Fast Track Message Documents

      Attached are two Fast Track message documents. The first is focused on
Fast Track and workers, the second on Fast Track implications for foreign
policy.

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       KEEPING AMERICA AND ITS WORKERS THE MOST COMPETITIVE IN THE WORLD

America Needs Fast Track to Continue to Create Higher-Paying Jobs for More Americans. Without it,
America's role as the largest exporter in the world will be put in jeopardy. And with new markets
opening around the world, it is more important than ever to give the President traditional trade authority
to break down trade barriers that put American products made by American workers at a disadvantage.
We will continue to ensure that America's workers will benefit from expanded trade by fighting for
increased training and education opportunities.

 I.     AMERICAN WORKERS STILL FACE A DISADVANTAGE BECAUSE TOO MANY
        FOREIGN COUNTRIES PLACE RESTRICTIONS ON AMERICAN GOODS. WE NEED
        FAST TRACK TO LEVEL THE PLAYING FIELD FOR AMERICAN WORKERS.

What We Inherited. In 1993, President Clinton came into office at a time when the U.S. continued its
commitment to free and fair trade, but other countries maintained high tariffs and other obstacles to fair
trade to the disadvantage of America's workers.
President Clinton Moved to Address this Disadvantage by Completing the Uruguay Round
Agreements, Negotiated Under Fast Track Authority. We have repeatedly leveled the playing field
by negotiating tough, fair agreements -- securing more concessions from our trading partners than we had
to give up. For example, Australia has cut its tariffs five times more than we have had to, Korea six
times more than the U.S. and Peru has cut its tariffs ten times more than the U.S. since the Uruguay
Round of GATT. Because of the ongoing benefits from the Uruguay Round, it is estimated that trade will
continue to grow by an average of 9% per year until 2000.
American Workers Still Face a Disadvantage. Even with the recent progress in GATT, American
exports still face higher tariff rates than our own. For instance, U.S. agricultural exports average 38%,
while our own rates average 11 %. U.S. electric machinery exports average 5%, while our rates average
under 2%. Without Fast track authority, these conditions will only persist when more and more countries
negotiate their own preferential trade deals to the detriment of America's workers. American workers
deserve better.
Open and Fair Trade is in the Best Interest of American Workers and their Families. As the
American people prepare for the challenges of the 21st century, we face a critical choice: We can meet the
challenges of the future, write the trade rules and continue America's remarkable economic growth -- or
we can tum our back on the world and fail to compete for new markets, new contracts, new business and
new jobs. All over America, jobs have been created in small, medium and large companies that would
not be here today if we did not have the ability to negotiate fair trade agreements.
         Over the last four years, American manufacturing exports rose 42%, high technology exports
           jumped 46%, service exports climbed 33% and farm exports rose 41 %.
         From 1990-1996, U.S. auto exports to the biggest emerging markets (excluding Mexico) rose
           $500 million and are estimated to reach $6.1 billion by 2010. U.S. parts exports to these
           emerging markets are expected to more than triple from the current $3 billion to $10 billion in
           2010.
         The U.S. dominates 75% ofthe global software market. More than one-half million workers
           are employed in the industry -- double the level a decade ago. This industry is expected to
           grow 9% per year worldwide over the next decade.
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          The U.S. once again dominates the world's semiconductor inaustry -- after trailing Japan for
           years. More than one-quarter million American are employed in the semiconductor industry --
           up 13% over the last three years. The global semiconductor market nearly tripled in size
           between 1990 and 1995 -- and sales are expected to reach $200 billion by the year 2000 -- a
           fourfold increase over a decade.
          Exports of goods and services have risen from about 4% of GDP in the early 1960's to over
           13% today. Over 15% of the total American workforce is employed in the manufacturing
           sector. U.S. exports have grown 3 times faster than Japan's, 5 times faster than Germany's
           since the mid 1980's.


 II.    TO ENSURE THAT ALL AMERICAN WORKERS BENEFIT FROM EXPANDED TRADE,
        THE CLINTON ADMINISTRATION HAS FOUGHT FOR INCREASED TRAINING AND
        EDUCATION OPPORTUNITIES.

 We need a growth strategy in which we take every action possible to ensure that all Americans can benefit
from economic change. We need to break out of the old arguments that say you are either for blocking
change or you are for the market, but everyone has to fend for themselves. Government needs to help
workers, communities and those not in the job market realize the benefits of expanded trade.

       o   The Administration is developing a comprehensive plan to help communities and
           workers who have been affected by trade. President Clinton is building on his strong
           record of helping workers and families secure more opportunities to improve their educations
           and obtain higher paying jobs. The President will announce his plan early next week.

       A Record of Strong Action to Help Families and Workers
       o Fought To Ensure Low-Income Families Benefitted from Child Tax Credit. Because of
          the President's efforts, 13 million children from families with incomes below $30,000 will
          receive the tax credit -- up to 7.5 million more than under the House plans. Families making
          under $30,000 -- such as young teachers, police officers, farmers, nurses and others who work
          hard and play by the rules -- will now receive the child credit.
       o 20% Tuition Tax Credit. The balanced budget deals provides for a 20% tuition tax credit
          applied to the first $5,000 of qualified education expenses and to the first $10,000 thereafter
          for college juniors, seniors, graduate students, and working Americans pursuing lifelong
          leaming.
       o $1,500 Hope Scholarship Tax Credit. The balanced budget deal also includes a $1,500
                                              Hope Scholarship to make the first two years of college
                                              universally available. For a student attending the average
                                              four-year college, the Tuition Tax and HOPE Scholarship tax
                                              credits will provide tax savings of up to $5,000.
       o Doubled Dislocated Worker Funding. The funding for dislocated workers has been
          doubled, from $651 million in FY93 to $1,286 million in FY97. This year, the dislocated
          worker program will assist 580,000 workers, up about 300,000 since President Clinton took
          office.
       o Largest Pell Grant Increase in Two Decades. The Balanced Budget agreement boosts the
          maximum 1998 Pell grant from $2,700 to $3,000, and expands the program to more poor
          independent students -- that's the largest increase in two decades.
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 III.   IF THE PRESIDENT DOES NOT HAVE THE SAME AUTHORITY THAT EVERY
        PRESIDENT HAS HAD SINCE 1974, OUR COMPETITORS, NOT AMERICAN WORKERS,
        WILL REALIZE THE BENEFITS OF THE NEW ECONOMY.

Today, we have the opportunity to pennanently create the types of jobs that pay more and provide our
workers with more security -- if we continue to increase our exports and open more markets. But if the
President does not have the authority to negotiate tough and fair trade agreements with Congress' consent,
our competitors will get the best jobs for their workers, while the U.S. will be relegated to the sidelines.
        Without fast track, the U.S. will lack credibility to push for a fast start on global
           negotiations scheduled to start at the end of 1999. The United States stands the most to
           gain in these negotiations because of its comparative advantage in agriculture,
           commercial services and government procurement.

           QT>   .   Agriculture. Agricultural exports support nearly a million U.S. jobs. Agriculture
                     remains one of the most protected and subsidized sectors in the world economy.
                     American exports still continue to face trade barriers through high tariffs and preferential
                     trade deals that exclude the U.S.

           QT>       Commercial Services. Service exports of U.S. firms supported nearly 4 million jobs in
                                                                                    1996. Unless
                                                                                    negotiated away,
                                                                                    barriers will inhibit
                                                                                    increased U.S. service
                                                                                    exports. In Korea, a
                                                                                    number of service
                                                                                    sectors remain
                                                                                    restrictive for foreign
                                                                                    investment including
                                                                                    telecommunications
                                                                                    and insurance. Brazil
                                                                                    has restrictive
                                                                                    investment laws, lack
                                                                                    of transparency in
                                                                                    administrati ve
                                                                                    procedures and limits
                                                                                    on foreign capital
                                                                                    participation.
                                                                                    Distribution in the
                                                                                    domestic market is
                                                                                    restricted in Indonesia.


           QT>       Government Procurement. Some sectors relating to government procurement include
                     civil aircraft, energy equipment, environmental technologies and services and medical
                     equipment which employ over 2 million American workers. The vast majority of low
                     and middle-income countries have not signed the WTO Government ProcUrement Code
                     and the U.S. cannot negotiate government procurement obligations in plurilateral
                     negotiations.
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            TALKING POINTS ON FAST TRACK AND FOREIGN POLICY

     Fast Track and American Leadership -- Overview

           The fast track debate is about much more than trade. It is about American
            leadership in the world. Other governments, particularly those in Latin America, view
            fast track as a test of whether the United States intends to maintain our half century of
            leadership -- or retreat and tum inward.

           A failure of U.S. leadership would be a huge mistake. For over 50 years, we have led
            the world toward freer markets -- reducing average tariffs from 40% at the end of World
            War II to about 5% today. That has led to a 90-fold increase in trade, which has
            enormously benefitted the U.S. We must not turn our back on that progress.

           American leadership is not divisible. If we fail to lead on trade, our influence will
            suffer in other areas. The patterns of trade developed in the coming decades will create
            patterns affecting our national security, foreign relations and political interests. If Latin
            America is permitted--by default in our leadership--to turn increasingly to Europe and
            Asia in its trade relations, it will weaken our relationship with Latin America. Rejecting
            fast track would also send a terrible signal to emerging markets, undermining the
            developing world trend toward free market policies and democracy.

     Exports and U.S. Growth

           For the U.S., the case for fast track is clear: if we are to sustain our economic
            growth, we must export. Since 1993, one-third of our growth has come from exports.
            Over the next decade, the economies of Latin America and Asia are expected to grow at
            three times the rate of the U.S. economy. In a world where 96% of the world's
            consumers live outside our borders, we must export to grow. It's that simple.

           We are in a perfect position to compete. Our economy is the envy of the world.
            We are once again the world's most competitive economy, the world's largest exporter,
            the leading producer in key industries like automobiles, semiconductors and
            pharmaceuticals. It makes no sense to sideline ourselves now.

           But we cannot afford to take our economic leadership for granted. Throughout the
            world, other countries are moving to reach trade deals opening their markets. We can
            either lead this process--or watch it proceed without us:
                   In Latin America and Asia alone, other countries have reached more than 20
                    preferential trade agreements without us. Today every major economy in the
                    hemisphere has a preferential trade deal with Chile, except the U.S.
                   The EU is seeking a preferential trade agreement with MERCOSUR, a market of
                    over 200 million people and a GDP exceeding $1 trillion. President Chirac has
                    declared "the future of the region rests with Europe, not the United States."
     Fast track and American Foreign Policy
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          Fast track is a test of our foreign policy. As the sole remaining superpower, the
           United States has a fundamental interest in aiding both security and prosperity around the
           world
           -- particularly in our own hemisphere. Stable trading relationships are critical to that
           end. In the post Cold-War world, trade agreements serve some of the same purposes
           security pacts played during the Cold War: They bind nations together through a set of
           shared interests and common objectives.

          If the U.S. fails to lead, we risk losing influence by default. The trade patterns set
           in coming decades will have enormous strategic importance too. That is part of the
           strategy behind FTAA and APEC processes. They are not just economic: they are also
           intended to reinforce broader U.S. engagement in Latin America and Asia, two regions
           where U.S. foreign policy strategic and security interests are deeply implicated.
           Rejecting fat track would signal retreat from these initiatives.

          That would clearly undermine broader U.S. interests. Latin America sees trade as
           the linchpin of a stronger hemispheric relations -- our failure to engage would undermine
           cooperation on a range of issues including drug interdiction, immigration, environmental
           protection and corruption. In Asia, the industrialization of3.5 billion people in the arc
           from Korea to Pakistan will be perhaps the greatest development of the 21 st Century. It
           is critical to America's economic and security interests that we be deeply engaged in the
           transformation. Without fast track, we are crippled in that effort.

          The cause of democracy and free markets would also suffer. After decades of failed
           experiments and anti-Americanism, many of the world's emerging markets today are
           embracing free markets, democracy and other American values. Today -- for the first
           time in history -- on behalf of the world's population lives under elected rulers. But this
           fragile progress will continue only if we continue to press countries to embrace free trade
           policies, build stronger middle classes and strengthen the building blocks of democracy.
           Rejecting fast track would send a terrible signal that we are not serious about trade
           liberalization and reform.

     Conclusion

          The United States faces a critical choice. We can continue to make our economy the
           model for the rest of the world, open foreign markets, and reaffirm our global leadership.
           Or we can convince ourselves that we cannot compete, turn inward, and cede that
           leadership to others eager to take our place. The choice is that stark -- and that
           important.
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[10/21/1997]
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