Hearing Of The Subcommittee On Trade Of The House Committee On Ways And Means - Operation, Impact, And Future Of The U.S. Preference Program

Statement

Chairman Levin and Ranking Member Brady, thank you so much for allowing me the opportunity to testify today regarding our trade preferences policy and its effect on working families.

The hearing today is an important opportunity to examine what works about our trade preferences policy as well as what doesn't. As many of you know, I have been a long time advocate for a new trade model. Our current approach too often fails working families, both here and abroad.

Our preferences programs have a laudable goal: to assist developing countries in their efforts to build up domestic industries, increase exports, and alleviate poverty.

In some cases, the preferences appear to have been wildly successful. Some countries, including South Korea, Singapore, Bahrain, and Slovenia have graduated from the GSP program and no longer qualify for preferences.

In other cases, the preferences have been less successful--at least from the point of view of working families.

A case in point is the Republic of the Philippines, a beneficiary of the General System of Preferences.

According to a petition filed with the United States Trade Representative, the government of the Republic of the Philippines has engaged in policies that deny workers freedom of association as guaranteed under International Labor Organization (ILO) Convention 87, and has undermined the ability of workers to form and join unions in violation of ILO Convention 98.

The petition also accuses the Philippine government of involvement in extra-judicial killings and abductions of union leaders, members, organizers, and supporters through elements of the Armed Forces of the Philippines, the Philippine National Police, local police forces, and private security forces.

Given such reports, which are not limited to the Philippines, I strongly believe that it is appropriate to re-examine our approach to preference system creation and renewal.

Encouraging and rewarding such abhorrent human rights policies with trade benefits is contrary to what America stands for, and not only harms families abroad, but also those struggling to make a living here at home.

Ecuador is another nation in which our trade policies may be leaving working families behind.

Chevron may have approached some of you before this hearing to ask that you consider limiting or eliminating benefits for Ecuador under the Andean Trade Promotion and Drug Eradication Act.

This effort arises from a private lawsuit between thousands of indigenous Ecuadorian peasants and Chevron. The plaintiffs, some of whom suffer from cancer, physical deformities, and multiple miscarriages, allege that Chevron is responsible for illegally dumping billions of gallons of toxic oil waste into rivers and streams, causing extraordinary environmental and human damage.

Texaco, now Chevron, began its oil operations roughly 40 years ago in a once pristine region of the Amazon rainforest.

Today, this region, the size of Rhode Island, struggles to deal with an environmental and humanitarian crisis. More than 1,400 residents have died from cancer, birth defects are prevalent, and the region suffers from water contamination, rainforest deforestation, and ecosystem degradation. The inhabitants of the region still drink and bathe in polluted water.

There are innumerable stories I could share from the 230,000 people who live along the oil fields in northern Ecuador. Pools of thick oil dot the landscape where Chevron dumped oil wastes into unlined or improperly lined pits.

Water tests of one local farmer's land revealed oil contamination at 20,000 percent above safe water consumption levels. Too many children have cancer and, as a result, too many parents have to experience the ultimate heartbreak--the death of a child.

A group of Ecuadorians originally filed suit in the U.S., but the case was dismissed when Chevron successfully argued that Ecuador was a better forum.

The case was refiled in Ecuador seeking damages, and experts have estimated that damages in this case could be as high as $27 billion.

Instead of settling with the plaintiffs, embarking on clean-up efforts, or even seeking mediation, Chevron has engaged in a lobbying effort that looks like little more than extortion. Apparently, if it can't get the outcome it wants from the Ecuadorian court system, Chevron will use the U.S. government to deny trade benefits until Ecuador cries uncle.

This turns the goal of trade preferences on its head! Trade preferences should be used as a hand up to provide needed help to the families of developing nations, not a paddle to punish governments who refuse to succumb to the demands of multi-billion dollar corporations.

As a private entity, Chevron certainly has the right to take action to advance its interests. However, it is our job to take a wider view.

It's well past time to reform our trade policies so that they work for working families.

As we re-examine our preference systems, I urge the Committee to explore options for holding nations accountable for protecting the rights of working families.

I hope that we also consider whether to add environmental standards and to reform investor protection provisions and examine which criteria, like private lawsuits, we should avoid.

We must examine our trade preferences with a focus on shared prosperity. We should encourage development with dignity. We should shape preferences programs to promote labor rights and a clean environment without dictating the outcome of cases proceeding through the civil justice systems of developing nations.

Finally, we must recognize that trade alone is not a development policy. Trade preferences must be combined with other forms of assistance that will help countries to sustain themselves and develop the infrastructure and capacity they need to fully take advantage of the trade preferences programs the U.S. offers.

Thank you for allowing me to testify.

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