Congressman Faleomavaega announced today that on October 6, 2004 the International Relations Subcommittee on the Western Hemisphere held a hearing regarding the impact U.S. investment disputes in Peru and Ecuador may have on the Andean Free Trade Agreement.
“As a member of the Subcommittee, I wanted to make my position clear about where I stand on Andean Trade. First and foremost, I stand with American Samoa’s cannery workers in opposing duty-free treatment for canned and pouched tuna from Ecuador,” the Congressman said.
In his statement, Congressman Faleomavaega welcomed Ms. Regina Vargo, the Assistant U.S. Trade Representative for The Americas, who testified before the Subcommittee. “While I have had the opportunity to share with Ms. Vargo my concerns about the impact the Andean Free Trade Agreement may have on the U.S. Territory of American Samoa, I commend her for taking American Samoa’s concerns into account as negotiations move forward.”
“This agreement is different than the agreement we fought two years ago which threatened American Samoa’s economy,” the Congressman continued. “This time the situation is even more serious because Congress will have no say in the negotiations and will not be able to amend any offers put forward by President Bush. In other words, Congress, including the House and Senate, will only be able to vote yes or no in support of the Andean Free Trade Agreement and will not be able to make changes to provisions dealing with tuna, clothing, watches, flowers, or any other items which will be negotiated.”
“This is why I have plainly stated that I am uneasy about trade negotiations moving forward at a time when political instability has undermined confidence in the rule of law in Ecuador. Despite promises made by President Lucio Gutierrez’s administration to adopt economic reforms and protect American investment, his efforts are often muted by special interests, even within his administration,” Faleomavaega said.
“Today, there continues to be commercial disputes between American companies and the government of Ecuador. The most egregious cases of Ecuadorian abuse to the detriment of an American company involve BellSouth, Chevron/Texaco and Occidental Petroleum. While I am pleased that U.S. Trade Representative Robert Zoellick has traveled to Peru and Ecuador and threatened to drop them from trade talks if their unwillingness to cooperate on investment issues becomes an obstacle to a pact with Colombia, I have concerns that tuna may once again be used as an instrument of foreign policy.”
“The reason I am concerned is because more than 80% of American Samoa’s private-sector economy is dependent either directly or indirectly on two United States tuna canneries (StarKist and Chicken of the Sea) which employ more than 5,150 people of 74 percent of the workforce. As was repeatedly stated during the Andean Trade Preference (ATPA) debate, a decrease in production or departure of one or both of the two canneries in American Samoa could devastate the local economy resulting in massive layoffs and insurmountable financial difficulties.”
“Needless to say, any fluctuation in global tariff rates also places our canneries at risk. As StarKist has repeatedly stated, the only market for tuna from American Samoa is the United States and the reason for this is simple. The Andean countries, the ASEAN member nations, and the European Union are about the business of imposing high duties on tuna from the U.S. while the U.S., on the other hand, continues to reduce tariff rates on tuna from foreign countries.”
“Presently,” Faleomavaega said, “the Andean countries have the production capacity to destroy U.S. tuna operations in American Samoa, Puerto Rico, and California. In fact, Ecuador and Colombia have the capacity to jointly process 2,250 tons of tuna per day or 48.6 million cases per year. Given that total U.S. consumption is only about 48 million cases per year, the Andean countries have the production capacity to supply the entire U.S. market and wipe out the economy of American Samoa. If the wage differential between American Samoa ($3.60 per hour) and the Andean countries ($0.70 per hour) is also considered, it is reasonable to conclude that American Samoa will not be able to fairly compete against Andean competition if U.S. tariff rates are reduced or eliminated.”
“Fleet capacity is also another important consideration. The Andean countries have the capacity to expand their fishing fleets if provided with the incentive to do so. Additionally, there is no barrier to prevent the Andean countries from bringing fish in from the Western Tropic Pacific for processing. Japan, Thailand, Taiwan, to name a few, could ship frozen tuna loins to the Andean countries for final processing and thereby defeat the intent of U.S. Andean trade which is to create jobs and build capacity in the Andean region.”
“Simply put, duty-free treatment for canned or pouched tuna products poses a tremendous threat to the stability of the U.S. tuna fishing and processing industries and to the economy of American Samoa and it is the people of American Samoa who will suffer economic loss if tuna is used as an instrument of foreign policy in the Andean trade negotiations.”
“For these reasons, I do not want to see the U.S. give Ecuador tuna in exchange for Ecuador’s commitment to resolve investment disputes involving Chevron/Texaco, Bellsouth and Occidental Petroleum. I also do not believe a discussion about tuna should be couched in the rhetoric of an anti-drug campaign. Although I want to be helpful to Ecuador in its efforts to curb drug production, I continue to believe that the issue of preferential treatment for canned tuna should be debated on its own merits and I am hopeful that this will be the case as U.S.-Andean Free Trade negotiations continue,” Congressman Faleomavaega concluded.