged me to push public policy that would keep competition alive in the livestock industry by banning packer ownership of animals fed for slaughter. My amendments got these two main family-farmer priorities included in the Senate version passed last February, but my amendments were dropped by the conferees. Who is this bad for? It is bad for small and medium sized farmers, the very people a farm bill is suppose to help. Throughout the history of farm bills, their intent has been to aim the majority of the benefit to small and medium sized producers, the Congress has missed before, but in my opinion we have never missed so badly. We sent strong family-farmer oriented provisions to the conference and we got nothing in return, except a bill that is so complex family farmers won't receive their 2002 crop benefits until right before harvest of the 2003 crop. That might make sense to the conferees, but it does not to me or any of the other farmers that are calling and emailing my office asking questions about this bill and why we made the farm bill so complicated. This clearly does not address the needs of small and medium-sized producers in Iowa that put a premium on the issues of payment limits and banning packer-ownership, so I am going to vote against this bill and do anything I can to remedy the issues regarding competition that the conferees discarded.

Mr. GRASSLEY. Mr. President, how much time is left on Senator Lugar's side?

Mr. GRASSLEY. I yield myself 4 minutes. I have permission to do that.

Mr. GRASSLEY

Mr. GRASSLEY. Mr. President, today is a very bad day for the family farmer. I am extremely disappointed by the effort that was made by the Senate conferees to maintain the provisions that were added to the Senate version of the farm bill on the floor. A number of folks have been saying this is a good bill, and I would say those folks are part right, it's a good bill if you are a cotton and rice producer. The problem is we don't grow those commodities in my state of Iowa. I plan to vote with the family farmers from Iowa. I'll sum it up in four words to explain why this is a bad bill for Iowa and why I'm so adamantly opposed to this conference report: competition, competition, competition, competition. My first reference to competition pertains to competition for grain farmers. The conferees threw out my amendment on reasonable payment limits. In fact I think what they did will cause more harm than good because the Senate Democrats are calling it legitimate reform. If this is their version of ``legitimate reform'' they're not talking to and representing the same farmers I'm listening to and representing. The American people recognize the importance of the family farmer to our nation, and the need to provide an adequate safety net for family farmers. In recent years, however, assistance to farmers has come under increasing scrutiny. Critics of farm payments have argued that the largest corporate farms reap most of the benefits of these payments. The reality is, 60 percent of the payments have gone to only 10 percent of our Nation's farmers. What is more, the payments that have been designed to benefit small and medium-sized family farmers have contributed to their own demise. Unlimited farm payments have placed upward pressure on land prices and cash rents and have contributed to overproduction and lower commodity prices, driving many family farmers off the farm. What is really disturbing though it the fact that the conference report failed to address this issue and even worse, the authors are acting like they did. This conference report fails to address the use of generic commodity certificates which allow farmers to circumvent payment limitations. The supposed ``reform'' in this bill is worthless due to the lack of generic certificate reform. In recent years, we have heard news reports about large corporate farms receiving millions of dollars in payments through the use of generic certificates. Generic certificates do not benefit family farmers but allow the largest farmers to receive unlimited payments. This bill will not even make the big corporate farmer blink. The Senate agreed, by an overwhelming vote of 66 to 31, to a bipartisan amendment sponsored by Senator Dorgan and me to target federal assistance to small and medium-sized family farmers. The amendment would have limited direct and counter cyclical payments to $75,000. It would have limited gains from marketing loans and LDPs to $150,000, and generic certificates would have been included in this limit. No subterfuge. The amendment would also establish a combined payment limitation of $275,000 for a husband and wife. This amendment was critical to family farmers in Iowa. I feel strongly the conference report failed Iowa when it failed to effectively address the issue of payment limitations. This will do nothing to help restore public respectability for federal farm assistance by targeting this assistance to those who need it the most. The second reference to competition refers to the independent livestock producer being almost completely ignored in this bill. Iowa's independent livestock producers had clearly made the elimination of packer ownership their number one priority. The conferees threw it out. The president of the Iowa Pork Producers had stated: ``It [the packer ban] was our number one issue for the Farm Bill and we are extremely disappointed it didn't survive.'' The Iowa Cattlemen released a statement which read: The Iowa Cattlemen's Association Executive Board . . . expressed their frustration with a missed opportunity for new legislation regarding a ban on packer ownership in the final version of the Farm Bill. . . . We believe the Farm Bill Conference committee has overlooked and ignored the family farmer and small livestock producer in failing to adopt appropriate packer limitations. It's clear that is what Iowa's livestock producers wanted and this farm bill doesn't deliver. It's that simple! Also, in regard to livestock producers, the bipartisan amendment I offered with Senator Feingold which would have eliminated the ability of packers to force livestock producers, into mandatory arbitration was dropped in conference. We finally had the chance to give farmers an opportunity to choose the best dispute settlement mechanism available for their individual situation. But instead of fixing the problem--and let me remind everyone that this passed by an overwhelming vote on the Senate floor-- we've locked independent livestock producers into binding arbitration instead of mediation or civil action which could have given family farmers a fighting chance to succeed in a dispute with a packer. Who wants a pat on the back from the packers for dropping these items from the conference report? I am sure the packers are really proud of you, whoever you are. Don't worry about the independent livestock producers, they won't be around much longer anyway. My third reference to competition pertains to competition for funds. Specifically, when the next round of payments will be made. Sticking with current law and passing a supplemental would provide a net benefit to Iowa farmers of approximately $662 million in the first six months if the supplemental was only equal to the levels of support offered within the last supplemental package, according to the Center for Agricultural and Rural Development at Iowa State University. If a farmer has the ability to pay down his debt earlier in a loan cycle than later in that same cycle that money goes much further for the individual producer, everyone knows this. Instead, under the bill as currently constructed, Iowa producers will be waiting till sometime between December and March for the first round of sizable payments. It won't be this fall as it has been for the last three years. I have read in the press that some Members of this body are trying to claim that this is beneficial to farmers in short term. I guess the question is what's ``short term'' to those folks, but the better question is, what's short term to Iowa's family farmers? In the next 6 months. I think it would be fair to say that Iowa farmers are concerned how they will be treated under this program for the next six months. The benefits to Iowa farmers from implementation of the new farm bill in the current fiscal year would include increased LDP rates for corn because of the increased corn loan rate. Nationally, corn farmers received less than 14 percent of a crop year's LDP payment in the same fiscal year since 1997. For Iowa, the amount is clearly less than one percent. This means that Iowa farmers would gain essentially nothing from the higher loan rates in the current fiscal year. Iowa farmers would find that their soybean LDP rates would decrease under the new farm bill because of lower soybean loan rate. But for soybeans, less than 5 percent of LDPs were collected in the fiscal year as the crop year. Thus, Iowa farmers would not lose much at all from implementation of the lower rates in the current fiscal year. So where is the benefit to this approach? Is there a payment hidden in the conference report I have not seen yet? I guess that those in favor of this bill could say that there is a fixed payment available to family farmers that will hopefully be made available in October, but then you have to remember to reduce that payment by the amount a family farmer has already received this year. In Iowa, that means your net benefit for the fixed payment is 1.9 cents per bushel of corn. How can anyone defend 1.9 cents as a substantive fixed payment? How does that compare with the Robert's supplemental? Well, he had 33.4 cents per bushel available for corngrowers in Iowa, and there was no slight of hand to force you to reduce it, or pressure to manipulate your reportable base, to improve your payment. Does anyone actually think 1.9 cents is better for family farmers than 33.4 cents per bushel? My fourth reference to competition is trade, specifically trade compliance. I offered an amendment during the Senate floor debate that would have reinforced the importance of ensuring that the farm bill which passes the Senate complied with our Uruguay Round trade commitments, and the conferees stripped it out. As I have said before, our family farmers depend on foreign markets, exporting about one-quarter to one-third of the farm products they produce. For the past 25 years, the U.S. has exported far more agricultural goods than it has imported. The Uruguay Round negotiations improved conditions of market access for American farmers. For the first time, the agreement reached during the Uruguay Round capped the level of trade-distorting support that WTO members can provide to producers. Worldwide, agricultural tariffs were reduced by an average of 36 percent over a 6-year period. The United States agreed to reduce its own amber box spending to $19.1 billion per year. Because agricultural domestic support commitments are now ``bound'' under WTO rules, the United States and its trading partners can be subjected to harmful trade retaliation if they exceed their WTO limitations. If a WTO complaint were brought against the United States for exceeding its domestic support commitments, it is possible that many countries could become complainants in the cases and allege injury. If the U.S. were found in violation of our trade obligations, we would be expected to change our current farm program, `midstream'. If we were not able to, the complaining countries would receive authorization to retaliate by raising duties on U.S. goods. Our agricultural goods would likely be the first target of retaliation as the products chosen for retaliation are often the most successful exports. Retaliation by our trading partners would cut our exports, forcing surplus commodities onto the domestic market. An increased domestic surplus would place downward pressure on domestic prices, increasing the need for additional assistance. At the same time, we would not be allowed to provide our family farmers any support. The result is that the conference report would fail family farmers when their need is the greatest. That is why I offered my amendment to provide reassurance that we would not have to cut the legs out from under our nation's family farmers if the funding provided by this legislation exceeds our Uruguay Round commitments. In the event that a provision of this farm bill would have threatened to break our amber box caps, as determined by the Secretary of Agriculture, my amendment would have sunset the offending provisions after 18 months. In order to continue funding at a level that is consistent with our Uruguay Round commitments, Congress would have been required to pass a readjustment resolution until the offending provision could be rewritten by Congress. Unlike the conference report, which gives the Secretary of Agriculture sweeping authority to reduce or suspend payments, this amendment would ensure that farmers can count on the assistance they need until Congress agrees that we will potentially violate our trade commitments. In addition, USDA would have determined what program played a significant role in potentially violating our trade agreements and within 18 months that program would have been suspended, hopefully to be reformed in a trade compliant fashion. But now, we wrote a new farm bill that will undercut our negotiators before the negotiations even get off the ground. That is because this farm bill we are discussing today, has, according to its own supporters, a 19 percent chance of violating our Uruguay Round Amber Box commitments. We have never violated those commitments. And we have certainly never publicly announced an intention to violate those commitments. To violate those commitments now, or to threaten to do so, is a tremendous shift in long-standing United States agricultural trade policy. Some of my colleagues might claim that this bill has improved from a 1 in 3 chance to a 1 in 5 chance of sabotaging our rural economy, and they might even be proud of the improvement. But even these dismal percentages get worse when we learn the details. FAPRI--The Food and Agriculture Policy Research Institute--used their existing 2001 baseline to determine this percentage. By FAPRI's own admission, the 2001 baseline does not take into account the full impact we are seeing in the market of many commodity prices trending downward. FAPRI qualified their analysis by explaining: Over the next few weeks, FAPRI intends to conduct an updated analysis of the bill that will incorporate more current market information. The new analysis will result in different estimates of prices, production, Government costs, farm income, and other indicators. Without prejudging results of the forthcoming analysis, please note that market prices for several commodities are currently lower than FAPRI had projected in its 2001 baseline. So get ready folks, when the 2002 baseline is completed and the analysis is run later this month we could very likely see a huge swing in the wrong direction. The percentage of non- compliance could very possibly be upward of 35-40 percent. We will not have solid figures until the next baseline is completed though because of the enormous impact the LDPs will have on 2002 projections. We seem to be rushing to milk the Federal cow before anyone checks the breed, or much less the gender of the cattle. This is not how you establish prudent, or even satisfactory policy, but it doesn't seem like many Senators care about that right now. We have achieved a great deal at the negotiating table in the past 50 years because we have credibility. Our trading partners respect the fact that we stick to our guns and do what we say we are going to do. In turn, we expect them to do the same. But passing a non-trade compliant farm bill seriously damages our credibility. And it does so right at the time when we are poised to launch new, comprehensive global trade talks largely built around our own agricultural negotiating objectives. I cannot think of a more effective way to undermine everything we have worked for, and everything we hope to accomplish at the negotiating table during the next 3 years, than to pass a farm bill that we know might break our WTO obligations. The advocates of this approach might say, well, it is only a one-in- five chance that we will not be trade-compliant under this farm bill. But would we accept that argument in discussing, say, education policy, and go forward with an education program that had a one-in-five chance of failure? Or a defense program? I do not think we would. And it does not make any more sense to go forward on that basis here, especially if those odds might actually be much worse than we realize. Competition is and for a very long time will be the number one issue for family farmers. We should all think back to Secretary Veneman's confirmation hearing. During the question and answer period before the Senate Agriculture Committee she said something that a few of my colleagues have seemingly already forgotten. She said that the one topic she had heard the most about while visiting Senators and House members was the issue of competition. It was the most mentioned issue and the issue that we generating the most concern in rural America. What did we leave out of this conference report? Competition, competition, competition, competition. The glaring lack of strong provisions regarding competition is why The Organization for Competitive Markets, and the Center for Rural Affairs oppose this legislation. These groups supported the legislation when family-farmer- friendly provisions were added on the Senate floor, but they are now opposed because they support family farmers and independent livestock producers and this bill does not do that. As I look at the conference report before us I have to admit I have lost a little bit of faith in the process. We put a good bill together on the Senate floor. It came out of committee with ridiculously high payment limits, nothing on livestock competition, a complete disregard for trade compliance, deficiencies in the nutrition title, etc. But on the floor of the Senate we all worked together to make it a bill that was acceptable, and I would say that bill was very good for Iowa's family farmers because it had in it the issues Iowans wanted us to address, specifically payment limits and packer ownership. This bill does not do what Iowans wanted it to do, plain and simple. It skipped Iowa's top priorities. In addition, let's not forget about the administrative nightmare that this conference report will create. Everyone should be well aware of how difficult implementation will be for USDA. Don't blame the Bush administration if payments don't get out time. I hope that the Senators that are more interested in immediate implementation, than passing a supplemental are not going to be disingenuous in the future and attack the administration because implementation takes awhile to accomplish. Let there be no question that if there is fault to assign regarding implementation it lies with the authors of the bill, not the bureaucrats required to decipher the intent of the authors. This will not be an easy task. So I hope that Senator Daschle's comments yesterday in the Daily Monitor ring true. He was quoted as saying, ``you're not going to see these disastrous supplemental requests in the future.'' But then I wonder what ``future'' means because the next sentence reads, ``We'd still like to get one for 2001, but in the future you're not going to see them.'' The thing I just cannot understand is why, if you just had the money and the willingness of Republicans to write a supplemental that would be beneficial to family farmers, why did you forsake the opportunity to put money in farmers hands right now, and trade that benefit for immediate implementation? It's a risk that family farmers should not have to take. To conclude, I would agree with those that claim this is a historic farm bill, but in my opinion it might be historic for all the wrong reasons. We are losing support in the urban sectors for future farm bills by not reforming the existing abuses that have been made abundantly clear by media. Even farmers want us to fix the payment problems by implementing reasonable, legitimate payment limits, but instead the conferees ignored this issue. This bill will do nothing to restore integrity to the programs, reduce pressure on rents and land prices, dampen overproduction, and help maintain family farms and the culture that surrounds our rural communities, isn't that our goal? Why is this conference report ``good enough'' to some when it does very little for our family farmers? Has anyone read the New York Times, Washington Post, Wall Street Journal, or the San Francisco Chronicle? These are urban newspapers and they are up in arms over this farm bill. What happens if urban folks decide they cannot hold their noses regarding the subsidy abuse down the road? But, I guess I am assuming there will be a rural community to serve in 6 years. There is a possibility we will not have a rural community to serve due to the consolidation, concentration, increased land prices, and cash rents. When I was in the well for the final vote I told my colleague I was going to support the Senate bill and I did. I said if those provisions were maintained, the provisions Iowa's family farmers wanted in this bill, I would support the conference report. But those provisions are not in this conference report, so I will not support it. This bill does not accomplish Iowa family farmers' highest priorities so I am opposing the conference report. Anyone representing Iowa's interests should. We can do better, we must do better if we want family farmers and independent livestock producers to survive.