[Senate Hearing 107-578]
[From the U.S. Government Publishing Office]
S. Hrg. 107-578
U.S.-MEXICAN RELATIONS: THE UNFINISHED AGENDA
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE
CORPS AND NARCOTICS AFFAIRS
OF THE
COMMITTEE ON FOREIGN RELATIONS
UNITED STATES SENATE
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
APRIL 16, 2002
__________
Printed for the use of the Committee on Foreign Relations
Available via the World Wide Web: http://www.access.gpo.gov/congress/
senate
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COMMITTEE ON FOREIGN RELATIONS
JOSEPH R. BIDEN, Jr., Delaware, Chairman
PAUL S. SARBANES, Maryland JESSE HELMS, North Carolina
CHRISTOPHER J. DODD, Connecticut RICHARD G. LUGAR, Indiana
JOHN F. KERRY, Massachusetts CHUCK HAGEL, Nebraska
RUSSELL D. FEINGOLD, Wisconsin GORDON H. SMITH, Oregon
PAUL D. WELLSTONE, Minnesota BILL FRIST, Tennessee
BARBARA BOXER, California LINCOLN D. CHAFEE, Rhode Island
ROBERT G. TORRICELLI, New Jersey GEORGE ALLEN, Virginia
BILL NELSON, Florida SAM BROWNBACK, Kansas
JOHN D. ROCKEFELLER IV, West MICHAEL B. ENZI, Wyoming
Virginia
------
SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE
CORPS AND NARCOTICS AFFAIRS
CHRISTOPHER J. DODD, Connecticut, Chairman
BILL NELSON, Florida LINCOLN D. CHAFEE, Rhode Island
JOHN F. KERRY, Massachusetts JESSE HELMS, North Carolina
RUSSELL D. FEINGOLD, Wisconsin MICHAEL B. ENZI, Wyoming
JOSEPH R. BIDEN, Jr., Delaware RICHARD G. LUGAR, Indiana
(ii)
C O N T E N T S
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Page
Baer, M. Delal, Ph.D., senior fellow and chairman, Mexico
Project; deputy director, Americas Program, Center for
Strategic and International Studies, Washington, DC............ 56
Prepared statement........................................... 59
Enzi, Hon. Mike, U.S. Senator from Wyoming, prepared statement... 6
Ladik, Steven M., president, American Immigration Lawyers
Association, Washington, DC.................................... 61
Prepared statement........................................... 63
Larson, Alan P., Under Secretary of State for Economic, Business
and Agricultural Affairs, Department of State, Washington, DC.. 17
Prepared statement........................................... 18
Lebedev, Gregori, chief operating officer and executive vice
president, International Policy, U.S. Chamber of Commerce,
Washington, DC................................................. 50
Prepared statement........................................... 52
Reyes, Hon. Silvestre, U.S. Representative in Congress from the
16th District of Texas......................................... 8
Prepared statement........................................... 10
Shailor, Barbara, director, International Affairs Department,
American Federation of Labor and Congress of Industrial
Organizations [AFL-CIO], Washington, DC........................ 44
Prepared statement........................................... 46
Taylor, Hon. John B., Under Secretary of the Treasury for
International Affairs, Department of the Treasury, Washington,
DC............................................................. 22
Prepared statement........................................... 24
Ziglar, Hon. James W., Commissioner, Immigration and
Naturalization Service, Department of Justice, Washington, DC.. 26
Prepared statement........................................... 29
(iii)
U.S.-MEXICAN RELATIONS: THE UNFINISHED AGENDA
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TUESDAY, APRIL 16, 2002
U.S. Senate,
Subcommittee on Western Hemisphere,
Peace Corps and Narcotics Affairs,
Committee on Foreign Relations,
Washington, DC.
The committee met, pursuant to notice, at 2:30 p.m., in
room SD-419, Dirksen Senate Office Building, Hon. Christopher
J. Dodd (chairman of the subcommittee), presiding.
Present: Senators Dodd, Bill Nelson, Helms, Chafee, and
Enzi.
Senator Dodd. The committee will come to order. Let me
thank all of our witnesses for being here today and
participating in what I hope will be a worthwhile hearing, and
one of a series we hope to hold from time to time on the issues
affecting the hemisphere.
I'm particularly pleased to have my colleague from the
House, my good friend Silvestre Reyes, here with us today, who
is the Chairman of the Congressional Hispanic Caucus. And it is
an honor, Silvestre, to have you on this side of the building.
Mr. Reyes. Good to be here, sir.
Senator Dodd. I think I feel the hands of the former
chairman here.
Senator Helms. Good morning.
Senator Dodd. Good morning. Thank you, sir. Thank you,
Senator Helms.
Senator Helms. That's the cutest baby you ever saw.
Senator Dodd. Thank you, Senator Helms. I hope Grace heard
that.
Let me take a few minutes and make some opening comments,
if I could, about this hearing. But also I want to make some
brief comments as well about events over the past number of
days in Venezuela that I think would be warranted.
First of all, today the Subcommittee on Western Hemisphere,
Peace Corps and Narcotics Affairs will hold the first in a
series of hearings whose purpose is to assess the challenges to
economic growth, democracy and the rule of law facing countries
in the Western Hemisphere, challenges in some cases so daunting
that they threaten fundamental institutions of democracy
throughout the hemisphere.
Among the questions that these hearings will focus on are
whether existing U.S. policies are fully responsive to current
circumstances that exist in the Americas, or whether those
policies should be altered in order to better serve U.S.
economic, political and national security interests throughout
the Americas.
In recent years the instability in the Balkans, the Middle
East and South Asia, there has been a tendency for U.S.
policymakers to neglect, in my view, some of our closest
friends and closest neighbors, to be complacent that all is
well in the Americas. How many times in recent years have we
heard U.S. policymakers, both in Congress and elsewhere, at
some point in the presentation about the state of this
hemisphere, proudly announce that all but one of the nations in
the region have democratically elected governments? It may
sound like a cliche but my response to that observation has
been that democracy is critically important, as is free
markets, but that democracy is more than simply having a
periodic election.
We will not have sustainable democracy, in my view, in this
hemisphere in the coming decade unless we do more to support
and nurture serious governmental and civic institutions capable
of protecting the rights of citizens and meeting their needs
and aspirations. Events over the past few days in Caracas,
Venezuela have no doubt called into question that complacency,
at least temporarily. While all the details of the attempted
coup in Venezuela are not yet known, what is clear is that the
vast majority of governments in the hemisphere lived up to
their responsibilities under the Inter-American Democratic
Charter, and denounced the unconstitutional efforts to take
power from a government which had been freely elected.
I am extremely disappointed that rather than leading the
effort to reaffirm the region's commitment to democratic
principles outlined in the OAS charter, only belatedly did the
United States join the OAS members to respond to the Venezuelan
crisis. I would be the last one to defend all of the decisions,
or even any of the decisions for that matter, and policies of
President Hugo Chavez and his administration in Venezuela. But
to stand silent while the illegal ouster of a government is
occurring is deeply troubling.
To take the similar statements--I may disagree vehemently
with what you say, but I will defend with my life your right to
say it. And that comes to democratically elected governments. I
may disagree profoundly with the decisions those governments
are making, but I think it's incumbent upon the greatest
democracy in the world to defend democratically elected
governments. And that is something that I'm terribly
disappointed in, that we did not do in this case.
Now I know that Secretary Powell obviously is extremely
preoccupied with events in the Middle East, as he should be.
But I would hope that in the future there would be more adult
supervision of the policy formulation as it related to our
hemisphere. And to President Chavez I would say simply this:
You've been given a second chance, don't waste it. Live up to
the responsibilities you assumed as the President of your
country.
It is not just Venezuelan democracy that stands at risk at
this moment. Colombian institutions are under siege, both by
drug traffickers and irregular para-military forces on the left
and right of the political spectrum. Argentina's current crisis
may be rooted in the near economic collapse of the country, but
the impact on democratic institutions and the Argentine
people's faith in their government institutions has been
devastating.
Central America is suffering as well from a decade of
neglect. It is a region that we have allowed to slip quietly
into despair. The nations of Central America have faced an
astounding array of natural disasters, fever outbreaks and
climatic misfortunes over the past several years. The nations
of the Caribbean are also at risk, particularly in the country
of Haiti where human misery is more pervasive than anywhere
else throughout the Americas. Yet Haitian political leaders are
unable to resolve their differences so that the Haitian people,
the millions of them, can have a functioning government focused
on their pressing needs of security, basic public health
services, education, jobs, shelter and even something as simple
as decent food.
While many of the subjects that I've just mentioned could
be the focus of today's first hearing on the state of the
hemisphere, it seemed to me that it would be most appropriate
to begin our review by focusing on the most important and
promising of our hemispheric relationships, our relationship
with Mexico and the administration of President Fox.
It is no accident that President Bush made relations with
the Fox administration a first priority of his new
administration, and I commend him for it. The two leaders have
met four times since President Bush assumed office last year,
and both appear determined to make progress on a bilateral
agenda.
We share so much in common with our neighbor to the South.
Many Americans have roots in Mexico. Our economies are
interdependent. Mexico is the second largest trading partner,
with bilateral trade flows exceeding $250 billion annually. Our
borders are a beehive of activity, with more than 800,000
individuals and 250,000 vehicles crossing the U.S.-Mexico
border daily.
More important than even our economic ties are our shared
values, which allow us to remain close partners even when
issues arise between us that are difficult to resolve. The
U.S.-Mexico bilateral relationship is an extremely important
cornerstone in fashioning a successful partnership with
countries throughout the Americas. It is so important that we
work at the relationship until we get it right, in my view.
We all know that the U.S.-Mexican agenda is an ambitious,
and a challenging one: migration, border security, drugs,
trade, investment, energy and economic development and there
are many others. But it is achievable and our success or
failure to get it right will have direct bearing on our
prosperity both in this country and in Mexico, especially in
border communities whose lives, security and economic well-
being are inextricably linked.
We are honored today to have with us the Chairman of the
Congressional Hispanic Caucus, Silvestre Reyes, who represents
the 16th District in Texas, the El Paso area, who can speak
with firsthand knowledge about the importance of the U.S.-
Mexican relationship for border states, as well as the
importance of finding the right solutions on issues to the
bilateral agenda. President Bush and President Fox have
established a strong relationship that should make resolution
of even the thorniest of issues possible. It is my hope that
the administration witnesses who are with us today, this
afternoon, will continue--or rather outline the
administration's plans for making progress on that agenda, and
a timetable for doing so.
At the core of that agenda is clearly the issue of
immigration. With more than three million undocumented Mexicans
living and working in communities throughout the United States,
it is an issue that is just not going to go away. It is an
issue that has implications for other topics on the bilateral
agenda, not the least of those being U.S. security interests.
Our public witnesses, representing organized labor and the
business community, are but one more concrete demonstration
that the U.S.-Mexican relationship is an important one, one
where there is more commonality of opinion that disagreement.
Making progress on the U.S.-Mexican bilateral agenda is
extremely important at large. U.S. cooperation and assistance
in consolidating Mexico's economic and political reforms will
be an extremely important signal to other governments in the
Americas. It will also enhance President Fox's authority as a
regional leader and better enable him to work in partnership
with the United States in confronting issues such as
corruption, drug trafficking and terrorism, which threaten the
integrity of governments throughout the region and undermine
popular support for democratic institutions and values. One
more reason, in my view, for placing Mexico first on this
subcommittee's agenda.
I look forward to hearing from all of our witnesses today,
but first let me turn to my colleagues who are here, and I
thank them for coming. Senator Chafee, who is my ranking member
on this subcommittee and has been a valued member of it;
Senator Helms, my former chairman and good friend with whom we
have our disagreements, but always has a deep interest in the
Americas and I've always appreciated it very, very well; and
Senator Mike Enzi of Wyoming, who is here as well. So with
that, Senator Chafee, we'll begin with you.
Senator Chafee. Thank you, Mr. Chairman, it's a pleasure to
be here and welcome the Congressman, also.
Mr. Reyes. Thank you, sir.
Senator Chafee. I know we have an aggressive agenda and I
commend the chairman for, certainly with all the events around
the world, looking south to our good neighbor Mexico, and then
continuing down, as he said, in subsequent hearings to Central
America and throughout the hemisphere, and foster good
relations which more than ever are important to our country. So
with that, I'll conclude my remarks and look forward to the
testimony from our witnesses this afternoon.
Senator Dodd. Thank you, Senator. Senator Helms.
Senator Helms. Mr. Chairman, thank you very much. I feel
obliged to suggest that the threats to Venezuelan democracy and
to its constitution began long before the events of this past
weekend. I personally would urge Mr. Chavez to make good use of
his second chance and embrace a little more strongly the
principles of democracy than he has in the past. I further
suggest that one way for Mr. Chavez to demonstrate a new
outlook would be to sever his very, very close relationship
with Castro's Cuba. He may be surprised how fast things could
improve if he would do that.
Beyond that, Mr. Chairman, I just want to thank you for
scheduling this meeting today. In my judgment it's one of the
most important we'll have because what happens in Mexico
directly impacts America, which makes our policy toward our
neighbor to the south of the greatest importance. Members of
this committee who traveled formally as a committee earlier to
Mexico learned about that firsthand. And you may recall that we
met jointly with the Foreign Relations Committee of Mexico, and
we are now working on a return visit from them where they could
have lunch with us. Thank you, Mr. Chairman, for calling this
meeting.
Senator Dodd. Thank you, Mr. Chairman, you made a good
point. You did do something unprecedented by taking this
committee down and we look forward to the Mexican delegation
coming here. In the middle of May or thereabouts we'll have yet
another inter-parliamentary meeting as we have had now--the
oldest inter-parliamentary, continuous inter-parliamentary
meeting with any other country in the world. And I'll be
chairing it this time with the Senate side chairs when the
meetings are in Mexico. And I extend an invitation to all
members who are interested in participating. There have been a
lot of important ones, but I think this could be one of the
most important ones.
Senator Helms. I agree with you, sir.
Senator Dodd. Senator Enzi.
Senator Enzi. Thank you, Mr. Chairman. I appreciate your
holding this hearing and I would ask that my entire statement
be included in the record.
Senator Dodd. All the statements will be included.
Senator Enzi. I am anxious to hear about the Immigration
and Naturalization Service as well as border security and
NAFTA, which are all of critical importance to Wyoming.
I appreciate that Mr. Jim Ziglar is here today. He is an
old college friend of mine, and I watched him from the time
that he got the appointment until he'd been confirmed, and then
shortly after that, watched the drastic changes in the world
that had to change his priorities.
We knew of a lot of paperwork problems that needed to be
solved, that I told him about. I saw him chomping at the bit
after doing extensive research in the southern United States,
in Australia, in other countries around the world to be sure
that he understood the job that he was going to have. And of
course, September 11 changed the job that he got. And I
appreciate the shift in priorities that he's done and all that
he's been able to find out that many of us found to be quite a
surprise.
We do rely on people coming into the country to help out.
In Wyoming we kind of have the three H's, the hoeing beets, the
herding sheep and the helping at restaurants and lodging.
Without help in those we don't have those industries.
So, in connection with that though, we are concerned about
those being allowed to cross our border and enter this country,
and fear as to not only whether immigrants might take away U.S.
jobs and drain health care and other programs, but also doing
harm to us. So it is very important that we understand what is
happening there, that we have enough agents, that the agency is
allowed to work in a way that will be beneficial.
On the controversy on whether to split up INS, I think that
Mr. Ziglar and the administration are headed in a better
direction with the original recommendation that the agency be
left intact but divided into two separate divisions, and that
its technology, reporting and enforcement systems be updated.
I think we've learned a lot about that recently and know
that there are some programs out there that will allow the
interaction between all of the agencies that are necessary to
do a good job on that.
Finally, I need to comment just a little bit on NAFTA,
because that's of prime concern to an agricultural state like
Wyoming, particularly in the area of sugar beets. I've already
mentioned the hoeing, but the sugar that results from them is a
huge issue.
One of the reasons that NAFTA passed is because some of the
western Senators who had an interest in sugar beets voted for
it based on a side letter that restricted some of the exports
coming in from Mexico on that. Since that time, somehow, that
side letter has been lost. I thought all of those things were
preserved in the National Archives, but if it is it must be
buried under the Constitution there. And with the loss of that
sugar side letter U.S. producers are now trading on a playing
field that has no referee. And that cannot be allowed to
continue.
We also have some difficulties with shipping meat. In the
United States, unless you meet very strict constraints that
only major packers can meet, you can't ship meat from one state
to another. But Mexico and Canada are allowed to ship meat into
the United States and across state lines just by filing a plan.
That's not a fair and level playing field and we need to have
that taken care of.
So there are a lot of issues that we need to address and I
thank you for having this hearing so we can address them.
[The prepared statement of Senator Enzi follows:]
Prepared Statement of Senator Mike Enzi
Mr. Chairman, I am grateful for the opportunity today to welcome
the distinguished panel of witnesses before this committee and hear
them speak on our country's relationship with Mexico.
I know we will be discussing many issues today, but I want to focus
my remarks on the Immigration and Naturalization Service, some issues
pertaining to immigration and border security, as well as NAFTA.
With respect to the INS, the President knew reform was needed even
before September 11. He picked the right man, Jim Ziglar, to accomplish
the daunting task of reorganizing and updating the INS. I am pleased to
see that Mr. Ziglar is one of the witnesses appearing before this
committee.
Today, one of the overwhelming tasks Mr. Ziglar faces is
immigration and border security issues with Mexico. While we all want
to continue friendly relations to the South, these issues are a large
component of the Administration's discussions with President Fox. He is
asking President Bush for some certainty for undocumented Mexican
workers in the United States. At the same time, the President and Mr.
Ziglar are facing even greater demands to protect our borders following
the events of September 11.
Folks in Wyoming as well as elsewhere are concerned about how to
deal with this issue. In Wyoming, we have many immigrant workers who
are hired mostly for agricultural jobs that others do not want. These
include hoeing beets and herding sheep. In addition, those in the
Wyoming tourism industry--in the lodging or restaurant industry--also
hire immigrant workers. On the other hand, people in Wyoming are
concerned about who is being allowed to cross our borders and enter
this country. Now, the fear is not only whether immigrants might take
away U.S. jobs and drain healthcare and other programs, but whether
they are entering this country to harm us.
It is important to understand that the problems we face with Mexico
and Mexican immigration are just the tip of the iceberg. Before we can
even begin to address Mexico specifically, we need a solution to the
overall immigration and border security problems our nation faces.
The INS has not been able to keep up. It has too few agents--only
2,000 agents to deal with over 8 million illegal immigrants. The
Director faces personnel limits, and he does not have the ability to
fire employees. We all learned this in March when a Florida flight
school received approved student visas for two of the dead hijackers.
The Director was unable to fire those responsible for this fiasco.
I am convinced, and I believe it is well documented, that the
biggest underlying, problem facing the INS is its outmoded computers,
and its overall, antiquated tracking system. One of the most egregious
examples of the computer problems in the INS is the fact that its
computer software and system in some parts of the agency are unable to
communicate within other parts of the agency. Not only are the INS
computer systems unable to communicate with each other, but they also
cannot communicate with other law enforcement, Customs, and State
Department systems. For instance, the INS and FBI fingerprint systems
can't cross-reference fingerprints. Basically, the INS needs to be
brought into the 21st century.
But some members of Congress think the answer is to totally
dismantle the INS and place its functions in two separate agencies
overseen, by the Justice Department. Dismantling the INS is not going
to provide any real solution.
I think Mr. Ziglar and the Administration are headed in a better
direction with the original recommendation that the agency be left
intact, but divided into two separate divisions, and that its
technology, reporting and enforcement systems, be updated.
A part of the solution is passage of the Enhanced Border Security
and Visa Entry Reform Act which is before the Senate today. This Act
provides for the hiring of needed INS agents to track down unwanted
aliens. It attempts to close the vast loopholes in the student-visa
program. It allocates $150 million to modernize computer and
information-sharing systems at the INS. With that technology, the INS
fingerprint system could be designed to cross-reference fingerprints
with other law enforcement agencies.
The Act also requires the INS to fully integrate its data bases and
systems with law enforcement and intelligence data systems. Under the
Act, the Justice and State Departments would be required to issue
travel documents, such as visas that are machine readable, tamper
resistant, and have biometric identifiers. In addition, it requires INS
and State Department to install equipment and software to allow
biometric comparisons of travel documents at all U.S. ports of entry.
It directs the INS to adequately staff ports of entry and mandates that
all commercial flights and vessels coming into the U.S. provide
manifest information prior to arrival. It would require border policing
agencies to coordinate their activities. Finally, one of the things it
does is direct the President to study the feasibility of establishing a
North American National Security Program for the United States, Canada,
and Mexico.
While this Act is the first step in assisting the INS with Mexican
immigration and border security issues, we also need to make sure that
the delicate trade issues we have with Mexico are properly addressed.
The North American Free Trade Agreement provides for the framework
under which three member countries aim to coordinate improved access to
fair and open trade opportunities. While the member countries have made
attempts to open their borders to a free flow of goods, the NAFTA has
provisions that have adversely effected Wyoming producers. Namely,
Wyoming sugar beet producers view the NAFTA as a serious problem in
Wyoming.
In discussing the issue of sugar, Mexico argues that it is entitled
to ship its net sugar surplus to the United States duty free under
NAFTA, while the United States argues that a sugar side letter
negotiated along with NAFTA limits Mexican shipments of sugar into the
U.S. With the loss of the sugar side letter, U.S. producers are now
trading on a playing field with no referee.
If we are going to be a common market, we have to establish fair
and documented guidelines, underwhich Mexico should decrease its
subsidization of its sugar industry. The U.S. is ready to negotiate a
new deal because the situation has changed in both countries since
NAFTA was signed.
Another NAFTA issue that has hit close to home is the allowance of
beef shipments from Mexico and Canada, despite the fact that we
currently prohibit the interstate shipment of state-inspected meat.
I abhor the hypocrisy of preventing our own states--our domestic
producers--from shipping meat to other Americans, while accepting meat
products from other countries. Our American producers abide by and
uphold their own state standards, which are comparable to the safety
standards of the federal government. Often times, the beef imported
from Canada and Mexico does not always meet our rigorous standards.
Senator Dodd. Not at all, we appreciate your points very
much Senator, and we thank you. Our first witness I've already
referred to, my good friend Silvestre Reyes. And I mentioned
not only is he a very fine Member of Congress representing the
El Paso area of Texas, but my colleagues should know that the
Congressman spent the good part of his adult life working
directly on the Border Patrol of the U.S. Government for many
years. He knows about these issues in a very, very direct way.
And so he brings a great deal of knowledge as a Member of
Congress, but his life experiences, having worked on the border
as a patrol officer, really--it's worth listening to him. And
we thank you immensely for being here, Silvestre, and look
forward to your testimony.
STATEMENT OF HON. SILVESTRE REYES, U.S. REPRESENTATIVE IN
CONGRESS FROM THE 16TH DISTRICT OF TEXAS
Mr. Reyes. Thank you, Mr. Chairman. It's my pleasure to be
here and thank you for inviting me, and ranking member Chafee
as well and members of the committee. This is an important
issue and the events of the weekend show how quickly things can
change in Latin America.
First and foremost, our Nation's relationship with Mexico
has matured and progressed in the past few years, and I am glad
that this subcommittee is focusing on the unfinished agenda
between our two great nations. Just a few short years ago any
hearing on Capitol Hill that focused on Mexico was sure to be a
session filled with finger pointing and accusations focused on
drug trafficking, money laundering and illegal immigration.
Times have changed. The issues are still important and still
require our attention, but we are working closely together.
As I have said time and time again, our nations must work
in an environment of cooperation rather than confrontation if
we are going to succeed. Unfortunately, there are still many in
Congress who would like to build a wall on our southern border.
They believe that the best way to deal with the problems
associated with migration, drugs and a host of border issues,
is to put up a wall and pretend that the other side simply does
not exist.
The reality is that Mexico is our second largest trading
partner, and we must engage our neighbors to the south if we
are going to resolve many of our mutual problems. An example of
what we have done to engage our partners can be seen in the
area of drug certification. As you know, Chairman Dodd, you and
I both introduced legislation last year to revamp the annual
drug certification process. We both agreed that the annual
process placed a terrible strain on our relationship with
Mexico and was very counter-productive.
As you know, the fiscal year 2002 Foreign Operations bill
provided a 1-year waiver of the drug certification procedure on
a global basis for all major drug transit and drug producing
countries, and has required the President to designate only
those countries that have failed during the previous 12 months
to make substantial efforts to adhere to obligations under
international counter-narcotics agreements. This is a positive
step forward in my opinion, and I look forward to working with
the members of this subcommittee to find a permanent
replacement solution for the flawed certification process.
We cannot speak of the U.S.-Mexico relationship without
addressing the issue of migration. As you know, I spent more
than 26 years with the Immigration and Naturalization Service,
and I believe I have some real world practical solutions to the
many migration challenges that we face. First and foremost, we
must do a better job of deploying resources to our borders.
We need additional Border Patrol agents on both borders. We
need more inspectors to facilitate the flow of commerce while
enforcing our laws. We need additional technology, like the
Integrated Surveillance Information System [ISIS], which is
capable of monitoring the border region.
We must plug the holes along our borders and keep people
from illegally entering the United States. I know that
Commissioner Ziglar is seated here behind me this afternoon,
and I know that he agrees with me on this very important and
vital issue for the security of our country. The issue of
legalization, or as some would call it, amnesty, has been in
the news quite a bit lately. The word amnesty is used as a
weapon by some and is thrown out to warn the country of what we
are trying to do.
Let me tell you, Mr. Chairman and members of the committee,
what we are trying to do, we are trying to keep families
together. We as a Nation must realize that there are millions
of undocumented people living in this Nation. We failed to keep
them out and now we must deal with them. They are members of
our society and contribute to our economy. They pick our food.
They wash our clothes and care for our children. These long-
time, tax-paying, law-abiding immigrants should be given some
type of legal status.
It is in the national security interests of this Nation to
deal with this underground society that currently exists within
our borders. We should provide these immigrants with some type
of legal status, but do so only after a complete background
check. No one that I know of who is advocating for legalization
wants to legalize criminals and/or terrorists. We must find
these people and they must be deported.
This process of legalization will benefit both our economy,
our national security, and most importantly will keep families
together. President Bush and President Fox have been working on
an agreement to ensure the safe, legal and orderly flow of
migrants between our two respective nations. While most of us
have been excluded from the discussions, it is our
understanding that they are working on a guest worker program.
I strongly believe that it is irresponsible and premature to
develop a new guest worker program before we deal with the
millions of hard working immigrants that are already present in
our country. President Bush should focus on the immigrant
families here in this Nation who need his help before he
develops a new program to accommodate foreign workers.
Immigration and trade are closely connected, especially
along our border. As the members of this subcommittee know, the
challenges along our Nation's border are very complex. Since
first arriving in Congress I have advocated for a consolidated
border inspection agency. Today, each port of entry has
conflicting mandates. What we need is one person in charge with
one set of operating priorities and one set of operating
procedures.
After working on the border for more than 26\1/2\ years, I
believe that in order to effectively enforce our laws, while
still facilitating trade, we must consolidate the United States
Border Patrol, the INS inspections, the Customs Service, parts
of USDA and the Coast Guard. Only then will we eliminate the
jurisdictional spats that plague our current port management,
and only then will we be successful in interdicting narcotics
and other contraband, while working toward fulfilling the
promises of NAFTA for the border region and for the rest of the
Nation.
There have been a number of proposals put forth in the
Senate and the House, some of which exclude vital components of
the very important system of port management. If we move a bill
with only INS Inspections, the Customs Service and FEMA, we
will do a disservice to this Nation and conceivably make things
much worse. The last thing I would like to mention this
afternoon on the issue of U.S.-Mexico relations is the INS.
I won't spend too much time on this issue, but I would like
to say that next week the House will vote on a bill modeled
after my initial INS restructuring proposal first introduced 5
years ago. I expect it to pass overwhelmingly and I urge all of
you to move a similar bill on this side of the Capitol.
Everything that I mention to you today, from legalization to
guest workers to border management will require more from INS.
Today, we know that they can't handle any more. In fact, they
can't handle what they have on their plate currently.
Commissioner Ziglar, despite his best efforts, I believe
will fail with the internal reorganization plan that he is
proposing. I have seen more reorganization plans in my 30 some
years of dealing both in and out of INS, currently as a Member
of Congress, than I can remember. The INS will only be
restructured when Congress intervenes, and we will do so next
week.
Mr. Chairman, that is a start but it's important to note
that this is an important issue for this country and our
national security. So in conclusion, Chairman Dodd and Ranking
Member Chafee, thank you for giving me this opportunity to be
here this afternoon to share some of my thoughts with you. I
look forward to answering any questions that you might have and
again I thank you for this opportunity.
[The prepared statement of Mr. Reyes follows:]
Prepared Statement of Representative Silvestre Reyes (D-TX)
Thank you Chairman Dodd and Ranking Member Chafee for inviting me
to be here this afternoon. Our nation's relationship with Mexico has
matured and progressed in the past few years and I am glad that this
subcommittee is focusing on the unfinished agenda between our two
nations. Just a few short years ago, any hearing on the Hill that
focused on Mexico was sure to be a session filled with finger pointing
and accusations focused on drug trafficking, money laundering, and
illegal immigration. Times have changed. The issues are still important
and still require our attention, but we are working together. As I have
said time and time again, our two nations must work in an environment
of cooperation rather than confrontation if we are going to succeed.
Unfortunately, there are many in Congress that would like to build
a wall on our southern border. They believe that the best way to deal
with the problems associated with migration, drugs, and a host of
border issues is to put up a wall and pretend the other side doesn't
exist. The reality is that Mexico is our second largest trading partner
and we must engage our neighbors to the south if we are going to
resolve many of our problems. An example of what we have done to engage
our partners can be seen in the area of drug certification. Chairman
Dodd, you and I both introduced legislation last year to revamp the
annual drug certification process. We both agree that the annual
process placed a terrible strain on our relationship with Mexico and
was very counterproductive. As you know, the FY2002 Foreign Operations
bill provided a one-year waiver of the drug certification procedures on
a global basis for all major drug-transit and drug producing countries
and required the President to designate only the countries that have
failed, during the previous 12 months, to make substantial efforts to
adhere to obligations under international counter-narcotics agreements.
This is a positive step forward and I look forward to working with the
members of this subcommittee to find a permanent replacement for the
flawed certification process.
We cannot speak of the U.S.-Mexican relationship without addressing
the issue of migration. As you know, I spent more than 26 years with
the Immigration and Naturalization Service and believe I have some real
world, practical solutions to the many migration challenges we face.
First and foremost, we must do a better job of deploying resources to
our borders. We need additional Border Patrol agents on both borders.
We need more inspectors to facilitate the flow of commerce while
enforcing our laws. We need additional technology like ISIS to monitor
the border. We must plug the holes along our borders and keep people
from illegally entering the United States. I know that Commissioner
Ziglar is here this afternoon and I know that he agrees with me on this
issue.
The issue of legalization or ``amnesty'' has been in the news quite
a bit lately. The word ``amnesty'' is used as a weapon by some and
thrown out there to warn the country of what we are trying to do. Let
me tell you what we are trying to do. We are trying to keep families
together. We as a nation must realize that there are millions of
undocumented people living in this nation. We failed to keep them out
and now we must deal with them. They are members of our society and
contribute to our economy. They pick our food, wash our clothes, and
care for our children. These long-time, tax-paying, law-abiding
immigrants should be given some type of legal status. It is in the
national security interest of this nation to deal with the underground
society that currently exists. We should provide these immigrants with
some type of legal status and do so only after a complete background
check. No one that is advocating for legalization wants to legalize
criminals and terrorists. We must find these people and they must be
deported. This process of legalization will benefit our economy, our
national security, and most importantly, will keep families together.
Mr. Chairman, I would like to insert for the record a copy of the
Democratic Immigration Principles which outline the ideas of
legalization and family reunification.
President Bush and President Fox have been working on an agreement
to ensure the safe, legal, and orderly flow of migrants between our two
nations. While most of us have been excluded from the discussions, it
is our understanding that they are working on a guest-worker program. I
strongly believe that it is irresponsible and premature to develop a
new guest-worker program before we deal with the millions of hard-
working immigrants already in this country. President Bush should focus
on the immigrant families here in this nation that need his help before
he develops a new program for foreign workers.
Immigration and trade are closely connected, especially along the
border. As the members of this subcommittee know, the challenges along
our nation's borders are complex. Since first arriving in Congress, I
have advocated for a consolidated border inspection agency. Today, each
port-of-entry has conflicting mandates. What we need is one person in
charge with one set of operating priorities and procedures. After
working on the border for 26\1/2\ years, I believe that in order to
effectively enforce our laws while still facilitating trade, we must
consolidate the U.S. Border Patrol, INS Inspections, the Customs
Service, parts of USDA, and the Coast Guard. Only then will we
eliminate the jurisdictional spats that plague our current port
management and only then will we be successful in interdicting
narcotics and other contraband while working towards fulfilling the
promises of NAFTA for the border region and the rest of the nation.
There have been a number of proposals put forth in the Senate and the
House, some of which exclude vital components of port management. If we
move a bill with only INS inspections, the Customs Service, and FEMA,
we will do a disservice to the nation and conceivably make matters much
worse.
The last thing I would like to mention this afternoon on the issue
of U.S./Mexican relations is the INS. I won't spend too long on this
issue but I would like to say that next week, the House will vote on a
bill modeled after my INS restructuring proposal first introduced 5
years ago. I expect it to pass overwhelmingly and I urge all of you to
move a similar bill on this side of the Capitol.
Everything I mentioned to you today, from legalization to guest-
workers to border management, will require more from the INS. Today, we
know that they can't handle any more. In fact, they can't handle what
they have on their plate. Commissioner Ziglar, despite his best
efforts, will fail with the internal reorganization plan he is pushing.
I have seen more reorganization plans in my more than 30 years of
dealing with the INS than I can remember. The INS will only be
restructured when Congress intervenes and we will do so next week.
Chairman Dodd, Ranking Member Chafee, thank you for the opportunity
to be here this afternoon to share some of my thoughts with you. I look
forward to answering any questions you may have for me.
Senator Dodd. Well thank you very much, Congressman. Your
ongoing interest in the subject matter is tremendously
valuable. As you pointed out in your testimony, your experience
of 26 years on the border brings a wonderful practical
consideration to these issues, and we're grateful to you for
them. Let me just ask you a couple of quick questions if I
could and then I'll let you get going.
I think I heard you say, and I know you're testifying today
both in your own capacity but also as Chairman of the Hispanic
Caucus in the House, and so it's worthwhile for us to get a
sense of how your colleagues from the Hispanic Caucus feel on
these issues as well. But as I understand it when you're
talking about the expanded guest worker program, that you or
the Caucus would have a very difficult time accepting any guest
worker program that did not include some mechanism, and there
are a variety of suggestions here, but some mechanisms for
legalization. Is that correct?
Mr. Reyes. That is correct, Mr. Chairman. It is vitally
important, as I mentioned in my testimony, that we recognize
that there are millions of undocumented people living in our
country. And it just makes sense that we have a mechanism that
brings them, identifies them, gives them a legal status.
It is important to note that these are people that are
living in our neighborhoods, living in our communities, that
are sending their kids to school, that are paying their taxes,
and that are in every sense of the word part of our community.
If we're going to move forward with a proposal to have some
kind of program for guest workers, first and foremost the
position of our Caucus is that we address a legalization
program. Whether you call it legalization, regularization or in
order to not get amnesty, it's important that we make that very
careful distinction and take that very important first step
toward what I think is a prudent issue of national security.
Senator Dodd. And I agree with you. I think we all do.
Second, you mentioned the certification issue and I am grateful
to the administration for the position they took on this
question of trying something new, suspending this--we're now
going to try a different approach.
I think most people have come to the conclusion, as you
point out in your testimony, that this was not having the kind
of productive results that we wanted to in seeking cooperation.
So, we're looking for a more cooperative approach on this. But
I wonder if you might comment what the suspension--there were
many who said you suspend this stuff it's going to be an
invitation to some of these drug traffickers to increase their
activities. And it's been a brief amount of time since we've
suspended the certification process, but I wonder, through the
connections you have in your work, what the impact has been on
the U.S.-Mexican bilateral counter-narcotics efforts since the
suspension?
Mr. Reyes. I think it's important that we recognize the
efforts that President Fox and the Mexican Government are
making to address some of these cartels. If anyone has been
paying attention to the news they have seen that there has
been, over the course of the last year, an increased activity
in addressing the issue. Most recently, in the area of Tijuana,
the Mexican Government conducted a sting where they arrested a
significant number of--even members of the law enforcement
community--and removed them to Mexico City and they're
currently undergoing interrogation. But that's just the latest
effort.
We have seen a dramatic change in the policy that the
Mexican Government has in addressing the issue of drug
trafficking. It's a tough issue. Like our law enforcement
agencies, drug trafficking organizations and cartels have a
heck of a lot more money, don't have to worry about putting out
bids for equipment, for night vision, for guns and for all of
the trades. Plus, the corruptive influence that they have on
both sides of the border is well documented.
But I think it's important that we recognize the efforts
that, in particular, the Mexican Government has made over the
course of the last year since we suspended the certification
process.
Senator Dodd. I appreciate that, and we pointed out over
and over again, of course, we talk about this issue in dealing
with Colombia as well. I always find it somewhat ironic in the
case of Colombia we may end up financing both sides of that
conflict. We finance one, obviously, through our tax dollars
and appropriations to assist a government trying to survive.
And then, of course, through those who consume narcotics
illegally, they end up funding the other side of the conflict.
And if we could--we've been tough on a lot of these
countries in seeking cooperation, but we're reminded painfully
that if we didn't have the consumption levels we do here these
operations would have no place to sell the stuff. So I'm
pleased to hear you say that and I hope that continues. We need
to work at this but my impression has been that the Fox
administration has made a significant effort and with some
success in dealing with this issue.
With that, let me turn to my colleagues for any questions
they may have for the Congressman.
Senator Chafee. Yes, thank you, Mr. Chairman. Thank you,
Congressman Reyes. I was wondering--talking about legalization,
regularization, amnesty, whatever you want to call it,
President Bush was outspoken on this issue last year--might
have floated it as a trial balloon. We haven't heard too much
about it since. What are the dynamics in the House? Any
prospect of a favorable consideration if that were to come
forward for some kind of a vote?
Mr. Reyes. I think since the events of 9/11, obviously the
priority that we had seen this issue take with the relationship
between Presidents Bush and Fox, obviously took a back burner
position to our national security and the fight against
terrorism and all of those kinds of issues. But nonetheless, on
the House side we continued to work and dialog with members of
our inter-parliamentary group. Today there's a tremendous
concern on the part of our Mexican counterparts, Senators and
Members of their House, that the issue not be forgotten, that
it be brought back to second tier or back burner status.
We have some basic principles that we would propose on the
House side, that we would make available to the subcommittee
for your consideration, that deal with the things that I
mentioned in my testimony: family reunification, a component to
recognize the fact that if we're going to have a guest worker
provision, then we have to address those who are already here.
And it makes prudent sense from a national security
perspective.
But I think that if given the interest of the President and
members of his administration, as well as the Mexican
administration, I think we would have a good opportunity on the
House side to pass a piece of legislation that we could,
perhaps if not similar legislation on the Senate side, take to
conference to again put this issue at the forefront of the
relations between the United States and Mexico. It's the right
thing to do. The climate is right for it.
The Mexican Government and Congress have been very
forthright in the dealings with us, in the fact that they want
to be an integral part of any effort that deals with national
security. Because, our national security is there interest as
well. They want to be helpful. And I believe that doing--
prioritizing this issue and doing this kind of legislation on a
priority basis, would certainly send that kind of message not
just to Mexico, but to the rest of Latin America as well.
Senator Chafee. Well, thank you very much. Keep up the good
work you're doing in the Hispanic Caucus.
Mr. Reyes. Thank you.
Senator Dodd. Senator Helms.
Senator Helms. Mr. Reyes, you made what is the best common
sense argument I've heard. I've heard a lot of words since I've
been in the Senate, particularly about what to do about the
Mexican flood coming across the borders, et cetera.
Down in North Carolina we have a man who is very
successful. He is very much interested in our government's
handling of this in a proper method so as to encourage
friendship with Mexico, but not to be victimized by a flood of
people who are unregistered and so forth. And I talked with him
at some length. He served on the board of trustees at the
University of North Carolina for many, many years and that sort
of thing. He first says that it's absolutely essential for
those who have come over the border to be registered as seeking
citizenship in this country. They don't have to follow through
with it, but they have to carry that identification card. Do
you agree with that?
Mr. Reyes. Well, you know, a lot of times citizenship and
lawfully admitted permanent residency gets confused. I think
you'll find that most--if we're talking about Mexicans--most
Mexicans that are in this country want to get permanent legal
status here, permanent residency. As you probably know, after
you've been a permanent legal resident it takes 5 years to be
eligible to become a U.S. citizen. We are seeing more--since
the Mexican Congress changed the law that now protects their
citizens abroad and they can own property in Mexico and all
those things----
Senator Helms. I'm aware of that.
Mr. Reyes [continuing]. I think you'll see overwhelmingly
more Mexican citizens wanting to become U.S. citizens. I agree
that that would be something that would be, I think,
commonsensical in addressing this issue.
Senator Helms. I don't need to tell you, nor Commissioner
Ziglar, that many employers in the United States welcome these
people, but they're not treating them fairly. Now my friends
says that there ought to be something in the law requiring a
minimum wage and that they must be paid by check so that the
payment can be a matter of record. And that those who have
applied for citizenship or received their registration card,
live in this country 3 years without any blemish on their
record in terms of a violation of law, that they would be
automatically considered for citizenship. But if they have
trouble with the law then that's a different story. Do you
agree with him so far with what I said?
Mr. Reyes. I think it's important that when we talk about a
legalization program there--and I mentioned it in my
testimony--there be a way, concrete review process, and that
there be a record check process. Because, we're trying to do
two things. We're trying to accommodate a whole population
that's here, and in most cases Senator, as you probably know,
may have citizen children that are here. But yes, there should
be a record and they should have a clean bill of health in
terms of any legal activity or anything else. That is fair and
I think most people will abide by that.
Senator Helms. But they should, in your judgment, also be
required to have that registration card or whatever, so that
they are in the mix for becoming citizens of this country?
Mr. Reyes. The law requires that. The law requires that an
individual be a lawfully admitted permanent resident for 5
years before they can apply, before they are eligible.
Senator Helms. I understand that, but how do you--do they
have identification cards?
Mr. Reyes. Yes, they have what is commonly referred to as a
green card. That's their proof that they've received an
immigrant visa, that they've been legalized, regularized, or
given amnesty, whichever the term may be that we deal with.
Senator Helms. My friend is also, he's tremendously
concerned about certain nefarious employers cheating these
people. He said that ought not be permitted. Now what
safeguards do we have allotted?
Mr. Reyes. Well, in the law already are aspects of employer
sanctions that were passed in 1986. And I think the only thing
that has kept that from working has been lack of resources to
INS and the fact that INS has not had adequate funding and
adequate personnel to assign them in the interior of the United
States. So absolutely we have to be clear that there is a role
to play by the Department of Labor in making sure and ensuring
that those that hire people, whether they're permanent
residents or guest workers or whatever category, that they
treat them fairly, that they comply with the law, and that they
give them the kinds of benefits that are provided for in law.
Senator Helms. But also that the employers must keep
adequate records about how much they paid, they can demonstrate
that they have, in fact, paid that much.
Mr. Reyes. Absolutely.
Senator Helms. That's already being done?
Mr. Reyes. That's already provided in the law. You know, as
often happens, any law is successful if you've got the people
to force its compliance. We haven't had that up to now. In INS,
most of the INS resources have been dedicated to the border
regions. And we haven't had a priority in the interior and
therefore you have these issues that crop up about employers
that are unscrupulous, that they mistreat, that they don't pay
adequate wages, don't give them housing, those kinds of issues.
Those should all be addressed comprehensively in any piece of
legislation. But in most cases, that already exists in the law.
Senator Helms. You have given me great comfort. Let me ask
you, and Mr. Ziglar can nod if he agrees. If I can persuade
this gentleman to fly to Washington, would you and Mr. Ziglar
meet with him and make sure the conditions that he believes are
essential are being met? Would you agree to meet with him?
Mr. Reyes. Senator, I will meet with whoever you ask me to
because I appreciate the efforts you are making.
Senator Helms. I think you will find it worthwhile. Mr.
Chairman, thank you again for this hearing. This is most
interesting and I'm encouraged by it.
Senator Dodd. Thank you, Senator. Congressman, I thank you
immensely. You're more than welcome to stay if you like and
hear the rest of us. I know you've got a busy schedule.
Mr. Reyes. Actually I'm in an Intelligence Committee
hearing, so I will excuse myself.
Senator Dodd. Very good, thank you once again, Congressman
for being with us.
I want to invite the next witnesses to come up as a panel
if they would. I'll introduce them as they're taking their
seats.
The Honorable Alan Larson, who is Under Secretary for
Economic, Business and Agricultural Affairs, Department of
State; the Honorable John Taylor, Under Secretary of
International Affairs, Department of the Treasury; and the
Honorable James Ziglar, Commissioner of the Immigration and
Naturalization Service. We thank you for being with us.
Welcome, all three of you. I appreciate your presence here
today. And a special welcome to the Commissioner, who when he
was here in the Senate we almost had--we've been accused, the
Democrats have been accused of delaying certain nominations
from going forward. And I won't dwell on that point here today.
Obviously we take issue with that charge, except with the case
of one nominee, and that was the case of Jim Ziglar.
There was actually a concerted effort here to deny a
confirmation hearing to Jim Ziglar so we could keep him in the
U.S. Senate. The affection for Mr. Ziglar is felt very strongly
by all of us up here regardless of party. There's a deep
affection of the Senate, the institution of the Senate, and the
administration was truly fortunate to convince you to join
them.
I know you must have some second thoughts about whether or
not you should have left the Senate, given the events of the
last couple of months, but I'll tell you we think you're doing
a great job. I know there's been a lot of accusations of
various kinds, but I know Jim Ziglar and I think the
administration is fortunate to have you in their service, and
serving all of us in this country for that matter. So, you're
always welcome here. I want you to know that.
And I know Mr. Larson very well. I have a high regard for
you as well, sir, and your work. Mr. Taylor, we thank you for
being here.
I'm going to turn these timer lights on. I want to have as
much of your testimony as we can get, but you all know from
previous experience these hearings can wander off and take more
time than would be the case. So, I'll put them on and give
about 6 minutes apiece or so and I don't--just as a warning to
you to sort of wrap up if you can. Obviously your full
statements will be included as part of the record. Any
documentation you think we should have that would help us in
this committee complete a full report on U.S.-Mexican relations
would be most appreciated. So we'll begin in the order I
introduced you, and Alan we thank you for being here.
STATEMENT OF HON. ALAN P. LARSON, UNDER SECRETARY OF STATE FOR
ECONOMIC, BUSINESS AND AGRICULTURAL AFFAIRS, DEPARTMENT OF
STATE, WASHINGTON, DC
Mr. Larson. Thank you very much, Mr. Chairman. I do have a
statement for the record. Mr. Chairman and Senator Chafee, I
really welcome the opportunity to testify today on our economic
relationships with Mexico. Last September when President Fox
visited, President Bush said, and I'm quoting, ``The United
States has no more important relationship in the world than our
relationship with Mexico. Each of our countries is proud of our
independence, our freedom and our democracy. We are united by
values and carried forward by common hopes.''
Six years after NAFTA was signed Mexico held a landmark
election that confirmed its democratic aspirations, resulted in
a peaceful change from one party to another, and reaffirmed the
commitment of Mexico to the rule of law. The mandate that
President Fox has to lead Mexico has brought a break with some
patterns of the past and has brought some new opportunities to
build strong cooperative relations between Mexico and the
United States.
When Congress approved NAFTA in 1993 bilateral trade
totaled about $81 billion. Just 8 years later two-way trade
reached $233 billion. Mexico is now our second largest trading
partner in the world, and we are Mexico's largest trading
partner. There are some 2,600 American companies that operate
in Mexico and the stock of U.S. foreign direct investment in
Mexico stands at $35 billion.
Since September 11 we've sought to develop a border
infrastructure that fully provides for our security while
permitting the rapid flow of legitimate goods and people. To
this end, Presidents Bush and Fox announced last month in
Monterrey a border partnership agreement that sets forth
integrated infrastructure investment plans. Freer trade with
Mexico has helped fuel growth in both countries. It has spurred
productivity, stimulated higher paying jobs and has reduced the
prices of consumer goods. And our close integration with Mexico
has made each of us more competitive in the global economy.
Mexico has been an active participant in negotiations to
establish a Free Trade Agreement for the Americas. And in fact,
the FTAA negotiations were moved to Puebla, Mexico in 2003.
Mexico also adopted a leadership position within the World
Trade Organization, and it will actually host the next WTO
ministerial meeting. Mexico is playing a leading role in the
Asia Pacific Economic Conference, and it will host this year's
leaders meeting. And last month Mexico successfully hosted the
U.N. Conference on Financing for Development.
During the recent meeting in Monterrey, Presidents Bush and
Fox unveiled a plan for Partnership for Prosperity. The
partnership aims to attract private resources and expertise to
support economic development in Mexico's less developed
regions. I had the privilege of working on this initiative with
Deputy Secretary of the Treasury Kenneth Dam, and with our
Mexican counterparts. We put to work some of the best minds in
Mexico and in the United States, business leaders, government
officials, academics and key public sector agencies. And our
objective is to forge a public-private alliance to harness the
power of free markets in order to foster an environment in
which no Mexican will feel compelled to leave his home for lack
of a job or lack of opportunity. We're not seeking
appropriations for this initiative. We will be monitoring
results carefully to track whether the Partnership is
fulfilling its goals, and we're going to report back to the two
Presidents in 6 months.
The interconnectedness of our economies extends to our work
forces. Recently, the President of the AFL-CIO, John Sweeney,
and the President of the U.S. Chamber of Commerce, Tom Donahue,
spoke to the key role of immigrant workers in our economy, and
they advocated regularization of illegal migrant workers.
President Bush shares their appreciation of the value of
migrant labor.
The Fox administration, while keenly interested in the
migration accord, also fully recognizes Mexico's strong
interest in promoting job creation and domestic economic
growth. Mexico has encouraged Mexican-Americans to return and
to invest in Mexico. President Fox has also declared that
trans-national crime and corruption are among the major threats
affecting Mexico's national interests. Mexico is actively
engaged with us on these issues. President Fox recognizes that
as Mexico moves into the globalized world it must offer
visitors and investors reasonable guarantees of security, of
protection of their legitimate interests, and of recourse to a
judicial system that honors the rule of law.
Mr. Chairman, Mexico and the United States share a common
economic destiny. We both live in a world that is still quite
turbulent and quite dangerous. And that is why an effective
foreign policy really begins in our own neighborhood, and in
particular it begins with having strong relations with Mexico.
Thank you.
[The prepared statement of Mr. Larson follows:]
Prepared Statement of Hon. Alan P. Larson, Under Secretary of State for
Economics, Business and Agricultural Affairs
u.s.-mexico bilateral economic relations
I would like to thank Chairman Dodd, Senator Chafee and other
subcommittee members for inviting me to testify today on a subject
vital to U.S. interests--economic relations with our immediate neighbor
to the south, Mexico. I also would like to make a special personal
expression of my appreciation to the members of this committee for
their support of the men and women of the State Department, Foreign
Service, Civil Service, and Foreign Service Nationals.
President Bush in September of last year told President Fox and the
world that ``The United States has no more important relationship in
the world than our relationship with Mexico. Each of our countries is
proud of our independence, our freedom, and our democracy. We are
united by values and carried forward by common hopes.''
Although the world changed soon after those words were spoken, one
thing did not change: our two countries' friendship and commitment to
bolstering bilateral cooperation across the wide spectrum of our ties.
Indeed, it is a remarkable neighborhood that we live in alongside
Canada and Mexico. Our relations with Mexico and Canada--our North
American neighbors and partners--are integral to our well-being and
security as a nation. These relationships are grounded, in increasing
measure, in shared values and perspectives on the world. We share a
faith in democracy and the rule of law as twin pillars of sustainable
governance, and a faith in open markets as the proven route to
sustainable economic growth and development for our peoples and
nations.
Seven years after we signed the North American Free Trade
Agreement, Mexico held landmark elections--elections which saw Vicente
Fox, a businessman turned politician dedicated to the advancement of
democracy, the rule of law and human rights in Mexico, win the
presidency fair and square. Fox's mandate to lead Mexico into a new
century has meant a break with its past and a new activism in its
foreign policy which is reflected in a close, cooperative relationship
with the United States.
NAFTA's Legacy
When the Congress passed NAFTA in 1993, trade between the United
States and Mexico totaled $81 billion. Our two-way trade hit $233
billion in 2001. U.S. exports to our NAFTA partners have almost doubled
since 1993. Mexico is now our second largest trading partner. Today, we
export more to Mexico than to Britain, France, Germany, and Italy
combined.
With $638 million in goods crossing the border each day, our
biggest challenge in the wake of September 11 remains to develop a
border security infrastructure which keeps pace with the demands of
travel and commerce. When Presidents Bush and Fox met in Monterrey in
March they signed a Border Partnership agreement which highlights the
need to develop integrated infrastructure investment plans to ensure
the economic competitiveness of the border region is not impaired as
the volume of trade increases. Our ``smart border'' plan will speed the
legitimate flow of people and commerce while it filters out threats to
our safety and prosperity.
Given the volume of trade between the U.S. and Mexico, it is not
surprising that we have some lingering trade disputes. I know you hear
about them from your constituents. Fortunately, we now have the
mechanisms to deal with those disputes through NAFTA and WTO
international arbitration. We continue to vigorously defend our
interests in these organizations. I believe that over time all of those
disputes can be resolved through negotiation.
Free trade between our countries and the resulting dramatic
increase in trade helped fuel an extended period of economic growth in
both the United States and Mexico. It spurred productivity, stimulated
creation of higher paying jobs on both sides of the border and reduced
prices for consumer goods. Close economic integration between Mexico
and the United States has made each of us more competitive in the
global economy.
Investors have looked much more favorably at Mexico since NAFTA.
Some 2,600 American companies have operations in Mexico. The stock of
U.S. foreign direct investment in Mexico grew to $35.4 billion in 2000,
an increase of 92 percent from 1993. U.S. investment in Mexico is now
concentrated in the manufacturing and financial services sectors.
American investors are anxious to expand to other sectors such as
information technology, energy and agribusiness as those opportunities
become available.
I am particularly intrigued by the opportunities for growth and the
expanding linkages of our economies that information technology offers.
I have had the opportunity to speak with many Mexican and American
businessmen about these prospects and all agree that as more Mexicans
gain access to computers and the internet, e-commerce could be a
tremendous boon to our cross-border relations.
Most Mexicans, unfortunately, are currently on the far side of the
digital divide. President Fox and his administration have launched
several initiatives to close that gap including e-Mexico, a
Telecommunications Social Fund and efforts to expand internet
connectivity through the Gulf Horseshoe Project. I will be encouraging
American firms to look at this growth market for the future.
The Global Economy
I am pleased to report that Mexico has been a constructive
participant in the negotiations to create an integrated hemispheric
market through the Free Trade Area of the Americas (FTAA). The
headquarters for FTAA negotiations will move to Mexico in 2003. We
expect that in the years ahead Mexico will be the focal point of
critical trade talks which will do much to shape the future of this
hemisphere.
At the same time as Mexico has strengthened ties with the United
States, it also has reached out to new markets in the global economy.
Following the success of NAFTA, Mexico has signed free trade agreements
with 32 countries including an agreement with the European Union.
Mexico has adopted a progressive leadership position within the
World Trade Organization, helping to encourage other developing nations
to embrace the benefits of trade liberalization. We worked closely with
Mexican Economic Secretary Derbez in the crucial period leading up to
Doha and we look forward to working together during the Doha round.
Mexico will host the next Ministerial meeting of the WTO.
Mexico also is playing a dynamic leadership role in the Asia-
Pacific Economic Conference (APEC). This year it will be the host
nation for the APEC Summit, putting a special focus on development of
small- and medium-sized enterprises.
Mexico hosted last month the successful United Nations Financing
for Development conference in March in Monterrey. Through its
leadership, Mexico helped to ensure that a new consensus on development
policy would emerge. This policy puts great emphasis on American
values, including linking good governance to development assistance and
emphasizing the vital role of trade and investment as engines of
development.
The Partnership for Prosperity
We took the opportunity of the U.N. conference in Monterrey to
present to President Fox and President Bush a plan for ``Creating
Prosperity through Partnership.'' Echoing the theme of the Monterrey
conference, the plan is a prime example of how we are seeking to
leverage private resources and expertise to achieve economic
development.
I have had the privilege of working on this innovative presidential
initiative, along with Deputy Treasury Secretary Kenneth Dam and our
Mexico colleagues. We were able to put some of the best minds in Mexico
and the United States to work on this project. It was a very collegial
effort, and we worked intensively with our Mexican counterparts. We
collaborated with more than 100 U.S. and Mexican business leaders,
government officials, academics and key U.S. government agencies,
including the Overseas Private Investment Corporation (OPIC), Export-
Import Bank (EXIM), U.S. Agency for International Development (USAID),
the U.S. Trade and Development Agency (TDA), and the U.S. Department of
Agriculture (USDA) and their Mexican counterparts.
In the Partnership, we have forged a public-private alliance to
harness the power of free markets to foster an environment so that no
Mexican feels compelled to leave his home for lack of jobs or
opportunity. Will the Partnership effort stop the flow of undocumentetd
migrants from Mexico? Of course not, nor is that its aim. Our
Presidents do agree however, that we need to take urgent steps to
foster growth, opportunity and job creation in regions where economic
growth has lagged and where opportunities are so limited that migration
is the only attractive alternative for an enterprising individual.
The ``Partnership for Prosperity'' includes no new requests for
appropriation of funds. We have mobilized the U.S. government resources
already devoted to Mexico and linked up with private sector and non-
governmental organizations in the small business, housing, agriculture,
information technology and infrastructure sectors. Some specific
examples of the concrete steps we are taking include:
Increasing investment in housing: The U.S. Treasury Department will
coordinate provision of technical assistance to Mexico to encourage
securitization of mortgages and creation of a secondary mortgage market
in Mexico. Treasury will draw upon experts with experience in housing
finance from private financial institutions, government-sponsored
enterprises (like Fannie Mae and Freddie Mac and Ginnie Mae) and the
U.S. Department of Housing and Urban Development (Office of Federal
Housing Enterprise and Oversight and Ginnie Mae).
Investing in infrastructure to boost commerce: The U.S. Trade and
Development Agency will lead efforts to spur participation of U.S.
companies in the development of Mexican infrastructure projects
including ports, an air cargo facility and an expansion of Mexico's
internet connectivity. The Trade and Development Agency signed a Master
Grant with Nacional Financeria (NAFIN), Mexico's largest development
finance institution, at the time of the bilateral meetings in Mexico
last month. A similar grant is ready for signing with Banco Nacional De
Obras y Servicios Publicos (BANOBRAS), Mexico's largest civil works
loan agency. A grant also is ready for signing for the modernization of
the Puebla Airport.
Supporting small business development: The U.S. Small Business
Administration and other U.S. financing agencies will work with their
Mexican counterparts to generate small business development centers in
Mexico. The agencies will work to broaden access to Mexicans interested
in U.S. franchise opportunities.
Lowering the cost of sending money home: Recognizing the important
role Mexican workers play in the American economy, U.S. Treasurer
Rosario Mann will work to highlight awareness of competitive products
by promoting financial literacy and expanded use of the banking system
by American Hispanics. Last year Mexicans and Mexican-Americans in the
U.S. sent nearly $9 billion home to family and friends in Mexico, often
at a high cost.
These are only a few of the highlights. The Partnership includes
many other activities. I will leave copies of the plan for the
Committee to review.
The Partnership recognizes that its goals will not be achieved
overnight, but we believe these initial steps will build a strong
foundation for long-term progress. To ensure that the Partnership
continues to be dynamic and productive, we will monitor results using a
management scorecard that will track how well the Partnership is
fulfilling the vision and meeting its goals. We will report back to the
Presidents in six months.
Outlook for the Mexican Economy
The outlook for the Mexican economy is good. Despite a recession in
2001, Mexico is expected to return to positive growth in 2002. Mexico
continues to be distinguished as a ``safehaven'' among other emerging
markets. Mexico in February 2002 received an investment grade rating
from Standard & Poor's and now has an investment grade rating from all
three major ratings agencies. Investors are seeing the benefits of
Mexican integration into the North America regional economy.
A New Spirit
The NAFTA legacy extends beyond a trade agreement. NAFTA represents
a commitment by Mexico to modernize politically and economically and a
commitment by the United States and Canada to support this great
change. President Fox ushered in a new, more open economic environment
in Mexico. The prevailing spirit is one of free enterprise and equal
opportunity, in which entrepreneurship is rewarded and graft is
punished. Mexico's closer ties to the U.S. economy mean that prospects
for our futures are increasingly linked. As our business cycles have
converged, predictions for an upswing in the Mexican economy this year
depend on our own economic recovery.
Willing Workers and Willing Employers
This growing interconnectedness carries over into our respective
workforces. During NAFTA's first seven years, employment in Mexico grew
by 25 percent, generating 2.7 million jobs while employment in the
United States grew by 16 percent, generating 21.5 million jobs. Last
week AFL-CIO President John Sweeney and U.S. Chamber of Commerce
President Tom Donahue--two men who do not always see eye-to-eye--spoke
out about the key role immigrant workers play in the U.S. economy and
advocated the regularization of illegal migrant workers. President Bush
recognizes the contribution made to our nation's economy by migrant
workers and embraces the idea of matching willing workers with willing
employers; but this needs to happen in a safe and legal framework.
When Presidents Bush and Fox met in February 2001 in Mexico, they
agreed to place the historically contentious issue of migration at the
center of the bilateral agenda. They instructed their governments to
begin high-level discussions to attempt to resolve the more difficult
facets of migration. Secretary Powell, Attorney General Ashcroft, and
Secretary Chao are the co-chairs of the U.S. side of the U.S.-Mexico
High-Level Working Group on Migration (HLWGM). The first meeting of the
HLWGM took place in April 2001. Since that time we have continually
engaged the Mexicans on all aspects of the bilateral migration agenda.
The administration has also consulted widely with Members of Congress
and with representatives of Non-Governmental Organizations.
The conversations about migration are on-going, both with the
Government of Mexico and domestically within the U.S. There is no
timetable for resolving the outstanding issues. The Mexicans are not
simply interested in sending workers to the U.S. The Fox administration
recognizes that the best way to resolve the issue of the outflow of
workers is to promote growth and create well-paying jobs in Mexico. It
has encouraged successful Mexican-Americans to invest in the Mexican
economy and would tend to build ``circularity'' into any temporary
worker programs.
The Battle Against Crime and Corruption
In the 18 months since President Fox's inauguration, we have seen
the Government of Mexico dedicate itself as never before to combating
crime. Fox has declared transnational crime and corruption to be among
the major threats affecting Mexican national security interests. He has
mounted a serious campaign against drug trafficking interests and
worked to root out corrupt elements from government, including judicial
and law enforcement agencies. He faces an uphill struggle, given
entrenched narcotrafficking interests and pervasive corruption, but has
registered significant victories. Accomplishments include the firing of
nearly 50 Tijuana-based customs officers on evidence, grounds of
corruption, the arrest of drug baron Benjamin Arellano Felix, the
arrest of several high-level members of the Gulf Cartel, and the arrest
in early April 2002 of some 40 Baja California police officers,
including the Tijuana Chief of Police.
The U.S. and Mexico face a host of trans-border criminal threats
that can only be addressed through close cooperation. Unlike previous
Mexican administrations, Fox's has welcomed a higher level of
cooperation with U.S. officials. Collaborative efforts on interdiction
of drugs have been unprecedented, including a major joint effort that
led in late 2001 to a multi-ton seizure of cocaine from a fishing
vessel in international waters off the Pacific coast of Mexico.
Mexico has taken these steps because it sees these scourges for
what they are--threats to Mexico's own national interests. President
Fox recognizes that as Mexico moves into the globalized world, it must
offer its neighbors and investors a reasonable guarantee of security,
protection of their interests and recourse in a judicial system which
affords them the protection of the rule of law.
Conclusion
Mexico and the United States share a common destiny. NAFTA has
shown that free trade with our southern neighbor can create better jobs
on both sides of the border, while putting both countries on a stronger
competitive footing in the global economic arena.
Deeper economic cooperation, such as the recently announced
Partnership for Prosperity, offers additional means to strengthen each
economy. At the same time, by working with President Fox to extend the
benefits of economic development throughout Mexico, we can address some
of the underlying conditions that tend to promote illegal immigration
and crime.
We live in a world that is still turbulent and dangerous. That is
why an effective foreign policy begins with strong relations in our own
neighborhood.
Our relations with Mexico have never been better. We have the
opportunity to deepen our cooperation in trade, investment, border
security, law enforcement and immigration. In doing so both countries
will become more prosperous and secure.
Thank you very much.
Senator Dodd. Very good. Thank you very much, Mr.
Secretary. I guess we're going to go to--do I introduce you
next. I'm going to go to John Taylor. I'll come back to you,
Jim. Mr. Taylor.
STATEMENT OF HON. JOHN B. TAYLOR, UNDER SECRETARY OF THE
TREASURY FOR INTERNATIONAL AFFAIRS, DEPARTMENT OF THE TREASURY,
WASHINGTON, DC
Mr. Taylor. Thank you, Mr. Chairman and Senator Chafee for
inviting me to this hearing on United States-Mexican relations.
As you requested in your invitation letter, Mr. Chairman, I
will focus my testimony on reform of the North American
Development Bank [NADBank] and the Border Environment
Cooperation Commission [BECC].
Last month in Monterrey President Bush and President Fox
announced a set of reforms to these institutions, and I'd like
to just provide some details about those reforms and enter my
testimony into the record. As you know, NADBank and BECC were
set up back in 1993 with the purpose of providing for better
infrastructure in the environment, especially in areas such as
wastewater treatment. These two institutions have separate but
quite related functions.
NADBank's role is primarily to arrange for financing of
projects, and BECC's role is to develop projects and to certify
these projects. There have been accomplishments in the years
since these institutions were set up. BECC has certified 57
projects. NADBank has committed $353 million in EPA grant funds
for many of these projects.
Notwithstanding this activity, however, the performance has
been inadequate and unsatisfactory in several dimensions. First
of all, NADBank has approved only $23.5 million and disbursed
only $11 million in loans to projects, despite having $405
million in authorized paid-in capital. Second, the structure
within which NADBank and BECC operate is not working
efficiently. Work that is closely related is conducted by two
separate organizations under the governance of two separate
executive boards. Clearly this has related to duplication of
effort, increased costs, and I think frequent
misunderstandings.
President Bush has recognized the need for serious reform
in this area. He and President Fox, who also has recognized the
need for reform or proposed reforms, discussed the subject on
several occasions. And in September 2001 they agreed, and I'll
quote, ``That immediate measures were needed to strengthen the
performance of the North American Development Bank and its
sister Border Environment Cooperation Commission to identify
and fund environmental infrastructure projects on the border.''
The result of this agreement was a set of recommendations
which I would like to describe. First of all, one
recommendation is to increase the amount of low interest loans
that NADBank can provide, actually doubling from $50 million to
$100 million. Second is to expand the geographic scope of
NADBank on the Mexican side of the border from 100 kilometers
to 300 kilometers. The geographic limit in the United States
will remain, under these recommendations, 100 kilometers.
Third, a more concerted effort will be made to certify and
finance private sector environmental projects. And fourth, the
two boards of these organizations will be replaced by a single
board. The new board will have representation from the Federal
Government, the border states and the public.
As also part of this reform process, there will be a
comprehensive business process review. That's going to be
initiated in order to identify other ways to improve the
performance of these institutions. I think with these reforms
we can expect substantial improvement.
First of all, the financial reforms will make NADBank
financing more affordable and thus increase the supply of that
financing. Second, the geographic expansion will give NADBank
more opportunities to use its resources. Third, with the
merging of the boards NADBank and BECC will be able to work
more effectively together. And fourth, the private sector
projects will enable a more efficient use of resources in many
cases.
To be sure, implementing these reforms is going to require
a great deal of commitment by both of our governments. I am
pleased that implementation efforts are already underway. The
Environmental Protection Agency, the Department of State and
the Department of the Treasury have already begun a planning
process. I've seen implementation discussions begin myself, and
we've initiated discussions with our Mexican counterparts to
this end.
We do intend to submit legislation to make some of these
reforms happen, and I look forward to working with you and
other Members of the Congress as we do this. I welcome your
views, your suggestions and your questions about these ideas.
Thank you very much.
[The prepared statement of Mr. Taylor follows:]
Prepared Statement of John B. Taylor, Under Secretary of the Treasury
for International Affairs
Chairman Dodd, Ranking Member Chafee, members of the subcommittee,
thank you for the opportunity to testify on relations between the
United States and Mexico. As you requested I will focus on. the Bush
Administration's efforts to improve the performance and effectiveness
of the North American Development Bank (NADBank) and its sister
institution, the Border Environment Cooperation Commission (BECC).
In Monterrey, Mexico, last month, Presidents Bush and Fox announced
a set of reforms to strengthen these institutions' ability to serve the
people of the United States-Mexico border region. Today, I would like
to discuss these reforms in some detail and elaborate on why they will
make these institutions more effective.
I would note at the outset that these reforms should be viewed in
the context of the Administration's broader initiative to improve the
effectiveness the international financial institutions and to increase
the value they deliver for the U.S. taxpayer. I look forward to working
with the Congress on our broader international financial institution
reform agenda, as well as on the reform proposals I will discuss with
you today.
nadbank and becc: origins and experience
The United States and Mexico established NADBank and BECC in 1993
for the purpose of helping border communities cope with the existing
shortfall of environmental infrastructure and potential environmental
pressures relating to the North American Free Trade Agreement in the
U.S.-Mexico border region. The two institutions perform separate, but
related functions in furtherance of their common mission. NADBank's
role is to arrange financing for environmental infrastructure projects
certified by BECC. BECC works with states and local communities to
develop such projects for certification.
During its seven years of operation, BECC has certified 57
projects, with a total construction cost of $1.2 billion. During this
same period, NADBank has committed $353 million in Environmental
Protection Agency (EPA) grant funds for 37 of these projects.
Notwithstanding this activity, the institutions' overall
performance has been inadequate and unsatisfactory. NADBank to date has
approved only $23.5 million and disbursed only $11 million in loans to
projects, despite having $405 million in authorized paid-in capital and
a total lending capacity of $2.7 billion.
Experience has demonstrated that the NADBank-BECC structure does
not work efficiently. Closely related work is conducted by two separate
organizations under the governance of two separate executive boards.
The results of this arrangement have included duplication of effort,
increased transaction costs, and frequent misunderstandings. Many
project sponsors and other stakeholders claim that the BECC-NADBank
project approval process is overly complex, too time-consuming and
duplicative, particularly (but not only) for small projects and those
with private-sector sponsors. Especially frustrating for border state
governments has been the overlap among federal, state, local and
NADBank/BECC regulatory and environmental review requirements.
the reform initiative
President Bush has recognized the need for serious reform. He and
President Fox of Mexico, who had also proposed reforms, discussed the
subject on several occasions and, in September 2001, they agreed that
``immediate measures were needed to strengthen the performance of the
North American Development Bank (NADBank), and its sister Border
Environment Cooperation Commission (BECC), to identify and fund
environmental infrastructure projects on the border.'' They called for
a binational working group to consult with key stakeholders and to
develop joint recommendations on strengthening the institutions.
Members of the binational working group undertook broad
consultations with state governments, local governments, national
legislatures, non-governmental organizations and the public in the
region. In the United States, the Treasury Department, the
Environmental Protection Agency, and the State Department led the
outreach efforts. An issues paper was distributed, including via
internet, to Congressional staff, state and local governments, and the
general public. Public hearings and meetings were held with state and
local officials and Congressional staff.
Comments received were seriously considered in developing the
recommendations that were eventually endorsed by Presidents Bush and
Fox in Monterrey last month.
The key recommendations are as follows:
Financial Instruments: To provide a greater level of financial
flexibility so that its capital can be used more effectively, the
governments have agreed to increase NADBank's ability to extend
affordable financing. This will include doubling the size of NADBank's
Low Interest Rate Lending Facility, from the $50 million level set in
November 2000 to $100 million, and making $50 million of the Bank's
paid-in capital available for grant financing.
Geographic Scope and Financial Differentiation: To expand the
capacity of both institutions to address important binational
environmental needs, the geographic scope for BECC/NADBank operations
in Mexico will be expanded from 100 km to 300 km from the border. The
geographic limit in the United States will remain unchanged at 100 km
from the border.
To ensure that both institutions continue to focus on the priority
environmental needs of the immediate border region, this geographic
expansion will be coupled with a system of financial differentiation.
Specifically, grant financing will be provided to the poorest
communities located within the current border region of 100 km in both
countries, and up to 25% of low interest rate lending may be made
available for projects located between 100 km and 200 km in Mexico.
Projects located between 200 km and 300 km in Mexico would be allowed
to borrow at standard NADBank interest rates and receive normal
technical assistance.
Private Sector: To expand the tools available for financing
projects that, among other things, prevent and mitigate industrial
pollution, conserve water, improve air quality, and recycle and reuse
wastes, a more concerted effort will be made to certify and finance
private sector environmental projects.
Organizational Structure and Process: To, improve functional
coordination and operational efficiency between BECC and NADBank, the
two boards of directors will be replaced by a single board. The new
board will have representation from the federal governments, the border
states, and the public. In addition, a comprehensive ``business process
review'' will be initiated to identify ways to improve the overall
project design, certification and implementation process.
Support for Sectoral Reforms: Sectoral reforms aimed at enhancing
the bankability of environmental infrastructure projects will be
leveraged and supported both through technical assistance and policy
reform conditionalities attached to project financing.
It is also important to note that the Presidents agreed that BECC
and NADBank will remain focused on addressing environmental needs in
the border region. The institutions will also continue to implement the
agreement reached in November 2000 to expand the institutions'
environmental mandate into areas including water conservation, air
quality, and renewable energy, in addition to the original focus on
clean water, the treatment of wastewater, and the handling of solid
waste.
improved performance with the reform initiative
We believe that these reforms will improve the performance of both
institutions in several ways:
First, the financial reforms will make NADBank financing more
affordable and thus promote an increase in the Bank's project financing
activities. The NADBank experience has demonstrated that its original
financial framework is unsuited to the financing of environmental
infrastructure in a region characterized by high rates of poverty and
fundamental structural problems in the utility sector.
Second, the geographic expansion will give NADBank more
opportunities to use its capital resources and thus address a greater
scope of important environmental issues that affect communities on both
sides of the border. For instance, NADBank will now be in a better
position to undertake projects in Mexico that improve water use
efficiency over a broader geographic area, thereby increasing water
supply in shared rivers.
Third, NADBank and BECC should be able to work more effectively
with the private sector on projects that will make economic development
in the region more environmentally sustainable, which is a win-win
proposition for both the environment and economic growth.
Fourth, a single Board of Directors should improve coordination and
accountability in NADBank and BECC and will provide unified, consistent
policy guidance to the management of both institutions. The Board will
have the capacity to enforce the imperative that the management and
staff of the two organizations must work together as a team if their
common mission is to be achieved. Membership on the Board will reflect
a broad range of interests and, for the first time, non-Federal board
members will have a role in the decision-making processes of both
institutions.
implementation of the reforms
Implementing the agreed reforms will require great commitment by
both governments. I am pleased that implementation efforts are already
underway. EPA, State and Treasury have begun planning a time line for
implementation, and have initiated discussions with their Mexican
counterparts to this end. Important steps include the launching of the
business process review, drafting amendments to the BECC-NADBank
Charter, and submitting the necessary legislation to the two countries'
respective legislatures.
As we proceed, we will continue to consult widely with stakeholders
and interested parties. As these implementation efforts get underway,
we will emphasize that management at both institutions continue to work
hard to process new and existing project proposals to serve the urgent
environmental needs of border communities. We will urge them, in the
spirit of the reforms, to intensify their efforts to work together in a
cooperative and collaborative manner.
Before I conclude, let me note one extremely important point. It is
imperative that the Senate act on President Bush's call to begin
consideration of Trade Promotion Authority (TPA) by April 22. TPA will
help complete both the Free Trade Area of the Americas and our broader
multilateral trade agenda. Of particular importance to this
Subcommittee is the renewal and expansion of the Andean Trade
Preference Act (ATPA) that will likely be joined with TPA. A critical
fact that is not well understood is that after ATPA expired, duties on
products that would have qualified if not for the expiration of the
program were deferred for ninety days. That deferral expires on May 16,
at which time all of the duties deferred over those 90 days will be
due. The Treasury Department estimates that duties were deferred on 50
percent of the trade that would have been duty-free under the program.
It will bring serious duress to U.S. businesses and our Andean partners
if all of those duties have to be paid on May 16. And without question,
TPA will be a great confidence-builder for the U.S. and the global
economy. For all of these reasons I urge the Senate to expeditiously
consider TPA.
To sum up, I appreciate the opportunity to discuss NADBank reform
and the U.S.-Mexico relationship with you today. We intend to submit a
legislative proposal to Congress soon and look forward to working
closely with you as we proceed to make these reforms a reality. I
welcome your views, suggestions, and your questions. Thank you very
much.
Senator Dodd. Thank you very much, Mr. Taylor. We have been
joined by our colleague from Florida. It's a pleasure to have
you with us, Senator Nelson. And when appropriate, let me know
if you care to make any comments. In the meantime, we'll turn
to Jim Ziglar.
STATEMENT OF HON. JAMES W. ZIGLAR, COMMISSIONER, IMMIGRATION
AND NATURALIZATION SERVICE, DEPARTMENT OF JUSTICE, WASHINGTON,
DC
Mr. Ziglar. Mr. Chairman, Senator Chafee, Senator Nelson,
thank you for that very warm introduction and welcome. Needless
to say, I'm happy to be here. I have very fond memories of my
days working up here in the Senate as your Sergeant-at-Arms,
and given the events of the last 6 months they grow fonder
every day. I also made some very close friendships that I
forged during that time, and I will treasure those forever. So,
it is nice to be back.
I'm also very pleased to be here to talk to you about U.S.-
Mexico relations. Since I started this job now 8 months ago,
I've visited about a dozen times with high-level Mexican
officials, as has been the case with many others in the
administration. And I can tell you from my perspective, I think
the relationship with Mexico is excellent.
In February 2001, as you know, President Fox and President
Bush undertook in the Declaration of Guanajuato to work for the
economic and social development of our border communities, to
fight crime and to strive to create an orderly and safe
environment at the border.
The President charged the Attorney General, the Secretary
of State, and later the Secretary of Labor, with co-chairing a
high-level working group with their counterparts on the Mexican
side. Since then, working through that mechanism, we've had
very frank, comprehensive talks, and I think productive talks,
between the folks on both sides on these very important
subjects.
In fact, the high-level working group met several times
last spring and summer and made substantial progress.
Obviously, what happened on September 11 altered the priorities
of that working group, placing border security issues at the
top of the list. However, I want to make the point that this is
not to say that work has ceased on the migration issue. It has
not.
In fact, on November 20, the INS and the Department of
State co-hosted a meeting of major folks from Mexico to restart
or at least to continue these issues and to get them back up on
the table in a very important way. And we've been doing that
ever since. For example, at that meeting we agreed to work on
streamlining the current temporary worker programs that we
have, looking at the Department of Labor function, our function
on the domestic side, and the Department of State function at
the visa area out in the Consular offices.
By the way, just as an aside, when Mike Enzi talked about
the three H's, we have decided back here we're going to have a
new visa. It's going to be called the H3E. That's the H3 Enzi,
for the three H's in Wyoming.
We have also in the course of our working with the Mexicans
created conditions for a safer border. We have great interest
in working with the Mexican Government to ensure that our
common borders are safe and secure for people on both sides of
that border. Both governments recognize that protecting the
border includes protecting lives, particularly the lives of
those people who are put in harms way by alien smugglers, whose
interest is not protecting life but making a profit on alien
smuggling. And our commitment to fulfilling this obligation is
unwavering and it's shared by everybody, everybody from the top
of our government here and the top of the government in Mexico
out to our officers in the field.
Our border safety efforts have been enhanced, frankly,
through cooperative law enforcement efforts all the way across
the border. A good example is the fact that the INS, working
with Mexican officials out of our Mexico City district office,
have put together an anti-alien trafficking task force that has
been extremely effective in terms of breaking up anti-smuggling
rings and prosecuting these people who engage in human cargo.
Although our efforts in the law enforcement area are very
positive, a lot more can be done in this particular area.
One of the key objectives of a recent U.S.-Mexico trip
before the President's trip to Mexico--and it was a trip on
which I accompanied Governor Ridge--was to, in fact, work with
the Mexicans to create a liaison mechanism on both sides of the
border so that we could, in fact, have a safer and more secure
border. The long border that America has with Mexico is a whole
lot more than just a line drawn on the map. It's a way of life.
If you've ever been down there, it's really a way of life for
our populations and for the populations on the Mexican side.
But, it is also a gateway to expanded opportunities,
tourism, markets and education. Together the United States and
Mexico can and will attempt to resolve the problem that we have
with respect to bottlenecks at the border, and also those who
chose to put themselves in harm's way by trying to come over
the border in other than the regular way.
President Bush and President Fox, as you know, met in
Monterrey on March 22. On that trip the two Presidents agreed
to a number of things, some of which have been mentioned here.
But one of the things that they did do is to agree to some
specific actions that are intended to serve our common human
security and economic interests in the years to come.
And these measures are designed to create a smart border
for the 21st century, one that embraces technology and
bilateral cooperation for humane, efficient and modernized
management of our border. The action plan has three elements to
it. First, is to create a border infrastructure that keeps pace
with the growth and travel and commerce across that border.
Second, it's a border that will provide for a secure flow of
people. And third, it's a border that will provide for a secure
flow of goods.
We have been working quite intensely with our Mexican
friends since that March 22 meeting. In fact, I've had four
meetings with them and spent most of yesterday with the folks
from Mexico working on the details of this 22 point plan. I
won't go into the details of it, Mr. Chairman, I think you're
aware of it. But I would say that it sets the stage for us to
have a much more secure border that facilitates commerce and
also facilitates security.
Obviously we have a great interest in working together with
the Mexican Government to ensure that our border is safe and
secure and that commerce is facilitated. I think even a few
years ago people would have been very surprised at the level of
cooperation and the spirit of cooperation that exists today
between our two governments on a lot of very sensitive and
important issues. Our bilateral cooperation is at an all time
high in many areas in this relationship. And under the
direction of the President, the Attorney General and in my
capacity as Commissioner of the INS, I can tell you that I am
working very hard and will continue to work very hard in trying
to achieve a safer, more secure border, a more humane border
and one that recognizes the realities of our two cultures.
Mr. Chairman, again, it's a real pleasure to be here. I
look forward to your questions.
[The prepared statement of Commissioner Ziglar follows:]
Prepared Statement of Hon. James W. Ziglar, Commissioner, Immigration
and Naturalization Service
Mr. Chairman, members of the Committee, thank you for this
opportunity to address the topic of U.S.-Mexico relations. Mr.
Chairman, since I started this job a little over 8 months ago, I have
met with high-ranking officials from Mexico more than a dozen times, as
is the case for many other policy makers in the Administration. This is
a vibrant relationship that has reached new levels under the leadership
of President Bush.
In February 2001, President Bush, along with Mexican President
Vincente Fox, undertook in the declaration of Guanajuato to ``work for
the economic and social development of our border communities, fight
violence and strive to create a safe and orderly environment.''
President Bush charged the Attorney General, the Secretary of State
and, later, the Secretary of Labor to co-chair a High-Level Working
Group on Migration with their Mexican counterparts. Since then we have
had likely the frankest, most comprehensive, and most productive talks
ever between our two countries on this important subject. The High-
Level Working Group met several times last year during the spring and
summer, making steady progress in these deliberations. Understanding
the importance and industriousness of Mexican nationals whose
contributions have helped fuel our economic prosperity over the past
years, President Bush is looking to new ways to link willing workers
with willing employers.
The terrorist attacks of September altered the priorities of the
High-Level Working Group, placing border security issues at the top of
our migration agenda. This is not to say that work has ceased on the
other agenda issues. It has not. On November 20, the Department of
State and the INS co-hosted a High-Level Working Group meeting at which
both countries acknowledged the need to re-order priorities while
continuing with our work. We agreed to examine ways to streamline and
improve existing temporary worker programs under U.S. immigration law,
taking a close look at the current procedures of the Department of
Labor and the INS that administer these programs domestically and those
of the Department of State at the consulates where visas are issued.
These programs, known by their alphabetic visa classification
designations, are the H-2 programs. The H-2A program is for temporary
agricultural workers while the H-2B program is designed for other, non-
agricultural workers. Currently, Mexican nationals receive more than
50% of the H-2 visas issued by the Department of State each year.
Similarly, we have pushed to create conditions for a safer border.
We have a great interest in working together with the Mexican
government to ensure that our common borders--and border communities--
are safe and secure.
The Border Safety Initiative, first started by INS and our Mexican
counterparts in 1998, has expanded significantly in the past year and
is truly a binational effort. Both governments recognize that
protecting the border includes an obligation to protect lives,
particularly those of people put in harm's way by smugglers, who view
money, not people's lives, as their chief concern. Our commitment to
fulfilling this obligation is unwavering, and it is shared by everyone,
from the top officials in Washington and Mexico City to agents in the
field. Presidents Bush and Fox demonstrated their commitment at their
first meeting last February in Guanajuato, when they pledged to
increase the amount of resources devoted to border safety.
Our border safety efforts have been enhanced through increased
cooperative law enforcement efforts. Alien smugglers routinely expose
migrants to risk by leading them into dangerous terrain and abandoning
them when difficulties arise. The INS, through its district office in
Mexico City, is working at an unprecedented level of cooperation with
Mexican officials to dismantle smuggling operations and prosecute those
who deal in human cargo.
Though current cooperative law enforcement efforts are extremely
positive, much more can be done in this area. A key objective for the
recent U.S.-Mexico meetings in March, held prior to President Bush's
trip to Mexico, was, in fact, to enhance cooperation with Mexico by
enabling the United States to work with an established Mexican federal
law enforcement presence across the border.
We also recognize that Mexico is a transit country for many long-
distance migrants who seek to enter the United States and request
asylum. As Mexico is signatory to the United Nations Convention on
Refugees, the U.S. welcomes closer cooperation with Mexico on asylum
issues. Together, the United States and Mexico must ensure that each
migrant is afforded protection from persecution.
Following the events of September 11, there has been concerted
effort to build a regime of security cooperation between the U.S. and
its southern and northern neighbors. This involves not only protection
for our respective populations, but also the free, cross-border flow of
legitimate goods and travel that helps drive our shared prosperity.
We share a long border with Mexico and it is more than a line drawn
on a map. It is a way of life for our populations residing in border
communities. It is a gateway to expanded markets, tourism, and
educational opportunities. Together the United States and Mexico can
and will combine our efforts to avoid bottlenecks and congestion at
legal crossings and discourage those who now choose to cross in
dangerous areas. We must ensure a border that works.
president bush's trip to monterrey
On March 22, Presidents Bush and Fox met in Monterrey, Mexico. On
that trip, the two Presidents agreed to strengthen U.S.-Mexican
cooperation by endorsing a series of specific actions intended to serve
our common human, security, and economic interests in the years to
come. These measures comprise important steps in the creation of a
smart border for the 21st century--one that embraces technology and
enhanced bilateral cooperation to ensure humane, efficient, and
modernized management of the border that joins our peoples and our
economies. We have one of the world's most dynamic and successful
trading relationships, as well as enormous bonds of family and culture.
We are committed to persevering in the establishment of a border that
serves and supports, in the most effective ways possible, this
extraordinary relationship.
The action plan that our two nations have agreed advances three
major goals: (1) creation of infrastructure that keeps pace with travel
and commerce; (2) the secure flow of people; and (3) the secure flow of
goods. Since March, we have met with our Mexican colleagues to develop
the detailed plans to meet these goals and develop mechanisms to
monitor progress. Allow me to describe these goals as they were agreed
to by President Bush and President Fox:
1. Infrastructure that keeps pace with travel and commerce
1. We will conduct a joint survey of infrastructure along our
common border to identify bottlenecks that impede the movement of goods
and people.
2. We will develop integrated infrastructure investment plans to
ensure that the economic competitiveness of the border region is not
impaired as the volume of trade grows.
3. We will conduct security assessments of critical infrastructure
including bridges, dams, and power generation and transmission
facilities and take steps to protect them from terrorist attack.
4. We will upgrade the existing Border Group of the Binational
Commission, and entrust it to carry out the necessary planning in our
common border.
2. The secure flow of people
1. We will develop and implement systems at ports-of-entry to speed
the flow of bonafide travelers and, to that end, streamline and
coordinate procedures at our common border.
2. We will cooperate to identify individuals who pose threats to
our societies before they arrive in North America.
3. We will enhance our efforts to deter smuggling of third-country
nationals.
4. We will work to establish a joint U.S.-Mexico Advanced Passenger
Information exchange mechanism.
3. The secure flow of goods
1. We will implement a technology-sharing program to place non-
intrusive inspection systems on cross-border rail lines and at high-
volume ports-of-entry.
2. We will develop and implement systems to increase security at
key points of the supply chain that links producers and consumers.
3. We will expand partnerships with the private sector to increase
security of commercial shipments.
4. We will develop systems to rapidly exchange customs data.
conclusion
Mr. Chairman, we have a great interest in working together with the
Mexican government to ensure that our common border is safe and secure.
Even just a few years ago, many would have been surprised at the level
of detailed discussion that is now taking place between the United
States and Mexico on very important and sensitive issues. Our bilateral
cooperation is at an all-time high in many areas of this modern and
successful relationship. Under the direction of the President of the
United States and the Attorney General, and in my capacity as
Commissioner of the INS, I will continue to build on this achievement
wherever possible, including in law enforcement, safety, migration, and
public awareness of our laws. I look forward to working to develop
further this excellent relationship, which can serve the interests of
so many people on both sides of the border.
Mr. Chairman, that concludes my prepared remarks. I would be happy
to answer your questions at this time.
Senator Dodd. Thank you very much, Commissioner. As I said
earlier, I think you're doing a fine job under difficult
circumstances. The world did change on September 11, but your
budget hasn't changed yet. So you have to do a lot more things
with the same amount of resources as in the past.
I'll put a clock on myself here as well, so that we don't
over-extend. What I'll do is just ask each various questions
and try to get through. I'll give myself about 6 minutes, as
well, and then we'll go back and forth if necessary, if we
don't cover all the ground.
Secretary Larson, just a brief answer from you because
obviously the question could be the subject of a long day's
hearing, and that is I'd just be curious in terms of the--and I
think Mr. Taylor you may want to comment on this too even
though I've focused on the banks with you--but I'm curious
about how the Mexican economy is recovering from the
consequences of the slowdown here in the United States. We're
apparently getting back on our feet again, economically, but
what is the outlook for the economy in 2002? If you'd give us
sort of a quick snapshot. Either way, either one can start.
Mr. Larson. I think the very quick snapshot is that Mexico
has very much become an economy that's tied to ours. So their
recovery, I think, will very much track ours as they export
primarily to the United States. Their credit rating has been
raised by one of the rating agencies recently, so I think they
have a relatively positive outlook this year.
Senator Dodd. OK, John.
Mr. Taylor. I would just add that there is definite
evidence of the Mexican economy picking up. And the recovery in
the United States is certainly helping that. The investment
grade rating is a real accomplishment for Mexico. I think
that's something to be very clear about and it took a lot of
important work on the policy side to get that. And I also note
that their inflation rate is coming down and it's a good
macroeconomic situation for growth going forward. So, the
Mexican economy is on its way to recovery in my view.
Senator Dodd. OK. Let me turn to--I want to ask both of you
again another question dealing with this case: Hoffman Plastics
Compound vs. NLRB. Are you both familiar with this matter? I
assume you are.
Mr. Larson. To some extent, yes, sir.
Senator Dodd. Well you know, this was a very close call, 5
to 4 decision by the Supreme Court overturning the NLRB's
decision to award back pay to an illegal worker who had been
fired illegally for having been involved in some unionizing
activities. Now I'm abbreviating this obviously. The majority
says--the Rehnquist opinion says that by allowing back pay you
unduly encroach upon explicit statutory prohibitions critical
to Federal immigration policy. The minority, four justices--
about equally decided--conclude that the ruling would actually
create more incentives for companies to hire illegal workers.
If you don't have to award any back pay and you can fire them
at will, then it seems to be more of an incentive to bring
people in.
Now this has provoked--in fact, I've been told, I'd like
you to comment on this--the unfortunate situation in which the
Mexican Congress of course denied President Fox the opportunity
to travel, which many Latin American countries--we don't want
to see anything like that, I'm sure, the Bush administration
and the Congress having similar provisions here at home. But
nevertheless, that's the rule in these countries. To what
extent did this decision cause or provoke the Mexican Congress
to invoke that clause in their laws to allow them to deny
President Fox an opportunity to travel.
And what is the administration going to do about this? Are
you going to propose anything? Are you going to stick with the
ruling? Or, are you proposing possibly legislation to correct
this situation.
Mr. Larson. I think three quick remarks, Senator. First of
all, it was a very--not only a very close call but a narrowly
constructed decision, as I understand it. We have initiated
consultations with the Mexican Government about the
implications of the Supreme Court's decision for immigrant
workers, and are talking with them about ways of exploring
further bilateral cooperation. And the third point really is
that we made very clear that it is the policy of the
administration to make sure that there are not--there is not
abuse by employers of workers in our country, whatever their
status. And that is something that Secretary Chao spoke out on
right away.
Senator Dodd. Mr. Taylor.
Mr. Taylor. I don't have anything to add to that, Senator.
Senator Dodd. Well, this is a matter for the Judiciary
Committee more, in a sense, than this committee. But obviously
because it does impact on U.S.-Mexican relationships here, and
I'm told that this had some bearing on the decision. There was
a question of U.S. policy, questions which had something to do
with the Congress' decision in Mexico.
I think the committee would very much like to be kept
abreast of what steps we're talking about taking here. We've
got an inter-parliamentary meeting coming up, which the Senate
chairs when we go to Mexico, and this is obviously going to be
a subject of some discussion, I'm sure, when we get there. So,
it would be tremendously helpful for us to get some further
clarity from the administration of what steps if any we're
likely to take.
Commissioner Ziglar, the U.S.-Mexico Border Partnership
Action Plan is a complicated proposal. But I wonder--a couple
of questions here--and I'm watching the clock. I'll get one in
here before the clock runs red.
I wonder if you could explain this in a little more detail,
the main points of this plan, No. 1. No. 2, they have
sufficient funds to implement it. Not only this but also the
proposed restructuring of the INS, after the implementation of
the post-11, September 11 border reforms.
It's a big question but I think it's a critical one here. I
said somewhat teasingly, but also seriously as well, you're
operating on last year's budget and to some extent the
pressures are even greater on the INS to perform. And we're
going to be asking you to do even more. So, I'm curious as to
what the--where you are with the funding issues and how the
plan itself would work in some detail?
Mr. Ziglar. Well Mr. Chairman, with respect to the border
action partnership, it has some major components to it. One of
them is sharing information, both on the Customs side, the INS
side, the peoples side, and then in a much broader sense
sharing information that we get from advance passenger lists
and things like that, so that we can detect situations where
there may be terrorists or criminal aliens or others that are
trying to come into the country.
It also has an infrastructure component to it, and that is
at the border synchronizing the way we operate at the border so
that we have mirror-image operations on each side so that we
don't have gaps, where we have a situation where people can
take advantage of those gaps.
Likewise between the ports of entry, we are working very
hard to deal with things like the smuggling operations,
enhancing those operations, also enhancing the border safety
initiative so that we can protect people's lives while also
interdicting them, as well as interdicting drugs. There are 22
points to it, as you know. But the concept here is to focus not
just at the physical border and making it a more efficient
border for commercial purposes and a more secure border for our
people, but it's also looking beyond the border and saying
where is it that we can be of help to each other in protecting
the security of our folks?
For example, third party nationals, it's a real problem in
Mexico because Mexico is a transit country to the United States
for third country nationals coming in. We are working with them
to help them identify those problems and help them, frankly,
deport people that come into their country illegally trying to
get here illegally. It's kind of a holistic, macrolook at our
border and our border relationships in its biggest sense.
The issue of money is always an issue at the INS. There's
no question about it that the INS has more and more things
thrown at it every day to do, at the same--fundamentally the
same level of resources. For example, Congressman Reyes made a
very good point about the interior enforcement mechanisms of
the INS. We have only 2,000 special agents at the INS to do the
entire interior enforcement operations. Everybody else
fundamentally operates at the border.
Two thousand agents to deal with smuggling, terrorists,
criminal aliens, and then the presence of undocumented folks in
here who don't represent any of those others, 2,000 is a drop
in the bucket and yet, of course as you know, we're expected to
do all of those things. And it is just not possible, so we have
to prioritize the interior enforcement side of this. So I can
tell you that at the border, some of the initiatives that we
have in the action plan are not so capital intensive as they
are cooperative relationships that we just need to build on.
But it's clear, particularly with respect to the investments at
the border, those are going to require a lot of capital.
With respect to the restructuring plan, we have in the 2003
budget a request for $45 million, I believe it is. We do have
some funds currently, but it's a stretch to do all the things
that I would like to get done in this fiscal year to move the
restructuring along at the pace I'd like to. But, we're bound
and determined to do it.
Senator Dodd. Thank you very much. Let me turn to my
colleague.
Senator Chafee. Thank you very much, Mr. Chairman. Mr.
Larson, you were testifying as to the Partnership for
Prosperity presented to Presidents Fox and Bush in Monterrey.
And as part of the Partnership for Prosperity, is it envisioned
at all to have any kind of an initiative in environmental
infrastructure?
It would seem to me it would be a natural for our two
countries to work together on some of the problems that Mexico
has, whether it's wastewater treatment, solid waste management,
clean air, some of the areas that perhaps we have wrestled with
in the past that now we can work together on as partners. And
Mr. Taylor testified as to the inefficiency and poor
performance of the NADBank and the Border Environment
Cooperation Commission and reconciling those two as to what we
can do better as Partners for Prosperity, the title of the
initiative, and also on the environment. It would seem to be a
natural to me that the two of us could work together on that.
Mr. Larson. Very definitely, Senator. The starting point
for this initiative is really that, by facilitating more
private investment and better cooperation between the citizens
of our two countries, that we can accomplish a great deal.
Mexico is a place that receives some $9 billion worth of
remittances from Mexican-Americans in the United States, and in
recent years has been getting $15 to $18 billion worth of
foreign direct investment. So the issue, one of the issues has
been how can the governments work with the private sector to
facilitate the types of investments one would like to see?
In the area of environmental infrastructure, for example,
one of the working groups that we had was on infrastructure. We
had both public and private sector people talking about what
could be done to facilitate private capital moving into some of
these projects. One of the things that they came up with was
that mayors in Mexico typically serve for a very short period
of time. They don't have a city manager concept there, and so
there isn't as much capacity at the municipality level to help
them plan for environmental infrastructure.
And so one of the ideas that our experts gave us was to try
to facilitate, through something like the President's Freedom
Corp, the provision of city managers who are retired and
perhaps could go and work with a municipality for a period of
time to help them figure out how to structure their finances
and their bidding processes so that they could attract
investment in things like sanitation plants and other types of
community infrastructure.
Senator Chafee. Mr. Taylor, in your testimony you did talk
about those areas that already are dedicated toward this trying
to improve the environmental infrastructure, have failed. It
seems to me the best way you want to start is have clean
drinking water and somewhere to dispose of your waste water or
your solid waste. And you did make recommendations to how we
can improve those, but do you agree that that's something that
as we work together that that's something of basic importance?
Mr. Taylor. I certainly agree, it's very important. And
what we want to do in improving the working of NADBank and BECC
is to make that happen, make the cases where it hasn't been
funded enough or the infrastructure is needed, make it work
better. So that's part of the reason to expand further into
Mexico in terms of the geographic limits, part of the reason to
have lower interest rate loans, and part of the reason, of
course, to have more grants. So I think it will all go in that
direction and it will also take, I think, a careful monitoring,
looking at what's happening from the Treasury and the State
Department and the EPA to make sure this all happens correctly,
focusing on the results.
Senator Chafee. Very good. And Mr. Ziglar, the Congressman
testified that there's going to be legislation that he expects
to pass the House consolidating the INS--or consolidation in
reference to some of our border policies. Have you had a chance
to review that legislation? Can you comment on whether you
favor it or oppose it?
Mr. Ziglar. Senator, the legislation he's referring to is
something called the Sensenbrenner bill that would divide--
create two agencies, legal entities; one a service, one an
enforcement department, if you will, in the INS. The
administration has not taken a position on the bill other than
in some testimony I gave last week to point out some issues
that were sort of macroissues in the legislation. However, I
think Congressman Reyes is right, that it probably is going to
pass and will be coming over here.
Senator Chafee. Very good. And last, Mr. Larson, I was a
mayor of my city and the most important thing for getting re-
elected or for returning is making sure that the basic
services--starting most importantly probably with drinking
water--were provided. So I think it's a terrific program,
Freedom Corps, and trying to help some of these growing
communities.
Mr. Larson. Good.
Senator Dodd. Thank you very much. Senator Nelson, we're
delighted you're here with us.
Senator Nelson. Thank you, Mr. Chairman. Mr. Ziglar, we've
got the Border Security bill that has been on the floor, and
one of the concerns--and if you would educate me what is the
status--where we have a program for security with a number of
swipe cards, but do not have the equipment to swipe it through.
Educate me about that.
Mr. Ziglar. That's with reference to something called the
border crossing card, of which there have been about 5 million
issued. They only use them on the southwest border. They
replaced a card that had been in existence for about 30 years
where people used it to come back and forth across the border,
people that worked on the other side or they came over to visit
family, or tourists or shoppers or whatever.
These new cards have in them a biometric. They have two
fingerprints as well as a digital picture and some information
on it. Working with the State Department, like I say, we have
replaced about 5 million of those cards, but we don't have
readers to read those cards.
And it has been a question of having the money
appropriated, quite frankly. However, in the counter-terrorism
supplement we did get $10.8 million to start the deployment of
those. We will be putting in the first of those readers within
a month or two.
They will be not completely deployed until we make sure
that the readers are going to work as they are advertised to
work. But, once we get up to August, we will know whether we've
got problems that need to be adjusted, and at that point we
will start the full deployment across the southwest border.
They cost about $6,000 per machine, so we're going to be able
to deploy a lot of machines with $10.8 million.
Senator Nelson. And what happens in the meantime, until you
get the readers in place?
Mr. Ziglar. Well, we are using the most common of
biometrics, and that is taking a picture and looking to see if
that's the right, same person. The border crossing card does
have a picture on it and as people come across the border, and
they've got the card, we can identify--our inspectors can look
at it and determine whether or not the people are the same
people.
Senator Nelson. Which is the way it's been done for the
last 30 years?
Mr. Ziglar. Well, it wasn't even that good. I don't think
the old cards even had pictures on them. It's better but it's
not at its optimum, but it will be.
Senator Nelson. And to what degree are we implementing this
because of terrorists and to what degree are we implementing
this new system because of illegal entry across the border?
Mr. Ziglar. This system was actually mandated in 1996, well
before September 11, and it was done for a number of reasons.
One is that the old cards had become the subject of a great
deal of fraud. They were just being passed around. And second,
it was also because of the problem of illegal immigration that
in 1996 the IRCA mandated that these cards be put into effect.
Clearly after September 11 and the counter-terrorism
supplement, the recognition that we needed to move this along
more quickly was there, and that's why we got the appropriated
money for the readers. I might add one other thing Senator, and
that is that we will be marrying the readers with--or it would
appear that we're going to do this--with our so-called IDENT
system so that we will have a way of making sure that the
people that come across truly are not people that are criminals
or at least they're not in our records.
Senator Nelson. That is they're hooked in with the FBI and
the CIA?
Mr. Ziglar. Well IDENT isn't currently, but we are in the
process of marrying IDENT with IAFIS which would then get us
access to the FBI. It's one of those things that grows.
Senator Nelson. And over what period of time will that take
place, until that's in effect so that somebody who is crossing
that the Immigration Service may not know is suddenly a major
wanted fugitive that's on the FBI list, that it would
automatically pick it up?
Mr. Ziglar. We are deploying the IAFIS system, which will
be coupled with the IDENT system, now. We've got it up and
running in a couple of facilities. We will have six more, I
believe, within the next 30 days or so, and then we're going to
continue to expand it out.
What we're doing is we're picking, obviously, our busiest,
most dangerous--what we consider our most dangerous spots to
put it in first. And then we will move it out to the more
remote locations. It's a question of the procurement and the
deployment of it. And obviously as the good chairman points
out, these things don't--money doesn't just fall off the trees,
it has to be there for us to be able to do that.
Senator Nelson. Well it sounds like we better get on the
stick and give you the money. Under the present system, when
would it first be deployed?
Mr. Ziglar. Well, it's----
Senator Nelson. I'm talking about the system where you
would hook into the FBI.
Mr. Ziglar. We're actually operating it now in two spots.
We'll have six more in about 30 days, and we'll just keep
moving it out.
Senator Nelson. And under your present schedule, how long
would it take for your entire southern border to be hooked in?
Mr. Ziglar. The rollout of the six is really to make sure
that this system works. So, we don't, my colleagues tell me,
actually have an end date for the entire rollout of it. It
depends on whether we encounter any big problems in this
rollout and the integration of the system.
Senator Nelson. Well then, what you're advising us is the
question is not money, it's a question of implementation of
what you have in the way of resources now.
Mr. Ziglar. Well, it's really--we now know that this system
is going to get deployed. It's just a question of tuning it up,
making sure that it works effectively. So while it may not be
money today, it's clearly going to be money as we go forward.
Senator Nelson. Well, I'm just trying to get a grasp. Are
we talking about a year, 2 years, 5 years until the whole
system is up? How long are we talking about, 2 months?
Mr. Ziglar. Well no, not 2 months, but I would suspect that
all things being equal, probably 2 years to have it fully
deployed.
Senator Nelson. And one final question, Mr. Chairman, of
five million cards that have been issued since 1996, what
percentage--I take it these are people that frequently go
across the border, that you've issued to--so what percentage of
your frequent crossings, of the Texas to the coast border, does
that five million cards represent?
Mr. Ziglar. Senator, we get about 800,000 crossings a day.
Now we don't clock how many of that five million and what
percentage of that goes across, but I would have to guess that
it's a fairly concentrated number that use it regularly, and
then others that have had it for 30 years, they use it for the
occasional once a month shopping trip over into the United
States. See this actually operates as a visa, as a B1, B2 visa,
so that people can get across the border because we do require
a visa.
Senator Nelson. Thank you, Mr. Chairman.
Senator Dodd. Just to followup, Jim, I presume there's some
way to track that so that you have some idea--people using the
new card versus the old card, so that for purposes of testing
the effectiveness of it, to iron out the kinks that the staff
member indicated would have to be the case before you'd be able
to predict with absolute certainty, before implementation. Am I
correct in that? Are we----
Mr. Ziglar. No one can use the old card anymore. The new
card is the only thing that can be used now. As of October 1 of
last year the old cards were not useable unless--we did have a
transition period. If you had an old card but your new card
hadn't been issued yet, but you had gotten into the queue for
it, then we did an identifier on the old card until you got
your new card. But now, with the swipe machines going up we
will then be able to, at least in the secondary, we'll be able
to identify who is coming across.
Senator Dodd. I gather, because we prohibited the old cards
from being used, this has created some real problems as well?
Mr. Ziglar. Well you know, it's interesting, Mr. Chairman.
Senator Dodd. That is we the Congress, but also in
cooperation with the President.
Mr. Ziglar. We thought--I remember the day that Congress
did not pass an extension last year as they had before, and I
remember going into work that next morning thinking oh boy,
this is going to be one of those days, because I figured they'd
have huge lines. And the fact is that while we did have some
lines some places, it was nothing like we anticipated it might
be. And it's now trailed off to the point that we really don't
have a problem there.
I know that in this Border Security bill there is a
provision for the extension. We have not taken a position on
that, but frankly I don't think it's necessary at this point.
And in fact, it might even be confusing to people about the
situation down there. So I'm not taking a position on this Mr.
Chairman. I think it might actually be counterproductive to
have it in there.
Senator Dodd. All right. Those were excellent questions,
Senator Nelson.
Senator Nelson. Thank you.
Senator Dodd. Let me jump if I can a bit to the NADBank.
Mr. Taylor, I've got a series of questions I could raise with
you about it. President Fox, you know, had sought to expand the
size of NADBank beyond simply the environmental projects to
include more broad-based assistance to infrastructure in order
to create a climate for local investment. The Bush
administration has rejected the notion of a broader scope for
NADBank, and I wouldn't--I want to know--I guess the question
is wouldn't such a move of a President Fox approach to this be
more consistent with the goals we've talked about in the plan
that Mr. Larson described in the Prosperity for Peace
Initiative?
Mr. Taylor. Well as you know, we've been working very
closely with the Mexican Government, and President Fox and
President Bush have discussed this. And upon looking at the
situation we felt it would be most important to get NADBank
working efficiently on what it is set up to do. In other words,
make sure it's working well in the areas that Senator Chafee
had indicated. And that's the direction where the reforms are
headed at this point.
And part of the creation of the activity that Under
Secretary Larson has discussed, is really to look for other
ways for the United States and Mexico to engage on these
issues. And I think it's been very successful in doing that. So
what we really--you could think of it as a two-track process.
One was the NADBank reform, which I think is going along quite
well, plus the activity and the whole wide range of things that
Under Secretary Larson's been involved with.
Senator Dodd. I understand that initially, to get it going,
but it seems that what President Fox has talked about makes
sense if not in the short term, at least in the longer term. Do
you disagree?
Mr. Taylor. Well I think we have to look into how this
reform works in the institutions that we have at this point in
time. And it very well might be that the activities that he may
have alluded to are going to be worked out better in the
Partnership for Prosperity. So I think it's very much let's get
done what we plan to do now and then see what happens after
that, Senator.
Senator Dodd. Well in that regard, I mean I appreciate the
points of unification of the boards, between the BECC and
NADBank. Couldn't you make also a strong case that they ought
to be merged organizationally, that you've got a lot of
duplication here? You could overcome that, it seems to me, by--
the inefficiencies built in are just--by having one board, two
organizations. Why didn't that happen?
Mr. Taylor. Well, there were various proposals to deal with
the improvements and coordination between the two
organizations. And certainly merging the organizations was
discussed and actually had quite a bit of discussion on
consultation. And there's been a lot of consultation with the
Mexican Government, with the border states, with the Governors,
with the NGO's.
But part of that led us to believe that we should try a
different approach, which was to merge the boards rather than
the organizations themselves. The boards will give the
coordination and the direction that's necessary, I think, to
drive the organizations to coordinate their activities better.
So I think this will work well and it's more acceptable to the
wide range of people that we consulted with.
Senator Dodd. You're not ruling out the possibility to
merge the organizations either down the road, are you?
Mr. Taylor. Well I guess we've got a good proposal here and
I think we're going to move ahead on that.
Senator Dodd. Now you're going to submit some legislation
to Congress authorizing some of the changes you've talked
about. When is that going to come up here?
Mr. Taylor. As soon as possible. That's necessary for the
grants proposal as well as for the extension beyond the 100
kilometers in Mexico. So we're working on that and will try to
do that as soon as possible. Those are the two issues which we
need legislation on.
Senator Dodd. As part of the Partnership for Prosperity
Initiative you indicated that you intended to use the
experiences of Fannie Mae and Freddie Mac in order to create a
secondary mortgage market for Mexico to facilitate home
ownership. I wonder if you'd give the committee some indication
or some of the details about this, and are Fannie Mae and
Freddie Mac officials involved in helping craft such a
proposal?
Mr. Taylor. I think in this I'm going to ask Under
Secretary Larson to address since that is part of the----
Senator Dodd. I know, the Partnership for Prosperity.
Mr. Larson. The answer, Senator, is yes, but if you'd
permit me to just back up slightly. One of the fascinating
things in the first outreach session that we had in Mexico was
how many times housing came up as an issue, in an exercise that
was focused on bringing foreign investment into Mexico. And it
wasn't anticipated, it was something we learned about from
talking to the experts. And it came up in several respects.
One, was the fact that housing, of course, was a very
important sector and this is one of the ways you can stimulate
economic activity. Second was the fact that many small business
persons use their home as a form of collateral for loans, and
it was part of the issue of stimulating small- and medium-sized
business in Mexico. Third, the absence of a well functioning
mortgage market was something that was impeding the overall
operation of financial markets in Mexico, and there was even
thought that a well functioning mortgage market could attract
additional capital into Mexico.
For all of these and other reasons, this was seen to be a
very fruitful area to explore further. And we did draw on
officials from each of those organizations to get further
advice as we carried this to the second stage. And then in the
implementation, there are explicit plans for cooperation
between those agencies and counterpart agencies in Mexico.
Senator Dodd. Very good. I'd be interested in following up
on that and how that's proceeding. I don't disagree with some
of the conclusions, at least temporary ones, you've reached
about the possibility of--or the effects of developing a
secondary mortgage market could mean. It could be very, very
successful.
Jim, let me jump back and I'm going to--obviously there may
be more questions. I'm going to leave the record open for
people who have some additional questions. I know the quick
answer to this next question might be, ``Well Senator, when is
the Senate going to move?''
I want to raise the issue of 245-I, which is a very
important issue. I know the--where I think, based on some
things I've heard today that we may actually be able to move on
that legislation sooner rather than later. But there are
obviously some principals involved who are not members of this
committee who are pursuing that--but some indication that we
may be able to get to that sooner rather than later. To what
extent is this a priority of the administration on the 245-I
proposal?
Mr. Ziglar. Mr. Chairman I believe that the administration
is very much committed to 245-I. Certainly I have been given
every indication in my activities that this is a high priority
item that we would very much like to see happen.
Senator Dodd. I should point out, I suppose, sometimes we
in Washington can start talking in these terms of just
announcing letters and numbers. And what we're talking about
here is a policy which would allow immigrants seeking permanent
resident status in the United States to be able to do that in
the United States rather than having to go back to Mexico and
then come back in again, to sort of expedite the process.
Second, Jim, I wonder on the immigration issues generally,
the overall proposals--and we've talked earlier. You've heard
some of the conversation about the guest worker programs. We've
had this debate.
We came very close a few years ago to actually having a
pretty good compromise between the employers of guest workers
and the constituency groups that very much are concerned and
work with guest workers here. It got very, very close. Howard
Berman, the Congressman from California, along with Senator
Gordon Smith of Oregon had really come a long way to developing
a proposal. The Congress went out of session and we didn't get
it done.
But I wonder if you might--this is such a critical issue.
It's going to dominate and dwarfs almost every other issue we
grapple with here. And so, I would be remiss if we didn't
pursue this issue a little further here in this hearing since
it's such a critical issue for both countries. Could you please
kind of lay out where things are with regard to the broader
immigration policy questions?
Mr. Ziglar. Well, Mr. Chairman, there's no question that
September 11 had an impact on what was, from my very limited
view at that time--because I started on August 6 and got thrown
right into the middle of the migration talks--and it was clear
to me that things were moving along very nicely. September 11
changed the dynamics of that. However, I can tell you that it's
pretty clear to me that this administration, and the President
specifically, still wants to find a way to deal with the host
of issues that come under the rubric of migration.
I know for a fact that there are a number of options that
are being discussed on an inter-agency basis. You know, it's
not just the INS. It's the Department of State, it's Labor,
it's HHS, the whole group have a play in this, and there are a
number of options being discussed.
When we will reach a point of having something to advance
to the Mexicans and to the Congress I don't know the answer to
that. But I do know that it still has the support of the
President and the White House and that we are still discussing
how to reach that. And there are principles that the President
has laid out, you know, over time. It has to be humane. It has
to protect American workers. It's got to be fair. It's got to
be flexible. Mexico has got to make a commitment on its side to
work with us on other issues.
I think there are some other things that probably need to
be principles in this, looking at it maybe from an INS point of
view. One is that it needs to be easy to administer, because it
will be--talking about having a full load now, that will be a
full load. It needs to be capable of being enforced, and it
shouldn't encourage further illegal immigration. As you know,
the President has used the supply and demand concept, at least
with respect to the guest worker component of it.
Senator Dodd. I wonder if you might--and I hear you very
loud. I'm not going to--I'll use, make the point you made
earlier. Obviously, look, this is a work in progress from the
administration's perspective. And so nothing you say here am I
necessarily going to take as some particular point of absolute
certainty of inclusion or exclusion.
But I wonder if you might just take--we had this discussion
obviously with Silvestre Reyes coming up with the guest worker
issue. And I wonder if you might just share with me, sort of
debate a little bit on this issue, on the question of whether
or not if we're going to have a guest worker program whether or
not there is also to be included a road here for legalization.
The people we're obviously implicitly or explicitly inviting to
come to change beds in hotels, and to pick crops and to do
other things--our economy doesn't survive without them.
And so, we need the guest worker program. Now, to what
extent are we prepared to say to people who come here, to
provide us that kind of economic advantage that the guest
worker does, that we're going to see to it in exchange that
that guest worker has a chance to begin that process of
legalization, either as for citizenship or permanent resident
status, whatever it may be? Where are we on that, that critical
point, that critical issue?
Mr. Ziglar. Well let me talk in broad terms about that. I
think it would be unrealistic to think that we could fashion a
program that had only circularity to it, and that is the
concept that people come in, stay a few years, leave, others
come in, that sort of thing. It's clear that people come and
they put down roots, and that they buy into our culture and
contribute to our society and all of those sorts of things.
And like other immigrants in the past, they aspire to be
Americans. So in a very broad sense I think it would be safe to
say that any program that attempted to deal with undocumented
workers here now, in terms of their status as well as creating
a guest worker program, would necessarily end up somewhere
along the line creating a path to permanent residency, which of
course then creates a path to citizenship. I mean, I think
that's--I'm a businessman, as you know, Senator from my
background. I try to deal with reality, and there are some
realities about this whole situation. You've got 8 million
people in this country who are undocumented and we need to do
something about that.
I thought Congressman Reyes had a very good point, and that
is that we have an underground, sort of a somewhat transparent
underground, but an underground in this country as a result of
that. And it's an underground that could breed security
problems. And it's something that we need to address. And I
know the President is very concerned about this, as are others
in the White House. And I am hopeful that we will have
something to show for it.
Senator Dodd. Well, there are a lot of very critical
points. I was sort of stunned, I think many of us were, to
learn, for instance, on students that come in--and sometimes
the only people who know who these people are, to the extent
they know anything, are the universities and colleges that
accept them, as to where they are in the country. It's a
wonderful thing they come here, but it's disconcerting in this
day and age to know that nobody knows where these people are,
what their status is as a result of that.
Tell me what your views are with regard to this Hoffman
Plastics vs. NLRB issue, where you had that almost equally
divided court, on what the implications of that decision are?
And I'm not going to ask you to write a law, but just in terms
of your own reaction. As the INS Commissioner, do you see merit
in the minority viewpoint of the four Justices that talk about
this actually in some ways as a magnet for maybe some
businesses to want to draw in people in illegal status?
Mr. Ziglar. Senator, as you know I had the good opportunity
to clerk at the Supreme Court in my much younger days, and I've
learned unless I've read an opinion not to comment, because
there are things in those opinions that the press doesn't pick
up. So I haven't read this opinion. However, in a broad sense I
am really--as you know at my confirmation hearings I talked
about the notion of mistreating people who were here illegally.
And that still offends me.
Now we are, at the INS, we are taking some actions in
places where we see situations that employers are not treating
people well, through our work site. But we don't have the
resources to do it in any kind of big way. But we have taken
some notable actions in the last few months.
I can understand the logic that this would cause--this kind
of approach to it would cause employers to be less recognizing
of the rights of people as human beings. I also think that--
again, without having read the opinion--that it probably makes
a pretty good argument for our dealing with the situation of
undocumented aliens in this country. Maybe you don't deal with
it legislatively and back into it, maybe you deal with it from
the top down instead of the bottom up.
Senator Dodd. Well, I thank you for that. You've been very
patient in time and I'm very grateful to all of you for coming
up. Obviously we could have spent just at any one of these
subject matters, a whole hearing. And obviously trying to cover
a terribly complicated, arguably the most significant--or one
of the most top two or three significant bilateral
relationships--a couple of hours of hearings in an afternoon
does not begin even to penetrate the layers that require it.
But I hope just in the fact that we're having a series of these
hearings--and as I said at the outset I really couldn't have,
in my view anyway, begun a series of hearings without beginning
with the one that is the most significant bilateral
relationship. And also, in terms of the rest of the Americas,
the administration of President Fox, Mexico's role is a
critical one. And so, that's the reason we've begun this.
So I'm grateful to the three of you. I've got another panel
here of views I want to hear on many of these same subject
matters. We've gone a little longer than I anticipated, but we
thank you. We'll leave the record open for some additional
questions. And I'm very grateful to you, Jim, for being here. I
know there was some question about coming up, and I'm glad you
did because it helps us in examining these policies a little
more thoroughly.
Mr. Ziglar. Like I said, I'm real pleased to be here
anytime.
Senator Dodd. Thank you.
Mr. Ziglar. Thank you, sir.
Senator Dodd. Thank you all. We've got four witnesses here.
I'm delighted to have you before the committee. I'll ask you to
join us at the table. Ms. Barbara Shailor, the director of
International Affairs Department, AFL-CIO. I might point out
that I was down at the AFL-CIO for coffee this morning with the
president, John Sweeney, at about 8 o'clock. And I saw Barbara
Shailor at that time. So it's almost not quite 12 hours later,
but I know you've had a busy day. We ran into each other in the
hallway, I should say.
Mr. Steven Ladik, president of the American Immigration
Lawyers Association, we appreciate Mr. Ladik being here. Mr.
Gregori Lebedev, who is the chief operating officer and
executive vice president of International Policy, U.S. Chamber
of Commerce. We thank you, Gregori, for being here. And Ms. M.
Delal Baer. Thank you, Ms. Baer, nice to see you again, the
senior fellow and chairman, Mexico Project, deputy director,
Americas Program, Center for Strategic and International
Studies, a very well respected organization.
And so let me thank all four of you for being here. I'm
sorry that this has gone a little later than anticipated. I'll
begin in the order I've just introduced you here. Ms. Shailor,
we'll begin with you. I'll put the clock on like I did for the
others, and if you can try and live within the timeframe, it
makes it a little easier. But we thank you very, very much for
being a part of this hearing, this first in a series of
hearings on the Americas and the importance of this bilateral
relationship. Ms. Shailor.
STATEMENT OF BARBARA SHAILOR, DIRECTOR, INTERNATIONAL AFFAIRS
DEPARTMENT, AMERICAN FEDERATION OF LABOR AND CONGRESS OF
INDUSTRIAL ORGANIZATIONS [AFL-CIO], WASHINGTON, DC
Ms. Shailor. Thank you very much, Mr. Chairman. And I also
recall almost a year and a half ago you were urging president
Sweeney to have his initial meeting with President Fox. And we
had the opportunity to lay out some of the framework of this
discussion at the World Economic Forum.
Senator Dodd. You're right, I arranged that and we had
breakfast with incoming President Fox. And I called him and
asked if they'd be willing to meet with John Sweeney and they
did. And we had a very, very--Jorge Castenada, the Foreign
Minister, was there, and president Sweeney and President Fox.
And it turned out to be a very, very worthwhile meeting.
Ms. Shailor. It was an excellent meeting. We appreciate
your leadership on this issue. We have stayed in very close
contact with the new Fox administration. And as you know, our
labor movements have a long history going back almost a
century, but particularly in these last few months the AFL-CIO
has continued our relationship with CTM and the expanding union
movement in Mexico.
On behalf of the AFL-CIO and the over 13 million working
men and women of every race, ethnic background and immigration
status, including many Mexican-Americans, it is very clear that
workers want to improve their lives and the lives of their
families. Workers here and in Mexico want to be treated with
basic dignity and respect, free from persecution and harassment
based on who they are or where they come from. These
fundamental aspirations of the human spirit do not distinguish
between workers based on their immigration status.
The attacks of September 11 and their aftermath, including
the increased fear of immigration and the greater burden placed
on immigrants by the recession, have made it more important
than ever to stand in solidarity with immigrant workers and
their families. We must demand that they be treated with
dignity and fairness, both on and off the job. Anything less
diminishes America, its leaders, its people, and immigrants
particularly deserve the attention that you and the committee
are giving these issues.
Let me point out a number of areas that I will expand on.
But certainly the issues of utmost concern to the AFL-CIO focus
on: Legalizing the undocumented among us who are working hard,
paying taxes, and contributing to their community and the
Nation; to replace employer sanctions and the failed I-9
system, which has never served their intended purpose; and then
in particular, to reform, not expand, the guest worker
programs. And finally, from a trade union perspective,
obviously to fully protect worker rights, including the freedom
to organize a union for all workers regardless of their
immigrant status, and stiff and meaningful penalties for
employers who break immigration and labor laws.
We feel strongly that without a meaningful remedy our
rights and rules cannot be effective. So, as you have asked
many of the former witnesses, we are deeply disappointed in the
decision of the Supreme Court on the Hoffman case which
invalidated the limited back pay remedy that the NLRB had
crafted for cases in which undocumented workers have been
unlawfully discharged. We believe the decision was wrong and we
will work with others in the Senate to press for legislation to
overturn this decision and pursue fundamental justice for all
workers.
And, we call on Presidents Bush and Fox to reinvigorate
their discussions on migration as it relates to the United
States and Mexico. We would hope that these discussions lead to
a framework for a far-reaching migration accord, consistent
with our principles, by the end of the summer. And ultimately,
legislation should not be Mexico-specific. We need a
comprehensive congressional act on an immigration package, and
we would hope that that immigration package could follow
sometime next year.
It is important to note the special relationship between
unions and immigrants. American workers and their unions are
indebted to an earlier generation of immigrants who, in their
determination to fight exploitation and abuse, founded the
American labor movement. Today, growing numbers of immigrant
workers once again are winning a voice at work by joining in
the unions. Last year, 10 percent of all of union members were
foreign born, roughly paralleling the percentage in the overall
U.S. population.
So to refer back to the specific issues on legalization,
together with our coalition partners the AFL-CIO is dedicated
to ensuring that the legislation to legalize undocumented
workers who contribute to their workplaces and community,
passes in this Congress. And we will work very closely with a
expanding coalition on these issues. It is clearly unacceptable
that upward of eight million people live and work in the
country each day without the full protection of the law.
In the workplace, employers may sometimes seek to polarize
workers based on race, ethnic background and national origin.
In the face of such a divide and conquer strategy, labor and
employment laws are broken with impunity, wages and working
conditions stagnate or fall, and worker progress overall is
impeded. That's one of the reasons why legislation to address
the recent Hoffman decision is so important, in addition to the
broader immigration legislation.
Also a broad legalization program must allow undocumented
people from all countries to address their status. This point
is particularly important in the context of the U.S.-Mexico
discussions. We value and respect Mexican immigrants. They are
hard working and deserving, but so are workers from Haiti,
Guatemala, Poland, Canada and elsewhere. Limiting a legislative
program to one nationality will only further divide us as a
people and leave millions of workers and families without the
legal protections they deserve.
And wrapping it up rather quickly, the three other areas,
reforming guest worker programs. Some policymakers have
advocated a new guest worker program would be the answer. We do
not agree with this.
On reforming employer sanctions, these provisions have not
worked and should be replaced with a more effective mechanism.
And then finally on the issue of full workplace rights, we are
working closely with unions in Mexico, in particular around the
Hoffman case which has been mentioned many times, in
formulating a position that we can bring back up to the
Congress that shows the uniformity of commitment on both sides
of the border.
So, we look forward to working with you in the days and
weeks ahead. And I know that president Sweeney particularly
appreciates your determined leadership on this issue. Thank
you, Senator.
[The prepared statement of Ms. Shailor follows:]
Prepared Statement of Barbara Shailor, International Affairs Director,
American Federation of Labor and Congress of Industrial Organizations
[AFL-CIO]
On behalf of the AFL-CIO, thank you for the opportunity to be here
today to discuss one of the most important issues we face as a nation
and a people, our policies with respect to Mexico, focusing
particularly on migration issues. Our nation's relationship with Mexico
is of significant importance. Mexico is our neighbor, one of our key
trading partners, and is by far our largest source of new immigrants,
documented and undocumented, who make an important contribution to our
economy today.
The scores of unions that make up the AFL-CIO represent over 13
million working men and women of every race, ethnicity, and immigration
status, including many Mexican-Americans. And all of our workers want
one thing: to provide better lives for their families. All of us want
the opportunity to hold good jobs in safe environments, which pay a
living wage and provide reliable health care and retirement benefits
and a chance to better ourselves through education and training. And as
much as anything else, workers here and in Mexico want to be treated
with basic dignity and respect, free from persecution and harassment
based on who we are or where we come from. These fundamental
aspirations of the human spirit do not distinguish between workers
based on their immigration status. Nor, we believe, should we.
The attacks of September 11 and their aftermath, including
increased fear and scapegoating of immigration and the great burden
placed on immigrants by the recession, make it more important than ever
to stand in unequivocal solidarity with immigrant workers and their
families. We must demand that they be treated with dignity and
fairness, on and off the job. Anything less diminishes America, its
leaders and all its people, regardless of immigration status. And we
must and can do so even as we make our borders more secure against
people who want to harm us.
We call on the Congress and the Administration to proceed with
plans to:
Legalize the undocumented among us who are working hard,
paying taxes and contributing to their communities and the
nation;
Replace employer sanctions and the failed I-9 system, which
have never served their intended purpose;
Reform, not expand guest worker programs;
Fully protect workplace rights, including the freedom to
organize a union, for all workers--regardless of immigration
status--and stiff and meaningful penalties for employers who
break immigration and labor laws in order to exploit workers.
It should be clear from my last point that we feel strongly that
without a meaningful remedy, our rights and rules cannot be
meaningful--and so we are deeply disappointed by the decision of the
United States Supreme Court on the Hoffman case which invalidated the
limited backpay remedy that the NLRB has crafted for cases in which
undocumented workers have been unlawfully discharged by their employers
in violation of national labor law. The decision was wrong. We will
join with others and work with the Senate to press for legislation to
overturn this decision and pursue fundamental justice for all workers.
By allowing unscrupulous employers to unlawfully victimize
undocumented workers without any economic consequence, the court's
decision undermines the living standards and working conditions of all
Americans.
And we call on President Bush and President Fox to reinvigorate
their discussions on migration as it relates to the U.S. and Mexico. We
hope the discussions could lead to a framework agreement for a far-
reaching migration accord consistent with our principles by the end of
the summer. Ultimately, legislative action should not be Mexico
specific. We need comprehensive Congressional action on an immigration
package. And we hope that package could--and should--follow next year.
It is important to note the special relationship between unions and
immigrants.
American workers and their unions are indebted to earlier
generations of immigrants who, in their determination to fight
exploitation and abuse, founded the union movement and in so doing,
improved working conditions and living standards for all working
families. Today, growing numbers of immigrant workers are once again
winning a voice at work by joining together into unions. Last year, 10
percent of all union members were foreign born, roughly mirroring
immigrants' share of the population overall.
Legalization: The labor movement is increasingly concerned about
the welfare of our undocumented brothers and sisters, as we are for all
immigrant workers. The relationship between unions and their immigrant
members is mutual: unions make a tremendous positive impact on the
lives of immigrant workers and their families, and immigrant workers
have long been a vital part of the union movement. As a growing part of
the workforce and a growing part of unions, immigrant workers have
courageously stood with U.S. workers, leading organizing drives and
assuming positions of leadership on both the local and national levels.
Together with our coalition partners, the AFL-CIO is dedicated to
ensuring that legislation to legalize undocumented workers who
contribute to their workplaces and community passes in the Congress.
It is unacceptable that upwards of 8 million people live and work
in our country each day without the full protection of the law.
Undocumented workers and their families are constantly at risk of being
preyed upon by criminals, dishonest landlords, or unscrupulous
employers, by those who believe they can get away with breaking the law
simply because their victims are immigrants. But, undocumented people
are not the sole victims when these laws are broken: All of us lose
some of our own legal protections when entire categories of people are
denied theirs. This is especially true in the workplace, where
employers may sometimes seek to polarize workers based on race,
ethnicity or national origin. In the face of such divide and conquer
strategies, labor and employment laws are broken with impunity, wages
and working conditions stagnate or fall, and worker progress overall is
impeded. That's why legislative action to address the recent Hoffman
decision is so important.
Also, a broad legalization program must also allow undocumented
people from all countries to adjust their status. This point is
particularly important in the context of the U.S.-Mexico discussions.
The large number of undocumented Mexican workers is a consequence of
the 2000-mile border and 300 year history our nations share. We
recognize and cherish the bond and special relationship between our
countries. And we value and respect Mexican migrants; they are
hardworking and deserving. But so, too, are undocumented workers from
Haiti, Guatemala, Poland, Canada and elsewhere. Limiting a legalization
program to one nationality will only further divide us as a people, and
leave millions of workers and their families without the legal
protections they deserve.
Reforming guestworker programs: Some policymakers have advocated a
new guestworker program as the answer to the problems associated with
our current failed immigration policies. We do not agree. Before there
is any serious consideration given to a new guestworker program,
immigrants who have been living in this country, holding jobs, paying
taxes and contributing to their communities must be given access to
permanent legal status.
Beyond that, we are deeply troubled by the guestworker proposals
some are advocating, which would lift restrictions on recruiting and
hiring low wage, low skilled foreign workers, while conferring only
limited protections on these workers and prohibiting them from seeking
permanent residency. We recognize that some workers want to return to
their native countries and should be able to do so, but any reforms of
our temporary worker programs must include a path to permanent
legalization.
A new guestworker program built on the failed policies and models
of the past cannot be the centerpiece of our national immigration
policy. Analyses by DOL, GAO and others have found that despite
employers' claims to the contrary, guestworkers earn less than their
U.S. counterparts. Years of low wages facilitated by the bracero and H-
2A programs and easy access to undocumented workers have left U.S.
agricultural workers with wages that actually fell during the last
economic expansion, a time when virtually all other low wage, low skill
workers saw their incomes rise. An INS report to Congress verified that
even highly skilled H-1B visa holders in the IT industry earned less
than U.S. workers in the same occupations. Guestworkers regularly face
many of the problems associated with contingent employment: lower pay,
no benefits and intentional misclassification of employment status.
Guestworkers are tied to an employer or industry or occupation in a
way that other workers are not. That alone makes them extremely
vulnerable. While guestworkers are covered by most labor and employment
laws, the nature of their tie to their employer makes these protections
more fiction than reality for most. Hence, any guestworker program must
include and protect all the workplace rights that U.S. workers enjoy.
In addition, a new guestworker program based entirely on a worker's
relationship to his or her employer, resulting in a system of virtual
bondage for many, is unacceptable.
Reform Employer Sanctions: The last legalization law enacted, IRCA
in 1986, included provisions making it illegal for an employer to hire
a worker without work authorization, imposing employer sanctions for
violations of that law. These provisions have not worked and should be
replaced with more effective mechanisms. Even though the object of
employer sanctions was to punish employers who knowingly hire
undocumented workers, and not the workers themselves, in reality, some
unscrupulous employers have manipulated the program to violate federal
and state labor laws and to discriminate against workers. The current
situation not only harms all workers, but also those employers who face
unfair competition from others who skimp on labor costs by hiring and
then exploiting undocumented workers.
I think no one will contest that employer sanctions have failed.
They have not deterred the flow of undocumented workers into the United
States, and almost no employer ever experiences a penalty or sanction.
In 1999, the General Accounting Office reported that only 17% of lead-
driven cases resulted in any sanction or penalty against employers who
had violated the law, and that INS collected only 50% of the fines that
were levied. During the same period reviewed by the GAO, only 2% of all
investigations resulted in a criminal penalty.
In addition, both the GAO and the U.S. Commission on Civil Rights
have documented that numerous workers, mainly Asian and Latino, have
faced discrimination by employers who assumed the workers lacked
legitimate work authorization because they ``appeared'' foreign or
spoke with accents. In effect, a system designed to penalize one form
of unlawful behavior promoted another.
Although employer sanctions did not create the problems of
exploitation and discrimination, they have contributed significantly to
the inability of immigrant workers to enjoy and enforce the most basic
of labor and workplace rights. Having failed to fulfill their central
purposes and, indeed, having set back the progress of workers
generally, employer sanctions must be replaced with laws that will
work. We should increase criminal penalties for employers who knowingly
recruit undocumented workers and participate in document fraud for
business advantage. Moreover, to help ensure the new scheme works and
to avoid the manipulation that characterizes the present system, it is
essential that immigrant workers, who risk unfair deportation when they
stand up for their rights, receive protections when they file well-
ground complaints against their employers.
Full workplace rights: In theory, all workers, regardless of
immigration status, enjoy most of the basic rights and protections
under the nation's labor and employment laws. In reality, though,
undocumented workers typically fall through and outside this safety
net--a result that all too often occurs not by accident, but by design.
The constant threat of deportation serves as a velvet hammer employers
can wield not only to deny basic rights, such as the right to earn the
minimum wage, but also to deter undocumented workers from filing
complaints. And since most labor standards investigations are
complaint-driven, employers deny rights and protections for
undocumented workers with virtual impunity.
In many instances, employers call the INS to report undocumented
workers only after they get wind of organizing campaigns or labor
standards complaints. Upon learning of organizing efforts or that
immigrant workers have filed wage and hour, OSHA, or EEOC charges,
employers who have shown no interest in complying with any other labor
law suddenly become converted to the sanctity of the ban on hiring
workers without work authorization. In a sense, employers determine
immigration enforcement policy by alerting the INS whenever workers
seek to exercise their employment and labor rights.
Union organizers have faced this tactic when they try to organize
workplaces that are comprised predominantly of immigrant workers. It
takes a lot of courage for workers to come forward and openly fight for
a voice at work through a union. Human Rights Watch stated in its
report ``Unfair Advantage: Workers' Freedom of Association in the
United States under International Human Rights Standards,'' that many
U.S. workers ``who try to form and join trade unions to bargain with
their employer are spied on, harassed, pressured, threatened,
suspended, fired, deported or otherwise victimized in reprisal for
their exercise of the right to freedom of association.'' The threat to
immigrant workers is even greater: they risk not only job loss, but
also possible deportation if they exercise their right to form a union.
Instead of punishing workers, immigration and labor standards
policies should specifically penalize employers who break the law and
protect workers who uphold the sanctity of our legal system by pursuing
their labor and employment rights. We need to ensure that all workers,
regardless of their immigration status, are made aware of their rights
and of the means to vindicate them. And immigrant workers should have
specific protections against employers who try to use the workers'
immigration status to block their efforts to form a union or to
otherwise exercise basic workplace rights. Workers should be protected
against deportation when they file a labor standards complaint unless
the INS can prove that the deportation proceedings are in no way
related to the workplace situation, and that the complaint was not
filed in bad faith to avoid deportation. Agencies such as the
Department of Labor should be required to keep confidential any
information they learn about a worker's immigration status during an
investigation or proceeding enforcing labor rights. The INS should be
prohibited from proceeding with workplace investigations during a labor
dispute. Finally, in order to better target investigations and
enforcement, the Departments of Labor and Justice should be required to
conduct a study of industries that employ undocumented workers, and the
exploitation of undocumented workers by their employers.
Of course, continued inadequate funding for labor standards
enforcement will hamper the measures I have outlined above. Funding for
labor protection activities has not kept pace with labor force growth
during the 1990's. We must reverse that trend and fund these programs
adequately, if we are to ensure full workplace rights and protections
for all.
We recognize that the issues we have discussed touch on just a few
aspects of the U.S.-Mexico talks now underway. There are several other
issues of critical importance. For instance, we believe that
discussions on the well being of U.S. and Mexican workers should
include a close examination of labor rights in Mexico and stronger
enforcement of Mexican labor laws to protect the right to organize and
other core ILO principles. For example the system of employer dominated
unions called ``protection contracts'' severely restrict freedom of
association. So far, these issues have been excluded from the Bush-Fox
agenda.
conclusion
Unions are playing an important role in bridging the gap between
immigrant and non-immigrant workers. We know that the fortunes and
futures of all workers in the United States--are linked: If
undocumented workers have no practical choice but to accept substandard
pay and working conditions, their U.S. counterparts will eventually be
forced to accept such conditions as well. There is no protection for
any worker when some workers have freedom to exercise their labor and
employment rights and others do not.
Unions have already begun the process of bringing workers together
and encouraging open and frank discussions in the workplace and in our
communities. We believe this dialogue fosters the respect and
brotherhood necessary for our country to move forward, even as our
demographics change. And we know that when we act to strengthen
protections for the most vulnerable among us, we build a movement and a
system that is stronger for all of us.
We strongly believe that the U.S.-Mexico discussions on migration
should reflect these principles, and we look forward to working with
you as the process moves forward.
Senator Dodd. Very, very good, and we thank you. We're
going to talk about the Hoffman case with all of you here
because I find it's an intriguing matter--hearing both
arguments on either side of this. I realize obviously having a
regulation or a statute is different than a constitutional
amendment. But I know that constitutional protections apply to
all people in the United States regardless of how they got
here, in a sense.
One may try and draw some distinctions, but it seems to me
there as well, to be able to summarily--to dismiss someone
illegally and then--you were willing to hire them, you weren't
worried about their status when you hired them--and then gives
you the right to illegally dismiss them and not have to bear
any responsibility, back pay--is rather precarious when it
comes to trying to discourage, using all the vehicles to
discourage illegal immigration in the country. So, I will come
back and I'll be asking others for their point of view on this
as well.
Mr. Lebedev, thank you for being with us.
STATEMENT OF GREGORI LEBEDEV, CHIEF OPERATING OFFICER AND
EXECUTIVE VICE PRESIDENT, INTERNATIONAL POLICY, U.S. CHAMBER OF
COMMERCE, WASHINGTON, DC
Mr. Lebedev. Mr. Chairman, thank you. On behalf of the
three million member companies of the U.S. Chamber I appreciate
the opportunity to comment today, not only on the spectacular
success of the U.S.-Mexico partnership over the past decade,
but on the unfinished agenda which we believe our two countries
still face today. My observations this afternoon will address
three major areas in the U.S.-Mexico relationship: trade,
border management and migration.
First, let me briefly highlight the dramatic revitalization
in this critical relationship in recent years. The foundation
of these improvements is, of course, the North American Free
Trade Agreement. In the 8 years since NAFTA came into force,
trade between the United States and Mexico has nearly tripled,
as Ambassador Larson said, with bilateral commerce topping
today about $245 billion.
This explosion in U.S. trade with Mexico has allowed U.S.
companies to generate hundreds of thousands of new jobs. In
fact, NAFTA was one specific reason why the U.S. economy
generated over 20 million new jobs in the 1990's. So, contrary
to the politically distorted forecasts, there has been no giant
sucking sound, just the noise of three nations working
together, raising incomes and building a prosperous and shared
future.
However, one item that some Members of Congress believe
ought to be placed on the unfinished agenda is the NAFTA
Chapter 11. Critics of Chapter 11's investor state claims
process argue that it gives foreign companies rights that are
denied to U.S. firms. This is indeed an odd and quite upside
down point of view.
It is curious how these critics overlook the fact that the
United States is by far the biggest beneficiary of the investor
state claims mechanisms. Such provisions are included in over
40 U.S. bilateral investment treaties around the world, for one
very good reason. The United States is the world's largest
overseas investor, with annual sales overseas surpassing $2.5
trillion. This sum is roughly two and a half times our total
merchandise trade.
While foreign investors in the United States can count on
our legal system to ensure due process, U.S. investors in too
many foreign countries cannot enjoy similar security without
effective treaty provisions and protections. It's that simple.
Let me repeat this crucial point. The United States is the
primary beneficiary of these protections against discriminatory
treatment. Why the United States should want to re-write these
rules is peculiar indeed, and the U.S. Chamber urges the
Congress to think long and hard before making any changes to
Chapter 11.
Let me speak for a moment about secure and efficient
borders, Mr. Chairman. Indeed, border management has become not
just a buzzword in Washington, but an imperative in the wake of
September 11. Economic activity at the border is tremendous.
Over 800,000 people cross the U.S.-Mexican border every day.
That includes 250,000 individual vehicles and over 12,000
trucks.
While we obviously must and will ensure our physical
security and protect our country from the devastation that
could be caused by another terrorist attack, we also must
protect our economic security, and therefore ensure the
continuation of legitimate travel and trade at our borders. In
January the Chamber conducted a survey of local and state
Chambers of Commerce on the Mexican border to assess the
economic impact of the post-9/11 security measures. Not
surprisingly, every locality reported significant delays
immediately after the attacks. But, these delays have gone down
as Customs and INS have been operating on 14 to 16 hour a day
shifts. However, even with that effort, border crossings are
still down by as much as 30 percent in some areas, and local
economies continue to suffer.
In response to this situation, the U.S. Chamber has created
the Americans for Better Borders (ABB) coalition, and the
Chamber and the ABB support S. 1749, which the Senate has been
debating. While this bill is only a good first step, the
Chamber also applauds the recent smart border agreement with
Canada and the 22 point border accord with Mexico, which was
announced during President Bush's recent trip to Monterrey.
These are very important initiatives.
Many in Congress and in the administration have also urged
the creation of a new border agency to achieve the dual goals
of improving security and facilitating trade at the border. The
Chamber is supportive of all measures that would move toward
these two goals. But, we do not encourage reorganization for
the sake of reorganization. We're all well aware of the good
work being done by the agencies toward improving border
processes. We don't want to see those initiatives lost or
derailed as otherwise necessary changes will occur.
Consequently, the Chamber looks ahead to working with the
Congress and the administration on any set of broad reforms on
border oversight that might be proposed.
Although the challenges of border management are enormous,
arguably the biggest area of unfinished business in the U.S.-
Mexico agenda is migration. To be sure, it's undeniable that
our legal and regulatory mechanisms have been largely out of
step with this phenomenon, resulting in terribly unfortunate
consequences. It's time for this country to initiate a
fundamental and comprehensive change in our immigration system.
As President Bush says, we need to make it legal for willing
employers to get together with willing employees.
The U.S.-Mexico migration discussions are the first step in
this comprehensive reform, and the U.S. Chamber actively
supports this process. Last Thursday, Chamber president and CEO
Tom Donohue and AFL-CIO president John Sweeney and
representatives of the Hispanic and religious communities
renewed their call for comprehensive immigration reform in the
course of the U.S.-Mexico dialog. Month-to-month changes in the
unemployment rate have altered the fundamental reality that
America's population is aging. In short, Mr. Chairman, we need
to move forward in a comprehensive fashion to examine the whole
range of immigration policies, including guest workers, the
legalization of those who are currently gainfully engaged in
this country, and a management system that will allow us to
monitor those in this country to either facilitate their
ultimate matriculation into our society or to help them return
to their country of origin.
[The prepared statement of Mr. Lebedev follows:]
Prepared Statement of Greg Lebedev, United States Chamber of Commerce
Mr. Chairman, thank you for allowing the United States Chamber of
Commerce to submit this statement today. I am Greg Lebedev, Chief
Operating Officer and Executive Vice President for International Policy
at the United States Chamber of Commerce, which is the world's largest
business federation. On behalf of our three million member companies of
every size, sector, and region, I appreciate this opportunity to
comment not only on the spectacular success of the U.S.-Mexico
partnership over the past decade but on the unfinished agenda our two
countries face today. My testimony will address three major areas in
the U.S.-Mexico relationship: trade, border management, and migration.
a decade of progress
First, I would like to survey the dramatic improvements in this
vital relationship in recent years. The tremendous progress in U.S.-
Mexico relations over the past decade is a bipartisan success story.
The first U.S. President named George Bush changed the relationship
between our countries forever by proposing and successfully negotiating
a completely new economic partnership under the North American Free
Trade Agreement (NAFTA). Likewise, President Clinton deserves credit
for his leadership in making the case for NAFTA's passage before the
Congress and for standing by Mexico during the 1995 financial crisis.
But more than his predecessors, President George W. Bush has
signaled a new perspective on the U.S. relationship with Mexico, By
choosing Mexico as the site of his first foreign trip as president,
President Bush showed that Mexico and the other nations of the Americas
would be a principal focus of his administration's foreign policy.
Mexico's President Vicente Fox shares this commitment to finding new
approaches to longstanding challenges.
The key to the progress of the past decade is clearly the
enormously successful North American Free Trade Agreement. In the eight
years since the NAFTA came into force, trade between the United States
and Mexico has nearly tripled, with bilateral commerce topping $245
billion last year.
The explosion in U.S. trade with Mexico has allowed U.S. companies
to generate hundreds of thousands of new jobs. By one calculation, the
boom in U.S. exports to Mexico alone generated over one million new
U.S. jobs, to say nothing of new jobs created south of the Rio Grande.
Indeed, NAFTA was one reason why the U.S. economy generated over 20
million new jobs in the 1990s. There has been no giant sucking sound--
just the noise of three nations working together, raising incomes, and
building a prosperous, shared future.
Also, the NAFTA has boosted international investment. By 2001, U.S.
companies had direct investments worth $35 billion in Mexico. Among
emerging markets, the level of U.S. investment in Mexico is second only
to Brazil (by less than $1 billion) and is more than four times the
amount U.S. companies have invested in China. Partly as a result of
this new flow of investment, Mexican sovereign and corporate debt is
receiving investment grade ratings from international agencies, and
Mexico has paid off all its IMF debts years ahead of schedule.
After growing by nearly 8% in 2000, Mexico today has followed its
northern neighbor into a recession, but it is a North American
recession characterized by a contraction of less than 1% of GDP. It is
not a classic Latin American recession, in which economies can contract
by 5-10% of GDP. North America is moving toward a true single market.
nafta's unfinished agenda
But more can be done to enhance the value of the trade and
investment partnership Mexico and the United States are building. Our
two nations took a step forward a year ago, when the U.S. Overseas
Private Investment Corporation (OPIC) announced that it would offer
long-term financing to small U.S. businesses investing in Mexico. This
was a historic decision because OPIC support was not available to U.S.
companies operating in Mexico until now. President Fox welcomed OPIC's
announcement, which comes in response to strong demand by U.S.
businesses to expand into the Mexican market.
At present, OPIC is authorized to lend from $100,000 to $200
million for small business projects in Mexico in which U.S. businesses
have at least a 25 percent ownership interest. However, the business
community is still waiting for an inter-governmental agreement to allow
OPIC to provide a complete array of investment services to U.S.
companies operating in Mexico. Over 140 countries around the world have
signed such agreements with the United States, but outdated concerns in
the Mexican Congress about such an agreement infringing on national
sovereignty have made Mexico one of just a handful of countries where
OPIC services are not generally available.
It's time for to leave these antiquated views behind. Thanks to its
free trade agreements with 32 nations, Mexico is already showing the
world that free trade is an engine of prosperity. Outmoded thinking
should not stand in the way of mutually beneficial trade and
investment,
One item that some critics of NAFTA believe ought to be placed on
the ``unfinished agenda'' for further work is the NAFTA's Chapter 11.
Even some members of Congress have criticized Chapter 11's ``investor-
state claims'' process, asserting that it gives foreign companies
rights that are denied to U.S. firms. What these critics overlook is
that the United States is by far the biggest beneficiary of investor-
state claim mechanisms. Such mechanisms are included in literally
hundreds of bilateral investment treaties around the world and are an
established and beneficial part of international commercial
jurisprudence.
Why is the investor-state claim process so important to the United
States? First, because the United States is the world's largest
overseas investor, with annual sales by overseas affiliates of U.S.
companies surpassing $2.5 trillion, a level roughly two and half times
that of our merchandise trade. While foreign investors in the United
States can count on our legal system to ensure due process, U.S.
investors in many foreign countries cannot enjoy similar security
without effective treaty provisions. This is why such provisions have
been included in 45 U.S. investment treaties with other countries. Even
as we speak, U.S. investors in Argentina are invoking the investor-
state claim process laid out in the investment treaty between the
United States and Argentina, to the great benefit of U.S. companies and
workers.
Let me repeat this crucial point: that the United States is the
primary beneficiary of these protections against discriminatory
treatment. Rules permitting investor-state arbitration grant U.S.
investors access to an impartial, independent decision-making body when
they make claims against foreign governments for breaking rules
established in trade agreements and investment treaties. Why the United
States should want to rewrite these rules is unclear, and the U.S.
Chamber urges the Congress to think long and hard before making any
changes to Chapter 11.
An additional area where our two countries are just beginning to
live up to the NAFTA's promise is cross-border trucking. The U.S.
Chamber of Commerce was pleased last year when the Bush Administration
and the Congress reached a consensus on legislation that will allow the
United States to live up to its NAFTA commitments on cross-border
trucking.
Under NAFTA, the United States and Mexico pledged to liberalize
cross-border trucking, but the United States retains full authority to
inspect--and reject--trucks that do not meet U.S. safety standards.
However, beginning in 1995, the Clinton Administration hid behind
safety standards to deny Mexican trucks entry to the United States.
That policy maintained a cumbersome, environmentally damaging, and
costly system that has put a brake on further trade growth. With over
80% of our trade moving by truck, neither country can afford to block
our trucks at the border.
In the wake of a NAFTA dispute panel ruling that unanimously found
the United States in violation of the agreement, President Bush has
pushed forward with plans to bring our country into compliance with our
solemn commitments under NAFTA. The Department of Transportation has
rolled out regulations that will allow the United States to do just
that beginning in the second half of this year.
Clearly, the time has come for our countries to open our borders to
a modern cargo transportation system that will allow our economic
partnership to reach the next level of success. We must insist that our
countries make adequate--and smart--investments in border
infrastructure to accommodate the ever-expanding volume of trade.
a secure and efficient border
Border Management has become not just a buzzword in Washington but
also an imperative in the wake of September 11. In many ways the
renewed focus on the operations of our borders has been a boon--for too
long policymakers in Washington have paid little attention to the
functioning of our borders, or, when they did, it almost always dealt
with stopping the flow of illegal immigration or contraband. Little has
been done over the past decades to update our border management
policies, border infrastructure or staffing to facilitate the millions
of legitimate travelers and billions of dollars in legitimate trade
that crosses our borders each day. Specifically, over 800,000 people
cross the U.S/Mexico border each day. That includes 250,000 personal
vehicles and over 12,000 trucks. Truck trade with Mexico amounted to
$171.1 billion in 2000.
As I stated in the first part of my testimony, under NAFTA, these
border crossings represent a significant portion of our international
trade and our domestic economy. While we must ensure our physical
security and protect our country from the devastation that could be
caused by another terrorist attack, we must also protect our economic
security, and ensure the continuation of the legitimate travel and
trade at our borders. We must remember that the terrorists also
targeted our economy when they struck at our national symbols.
In the wake of the September 11 attacks, our nation's ports of
entry have been on a Level 1 Security Alert. This increased security
has meant that commercial and passenger traffic at our nation's land
borders has been subject to increased scrutiny. While this security is
necessary, it has also resulted in significant disruptions to the
normal course of trade and travel across our borders.
In December, the Chamber conducted a survey of local and state
chambers of commerce on the Mexican border to assess the economic
impact of the post-9/11 security measures. Every locality reported
significant delays immediately after the attacks. Delays have gone down
since then as Customs and INS have been operating on 14-16 hour shifts,
mounting uncountable overtime hours, and stretching resources to the
limit. National Guard and local law enforcement have been called in to
assist with managing the traffic flow. But even so, border crossings
are still down as much as 30% in some areas and local economies that
are heavily dependent on the border traffic are continue to suffer. We
are gravely concerned that the current border situation is
unsustainable in the long term,
In response, the U.S. Chamber has created the Americans for Better
Borders (ABB) coalition. The coalition brings together over 100
regional business organizations, companies, and national trade
associations representing manufacturing, hospitality, tourism,
transportation, recreation and other industry sectors to work to ensure
the efficient flow of exports and tourism across our borders while
addressing national security concerns.
The Chamber and ABB support S. 1749, the Enhanced Border Security
and Visa Entry Reform Act, sponsored by Senators Kennedy, Brownback,
Feinstein and Kyl, which we believe takes good, reasoned steps toward
security while ensuring the continued flow of legitimate travel and
trade. The House passed a version of this bill in December and we urge
the Senate to do so as well.
But this bill is only a first step. We cannot address our border
security from our side alone. We must work in concert with our
neighbors. The Bush Administration has acknowledged this need and has
moved forward in a positive way to address border issues by engaging
Canada and Mexico in the creation of ``smart border'' accords. The 22-
point accord with Mexico, announced during President Bush's trip to
Monterrey last month, commits the United States and Mexico to moving
forward on an expedited clearance program for shipments by firms that
participate in enhanced compliance regimes, dedicated lanes for
frequent border crossers with ``smart cards,'' and exploration of joint
border infrastructure. This new agreement also provides a framework for
future border cooperation and communication between the United States
and Mexico.
Many in Congress and in the Administration have also urged the
creation of a new border agency to achieve the dual goals of improving
security and facilitating trade at the border. The Chamber is
supportive of all measures that would move toward those two goals, but
we do not favor reorganization for the sake of reorganization alone.
Any agency consolidation or reorganization should be undertaken with
specific goals and outcomes in mind. We are also aware of the good work
being done at the agencies now toward improving border processes, and
we would not want to see those efforts derailed in the rush to make
organization changes. It is a daunting challenge to reform both the
procedures at our borders and their management oversight at the same
time, and in an urgent manner. But let me say this clearly--when it
comes to our borders we cannot afford to make mistakes. So we must
think carefully about all such moves and gauge their impact before we
undertake them.
The Chamber can serve as a forum for bringing together lawmakers
and policymakers with the private sector to accomplish these
objectives. Later this month we will host a daylong forum with Members
of Congress and representatives from business and academia to discuss
cargo security and how to achieve the dual goals of security and
efficiency. We would like to work with Congress and the Administration
on any broad reforms of border oversight that might be proposed.
creating a legal migration framework
Although the challenges of border management are enormous, arguably
the biggest area of ``unfinished business'' in the U.S,/Mexico agenda
is migration.
The United States and Mexico share almost 2,000 miles of border in
addition to cultural, historic, economic and familial times that go
back generations. The links between our economies also extend to our
workforce. These factors have resulted in the patterns of migration
that have evolved over centuries. And yet our legal and regulatory
mechanisms have been largely out of step with this phenomenon,
resulting in terribly unfortunate consequences: millions of people
living and working in the U.S. without legal status, but building our
communities and economy; hundreds of people dying each year on our
border trying to achieve the same American dream; and a thriving
criminal underclass to take advantage of this system.
It is time for us to seriously address this reality. We need
comprehensive, fundamental change in our immigration system--not just
more small band-aid fixes that create more problems than they solve. We
need to make it legal for, as President Bush says, ``willing employers
to get together with willing employees.''
And once again, President Bush has shown leadership in this
difficult area. He and President Fox announced in February 2001 the
creation of a High-Level Bi-National Working Group on migration, and
tasked these senior cabinet officials with developing a new immigration
framework for the United States and Mexico. We have supported these
discussions from the beginning.
Last fall, in fact only four days before the terrorist attacks,
U.S. Chamber President and CEO Tom Donohue testified before the Senate
Judiciary Committee, along with AFL-CIO president John Sweeney and
representatives of the Hispanic and religious communities to urge
comprehensive immigration reform in the course of the U.S./Mexico
dialog. And, last Thursday, these groups came together again for the
first time since the attacks to renew their call for immigration policy
reform. We continue to state reality: we need these workers and they
are not going anywhere.
Month-to-month changes in the unemployment rate have not changed
the fundamental reality that America's population is aging and our pool
of available workers is shrinking. According to the Bureau of Labor
Statistics, by 2010 we will have 167.8 million jobs, a more than 15%
increase from current levels. But our workforce is expected to grow
only 12%, to 158 million, in the same period. And the median age of the
workforce will be over 40 years old! We need to change our policies,
make legal immigration the norm, and expand--not limit--immigration to
meet our labor needs.
New immigration policy must satisfy three important requirements.
First, we need to address the need for employers to hire foreign
workers legally when U.S. workers are not available. We need to allow
employers to fill jobs quickly and workers to have the rights and
dignity that come from having legal status.
Second, we need workable temporary and long-term visas. We need to
create new visas that go beyond seasonal needs and that have
streamlined processes that do not create additional, unnecessary
burdens. We also need to assure that everyone is playing fairly:
offering the required wages, looking first within the U.S. and treating
workers well. We need a system that is flexible to allow employers to
train and promote these workers, to allow workers to find the best
employers for them, and for both employers and employees to make the
arrangement permanent, when both agree.
And third, but possibly most importantly, we need to address the
status of those who are already here and contributing to our economy.
We believe that those who have already demonstrated their commitment to
the United States by living here, working and paying taxes, should have
a means by which they can earn permanent residence. There are many
possible ways to accomplish this that are being discussed by the
policy-makers; but we simply want to ensure that these individuals can
continue their contributions to their employers and communities.
Now there will be some who will say that in light of the terrorist
threat against us, how can we propose such a broad expansion of our
legal immigration system. The Chamber has been at the forefront of
creating a security framework in which business can continue to operate
and I would argue that immigration reform is fully consistent with our
national security imperative.
A regulated, structured immigration system will tell us who is
coming to our country, where they are living, and assure us that they
are not terrorists. We need to bring into the light hard working,
upstanding immigrants who deserve protection under our laws, while
exposing criminal gangs and terrorists that use the current system to
their advantage.
The relationship between the United States and Mexico cannot
flourish with this large issue remaining unaddressed. As Tom Donohue
said on Thursday to President Bush, President Fox and Congress: ``Do
it. Work it out. And we . . . will be here to work with you. But don't
leave this unfinished business.''
conclusion
In conclusion, Mr. Chairman, the U.S. Chamber of Commerce believes,
as the President does, that we have no more important relationship in
the world than with our neighbors in Mexico, and we need to do all we
can to perpetuate and strengthen that relationship, through increased
trade, secure and efficient borders and a migration framework that
meets the needs of both nations, And we look forward to working with
Congress and the President to achieve those goals.
Thank you, and I am happy to answer your questions.
Senator Dodd. Very good, I thank you for your testimony.
I've got some questions for you in a few minutes. Ms. Baer, why
don't you go ahead.
STATEMENT OF M. DELAL BAER, PH.D., SENIOR FELLOW AND CHAIRMAN,
MEXICO PROJECT; DEPUTY DIRECTOR, AMERICAS PROGRAM, CENTER FOR
STRATEGIC AND INTERNATIONAL STUDIES, WASHINGTON, DC
Ms. Baer. Thank you very much, Senator Dodd. Thank you so
much for your leadership on these issues over the years. It's a
tremendous honor to testify before you.
Senator Dodd. Thank you.
Ms. Baer. Mr. Chairman, if you were to ask me the question
what are the two most important issues confronting the United
States and Mexico today, I would answer without hesitation.
First, we must make provision for the mutual security of our
two nations. It is fundamental. And second, we must do all we
can to support the consolidation of Mexico's new democracy. Let
me begin with a few comments on security.
The national interests of the United States and Mexico are
complementary when it comes to homeland security. Millions of
Mexicans and Mexican-Americans reside in the cities of the
United States, for example, and they are as vulnerable to a
terrorist attack as is any other U.S. citizen. A contagious
bioterrorist attack, for example, would know no boundaries, and
it would strike deep into the heart of Mexico as surely as it
would strike into the U.S. heartland.
The defense of our contiguous airspace, land, border and
seacoasts is essential to the uninterrupted flow of our
integrated trade and transportation systems. Mr. Chairman, I
believe that there is a compelling rationale, for the first
time in the history of U.S.-Mexican relations, for creating a
partnership for security, an orderly framework for U.S.-Mexican
homeland defense that would complement our efforts in the
Partnership for Prosperity. The objective of such a framework,
as I conceive of it, would be focused principally on matters of
mutual homeland defense.
Mexico and the United States, you know your history very
well, have never had an institutionalized defense arrangement,
as has the United States and Canada in the case of NORAD, for
example. Yet surely, we should be thinking about air and sea
defense cooperation. Guidelines are needed regarding hijacked
civilian airlines which could cross international borders,
overflight rights, and coordinated operations in emergency
situations.
A bilateral data base, for example, of shared flight
pattern information is needed in order to be able to detect
cross-border flight path anomalies. I also suspect that our
grip is shaky on even such basic issues as the low flying
illegal aircraft that regularly evade radar detection to cross
the border. I applaud the steps mentioned by Jim Ziglar that
have been taken with the signing of the 22 point bilateral
agreement by Presidents Bush and Fox aimed at creating smarter
and more secure borders. I would simply warn that the
institutional capacity of Mexico to implement such accords is
limited by the lack of resources, trained personnel and
technology.
You, Senator, were asking questions about whether or not
the resources were sufficient for the INS to comply with its
mission. And I have serious doubts about whether there are
sufficient resources for our partners, with all of their best
intentions, to meet their own missions as well. I'll just give
you one example.
According to the Mexican Government's figures as released
by UNICEF, as of 1998 there were over five million Mexican
children without birth certificates, which suggests how
difficult it is for the Mexican Government to keep tabs on its
own citizens, let alone those who would enter Mexico illegally.
Senator Dodd. Enter the United States illegally.
Ms. Baer. Pardon me.
Senator Dodd. Enter the United States illegally.
Ms. Baer. And into the United States, absolutely, but born
in Mexico. Also illustrative is the ease with which one can
acquire false birth certificates, military service cards and
driver's licenses to create fictitious identities. The United
States and Mexico, I believe, will have to apply immense
resources, more than we currently are, and hands-on cooperation
in order to effectively achieve our goal of secure borders.
So, I am interested in your repeated allusion to the need
for resources. My own intuitive suspicion is that there is a
need for a serious infusion of resources on both sides of the
border. We shouldn't be shy about making a compelling case for
better defending our citizens. It's a controversial issue in
Mexico. But making the case for a partnership for security
would be the boldest thing to be attempted in the bilateral
relationship since the passage of the North American Free Trade
Agreement, which as you know required a revolution in the
historic mindset of bilateral relations. And I think it's time
to work toward another revolution in our mindset of bilateral
thinking.
Let me make a few comments on the consolidation of
democracy and building prosperity. Obviously our security
efforts will be in vain if it is not to defend freedom. The
consolidation of Mexico's democracy is important to the United
States and to building a community of shared values in North
America, to which you alluded. In that context, Mr. Chairman, I
am increasingly worried about the apparent difficulty of
Mexico's new democracy to generate multi-party consensus on
basic policy matters at home. Such difficulties could well
impact Mexico's margin for maneuver abroad and in its
relationship with the United States.
At the end of the day it's not really clear to me what more
the United States can do or should do to help Mexico
consolidate its new democracy. It's clear to me what we
shouldn't do. We shouldn't take sides in Mexico's partisan
battles, I think that's elementary. Nor should we be in the
business of designing our bilateral relationship with one eye
on the partisan balance of Mexican politics. I guess I have a
simpler vision, and that is offering hope to Mexico's poorest
citizens might be one of the best things that we can do in the
United States to help Mexico consolidate its new democracy.
Presidents Fox and Bush have announced the deliberations of
the public-private group called the Partnership for Prosperity.
I believe that a vigorous commitment must now be made for
providing resources to implement that partnership vision. Alan
Larson mentioned that there is no appropriation envisioned for
the partnership initiative. I wonder whether or not perhaps we
should be thinking of that.
I'm not a great believer in foreign aid, Mr. Chairman, but
if it is managed with an eye toward triggering private
investment, then perhaps it well may make some sense, and it
would offer hope in Mexico and it would strengthen our
bilateral relationship. I worked on the agricultural committee
of the Partnership for Prosperity, and we ended up deciding
that the United States and Mexico should facilitate partnership
agreements between Mexico campesinos organizations and private
investors. I think if we move energetically ahead on something
like that we can touch the lives of thousands, and we can bring
hope to many.
In conclusion, I am concerned about the potential for
growing impatience in Mexico with democratic institutions. I am
concerned about the growing frustration in Mexico about the
perceived absence of progress in bilateral relations. Mexico is
a shining light in our troubled Western Hemisphere, but we
shouldn't take it for granted. We have to deliver results.
And let me conclude by citing Ecclesiastes, the famous
passage: ``To everything there is a season, and a time to every
purpose under heaven.'' Now is the season for the United States
and Mexico to embrace the dual purpose of defending democracy
and future generations of Mexicans and Americans from the
depredations of global terror. Thank you very much.
[The prepared statement of Ms. Baer follows:]
Prepared Statement of M. Delal Baer, Ph.D., Chairman and Senior Fellow,
Mexico Project, Center for Strategic and International Studies
a partnership for prosperity and security--u.s.-mexico relations
Mr. Chairman and distinguished Members of the Committee,
Thank you for inviting me to share my views about U.S.-Mexico
relations with the Committee. This hearing is especially timely. We are
at a special moment in the history of U.S.-Mexican relations, and I am
not convinced that we are doing all we can to meet the challenges
before us.
Mr. Chairman, if you were to ask me the question, ``What are the
two most important issues confronting the U.S. and Mexico,'' I would
answer without hesitation--first, we must make provision for the mutual
security of our two nations and second, we must do all that we can to
support the consolidation of Mexico's new democracy. Mexico's
democratic transition and the tragic events of September 11 create a
dramatic window of opportunity to build a new security relationship
with Mexico at the same time that we help to advance Mexican social and
economic development. We must work hard to build a Partnership for
Prosperity at the same time that we build a new Partnership for
Security.
U.S.-Mexico Homeland Defense
Let me begin with a discussion of security issues. The national
interests of the U.S. and Mexico are complementary when it comes to
homeland defense. Millions of Mexicans and Mexican Americans reside in
the cities of the United States, for example, and they are as
vulnerable to terrorist attack as any U.S. citizen. A contagious bio-
terrorist attack, for example, would know no boundaries and which would
strike into the heart of Mexico as surely as it would strike into the
U.S. heartland. The defense of our contiguous air space, land border
and seacoasts is essential to the uninterrupted flow of our integrated
trade and transportation systems. Open trade must not create an open
door for terrorists, and Mexico's interest in liberalized U.S.
immigration policies depends upon closing loopholes that can be
exploited by terrorists. In sum, it is hard to argue with the
proposition that our destinies are linked by geography and that
everything possible must be done to assure the safety of the citizens
of both countries.
Mr. Chairman, I believe that there is a compelling rationale for
the first time in the history of U.S.-Mexico relations for creating a
Partnership for Security--an orderly framework for U.S.-Mexican
homeland defense. The objective of such a framework, as I conceive of
it, would be to focus principally on matters of mutual homeland
defense. Mexico and the United States never have had an
institutionalized defense arrangement as do the U.S. and Canada with
NORAD, for example, yet surely we should be thinking about air and sea
defense cooperation. Surely we should be thinking about how to organize
our homeland security together with Mexico and asking whether or not
tripartite institutions involving Canada are appropriate. Guidelines
are needed regarding hijacked civilian airliners crossing international
borders, over flight rights and coordinated operations in emergencies.
A bilateral database of shared flight pattern information is needed in
order to be able to detect cross border, flight path anomalies. I
suspect our grip is shaky on basic issues such as low flying, illegal
aircraft that regularly evade radar detection to cross the border.
I applaud the steps that have been taken with the signing of the
bilateral agreement by Presidents Bush and Fox aimed at creating
smarter and more secure borders. I would simply warn that the
institutional capacity of Mexico to implement such accords is limited
by a lack of resources, trained personnel and technology. According to
the Mexican government's figures as highlighted by UNICEF, as of 1998
there were over 5,000,000 Mexican children without birth certificates,
which suggests how difficult it is for the Mexican government to keep
tabs on its own citizens, let alone those who enter Mexico illegally.
Also illustrative is the ease with which one can acquire apocryphal
birth certificates, military service card and driver's licenses to
create fictitious identities. The U.S. and Mexico will have to apply
immense resources and hands on cooperation in order to effectively
achieve our goal of secure borders.
These are not easy issues, Mr. Chairman, and the mere mention of
closer security relations is controversial in some Mexican circles.
Recently, a political firestorm was touched off by the U.S. decision to
create a Northern Command as a part of the post 9/11 restructuring of
the U.S. Unified Command Plan. Some Mexicans mistakenly believed that a
joint, U.S.-Mexico-Canada military command was in the making, while
others suspiciously viewed the Northern Command as a hostile act
directed at Mexico. Similar tensions could be seen when the Mexican
Senate recently refused permission for President Fox to travel to the
United States, citing an accumulation of irritations in bilateral
relations and questioning new security-oriented initiatives.
In light of these tensions, a strong articulation of our shared
security interest should be made a priority mission of U.S. and Mexican
diplomacy. Each country has an interest in guaranteeing its own
homeland security, and this interest exists independently of the many
other issues that are currently on the bilateral agenda, such as
immigration or trade disputes. We should not be shy about making a
compelling case for better defending our citizens. Making the case for
a Partnership for Security would be the boldest thing to be attempted
since the passage of the North American Free Trade Agreement, which
required a revolution in the historic mindset of bilateral relations.
It is time to work toward another revolution in bilateral thinking.
Consolidating Democracy and Building Prosperity
Our security efforts will be in vain if it is not to defend our
freedom. The consolidation of Mexico's democracy is important to the
United States and to building a community of shared values in North
America. In that context, Mr. Chairman, I am increasingly worried about
the apparent difficulty of Mexico's new democracy to generate multi-
party consensus on basic policy matters at home. Such difficulties
could well impact Mexico's margin for maneuver abroad and in its
relationship with the United States.
At the end of the day, it is not clear what more the United States
can or should do to help Mexico consolidate its new democracy. It is
clearer to me what we should not do. The United States should not take
sides in Mexico's partisan battles. Nor should the United States be in
the business of designing the bilateral relationship with one eye cast
on the partisan balance of Mexican politics.
Offering hope to Mexico's poorest citizens may be one of the best
things that the U.S. can do to help Mexico consolidate its new
democracy. Presidents Fox and Bush announced the deliberations of a
private-public group called the Partnership for Prosperity during their
last meeting in Monterrey, Mexico last March. A vigorous commitment
must now be made to providing the resources for implementing the
Partnership for Prosperity, whose mission is to stimulate private
investment in the poorest, migrant-sending regions of Mexico.
I am not a great believer in foreign aid, Mr. Chairman, but if aid
is managed with an eye toward triggering private investment, as
conceived in the Partnership for Prosperity, than it may well make
sense. I participated in the agricultural session of the Partnership
for Prosperity and can see an enormous potential for good. Let me give
you one example. If the United States and Mexico reach out
energetically to match up scores of Mexican peasant organizations with
U.S. private investors, we can touch many lives and rapidly spread the
seeds of hope in Mexico's poorest regions. There are similar
opportunities for progress in the areas of providing technical
assistance and funding for micro-credit and remittances programs in
Mexico. Many of the strategic relationships that the United States
sustains around the globe are accompanied by a commitment to provide
development assistance as well as military or technical assistance. If
we can provide resources to strategic partners such as Egypt, Israel
and Pakistan, surely we can do so for Mexico.
Finally, let me make one brief comment on immigration policy.
President Fox has made a liberalized immigration policy in the United
States a key objective of his foreign policy, a goal that is shared by
many Mexicans across the partisan spectrum. Clearly, there is growing
impatience in Mexico with the slow pace of bilateral discussions with
the U.S. Yet, immigration is a very complex domestic issue in the
United States, and the first obligation of U.S. policy is to the
interests of our own citizens. I, for one, do not think that it is
helpful to imagine that migration policy can be treated as a bargaining
chip in some wider trade off with the Mexican government--I tend to
believe that each issue on the bilateral agenda should be treated on
the virtue of its own merits. And as an academic, I have the luxury of
being dismayed at the partisan treatment of this important policy issue
at the hands of politicians of all parties on both sides of the border.
My own view is that we are most likely to make progress on
migration policy if we take it one step at a time, building consensus
along the way. For example, if a carefully conceived expansion of our
temporary visa program can be designed to prevent visa overstays and to
guarantee that false documents and false identities are screened out,
than such a program should be moved expeditiously as part of an overall
enhancement of bilateral relations.
Mr. Chairman and Members of the Committee:
I am concerned about the potential for growing impatience in Mexico
with democratic institutions. I also am concerned about the growing
frustration in Mexico with a perceived absence of progress in bilateral
relations. Mexico is one of the shining lights in our troubled western
hemisphere, but we should not take Mexico's democracy for granted. The
excitement inspired by Mexico's democratic transition and the
friendship between President Fox and President Bush has raised
unrealistically high expectations about the potential for striking
grand deals on everything from migration to energy. In addition, the
events of September 11th have set a new and very high bar over which
Mexico and the United States must now leap. We must find a way to
deliver results.
Let me conclude by citing the famous passage of Ecclesiastes--``To
everything there is a season, and a time to every purpose under
heaven.'' Now is the season for Mexico and the United States to embrace
the dual purpose of defending democracy and defending future
generations of Mexicans and Americans from the depredations of global
terror.
Senator Dodd. Excellent testimony, we thank you. Mr. Ladik,
thank you for being with us. You are the last witness, but not
the least witness.
STATEMENT OF STEVEN M. LADIK, PRESIDENT, AMERICAN IMMIGRATION
LAWYERS ASSOCIATION, WASHINGTON, DC
Mr. Ladik. Thank you, sir. Thank you very much. I am
honored to be here today, Mr. Chairman, representing the
American Immigration Lawyers Association. AILA appreciates this
opportunity to express its views on strengthening U.S.-Mexican
relations, and the unfinished agenda that the two nations face.
I will focus my testimony today on the immigration aspects
of this unfinished agenda, because immigration clearly is an
important dimension of that agenda. Migration issues play a
pivotal role in any discussion about the relations between
these two neighbors. The United States and Mexico share a
challenging history, a long common boundary, and an important
trading relationship, reflected most recently by the North
American Free Trade Agreement; and the shared responsibility,
along with Canada, of enhancing this hemisphere's security.
An agreement between the United States and Mexico on
immigration matters will be groundbreaking for both countries.
Through these talks the United States can achieve long needed
immigration reforms that contribute to our national security,
that reunify families and respond to ongoing worker shortages
that remain a critical issue because of long term demographic,
economic and education trends. These reforms need to be
comprehensive in nature. We must align our immigration policies
with our national security needs, while recognizing market
forces and working to reunify families.
It is our hope that President Bush and President Fox sign a
migration accord that combines cooperation and enforcement and
security with changes in U.S. immigration policy. Enforcement,
security and U.S. immigration policy reforms must proceed
together because each needs the others to succeed. It is only
through such comprehensive reform that we can change our
immigration policies in ways that enhance our security and make
legal immigration the norm.
The outline of such comprehensive reform would include a
smart border agreement that would enhance the security of both
nations and include joint enforcement efforts to reduce illegal
immigration; an increase in the number of temporary and
permanent visas for workers and their families coming to the
United States so that our legal immigration system, by more
closely tracking economic needs and family dynamics, will be
more easily and effectively enforced; and earned legal status
for hard working immigrants already here so that these valued
workers are properly documented, can participate fully in their
communities, and are eventually made eligible for permanent
residence and U.S. citizenship.
Past efforts at reform were partially successful at best,
because they were not comprehensive. For example, the 1986
amnesty while addressing one issue, legalizing the status of
people already here, failed to address systemic problems such
as the backlogs in family based immigrant visas and the absence
of temporary and permanent business-based visa programs. We
need to learn from our past and advocate for comprehensive
reform this time around.
What specifically would a comprehensive reform package
include? No. 1, an earned adjustment for people in the United
States without authorization. People who work hard, pay taxes
and contribute to the United States should be given the
opportunity to obtain permanent residence. This legalization
would stabilize the work force of U.S. employers, encourage
people to come out of the shadows to be scrutinized by our
government, and allow immigrants to work and travel legally and
be treated equally.
Next, a new temporary worker program. Current immigration
laws do not meet the needs of our economy for short and long
term employees in those sectors currently experiencing worker
shortages, and others that are expected to experience shortages
when the economy rebounds. A new temporary program that
includes full labor rights and protections would give workers
the opportunity to work in areas of the country where they are
needed, and would give employers experiencing shortages the
work force that they need.
Such a new temporary worker program would have many
positive benefits for Mexico, because it has the potential to
allow for the cross-border flow of Mexican workers between the
United States and their home communities. Currently, Mexican
towns and labor exporting regions are bereft of their working
age males because border crossing is too dangerous. A visa
program that allowed these workers to return to their homes
would be of immense benefit to their families and their
communities, and would help the Mexican economy greatly. Such a
program would parallel the Mexican program that already exists
with Canada, under which future program participation is based
on current year compliance.
Next, more legal channels for family and business-based
immigration. Our immigration system has been characterized by
long backlogs in family based immigration and long delays in
business-based immigration. Illegal immigration is a symptom of
a system that fails to reunify families and address economic
conditions in the United States and abroad. Developing an
increased legal migration flow will make immigration more
orderly and legal. It also will allow more people to reunite
with their families and work legally in the United States.
Finally, adequate funding for these reform initiatives.
Immigration reform must include adequate funding to implement
reform. Unfortunately, and in all due respect, Congress
frequently passes new immigration laws without including
adequate funding. Such changes would make legality the norm and
would ensure that immigration is legal, safe, orderly, and
reflective of the needs of American families, businesses and
national security. It is now time that we work with Mexico to
develop and implement these needed reforms. Thank you.
[The prepared statement of Mr. Ladik follows:]
Prepared Statement of Steven M. Ladik, President, American Immigration
Lawyers Association
Mr. Chairman and Distinguished Members of the Subcommittee:
My name is Steven Ladik. I am honored to be here today representing
the American Immigration Lawyers Association (AILA). I am President of
AILA, the immigration bar association of more than 7,800 attorneys who
practice immigration law. Founded in 1946, the association is a
nonpartisan, nonprofit organization and is affiliated with the American
Bar Association (ABA).
AILA takes a very broad view on immigration matters because our
member attorneys represent tens of thousands of U.S. families who have
applied for permanent residence for their spouses, children, and other
close relatives to lawfully enter and reside in the United States. AILA
members also represent thousands of U.S. businesses and industries that
sponsor highly skilled foreign professionals seeking to enter the
United States on a temporary basis or, having proved the unavailability
of U.S. workers, on a permanent basis. Our members also represent
asylum seekers, often on a pro bono basis, as well as athletes,
entertainers, and foreign students.
introduction: immigration and the unfinished agenda
AILA appreciates this opportunity to express its views on
strengthening U.S./Mexican relations and the unfinished agenda that the
two nations face. I will focus my testimony on the immigration aspects
of this unfinished agenda because immigration clearly is an important
dimension of that agenda. Migration issues play a pivotal role in any
discussion about the relations between these two neighbors. The United
States and Mexico share a challenging history, a long common boundary,
an important trading relationship reflected most recently by the North
American Free Trade Agreement (NAFTA), which has deepened the levels of
economic integration and interdependence between the two countries, and
the shared responsibility (along with Canada) of enhancing this
hemisphere's security.
An agreement between the U.S. and Mexico on immigration matters
will be groundbreaking for both countries. President Bush and Mexico's
President Fox were working together to produce such an accord just
prior to the September 11 terrorist attacks. Those attacks only
reinforced the need for such an agreement. I come before you today to
both express my hope that these discussions accelerate and produce an
agreement and to review the potential benefits of such an accord. I
feel most comfortable in my capacity as AILA's President to focus my
testimony on the benefits to the U.S. of such an agreement.
The mere existence of these discussions has revolutionized the
immigration debate. Direct talks between our two countries have
internationalized the issue of immigration and broadened the
discussions in Washington, D.C. Much is now on the table for the first
time to offer us an historic opportunity to fix what has been long-
broken. Through these talks, the U.S. can achieve long-needed
immigration reforms that contribute to our national security, reunify
families, and respond to ongoing critical worker shortages.
Most agree that our current immigration system has failed in many
ways and needs to be fixed. It has not been reformed in many years and
reflects neither current nor future needs. Many have lost their lives
at our borders, trying to cross into the U.S., smugglers are profiting
from this trade in human lives, and precious resources are diverted
from enhancing our national security because our government, instead of
seeking out those who would do us harm, is rounding up people who are
drawn here to fill our labor needs. Employers in several sectors
currently are unable to obtain the workers they need, and as the
economy continues to improve, other employers will experience worker
shortages. Furthermore, families remain separated for years due to
bureaucratic processing delays and long backlogs, and hard-working tax-
paying people who contribute to our economy are undocumented and forced
to live an underground existence.
The United States needs to reform its immigration system to
recognize the contributions that immigrants have made to this nation
and their continued importance to our national well-being and to the
enhancement of our security. These factors will only intensify as the
U.S. continues to emerge from an economic slowdown and from the shadows
of the September 11 terrorist attacks. President Bush views reforming
our immigration policies as an opportunity rather than a problem and
has put together high-level working groups in his Administration to
develop a proposal with their Mexican counterparts. The President has
pointed out that the ``relationship between the United States and
Mexico is very strong, is very important, and it's growing stronger
every day.'' Senator Tom Daschle (DND) and Representative Dick Gephardt
(D-MO), the Democratic leaders of the Senate and House, respectively,
have emphasized that ``fashioning strong relations with Mexico is vital
to our national security,'' and have reiterated their strong support
for ``comprehensive immigration reform'' and policies that ``must
reflect our core values of family unity, fundamental fairness and
economic opportunity.''
The election of Mexico's President Fox has been essential in making
these discussions possible. President Fox has made migration a priority
on his government's agenda, has called Mexicans who have come to the
U.S. ``heroes,'' and has been a forceful partner in the ongoing
discussions. He has shed the Mexican government's traditional hands-off
approach to the issue. In fact, just prior to the attacks, the Mexican
government put forth a new comprehensive proposal consisting of five
components: an earned legalization program for hardworking people
currently in the U.S.; an expanded permanent visa program; an enhanced
temporary worker visa program; border control cooperation; and economic
development in Mexican immigrant sending regions. These five components
point the way to the comprehensive reform that is needed is this area,
and should be the foundation upon which the continuation of the
bilateral talks between our government and Mexico is built.
the need for comprehensive immigration reform
The U.S. immigration system needs to be reformed in a comprehensive
manner to meet our security needs, to reflect accurately the close and
growing economic ties between the U.S. and Mexico, and to help families
to reunify. Most would agree that our current immigration system is out
of sync with reality. In fact, the status quo is unacceptable,
especially in a post-September 11 world in which enhanced security
becomes a central priority along with the need to balance these
security demands with the continued flow of people and goods that keeps
our economy strong.
The Border Security and Visa Reform Bill, that we hope the Senate
will soon pass, takes a first important step to change our immigration
laws to help make us safer. But this bill, which includes urgently
needed provisions, is by itself insufficient and needs to be fortified
by the kind of comprehensive reforms the U.S./Mexico discussions can
produce. These discussions offer us the opportunity to further align
our immigration policies with our national security needs while
recognizing market forces and family reunification goals.
It is our hope that President Bush and President Fox sign a
migration accord that combines cooperation in enforcement and security
with changes in U.S. immigration policy. Enforcement, security, and
U.S. immigration policy reforms must proceed together because each
needs the others to succeed. It is only through such comprehensive
reform that we can change our immigration policies in ways that enhance
our security and make legality the norm. The outline of such
comprehensive reform would include:
A ``smart border agreement'' that would enhance the security
of both nations and include joint enforcement efforts to reduce
illegal immigration.
An increase in the number of temporary and permanent visas
for workers and their families coming to the U.S. so that our
legal immigration system, by more closely tracking economic
needs and family dynamics, will be more easily and effectively
enforced.
Earned legal status for hardworking immigrants already here
so that these valued workers are properly documented, can
participate fully in their communities, and are eventually made
eligible for permanent residence and U.S. citizenship.
Aspects of such comprehensive reform were highlighted in the
groundbreaking report issued last year by the Carnegie Endowment for
International Peace and the Instituto Tecnologico Autonomo de Mexico.
In this report, a high-level panel composed of equal numbers of Mexican
and American experts issued recommendations on U.S.-Mexico relations
with respect to migration and border issues. The report proposes a
``grand bargain'' with the shared belief that ``migration from Mexico
to the United States should be (a) mutually beneficial; (b) safe,
legal, orderly, and predictable; and (c) that, over the long term, it
should naturally decrease and stabilize at moderate levels.''
Our immigration system needs to be reformed comprehensively so that
legality is the norm, and immigration is legal, safe, orderly, and
reflective of the needs of American families, businesses, and national
security. Past efforts at reform were partially successful at best
because they were not comprehensive. For example, the 1986 amnesty,
while addressing one issue--legalizing the status of people already
here--failed to address systemic problems such as the backlogs in
family-based immigrant visas, and the absence of temporary and
permanent business-based visa programs. We need to learn from our past,
and advocate for comprehensive reform this time around.
A U.S./Mexico Immigration Agreement Will Help the U.S. Address National
Security Concerns
Bilateral cooperation in enforcement initiatives that focus on
illegal immigration, the opportunity for hardworking immigrants already
here filling legitimate labor needs to earn legal status, a new
temporary program for essential workers to fill identified labor needs,
and more visas for workers and family members are initiatives that
together will contribute to our security. Because our shared security
needs create the additional impetus for Mexico and the U.S. to
coordinate and cooperate, it follows that by encouraging and
facilitating legal immigration, both countries will be able to focus
their resources on terrorists and people engaged in smuggling,
trafficking, and other criminal activities.
Immigration reforms that legalize hard working people already here
and that create a new temporary program also will help the U.S.
government focus resources on enhancing security, not on detaining hard
working people who come here to work or reunite with their close family
members. In addition, reform that includes a new legalization program
and a temporary worker program will encourage people to come out of the
shadows and be scrutinized by our government. The legality that results
from these initiatives will further contribute to our national
security.
That cooperation with Mexico is central to enhancing our security
is evident in the recent action plan signed by Presidents Bush and Fox.
During President Bush's April trip to Mexico, he and President Fox
finalized a 22-point ``U.S.-Mexico Border Partnership Action Plan.''
This plan is a first step to reconcile post-September 11 security
concerns with the need to keep commerce moving freely between the U.S.
and its second largest trading partner. The ``smart border'' deal aims
to facilitate the legitimate flow of people and commerce across our
borders while screening out those who would threaten us. In a joint
statement, Presidents Bush and Fox stated, ``We will build a border
that protects our societies against those who would do us harm, and
that truly serves the human and economic needs of our dynamic
relationship. We share a vision of a modern border that speeds the
legitimate flow of people and commerce, and filters out all that
threatens our safety and prosperity.''
Among other initiatives, the plan calls for the U.S. to pre-certify
certain Mexican companies that would electronically seal their
containers in Mexico and receive express treatment at the border. The
plan also calls for a study of the possibility of creating express
immigration lines at airports for people from the three NAFTA nations,
and for Mexico and the U.S. to share information on those applying for
visas to travel to either country.
The two countries are also discussing: improved sharing of
intelligence in order to thwart terrorists using Mexico to facilitate
illegal entry into the U.S.; border crossing practices that facilitate
and streamline the passage of legitimate people and cargo while
identifying those that require more extensive screening; and
intensified joint efforts to crack down on human trafficking.
This type of bilateral effort to facilitate the safe and legal flow
of people and commerce across our borders through the use of improved
technology and international cooperation will aid us in our fight
against crime and terrorism.
A U.S./Mexico Immigration Agreement Will Help the U.S. Address this
Country's Economic Needs
Mexico is the U.S.' second largest trading partner (after Canada),
with southern border communities a symbol of the interrelatedness of
the two countries and economies. Since the passage of the NAFTA, levels
of economic integration and interdependence have dramatically
increased. However, this cooperation and coordination of capital,
goods, and services stands in stark contrast to the massive enforcement
efforts directed against employers and the legal restrictions faced by
labor. The U.S. and Mexico cannot continue to be good partners on
economic issues when a partnership does not exist on immigration
issues. This contradiction is particularly harmful to the U.S. economy
due to our nation's economic dependence on undocumented workers from
Mexico and the demand for additional workers to meet labor shortages.
Recent studies suggest that the current levels of undocumented
migration from Mexico contribute somewhere between $154 billion to $220
billion to the Gross Domestic Product of the U.S. Because these workers
have become indispensable to the U.S. economy, it is vitally important
that their status be legalized so they acquire the protections and
rights that all workers in the U.S. should receive. Yet there are few
opportunities for these workers to legalize their status. Current laws
pose difficulties for employers as well. In my experience as a lawyer
who practices in Texas, when the Immigration and Naturalization Service
(INS) initiates work-site enforcement, U.S. employers, through no fault
of their own, can lose 50 to 75 percent of their workforce. These
employers usually are unable to replace these workers in a timely
manner, getting no assistance from either the Texas Workforce
Commission or the Dallas County Welfare Department. Finally, after
about five months, employers are generally able to find employees to
replace the ones they lost through INS enforcement efforts. In the
meantime, however, assembly lines are shut down and businesses are
incapacitated for months.
This is no way to run a world-class economy. We must find a way for
employers to get the legal workers they need, and for workers to either
legalize their status or have a legal means, on a temporary or
permanent basis, to enter the U.S. to take jobs for which they are
needed. Mexicans have been coming to the U.S. for more than a century
to work in both agriculture and the service sector, and this flow will
continue regardless of the laws that Congress does or does not pass.
The U.S./Mexico discussions offer us the opportunity to legalize this
flow of needed workers so that we treat them, not as second-class human
beings, but with the full rights and protections of our laws and legal
system to reflect their many contributions to our country and economy.
It is important to understand that our country's need for these
workers will only increase over time. Our labor market will demand even
more workers because this nation is facing the prospect of dramatic
labor shortages. Notwithstanding the now receding slowdown, the U.S.
will be confronting shortages that result from demographic realities:
our society is aging, with insufficient replacements due to low birth
rates. European countries are already beginning to experience the
negative consequences of such an equation. The U.S. will be next if we
do not reform our immigration system. And Mexico is key to any
successful reforms we are to undertake.
The Bureau of Labor Statistics (BLS) projects that the U.S. will
create 17 million new jobs by 2010, 58 percent of which will not
require a four-year college degree. The service-producing sector will
add 20.5 million jobs with a total projected increase in the labor
force of 17 million. Meanwhile, the U.S. is not producing enough new
workers to sustain such growth and our current workforce is aging. By
2010, the labor force ages 46-64 will have the fastest growth rate.
More than 60 million current employees will likely retire over the next
30 years. Testifying before a House Subcommittee in 2000, Dr. Richard
Judy of the Hudson Institute said, ``After 2011, the year in which the
first of the Baby Boomers turns 65, their flight to retirement will
reach proportions so huge as, barring unforeseen increases in
immigration and/or participation rates among the elderly, to reduce the
total size of the nation's workforce.''
The following are examples of sector-specific information on
present and future labor needs provided by the Essential Worker
Immigration Coalition (EWIC), a coalition, of which AILA is a member,
of businesses, trade associations, and other organizations from across
the business spectrum concerned with the shortage of both skilled and
less skilled (``essential worker'') labor.
From the American Health Care Association
On February 18, 2002, the New York Times reported that more than 90
percent of all nursing facilities do not have the number of staff
necessary to provide good care. The U.S. Department of Health and Human
Services recently reported that nursing homes currently need 181,000 to
310,000 nurse aides (an entry-level position) to reach full staff
levels. This number is expected to grow to over 800,000 by the year
2008, as more baby boomers need long-term care. Nursing homes have
hired over 100,000 people from the welfare roles, wages are higher than
in the service sector generally, and the facilities generally provide a
training and certification course (paying wages while attendees take
classes) to become a Certified Nurse Aide (CNA).
From the American Hotel & Lodging Association
A recent report by the American Economics Group estimated current
lodging industry employment at 1.9 million with projected growth to
over 2.6 million in 2010, meaning that the industry will require more
than 700,000 additional workers this decade.
From the American Meat Institute
According to the BLS, the meat and poultry packing and processing
industry employed more than 500,000 workers in 2000 (compared to
235,000 in 1975), and is projected by BLS to employ more than 540,000
workers, a 7.6 percent increase, by 2010. Most large meat and poultry
packing plants are located in low-population, rural areas, which pose
unique challenges to this labor-intensive industry. Not only does a
labor shortage reduce productivity and efficiency in meat and poultry
plants, it reduces capacity to buy and process poultry and livestock,
hurting farmers as well.
From the Associated General Contractors
The December 2000 ``Insights in Construction'' Survey by AGC and
Deloitte & Touche listed a shortage of skilled labor as the biggest
challenge facing the construction industry over the next five years.
The BLS recently estimated that more than 2 million workers will be
needed in construction trades and related fields between 2000 and 2010
due to job growth and net replacements for retiring workers.
From the Building Service Contractors Association International
Current employment in building services is over 1 million, and has
grown steadily in the last year. According to a survey by the
Association, all responding members reported they expect to increase
employment in the next year, and all reported difficulty filling vacant
positions. These vacancies have resulted in curtailment of seeking
additional service contracts and expansion plans. Notably, these
shortages are affecting an industry that employs anywhere from 40 to 99
percent women and minorities.
From the National Association of Home Builders
Finding skilled workers has become increasingly difficult for
homebuilders. Recent surveys of local homebuilder associations have
consistently ranked labor availability as one of the most critical
issues facing the industry. Other NAHB surveys have reported that the
labor shortage has added 20 days to the time needed to build a single-
family home, significantly adding to its cost. According to BLS, over
200,000 new workers are required by the industry each year to meet
consumer demand for housing.
From the National Restaurant Association
Restaurants are the largest private-sector employer with over 11.3
million employees. By 2010 the industry expects to employ an additional
2 million workers. Labor shortages consistently poll among the top
issues for restaurants/small business. According to the National
Council of Chain Restaurants, workforce shortages, particularly in
metropolitan areas, are among the most significant short and long term
challenges to the industry.
From the National Roofing Contractors Association
The lack of qualified workers is the single biggest problem facing
roofing contractors today. In a recent on-line survey of members, over
50 percent responded that they could hire up to five additional
employees right now if qualified workers were available. The BLS
projects an additional 50,000 roofers will be needed over the next
decade to keep pace with demand.
From the U.S. Chamber of Commerce
The U.S. Chamber of Commerce's Center for Workforce Preparation did
a survey of local chambers of commerce in the summer of 2001. Ninety-
nine percent of leading chamber of commerce CEOs reported workforce
development as a priority issue among employers. Eighty percent of
survey respondents listed a ``shortage of workers/low unemployment'' as
a key workforce development issue in their community. For example, a
representative from Chamber member Ingersoll-Rand, a multinational
manufacturing company, testified in Congress in 2001 that one of its
key workforce problems is finding workers for skilled trades, including
welders, tool and die makers and skilled machinists, and that even
though the company operates its own training facilities for these jobs,
it cannot find enough applicants for the training.
All of these facts point to one simple reality: developing a fair
and effective immigration system is essential to our economy. The
current discussion between the U.S. and Mexico provide a rare
opportunity to address this country's economic needs and build a
stronger, brighter future.
A U.S./Mexico Immigration Agreement Will Help the U.S. Address the
Urgent Need to Reunify Families:
Through family-based immigration, a U.S. citizen or legal permanent
resident can sponsor his or her close family members for permanent
residence. However, the numerical limitations on many visa categories
for both family-based and employment-based immigration force families
to wait many years before they can be reunited legally. The current
caps are unrealistic and run contrary to policy promoting family unity
(as well as make it difficult for U.S. employers to secure able and
qualified workers). For example, adult unmarried children of U.S.
citizens must wait four and a half years before they can receive a
permanent visa. Mexicans are especially impacted. Mexican family
members of U.S. citizens or legal permanent residents in all of the
visa categories must currently wait anywhere from 1-5 years longer than
most other nationals for a visa to become available.
The result is that families remain separated for many years, a
situation that encourages illegality as families are forced to wait,
sometimes for a decade, and during that period are not even allowed
legal entrance into the U.S. as visitors.
Two possible approaches to ameliorating the family immigration
backlogs should be considered. First, the U.S. should consider
exempting both Mexico and Canada from the per-country limits. These
limits impose an artificially low ceiling on family immigration from
Mexico, and are out of synch with today's reality. In light of the
increasing interdependence of North American economies, there is no
reason to continue to limit Mexican immigration to the same per-country
quota imposed on countries in other more distant parts of the world.
Second, the U.S. should consider exempting Mexico and Canada from
the family preference system numerical limits. Doing so would free up
family preference numbers and would help alleviate the backlogs in
these categories for all foreign nationals.
Comprehensive reform must support the reunification of families.
Legalizing the status of hardworking people already in the U.S. and
opening up channels for family-based immigration will help ensure an
orderly process and legal flow and make legal that which in many cases
has been illegal.
conclusion: what needs to be done
To address our economic and security needs and to reunite families,
any U.S./Mexico agreement needs to accomplish the following:
Develop a Regularization Program for People in the U.S.
without Authorization: People who work hard, pay taxes, and
contribute to the U.S. should be given the opportunity to
obtain permanent residence. This legalization would stabilize
the workforce of U.S. employers, encourage people to come out
of the shadows to be scrutinized by our government, and allow
immigrants to work and travel legally and be treated equally.
Many have been here for years, are paying taxes, raising
families (typically including U.S. citizen and lawful permanent
resident spouses and children), contributing to their
communities and are essential to the industries within which
they work. In order to unite families and keep them together,
liberal and generous waivers must be made available for grounds
of admissibility and deportability. It is neither in the best
interests of the workers nor their employers for this situation
to remain unaddressed.
Create a New Temporary Worker Program: Current immigration
laws do not meet the needs of our economy for short- and long-
term employees in those sectors currently experiencing worker
shortages and others that are expected to experience shortages
when the economy rebounds. A new temporary program that
includes full labor rights and protections would give workers
the opportunity to work in areas of the country where they are
needed and would give employers experiencing shortages the
workforce they need. Current programs often have proven
unusable by both employees and employers, and do not
accommodate employers facing longer term, chronic labor
shortages. The framework for a new temporary worker program
must differ significantly from existing programs, and must
respect both the labor needs of business as well as the rights
of workers.
The creation of a new temporary worker program would have
many positive benefits for Mexico because it has the potential
to allow for the flow back and forth of Mexican workers between
the U.S. and their home communities. Currently, Mexican towns
in immigrant sending regions are bereft of their working-age
male members because border crossing is too dangerous. A visa
program that allowed these workers to return to their homes
would be of immense benefit to their families and communities,
and would help the Mexican economy immensely. Such a program
would parallel the one already that already exists with Canada
under which future program participation is based on current
year compliance.
Open Up Legal Channels for Family and Business-Based
Immigration: Our immigration system has been characterized by
long backlogs in family-based immigration and long delays in
business-based immigration. Illegal immigration is a symptom of
a system that fails to reunify families and address economic
conditions in the U.S. and abroad. To ensure an orderly future
process, it is critical to reduce bureaucratic obstacles and
undue restrictions to permanent legal immigration. Developing
an increased legal migration flow will make immigration more
orderly and legal. It also will allow more people to reunite
with their families and work legally in the U.S., and would
facilitate fair, equitable, and efficient immigration law,
policy, and processing. It is essential to make legal future
immigration that otherwise will happen illegally.
Adequately Funding Immigration Reform Initiatives:
Immigration reform must include adequate funding to implement
reform. Congress frequently passes new immigration laws without
including adequate funding. Lack of adequate funding has
contributed to the long backlogs and ineffective, inefficient
and unfair services that currently characterize the Immigration
and Naturalization Service (INS). Whether funds are directed to
the INS or other entities to implement reform, any changes in
the law must be accompanied by adequate funding, in the form of
direct congressional appropriations.
Senator Dodd. Thank you very much. I thank all four of you.
Excellent testimony, very, very helpful to this committee in
having a full discussion of the many issues that relate to the
bilateral relationship, and your particular emphasis on a
couple of them, I think, is particularly helpful. Let me--and
I'll leave the record open--I wanted to raise some issues with
you here, and if any of you want to jump in or raise any
questions please feel free to do so.
I raised the issue of Hoffman Plastics, Ms. Shailor, and I
wonder if you might--what recommendations would you be making.
I know my colleague, Senator Kennedy of Massachusetts, is
talking about legislation to deal with the court's ruling in
this matter. And I've raised this issue with other panelists,
and obviously you all--particularly from the administration
being advisedly cautious about expressing what legislative
proposals they'd support.
But it just strikes me that if you're, as I said earlier,
if you're going to stay within the borders of the United
States, we're going to say that some laws like this will only
apply to people who work here, who have a legal status. In
other words, the law does discriminate in that sense. It seems
to me you're going to have--it raises some serious questions
when you begin to move into other areas of law. It seems to me
you start applying that same standard and you're going to run
into some major, major problems. And I think it's been
reflected in some of the reaction to this decision, in Mexico.
So I'd like you to comment on that. And I'm going to ask
you as well, Mr. Lebedev if you might, because clearly I'd like
to hear the Chamber's sort of view on this because obviously it
involves a business and a decision they made to one, hire this
individual, and then to fire this individual. And I'm curious
as to how you and the Chamber might react to this as well.
Ms. Shailor. Well, I think on a basic trade union principle
of international solidarity, the reality is when you undercut
any one worker's rights you undercut all workers rights. And so
in this particular situation, invalidating the limited back pay
remedy, is one that is basically, you know, a hammer that
unscrupulous employers can use when they realize there will be
no effective penalty for their actions. And so I think this is
symptomatic of hundreds of stories that we hear from organizers
from all our affiliated unions who are dealing with immigrant
populations, whether it be in organizing campaigns or
representing them under collective bargaining agreements.
So I think this has to be looked at very carefully by the
Congress. I would say that our relationship with our Mexican
trade union counterparts is essential in this regard so that
we're speaking, obviously, with one voice in speaking with the
Mexican Government as well as to our own Congress. But this is,
as you well know, not unusual. We face this every day as we try
and represent the rights of immigrant workers throughout the
country.
Senator Dodd. Mr. Lebedev.
Mr. Lebedev. Unlike Jim Ziglar, I did not clerk in the
Supreme Court, but I will subscribe to his general thesis that
one should not comment extensively on a case that has not been
read. But, I think the case highlights that employers in this
country and members of the U.S. Chamber are fundamentally
concerned about fairness in the workplace. And without speaking
to the merits of a case with which I'm not specifically
familiar, I think it goes to the very reasons that you're
holding these hearings.
You're putting a spotlight on the need for considerable
reform in a system that creates circumstances, that creates
contexts that high light, that we have not yet come to terms
with the undocumented yet contributing worker. We do not have a
regime that properly addresses either worker or employer needs
and requirements and rights in the guest worker context. So I
think if Hoffman does anything it highlights and should
accelerate our thinking toward, as my colleague here said, a
revolution in our thinking about how we come quickly to grips
with a set of circumstances that each may be different but each
is probably untenable in its own right.
Senator Dodd. Well, that's a good point. You mention--you
outline, rather, your vision of a guest worker program, and
stated that the migrant workers, obviously as you just pointed
out again, the ready worker, the ready employer, the ready
employee, the ready worker, and that they're absolutely
critical. I mean if you talk about sustaining economic growth
in the United States and remove from that formula the guest
worker, you cannot reach the conclusion we're going to have a
sustainable economy. You're shaking your head in agreement.
Mr. Lebedev. I'm shaking my head in agreement.
Senator Dodd. Yes, so this is a critical element in terms
of our sustained economic growth. And obviously American
industry and business, to varying degrees, are dependent on
these migrant foreign workers, guest workers to fill a variety
of jobs. I guess the point--and I accept the last point that
you made that you're going to have to deal with the underlying
issues that Mr. Ladik and others have talked about. But in the
interim period, it seems to me, while you're getting there,
just as there is a necessity in recognizing the contribution of
the guest worker, there must be a commensurate recognition of
the rights of those workers. That their rights, their basic
rights as workers be protected. And I wonder if you might just
comment on that?
Mr. Lebedev. We would fully agree. Without presumptuously
prescribing a legislative response to the situation, I think
that there are, as my colleague from the AFL-CIO would say,
rights and responsibilities for both employers and employees.
So, today, there are too many circumstances that create an
uncertainty in the workplace, that create an ambiguity in those
relationships, that create situations that are neither fair for
individuals nor for the business purpose, and that don't create
a harmonious productivity which is to the ultimate benefit of
this country and the communities in which these businesses
operate.
So, indeed, I hardly know a businessman or woman who would
argue for anything other than a workplace that has fundamental
fairness, that respects the rights not just of workers, but of
human beings in their interaction with those with whom they
work.
And so we encourage that sort of conduct across the board.
But, in the same spirit, Mr. Chairman, we would still urge that
the Congress look comprehensively at the context and the
history of this whole matter. We don't look to individual
businesses to do it but rather to create a framework for
reform.
Senator Dodd. I don't think you'll hear much debate about
that. A related point that should be made here is what we're
talking about, or at least I'm talking about, is the idea of
guest workers filling voids, where it cannot be the present--
there are shortages that are not going to be, for whatever
reasons, they're not going to be filled, rather than using that
guest worker to depress the wages and benefits of potential
workers where shortages don't exist. I think it's very
important to make that distinction as well. If it's going to be
used more for the latter, then it's going to run into a buzz
saw of opposition. Whereas, I think in the former set of
circumstances, there is a recognition, obviously, of the need.
So, I'll make that point as well.
Mr. Ladik, you made some, obviously sweeping comments here,
and they're appreciated. I know that AILA does not entirely
support the current extension of the 245-I program that is
making its way through Congress because in your view it does
not do enough for immigrants in the country. I wonder if you
could speak to your position on this issue and outline what
type of permanent extension of 245-I you would support.
Mr. Ladik. Well, 245-I as it is now, it's kind of like the
old hamburger commercial where 245-I is between the buns and
when I open it my first thought is where's the beef? It has a
retroactive date which in effect is going to reward a lot of
people engaged in the unauthorized practice of law--Notarios.
For instance, last summer I would go out to an electrical
contractor who cared a lot about his employees in this
situation and say, ``Steve, what can you do for them?'' I said
well, 245-I expired April 30. I would be a crook if I took your
money and started filing labor certifications for your workers
now. I'm not going to rip them off.
And at the same time you had the people engaged in the
unauthorized practice of law, as I said, who would ``Oh yeah,
245-I, you know, give me a thousand dollars for the fine and I
will prepare your application.'' Well there was no application
to be filed. Now, if this passes, ironically the guy who was
giving bad legal advice last summer when there was no 245-I may
be rewarded and look like he has a crystal ball. And I look
like an idiot for following the rules.
So as far as business-based immigration goes, it's kind of
a hollow benefit. It will be a benefit for family based
immigration because it will extend the date--you know, people
who were confused about the law last April 30. It will give
them--if they had the relationship as of last August--they will
be able to benefit. I would, to answer your question, I would
really favor a permanent extension of 245-I which would not
result in these piecemeal programs that allow people engaged in
UPL, an unauthorized practice, to play on the fears of people
and get them in long lines where there's a panic situation.
If you can't have a permanent extension, I would favor a
reasonable extension from this day forward from 6 months to a
year where there's time to educate the public. And then let
businesses, like the companies I went and talked to, try to use
the benefit for their workers.
Senator Dodd. I appreciate your suggestions, and as well on
the more comprehensive reform efforts. You realize though up
here, there are such strong emotional feelings about these
questions that it's--you see the difficulty we're going through
even on a temporary 245-I. I mean, here you have the
administration, I think most of the Congress, agreeing that
even a temporary program makes some sense. But we still have,
here it is now--we tried to get this through in December of
last year and it's now the middle of April and maybe something
might happen in the next few weeks, maybe May or so. But
nonetheless, even on something which isn't terribly difficult,
it seems to me to understand, we're having an awful difficult
time moving along. So----
Mr. Ladik. Mr. Chairman, I didn't want to sound ungrateful
because we do appreciate----
Senator Dodd. No, no.
Mr. Ladik [continuing]. You're taking the leadership on it
and for the benefit it does provide, but I think we have to
honestly----
Senator Dodd. I'm sure--I knew you meant that as well, but
I also think that you're right. I think that in the end here--
sometimes because we deal with this on an incremental basis we
end up creating the unintended consequence is what we do. It's
like we kind of move them along in an uneven way so as we move
one forward without moving forward in a comprehensive fashion,
you create situations that can be, as you point out, you're
rewarding those engaged in the illegal practice of law, in
effect, for something that they did, in a way. So, that's a
point worth making.
Ms. Baer, I want to ask you a couple of things as well. I
wanted to ask you because you're knowledgeable, comprehensive.
I think some of your ideas are very creative that you've raised
here. We saw on April 10 the arrest of some major figures from
the Arellano Felix drug cartel that were sold information.
There were policemen, including top officers in Tijuana and
Tecate who were arrested. Do you think this is limited--that
corruption is limited to the north, northwestern Mexico or is
it more widespread?
Ms. Baer. Oh no, I don't think it's limited to the north of
Mexico at all. I think it extends throughout all of Mexico, the
south where there is always the opportunity for border
corruption, central highland states like Michoacan, Jalisco
which had a history of being in drug routes. I think the
problem is probably a national one and I laud the energetic
activity of the current Attorney General of Mexico who as you
know, was also a distinguished member of the Mexican military.
The question that we all have to ask at some point, will
Mexico's police force be able to stand on its own two legs
without the military crutch. It's a question of institutional
development and capability, and it also speaks to the question
of resources and training. It's a long term challenge.
Senator Dodd. You know you mentioned--and I found it
somewhat creative. My first reaction, I'm sure the reaction of
many would be to start talking about defense cooperation. You
can just imagine the reaction you're going to get with
something like that.
But I think it's worth--maybe take the word defense out,
and look for some other words. You might not sort of get the
Pavlovian--Pavlov's dog response here with it. My first
reaction is here's a country struggling to get an economic
development program going.
I mean, I have fought for years against the introduction of
sophisticated military hardware in the region, not
modernization, but sophisticated hardware, knowing what it does
to budgets of developing countries. We're waging this again now
as a result of Brazil's desire to bring in some sophisticated
weaponry, and Chile and then Peru, and it gets complicated here
and we're trying to sort this out. But my first reaction would
be, and I'd like you to respond to it, at a time when President
Fox is trying to marshall the resources to invest in the
infrastructure of a country in order to get its economy
functioning in such a way--and I don't think it's going to be
done just in his administration, I think you're going to need
successive administrations, over three or four, to have a
continuum of policies. If there's a start and stop process I
think it's going to be very difficult to do this over an
extended period of time. So at a moment when we're trying to
focus our attention on increasing economic opportunity, which
is the underpinning of stabilizing democratic institutions, the
idea of talking about an interchangeability in some defense
cooperation strikes me as the kind of proposal that is apt to
meet with rather significant opposition within Mexico.
Ms. Baer. Well I think I was being deliberately
provocative, Senator, in using the----
Senator Dodd. Outrageous that you should do so.
Ms. Baer. Simply because I think we need to at least begin
the dialog and begin the process of thinking about these ideas.
I personally believe that you need to do both. It's not a
question of either/or. And in the case of other strategic
relationships that the United States sustains around the world,
there often is a sizable development assistance component that
goes along with the U.S. strategic relationship. I'm not
unalterably opposed to something along those lines.
Obviously I'm throwing out a grand notion and we would have
to be looking at baby steps in the beginning. I raised the
model of NORAD and I think it's a reasonable model to think
about simply because what we were doing in the case of NORAD is
we are monitoring. A large part of NORAD activity is devoted to
intelligence monitoring of air traffic and air movement.
It's the sort of thing that we perhaps should be able to do
with Mexico. It's a bilateral agreement which is not terribly
threatening. But yes, of course, people will respond to it, but
I think you can make a strong case that the defense of Mexican
citizens requires a new security arrangement--you can't
separate us, we're joined at the hip. Whether Mexico likes it
or not, you don't have to love the United States to realize
that Mexico's security is bound up with our security. And we
might as well come to grips with that issue.
There are some small things we can do. For example, we used
to have a bilateral working group in which members of the
defense community across the board would meet on a regular
basis, defense to defense, to talk about a whole series of
issues. That group, to my understanding, hasn't met for a while
and that's a simple question of creating a forum for dialog.
Senator Dodd. Well I appreciate your being provocative too,
whether that's a good idea. Just quickly, just to get a--and
I'll leave the record open because there are other questions I
didn't raise with you, but if you just had to in a sentence or
two or three--all of you bring some real knowledge about this
bilateral relationship. I'll begin with you Mr. Ladik, how
would you briefly describe the present state of affairs between
Mexico and the United States? We've discussed a lot of
different issues here today, but what would be your answer to
that question if you were asked to describe the current
bilateral situation?
Mr. Ladik. Well, I'm very excited by it. I think last
August we were extremely excited, and having looked at what's
taking place in the last 6 months, and the strength of the
dialog and the fact that we're 6 months from September talking
about legalization and talking about temporary worker programs,
leads me to believe that immigration as a benefit to our
country, it has sunk in so deep that we all--we didn't pull
away from it and that thanks to President Fox's foresight and
President Bush for moving the debate along, and Congress. I'm
amazed we're at where we are now and I'm very excited where
we're going to be by the end of the year, I hope.
Senator Dodd. Very good, Ms. Baer.
Ms. Baer. Relations are excellent, but I think on the
Mexican side in particular, people are awaiting results. I
detect some mounting frustration on the Mexican side, and so I
do hope we can generate some concrete achievements that we can
point to in the next year, whether it be pilot programs that
are begun under the Partnership for Prosperity or some movement
on the immigration issue. At some point, the wonderful embraces
have to be, as they say ``aterrizado'' they have to come down
to earth in practical achievements.
Senator Dodd. Mr. Lebedev.
Mr. Lebedev. Allow me to echo the fact that we are all very
enthusiastic about the current state of bilateral relations and
the positive contributions that NAFTA has made. I think what's
important and what should emerge, whether from 9/11 or however
we choose to consider our path going forward, is that we have
common borders, have increasingly common economies, we're going
to have increasingly common cultures. And despite political
issues in both Mexico and the United States, and views will
always change politically, there is a transcendent relationship
that cannot be ignored, and I think that's the real opportunity
for both countries.
Senator Dodd. Ms. Shailor.
Ms. Shailor. And I would point to three particular areas at
the AFL-CIO where our relationship with Mexico is greatly
strengthened. One would be the reality that we elected for the
first time our executive vice president, who is of Mexican
descent. And so the whole dialog and discussion inside the AFL-
CIO on immigration issues, our relationship with Mexico, has
been very deepened by listening to Linda describe over and over
her experience as a young immigrant in this country.
Second, as you well know Senator, our position on
immigration has become sort of dramatically revised. We're
working with organizations throughout the country. And then
third, after many years we reopened our Solidarity Center
office in Mexico City. Tim Beilly who is behind me was for many
years, well these last 3 years, our Mexico City representative.
So this interchange of U.S. unions going to Mexico, Mexican
unions coming to the United States now takes place on a weekly
and a monthly basis. And therefore, I think the understanding,
despite our dramatic differences on the NAFTA integration
model, we are working constructively to improve the integration
model for the hemisphere. So I think we have a lot to look
forward to, and again, we very much appreciate the leadership
that you have taken on these issues.
Senator Dodd. Thank you very, very much. This has been
very, very helpful. And again, we touched on subject matters
any one of which could have been the subject matter of several
days of hearings, let alone a 3-hour hearing on a relationship
that is tremendously important, tremendously complicated and as
the expression in Spanish goes, you know, ``So far from God and
so close to the United States.'' And I suppose the same could
be said here from time to time as you talk about that
relationship. But we're here and no one knows of any policies
that would allow us to move.
And so it is important that we stay at this and work at it.
I know all of you do and for those reasons we're all very
grateful and I am encouraged by your relatively positive
outlook on where things stand today. As I say, we'll be having
bilateral inter-parliamentary meetings, the oldest by the way
in the United States, the continuous inter-parliamentary
meetings that have gone on. I've been at them every year pretty
much since I've been in Congress, and that's more than a
quarter of a century. I remember my parents going on bilateral
meetings in Mexico 40 years ago. And so it's certainly seen
dramatic changes over the years, but getting closer and closer.
In fact, the present Ambassador from Mexico to the United
States, Juan Jose Bremer and I were sort of young first-term
Congressmen meeting at inter-parliamentary meetings years ago
when he was a member of the House of the Mexican Congress.
So it's tremendously important that we maintain that
interchange, that communication, which is essential. And I'm
delighted to hear that those relationships exist as well with
your various organizations. So with that, we'll leave the
record open for members who want to raise some additional
questions. I'm very grateful to all of you. And as I said, this
is one in a series of hearings of examining U.S. relations in
this hemisphere, and there's some very, very big issues that
are outstanding. And this is a very troublesome time, in my
view, in the Americas and we've got a lot of work to do. I know
there are issues all across the globe, not the least of which
in the Middle East as we talk.
But the United States needs to be active and involved on a
multitude of levels and a multitude of places. And that's the
price of being a super power. And it's also the obligation of a
great nation, to stay involved in the affairs, particularly of
its own neighborhood. And so I am hopeful that we can energize
some more comprehensive and deeper perspectives on these
questions that we've seen in recent times. With that, this
committee will stand adjourned.
[Whereupon, at 5:23 p.m., the hearing was adjourned, to
reconvene subject to the call of the Chair.]
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