Providing for consideration of the bill (H.R. 4759) to implement the United States-Australia Free Trade Agreement.

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

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Massachusetts (Mr. McGovern), my very good friend and Committee on Rules colleague, pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

Mr. Speaker, this is a very exciting day. We are about to embark on the debate for a very important bipartisan issue. Let me at the outset say that there is so often attention, in fact, almost all of the attention that is focused on this institution, the United States Congress, both Houses of Congress, is on disagreements that take place, and of course those are very important. But very little attention is focused on the fact that we are able to craft major bipartisan agreements on a wide range of issues, and at this moment we are beginning debate on a measure which will enjoy very strong bipartisan support.

It is going to create an opportunity for us to expand one of the most important bilateral relationships that exists, and it is the U.S.- Australia Free Trade Agreement that will build upon the long-standing commercial ties that we have with Australia by eliminating terrorists, removing nontariff barriers, and providing better market opening opportunities for U.S. goods, services, and investment. It is a first- rate, state-of-the-art agreement that will spur growth and create jobs for Americans and Australians alike.

But the vote that we have before us today is bigger than just this one agreement. The Free Trade Agreement we have negotiated with Australia is a significant piece of our overall economic growth and trade liberalization agenda.

I want to begin by congratulating our great U.S. trade representative, Ambassador Bob Zoellick, for his tremendous work in negotiating agreements not only with Australia but with the Central American countries, with Morocco, with Bahrain, as well as his ongoing work in Thailand and the Andean countries, in Southern Africa, and in the Middle East.

Mr. Zoellick, with the support of this Congress, has made great strides in our fight to open the global marketplace to the free flow of goods, services, and capital; a marketplace where American producers, workers, consumers, and investors can freely compete; a marketplace where the U.S. is the clear global leader based on the power of our ability to innovate, adapt, and grow.

The Australia Free Trade Agreement is a significant part of moving this agenda forward. This agreement will create significant new opportunities for producers and consumers both here at home and in Australia. Under the Free Trade Agreement, tariffs on 99 percent of all U.S.-manufactured products will immediately drop to zero. Let me say that again. The tariffs on 99 percent of the products that we will be exporting, the manufacturing sector, to Australia will immediately go to zero, achieving the greatest immediate reduction ever attained in any U.S. Free Trade Agreement. This kind of comprehensive reduction would be significant in any agreement, but it is particularly significant and particularly beneficial in trade with Australia in which manufacturing actually makes up 93 percent of all U.S. exported goods.

This is also good news for States like California, which I am very honored to be able to represent here in the Congress. Our State exports almost $2 billion in goods every year. Australia is a huge market for California's high-valued manufactured goods, with computers, transportation equipment, chemicals, and machinery topping the list of major exports.

Huge gains will also be achieved in terms of market access for services, which is the fastest-growing sector both here at home and in Australia. Thousands of Americans are already employed by Australian service providers here in the United States. This Free Trade Agreement makes enormous progress in opening up service sectors in Australia to U.S. companies and investors. Market access gains were negotiated across virtually all sectors, from telecommunications to financial services to energy.

The Free Trade Agreement also contains unprecedented gains in access for U.S. entertainment products and services, something else that is very important to me as a representative from Southern California.

Protection of intellectual property rights in general represents another important achievement in the Australia Free Trade Agreement. The agreement guarantees strong protection for American innovations and encourages robust trade in cultural, scientific, and high-tech products. Patents, trademarks, content, test data, and trade secrets will be protected as well as governed by a transparent and fair regulatory process. And perhaps most important, Mr. Speaker, the Free Trade Agreement provides for strict, effective enforcement measures to protect U.S. innovators from pirates and counterfeiters.

The FTA will also expand the markets for U.S. farmers. I know that some agriculture sectors have opposed provisions in this agreement, but the fact is that this FTA will significantly increase market access in Australia for U.S. agricultural products. Our agricultural exports will immediately gain duty-free access.

Furthermore, significant progress has been gained on the large nontariff barrier to agricultural trade, that is, Australia's sanitary and phytosanitary standards. Nontransparent and often nonscientific- based rulings on the safety of U.S. agricultural goods have been a major barrier to the Australian market. But through the FTA negotiations, communication and cooperation between United States and Australia have been significantly improved. Strong commitments were also obtained to ensure that the review process is entirely science- based.

Even before passage and implementation of the Free Trade Agreement, we are seeing the effects of this greater cooperation in Australia's recent decision on pork products. U.S. pork exports have long faced a de facto ban because of Australia's animal health standards process. But through the leverage of the FTA negotiating process, U.S. trade and agricultural officials have succeeded in opening up the Australian market to processed as well as certain types of unprocessed pork. While this will no doubt be an ongoing battle as other products seek full access, there is no question that without the fuller engagement brought about by the Free Trade Agreement, U.S. farmers would still be facing formidable barriers for many of their products.

Similarly, the Free Trade Agreement makes great strides in increasing market access for our highly innovative pharmaceutical and biotech industries. The Australians made strong commitments on transparency and accountability as well as recognized the value of innovation.

In recent weeks there have been misleading assertions made that this Free Trade Agreement would permit Australia to levy sanctions against the United States if we were to enact a drug reimportation bill. I do not happen to be a supporter of the issue of drug reimportation, but I think it is important to make clear the disagreement in no way prevents the United States from enacting drug reimportation legislation. It is existing Australian law, existing Australian law, that prohibits the export of drugs purchased within their national health care system, the PBS, which constitutes over 90 percent of the market. In addition, it prohibits the export of

drugs purchased outside of their system except by the original manufacturer or their licensed Australian distributor. Unlike Canadian law, Australian law prohibits pharmacies from selling drugs outside of Australia.

Again, Australian domestic law prohibits reimportation, not the Free Trade Agreement. Therefore, any future reimportation law implemented in the United States would have no bearing whatsoever on the Australian system and would not be actionable as a trade dispute.

Clearly, the U.S.-Australia Free Trade Agreement is a win-win for producers, consumers, and workers in the United States and Australia. It will create new opportunities, spur investment, create good jobs, and increase access to high-quality consumer goods. It will also strengthen our relationship. This is one of the very important aspects of this, Mr. Speaker. This will strengthen our relationship with one of our most important and significant allies in the global war on terror.

Since the September 11 attacks on the Pentagon and the World Trade Center, we have seen Australia provide over 1,500 troops in addition to military equipment to support the U.S.-led coalition to combat global terrorism. Specifically, Australia has provided significant support for our mission in Iraq, an integral part of the war on terrorism, by contributing everything from fighter jets to reconnaissance forces.

While our partnership has been strong for many decades and we have clearly seen it most evident in this global war on terror and we all remember very vividly the brilliant address that was given to a joint session of Congress by Prime Minister Howard here in this body, we have seen the relationship with Australia grow even more, and they are one of our closest friends.

With this Free Trade Agreement we have an opportunity to strengthen even further our ties with that key ally of ours. It allows us to advance our agenda to improve American competitiveness, enhance our position as the global economic leader, and create thousands of new job opportunities for Americans.

Mr. Speaker, I look across the other side of the aisle, and I see the gentleman from New York (Mr. Crowley), who has worked very hard in working to bring about bipartisan support for this effort, and I do believe, again, that this is further evidence of our quest to work in a bipartisan way to bring about trade liberalization.

With that, I urge strong support of both the rule and the agreement itself.

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

Mr. Speaker, I yield myself such time as I may consume to state once again that I am very gratified to see the strong and overwhelming bipartisan support for this important agreement, demonstrating that Democrats and Republicans alike can come together and address such a critical issue.

I would like to just take one moment before yielding to my friend, the gentleman from Georgia (Mr. Linder), to say what I did in my opening statement, and that is the issue of reimportation is one that exists not in this free trade agreement at all, but instead under the PBS, which is the Prescription Benefit System, the structure that exists in Australia today.

Now, I will say that there was a consultative process that was ongoing in a bipartisan way with this administration, the U.S. Trade Representative, and members of the subcommittees of Congress. In fact, we are in the process right now of getting the dates of those meetings and the consultation process as it took place, and I am going to be entering those into the Record, because I think it is important to note that there has been a very, very important discussion which has taken place between this administration and Democrats and Republicans in both Houses of Congress on this issue.

Mr. Speaker, I yield 4 minutes to the gentleman from Georgia (Mr. Linder), one of the most thoughtful advocates of trade liberalization, the chairman of the Committee on Rules Subcommittee on Technology, in the House.

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

Mr. Speaker, I would just like to compliment my friend, the gentleman from New York (Mr. Crowley) for his very thoughtful statement.

I, too, want to join in extending congratulations not only to those on our side of the aisle who have worked in a strong bipartisan way on this issue, including the gentleman from Missouri (Mr. Blunt), the Chief Deputy Whip, the gentleman from Virginia (Mr. Cantor), an organization that the gentleman from California (Mr. Thomas) and I have had in place working on trade issues for a long period of time, reaching out to my friends, the gentleman from Michigan (Mr. Levin), and the gentleman from Oregon (Mr. Blumenauer), who has worked with us on trade issues for a long period of time. I would like to say how important this bipartisan effort has been.

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

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

It is great to see such extraordinary bipartisan support for this very important agreement.

Let me take just a few minutes to respond to the comments of my good friend from Ohio. As I said in my opening remarks, Mr. Speaker, the Australia Free Trade Agreement does not prevent Congress from passing legislation on drug reimportation. Under the U.S. Constitution, we all know that no trade agreement could do this.

We also need to know that there has been ongoing consultation between this administration, the U.S. Trade Representative and a bipartisan group here in the United States House of Representatives, as well as in the United States Senate.

We know that any law that is passed by the Congress will always trump any kind of Free Trade Agreement. There is nothing in the Australia Free Trade Agreement or in the implementing legislation, H.R. 4759, that changes U.S. patent law or the Federal Food, Drug and Cosmetic Act, FDCA.

We also think it is very important for our colleagues to understand that the patent provision in the Free Trade Agreement restates U.S. law and applies to all patents. It restates U.S. law and applies to all patents, Mr. Speaker, not just pharmaceuticals. Not including this provision would be devastating to U.S. intellectual property rights holders in every single sector of our economy.

It is one of the things I was talking about in my opening remarks. The issue of piracy, counterfeiting, intellectual property violations, those are violating property rights, and we clearly feel strong about the need to maintain those private property rights.

Australian law already bans the exportation of drugs dispensed under its pharmaceutical benefit scheme, the PBS. Unlike Canada, the law in Australia explicitly prohibits other parties, such as wholesalers or pharmacists, from exporting non-PBS dispensed drugs.

Therefore, I think that, as I listen to my friend from Ohio talking, he could not be more inaccurate in his assessment of how this came out or in his assessment of his relationship between those of who do truly want to do everything that we possibly can to lower the cost to consumers of pharmaceutical drugs, of basically any kind of consumer product.

We are here to do what we can to improve the standard of living and quality of life for our consumers.

We happen to believe in bringing about an agreement like this, and so I think it is important to note that any change in U.S. law would have no practical effect on reimportation from Australia due to Australian domestic law that exists, regardless of the free trade agreement; and, therefore, Australia would have no plausible basis to claim harm or to pursue any kind of sanctions.

I think it is very important, Mr. Speaker, for our colleagues to understand the fact that this is an agreement which is focused on ensuring the very important intellectual property

rights, but at the same time, working to ensure that consumers have access to the best quality product at the lowest possible price, whether it is a pharmaceutical drug or whether it is a product coming from my great entertainment industry in Hollywood.

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

Mr. Speaker, let me once again thank my friend from Michigan for his strong and committed bipartisan support to this effort.

I do not have any further speakers. I plan to just make some closing remarks myself. If the gentleman has no further speakers and would like to yield back the balance of his time or make remarks, I look forward to them.

Mr. Speaker, I yield myself the balance of the time.

Mr. Speaker, with all due respect to my very good friend from Massachusetts, I have no idea whatsoever he is talking about when he talks about the economy that we are in today. Since January 1 of this year, 1.26 million new jobs have been created right here in the United States. We have seen the largest surge in 45 months of manufacturing jobs. We are seeing unanticipated revenues coming into the Federal Treasury because of the tax package

that this Congress, in a bipartisan way, passed and this President signed.

We are, I believe, poised to move towards a balanced budget earlier than had been anticipated, and we have undergone some of the most serious challenges that our Nation has ever felt during the past few years.

We all know that when President Bush came into office he inherited an economy that was already slowing. Within just a couple of months, we went into recession. That was two quarters of negative economic growth.

Mr. Speaker, since that period of time, we saw 7\1/2\ months after President Bush took office the worse attack in our Nation's history on American soil when 3,000 Americans were killed on September 11 of 2001.

We saw the tremendous problem of corporate abuse, corporate scandals; and we know the challenges that that created for our economy. We saw the global war on terror proceed; and we, of course, are still struggling as we work to liberate the people of Iraq and move towards political pluralism and the rule of law and free and fair elections.

With all of those challenges, we have seen tremendous economic growth. A very important aspect of that has been trade liberalization, a policy that has enjoyed bipartisan support. Usually it is Republican- led, I will acknowledge, and there are not many Democrats who do join; but in the past, there have been Democrats who have joined in, trying to bring about the very important market-opening opportunities that we see worldwide.

This agreement is going to enjoy tremendous bipartisan support; and, again, I will say that it has been great to work with our colleagues on the other side of the aisle. My colleague, the gentleman from California (Mr. Dooley), is going to be retiring; but he is a Democrat who has been very thoughtful and consistently pushing trade liberalization. He helped us with the passage of Trade Promotion Authority, and he has just done a terrific job, and I will miss him when he retires from this body at the end of this year.

The gentleman from New York (Mr. Crowley), who stood up and spoke very eloquently on the need to pass the U.S.-Australia Free Trade Agreement, has been a leader within the whip organization on the other side of the aisle, and I mentioned my colleague, the distinguished whip, the gentleman from Missouri (Mr. Blunt); the gentleman from Virginia (Mr. Cantor), the chief deputy whip; and a wide range of members; the gentleman from California (Mr. Thomas) providing the leadership that he has on the Committee on Ways and Means.

We have gotten to this point, Mr. Speaker, and this point is one which will allow us, Democrats and Republicans alike, to come together and underscore how trade liberalization is helping our economy. It is helping to create jobs.

Now, we have heard this argument raised about prescription drugs, and I will say what I have said throughout the debate. It is current law. It is current law in Australia, not part of the free trade agreement, that, in fact, ensures that reimportation will not take place. Nothing in this agreement whatsoever, nothing in this agreement will in any way impact the debate which has been ongoing in this body on the issue of drug reimportation; and if any change is made, the free trade agreement cannot in any way override that.

This issue of the administration and the consultation process, as the pharmaceutical drug question was addressed, taking place, there was broad consultation that took place, in a bipartisan way, Democrats and Republicans in both Houses of Congress, with this administration, with our U.S. Trade Representative, Ambassador Zoellick.

So, Mr. Speaker, I think it is very important to recognize that, on the specifics of this, it has been very, very well handled and, I think, is in many ways a model.

I will say to my friend from Massachusetts that in the U.S.-Singapore Free Trade Agreement that we put together, very similar language as we have in the Australia agreement on the pharmaceutical question. We feel strongly about the issue of intellectual property, we feel strongly about property rights, we do not like piracy, we do not like counterfeiting, and this agreement is designed to strengthen our ability to deal with that question.

Mr. Speaker, September 11 of 2001 was one of the most difficult days in our Nation's history. We were poised to hear an address before a joint session of Congress by Prime Minister John Howard, the great Prime Minister of Australia. Obviously, we were unable to do that, but Prime Minister Howard was, as I recall very vividly, here when President Bush came and addressed a joint session of Congress.

I am very proud, and I think I am the only Member who has a place in the U.S. Capitol where I have a quote from an Australian. I have a very important quote, which I would commend to my colleagues, and I will enter that into the record and not read through it right now, but I actually saw it when I visited the Australian parliament at Canberra several years ago, actually in December of 1998. I was struck by this quote by R.G. Menzies, who was one of the great, strong anti-Communist prime ministers of Australia. He talks about the importance of public service and the sacrifice that public service entails, and I have that quote hanging in the Committee on Rules upstairs, just above this Chamber.

Mr. Speaker, I think it is important for us to realize that Australia has been an important ally of ours in every single way. They have been unrelenting in their commitment to the global war on terror. They have been victimized themselves. Our September 11 was at one point an October 11, or October 6, it was an October date, that saw many Australians tragically become the victims of the challenge of international terrorism with the bombings that took place at Bali, killing many Australians. So they have suffered as well. They understand what it is like. So they have stood with us in Iraq, in Afghanistan, and in international fora in trying to deal with these challenges.

Our relationship is already, as I said, an extraordinarily strong relationship. But with the passage of this measure today, Mr. Speaker, we are going to strengthen even more that very important tie that exists between the United States of America and the wonderful people of Australia. So I urge strong support of this rule and strong support of the measure as we address it.

Mr. Speaker, I submit for the Record the quote by R.G. Menzies which I earlier referred to:

I believe that politics is the most important and

responsible civil activity to which a man may devote his

character, his talents, and his energy. We must, in our

interests, elevate politics into statesmanship and

statecraft. We must aim at a condition of affairs in which we

shall no longer reserve the dignified name of statesman for a

Churchill or Roosevelt, but extend it to lesser men who give

honourable and patriotic service in public affairs. In its

true that most men of ability prefer the objective work of

science, the law, literature, scholarship, or the immediately

stimulating and profitable work of manufacturing, commerce,

or finance.

The result is that our legislative assemblies are a fair

popular cross-section, not a corp d'elite. The first-class

mind is comparatively rare. We discourage young men of parts

by confronting them with poor material rewards,

precariousness of tenure, an open public cynicism about their

motives, and cheap sneers about their real or supposed search

for publicity. The reason for this wrong-headedness, so

damaging to ourselves, is that we have treated democracy as

an end and not as a means. It is almost as if we had said,

when legislatures freely elected by the votes of all citizens

came into being, ``Well, thank heaven we have achieved

democracy. Let us now devote our attention to something

new.'' Yet the true task of the democrat only begins when he

is put in possession of the instruments by which the popular

will may be translated into authoritative action. In brief,

we cannot sensibly devote only one per cent of our time to

something which affects ninety-nine per cent of our living.--

R. G. Menzies, New York Times Magazine, November 28, 1948.

Mr. Speaker, I yield back the balance of my time, and I move the previous question on the resolution.

The previous question was ordered.

Mr. Speaker, I thank the gentleman from Ohio, and I doubt anyone can hold a candle to him relative to trade.

Mr. Speaker, I rise in opposition to this trade proposal, in a way reluctantly. I had held such hope that this particular proposal could be the template for trade agreements that could be negotiated between the developed democracies of the world, and that following on the Jordan Free Trade Agreement, we could actually produce the first trade agreement between developed democracies that would provide the gold standard for the world, that we could really use proactively. This one falls far short of doing that.

You might ask the question, Would we have this agreement before us if Australia did not have troops in Iraq? It is kind of interesting that this is coming up at this particular moment.

One of my concerns about this agreement is that Australia may become another back door trade route to the U.S., sort of the new Hong Kong, because of all the current difficulties in Hong Kong NOW. This agreement is imperfect. It does not really provide a comprehensive set of provisions to really deal with trade between nations that want higher standards of living, but that in fact you will get more Chinese goods and Chinese investment going into Australia and then coming here under this so-called ``free trade'' agreement because of all the economic and commerical difficulties that Hong Kong is having since the handover to the Chinese.

We know that this particular agreement would allow drug companies to challenge decisions on coverage and payment, so we further weaken the abilities of developed democracies to try to provide affordable health care for all their people.

The agreement is absolutely inadequate in terms of comprehensive labor and environmental standards. We should accept no less. In fact, my dream would be that we would learn how to strike trade agreements between developed countries, and then ask third world nations to join that consortium in order to raise standards of living around the world, rather than force all nations in this race to the bottom, including our own, where wages among the majority have fallen.

Mr. Speaker, I include for the Record an article from the Wall Street Journal, ``Trade Agreement May Undercut Importing of Inexpensive Drugs,'' and also a set of standards we should use in any trade agreement based on a review of some of our other trade agreements. There standards should be expected from any trade agreement this Nation negotiates.

I ask my colleagues to vote ``no.'' This agreement is too incomplete and imperfect.

[From the New York Times, July 12, 2004]

Trade Agreement May Undercut Importing of Inexpensive Drugs

(By Elizabeth Becker and Robert Pear)

Washington, July 11.--Congress is poised to approve an

international trade agreement that could have the effect of

thwarting a goal pursued by many lawmakers of both

parties: the import of inexpensive prescription drugs to help

millions of Americans without health insurance.

The agreement, negotiated with Australia by the Bush

administration, would allow pharmaceutical companies to

prevent imports of drugs to the United States and also to

challenge decisions by Australia about what drugs should be

covered by the country's health plan, the prices paid for

them and how they can be used.

It represents the administration's model for strengthening

the protection of expensive brand-name drugs in wealthy

countries, where the biggest profits can be made.

In negotiating the pact, the United States, for the first

time, challenged how a foreign industrialized country

operates its national health program to provide inexpensive

drugs to its own citizens. Americans without insurance pay

some of the world's highest prices for brand-name

prescription drugs, in part because the United States does

not have such a plan.

Only in the last few weeks have lawmakers realized that the

proposed Australia trade agreement--the Bush administration's

first free trade agreement with a developed country--could

have major implications for health policy and programs in the

United States.

The debate over the drug imports, an issue with immense

political appeal, has been raging for 4 years, with little

reference to the arcane details of trade policy. Most trade

agreements are so complex that lawmakers rarely investigate

all the provisions, which typically cover such diverse areas

as manufacturing, tourism, insurance, agriculture, and

increasingly, pharmaceuticals.

Bush administration officials oppose legalizing imports of

inexpensive prescription drugs, citing safety concerns.

Instead, with strong backing from the pharmaceutical

industry, they have said they want to raise the price of

drugs overseas to spread the burden of research and

development that is borne disproportionately by the United

States.

Many Democrats, with the support of AARP, consumer groups

and a substantial number of Republicans, are promoting

legislation to lower drug costs by importing less expensive

medicines from Europe, Canada, Australia, Japan and other

countries where prices are regulated through public health

programs.

These two competing approaches represent very different

ways of helping Americans who typically pay much more for

brand-name prescription drugs than people in the rest of the

industrialized world.

Leaders in both houses of Congress hope to approve the free

trade agreement in the next week or two. Last Thursday, the

House Ways and Means Committee endorsed the pact, which

promises to increase American manufacturing exports by as

much as $2 billion a year and preserve jobs here.

Health advocates and officials in developing countries have

intensely debated the effects of trade deals on the ability

of poor nations to provide inexpensive generic drugs to their

citizens, especially those with AIDS.

But in Congress, the significance of the agreement for

health policy has generally been lost in the trade debate.

The chief sponsor of the Senate bill, Senator Byron L.

Dorgan, Democrat of North Dakota, said: ``This administration

opposes re-importation even to the extent of writing barriers

to it into its trade agreements. I don't understand why our

trade ambassador is inserting this prohibition into trade

agreements before Congress settles the issue.''

Senator John McCain, an author of the drug-import bill,

sees the agreement with Australia as hampering consumers'

access to drugs from other countries. His spokesman said the

senator worried that ``it only protects powerful special

interests.''

Gary C. Hufbauer, a senior analyst at the Institute for

International Economics, said ``the Australia free trade

agreement is a skirmish in a larger war'' over how to reduce

the huge difference in prices paid for drugs in the United

States and the rest of the industrialized world.

Kevin Outterson, an associate law professor at West

Virginia University, agreed.

``The United States has put a marker down and is now using

trade agreements to tell countries how they can reimburse

their own citizens for prescription drugs,'' he said.

The United States does not import any significant amount of

low-cost prescription drugs from Australia, in part because

federal laws effectively prohibit such imports. But a number

of states are considering imports from Australia and Canada,

as a way to save money, and American officials have made

clear that the Australia agreement sets a precedent they hope

to follow in negotiations with other countries.

Trade experts and the pharmaceutical industry offer no

assurance that drug prices will fall in the United States if

they rise abroad.

Representative Sander M. Levin of Michigan, the senior

Democrat on the panel's trade subcommittee, voted for the

agreement, which could help industries in his state. But Mr.

Levin said the trade pact would give a potent weapon to

opponents of the drug-import bill, who could argue that

``passing it would violate our international obligations.''

Such violations could lead to trade sanctions costing the

United States and its exporters millions of dollars.

One provision of the trade agreement with Australia

protects the right of patent owners, like drug companies, to

``prevent importation'' of products on which they own the

patents. Mr. Dorgan's bill would eliminate this right.

The trade pact is ``almost completely inconsistent with

drug-import bills'' that have broad support in Congress, Mr.

Levin said.

But Representative Bill Thomas, the California Republican

who is chairman of the Ways and Means Committee, said, ``The

only workable procedure is to write trade agreements

according to current law.''

For years, drug companies have objected to Australia's

Pharmaceutical Benefits Scheme, under which government

officials decide which drugs to cover and how much to pay for

them. Before the government decides whether to cover a drug,

experts analyze its clinical benefits, safety and ``cost-

effectiveness,'' compared with other treatments.

Joseph M. Damond, and associate vice president of the

Pharmaceutical Research and Manufacturers of America, said

Australia's drug benefit system amounted to an unfair trade

practice.

``The solution is to get rid of these artificial price

controls in other developed countries and create real

marketplace incentives for innovation,'' Mr. Damond said.

While the trade pact has barely been noticed here, it has

touched off an impassioned national debate in Australia,

where the Parliament is also close to approving it.

The Australian trade minister, Mark Vaile, promised that

``there is nothing in the free trade agreement that would

increase drug prices in Australia.''

But a recent report from a committee of the Australian

Parliament saw a serious possibility that ``Australians would

pay more for certain medicines,'' and that drug companies

would gain more leverage over government decisions there.

Bush administration officials noted that the Trade Act of

2002 said its negotiators should try to eliminate price

controls and other regulations that limit access to foreign

markets.

Dr. Mark B. McClellan, the former commissioner of food and

drugs now in charge of Medicare and Medicaid, said last year

that foreign price controls left American consumers paying

most of the cost for pharmaceutical research and development,

and that, he said, was unacceptable.

Executive Summary

NAFTA and The Future of Global Trade

The North American Free Trade Agreement (NAFTA) is now ten

years old. At its heart, it embodies the new heroic struggle

of working men and women to gain a foothold in the rough and

tumble global economy dominated by multinational corporate

giants. Unfortunately, it pits local workers and farmers

against global investors. It pits Neustro Maiz, a peasant

tortilla co-op in southern Mexico, against ADM, the US grain

trade giant. It pits Norma McFadden of Sandusky, Ohio, who

lost her middle class job with benefits at Dixon Ticonderoga,

against Ana Luisa Cruz of Cuidad Juarez, who earns $7 a day

with no benefits. For NAFTA to be credible as a model for

future trade agreements, it must be amended. People should be

more important than goods. A human face to trade must be

negotiated. Without it, the global divide between poverty and

wealth will exacerbate. More popular unrest will result from

unfair trade, and the social compact so necessary for global

cooperation will be shattered.

NAFTA is important because it serves as the major template

for a new global economic order integrating rich and poor

nations through trade and investment. Mexico, Canada and the

U.S. were to integrate their economies and, as a result, be

better positioned to compete globally. It was touted as the

neo-liberal model that would lift the economic condition of

all people. All ships, no matter how small, were to be

brought forward. But NAFTA worked exactly in the reverse.

Affected workers in all three nations saw their wages and

working conditions lowered. As capital moved across borders

with no social policies in place, NAFTA has triggered an

international race to the bottom as even Mexico has lost

218,000 jobs to China, a lower wage environment with a

notorious record of human rights abuses.

Capital and wealth have become more concentrated in all

three nations. The middle class in the U.S. is experiencing a

growing squeeze on benefits and job quality. In Mexico, an

endless supply of ``starvation wage'' workers was unleashed.

Now the Bush Administration is trying to spread the same

model to Central America using Central American Free Trade

Agreement (CAFTA), and throughout the rest of the Western

Hemisphere with the Free Trade Area of the Americas (FTAA).

If these agreements are passed, it is clear that only the

same can be expected, that is, expanding job washout,

underemployment, and trade deficits in the U.S. without

improved living standards in the poor countries with whom it

trades.

A reformed trade model among trading nations is needed that

yields rising standards of living for workers and farmers.

This must be based on transparent and enforceable rules of

law concerning labor, environment and business. Continental

sustainable wage and labor standards should be adopted. Trade

accords must also incorporate industrial and agricultural

adjustment provisions, and currency alignment. An

infrastructure investment plan should be negotiated as a core

provision of any trade agreement. Along with complementary

systems for education and safe, reliable medical care for all

of their citizens, including the over 9 million immigrants

traveling as itinerant labor to the U.S. every year.

recommendations

Policy reforms are essential to amending NAFTA and other

trade agreements that have yielded such huge U.S. trade

deficits, job washout, and lowered standards of living.

a continental assessment of nafta should be launched to address its

shortcomings

An intracontinental parliamentary Working Group on Trade

and Working Life in America, comprised of U.S., Mexican, and

Canadian members, should be established with the goal of

amending NAFTA to address its shortcomings. Such a working

group should analyze the results of NAFTA and its impact on

workers, farmers and communities. The Working Group should

define a sustainable wage standard for workers in each

country and a continental labor registration system along

with enforceable labor and environmental standards. It would

identify the massive continental labor displacements that are

occurring, often with no social safety net in place. It would

explore options to deal with divergence in education and

health as well as currency fluctuations and impact of trade

on infrastructure, investment, and migration. It would

harmonize inequitable tax systems and augment credit systems

for the safe and non-usurious continental transfer of

remittances by mobile workers. It would also propose funds in

the form of adjustment assistance to cushion continental

economic integration. The organization would include as a key

component an intracontinental Agricultural Working Committee

to address the hardships faced by farmers and farm labor in

all three countries.

trade agreements should yield trade balances

If NAFTA were working in the interests of the U.S., there

would be a trade surplus with Canada and Mexico, as the U.S.

exported more than it imported. Exactly the reverse is true.

In 2003, the NAFTA trade gap equaled $100 billion--$42

billion with Mexico and $85 billion with Canada. This

represents a serious drag on U.S. gross domestic product and

a loss of wealth. Indeed the U.S.-NAFTA trade balance with

low-wage Mexico as well as Canada has turned decidedly more

negative, and worsened each year, contrary to NAFTA's stated

aims. When a trade agreement yields major and growing

deficits for more than three years, it ought to be

renegotiated.

develop an alternative trade block paradigm

Trade agreements must be structured to achieve rising

standards of living for a broad middle class, not just the

capital class. The current NAFTA model fails to address the

root causes of market dysfunction and growing U.S. trade

deficits i.e., the managed market and regulated trade

approaches being employed by its European and Asian

competitors. With NAFTA, the U.S. chose a low wage strategy

to meet this real competition from trading counterparts that

were gaining global edge. The U.S. must counter the managed

market and regulated trade approaches of its major

competitors.

harmonize quality of life up, not down

Rather than allowing transnational companies to set the

rules of engagement, democratic nations first should forge

international trade agreements with the world's developed

democracies and then invite in developing nations to

participate in this ``free world'' Global Trade Organization.

Such an effort holds the potential to transition these

nations upward to the same democratic, legal, and

environmental systems of the free world. Instead, the trade

relationships that have been forged link the economic systems

of first world democratic nations to Third World,

undemocratic, non-transparent systems. Social concerns like

education, environment, infrastructure, labor conditions, and

health have been ignored. The downward ``race to the bottom''

push of NAFTA continues to be felt in the U.S. as well as

Mexico and Canada.

trade accords should produce living wage jobs, less poverty and an

improved environment

If NAFTA were working, more good U.S. jobs would be

created, outnumbering job losses. In Mexico, workers would

experience a rising standard of living. Exactly the opposite

is true. Conservative estimates indicate the U.S. has lost

880,000 jobs due to NAFTA. These jobs are largely in U.S.

companies that merely relocate to Mexico paying ``hunger

wages.'' Wages in Mexico have been cut by a third. If NAFTA

were working in the interest of Mexicans, there would be a

reduction in poverty, a growing middle class, and

environmental improvement. Instead there is a rollback in

wages, deplorable working conditions, and growing economic

concentration of wealth in a few hands, forcing huge social

dislocation.

As U.S. jobs are sucked into Mexico, not only do more

people vanish from the middle class but also U.S. schools

lose property taxes. In a state like Ohio that has lost

nearly 200,000 jobs to Mexico, the economic decline is

visible. Ohio's income growth is declining. In 1999,

according to Ohio Department of Development statistics,

citizens in Ohio lost $30.7 billion in total income compared

to the past year. The state itself lost $15 billion. As a

result, college tuition has increased, with average student

undergraduate debt rising to record levels of $18,900.

Nursing homes are understaffed with low paid workers, and the

ranks of uninsured Ohioans has risen to 1.3 million. The

State is raising taxes on everything from sales, to gas

and to property to try to fill the gap of a fleeing

private sector. Quality of life is sliding backwards.

NAFTA-related environmental enforcement remains largely

nonexistent. If NAFTA were working, environmental

improvement in Mexico would be upgrading; it is sliding

backward.

Transition U.S./Canadian displaced workers to comparable

employment and Mexico's workers and peasants to land holding

and living wage standard.

NAFTA--displaced workers in the U.S. largely have been

abandoned in their efforts to reposition to new employment.

Unemployment benefits expire, training is inadequate, and

health benefits expire or are unaffordable. Experienced

workers rarely find jobs with comparable pay or benefits.

Mexico's vast underclass, underpaid, and exploited, lacks a

living wage, affordable elementary education, basic health

care, and systems to gain property ownership and affordable

credit even for basic purchases. In order to move forward

with any future trade agreements, NAFTA must acknowledge its

human toll and respond accordingly. NAFTA provisions have led

to the displacement of thousands of small business,

industrial and agricultural workers throughout the U.S.,

Mexico and Canada. Little provision has been made to assist

these workers, farmers, and communities with any transitional

adjustment assistance. In Mexico, this has caused masses of

people to stream toward the border and the maquiladora zones

in search for jobs.

The North American Development Bank, which was established

to help local communities build their human and physical

infrastructures, has been an abject failure. It should

promote economic investment in those regions of Mexico and

the United States where jobs have been hollowed out due to

NAFTA, or infrastructure is needed. Bank assets could be

enhanced by financial contributions that flow from trade-

related transactions.

Create new continental law enforcement body to combat

growing crime along U.S.-Mexico border region related to

border workers, drugs, and unsolved murders of hundreds of

Mexican women.

The United States Departments of Labor and Homeland

Security should be tasked not only with stopping the

trafficking of bonded laborers but devising a continental

labor identification card. Along with mass migration, the

border has seen an explosion in the illicit drug trade. Law

enforcement officers on both sides of the border must battle

smuggling in narcotics and persons. A continental working

group should be directed to recommend a new solution for

combating crimes that result from the illegal drug and bonded

worker trade that spans the border.

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

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

I want to remind my colleague that we can get into the debate on reimportation of drugs at some time when it is relevant, because it has no application to this agreement.

I am pleased that the House today will pass the long-overdue U.S.- Australia Free Trade Agreement. I applaud the efforts of President Bush and the USTR in negotiating an agreement that opens markets for U.S. exports by eliminating tariffs, reducing nontariff barriers, opening services markets, and strengthening intellectual property protections.

This is an important agreement. The U.S. enjoys a $9 billion trade surplus with Australia, and Australia is our ninth largest goods export market. Australian firms in the U.S. employ about 85,000 Americans, and it is estimated that U.S. exports to Australia support more than 150,000 U.S. jobs. Under the terms of this agreement, over 99 percent of U.S. exports of industrial goods to Australia will become duty-free immediately. U.S. manufacturers estimate that the elimination of tariffs could result in nearly $2 billion per year in increased U.S. exports of manufactured goods.

This agreement also gives our farmers new opportunities. All U.S. agricultural exports to Australia totaling more than $400 million will receive immediate duty-free access. Key agricultural products that will benefit from immediate tariff elimination include soybeans and oilseed products, fresh and processed fruits, vegetables and nuts, and pork products. Our dairy farmers also will have immediate access to the Australian market.

Mr. Speaker, this agreement is also very important to my State of Illinois, which is home to companies including Caterpillar, Boeing, Motorola, Abbott Labs, and Zurich Life. Illinois exports to Australia directly support approximately 4,400 jobs in the State of Illinois. Additionally, there are 20 Australian-owned companies in Illinois, employing over 2,000 people. Nine hundred of these positions are manufacturing jobs. Trade with Australia supports numerous other high- paying jobs in areas such as transportation, finance, and advertising; and between 1999 and 2003, Illinois exports to Australia grew by 12 percent. This Free Trade Agreement means more jobs, better jobs, and higher-paying jobs in Illinois and America.

As chairman of the Subcommittee on Trade, it has been my privilege to have been involved in the completion of this trade agreement, and I thank my colleagues who worked so hard to make this a reality.

I would also like to express appreciation to staff, including, to name just a few, Angela Ellard, Stephanie Lester, Matt Howard, Tim Reif, Viji Rangaswami, Mike Castellano, Brian Gaston, Sam Geduldig, Brian Diffell, Andrew Shore, John DeStefano, Amy Heerink, Rachael Leman, Janet Nuzum, James Koski, Greg Sheiowitz, Chris McConnell, and Vergil Cabasco. I thank them.

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

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

I would like to remind everyone of a Dear Colleague that was released yesterday by our ranking minority member on the Committee on Ways and Means Subcommittee on Trade, the gentleman from Michigan (Mr. Levin), and our ranking member on the full Committee on Ways and Means, the gentleman from New York (Mr. Rangel); and this is in their Dear Colleague letter: ``The Australia Free Trade Agreement is worthy of support. Article 17.9.4 of the Australia FTA essentially codifies existing U.S. law in an international trade agreement. Current U.S. law allows patent holders to bar the import of their patented products. The patent provision will not have a practical effect due to the fact that Australia's domestic law prohibits the export of drugs purchased through its government-subsidized program which accounts for over 90 percent of all drugs sold in Australia.

``Article 17.9.4 matters only to the extent that the United States is allowing the import of prescription drugs from Australia, or which are covered by a patent owned by an Australian firm. As a practical matter, with or without the Australia FTA, there is little possibility of importing prescription drugs from Australia.''

Mr. Speaker, I yield 3 minutes to the gentlewoman from Washington (Ms. Dunn), cochair of the U.S.-Australia Caucus and a member of our Committee on Ways and Means.

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

Mr. Speaker, the Australia FTA does not prevent Congress from passing legislation on drug reimportation. Under the U.S. Constitution, no trade agreement could do this. Any law passed by Congress will always trump any FTA. There is nothing in the Australia FTA or H.R. 4759 that changes U.S. patent laws or the Federal Food, Drug and Cosmetic Act. The patent provision in the FTA restates U.S. law and applies to all patents, not just pharmaceuticals. Not including this provision would be devastating to U.S. intellectual property rights holders in every sector.

Australian law already bans the exportation of drugs dispensed under its pharmaceutical benefits scheme. Unlike Canada, Australian law expressly prohibits other parties such as a wholesaler or pharmacist from exporting non-PBS dispensed drugs. Therefore, any change in U.S. law would have no practical effect on reimportation to Australia due to Australia domestic law, regardless of the FTA; and, therefore, Australia would have no plausible basis to claim harm or pursue sanctions.

Mr. Speaker, I yield 2 minutes to the gentleman from Ohio (Mr. Portman), one of our colleagues on the Committee on Ways and Means.

Mr. Speaker, I yield myself such time as I may consume. The State of Vermont exported $12.8 million of merchandise to Australia in 2003. Vermont's high-value exports to Australia include food for infants, aircraft and sports equipment; and if the FTA was in place in 2003, 99.8 percent of Vermont's exports would have entered Australia duty free.

American exports to Australia directly and indirectly support over 270,000 jobs in the United States.

Mr. Speaker, I yield 1 minute to the distinguished gentleman from Texas (Mr. Brady).

Mr. Speaker, I yield 2\1/2\ minutes to the distinguished gentleman from Pennsylvania (Mr. English).

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

Oregon is a trader with Australia right now, and Australia is the 10th largest market for Oregon goods that are exported with total exports valued at over $257 million in 2003. Oregon's high-volume exports to Australia include chassis trucks, fertilizers, vehicle parts, and helicopters.

Oregon exports to Australia directly support approximately 1,200 jobs. Additionally, there are 12 Australian-owned companies in Oregon employing over 300 people. Trade with Australia supports numerous other high-paying jobs in areas such as transportation, finance, and advertising.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Michigan (Mr. Knollenberg).

Mr. Speaker, I yield 3 minutes to the distinguished gentlewoman from Connecticut (Mrs. Johnson).

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

Australia is the eleventh largest market for Ohio goods exports, with total exports valued at around $389 million in 2003. Ohio primarily exports high-valued products to Australia, such as aircraft engines and parts, other aircraft parts, auto parts, forklifts, pet food, and household appliances. If the FTA was in place in 2003, over 93 percent of Ohio's exports would have entered Australia duty free.

Ohio's exports to Australia directly support approximately 1,854 jobs. Additionally, there are 17 Australian-owned companies in Ohio, employing 1,800 people, with 1,300 of these positions in manufacturing jobs. Trade with Australia supports countless other high-paying jobs in areas such as transportation, finance and advertising.

The Bureau of Economic Analysis reports that Australian businesses have more than $817 million invested in Ohio.

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from Texas (Mr. Hensarling).

Mr. Speaker, I yield 2 minutes to my distinguished colleague, the gentleman from Illinois (Mr. Weller).

Mr. Speaker, I yield myself such time as I may consume to simply remind all those paying any attention to the debate that we enjoy a $9 billion trade surplus with Australia at the present time, and that will expand greatly with the passage of this free trade agreement.

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

I am sorry I cannot yield my time, but I will, Mr. Speaker, use some of my time at the present moment.

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

Mr. Speaker, the administration strongly supports H.R. 4759, which will approve and implement the U.S.-Australia Free Trade Agreement as signed by the United States and Australia on May 18 of this year. The U.S.-Australia FTA advances U.S. national economic interests and meets the negotiating principles and objectives set out by the Congress in the Trade Act of 2002.

The agreement enhances our close trade relationship with Australia and will further open Australia's market for U.S.-manufactured goods, agricultural products, and services. As soon as the FTA enters into force, tariffs will be eliminated on nearly all manufactured goods traded with Australia. In addition, Australia will eliminate tariffs on all exports of U.S. agricultural products.

The U.S.-Australia FTA further solidifies our relationship with an important partner in the global economy and a strategic ally. It sets a strong example of the benefits of free trade and democracy. Opening markets is part of

the President's six-point plan for continuing to strengthen America's economy and to create more opportunities for American workers and farmers.

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

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

Mr. Speaker, Australia is the 15th largest market for New Jersey goods exports, with total exports valued at nearly $307 million in 2003. New Jersey primarily exports high-valued products to Australia such as pharmaceuticals, printed media, medical equipment, perfumes, and chemicals. If the FTA was in place in 2003, 99.44 percent of New Jersey's exports would have entered Australia duty free. New Jersey's exports to Australia directly support approximately 1,400 jobs. Additionally, there are 13 Australian-owned companies in New Jersey, employing 900 people. Seven hundred of these positions are manufacturing jobs.

Trade with Australia supports numerous other high-paying jobs in areas such as transportation, finance, and advertising.

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

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

I want to congratulate my colleague from North Dakota on his support for this Free Trade Agreement and also explain to folks that Australia is the third largest market for North Dakota goods exports, with total exports valued at over $47 million in 2003. North Dakota's exports to Australia include tractors, front-end loaders, beans, and agricultural sprayers. These exports support approximately 220 jobs in North Dakota. The Australia-U.S. Free Trade Agreement provides tremendous opportunities for North Dakota businesses, offering them preferential access to a strong economy and growing market. And I think the gentleman's folks back home will particularly appreciate his support, as do all the rest of us, for this important Free Trade Agreement.

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

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

Mr. Speaker, I would like to reiterate a comment I made earlier from the Dear Colleague released yesterday by the gentleman from Michigan (Mr. Levin) and the gentleman from New York (Mr. Rangel). And it says: ``The patent provision will not have a practical effect due to the fact that Australia's domestic law prohibits the export of drugs purchased through its government-subsidized program which accounts for over 90 percent of all drugs sold in Australia.''

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

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

Mr. Speaker, I want to congratulate the distinguished gentleman from California (Mr. Dooley) for his commitment to these fundamental principles that are involved here in the best interest of this country as well as our good friend and ally Australia for all these years. I thank him.

Mr. Speaker, I yield 3 minutes to the distinguished gentleman from Florida (Mr. Shaw).

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

Mr. Speaker, I would like to remind my colleague that the Australian government prohibits the export of drugs from Australia. They subsidize drugs for their own people, and they prohibit the export of those drugs.

Mr. Speaker, I yield 2 minutes to another gentleman from Florida (Mr. Mario Diaz-Balart). This is not a repeat. This is his younger brother.

Mr. Speaker, I yield 3 minutes to the distinguished gentleman from California (Mr. Cunningham).

Mr. Speaker, I yield 4 minutes to the distinguished gentleman from Arizona (Mr. Kolbe).

Mr. Speaker, I yield 2 minutes to our distinguished colleague, the gentleman from California (Mr. Rohrabacher).

Mr. Speaker, I yield 10 minutes to our distinguished colleague, the gentleman from California (Mr. Dreier), the chairman of the Committee on Rules.

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

Mr. Speaker, I yield such time as he may consume to the

gentleman from California (Mr. Dreier).

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

I would like to just reiterate in closing that this is an important agreement, and Australia is a close ally and friend of the United States. As the Australian Trade Minister Mark Vaile has said, this FTA is the commercial equivalent of the ANZUS treaty on security issues signed in 1951. This agreement represents the best FTA ever negotiated regarding industrial products, over 99 percent of which will become duty free immediately. And it is estimated that U.S. exports to Australia support more than 150,000 jobs currently. And in addition, Australian farms in the U.S. employ over 85,000 Americans. The U.S. already enjoys a $9 billion trade surplus with Australia, and this agreement is clearly in our national interest; and I strongly urge my colleagues to support this agreement. Vote ``yes'' on H.R. 4759.

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

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, I yield 30 minutes of my time to the gentleman from New York (Mr. Crowley), and I ask unanimous consent that he be allowed to yield such time as he sees fit.

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

I am in opposition to H.R. 4759, Mr. Speaker. It deals with issues of credibility, and it deals primarily with issues of pharmaceutical drugs and the possibility of reimportation, an issue dear to the hearts of many of the seniors in this country who are paying outrageous prices and are not being helped by the recent Republican pharmaceutical benefit.

We have been repeatedly either lied to or have had information withheld. I know many of my colleagues are aware that the actuaries in CMS knew that the drug bill was going to cost closer to $500 billion, or $550 billion rather than the $400 billion which was promised. That information was withheld.

For those of my colleagues who read The New York Times this morning,

they are aware of further withholding of information on the part of the Republicans. I guess it is not a lie, but I only bring it up at this point to indicate that I do not think we can trust any statements as to what the trade negotiator or trade representative may or may not be negotiating with Australia and what their intention is in the future.

We were told by OMB in the pharmaceutical drug bill that 2.4 million employees would lose their retiree prescription benefits when we voted for this last pharmaceutical bill under Medicare. Well, guess what? Just earlier this week, we received from the CMS, another branch of the administration, a memo showing that 3.8 million workers will lose their drug benefits as a result of the Republican drug bill. A mere mistake of 1.4 million Americans who are going to lose drug benefits after we were opportuned to pass that bill with the idea that only 2.4 million would lose coverage.

Now my colleagues may or may not care about another almost 1.5 million workers being denied their retirement drug benefits, I know the Democrats do, but I raise these two issues, a difference of almost $200 billion low-balling us on the cost of a drug bill and then subsequently, just today, finding out that 1.5 million more workers are going to lose their benefits. Now how can we depend on the administration to tell us anything straight that is in this trade bill?

I get now to my point. We are concerned that intellectual property language allows pharmaceutical manufacturers to contractually prohibit reimportation of prescription drugs from Australia. We know that. Once we approve this language, any attempt to pass reimportation language will immediately run afoul of the Australian Free Trade Agreement. This is not just about the U.S. and Australia. This is a bill that was engineered by the pharmacy lobby.

Let me point out, when the trade representatives met, they have a board, there were 15 members of the pharmaceutical industry sitting down to advise the trade representative and not one representative of the consumer community. What does that tell us? It tells us that certainly the trade representative representing the administration can undermine the will of the people in this country and the majority of Congress through trade negotiation power over which we are powerless to change after we vote today.

The last time that I checked, reimportation of pharmaceutical drugs was a domestic health policy issue that should be debated in Congress, and we should be making domestic health policy in this Chamber, not the U.S. Trade Representative.

Now, the trade representative is promising to use this language over and over again in future free trade agreements, and eventually it is going to come back to haunt us.

Now I have no doubt that the trade representative knows how to negotiate free trade, but I have a real question if he has any interest in protecting the health care of American citizens. Not only have we given PhRMA the keys to the kingdom, we are now letting them pillage their way through our health care programs.

In a brief moment of honesty, the U.S. Trade Representative admitted that transparency requirements in annex 2(c) of the Fair Trade Agreement actually do apply to a Medicare Part B drug reimbursement decision. In its current form, the proposed change to an average sales price reimbursement system does not meet the transparency requirements of the FTA, it opens the door to challenges, and it frustrates the ability of this body to pass reasonable, safe reimportation that will lower the cost of drugs for our senior citizens by, in many cases, 50 percent, far more than the mere 5 or 10 percent that this cockamamie Buck Rogers discount card that the administration has brought out.

So we are here with a subtle underlying problem, and that is the health care of 42 million seniors in this country, and now it turns out almost 4 million more employed Medicare beneficiaries or people who are receiving their benefits as retirees, and we cannot sell them down the river, Mr. Speaker. That is not the right thing to do.

We could argue the trade bill all day long, take some of these things out, and it is probably all right, but it is engineered not to be amended. We were not allowed to amend it in markup in committee, we cannot amend it here on the floor, it is up or down. So our only choice is to vote it down, send it back to the committee, do it right, and then proceed.

So I urge a no vote.

Mr. Speaker, at this point I yield the balance of my time to the gentleman from Ohio (Mr. Brown) and ask unanimous consent that he be allowed to yield that time as he sees fit.

Mr. Speaker, I rise today in opposition to H.R. 4759, the U.S.-Australia Free Trade Agreement (FTA). Once again the administration has given the pharmaceutical industry open access to the cookie jar. The result, to no one's surprise, is a free trade agreement that ensures the continued profitability of pharmaceutical manufacturers at the expense of average Americans who must buy drugs from other countries just to afford the prescriptions they need.

This agreement is about trusting the administration on prescription drugs. Unfortunately, the administration's recent record on this issue shows they are less than willing to tell the truth. During the debate on the Medicare prescription drug bill the administration hid the fact that the prescription benefit would cost $534 billion instead of the projected $400 billion.

Just today we learned that the administration has again missed the mark on an important estimate. According to this morning's New York Times 3.8 million people will lose retiree health coverage under the new Medicare law. This CMS estimate is 1.4 million people higher than the 2.4 million we were told during the Medicare debate.

The moral of the story is we can't trust the administration to make domestic health policy without congressional guidance. I don't trust USTR and the administration on prescription drugs, and you shouldn't either.

Less than one year ago, this House passed a bipartisan bill directing the Secretary of Health and Human Services to promulgate regulations allowing for reimportation of prescription drugs. There remain a number of pending proposals in the Senate that would legalize reimportation, as well. However, instead of fronting the reimportation issue in open debate, the administration took a back door approach, slipping language into the Australia agreement that effectively prohibits Congress from passing reimportation legislation.

Last time I checked, reimportation was a domestic health policy issue that should be debated in Congress. When the administration realized they were losing the battle, however, they turned to trade negotiation authority and their wealthy donor friends at the Pharmaceutical Research and Manufacturers of America (PhRMA), to find another alternative.

Last year the pharmaceutical industry spent $108 million on federal lobbying, and it is now clear they have purchased the keys to the kingdom. PhRMA used its power and influence during the FTA negotiations to obtain language that effectively precludes Congress from passing legislation allowing reimportation. As a result, U.S. citizens will never have access to affordable prescription drugs and the pharmaceutical manufacturers will continue to profit at the expense of Americans' health.

A vote for this FTA sets a dangerous precedent for the future of domestic pharmaceutical policy. Deputy U.S. Trade Representative Josette Shiner has already explained what will happen next. Testifying before the Senate Finance Committee, Ms. Shiner said the pharmaceutical provisions in the Australia FTA ``lay the groundwork for future FTAs,'' which will ``steer us in ongoing and future global, regional, and bilateral negotiations--including upcoming FTA negotiations and consultations with Canada and other major trading partners bilaterally and in international fora like the OECD.''

While I have no doubt the USTR knows how to negotiate a free trade agreement, I question whether they have any idea how their negotiations affect domestic health policy. During the negotiations with Australia, USTR pushed for language that would have decimated how the Veterans Administration and the Department of Defense buy drugs for our soldiers, veterans and their families. Though this language was later removed, the final agreement is so ambiguous, there are no guarantees Australia will not challenge our domestic drug procurement procedures. Besides the VA and Department of Defense, this could also affect Medicaid, Medicare and other federal programs.

In a brief moment of honesty, the Administration admitted that the transparency requirements in Annex 2-C of the FTA actually do apply to Medicare Part B drugs. Though no changes are currently necessary to comply with the FTA, there is no guarantee that we won't have to act in the future to change Medicare drug policy because of the Australia FTA and future agreements that share this transparency language. One possible problem in the near future is the switch to average sales price for Part B drugs in 2006. It is very clear that this payment policy change does not meet the transparency requirements of Annex 2-C, but as long as PhRMA is happy, I guess we should all rejoice and turn our backs on policies designed to lower the cost of Part B drugs for Medicare beneficiaries.

I urge all members today to think long and hard about what this vote means for the future of domestic prescription drug policy. Don't let anyone tell you that this vote is just about the U.S. and Australia and therefore you have nothing to worry about. If you have been touting the benefits of reimportation to constituents, but decide to vote for this FTA, I suggest you be prepared to deal with the backlash. If you truly care about reimportation and want to be able to use the issue on the campaign trail, vote against the U.S. Australia Free Trade Agreement.

Mr. Speaker, I rise in strong support of this legislation.

I would like to take a few minutes to first follow up on the discussion that we had at the opening of the rules debate this morning on the House floor.

One of our colleagues, I do not remember exactly who it was, I think it may have been my friend, the gentleman from Michigan (Mr. Levin), talked about the fact that there had been no consultation on the issue of this pharmaceutical drug reimportation issue; and I said at the time that I was going to get some information on the consultative process which took place as it relates to the free trade agreement, and it does include a great deal of discussion on the issue of the pharmaceutical question.

The administration, as I said this morning, held extensive, extensive consultations with Congress on the Australia Free Trade Agreement. There were, in fact, 29 briefings that were held with the Committee on the Judiciary and members of the Committee on Ways and Means on the FTA. There were actually eight briefings that were held specifically on the pharmaceutical question in a bipartisan way, and they related directly to the intellectual property rights issue, which is an important question.

So this argument that somehow there was no consultation with the Congress on the issue of the pharmaceutical question is a specious one. Actually, Members and staff who have clearances received the text on the intellectual property rights issue, which included patent provisions, in March of 2003, 16 months ago. So I think it is important for us to note that there has been an important process that took place.

My good friend and fellow Californian (Mr. Rohrabacher) was just here in the well, and I know that there has been, again, some confusion on this issue of whether or not the free trade agreement itself somehow includes a provision that would prevent the United States Congress from dealing with the reimportation issue. I will say right now what I said this morning when we were debating the rule: There is absolutely nothing whatsoever in this legislation that regards the issue of drug reimportation.

What I would like to do is say that the free trade agreement has nothing in it, the implementing language has nothing in it at all. Any law that the United States Congress passes always will trump the free trade agreement. So the very important thing that we need to realize is that our Constitution grants us that authority. So the patent provision in the free trade agreement restates U.S. law and applies to all patents, not just pharmaceuticals. Not including this provision would be devastating to the U.S. intellectual property rights holders in every sector of our economy, including pharmaceuticals.

I know my friend, the gentleman from California (Mr. Rohrabacher), is a great screenwriter. It would include, obviously, intellectual property when it comes to our very important entertainment industry as well.

Australian law states, already states that there is a ban on the exportation of drugs dispensed under the PBS, the Pharmaceutical Benefits Scheme that exists. Unlike Canada, Australian law explicitly prohibits other parties such as a wholesaler or a pharmacist from exporting nonPBS-dispensed drugs. That is Australian law. It has nothing whatsoever to do with the free trade agreement itself.

So I think we need, and I am happy that my friend is going to be supportive of this legislation and was going to be supportive earlier, but now what I want him to know is that he can be an even greater enthusiast in support of this now that we realize that there is nothing in this free trade agreement that deals with the issue of drug reimportation.

Now, let me just make a couple of comments on some things that had troubled me.

First, and this does not trouble me at all, it is simply praise for the gentleman from Illinois (Mr. Crane), the chairman of the Subcommittee on Trade. He educated me and a lot of others over the years on the importance of trade liberalization. Trade liberalization, breaking down barriers, does enhance opportunities for the free flow of goods, services, and capital and how that improves the quality of life worldwide. I learned so much of that from the gentleman from Illinois (Mr. Crane). He has been a great teacher on it.

The thing that has concerned me about this debate today is that some are trying to use the U.S.-Australia free trade agreement as an argument in opposition to other agreements. It is true that with Australia we have a very similar economy, and that is something that is important for us to recognize. It is also true, as my friend, the gentleman from California (Mr. Rohrabacher), and others have said, and I said when I was standing here this morning, that the alliance between Australia and the United States of America is an extraordinarily important one.

Prime Minister Howard was here on September 11 of 2001. He was going to be addressing a joint session of Congress, and he was here when President Bush addressed the Congress, and he stood with us consistently. In fact, he actually has used this term, he describes Australia as the sheriff for the United States of America. And it does underscore the importance of this agreement, how it will go even further in strengthening this critically important tie.

But as we look at the Australia agreement, how we can all of a sudden say the trade liberalization with countries that are trying to claw themselves onto the first rung of the economic ladder, how we did oppose those based on the fact that we have one structure with the U.S.-Australia agreement, is to me something that is very, very troubling.

I happen to be a strong proponent of the Central American Free Trade Agreement. I believe that it is critical for us, as the trade ministers, all the trade ministers said to me upstairs in the Committee on Rules just several weeks ago from five Central American countries, that to lock in democracy in Central America, to make sure that we improve the standard of living for the people of Central America, we must have the Central American Free Trade Agreement.

Now, many of us were in Seattle. I know I was there with my friend, the gentleman from Michigan (Mr. Levin), in December of 1999, the first week of December, 1999. We all know how that meeting fell apart. And I will never forget the cover of The Economist magazine, that great publication which, for a century and a half, has focused on the issue of trade liberalization as its priority. The cover of that magazine the week after the ministerial meeting broke down in Seattle had a picture of a starving baby in Bangladesh with the caption: ``Who was the real loser in Seattle?''

The reason is that it is important for us, if we are committed to making sure that these developing nations do, in fact, have an opportunity to succeed and, as I said, get onto the first rung of

the economic ladder, we need to work on trade liberalization with them. We need to help them find new opportunities to participate in the global economy. So that is why this is a very good agreement; and, similarly, other free trade agreements that we are going to be putting together that will break down barriers and encourage that free flow of goods and services and capital is something that we absolutely must continue with.

So, yes, we are going to have strong bipartisan support for this measure, but equally important and, in some ways, maybe even more important, Mr. Speaker, we need to have strong bipartisan support when it comes to these further agreements. Why? Because there are countries in this hemisphere and in other parts of the world that would love to have economies like Australia's or like the United States of America, and I happen to believe that the only way that we are going to create an opportunity for them to enjoy the wonderful standard of living that exists in both Australia and the United States of America is for us to have them enjoy the opportunity to participate in our global economy.

So I herald my colleagues who are going to be supporting this. I hope that everyone plays a role in understanding that this is part of our being on the cutting edge of the 21st century global economy. I congratulate President Bush for the leadership that he and Ambassador Zoellick have provided on this issue and my colleagues on both sides of the aisle for doing it. I look forward to a very, very strong vote in just a few minutes.

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

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I thank my friend for yielding me the time, and I would simply say that we all want to ensure that we do not see an engagement in the race to the bottom. That is not a goal that we have at all. What we want to do is we want to have in place policies, and the so-called race-to-the-bottom argument is one which was used as we were looking at the passage of fast track several years ago.

I yield to the gentleman from Michigan.

Mr. Speaker, reclaiming my time, let me say that we all want to do everything that we can to ensure that we do not engage in a race to the bottom. What we want to do is we want to make sure that we engage in a race to the top; and to get to the top, there are many countries that today may not be able to comply with every single standard that developed nations like Australia and the United States of America enjoy, and it is for that reason that we need to ensure and recognize that the best way for them to be able to qualify for that status is to see the economies of those countries grow.