White House Briefing on NAFTA Side Agreements
From kmander@igc.apc.org Wed Sep 22 23:00:31 1993
Date: 22 Sep 93 08:05 PDT
From: Kai Mander 
Reply to: "Conference trade.library" 
To: "Recipients of conference trade.library" 
Subject: White House on NAFTA Side Agmts

From: Kai Mander 
Subject: White House on NAFTA Side Agmts

/* Written  9:22 pm  Sep 15, 1993 by Clinton-Info@campaign92.org in igc:pol.govinfo.us */
/* ---------- "Background Briefing NAFTA" ---------- */
From: The White House <75300.3115@compuserve.com>
Reply-To: Clinton-Info@campaign92.org
Subject: Background Briefing NAFTA

                           THE WHITE HOUSE 

                    Office of the Press Secretary 


                         BACKGROUND BRIEFING 


                          September 14, 1993 


                          The Briefing Room 


1:35 P.M. EDT 


     MR. JONES:  This briefing on NAFTA is a BACKGROUND 
BRIEFING.  Copies of the side agreements will be available after 
this, as well as a summary that are on their way.  So -- and I think 
there will be an opening statement by [the senior official]. 

     SENIOR ADMINISTRATION OFFICIAL:  Thank you very much. 
I'll just make a couple of brief opening remarks and then open it up. 
First of all, of course, you all heard today from the President as 
well as the three former Presidents all the compelling arguments for 
the NAFTA.  So I'm not going to try to duplicate anything they said. 
The purpose of this briefing, obviously, in your coverage of the 
story to fill in anything you need to know about the NAFTA itself, 
about the supplemental agreements, about the legislative process for 
finalizing the agreements and for finalizing the implementing 

     I'd like to start first by very, very briefly describing 
for you what will happen from this point forward.  The President, 
obviously, started off the administration's effort this morning. 
This was directly followed by testimony by Ambassador Kantor, 
Secretary Reich and Administrator Browner before the House Ways and 
Means Committee.  They're probably still being grilled up there.  And 
tomorrow, Secretary Bentsen, Secretary Christopher and Ambassador 
Kantor will be testifying before the Finance Committee. 

     The President, of course, is going to New Orleans to 
speak to this issue in the Port of New Orleans tomorrow.  And in 
addition, we have a full schedule of Cabinet officers traveling to 
various points around the country to convey the administration's 
message, to explain the arguments in favor of this very important 

     The legislative process, just so you understand, is an 
extremely arduous and detailed process.  Perhaps the greatest 
misnomer is fast track, because this is a process that takes quite a 
bit of time.  We work very, very carefully with all of the relevant 
committees in the Congress to fashion appropriate legislation.  The 
President will not introduce legislation in the Congress to implement 
the NAFTA until we have worked with all of the committees of relevant 
jurisdiction, both on the House and Senate side.  And they actually 
have a process that duplicates the normal legislative process, except 
instead of markups and conferences, they call them "nonmarkups and 
nonconferences," because the bill hasn't been introduced yet. 

     Once the committees have finished that process, working 
with the administration to fashion the appropriate language, the 
President then takes the recommendations of the Congress, folds them 
into the implementing legislation.  Of course, he has to ensure that 
what's being recommended is consistent with the spirit and the letter 
of the NAFTA itself, and then he introduces an implementing bill. 

     Our target for introduction of that legislation -- and 
we think it's a very reasonable target -- would be late October or no 
later than the first of November.  At that point, that legislation, 
which is introduced, is considered by both Houses under the fast 
track procedure.  It is not amendable.  There is a period for 
committee votes and committee hearings, followed then by floor action 
and a final vote.  And we fully expect that the Congress would be 
able to finalize and approve this legislation this year. 

     The date of entry into force of the NAFTA is January 1, 
1994, which means, of course, the President is committed to 
introducing it and securing the necessary congressional approval this 

     With respect to the supplemental agreements, let me just 
say, first of all, they were fully described to you by the President. 
They are available to you and you can see in quite a bit of detail 
what the supplemental agreements addressed.  They establish new 
commissions for both -- North American commissions for both the 
environment and labor.  And they provide a mechanism for addressing 
our concerns about adequate enforcement in both the labor and 
environment field and also for addressing any possible risks of 
import surges under the agreement. 

     Now, I can, of course, answer for you any questions 
about exactly what the NAFTA itself does.  The simplest way to 
describe it obviously:  it is an agreement which reduces and 
eventually eliminates all tariffs among the three countries in North 
America.  And it also eliminates nontariff barriers; that is 
investment restrictions and other forms of nontariff restriction that 
might exist on U.S. exports to Mexico. 

     Now I will just stop there and open it up for 

     Q  The way the House works, the President is going to 
open himself up to a lot of criticism if he goes -- he doesn't 
introduce a bill before they start hearings. 


     Q  If they don't have anything specific from him to 
work on, or he's going to get a lot of criticism from Congress, 
especially from the Republicans. 

explain.  This is -- we will handle this the same way other trade 
agreement implementations have been handled in previous 
administrations including the 1979 Trade Agreements Act, the 1988 
Canada Act.  We will propose draft legislation to the committees 
which begins the committee process.  We will then work with the 
committees to get their approval to those drafts before the President 
introduces the bill.  If he introduces the bill before talking to the 
committees there will be even more criticism from the committees 
because he will not have taken into account their concerns. 

     We want to work with the Congress in fashioning the 
legislation and we've been asked by the committees not to introduce 
the legislation until after the committees have had the necessary 
period to work out with us the implementing language. 

     Q  I have a question on process. 


     Q  With the fast track, as I understand it, it's 90 
legislative days from the date of introduction. 

confusing than that. 

     Q  And does it expire after that if it goes over to 
next year? 


     Q  What's the December 15th -- 

     SENIOR ADMINISTRATION OFFICIAL:  Let me try to answer 
one question at a time.  The fast track does not expire for NAFTA 
because President Bush signed the NAFTA before the expiry   of the 
original fast track period.  So the NAFTA, if we follow the 
appropriate procedures, the NAFTA legislation is entitled to fast 
track treatment. 

     Now, you're going to the question of what happens once 
we actually introduce the final bill.  Once we introduce the final 
bill -- 

     Q  Which you're suggestion would be no later than 
November 1st? 

     SENIOR ADMINISTRATION OFFICIAL:  That's right.  Once we 
introduce the final bill, there is then a period of 45 legislative 
days for consideration in the House, and an additional 15 days on the 
committee -- in the Senate committees -- with, if necessary, an 
additional period for the Senate floor.  Now, that may immediately 
raise the question of whether we are guaranteed under fast track 
procedures a vote before the Congress adjourns, and I understand that 
question.  We are working with the congressional leadership to secure 
that action as rapidly as possible. 

     The important thing to emphasize here is that in no 
previous fast track bill has that full period ever been utilized, 
because once the bill is introduced it is unamendable and the 
committees normally report it and vote on it expeditiously.  If you 
look at what happened with the '79 act or the '88 act, it was voted 
on within a month of being introduced. 

     Q  Isn't unrealistic to think that you could introduce 
legislation November 1st and have something before the end of the 

     SENIOR ADMINISTRATION OFFICIAL:  But try to understand, 
fast track is different than other procedures because we actually 
introduce a draft bill in the next several days and work out the 
language of the legislation with the committees.  So before it's ever 
been introduced, we go through an entire legislative process. 

     And I've been through two fast track bills in the 
Congress myself, and I know that you have a period of committee 
markups, you have a conference between the House and the Senate, and 
all that takes place before the date of introduction. 

     Q  Are you going to take it up first in the Senate or 
the House? 

     SENIOR ADMINISTRATION OFFICIAL:  No, it will be taken up 
in the normal process.  We will work out the draft legislation with 
both Houses, introduce it.  Our expectation then would be, of course, 
that the House and the Senate will work out the timetable for action. 

     Q  Can you go back -- you said 45 days in the House, 
and then you said 15 days in the Senate Finance, and then maybe more 
time for the Senate? 

     SENIOR ADMINISTRATION OFFICIAL:  Fifteen days in the 
committees, and an additional 15 days on the floor, yes. 

     Q  So there's 75 -- there's no such thing as 90 days, 
even though that's what everybody talks about? 

     SENIOR ADMINISTRATION OFFICIAL:  There is a grand --this 
is complicated stuff.  There is a grand total of 90 legislative days 
that could be used if all of the committees and if both House floors 
utilize their full time period. 

     Q  But they can't fudge each other's time? 

out these are legislative days, they're not calendar days.  And 
legislative days is a very complicated formulation because it 
excludes days when the Congress isn't in session for a certain number 
of days. 

     Q     is what we're talking about. 

     SENIOR ADMINISTRATION OFFICIAL:  My point here is that 
we're not going to need all of those days.  We haven't, under prior 
trade agreements legislation.  And once the bill is introduced, it is 
not amendable.  The job for the committees at that point is to decide 
whether or not to approve the legislation. 

     Q  In terms of the specifics that you are going to be 
working on as this draft legislation moves through the committees, 
are there enough points that there is room for give and take on, that 
they're going to change anybody's votes, or isn't it just basically 
the whole concept of NAFTA that's upsetting a lot of the opponents to 
this legislation? 

agreement of this type, obviously, we have certain discretion with 
respect to how we implement our obligations.  The legislation does 
have to be consistent with the agreement.  We have to honor the terms 
of the agreement.  But how Congress does that and how they wish to do 
it is a matter that allows certain flexibility in the implementation 

     If you look at prior trade agreements, that's why the 
Congress places such a heavy emphasis on what I've described to you 
-- this nonmarkup and nonconference process -- because we do work out 
legislative language.  Under the agreement you have flexibility as to 
how you implement certain of these obligations. 

     Q  Can you give us an example of some of the places 
that you think that there is room for give and take, that you see -- 

prejudge the process.  I'm certainly not going to offer anything 
before we've begun to talk to the committees.  But I can give you all 
kinds of examples of what's been done in the past.  With respect to 
the Canada Free Trade Agreement, for example, the administration and 
the Congress worked out certain language about subsidy practices and 
how they would be addressed under U.S. law, which was directly 
relevant to the agreement. 

     So there are a number of things that can be done.  My 
point here is that the implementing legislation that the President 
will introduce ultimately will carry out our obligations under the  
agreement, but will do so in a way we work out with the congressional 

     Q  Are you prepared in dealing with the congressional 
committees to make changes in the administration's position to try to 
get individual members or blocks of members' votes? 

     SENIOR ADMINISTRATION OFFICIAL:  I don't know what you 
mean by changes in the administration position.  The President has 
endorsed and is supporting and will submit to the Congress the NAFTA 
agreement.  That has to be successfully implemented by this bill.  As 
I said, we have flexibility in certain aspects of how we carry it 

     Q  Is the administration going to introduce some sort 
of jobs displacement package separate from stuff already out there as 
a way of answering and reassuring people about job loss? 

President, Secretary Reich, others have described a comprehensive 
dislocated worker program that the administration is discussing with 
the Congress and would expect to introduce this fall.  That would 
address the -- not only the dislocation caused by trade but the much 
greater dislocation caused by other changes in our economy. 

     I think what they will say to the committees today, and 
there's discussion of this in their testimony, is that the 
administration strongly supports a comprehensive, as the President 
said today, reemployment program, because many of the workers who 
have lost their job in our economy over the last several years had 
not gone back to their original job, they've gone to new jobs.  And 
we need a program to deal with those adjustments.  That will be 
something that the administration will be addressing this fall.  And 
it would be obviously designed to take care of the very, very minimal 
dislocations that might occur under trade agreements.  I might also 
point out that, as the President said, the NAFTA creates far more 
jobs than would be lost. 

     Q  Not for the same people, though, right? 

     SENIOR ADMINISTRATION OFFICIAL:  Well, as he said, in 
any change, in any effort to create a new and larger and more 
expanding economic base and market, you obviously are going to have 
some transitions in the economy. 

     Q  What do you mean by minimal? 


     Q  We heard the million jobs over a five years. 

reputable estimates of the job impacts of NAFTA, the reputable 
estimates as to opposed to the estimates by those who maybe have some 
ulterior motive for putting them forward, you will find that the 
consensus among those reputable estimates is over the period of full 
entry into force of the NAFTA.  Which, by the way, doesn't become 
fully effective until 15 years after it's first implemented.  That is 
the tariffs phase down over 15 years. 

     The reputable estimates are total job losses to the U.S. 
job economy of no more than 200,000.  That's the consensus of these 
groups -- more than outweighed by the job gains which in all most all 
of these studies are a much larger number.  That's why we recently 
received a letter from 294 economists.  You know, I've never seen 294 
economists agree on anything, but what they all agreed on, including 
all 12 living Nobel Prize winners -- I tried to get some of the dead 
ones but I --  was the following comment -- 

     Q  How could you tell the difference?  (Laughter.) 

     Q  Oooh, Andrea.  (Laughter.) 

economist so I can tell the difference, but -- (laughter.) 

     Q  Are you blushing, Andrea?  (Laughter.) 

     SENIOR ADMINISTRATION OFFICIAL:  You knew a different 
economist than I did.  (Laughter.) 

     Anyway, what they say is that they all agree that NAFTA 
-- well, there's disagreement among these economists on the precise 
numbers, and that's not surprising.  They all agree that NAFTA will 
create far more jobs than it loses and that the estimates of massive 
job losses or massive increased imports are without foundation -- 
without basis.  And that's in a letter to the President from these 
economists.  I'm sure we can make that available to you. 

     Q  You give the job loss number.  What's the job gain 
number?  What is that? 

     SENIOR ADMINISTRATION OFFICIAL:  What we have said, and 
I think all of the studies bear this out, whether you look at the 
Congressional Budget Office study or the private independent studies 
that have been done, is that net job creation over the next several 
years will be anywhere from the low figure in these studies of 
something like 35,000 net jobs to a high figure of I think it's a net 
job creation of a million.  Now, that one study that showed a million 
net job creation I would be a little bit careful of because it -- 

     Q  The President used it today in his speech. 

     SENIOR ADMINISTRATION OFFICIAL:  No, no, no.  That's not 
the figure. 

     Q  Yes, it is. 

     SENIOR ADMINISTRATION OFFICIAL:  Let me explain what the 
President -- 

     Q  Over five years. 

     SENIOR ADMINISTRATION OFFICIAL:  What he said was --yes, 
what he said was a million jobs -- let me explain exactly what that 
means.  By 1995, we will have nearly a million jobs in the U.S. 
economy directly dependant on exports to Mexico.  There are about 
700,000 today and over the next two years with NAFTA we will create 
200,000 more jobs.  So nearly a million jobs -- I think the figure is 
something like 940,000 -- directly dependent on exports to Mexico 
made secure by the NAFTA agreement. 

     Q  Excuse me, that's not what he said.  He said, "I 
believe that NAFTA will create a million jobs in the first five 

     Q  NAFTA will create a million jobs. 

are studies out there that show anywhere from 35,000 to 1.1 million 

     Q  Be careful of the million. 

     Q  You don't agree with him. 

     SENIOR ADMINISTRATION OFFICIAL:  What I'm trying to tell 
you is, there are all kinds of estimates out there of job gains. 
These 294 economists couldn't agree exactly among themselves because 
this process of estimating job loss and job gains -- and all of you 
know this -- is an art form.  It's not an exact science.  You can't 
precisely calculate exactly every job change that's going to occur. 
But the impressive thing is that the vast majority of these studies 
show net job creation and show significant net job gains. 

     The only people who seem to be disputing that are people 
who have created some pretty phony numbers.  Let me give you an 
example.  The study that Mr. Perot and Mr. Choate rely on says 5.9 
million jobs at risk under NAFTA.  Now, how do they get that 5.9 
million job figure?  They get it by taking every job in America in 
the manufacturing or production sector, which includes agriculture 
where more than 20 percent of the costs of that industry are direct 
labor costs. 

     They then take all of those jobs and move them to 
Mexico, which means, of course, the entire aircraft industry, the 
entire telecommunications industry, the entire automobile industry 
and many others.  I've just named you three industries that are big 
winners under NAFTA because we increase exports.  The Big Three auto 
producers have estimated that in the first year of NAFTA, we will 
have an increase of our exports to Mexico of 60,000 vehicles. 

     So for Mr. Perot to suggest that 5.9 million jobs go to 
Mexico is wildly outrageous.  Let me just give you the numbers so you 
understand how outrageous it is.  In order for 5.9 million jobs to go 
to Mexico, Mexico would have to increase its exports to us by $350 
billion.  That is the entire GNP of Mexico -- $350 billion -- that's 
the entire GNP of Mexico. 

     So my point to you here is, there are some people out 
there who have postulated for you big job loss numbers, and their 
studies are not based on any sound economic modeling, they're not 
based on any serious examination of the record, and the serious 
examination which has been done, the President cited it today by 
numerous private sector studies, by the Congressional Budget Office, 
by the International Trade Commission, all show net job creation. 

     Now, we can quibble about exactly how many jobs, and I 
can tell you that those are based -- all of those are based on 
certain assumptions and you have to decide which assumptions to 

     We do know this:  We know that since 1987, we've created 
700,000 export-related jobs to Mexico because of liberalization.  We 
know that there are numerous barriers that are still in place that 
the NAFTA wipes out.  And if we look at the sectors where the NAFTA 
wipes out the barriers such as automobiles, we can predict 
significant growth in exports. 

     Q  Can we go back to timing for a minute?  You are 
saying that -- you're saying that it's conceivable that those things 
can all be done with a cooperative Congress, and you're saying -- 
you're citing as examples of this the fact that it has happened 
before in past trade agreements.  And the past trade agreements that 
you helped negotiate or were witness to -- 

Congress at the time. 

     Q  In Congress?  Okay.  Was the Congress as divided 
over those as they are over this, number one; and number two, is 


there anything that happens if these things are not passed by January 
1?  And if it's not, why push it? 

     SENIOR ADMINISTRATION OFFICIAL:  Well, look, you all are 
better at reading the tea leaves than I am.  You know what the 
sentiment is about this agreement.  All I can tell you is that the 
administration and the President believe that a lot of the arguments 
are wrong, that we are beginning to change the perception of this 
agreement, that we're beginning to convince the Congress that this is 
a good agreement. 

     Can I ensure that all of the congressional committees 
will act expeditiously on this matter?  Of course, I can't give you 
that assurance.  What I can tell you is, the administration is going 
to the Congress, we're presenting the draft legislation.  We've 
already gotten indications of cooperation from the two principle 
committees, the Ways and Means and Finance Committees.  We will begin 
the nonmarkup process.  We expect to introduce the legislation, as I 
said, no later than late October or the first of November.  And at 
that point, the President will push very hard for the Congress to 
approve this. 

     Q  Let me just try to get you to answer two pieces of 
that.  Why January 1st?  Why push for that date?  And in your 
experience, was Congress as divided last time over the last 
agreements that you talked about as they are over this? 

     SENIOR ADMINISTRATION OFFICIAL:  January 1st is the date 
of entry into force of the agreement.  That is the date that the 
three countries negotiated.  They negotiated a provision that says it 
enters into force on January 1st. 

     Q  What happens if it's not passed by then? 

     SENIOR ADMINISTRATION OFFICIAL:  If it's not passed, 
obviously, we're in breach of the agreement. 

     Q  Then what does that mean?  Is that the end of NAFTA 
or -- 

     Q  Do you renegotiate a different date? 

     SENIOR ADMINISTRATION OFFICIAL:  Listen, all I can tell 
you is that we would be in breach of the terms of the agreement, that 
means that Mexico and Canada would obviously not implement the 
agreement, either, and that at that point there would be uncertainty 
as to the future of the agreement. 

     Q  Vice President Gore suggested the other day that 
this fight for ratification of this treaty could go past January 1st. 
Do you anticipate that as a possibility? 

question first?  Then I'll answer it.  The second part of it was 
whether previous legislative debates have been, in my opinion, have 
had as much opposition.  I mean, I think we're going to let the 
Congress speak to what their position is on this over the next 
several days.  We'll see what attitude members are taking towards the 
agreement.  We've already seen indications of undecided members 
moving to support it.  I think you saw several congressional 
leadership figures at today's event.  And obviously, as we get the 
message out, we would expect greater support. 

     Is it a very controversial issue at this point?  Of 
course, it is.  But, you know, it's -- we have just begun to fight. 
And it's not over until the vote. 

     Q  Is it possible ratification will go past January 
1st?  I mean, is that something that -- Gore had suggested this might 
happen the other day.  And is that something that you say is, well, 
if we can't get it before then, maybe it will go later? 

     SENIOR ADMINISTRATION OFFICIAL:  The President is going 
to fight to have this legislation approved by the Congress this year. 

     Q  In your strategy, who is the point person who's 
going to respond to Ross Perot? 

     SENIOR ADMINISTRATION OFFICIAL:  You're above my pay 
grade here.  You're above my pay grade. 

     Q  In which industries will you see job loss as a 
result of NAFTA? 

     SENIOR ADMINISTRATION OFFICIAL:  The studies that have 
been done obviously indicate that there will be changes in jobs in 
the industries that currently have high import protection.  Now, the 
industries that have high import protection include such products as 
household glassware, corn brooms -- 

     Q  What? 


     Q  What are corn brooms? 

     SENIOR ADMINISTRATION OFFICIAL:  You know, you've been 
to a grocery store; you see those brooms that are made out of real 
broom corn. 

     Q  What about agriculture? 

     SENIOR ADMINISTRATION OFFICIAL:  Well, but you've got to 
understand, the reason many, many textile companies are supporting 
this legislation is that we have very, very favorable rules under the 
NAFTA for joint production.  And actually, the vast majority of 
production in Mexico is based on U.S. yarn and fabrics.  And 
many of the major textile producers believe that this is a win-win 
situation and we do not estimate major job losses in that sector. 

     Q  If it's going to be such a boon to the automotive 
industry than why is the entire, I think all most the entire Michigan 
delegation against this? 

     SENIOR ADMINISTRATION OFFICIAL:  Well, you answer that 
question for me.  Let me tell you what the current situation is on 
automobiles.  Many, many U.S. companies produce autos in Mexico today 
and ship them to the United States.  The tariff that they pay coming 
into the U.S. is 2.5 percent, which is basically an insignificant 
tariff.  That's what we're reducing under this agreement. 

     On the other hand, U.S. auto companies are essentially 
barred from exporting to Mexico unless they produce in Mexico.  And 
the barriers we're wiping out in Mexico include their local content 
rules, their investment restrictions and their very high tariff on 
automobiles, which comes down almost immediately under this 
agreement.  The consequence of which there are much, much greater 
incentives to move auto production from Mexico back to the United 
States and ship to Mexico.  In fact, as the President said today, one 
auto company had recently moved jobs from Mexico back to the United 

     And we've had conversations with, as I say, the major 
auto producers.  The major auto parts producers all support this 
agreement because they believe that it means a bigger market for 


parts in the United States for inclusion in products shipped to 
Mexico.  Why is there a -- 

     Q  Why is every union opposing it, most of the 
Democrats opposing it?  It's hard to believe that just because -- 

     SENIOR ADMINISTRATION OFFICIAL:  Don't say most of the 

     Q     corn broom growers -- 

     SENIOR ADMINISTRATION OFFICIAL:  There are a number of 
Democrats who support this legislation.  All I'm trying to do is -- 

     Q  A majority of Democrats in Congress thus far, 
according to the White House count have said this. 

Well, you know, sometimes people need to hear the facts and hear 
exactly what the agreement is about and what it does.  And I think 
you have to make your own judgments after you've listened to those 
arguments whether or not the concerns, the uncertainties that are out 
there about the future of our economy. 

     Q  What other industries besides auto will prosper 
from this? 

     SENIOR ADMINISTRATION OFFICIAL:  Telecommunications, 
automobiles, the agriculture sector is a big winner under this 
agreement, a number of others as well. 

     THE PRESS:  Thank you. 

                                 END2:05 P.M. EDT