SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOC
27–229PDF
2006
U.S.-MEXICO RELATIONS
HEARING
BEFORE THE
SUBCOMMITTEE ON
THE WESTERN HEMISPHERE
OF THE
COMMITTEE ON
INTERNATIONAL RELATIONS
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
APRIL 26, 2006
Serial No. 109–194
Page 2 PREV PAGE TOP OF DOC
Printed for the use of the Committee on International Relations
Available via the World Wide Web: http://www.house.gov/international—relations
COMMITTEE ON INTERNATIONAL RELATIONS
HENRY J. HYDE, Illinois, Chairman
JAMES A. LEACH, Iowa
CHRISTOPHER H. SMITH, New Jersey,
Vice Chairman
DAN BURTON, Indiana
ELTON GALLEGLY, California
ILEANA ROS-LEHTINEN, Florida
DANA ROHRABACHER, California
EDWARD R. ROYCE, California
PETER T. KING, New York
STEVE CHABOT, Ohio
THOMAS G. TANCREDO, Colorado
RON PAUL, Texas
DARRELL ISSA, California
JEFF FLAKE, Arizona
JO ANN DAVIS, Virginia
MARK GREEN, Wisconsin
JERRY WELLER, Illinois
Page 3 PREV PAGE TOP OF DOC
MIKE PENCE, Indiana
THADDEUS G. McCOTTER, Michigan
KATHERINE HARRIS, Florida
JOE WILSON, South Carolina
JOHN BOOZMAN, Arkansas
J. GRESHAM BARRETT, South Carolina
CONNIE MACK, Florida
JEFF FORTENBERRY, Nebraska
MICHAEL McCAUL, Texas
TED POE, Texas
TOM LANTOS, California
HOWARD L. BERMAN, California
GARY L. ACKERMAN, New York
ENI F.H. FALEOMAVAEGA, American Samoa
DONALD M. PAYNE, New Jersey
SHERROD BROWN, Ohio
BRAD SHERMAN, California
ROBERT WEXLER, Florida
ELIOT L. ENGEL, New York
WILLIAM D. DELAHUNT, Massachusetts
GREGORY W. MEEKS, New York
BARBARA LEE, California
JOSEPH CROWLEY, New York
EARL BLUMENAUER, Oregon
Page 4 PREV PAGE TOP OF DOC
SHELLEY BERKLEY, Nevada
GRACE F. NAPOLITANO, California
ADAM B. SCHIFF, California
DIANE E. WATSON, California
ADAM SMITH, Washington
BETTY McCOLLUM, Minnesota
BEN CHANDLER, Kentucky
DENNIS A. CARDOZA, California
RUSS CARNAHAN, Missouri
THOMAS E. MOONEY, SR., Staff Director/General Counsel
ROBERT R. KING, Democratic Staff Director
Subcommittee on the Western Hemisphere
DAN BURTON, Indiana, Chairman
RON PAUL, Texas
JERRY WELLER, Illinois, Vice Chairman
KATHERINE HARRIS, Florida
JAMES A. LEACH, Iowa
CHRISTOPHER H. SMITH, New Jersey
ILEANA ROS-LEHTINEN, Florida
CONNIE MACK, Florida
MICHAEL McCAUL, Texas
Page 5 PREV PAGE TOP OF DOC
ELIOT L. ENGEL, New York
GRACE NAPOLITANO, California
ENI F.H. FALEOMAVAEGA, American Samoa
DONALD M. PAYNE, New Jersey
WILLIAM D. DELAHUNT, Massachusetts
GREGORY W. MEEKS, New York
BARBARA LEE, California
MARK WALKER, Subcommittee Staff Director
JASON STEINBAUM, Democratic Professional Staff Member
DAN S. GETZ, Professional Staff Member
BRIAN WANKO, Staff Associate
C O N T E N T S
WITNESSES
Ms. Elizabeth A. Whitaker, Deputy Assistant Secretary for Mexico, Canada, and Public Diplomacy, Bureau of Western Hemisphere Affairs, U.S. Department of State
Mr. John M. Melle, Deputy Assistant Trade Representative for North America, Office of the United States Trade Representative
Ms. Audrey Adams, Deputy Assistant Commissioner, Office of International Affairs, U.S. Customs and Border Protection, U.S. Department of Homeland Security
Page 6 PREV PAGE TOP OF DOC
Mr. Stephen Johnson, Senior Policy Analyst, The Heritage Foundation
Robert A. Pastor, Ph.D., Vice President of International Affairs, Office of International Affairs, American University
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
The Honorable Dan Burton, a Representative in Congress from the State of Indiana, and Chairman, Subcommittee on the Western Hemisphere: Prepared statement
Ms. Elizabeth A. Whitaker: Prepared statement
Mr. John M. Melle: Prepared statement
Ms. Audrey Adams: Prepared statement
Mr. Stephen Johnson: Prepared statement
Robert A. Pastor, Ph.D.: Prepared statement
APPENDIX
Material Submitted for the Hearing Record
U.S.-MEXICO RELATIONS
Page 7 PREV PAGE TOP OF DOC
WEDNESDAY, APRIL 26, 2006
House of Representatives,
Subcommittee on the Western Hemisphere,
Committee on International Relations,
Washington, DC.
The Subcommittee met, pursuant to notice, at 2:57 p.m. in room 2172, Rayburn House Office Building, the Honorable Dan Burton (Chairman of the Subcommittee) presiding.
Mr. BURTON. A quorum being present, the Subcommittee on the Western Hemisphere will come to order. I ask unanimous consent that all Members' and witnesses' written and printed statements be included in the record. Without objection, so ordered. I ask unanimous consent that all articles, exhibits, and extraneous or tabular material referred to by Members or witnesses be included in the record. Without objection, so ordered. And I ask unanimous consent that any Member who may attend today's hearing be considered a Member of the Subcommittee for purposes of receiving testimony and questioning witnesses after Subcommittee Members have been given the opportunity to do so. Without objection, so ordered.
Now, I will get to my opening statement. I want to welcome you folks being here, and I apologize for our tardiness. I do not know if the second panel is here or not, but because of the voting patterns that we are going through today, we are going to ask the second panel to submit their statements for the record, and we will be submitting questions to them for them to answer, but we will not have the time to have the second panel, as we had anticipated. So I really apologize to them, but, unfortunately, the situation just is not conducive to having two panels today.
Page 8 PREV PAGE TOP OF DOC
Today, the Subcommittee on the Western Hemisphere will hear testimony on the current state of relations between the United States and Mexico. In his National Security Strategy for 2006, President Bush urged a deepening of our ties to Mexico if we want to see cooperative policies be extended and carried out through the region of Latin America. He has also repeatedly illustrated how important it is to maintain a good relationship with Mexico, and I could not agree with the President more on this assessment.
Mexico is the gateway to South America, both physically and intellectually, and we need to continue to work with the Government of Mexico if we wish to succeed in promoting growth and stability throughout the region and stemming the rising threats throughout our hemisphere. The border between us and Mexico is 1,980 miles long, and it is absolutely necessary that we have a good working relationship with the leadership of that country in solving our problems.
Today's geopolitical reality underscores the importance of United States-Mexico relations. With a leftist tide sweeping over much of Latin America, championed by Venezuelan President Hugo Chavez, the United States needs to maintain the friends it has and do what it can to bolster those friendships. While we have enjoyed a great bilateral friendship with Mexico these last several years under President Fox, there are some major policy issues we need to work through.
Border security and immigration are the issues at the top of the list and the concern of many Americans right now, and not coincidentally, they are the most contentious issues between the United States and Mexico. Illegal immigration to the United States from Mexico continues largely because of a stagnant Mexican economy. While President Fox has made strides in improving Mexico's economy since he took office in 2001, job opportunities in Mexico are scarce, and where they do exist, they do not pay as well as many jobs in the United States. This causes many Mexican nationals, in turn, to migrate to the United States where they can work and send remittances back to their families.
Page 9 PREV PAGE TOP OF DOC
A necessary precondition to stem the flow of illegal immigrants to the United States will be to work together with Mexico to better stabilize and strengthen its economy. Trade, since the early nineties, has grown significantly. In fact, it has almost quadrupled from $81 billion in 1993 to $292 billion in 2005. The United States is now Mexico's most important trading partner, accounting for over 85 percent of Mexico's exports and 60 percent of Mexico's imports. Conversely, Mexico is the United States' second most important trading partner, with 13 percent of United States exports going to Mexico and 10 percent of imports coming from Mexico. Mexico is the world's fifth-largest crude oil producer, and according to the United States Department of Energy, Mexico ships 88 percent of its oil exports to the United States, ranking it among the top three of our suppliers.
Despite the progress and deepening commercial engagement, there have been bumps in the road with regard to our bilateral trade, and I believe there is room for improvement. With the help of a cooperative administration in Mexico, we can resolve trade disputes and make trade easier and more beneficial for the people of both of our countries.
Last month, our two countries made progress in a longstanding dispute over soft drink beverages and applied adjustments on tariff rate quotas on sugar and high-fructose corn syrup.
The issue of illegal immigration is as important to the Mexican people as it is to Americans. While the strengthening of the Mexican economy will help to solve the problem of illegal immigration, there will still be those seeking work in the United States, and there will be employers inside American who will remain willing to hire them.
Page 10 PREV PAGE TOP OF DOC
President Fox has repeatedly called for enactment of some sort of guest worker program inside the United States, and Congress is now working on that issue, and all options are on the table, but Mexico needs to do its part to help the United States. The drug trade continues to be a thorn in the side of United States-Mexico relations, and as Congress prepares to solve the worsening crisis of illegal immigration, it is important that Mexican authorities ratchet up counternarcotics law enforcement and aggressively prosecute traffickers and those who aid them.
According to the most recent report from the State Department, Mexico is the primary transit point for cocaine entering the United States from South America and continues to be a main source country for heroin, marijuana, and methamphetamine. Narcotrafficking is fueling the recent rash of violence which thrives in towns located on the United States-Mexico border. I am very concerned about reports of Mexican military personnel, or those posing as Mexican military personnel, illegally crossing the border and, in some instances, providing protective cover for drug smugglers. This has happened in several spots across the Mexican-American border, and it is something that is really raising the ire of the people in those border states as well as across the country.
Equally pressing is the serious rise in the number of assaults on our Border Patrol agents.
The issue of human rights is a major focal point between the two nations as well. The Mexican Government has charged the United States to find a humane solution to the problem of illegal immigration, concerned because of the severe conditions many Mexican citizens have to endure to get across the border illegally. I agree that something needs to be done, but at the same time I remain concerned that human rights in Mexico are deteriorating. Powerful drug cartels are able to exert their influence to intimidate and sometimes injure or kill those who speak out against them.
Page 11 PREV PAGE TOP OF DOC
Mexico serves as a transit point for those trafficking women and children for sexual and labor exploitation, and it is most ironic that Mexico calls for a humane solution to the illegal immigration problem while its own constitution denies immigrants to Mexico, both legal and illegal, the ability to own property, the right to free speech, and equal employment.
While Mexico and the United States might not agree on everything, our relationship remains solidly intact. Five years of working with the administration of Vincente Fox has changed the nature of our relationship from one of antagonism to one of cooperation. After 70 years of poor cooperation between the United States and Mexico, at best, and outright hostility, at worst, this is a most welcome change, and we really appreciate that.
I believe we are on the right path with Mexico, and I look forward to working with the Fox administration in its final stages, and I also look forward to working with Mexico's new President in the interest of continuing our relationship, whomever that may be. It is extremely important, in my opinion, that whoever the next President is of Mexico that we find ways to work with him on all kinds of issues because our border is so long and so porous. It is extremely important that Mexico and the United States work together, and I look forward to working with the next administration. With that, I yield to my colleague, Mr. Engel.
[The prepared statement of Mr. Burton follows:]
PREPARED STATEMENT OF THE HONORABLE DAN BURTON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF INDIANA, AND CHAIRMAN, SUBCOMMITTEE ON THE WESTERN HEMISPHERE
Page 12 PREV PAGE TOP OF DOC
Today the Subcommittee on the Western Hemisphere will hear testimony on the current state of relations between the United States and Mexico. In his National Security Strategy for 2006, President Bush urged a deepening of our ties to Mexico if we want to see cooperative policies be extended and carried out through the region of Latin America. He has also repeatedly illustrated how important it is to maintain a good relationship with Mexico. I couldn't agree more with the President in his assessment. Mexico is the gateway to South America, both physically and intellectually, and we need to continue to work with the government in Mexico if we wish to succeed in promoting growth and stability throughout the region, and stemming the rising threats throughout our Hemisphere.
Today's geopolitical reality underscores the importance of U.S.-Mexico relations. With a leftist tide sweeping over much of Latin America, championed by Venezuelan President Hugo Chavez, the U.S. needs to maintain the friends it has, and do what it can to bolster those friendships. While we have enjoyed a great bilateral friendship with Mexico these last several years under President Vicente Fox, there are some major policy issues we need to work through.
Border security and immigration are the issues of top concern to many Americans right now, and not coincidentally, they are the most contentious issues between the U.S. and Mexico. Illegal immigration to the United States from Mexico continues largely because of a stagnant Mexican economy. While President Fox has made strides in improving Mexico's economy since he took office in 2001, job opportunities in Mexico are scarce, and where they do exist, they do not pay as well as many jobs in the United States. This causes many Mexican nationals, in turn, to migrate to the U.S., where they can work and send remittances back to their families. A necessary precondition to stem the flow of illegal immigrants into the United States will be to work together with Mexico to better stabilize and strengthen its economy.
Page 13 PREV PAGE TOP OF DOC
Since NAFTA went into effect in 1994, it is indisputable that trade between the U.S. and Mexico has grown significantly. In fact, it has almost quadrupled from $81 billion in 1993 to $292 billion in 2005. The U.S. is now Mexico's most important trading partner, accounting for over 85% of Mexico's exports and 60% of Mexico's imports. Conversely, Mexico is the United States' second most important trading partner, with 13% of U.S. exports going to Mexico and 10% of imports coming from Mexico. Mexico is the world's fifth largest crude oil producer, and according to the Department of Energy, Mexico ships 88% of its oil exports to the U.S., ranking it among our top three suppliers.
Despite the progress and deepening commercial engagement, there have been bumps in the road with regard to our bilateral trade, and I believe there is room for improvement. With the help of a cooperative administration in Mexico, we can resolve trade disputes, and make trade easier and more beneficial for the people of both our countries. Last month our two countries made progress in a longstanding dispute over soft drink beverages and applied adjustments on tariff rate quotas on sugar and high fructose corn syrup.
The issue of illegal immigration is as important to the Mexican people as it is to Americans. While the strengthening of the Mexican economy will help to solve the problem of illegal immigration, there will still be those seeking work in the United States, and there will be employers inside America who remain willing to hire them. President Fox has repeatedly called for enactment of some sort of guest-worker program inside the United States, and Congress is now deliberating over various options on the table.
But Mexico needs to do its part to help the United States. The drug trade continues to be a thorn in the side of U.S.-Mexico relations and as Congress prepares to solve the worsening crisis of illegal immigration, it is important that Mexican authorities ratchet-up counter-narcotics law enforcement and aggressively prosecute traffickers and those who aid them. According to the most recent report from the State Department, Mexico is the primary transit point for cocaine entering the U.S. from South America, and continues to be a main source country for heroin, marijuana, and methamphetamine. Narco-trafficking is fueling the recent rash of violence which thrives in towns located on the U.S.-Mexico border. I am very concerned about reports of Mexican military personnel or those posing as Mexican military personnel, illegally crossing the border, and in some instances, providing protective cover for drug smugglers. Equally pressing is the serious rise in the number of assaults on our border patrol agents.
Page 14 PREV PAGE TOP OF DOC
The issue of human rights is a major focal point between our two nations. The Mexican government has charged the U.S. to find a humane solution to the problem of illegal immigration, concerned because of the severe conditions many Mexican citizens have to endure to get across the border. I agree that something needs to be done, but at the same time, I remain concerned that human rights in Mexico are deteriorating. Powerful drug cartels are able to exert their influence to intimidate, and sometimes injure or kill, those who speak out against them. Mexico serves as a transit point for those trafficking women and children for sexual and labor exploitation. And it is most ironic that Mexico calls for a humane solution to illegal immigration, while its own constitution denies immigrants to Mexico—both legal and illegal—the ability to own property, the right to free speech and equal employment.
While Mexico and the United States might not agree on everything, our relationship remains solidly intact. Five years of working with the administration of Vicente Fox has changed the nature of our relationship from one of antagonism, to one of cooperation. After 70 years of poor cooperation between the U.S. and Mexico—at best—and outright hostility at worst, this is a most welcome change. I believe we are on the right path with Mexico. I look forward to working with the Fox Administration in its final stages, and I also look forward to welcoming Mexico's new President, in the interest of continuing our relationship, whoever that may be.
Mr. ENGEL. Thank you very much, Mr. Chairman. I welcome the opportunity to listen to the testimony today. I think it is very appropriate that we called this Subcommittee hearing on United States-Mexico relations.
Page 15 PREV PAGE TOP OF DOC
With a 2,000-mile common border, the United States and Mexico share concerns that include trade, immigration, agriculture, manufacturing, foreign investment, oil and gas, transportation, communications, the environment, water conservation, and health. We have a record number of Mexican-Americans in the United States. Indeed, United States relations with Mexico are as important and complex as with any other country in the world. Our relationship with Mexico has a direct impact on the lives and livelihoods of many Americans, an impact, whether the issue is trade and economic reform, homeland security, drug control, migration, or the promotion of democracy, labor protections, and the environment.
The United States and Mexico, of course, are partners in NAFTA and enjoy a rapidly developing trade relationship, but we must not lose sight that our relationship is about our people, the millions who live along our shared border, the millions of Mexicans who have come to the United States, and the millions of citizens of both of our countries who benefit from our ties to our neighbor to the south. A strong partnership with Mexico is critical to combatting terrorism, addressing the illegal immigration flows, and controlling the flow of illicit drugs into the United States. Immigration, primary for Mexico, both legal and illegal, has to be addressed by this and future Congresses, and a stable, democratic, and economically prosperous Mexico is fundamental to our mutual interests.
When President Bush first took office in 2001, the United States and Mexico envisioned the fulfillment of long-sought-after goals. Mexican President Fox had just toppled Mexico's 71-year-old, semi-autocratic, political structure. His policies appeared consistent with President Bush's ideals, and a quick personal relationship, friendship, developed between the two leaders. Moreover, as a former governor of Texas, the President had a particular interest in Mexico. Indeed, President Bush's first state visit was to welcome President Fox, and immigration reform became a priority for President Bush's first year in office.
Page 16 PREV PAGE TOP OF DOC
However, after September 11, our priorities changed. Our post-9/11 fight against international terrorism and the war in Iraq took the focus off expanding our relationship with Mexico and, for that matter, the Western Hemisphere region as a whole. Indeed, there is a growing recognition that we must now play catch up to preserve and restore relations with our neighbors to the south. We also know that China and other countries are attempting to engage in Central and South America, which is not exactly in our best interests, so we need to redouble our efforts to have good relations with Latin America, and it makes sense to start with Mexico.
It is within this context that we discuss Mexico. Ongoing debates about immigration only highlight the nation's importance to us. Now that there is clearly renewed momentum to address many of our shared interests with Mexico, I welcome the opportunity to explore the state of our current relationship. Given the possibility for significant political change after the July 2006 Presidential and legislative elections, I also look forward to hearing how our relationship might evolve and how new Mexican leadership might impact developments within the country and region.
We all know that the United States-Mexican agenda is an ambitious and challenging one—migration, border security, drugs, trade, investment, energy, and economic development—but I believe it is achievable, and our success or failure to get it right will have a direct bearing on the prosperity of both the United States and Mexico, especially in border communities whose lives, security, and economic well-being are inextricably linked.
The United States-Mexico bilateral relationship is also an important cornerstone in fashioning a successful partnership with countries throughout the Americas. It is vital that we work on our relationship until we get it right.
Page 17 PREV PAGE TOP OF DOC
So I thank you, Mr. Chairman. I look forward to working with you on a successful policy toward Mexico and in hearing the testimony today.
Mr. BURTON. Thank you, Mr. Engel. I should have introduced you as the Ranking Democrat on the Committee, and I apologize for that error. You are a good man.
Mr. ENGEL. No apology needed, Mr. Chairman.
Mr. BURTON. Now, we have an expectant father, the Vice Chairman of the Committee, Mr. Weller.
Mr. WELLER. Thank you, Mr. Chairman. I commend you for your leadership in conducting this hearing on the very important relationship between the United States and Mexico, and, like you, I regret that time is not going to allow us to hear testimony from our two panelists on the second panel. I want to extend a personal invitation to Steve Johnson with the Heritage Foundation and Bob Pastor with the Center for North American Studies at American further to come on by my office. I welcome the opportunity to talk directly with you about our United States-Mexico relationship and hear your thoughts. So please come by. The door is open.
The United States-Mexico relationship is both deep and dynamic. Our geographical and economic ties make our relationship that much more important. Today, we have significant challenges in our relationship with Mexico and between Mexico and the United States where both of our countries need to work together effectively as partners. Internal security and narcotrafficking are serious problems, fueling violence internally in Mexico, especially along the United States-Mexico border. Comparatively wealthy to Mexico's Latin American neighbors, Mexico still has serious problems with job creation and elimination of poverty. Border incursions in the United States also continue to be a concern, and, of course, immigration and border security, preventing terrorist access to our countries continue to be issues that we must work to both address and strengthen our partnership.
Page 18 PREV PAGE TOP OF DOC
But to simply focus on these issues ignores the positive direction Mexico has taken in important areas. Mexico has solidified its democracy and is preparing for free and fair elections in July of this year. We should commend Mexico for their commitment to democracy. President Fox's election changed the one party rule of Mexico, and his leadership has strengthened democratic institutions, and there should be no doubt that the United States will actively work to partner with the next democratically elected President of Mexico.
Mexico is also a key trading partner with the United States. Mexico is our second-largest trading partner, due in no small part to the North American Free Trade Agreement. NAFTA has meant greater access to Mexican markets for the United States, my home State of Illinois, and corresponding growth in our export markets, but it has also meant new development, economic growth, and job creation in our friend, Mexico. NAFTA works, and it has been good for the United States, Canada, and Mexico.
Finally, Mexico has recognized the country's fundamental need to address their immigration issues. In a resolution passed unanimously by the Mexican Congress earlier this year, known as the ''Mexico Immigration Phenomenon,'' Mexico makes a public commitment to address their responsibility for immigration to the United States. While this paper alone does not solve the enormous problem that both of our countries are facing, Mexico's loss of its own workforce and the United States contending with millions of undocumented and illegal workers and an unsecured border, it is also an important recognition of their responsibility on the immigration issue.
People of the United States and Mexico have a long and important relationship. Our Governments must continue to find ways to work together in partnership to address the mutual challenges both of our countries face, including narcotrafficking, terrorism, economic growth, and security for both of our countries.
Page 19 PREV PAGE TOP OF DOC
Mr. Chairman, thank you again for this opportunity to make a statement, and I look forward to the testimony of our witnesses.
Mr. BURTON. Thank you, Mr. Weller, and, again, congratulations on the addition to your family.
Do you have an opening statement?
Mr. DELAHUNT. No, I do not, but I want to echo your congratulations to the Vice Chairman of the Committee. I would just note that both Congressman Weller and myself recently attended an interparliamentary conference between Mexico and the United States. I thought it was a very positive experience.
I do believe that the Mexican Government, or at least the Mexican Congress, has spent considerable time on the issue of immigration, these issues, and, I believe, has taken a very thoughtful, measured understanding of the complexity. They have come in with, I think, some very challenging proposals for us, and I think that good people with good intentions can make good things happen. With that, I yield back.
Mr. BURTON. Mr. Mack?
Mr. MACK. Thank you, Mr. Chairman. I guess I also want to congratulate Congressman Weller to the new addition. I did not want to be the only one not to congratulate you. That would be bad form. And I also want to thank the panel for being here and the Chairman for this hearing, and just to be very brief, I know that on the people's minds there is the issue of immigration.
Page 20 PREV PAGE TOP OF DOC
I also—Mr. Chairman, you mentioned it in your opening statement—am concerned with who may be the next President in Mexico and really see this as an opportunity for democracy to continue to grow or potentially move toward the Hugo Chavez model. And so I would be interested to hear, later on, the members of the panel and their thoughts when it comes to the influence of Hugo Chavez and how that might relate in Mexico and the election in July. I just hope that we will end up with a President of Mexico who wants to continue to the relationship with the United States, who wants to continue to try to raise the freedom flag and allow the citizens of Mexico to enjoy the freedoms that they have. Thank you.
Mr. BURTON. Thank you very much.
We now will turn to our first panel, and that panel consists Elizabeth A. Whitaker, and she has served as deputy assistant secretary for Mexico, Canada, and Public Diplomacy in the Bureau of Western Hemisphere Affairs at the Department of State since September 2005. She has served in Costa Rica, Honduras, and Nicaragua and joined the Foreign Service in 1982 as a public diplomacy officer with the U.S. Information Agency.
John Melle serves as the deputy assistant trade representative for North America, Office of the Trade Representative. His responsibilities included oversight of the North America Free Trade Agreement and bilateral trade issues with Canada and Mexico. Mr. Melle has worked on North American trade issues in various capacities since 1993, most recently having the responsibility for bilateral Canada issues in 2002, and he joined USTR in 1987.
Audrey Adams is deputy assistant commissioner in the Office of International Affairs, U.S. Customs and Border Protection in the U.S. Department of Homeland Security. She brings over 30 years of customs and border-protection experience to her position. She has served in a variety of key leadership positions in Laredo, Los Angeles, and Washington, DC.
Page 21 PREV PAGE TOP OF DOC
Would you please rise so I can have you sworn in?
[Witnesses sworn.]
Mr. BURTON. We will start with Ms. Whitaker. Do you have an opening statement?
TESTIMONY OF MS. ELIZABETH A. WHITAKER, DEPUTY ASSISTANT SECRETARY FOR MEXICO, CANADA, AND PUBLIC DIPLOMACY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE
Ms. WHITAKER. Thank you, Mr. Chairman. Is it permissible for the panel to congratulate Mr. Weller as well?
Mr. BURTON. No, I am sorry.
Ms. WHITAKER. I retract that.
Mr. Chairman, Members of the Subcommittee, it is a privilege and honor to meet with you today to discuss the broad range of our relations with Mexico, as many of you stated so eloquently already. We appreciate and share your interest in and support for a wide-ranging, dynamic, and productive relationship with our neighbor to the south, or the gateway to South America, as you said.
Page 22 PREV PAGE TOP OF DOC
In addition to the ties of shared history and geography that bind Mexico to the United States, Mexico is our second-largest trading partner and our third-largest source of imported petroleum. Our nearly 2,000-mile border is one of the busiest in the world in terms of commercial exchange and the flow of people. Our relationship is centered on our common values and interests, and that allows us to work in close cooperation on the many issues that affect the well-being of our citizens.
Recent years have seen an unprecedented level of bilateral cooperation. We are partners on issues ranging from democracy, trade, counterterrorism, law enforcement, the environment, energy, and transportation, some issues surely more challenging than others. We share a commitment to democracy, human rights, and free markets in the pursuit of security and prosperity for our people. That shared commitment also makes us natural partners on the world stage.
It is no exaggeration to say that our relations with Mexico, under the leadership of President Vincente Fox, have been better than with any previous Mexican Government. Under President Fox's leadership, Mexico has strengthened democracy at home by reenforcing its political and legal institutions, introducing unprecedented transparency and accountability in government institutions, and improving respect for human rights. Mexico has stood up for democracy in the hemisphere and in multilateral institutions such as the Organization of American States and the United Nations. Mexico's next President will inherit a country that is more democratic, more prosperous, and more economically stable than it has been in history.
I mentioned Mexico's next President. Indeed, President Fox is in the last months of his administration. Mexico will hold Presidential and congressional elections on July 2. There is widespread speculation about who Mexico's next President will be and whether our bilateral relationship will change. I think it is important to state here that the Mexican people and their electoral institutions have shown their democratic conviction. I have no doubt that the Mexican people will speak clearly this July. We await with great interest, as do you and the Mexican people, the results of those elections, but have no doubt that we will be able to work cooperatively with whoever is elected on our long-established, shared agenda.
Page 23 PREV PAGE TOP OF DOC
The advances that we have seen in our ties with Mexico were reflected in two recent, high-level meetings. The 22nd U.S.-Mexico Binational Commission meeting, which Secretary Rice and her Mexican counterpart, Secretary Derbez, hosted in Washington on March 24, underscored the cooperative efforts over the entire range of our relations. These included the safety and security of our common border, bilateral law enforcement efforts, returning criminal fugitives to justice across the border in both directions, as well as cooperative programs and good governance, environmental protection, and the regional energy integration effort that Mexico is exploring with Central America.
Our relations with Mexico are increasingly linked with Canada, as we all share a continued commitment to enhance the security, prosperity, and quality of life of our citizens within North America. The Security and Prosperity Partnership of North America, or SPP, provides a framework for us to advance collaboration in areas as diverse as security, transportation, the environment, and public health. In June 2005, the three governments published an ambitious agenda for collaboration.
The SPP recently celebrated its first anniversary just last month at a meeting in Cancun, Mexico, among President George W. Bush, President Vicente Fox of Mexico, and Prime Minister Harper of Canada. The leaders reviewed the progress made on the SPP agenda and directed their ministers to continue to move forward on the agenda. The leaders also agreed on initiatives to strengthen competitiveness in North America, cooperate on managing the threat of Avian and pandemic influenza, collaborate on energy security, work toward smart and secure borders, and develop a common approach to natural and man-made disasters.
Page 24 PREV PAGE TOP OF DOC
We three countries set the cornerstone of this North American community 12 years ago by deciding to create NAFTA. Since that treaty went into effect in 1994, trade between Mexico and the United States has almost quadrupled, and direct investment by the United States in Mexico and by Mexico in the United States has flourished.
We are committed to ensuring the secure flow of goods and people across our shared border. It is a tough challenge. We have worked closely with Mexico to create institutions and infrastructure to enhance border security while making border transit easier and quicker. I know my colleague from DHS will discuss that.
While we have had good cooperation from our Mexican partners for the past several years, there are still challenges before us. We see increased crime and violence, largely due to the activities of narcotrafficking organizations. The Mexican Government has made a sincere effort to attack the problem of border violence and border security on its side, for example, by sending in military and Federal police forces to take temporary control over security and to purge and revamp local police forces in areas where violence is acute, such as Nuevo Laredo.
We are continually extending linkages among our law enforcement agencies along the border deep into the operational level to be able to mount coordinated responses to breaking security events.
The United States and Mexico have also decided to work together on addressing historic inadequacies of the Mexican justice system. We are helping Mexico reform its systems of law enforcement and criminal justice by providing training to Mexican law enforcement officials, and we are supporting a major revision of criminal procedure laws in six Mexican states that will replace the old, inquisitorial system with an oral, adversarial justice system more in keeping with the requirements of modern society. This work at the state level is very important, as these subnational units recognize that such reforms will provide swifter, more equitable justice for all, as well as a more attractive market for investors and businesspeople. At the end of the day, though, these are Mexican decisions, and we do not pretend to have all of the answers, but if we can help, and the Mexicans want it, we are there for them.
Page 25 PREV PAGE TOP OF DOC
Drug trafficking remains a significant challenge for our two nations, but we are making progress. The cooperation in counternarcotics and law enforcement that we have seen from Mexican authorities under President Fox has improved dramatically. Mexico has worked hard to improve law enforcement capability and root our corruption. Extraditions of criminals from Mexico to the United States have risen in number annually, including high-profile cop killers and fugitives, and a November 2005 Mexican Supreme Court decision will facilitate the extradition of criminals facing life sentences in the United States.
Mr. BURTON. Excuse me, Ms. Whitaker. Are you about finished with your statement?
Ms. WHITAKER. Yes, sir, I am.
Mr. BURTON. Okay. Thank you.
Ms. WHITAKER. Certainly, the immigration issue looms large in Mexico and the United States. The Government, as was stated previous, of Mexico recognizes its shared responsibility for security along the border. Understandably, the Mexicans are following with great interest the reform debate here in the United States, and for our part, we reiterate to our interlocutors President Bush's unequivocal support for a comprehensive bill and explain that this issue is now before the U.S. Congress for a decision.
Mr. Chairman, that concludes my remarks. Thank you.
Page 26 PREV PAGE TOP OF DOC
[The prepared statement of Ms. Whitaker follows:]
PREPARED STATEMENT OF MS. ELIZABETH A. WHITAKER, DEPUTY ASSISTANT SECRETARY FOR MEXICO, CANADA, AND PUBLIC DIPLOMACY, BUREAU OF WESTERN HEMISPHERE AFFAIRS, U.S. DEPARTMENT OF STATE
Mr. Chairman, members of the Subcommittee, thank you for the opportunity to meet with you today to discuss our relations with Mexico. Despite some perceptions to the contrary, the real story of the United States and Mexico is marked by excellent relations and bilateral cooperation in the pursuit of a shared security and prosperity.
Mexico is a country with enormous and growing strategic significance for the United States. Mexico is our second largest trading partner and our third largest source of imported petroleum. Our border is one of the busiest in the world in terms of commercial exchange and personal traffic. Our economies and trade, public health, the environment, law enforcement and national security are intertwined to a degree few of us realize. Our peoples and governments now share a commitment to democratic values that has helped make Mexico a partner in the hemisphere.
The first foreign leader President Bush met with after assuming office was President Fox of Mexico. Through the fundamental changes the world has gone through since then, Presidents Bush and Fox have continued to meet frequently, most recently last month in Cancun, along with Canadian Prime Minister Harper, in the framework of the trilateral Security and Prosperity Partnership. Security and prosperity are the watchwords of our relations with Mexico. These two objectives are increasingly a shared agenda for all three partners in North America.
Our relationship is entering the final year of President Fox's administration. His government has been a valued partner of the United States. We have had better relations with Mexico under his administration than under any previous Mexican government. This is in no small part due to President Fox's own democratic convictions. His election to the Presidency in 2000 marked the end of more than 70 years of one-party rule in Mexico. Under his leadership, we have seen the strengthening of Mexico's political and law enforcement institutions, the introduction of unprecedented transparency and accountability in government institutions, and improved respect for human rights. His administration has pursued sound economic policies that have brought economic stability, a stable currency, low inflation, increased employment, an expanded middle class, and special help for the most disadvantaged.
Page 27 PREV PAGE TOP OF DOC
In the Hemisphere, we share with Mexico a vision governed by the values of liberty, open markets, free trade, and strong institutions guaranteeing these values. I know you will recall how President Fox, at the Summit of the Americas, courageously defended free trade in the Americas. The Government of Mexico has also stood up for democratic values in multilateral institutions such as the OAS and the UN. President Fox will bequeath to his successor a Mexico that is more democratic, more prosperous, and more economically stable than the Mexico of the past.
Mexico will hold presidential and congressional elections July 2, and there is much interest in who Mexico's next president will be and whether our bilateral relations will change. We have full confidence in the ability of Mexico's electoral institutions to conduct free and fair elections. These institutions have an established track record going back to the monumental presidential election of 2000 and earlier. As to the campaign and on the outcome of the election itself, we are taking a neutral posture. We have no doubt we will be able to work cooperatively with the next Mexican president—whoever that may be—on our long-established shared agenda.
The advances we have seen in our ties with Mexico were reflected in two recent high level meetings. The twenty-second U.S.-Mexico Binational Commission meeting is an annual meeting at cabinet secretary level chaired by the Secretary of State and the Mexican Secretary of Foreign Relations, and is held alternately in each capital. The Binational Commission that Secretary Rice and her Mexican counterpart, Secretary Derbez, hosted in Washington March 24, underscored cooperative efforts over the entire range of our relations. That meeting renewed our joint commitment to ensure the safety and security of our common border, reconfirmed bilateral law enforcement efforts, especially along the border, and our efforts to return criminal fugitives to justice across the border in both directions. The Binational Commission reaffirmed commitments to a series of cooperative programs in good governance, environmental protection, and the regional energy integration effort that Mexico has initiated in Central America. The Binational Commission meeting sends a strong signal that the U.S.—Mexico partnership that inspired NAFTA continues to deepen our economic integration, strengthen the security of our citizens, and provide a model of freedom and opportunity for the Hemisphere and the world.
Page 28 PREV PAGE TOP OF DOC
Our relations with Mexico are increasingly linked with Canada, as we all share a continued commitment to enhance the security, prosperity, and quality of life of our citizens within North America. The Security and Prosperity Partnership of North America, or SPP, provides a framework for us to advance collaboration in areas as diverse as security, transportation, the environment and public health. This Partnership has increased our institutional contacts to respond to our vision of a stronger, more secure, and more prosperous region. In June 2005, the three governments published an ambitious agenda for collaboration. The SPP celebrated its first anniversary last month, at the meeting in Cancun. The leaders reviewed the progress made on the SPP agenda, and directed their minister to move forward on the agenda. The leaders also agreed on initiatives to strengthen competitiveness in North America, cooperate on managing the threat of avian and pandemic influenza, collaborate on energy security, develop a common approach to natural and manmade disasters, and work toward smart and secure borders. Together, these steps aim to coordinate approaches to sharpening the competitiveness that our countries' economies depend upon, and addressing security vulnerabilities that could threaten that prosperity.
In that same trilateral framework, free trade in North America anchored in NAFTA remains the foundation of our shared prosperity. Since that treaty went into effect in 1994, trade between the United States and Mexico has almost quadrupled from $81 billion in 1993 to $292 billion in 2005. Reforms that Mexico enacted for NAFTA are a key reason why Mexico weathered the financial turmoil that affected many developing countries in the late 1990s. NAFTA has also provided the stability needed for investment in Mexico. Foreign direct investment in Mexico from 1994–2005 exceeded $100 billion, 62 percent of which came from the United States. That represents a more than fifty-fold increase over the span of the treaty thus far. Over 2,600 U.S. firms have an important presence in Mexico. One such company, Wal-Mart, is the second largest private sector employer in the country, with more than 112,000 Mexican employees on its payroll. By consolidating Mexico's economic reforms into an international agreement, NAFTA is helping Mexico build a stable, efficient and predictable economic system that is the foundation for sustained growth and broad-based prosperity.
Page 29 PREV PAGE TOP OF DOC
Facilitating the secure flow of goods and people across our shared border is one of the greatest challenges before us today. We have worked closely with Mexico to create institutions and infrastructure to enhance border security while making border transit easier and quicker. The U.S.-Mexico Border Partnership, established by agreement of Presidents Bush and Fox in 2002 and now largely incorporated into the SPP, continues to pursue the three-fold goals of a secure transborder infrastructure while also facilitating the efficient flow of goods and people. That program has established SENTRI lanes (Secure Electronic Network for Rapid Travelers Inspection) at six ports of entry to ensure expedited crossings for identified low risk travelers. A similar program of FAST lanes (Free and Secure Trade) for cargo shipments provides expedited border crossing for cargo from participating companies who have demonstrated that their facilities are secure and their shipments low-risk. It is clear that with more than 1 million legal crossings every day on our southern border, more must be done to make those crossings swifter and safer, and we are committed to doing even more to achieve that goal.
The Mexican Government works closely with the United States on all aspects of counterterrorism security and prevention. In particular, Mexico has been very helpful flagging, monitoring and controlling flights to or over the United States that may have raised terrorism concerns.
A National Security Law that took effect in Mexico in January 2005 established a National Security Council to improve military, intelligence, immigration and civilian law enforcement cooperation on security issues, including terrorism. The law also established a National Security Commission in the congress. Legislation criminalizing the financing of terrorist organizations awaits conclusive action in the legislature in 2006.
Page 30 PREV PAGE TOP OF DOC
While we have had very good cooperation from our Mexican partners for the past several years in many areas, there are still many challenges. These issues have deep roots and go back many years. Many of them stem from the fact that such a long and busy border inevitably becomes the focus not only of legitimate trade and tourism but also of crime and lawbreaking.
Our border region, particularly on the Mexican side, has also been the scene of increased crime and violence, largely due to the activities of narco-trafficking organizations. These criminal groups are reacting to increased law enforcement pressure and arrests from the United States and Mexico. DHS, which has overall responsibility for patrolling and securing our border, can provide the details of the border security situation. However, the Mexican government has made a sincere effort to attack this problem on its side, for example, by sending in military and federal police forces to take temporary control over security and to purge and revamp local police forces in areas where the violence is acute, such as Nuevo Laredo. We are continually extending linkages among our law enforcement agencies along the border deep into the operational level to be able to mount coordinated responses to breaking security events. The latest such effort was the Action Plan signed by Homeland Security Secretary Chertoff with his Mexican counterpart on March 3 in Brownsville, Texas, an agreement that will establish operational protocols to govern coordinated law enforcement action to address security incidents along the border.
The Committee is no doubt aware that unauthorized border incursions have occurred recently and in the past. Most cases of unauthorized border crossings by Mexican or U.S. officials are resolved on the ground at the working level, and are determined to be inadvertent. It is rare that a cross-border incident requires diplomatic intervention by the Department of State. Such an occasion occurred last January, when initial reports indicated that persons dressed in military uniforms crossed the border with Texas to protect a drug shipment, and quickly fled back into Mexico when confronted by local law enforcement. We made an official inquiry with the Government of Mexico via a diplomatic note. The Government replied by informing us that the participants in the January 23 incursion were not members of the Mexican military but known drug traffickers, for whom arrest warrants have been issued, and that an investigation is continuing. Most incursions of this type are not the work of current officials but of criminal organizations smuggling narcotics or people. In this connection, I would also commend the officers of the U.S. Border Patrol for the difficult work they accomplish in protecting the border area and U.S. citizens, often in very dangerous circumstances when confronted by armed and dangerous criminals.
Page 31 PREV PAGE TOP OF DOC
The United States is also committed to assisting in the professionalization of law enforcement and reform of the criminal justice system in Mexico. Last fiscal year, over 2,800 police investigative personnel and prosecutors at the state and federal level were provided specialized training organized by Embassy Mexico City's Narcotics Affairs section. Eight hundred twenty-seven (827) police investigative personnel and prosecutors have received this specialized training so far this fiscal year. Courses have included ethics in government, management and supervision, criminal investigations, white collar crime investigations, anti-corruption, interviewing techniques, and ''train the trainer'' courses. The training has become more specialized as our Embassy begins more ''train the trainer'' programs for more Mexican Police Academy instructors.
USAID is also providing assistance in revamping the criminal justice system in six Mexican states, replacing the old inquisitorial system based on written procedure with an oral, adversarial system more in keeping with democratic practice and a modern society. We are gratified that a number of Mexican states are clamoring for such reform, recognizing that it will provide more swift and equitable justice for all, as well as a more level playing field for investors and businesspeople, thereby stimulating economic development. However, that assistance program will be curtailed this year due to the Foreign Operations, Export Financing, and Related Programs Appropriations Act for FY '05 and '06 (the ''Nethercutt amendment'') that prohibits the use of Fiscal Year 2006 Economic Support Funds for assistance to the government of a country that is party to the Rome Statute and has not entered into a bilateral Article 98 agreement with the United States. Mexico became a member of the International Criminal Court (ICC) in October of last year, and has told us it will not enter into an Article 98 agreement. Additionally, Mexico's accession to the ICC absent an Article 98 agreement subjects Mexico to the American Servicemembers' Protection Act (ASPA) of 2002, which prohibits certain forms of military assistance—International Military Education and Training Program (IMET), Foreign Military Financing (FMF), and grant Excess Defense Articles (EDA)—to countries that are parties to the Rome Statute. As a result of ASPA restrictions on security assistance, we have halted IMET assistance to Mexico's military.
Page 32 PREV PAGE TOP OF DOC
Drug trafficking remains a significant challenge for our two nations, but we are making progress. Mexico remains the source and transit zone for the great bulk of narcotics feeding the drug markets of the United States. The cooperation in counternarcotics and law enforcement from Mexican authorities under President Fox has been unprecedented. From destruction of drug crops to confiscation of drug shipments to disruption of narco-trafficking organizations to hardened border security, Mexico has worked seriously and closely with U.S. authorities to attack the drug problem. To impress upon his government and the Mexican public the seriousness of the problem, President Fox frequently has declared that Mexico is ''at war'' with narcotics traffickers. He has also worked hard to improve law enforcement capability and capacity and to root out corruption, including by having thousands of Mexican officials at the federal and state level receive training from U.S. authorities. He has increased the number of criminal suspects, including Mexican nationals, extradited to the U.S. to record levels. Mexico's Supreme Court this year eliminated a legal impediment to the extradition of persons to the U.S. who face the possibility of being sentenced to imprisonment for life without parole. And last year, Mexico instituted controls on imports and purchases of precursor chemicals for the production of methamphetamine, a growing menace in the United States.
Yet despite these efforts, we must acknowledge that flows of narcotics from Mexico to the United States continue at a high level. Without these efforts, to be sure, drug flows would have been far greater, but the fact remains that we have a lot of work left to do. In the administration of President Fox, we have a committed partner. The effectiveness of our work with Mexico in recent years has extended our law enforcement ties with Mexico down to the working level at the border, ties that we trust will continue into the next Mexican administration.
Page 33 PREV PAGE TOP OF DOC
There is also the issue of trafficking in persons to the United States through and from Mexico for purposes of sexual and labor exploitation. This has long been a serious problem, but one that Mexico has acknowledged and is working with us to address. Over the last year, Mexico entered into an agreement with USAID and Mexican NGOs that included areas such as protection of victims, and began a program with the Department of Justice to partner with Mexican law enforcement authorities on building capacity for investigations and prosecutions. Mexico has made some progress but has much work to do, including passing a specific trafficking law and prosecuting human traffickers more aggressively.
The topic of immigration looms large in both Mexico and in the United States. The Government of Mexico recognizes, as President Fox said in Cancun, that it shares responsibility for security along the border as an element of the overall migration picture. We at the Department of State follow the immigration reform debate with great interest, and have reiterated to our Mexican interlocutors President Bush's unequivocal support for a comprehensive bill. We also explain to our foreign audiences that this issue is now before the U.S. Congress for legislative action.
In conclusion, I would emphasize how far we have moved ahead with Mexico since the implementation of NAFTA, especially under the Fox administration. We will focus on continuing that progress under the next Mexican administration, which will take office December 2. The issues that both of our countries can address effectively only with the help of the other are vital. They make it imperative that the United States continue to engage Mexico intensively in issues of trade, immigration, law enforcement including border security, and democracy in the hemisphere. We will continue to do this bilaterally and in the North American context with Canada. Our economic prosperity and national security will continue to depend on this.
Page 34 PREV PAGE TOP OF DOC
Mr. BURTON. Thank you very much, Ms. Whitaker.
Mr. Melle?
TESTIMONY OF MR. JOHN M. MELLE, DEPUTY ASSISTANT TRADE REPRESENTATIVE FOR NORTH AMERICA, OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Mr. MELLE. Thank you, Mr. Chairman and Members of the Subcommittee, for this opportunity to appear before you today. I am pleased to represent the Office of the United States Trade Representative and provide an overview of our trade and investment relationship with Mexico. Of course, that relationship has been defined by the North American Free Trade Agreement since January 1994 when it went into effect. Twelve years after implementation, essentially all of the agreement's transitional periods are now complete with the exception of a handful of tariffs that fall to zero on January 1, 2008.
In evaluating the impact of NAFTA on both the United States and Mexico, the appropriate place to start is with trade and investment flows. As has already been mentioned today, the goods trade with Mexico has grown—I am a more conservative estimator in saying over three and a half times since the NAFTA began. More importantly or significantly, this is double the rate of growth in trade between the United States and the rest of the world over that same period. Mexico passed Japan to become our second-largest trading partner after the NAFTA was passed and now trails only our other NAFTA partner, Canada.
Page 35 PREV PAGE TOP OF DOC
Much of the recent concern about United States-Mexico trade has focused on agriculture. In fact, agricultural trade has been remarkably balanced since 1993, with United States exports to Mexico increasing by $5.7 billion, and our imports from Mexico increasing by $5.6 billion, both setting records in 2005. Numerous studies have documented that the NAFTA is not the cause of the challenges that are being faced by some parts of Mexican agriculture today, and for the United States, agriculture is the source of many of the most impressive successes of the NAFTA.
Mexico is the largest United States market for a wide range of products, including beef, dairy, rice, swine, turkey, apples, and dried beans. For most of these products, not only do we have our success in exporting to Mexico; our share of Mexico's imports of those products is above 90 percent due in large part to the preferential access we have under the NAFTA.
As a result of the NAFTA, we already have something very close to free trade in goods with Mexico. The average duty the United States now charges on Mexico has fallen to 1/10 of 1 percent in 2005. Mexico's duties on United States goods are even smaller: Three-thousands of 1 percent, also in 2005.
We have seen similar trade trends in services, which has grown bilaterally 76 percent since 1993. Foreign direct investment has also increased in all directions since 1993. The United States and Mexico are investing more in each other's economies, and the rest of the world is also investing more in our economies.
This change is especially important for Mexico. Since 1994, foreign direct investment inflows have averaged $15 billion, compared to less than $3 billion in the 1980s. But investment growth in Mexico has not come at United States expense. Even excluding housing, U.S. business investment has risen 104 percent since 1993, compared to a 37 percent rise between 1981 and 1993.
Page 36 PREV PAGE TOP OF DOC
The NAFTA is not the only trade agreement that has expanded United States-Mexico trade. Through the World Trade Organization, we have increased competition in Mexico's telecom market, conducted primarily by United States-affiliated companies. Following a recent win in the WTO, the wholesale cost of calling Mexico fell from 19 cents a minute in 2003 to under 5 cents a minute today. As a result, cross-border telephone traffic has almost doubled, to 12.5 billion minutes in 2004, saving U.S. consumers hundreds of millions of dollars.
How much the NAFTA has affected broader economic trends cannot be measured precisely. However, there is a wide range of economic indicators that have grown more rapidly since the NAFTA was implemented. For the United States, job creation, industrial production, real compensation for manufacturing workers, business productivity and investment have all increased by higher rates since 1993 compared with prior years.
In Mexico, we have seen consistent GDP growth, a 40 percent increase since 1993, and annual real wage growth since 1995. This has been accompanied by a number of other indicators of more stable economic growth, such as lower interest rates, and that has led in part to a boom in consumer lending and home purchases.
In the case of Mexico, firms that export have created more than half of the new jobs in Mexico since 1995, and those jobs, on average, pay 40 percent more than jobs in Mexican firms that do not export.
To address the challenges in the United States-Mexico trade relationship today and for the future, there are three circumstances to consider.
Page 37 PREV PAGE TOP OF DOC
The first, as I mentioned, is complete implementation of the NAFTA on January 1, 2008. This consists of less than 1 percent of our remaining trade, but final removal of these duties has raised concern in some sectors. We have made a commitment to all three NAFTA trade ministers to the full implementation of the NAFTA, and the United States' policy is not to consider any reduction in our NAFTA obligations.
The second set of challenges must take into account the changes in global trade since the NAFTA entered into force. In 1993, for example, the average United States tariff on imports from all other countries in the world was 3.2 percent. By 2005, it had fallen to 1.4 percent. That means Mexico faces more competition in our market, and we face more competition in Mexico's market as the number of countries with which it has other free trade agreements has increased from one to 42 today.
The third set of challenges concerns security and the issue of addressing security concerns without creating unnecessary barriers at the border, and we have Homeland Security to address those questions today.
To briefly describe what we are doing to meet these challenges, we had a NAFTA ministerial meeting, also on March 24, in Mexico, and, of course, the leaders met the next week in Cancun. Trade ministers have agreed to launch a review of the NAFTA, and this review will identify more ambitious disciplines in our more recent regional FTAs that could be candidates for incorporation into the NAFTA, and we will also work to identify additional trade barriers that could be removed and to explore how the NAFTA countries can work together to respond to current challenges we face in the global economy.
Page 38 PREV PAGE TOP OF DOC
Mr. BURTON. Mr. Melle, could you sum up in just a few minutes?
Mr. MELLE. I can.
Mr. BURTON. Thank you.
Mr. MELLE. As Ms. Whitaker mentioned, the SPP process; the USTR participates in that, and we have a NAFTA exercise related to rules of origin that will reduce transaction costs, and so we contribute to the integration of those efforts.
To conclude, with the NAFTA firmly in place, the United States and Mexico have not only become better customers for each other but better neighbors, more committed partners, and effective colleagues in a wide range of trade-related, international organizations.
I would be pleased to answer any questions that the Subcommittee may have.
[The prepared statement of Mr. Melle follows:]
PREPARED STATEMENT OF MR. JOHN M. MELLE, DEPUTY ASSISTANT TRADE REPRESENTATIVE FOR NORTH AMERICA, OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE
Mr. Chairman, Members of the Subcommittee on the Western Hemisphere:
Thank you for the opportunity to appear before the Subcommittee today. I am pleased to represent the Office of the United States Trade Representative and provide an overview of our trade and investment relationship with Mexico.
Page 39 PREV PAGE TOP OF DOC
Our commercial relationship with Mexico is defined by the North American Free Trade Agreement, the NAFTA, which has been in force since January 1, 1994. The NAFTA is a comprehensive trade agreement, covering trade in goods, services and investment, as well as government procurement, intellectual property rights, standards, and dispute settlement. Twelve years after implementation of the NAFTA began, essentially all of the agreement's transitional implementation periods are now complete with the exception of a handful of tariffs that fall to zero on January 1, 2008.
In evaluating the impact of the NAFTA on both the United States and Mexico, the appropriate place to start is with trade and investment flows.
For goods, trade with Mexico has increased over three-and-one half times the pre-NAFTA levels; this increase is nearly double the increase in trade between the United States and the rest of the world.(see footnote 1) Mexico has passed Japan to become our second largest trading partner and export market, trailing only Canada.
There has also been a qualitative transformation in goods trade; in the 1980s, 80 percent of Mexico's exports were oil and raw materials. Today, value-added manufactured goods account for 90 percent of Mexico's exports.
Much of the recent concern about U.S.-Mexico trade is with agriculture. In fact, agricultural trade has been remarkably balanced since 1993, with U.S. exports to Mexico increasing by $5.7 billion, and our imports from Mexico increasing by $5.6 billion, setting 2005 records in each direction. Numerous studies, completed both by the Mexican government and independent researchers, have documented that the NAFTA is not the cause of the challenges faced by parts of Mexican agriculture.
Page 40 PREV PAGE TOP OF DOC
Many of the most impressive export successes for the United States are also agricultural. Mexico is our largest market for a wide range of products—beef, dairy, swine, rice, turkey, apples, and dry beans among them. Our share of Mexico's imports is above 90 percent, due in part to the preferential access we have under the NAFTA for five of these seven products.
As a result of the NAFTA, we are already very close to free trade in goods with Mexico, with the average U.S. duty on Mexico falling to about 0.1 percent in 2005. Mexico's duties on U.S. goods are even smaller—0.003%.
We see similar trends for bilateral services trade, which has increased 76 percent since 1993. Since 1993, Mexico has also liberalized its banking sector, where the United States has a large presence.
Foreign Direct Investment (FDI) has also increased in all directions since 1993—the United States and Mexico are investing more in each others' economies, and the rest of the world is also investing more in our economies.
This change is especially important for Mexico. Since 1994, annual FDI inflows have averaged $15 billion, compared to less than $3 billion in the 1980s. Mexico's outward FDI flows have increased fourteen-fold since 1990, and it is now one of the largest developing country overseas investors.(see footnote 2)
Investment growth in Mexico has not come at U.S. expense. Even excluding housing, U.S. business investment has risen by 104% since 1993, compared to a 37% rise between 1981 and 1993.
Page 41 PREV PAGE TOP OF DOC
The NAFTA is not the only trade agreement that has expanded U.S.-Mexico trade. Through the World Trade Organization, we have increased competition in Mexico's telecom market, conducted primarily by U.S.-affiliated companies. Following our recent win at the WTO, the wholesale costs of calling Mexico fell from 19 cents a minute in 2003 to under 5 cents a minute today. As a result, cross-border telephone traffic has witnessed extraordinary growth, almost doubling from 6.5 billion minutes in 2002 to 12.5 billion minutes in 2004, and saving U.S. consumers hundreds of millions of dollars while putting Mexico firmly in first place (above Canada) as the country Americans call most.
How much the NAFTA affected the changing trends in goods and services trade and investment cannot be measured precisely. This is especially true when looking at broader measures of economic performance since the NAFTA entered into force. However, there is a wide range of economic indicators that have grown more rapidly since the NAFTA was implemented.
For the United States, job creation, industrial production, real compensation for manufacturing workers, business productivity and investment have all increased by higher rates in the period since 1993 compared with prior years.
Mexico has seen consistent GDP growth—40 percent since 1993—and annual real wage growth since 1995. This has been accompanied by much lower interest rates and rapid development of consumer finance services, such as home mortgages that have created a boom in consumer lending and home purchases.
There is substantial evidence trade has played a very positive role in Mexico's development.
Page 42 PREV PAGE TOP OF DOC
Firms that export have created more than half of Mexico's new jobs since 1995, and those jobs pay on average 40 percent more than jobs in Mexican firms that do not export.
Mexican wages and employment tend to be higher in states with higher FDI and trade, and outward migration from those states is lower.
CURRENT CHALLENGES
To address the challenges the U.S.-Mexico trade relationship faces today and in the future, there are three circumstances to consider.
The first is implementation of the remaining NAFTA commitments by January 1, 2008.
While less than 1 percent of our trade remains subject to duties, final removal of these duties has raised concerns in some sectors. As the three NAFTA trade ministers made clear at their annual oversight meetings last month in Mexico, they are committed to full implementation of the NAFTA and will not consider any reduction to our NAFTA obligations.
A second set of challenges must take into account the changes in global trade since the NAFTA entered into force. Simply put, Mexico and the United States have been reducing trade barriers with other countries, meaning the margins of preference provided by the NAFTA ten years ago are shrinking.
Page 43 PREV PAGE TOP OF DOC
In 1993, for example, the average United States duty on imports from all countries in was 3.2 percent. By 2005, it had fallen to 1.4 percent. Mexico still has a larger margin of preference today than it did before the NAFTA, but it is has begun to fall.(see footnote 3)
The United States also faces more competition in Mexico's market: Mexico has free trade agreements with 42 other countries today, compared with one (Chile) in 1994.
And of course we both face the challenge of increased competition for goods and resources with economies such as China and India.
A third set of challenges is how to best address today's security concerns while not creating trade barriers, an issue my colleagues from Homeland Security describe in greater detail.
I will conclude my remarks by briefly describing the work we are undertaking to meet these challenges, coming out of both the NAFTA trade ministers meeting held on March 24 and the meeting of Presidents Bush and Fox and Prime Minister Harper the following week in Cancun.
As I noted above, the key to our efforts is the recognition that the NAFTA has been a tremendous success for Mexico, the United States and Canada, and all are fully committed to the full implementation of the NAFTA in 2008.
Second, trade ministers have also launched a review of the NAFTA. This review will identify more ambitious disciplines in our more recent regional FTAs that could be candidates for incorporation into the NAFTA. As a part of this review, we will also identify work that could be undertaken to remove remaining trade barriers and explore how the NAFTA countries can work together to respond to current challenges faced in the global economy.
Page 44 PREV PAGE TOP OF DOC
In Cancun, Presidents Bush and Fox and Prime Minister Harper affirmed their commitment to advancing the productivity and competitiveness of the region through the Security and Prosperity Partnership of North America (SPP), as noted in the State Department testimony. The SPP builds on and complements the NAFTA, and we can use both processes to advance common strategic North American goals. For example, under both the NAFTA and the SPP, USTR is soliciting proposals from U.S. industries to liberalize and simplify NAFTA Rules of Origin, making it easier to use the benefits of the duty-free access that the NAFTA provides.
To conclude, with the NAFTA firmly in place, the United States and Mexico have not only become better customers for each other but better neighbors, more committed partners, and effective colleagues in a wide range of trade-related international organizations.
I am pleased to answer any question the subcommittee may have.
Mr. BURTON. Thank you very much.
Ms. Adams?
TESTIMONY OF MS. AUDREY ADAMS, DEPUTY ASSISTANT COMMISSIONER, OFFICE OF INTERNATIONAL AFFAIRS, U.S. CUSTOMS AND BORDER PROTECTION, U.S. DEPARTMENT OF HOMELAND SECURITY
Ms. ADAMS. Chairman Burton, Ranking Member Engel, Members of the Subcommittee, it is a privilege and an honor to appear before you today to discuss U.S. Customs and Border Protection's efforts to strengthen our partnership with the Government of Mexico.
Page 45 PREV PAGE TOP OF DOC
I want to begin by expressing my gratitude to the Committee for the interest and support you provide for important initiatives with our Mexican counterparts and other efforts to increase the security of our homeland.
As we execute our primary mission of preventing terrorists and weapons of mass destruction from entering the United States, Customs and Border Protection continues to execute its traditional enforcement missions, including apprehending individuals attempting to enter the country illegally, stemming the flow of illegal drugs and other contraband, protecting our agriculture and economic interests from harmful pests and diseases, regulating and facilitating international trade, collecting import duties, and enforcing United States trade laws.
The Security and Prosperity Partnership is a key initiative in our efforts to improve security while facilitating legitimate trade and travel between Mexico, Canada, and the United States. The SPP encompasses both a security and a prosperity agenda.
One of the key initiatives within the SPP is the World Customs Organization Framework of Standards, frequently referred to as ''the framework,'' to which both the United States and Mexico are signatories. An important piece of the framework is capacity building whereby member nations, customs agencies, and administrations provide assistance to their foreign counterparts in an effort to modernize and upgrade their internal organization and improve their capacity to fully implement the framework.
In March of this year, a Customs and Border Protection assessment team traveled to Mexico to assess and document basic issues related to Mexico's customs processes, infrastructure, and programs. The results of this assessment will be used to develop a proposed action plan for future training and technical assistance to Mexico.
Page 46 PREV PAGE TOP OF DOC
We are strengthening our partnership with Mexico through a number of the working groups established to implement the deliverables associated with the Security and Prosperity Partnership. These working groups are critical to implementing important bilateral programs, including the Free and Secure Trade Initiative, known as FAST; the Customs Trade Partnership Against Terrorism, known as C–TPAT; and the Secure Electronic Network for Travelers, Rapid Inspection, or SENTRI.
These programs assist law enforcement at our nation's borders in identifying high-risk passenger and cargo traffic and separating those that represent a lower risk to homeland security. This concept reflects CBP's strategy of using risk management and advanced technology and information to secure our borders while also facilitating the expeditious processing of legitimate trade and travel.
CBP and the Mexican Government are also engaged in a variety of efforts to combat human trafficking and smuggling. These efforts will enhance our collective security, increase safety in border areas, and will enable the more effective prosecution of human smugglers and traffickers. The Operation Against Smugglers and Traffickers Initiative on Safety and Security, known as OASISS, is a bilateral program between the United States and Mexico that enhances the ability to prosecute alien smugglers and human traffickers on both sides of the border.
Working with our key partners in the Mexican attorney general's office, OASISS is currently operational along the California and Arizona sections of the southwest border. We will continue to engage our Mexican partners in expanding it to the New Mexico and Texas border areas as well.
Page 47 PREV PAGE TOP OF DOC
Additionally, the Interior Repatriation Program is a key bilateral program in which certain Mexican nationals apprehended while attempting to cross illegally into the United States are voluntarily returned to the interior of Mexico. By voluntarily returning these Mexican nationals to the interior, we break the cycle of human smuggling and the incidence along the border.
In March 2006, DHS Secretary Chertoff and his Mexican counterpart, Secretary Abascal from the Department of Governance and Public Safety, signed a plan of action committing both governments to continue the establishment of border emergency protocols to ensure rapid response in an effort to decrease the violence against officers on both sides of the border. CBP, in partnership with Immigration and Customs Enforcement, are the lead U.S. agencies for rapid response and coordination of all follow-up investigations. CBP continues to further empower our local officials to assess issues at a local level and craft solutions appropriate to local circumstances.
The United States and Mexico also work cooperatively in the area of training. A prime example has been the efforts undertaken by the United States Border Patrol Search, Trauma and Rescue teams, or BORSTAR. These BORSTAR teams are elite, special-response units with law enforcement search and rescue and medical aid rapid-response capabilities. In 2005, BORSTAR conducted the first-ever search, trauma, and rescue training at the Binational Academy located in southern Mexico in the state of Chiapas. Additionally, CBP operates the National Air Training Center in Oklahoma City, Oklahoma, which provides training not only to CBP pilots but also aircraft and tactical training for Mexican pilots as well. These cooperative training programs have been highly successful and well received within the Government of Mexico.
Page 48 PREV PAGE TOP OF DOC
Mr. Chairman, Members of the Subcommittee, I have outlined a number of initiatives today that we have taken jointly with the Government of Mexico to protect America from the terrorist threat while performing our traditional enforcement and facilitation missions. With the continued support of the Department of Homeland Security, the Government of Mexico, and the Congress, CBP will succeed in meeting the challenges posed by the ongoing terrorist threat and the need to facilitate the increasing number of legitimate shipments and travelers.
Thank you again for this opportunity to testify, and I would be happy to answer any questions you may have.
[The prepared statement of Ms. Adams follows:]
PREPARED STATEMENT OF MS. AUDREY ADAMS, DEPUTY ASSISTANT COMMISSIONER, OFFICE OF INTERNATIONAL AFFAIRS, U.S. CUSTOMS AND BORDER PROTECTION, U.S. DEPARTMENT OF HOMELAND SECURITY
Chairman Burton, Ranking Member Engel, Members of the Subcommittee, it is a privilege and an honor to appear before you today to discuss U.S. Customs and Border Protection's (CBP's) partnership with the Government of Mexico.
I want to begin by expressing my gratitude to the Committee for the interest and support you provided for important initiatives with our Mexican counterparts, and other efforts to increase the security of our homeland. Your support has enabled CBP to make significant progress in securing our borders and protecting our country against the terrorist threat. CBP looks forward to working with you to build on these successes.
Page 49 PREV PAGE TOP OF DOC
On March 1, 2006, CBP marked its third anniversary, and in those three years we have made great strides toward securing America's borders, protecting trade and travel, and ensuring the vitality of our economy. As America's frontline border agency, CBP employs highly trained and professional personnel, resources, expertise and law enforcement authorities to discharge our priority mission of preventing terrorists and terrorist weapons from entering the United States. Carrying out our extraordinarily important mission entails improving security at and between our ports of entry, as well as extending our zone of security to protect our physical borders.
As we work to gain operational control of our borders, we continue to perform our traditional missions, including apprehending individuals attempting to enter the United States illegally; stemming the flow of illegal drugs and other contraband; protecting our agricultural and economic interests from harmful pests and diseases; protecting American businesses from theft of their intellectual property; regulating and facilitating international trade; collecting import duties; and enforcing United States trade laws. In FY 2005, CBP seized over 2 million pounds of narcotics, processed 431 million pedestrians and passengers; processed and cleared 25.3 million containers transported via sea, rail and air; processed approximately 29 million trade entries and 121 million privately owned vehicles; and collected $31.4 billion in revenue.
CBP must perform its important security and trade enforcement missions without stifling the flow of legitimate trade and travel that is so important to our nation's economy. Our efforts to build more secure and more efficient borders would not be possible without our partnerships with the trade community and foreign governments, including the government of Mexico.
Page 50 PREV PAGE TOP OF DOC
As our closest neighbor to the South, the government of Mexico is a critical partner for U.S. Customs and Border Protection. In FY 2005, approximately 242 million people crossed through U.S. ports of entry from Mexico. CBP works extensively with representatives of the customs, immigration, law enforcement and security agencies of Mexico, as well as with many of the leading Mexican businesses. I would like to take this opportunity to describe some of the initiatives and programs that are currently underway with our Mexican colleagues.
SECURITY AND PROSPERITY PARTNERSHIP (SPP)
On March 23, 2005 in Waco, TX, President Bush, along with Canadian Prime Minister Martin and Mexican President Fox, unveiled the Security and Prosperity Partnership for North America (SPP), a blueprint for a safer and more prosperous continent. The Leaders agreed on an ambitious security and prosperity agenda which will keep our borders closed to terrorists and open to trade. The three leaders instructed each nation to establish ministerial-level Security and Prosperity working groups. Secretary Chertoff chairs the security agenda while Secretary of Commerce, Carlos Gutierrez, chairs the prosperity agenda.
The Leaders met again this year on March 31 in Cancun to review progress and renew commitment to enhance the security, prosperity, and quality of life of the citizens within North America. The leaders announced the creation of a North American Competitiveness Council (NACC). The Council will comprise members of the private sector from each country who will meet annually with security and prosperity Ministers and will engage with senior government officials on an ongoing basis. CBP looks forward to its role in working with the NACC.
Page 51 PREV PAGE TOP OF DOC
The Security agenda consists of ten security-related goals including Traveler Security, Cargo Security, Border Facilitation, Law Enforcement, Critical Infrastructure Protection, and Technology. Last June, Secretary Chertoff together with his counterparts in Canada and Mexico, delivered a detailed work plan for the security agenda. Within each goal there are more defined objectives, and within each objective there are certain Canada-Mexico deliverables that call for specific actions to be implemented jointly between the U.S. and Mexico. CBP is responsible for a significant portion of SPP. The Security agenda builds upon and expands the initiatives that CBP previously had engaged with Mexico under a bilateral forum known as the Border Partnership Plan (BPP).
We continue to strengthen our ties to our Mexican colleagues through a number of working groups that were established to implement the SPP Deliverables. These working groups are critical to implementing important bi-lateral programs such as Free And Secure Trade (FAST), Secure Electronic Network for Travelers Rapid Inspection (SENTRI), the Customs-Trade Partnership Against Terrorism (C–TPAT), the Operation Against Smugglers (and Traffickers) initiative on Safety and Security (OASISS), and the Interior Repatriation program (IR), which I will describe shortly.
One of the key SPP initiatives is the World Customs Organization (WCO) Framework of Standards, to which Mexico is a signatory. Adopted by the WCO in June 2005, the Framework consists of four core elements: harmonized advance electronic manifest information on cross border shipments; a risk-management approach to inspections; application of modern technology; and customs privileges for businesses that meet minimum supply-chain standards. The Framework has the potential to dramatically improve the security of world trade and improve the efficiency and flow of trade. Through the Framework, the WCO is promoting security concepts of programs, including our Container Security Initiative (CSI) and C–TPAT, which seek to identify, detect, and deter a threat at the earliest point in the supply chain.
Page 52 PREV PAGE TOP OF DOC
An important element of the Framework is capacity building. Through the WCO, certain member nations' customs agencies provide assistance to other countries to modernize and upgrade their capacity, including the internal organization, requirements, procedures and processes, so that these countries can fully implement the standards set forth in the Framework. CBP believes strongly in the principles of the Framework, recognizes its ability to offer relevant training and assistance, and has extended formal offers of assistance to ten countries. Mexico accepted CBP's offer and a CBP team completed its site assessment of customs operations in Mexico between March 6, 2006, and March 16, 2006. This team of subject matter experts documented basic issues related to legal authorities, customs processes, information technology infrastructure, integrity monitoring programs and physical infrastructures at selected seaports, airports and land borders. The assessment results will be used to develop a proposed action plan for future training and technical assistance for Mexico.
FREE AND SECURE TRADE (FAST)
Under the FAST program, Mexico and the United States have agreed to coordinate to the maximum extent possible, their commercial processes for clearance of commercial shipments at the border. This will promote free and secure trade by using common risk-management principles, supply chain security, industry partnership, and advanced technology to improve the efficiency of screening and clearing commercial traffic at our shared border. Under FAST, applicants who pay a fee and undergo security checks receive expedited processing for qualified merchandise in designated traffic lanes at select border sites. If a significant event or disaster that impacts cross-border trade were to occur approved FAST participants may receive priority during border business resumption protocols.
Page 53 PREV PAGE TOP OF DOC
Since its inception in December 2002, FAST has enrolled approximately 61,000 commercial drivers and has expanded to eleven sites along the Northern border and seven locations along the Southwest Border. FAST will expand in calendar year 2006 to six additional sites along the Northern border and seven additional locations along the Southwest Border.
Mexican Customs and CBP continue to work together to further harmonize and refine FAST and its Mexican equivalent, Exprés.
SECURE ELECTRONIC NETWORK FOR TRAVELERS RAPID INSPECTION (SENTRI)
SENTRI is a ''trusted traveler'' program exclusive to the Southwest Border. The ''trusted traveler'' concept assists law enforcement officials at our nation's borders in identifying low-risk passengers from those that present a higher risk to U.S. homeland security. Working with the Department of State, this concept supports CBP's strategy of using risk management principles and advanced technology to facilitate the entry of low-risk travelers across the border at selected crossings.
SENTRI provides expedited CBP processing for pre-approved, low-risk travelers who undergo a thorough biographical background check against criminal, law enforcement, customs, immigration, and terrorist indices; a 10-fingerprint law enforcement check; and a personal interview with a CBP Officer. Approved applicants are issued a Radio Frequency Identification (RFID) card that identifies their record and status in a CBP database upon arrival at Port of Entry. An RFID transponder is also issued to the applicant's vehicle.
Page 54 PREV PAGE TOP OF DOC
SENTRI participants wait for much shorter periods of time than non-participants to enter the United States, even at the busiest times of the day. Critical information required in the inspection process is provided by the RFID technology to the CBP Officer in advance of the passenger's arrival, thus reducing the inspection time from an average of 30–40 seconds to an average of 10 seconds. As soon as a SENTRI participants presents his vehicle for inspection, bollards and concrete barriers create a chute that captures the SENTRI traffic and puts it under the CBP Officer's ''zone of control''. If both the CBP Officer and the SENTRI electronic equipment approve, the traveler can be granted admission into the United States. Currently, approximately 75,000 individuals are enrolled in SENTRI, accounting for over 300,000 border crossings into the U.S. per month.
CUSTOMS-TRADE PARTNERSHIP AGAINST TERRORISM (C–TPAT)
In fiscal year 2005, over 5.3 million containers entered the United States from Mexico across our Southwest border. Working with our Mexican partners, we are extending our zone of security beyond our borders. Through C–TPAT, CBP works together with businesses to identify, implement, and validate strong supply chain security. C–TPAT was modeled after two earlier programs, Business Anti-Smuggling Coalition (BASC) and Carrier Initiative Programs that were supported by the Mexican government and the Mexican business community. The Mexican government and Mexican business continue to support our efforts in cargo and supply chain security. Numerous Mexican manufacturers and southern border highway carriers have become C–TPAT members, and have welcomed CBP validation teams to inspect their supply chain security measures.
OPERATION AGAINST SMUGGLERS (AND TRAFFICKERS) INITIATIVE ON SAFETY AND SECURITY (OASISS)
Page 55 PREV PAGE TOP OF DOC
OASISS is a bilateral program between the U.S. and Mexico, which enhances our ability to prosecute alien smugglers and human traffickers on both sides of the border. Too often, smugglers responsible for life threatening behavior, and even deaths, on one side of the border were able to evade justice by escaping to the other side.
Working with the Mexican Attorney General's Office (PGR), we have been able to successfully process a total of 129 cases under the OASISS program. In 2005, the Border Patrol, in California and Arizona alone, assisted in the prosecution of 786 smuggling cases, and the Office of Field Operations assisted in the prosecution of 766 cases, a total of more 1,500 alien smuggling prosecutions.
OASISS is currently operational along the California and Arizona sections of the Southwest border, but we are engaging our Mexican partners to expand it to the New Mexico and Texas border areas.
INTERIOR REPATRIATION PROGRAM (IR)
The IR program is a bilateral program between the U.S. and Mexico, in which certain Mexican nationals apprehended while trying to cross illegally into the United States are voluntarily returned to the interior of Mexico, in an effort to break the cycle of human smuggling and decrease incidents of border deaths. The general principles for the IR Program were agreed to bilaterally through the U. S.—Mexico Repatriation Technical Working Group. Through programs like the IR we can enhance our collective security, provide for the safety of Mexican nationals, and repatriate them in a manner that is safe, orderly, humane and dignified.
Page 56 PREV PAGE TOP OF DOC
The program was established in summer 2004 and successfully repatriated more than 14,000 individuals to their hometowns in the interior of Mexico. The program exhibited bi-national cooperation at the level of central government and local officials. In 2005, the second IR program ran for 113 days, from June 10 to September 30, 2005. During that time, an estimated 20,850 persons were safely repatriated to the interior of Mexico. Participants were flown from Tucson, Arizona, to Mexico City and then transported by bus to locations nearer to their hometowns.
Our governments are currently assessing proposals for an IR program for this summer.
Further, we are working with Mexican officials to update and implement local repatriation arrangements between DHS and the Mexican consulates in the United States. CBP officers—including those at ports of entry and in the border patrol—as well as our colleagues in Immigration and Customs Enforcement (ICE) are responsible for the safe, orderly, and effective repatriation of Mexican nationals.
BORDER VIOLENCE
On March 3, 2006, in Brownsville, Texas, Secretary of Homeland Security, Michael Chertoff, and his Mexican counterpart, Secretary of Governance and Public Safety, Carlos Abascal, signed a Plan of Action committing both governments to combat border violence and improve public safety. The commitment between our two nations will strengthen procedures between federal law enforcement agencies on both sides of the border to respond to a variety of incidents, including accidental crossings, incidents of violence, or other situations that present risks to those who live, work, or travel at our common border. CBP and the Center for Investigation and National Security (CISEN) in Mexico are working closely to develop communication and response protocols when these incidents occur. Advances we are making with this effort include the establishment of local groups to work together on issues of border security, including border violence. We are working to empower our local officials to assess issues and craft solutions appropriate to local circumstances. Our first two test sites for this concept are Laredo, Texas, and Nogales, Arizona. The principal focus of these groups is to implement border violence response protocols.
Page 57 PREV PAGE TOP OF DOC
In recognition of our important relationship with Mexico, CBP opened its first Mexican Attaché office in August 2004. Working closely with our Mexican partners, this office plays a critical role in the development of communication and response protocols.
The commitment between our two nations will strengthen procedures between federal law enforcement agencies on both sides of the border to respond to a variety of incidents, including accidental crossings, incidents of violence, NARCOTICS TRAFFICKING or other situations that present risks to those who live, work, or travel at our common border. ''
TRAINING AND ASSISTANCE
The United States has further developed its relationship with Mexico through training programs. Training sessions have focused on subjects including using of non-intrusive inspection equipment, detecting weapons of mass destruction, and identifying fraudulent immigration documents.
Border Patrol Search, Trauma and Rescue units (BORSTAR) are elite special response teams with law enforcement search and rescue, and medical aid rapid response capabilities. In addition to its core focus of supporting Border Patrol operations, this Special Unit provides mutual assistance to other federal, state and local entities including tribal authorities. BORSTAR has become a highlight of a bilateral training initiative in our relationship with Mexico. In December 2005, BORSTAR conducted its first ever search, trauma, and rescue academy for 25 Mexican officials. The training was conducted in the southern Mexican state of Chiapas and was well received. Additionally, CBP operates the National Air Training Center in Oklahoma City, Oklahoma. In addition to training CBP pilots, the center provides aircraft and tactical training to Mexican pilots.
Page 58 PREV PAGE TOP OF DOC
Mr. Chairman, Members of the Subcommittee, I have outlined a number of initiatives today that we have taken with the government of Mexico to allow us to protect America from the terrorist threat while performing our traditional enforcement and facilitation missions. But our work is not complete. With the continued support of the President, the Department of Homeland Security, and Congress, as well as our international partners including the Government of Mexico, CBP will succeed in meeting the challenges posed by the ongoing terrorist threat and the need to facilitate the increasing numbers of legitimate shipments and travelers.
Thank you again for this opportunity to testify. I will be happy to answer any questions you may have.
Mr. BURTON. Thank you very much.
We sure appreciate all of your testimony. I am sure we are going to have a number of questions that we will not have time to have answered, so I would like to submit those to you for the record so if we do not get through all of the questions, I hope you will respond to those in writing for us.
Let us start off with one on trade. I am sure that there has been significant trade advances on both sides of the border, but what has the balance of trade been like since NAFTA passed? I know there is more trade, but has the trade balance been in favor of Mexico or the United States, and if so, how much?
Mr. MELLE. At the time NAFTA was passed, the United States ran a small goods surplus with Mexico.
Page 59 PREV PAGE TOP OF DOC
Mr. BURTON. How much?
Mr. MELLE. I believe, a billion-seven, $1.7 billion.
Mr. BURTON. So we had a billion-seven surplus at the time we passed NAFTA. What is it now?
Mr. MELLE. I will have to look up the current figure, but it is a large deficit at this point.
Mr. BURTON. Can you tell me about how much?
Mr. MELLE. I hope I can in a moment.
Mr. BURTON. I would think that would be a significant thing to bring to this discussion.
Mr. MELLE. It is, and I hope I brought it with me, but I do not have it memorized.
Mr. BURTON. Get the gun. A lot of my colleagues on both sides of the aisle are for certain free trade agreements, and they want to know what the progress has been or what the situation has been. We have a $123 billion trade deficit with China right now, and we are wrestling with that, and I just wanted to know how we have gone from a $1.7 billion trade surplus with Mexico to what kind of a trade deficit.
Page 60 PREV PAGE TOP OF DOC
Mr. MELLE. I believe it is in the vicinity of $50 billion, but I will have to——
Mr. BURTON. So we have gone from a $1.7 billion trade surplus to a $50 billion trade deficit. Can you tell us roughly what that means in employment, as far as jobs going south?
Mr. MELLE. Well, we do not subscribe to any methodology that makes a direct comparison between a trade balance and a job-supported number. Obviously, the U.S. economy has grown significantly since the NAFTA. I believe the job creation figure for us is about 22 million since the NAFTA.
Mr. BURTON. 22 million jobs you say?
Mr. MELLE. Created in the United States, and, obviously, a very low unemployment rate. So that is how we measure the success of the U.S. economy and its performance.
Mr. BURTON. I see, but as far as that relationship to our trade agreements with Mexico, you do not have any figures on that.
Mr. MELLE. To convert a deficit into an impact on job creation, no.
Page 61 PREV PAGE TOP OF DOC
Mr. BURTON. All right. That is fine. Thank you very much. I appreciate that.
Let me ask you a question about security, border security. We have had a number, as you mention in your statement, a number of border agents attacked by gangs of people coming across that border. Do we need more border agents now, and if so, how many do you think we need?
Ms. ADAMS. I think we work very, very closely with our colleagues in Mexico in attempting to help them build institutions to strengthen the response capabilities on the border. Obviously, we take the matter of border violence incredibly seriously. It is an exceptionally difficult issue for all of us. The Border Patrol has a very aggressive recruitment process in place. They have received many additional positions, thanks to our Congress. I think, at this point in time, we have to just realize it is a complex problem, and we are using a combination of technologies, personnel——
Mr. BURTON. You are not really giving me a direct answer, and I can understand you may have difficulty in doing this. You do not have any idea how many additional Border Patrol agents you think we need right now.
Ms. ADAMS. I think it is a combination of technology, training, and personnel, and I think we are working to find that right mix.
Mr. BURTON. What kind of technologies are you talking about, and how much of that do we need?
Page 62 PREV PAGE TOP OF DOC
Ms. ADAMS. Certainly, we have sophisticated sensor systems. We have unmanned aerial vehicles that we use——
Mr. BURTON. Drones?
Ms. ADAMS [continuing]. Precisely—that we have tried to use to supplement our available personnel. There are a lot of issues out there, and I would like the opportunity to have a more formal response presented to the Committee, if that is all right.
Mr. BURTON. Yes. I would like for you to send that to us.
One of the big things we are wrestling with right now is an answer to the immigration problem. We have got, as you know, over 11 million illegal aliens in the United States, and we have got a problem with the continued porous border. So we need to know how we are going to address that, and we need some guidance from Homeland Security and our Border Patrol people, as well as law enforcement people down along the border. So any information you can give me or the Committee or any other Member of Congress, we would really appreciate because, as you know, it is a big, big issue, not only here but across the country.
Ms. ADAMS. It is a very significant concern for U.S. Customs and Border Protection, and, believe me, it is the safety of our officers and the lives of our officers, and we are exceptionally concerned.
Mr. BURTON. Now, the people that have been coming across that look like they are in military uniforms from Mexico; have we caught any of those people, and if so, are they military people from Mexico, or are they people just dressed up as military people?
Page 63 PREV PAGE TOP OF DOC
Ms. ADAMS. I understand that the recent incident in Hudspeth County in Texas is still an open investigation being conducted by Immigration and Customs Enforcement.
Mr. BURTON. Did we capture anybody?
Ms. ADAMS. Not to my knowledge, but we can certainly get back to you with a more formal response to that as well.
Mr. BURTON. Have we captured anybody in any of these incursions that look like they were military or police from Mexico?
Ms. ADAMS. Not to my knowledge, but, again, we will have to get back to you with a more formal response.
Mr. BURTON. What I might do is suggest that if any Mexican police or military is caught in the United States illegally bringing people across the border, and we catch them, I want to know about that, and I would like for you to make a note in the report to this Subcommittee about that because that is something we need to take up with the Mexican authorities.
We want to have a great relationship with Mexico. It is absolutely essential. But if officials from that government—police or military—are coming across the border illegally, it needs to be stopped, and they need to help us in dealing with that. So we would like to have that information. So I am just making an open solicitation for that information as it occurs down the road.
Page 64 PREV PAGE TOP OF DOC
Ms. ADAMS. Yes, sir.
Mr. BURTON. Let me just ask you this question. You know the candidates that are running for President down there. Can you give us an assessment real quickly on what you foresee as things we can do to create a better climate for any one of those that are elected? Some of them, I understand, are a little farther to the left than others. So can you give us any suggestions on what you think we can do to help maximize our ability to work with them?
Ms. WHITAKER. I think we watch the elections, as do you, with great interest. As you have, I am sure, seen the lineup of the candidates, they all tend to hover more or less in the center. We really do not have any extreme positions. There is left and right center, all relatively moderate, although campaign rhetoric sometimes does get a little bit farther out there.
We do not speculate on who is winning. We watch the polls as well as everyone else. It does seem that Mr. Lopez Obrador may either be holding onto his percentage or losing a little bit. Mr. Calderon seems to be gaining a little bit.
But I think the most important thing that we can do is, first of all, we reaffirm to the Mexican people our firm conviction that they can do this, that they will have another free and fair election, that we trust their commitment to democracy, and we look forward to welcoming whoever is elected. In the meantime, of course, our personnel in Mexico City are speaking and trying to get a better sense of all of the candidates and their staff members.
Page 65 PREV PAGE TOP OF DOC
Mr. BURTON. I want to say one more thing to Mr. Melle. I certainly support free and fair trade. I do not want you to be misled by my question that I think we should not have a trade agreement with Mexico. I just think it is important that we know what the numbers are so we know how to deal with this situation as time goes by, and knowing what the trade deficit is is real important, I think, for most Members of Congress.
I want to say one more thing here, and then I will yield to my ranking Democrat. The Mexican legislative body passed a resolution that states the Government of Mexico does not promote illegal migration and calls for the development of a guest worker program in the United States under the principle of shared responsibility. Has there been any indication that they are going to work as hard on the Mexican side of the border as we are on the American side of the border to make sure that we have stopped illegal immigration?
Ms. WHITAKER. We did see the concurrent resolution, and we have also seen the newspaper advertisement that the Mexicans published not too long ago. Indeed, we take those statements of policy, bipartisan policy, very seriously.
We have seen, under the rule of President Fox, that the Mexicans have taken steps to make the world see that it understands its obligations to control the flow of people across borders. They have established new checkpoints to detect third-country nationals, have established a tighter visa regime, for example, requiring visas of individuals from certain countries who are suspected to be using Mexico as a transport point or a point of entry into the United States.
What I think we expect is that regardless of whoever the current leadership is right now, that it is a bipartisan commitment, it is a commitment on the part of the Mexican institutions which have been established and reinforced to allow Mexico to carry out its obligation to the United States. We expect more——
Page 66 PREV PAGE TOP OF DOC
Mr. BURTON. I think, on behalf of most Members of Congress, and I cannot speak for everybody, but I think that if we perceive that the Mexican Government is really working to try to help stem the tide of illegal immigration, it would be a positive step toward the Congress of the United States passing an immigration law that is fair as far as the way the Mexican Government views it. The less cooperation we have from the Mexican side of the border, I think, the more likely it is we will have a more restrictive immigration policy that passes the Congress. With that, I yield to my colleague, Mr. Engel.
Mr. ENGEL. Thank you very much, Mr. Chairman.
I want to, Mr. Melle, agree with the Chairman in terms of the NAFTA trade disparity. It is really a concern, and when NAFTA was first implemented, the United States was positive in terms of the flow of goods and services. The 1994 devaluation of the peso, which made Mexican