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KERRY: Thank you. I appreciate it, because I have a meeting that’s waiting. Thank you very, very much. That’s very generous of you.
Well, Mr. Portman, I think that Senator Baucus has sort of come back around to where I started. What’s frustrating to all of us here is that, you know, this is not—is that we’ve been talking about this. We’ve been pleading with people to listen to us over the course of the last years. And there’s just been this sort of deaf ear, “We know better. We’re on a course.”
And you know, for five or ten years, these things have been compounding. And it’s going to be that much harder now to try to get back. But let’s get to sort of some of the specifics.
I asked you specifically about Mr. Allgeier’s comments to us about the 2003 standard.
PORTMAN: Right.
KERRY: And it hasn’t changed. Why now is it OK?
PORTMAN: Well, and I took some notes from your earlier comments. And I will be able, if confirmed, to give you more specifics. Let me tell you what I know at this point.
First of all, when those comments were made in 2003, those countries had not undergone the process of looking at their own laws and trying to upgrade them. Some countries have, and you indicated some have and some haven’t.
My understanding is, during that interim period, the International Labor Organization, the ILO, has actually visited those countries and issued a report indicating that the basic core standards have now been met.
Now, this is all about enforcement, as you said earlier. You can have the laws on the books—and they have been improved—but we need to be sure that those laws are actually enforced. I will be able to, again, give you more information on this, more precisely if I’m confirmed.
But my understand is that we have an opportunity, as we did last year with a $20 million appropriation, to improve capacity building in Central America and the Dominican Republic through the Central American-Dominican Republican Free Trade Agreement.
I think that would be a positive aspect of what we would do, not only to see improved laws on the books—and you listed some of the concerns, some of the labor rights concerns—but actually to have the United States help to ensure that there are inspectors.
I’m told that it, Senator Kerry, it’s to the point where there are inspectors in some of these countries but they literally don’t have transportation to be able to go out to do the inspections. So to help them to enforce their laws.
KERRY: But the laws themselves have, in fact, not been changed in most of those countries. In fact, the USTR has been touting a number of those laws, the reforms made in the past decade, particularly Costa Rice in ‘93, Dominican Republic ‘92, El Salvador ‘94, Guatemala ‘92 and again in 2001, and then Nicaragua in ‘96.
But each and every one of those major reforms didn’t come about because of the political will of the country. They came about precisely as a direct outcome of the GSP which controlled. Now, GSP allows for members of the public to file a workers’ rights petition based not just on the failure to enforce the law but also the adequacy of the laws. That tool is eliminated if CAFTA passes.
So in its place, we’re only going to be able to condition trade benefits on the enforcement of a country’s labor laws, no matter how inadequate they are, and they are, by everybody’s measurement. And the only recourse we’re going to have is non-punitive fines before the withdrawal of trade benefits could be threatened.
So we’re, in effect, going to move to a weaker workers’ rights enforcement mechanism of the CAFTA, and we’ll lose the GSP petition process and go backwards. So if our goal is to improve workers’ rights in the regions, why would we eliminate the one tool that’s been proven effective?
PORTMAN: Well, I think it’s positive that we graduate these countries out of GSP. And I think you probably share that, if we could bring them into a free trade agreement, GSP would...
KERRY: But only if you have the mechanism for enforcement. If you don’t, it’s not positive.
(CROSSTALK) PORTMAN: ... and you’re right. If they don’t continue to uphold their laws—and there’s a maintenance provision, as you know, in the legislation that would be sent to the Congress—there are fines.
And again, I will get back to you, Senator Kerry, very specifically on this—my understanding is that ultimately, after those fines are in place, and if there still is not the adherence to this maintenance requirement, then there could be trade sanctions. And those trade sanctions, obviously, would be a big stick, because the whole reason these countries are interested in entering into this agreement is that we do have enhanced trade between our countries.
So I do think that there is some more enforcement behind that, but I will certainly look into that.
And with regard to the public comment issue, I don’t know the answer to that at this point.
(CROSSTALK)
KERRY: Well, I would appreciate it if we could continue that dialogue.
PORTMAN: I’d like to.
(CROSSTALK)
KERRY: ... I know you will.
Obviously, in the opposition to CAFTA in the Central American region is striking in and of itself. You’ve got small farmers, indigenous groups, environmentalists, bishops, parliamentarians. Many others have spoken out against it. And what they do is they cite the experience of Mexico as one of the reasons that they’re deeply concerned about it.
In Mexico, real wages have fallen. Poverty has risen. More than a million small farmers lost their land. Many civil society groups and people of conscious believe that you’ve got an even, you know, worse enforcement mechanism and a worse starting point here.
Tens of thousands of Central Americans have taken to the streets to protest this. They’re demanding a public referendum on the agreement. A recent Gallup poll found that 65 percent of Guatemalans think it’s going to harm rather than help their country.
You’ve got a number of immigrant groups here in our country, the League of United Latin American Citizens, the Labor Council for Latin American Advancement, CARACEN, Salvadorian American National-Network, others have come out against it.
Why do you think such a broad and diverse range of Central Americans here and there are against it? And what does that say about this consensus that is so necessary to proceed forward and make it work? PORTMAN: I think it goes back to your earlier concerns about the fact that we do have a fraying of that consensus for a lot of reasons. I think part of it is—I said in response to Senator Wyden is, we have not effectively communicated the benefits of trade. And bringing these countries into a free trade agreement, I think, they’d have tremendous economic benefits over time. It also has great benefits to sustain these democracies.
But I’ve heard some of these comments. I’ve also, as you know—I’m sure have, as well—met with a lot of the elected representatives from these countries as well as traveled to those countries. And I recently met with the economic ministers and labor ministers from those countries.
They’re democracies. And they have elected, as democracies, albeit in some cases fragile democracies, to move forward with this, sometime courageously and at some political risk. And I also know that there are groups that are non-government groups in those areas that are very supportive, including environmental groups.
As you know, some of the environmental groups are strongly supportive of the agreement because it does raise environmental standards. Does it raise it to the level that all these environmental groups would like? No. But the question is, do you go from where you are now to an improvement? And I would say the same thing with regard to the labor standards.
So these are democracies. They’ve made, in many respects, probably a courageous political decision to move forward. But they’ve done it through the legislative process and through their democracies. And I think we should respect that.
KERRY: Well, my time is up, also, again. And I don’t want to—if I could just say two things quickly.
Number one, I looked at the environmental pieces very carefully. And I was interested. There are a couple of good changes. And I was struck by that. I thought they were creative, and they were positive steps.
But then there are these other enforcement issues and the overall standards question which sort of drag it down on the backside and I think create even a larger problem. I’d like to talk to you about it. And we can do it at another time.
The second thing I want to emphasize, also together with the ranking member, Senator Baucus. On the Foreign Relations Committee, I’ve served as the chair and ranking member of the Asia committee for a long time, traveled to China like the senator has.
We’ve been at this for 15 years with China now. And the problem, despite all the promises and all the entreaties and efforts of the last several trade representatives of both parties, the problem has gotten worse. China is now the second-largest P.C. manufacturer in the world, but it ranks only about 20th in terms of software. And the loss of billions of dollars—billions of dollars—to our music industry, to our software industry, to our companies in this country is simply unacceptable.
And Senator Baucus is absolutely correct. We’re just, you know, kind of kidding ourselves and sitting here pretending this can be a sweetheart relationship for other kinds of reasons, or whatever reasons. And it’s not working for the American people. It’s not adhering to our laws. It’s not even adhering to the agreements, with respect to the WTO.
Now, either you’re going to live up to the law or you’re not, and we’re going to have a relationships and be partners or we’re not. This is not directed in any personal way against China. There’s a great partnership that could be built there. And there’s great work to be done together.
But, boy, that enforcement has got to change. And the relationship has to change.
PORTMAN: Well said.
KERRY: Thank you.
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