Providing for Consideration of H.R. 4759, United States-Australia Free Trade Agreement Implementation Act

PROVIDING FOR CONSIDERATION OF H.R. 4759, UNITED STATES-AUSTRALIA FREE TRADE AGREEMENT IMPLEMENTATION ACT -- (House of Representatives - July 14, 2004)

Mr. DREIER. Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 712 and ask for its immediate consideration.

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Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.

(Mr. McGOVERN asked and was given permission to revise and extend his remarks.)

Mr. McGOVERN. Mr. Speaker, I want to thank the gentleman from California (Mr. Dreier), the distinguished chairman of the Committee on Rules, for yielding me the customary 30 minutes.

Mr. Speaker, the U.S.-Australia Free Trade Agreement is the third Free Trade Agreement the Bush administration has sent to Congress under the Fast Track Authority granted in 2002, and it is the first trade agreement made between two affluent industrialized nations.

The United States and Australia have many similarities in terms of our economic development. This is particularly true in the manufacturing sector, and this agreement lifts 99 percent of the manufacturing tariffs between our two nations, which should provide many mutual benefits and comparable advantages.

The U.S. currently has an $8 billion trade surplus with Australia in the area of manufactured goods and also in several key agricultural exports. In these areas this agreement should continue to promote our economic interest, contribute to job creation here at home, and further strengthen our long-standing alliance in economic partnerships. These are all hallmarks of a Free Trade Agreement made among equals.

In the area of internationally recognized labor standards and rights, this trade agreement adopts the standard for each nation to effectively enforce its own laws. I want to be clear that I do not support this model, and I am disappointed that the Bush administration chose not to build on the model established in the U.S.-Jordan agreement and include enforceable labor standards in the core of the agreement.

Australia has very strong labor rights, an effective enforcement regime, and a strong independent judiciary. So I am not concerned that the labor provisions will prove detrimental to Australian or U.S. workers, but I do believe that, once again, we have squandered an opportunity to set a higher benchmark for future trade agreements, one that commits our trading partners to achieving the five core international labor standards and not just the mere enforcement of existing domestic labor laws, which can change at any time and are subject to the political whims of whatever government is in power.

We cannot and should not continue to pursue this one-size-fits-all approach to trade agreements, particularly in the area of labor standards, environmental standards, and the settlement of disputes and especially as we pursue trade agreements with countries in very different stages of economic development from our own.

I must admit, Mr. Speaker, that in general I have heard nothing but good things about the U.S.-Australia Free Trade Agreement. So imagine my surprise when I woke up Monday morning to read on the front page of the New York Times that this trade agreement may undercut the importing of inexpensive drugs.

Mr. Speaker, I ask unanimous consent to include this article in the RECORD.

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Mr. McGovern. At the last minute at the bidding of U.S. pharmaceutical companies, but without consultation with Congress, the USTR attempted to persuade Australia, which provides a universal prescription drug benefit to all Australian residents, to change its national health care system for pricing drugs. These changes would have resulted in Australians having to pay higher prices for their prescription drugs.

In other words, according to the administration, because we have high drug prices here in the United States, the solution to our problem is to make every other country feel our pain and force them to raise their drug prices. The Republican leadership in this House calls this leveling the international playing field for prescription drug prices. I call it bad precedent and bad policy.

Not surprisingly, Australia rejected this proposal; but in a move to appease U.S. negotiators, Australia did agree to language calling for greater transparency in how it prices drugs and for recognizing the need for competitive pharmaceutical markets. Drug industry officials have hailed this language as a big victory and the first step in raising the issue of prescription drug pricing to a higher level in trade negotiations.

Even more controversial is the prescription drug provision in chapter 17 of this agreement, the chapter dealing with intellectual property. This provision protects the exclusive right of drug patent owners, usually the large drug companies, to prevent the importation of their patented drugs. In short, Mr. Speaker, the drug companies get to set national policy on the reimportation of drugs.

The USTR argues that this is consistent with current U.S. law, which bans prescription drug reimportation. However, as every Member of this House well knows, current law is the subject of vigorous debate. In fact, both Houses of Congress have recently passed bills that would change current law. While this debate has focused on reimporting drugs from Canada, it does not mean that the debate might not broaden to include other modern industrialized nations such as the European Union, Australia, and Japan.

So if Congress changes U.S. law and allows the import of patented drugs, then that revised law will be inconsistent with U.S. obligations under this agreement.

Mr. Speaker, when the Congress is in serious discussions and has taken votes to change a current law, it is highly inappropriate, in my view, for the USTR to negotiate a specific provision in a free trade agreement that could create a potential conflict or a violation of that law in the near future. The fact that this provision is in the trade agreement is even more baffling when there is absolutely no mandate by Congress in trade negotiating authority to include such provisions in the FTA.

Mr. Speaker, these proposals on prescription drugs were brought to the negotiating table by the USTR at the last minute without congressional consultation. When Congress renewed fast track trade authority for the Bush administration in 2002, it established what it called the Congressional Oversight Group to foster communications between the USTR and the congressional leaders whose committees have jurisdiction over trade matters. In fact, our Committee on Rules chairman, the gentleman from California (Mr. Dreier), and our ranking member, the gentleman from Texas (Mr. Frost), are members of that oversight group. The goal of the oversight group was to make it easier for the administration to keep Congress informed about what was going on at the negotiating table.

The administration does not appear to have checked in with Congress before it offered its last-minute idea to dismantle the Australian health care system. If the administration had asked us about this idea, we would have told them what the Australian Government told them during the actual negotiations, no way. The Trade Act of 2002 requires the administration to consult with Congress as it negotiates trade agreements, not with the pharmaceutical industry.

With all due respect, the Bush administration could avoid future embarrassments of this kind by consulting more with the congressional oversight group and paying less attention to the bad ideas of the drug industry lobbyists.

Mr. Speaker, let me conclude my remarks with one final and very personal observation on a related matter. I have the greatest respect for the government and the people of Australia. I have every reason to believe this free trade agreement will be approved, further cementing the economic and political ties between our two nations. I am, however, deeply concerned by its ruthless treatment and disregard of East Timor's rights to oil and natural gas deposits in the Timor Sea. We all remember how Australia led the international force to protect East Timor in 1999 from the bloody and devastating attacks by Indonesia-supported militias when the Timorese people first voted for their independence.

However, ever since 1999, Australia has taken in an average $1 million every day from petroleum extraction that may rightfully belong to East Timor.

At the root of this problem is Australia's refusal to negotiate and resolve maritime boundaries with East Timor. The U.S. and Australia scarcely took 1 year to negotiate a free trade agreement. Australia has been dragging its heels since 1999 to resolve this dispute with East Timor. Australia even unilaterally withdrew from the dispute mechanisms established under international law to avoid having to act in good faith on this issue.

Meanwhile, Australia keeps pumping out the oil from undersea deposits and even selling the rights to exploit even more of these deposits to foreign companies.

Australia is the wealthiest nation in its region and one of the wealthiest nations in the world. East Timor, the world's newest democracy, is also the world's poorest nation. Currently, 41 percent of East Timorese live on less than 55 cents a day. East Timor's elected President, Xanana Gusmao, has said the boundary dispute is a question of life or death. The people of East Timor do not want to be poor. They do not want to be begging for charity from wealthy countries. They do not want to end up as a failed state. They want to be self-sufficient.

Australia needs to do the right thing by East Timor: rejoin the international dispute resolution mechanism for maritime boundaries, refrain from offering disputed areas for new petroleum contracts, and expeditiously negotiate in good faith a permanent maritime boundary in the Timor Sea.

The U.S.-Australia Free Trade Agreement was negotiated between two sovereign nations for their mutual benefit and respecting each other's rights and interests. It exemplifies good relationships between nations. Australia needs to show the same respect for the rights and interest of its newest democratic neighbor, East Timor.

Finally, Mr. Speaker, let me point out for the record that although the House has generally adopted special rules to debate trade agreements submitted to Congress under fast track trade procedures, they are technically not necessary. Under the Trade Act of 1974, which Congress renewed two years ago, our standing House rules limit debate on trade agreements to a total of 20 hours and impose a number of limitations on our usual rules of debate. Under these special fast track rules, Members cannot offer motions to recommit the bill or reconsider a vote.

Now, keep in mind that these restrictions on Members' rights to debate come at the end of a process that severely restricts our right to participate in trade negotiations and prevents us from amending the terms of the trade agreement once the administration sends implementing legislation to Congress.

While both Democrats and Republicans appear to agree that 2 hours is enough time to debate this Australia legislation today, we should all recognize that 2 hours may not be enough time to debate other legislation the House may bring up in the future under fast track procedures.

For example, when the House debated the NAFTA agreement in 1993, the Committee on Rules granted a rule allowing for 8 hours of debate. Who knows, it is quite possible that we will have a trade debate that lasts the full 20 hours allowed under the rules of the House. This body and the American people would probably benefit from such an exhaustive debate over a country's trade policies. I hope that providing 2 hours for debate does not become the standard for these critical issues.

Mr. Speaker, I reserve the balance of my time.

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Mr. McGOVERN. Mr. Speaker, how much time do I have remaining?

The SPEAKER pro tempore (Mr. Miller of Florida). The gentleman from Massachusetts (Mr. McGovern) has 3 minutes remaining.

Mr. McGOVERN. Mr. Speaker, I yield myself such time as I may consume.

As the gentleman from New York (Mr. Crowley) indicated earlier, a number of Democrats support the Australia trade agreement and feel it is fine as far as it goes, and the gentleman from Michigan (Mr. Levin) made the same comments as well.

However, I think it is important to note that this agreement covers less than 1 percent of U.S. trade, and it cannot make up for the Bush administration record of failing to vigorously enforce trade laws and trade agreements. It cannot make up for a failure to invest in research and development and in training American workers in cutting-edge skills and technologies to improve America's ability to compete in the global economy.

Our trading partners consistently violate the terms of their trade agreements with us; and the administration has failed to stop China, Japan, and other nations from manipulating their currencies. The administration has failed to break down barriers for American workers and American companies in key export markets such as Japan and Korea.

The Bush administration has failed to invest in the innovative technologies of the 21st century. The Bush budget has tried to eliminate the Advanced Technology Program and slashed the Manufacturing Extension Partnership and proposed cutting job-training programs by more than $1.5 billion over the past 3 years.

Republican policies have led to the loss of 1.8 million private sector jobs, and the average length of unemployment is at its highest level in 20 years, and the overall job picture is the worst in almost 40 years.

So as we take up consideration of the U.S.-Australia Free Trade Agreement, we also need to change direction and pursue policies in tax policy and job training and supporting our small and medium-sized manufacturers and R&D that will create jobs right here at home right now.

Mr. Speaker, I also want to say for the record once again that I regret very much the prescription drug provisions that are in this agreement. It is bad precedent. To my knowledge, this is the first time a prescription drug provision has been included in a trade agreement, and hopefully it will be the last time. I know that the big drug companies want to view this as what will be the norm in future trade agreements, but I will point out to my colleagues that there are millions and millions of Americans who deserve and who expect more from this administration or whatever administration is in power and from this Congress.

To the extent that there is bipartisanship on this agreement, let the record reflect that that bipartisanship will not be there. If in the future there are these prescription drug provisions included in future trade agreements, that is unacceptable.

Mr. Speaker, I yield back the balance of my time.

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The SPEAKER pro tempore (Mr. Miller of Florida). The question is on the resolution.

The question was taken; and the Speaker pro tempore announced that the ayes appeared to have it.

Mr. McGOVERN. Mr. Speaker, on that I demand the yeas and nays.

The yeas and nays were ordered.

The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further proceedings on this question will be postponed.