January 1998
USCIB Statement on Administration's Proposal on Fast Track
The United States Council for International Business (USCIB) welcomes the decision of the Clinton Administration to seek the renewal of Fast Track legislation, but calls for clarification of key provisions in the draft bill. We believe that at a minimum the proposed legislation provides a framework for the Administration and the Congress to reach agreement quickly on new Fast Track authority, if flexibility is demonstrated, thereby permitting a resumption of efforts to open markets and improve existing trade disciplines.
With respect to the overall trade negotiating objectives set forth in the draft bill, we note that the U.S. intends to address aspects of foreign government practices regarding labor and the environment that are "directly related" to trade. It should be made unambiguously clear that this key phrase serves to prevent the use of Fast Track procedures to implement agreements that establish labor and environment standards and the use of trade sanctions to enforce those standards.
The principal trade negotiating objectives set forth in the draft bill cover areas of great importance to the United States including trade in services, intellectual property, agriculture, and investment. In the case of investment, we particularly welcome the reference in the legislation to the reduction of artificial or trade-distorting barriers as a major negotiating objective and a definition of trade that includes foreign investment by U.S. persons. At a time when multinational companies must have the flexibility to access markets through both trade and investment, we are gratified by the Administration's recognition of investment's critical role in promoting America's economic expansion. USCIB and our sister business organizations abroad are supporting the negotiation of a high-standards Multilateral Agreement on Investment within the Organization for Economic Cooperation and Development (OECD).
We note that the legislation includes a commitment to sustainable development. We believe it would be useful to clarify the intent and meaning of this phrase in the context of the Fast Track bill, either in the legislation itself or the legislative history.
We are pleased that the U.S. will seek to ensure that trade and environmental protection are mutually supportive through clarification of the relationship between them. For example, there is a need to clarify the application of trade rules to multilateral environmental agreements and ecolabeling. American leadership is essential if there is to be any progress internationally on these important questions. USCIB has made and will continue to make recommendations to the Administration in support of this objective.
We regret that the Administration has once again, as in previous trade bills, felt obligated to cite worker rights as a principal negotiating objective in the WTO. USCIB continues to believe that the International Labor Organization (ILO), not the WTO, is the appropriate forum to address questions about worker rights, a position strongly endorsed by WTO Trade Ministers at the December 1996 Ministerial meeting in Singapore. We do not believe that this matter should be pursued further in the WTO where it has little support among our trading partners and where it is likely to prove divisive as it did at Marrakech and Singapore thereby compromising the prospects for achieving other vital negotiating objectives.
The Administration appears to recognize the ILO's central role. The legislation proposes the establishment in the ILO of a mechanism to examine whether other member governments promote and enforce core labor standards. We note that in that tripartite organization employers', workers', and government representatives are actively working to define a set of fundamental labor rights principles and an implementation procedure that would achieve the essential objective of this part of the bill. USCIB is fully engaged on this effort which is aimed at dealing with the most egregious violations of worker rights. However, in view of the fact that this effort in the ILO is unrelated to trade, this provision would appear to be extraneous and unnecessary in this bill. If it remains in the bill, it should be made clear that any agreements reached in the ILO would not be subject to Fast Track procedures.
In sum, USCIB believes that the proposed bill is a useful starting point for what we hope will be a speedy process to approve new Fast Track authority.
