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44–893 CC








MARCH 19, 1997

Printed for the use of the Committee on International Relations

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BENJAMIN A. GILMAN, New York, Chairman
HENRY J. HYDE, Illinois
CASS BALLENGER, North Carolina
EDWARD R. ROYCE, California
JAY KIM, California
TOM CAMPBELL, California
JON FOX, Pennsylvania
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LINDSEY GRAHAM, South Carolina
ROY BLUNT, Missouri
SAM GEJDENSON, Connecticut
TOM LANTOS, California
PAT DANNER, Missouri
WALTER CAPPS, California
BRAD SHERMAN, California
BOB CLEMENT, Tennessee
BILL LUTHER, Minnesota
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JIM DAVIS, Florida
RICHARD J. GARON, Chief of Staff
MICHAEL H. VAN DUSEN, Democratic Chief of Staff

Subcommittee on the Western Hemisphere
ELTON GALLEGLY, California, Chairman
CASS BALLENGER, North Carolina
JAY KIM, California
ROY BLUNT, Missouri
WALTER H. CAPPS, California
BRAD SHERMAN, California
VINCE MORELLI, Subcommittee Staff Director
PAUL BONICELLI, Professional Staff Member
DAVID ADAMS, Democratic Professional Staff Member
HOLLY FEIOCK, Staff Associate
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    Hon. Jeffrey Davidow, Assistant Secretary for Inter-American Affairs, U.S. Department of State

Prepared statements:
Jeffrey Davidow
Mark Schneider

House of Representatives,
Subcommittee on the Western Hemisphere,
Committee on International Relations,
Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:15 p.m. in room 2200, Rayburn House Office Building, Washington, DC, Hon. Elton Gallegly, chairman of the Subcommittee, presiding.
    Mr. GALLEGLY. Today the Subcommittee continues its overview of current trends in the Western Hemisphere by focusing on the U.S. policy toward the region.
    We have with us today Jeffrey Davidow, Assistant Secretary of State for Inter-American Affairs, and Mark Schneider, Assistant Administrator for Latin American Programs at the Agency for International Development.
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    Last week at our opening hearing, the Subcommittee was provided a comprehensive overview of issues facing Latin America from a distinguished panel of scholars and thinkers of the region.
    Although there was quite a variety of opinion, a general consensus seemed to focus on five themes:
    First, the democratization of the hemisphere is moving forward in a very positive direction, as witnessed by the recent elections in Nicaragua and El Salvador. However, in some countries, the breadth and depth of democracy is less advanced than in others and while the democracy process is not likely to be reversed, there are serious challenges ahead for many nations.
    Second, the initial economic reforms proposed by many of the new leaders in Latin America have had mixed results, especially in addressing poverty, and that many of these nations' economies will continue on a roller coaster ride for some time fighting bouts with poverty, unemployment, wage stagnation and inflation.
    Third, problems such as drugs, crime and corruption pose greater threats to the success of these nations than anything else. The need for well-trained and corruption-free police forces and judicial systems is critical to the survival of these nations.
    Fourth, trade with the United States, while an important ingredient for long-term economic success in the regions, is not necessarily the single most important issue in the U.S.-Latin American relations.
    Finally, U.S. policy toward Latin America lies somewhere between semi-active partnership and benign neglect. Clearly, the Miami Summit of the Americas brought a renewed hope that the U.S.-Latin American relations were on the rise. But the followup has left much to be desired and, as one witness said last week, ''Summitry without followup may be worse than no summitry at all.''
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    The recent appointment of Mack McLarty as a special envoy to the region and the President's announced trips to Latin America will again raise expectations. I hope our followup this time will move to be more concrete.
    Now, I see that the Ranking Member, Mr. Ackerman, is not here this afternoon.
    Mr. Martinez, do you have anything that you would like to offer as an opening?
    Mr. MARTINEZ. No, Mr. Chairman. He will have to make his own statement. I would simply say I am eager to hear the witnesses.
    Mr. GALLEGLY. Thank you very much, Mr. Martinez.
    Mr. Secretary, I will now recognize you and your written statement will be included in the record in its entirety.
    Mr. DAVIDOW. Thank you, Mr. Chairman. Mr. Gallegly, congratulations on your new chairmanship of the Subcommittee. It is good to see you and Mr. Martinez here as well.
    Gentlemen, as we stand on the cusp of a new century, we have an unparalleled opportunity to advance the interests of the American people throughout the Western Hemisphere. Together both Congress and the executive branch will play an important role in moving our country to take maximum advantage of these opportunities. President Clinton's policies toward the region are structured around four basic objectives: promoting free trade and economic integration to enhance economic development and assist U.S. business; strengthening democracy and the rule of law; combatting transnational problems, such as drug trafficking, migrant smuggling and environmental degradation; and encouraging sustainable development and poverty-alleviation programs to improve living standards for all citizens.
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    The next 12 months promise to be an intense time and one of great focus on issues in this region by the President. Late last month, President Clinton hosted Chile and President Eduardo Frei for a State visit. He addressed this body as part of that visit. Soon, the President will visit Mexico and, later, he will continue his regional travels with a five-country trip to Central and South America and the Caribbean. Finally, next March—that is, March 1998—he will attend the Second Summit of the Americas in Santiago, Chile. This high level of activity is indicative of the importance we place on advancing the agenda of the American people through our hemisphere.
    This is a region of change. We must recall that just 20 years ago, only four countries on the South American continent had democratically elected civilian governments or were following free market programs. Ten years ago, democracy had taken a tentative hold in much of the region. But internal conflict and guerilla war gripped most of central America. Serious reform was still getting a skeptical reception throughout most economic and finance ministries. Today, the hemisphere is generally at peace.
    This past weekend, I traveled to Guatemala and visited two of the demobilization camps where URNG guerrillas are coming in under the observation of the United Nations to really put an end to the war in that country. It was a very moving experience and a very satisfying one. The process is working and the United States has had a very significant role in making it work.
    We have a shared vision for the Americas. The framework for our ambitious policy of regional cooperation was established at the Summit of the Americas in Miami in December 1994. The agenda of that historic meeting called for the establishment of a Free Trade Area of the Americas by 2005, the alleviation of poverty, sustainable growth and respect for the environment, and concerted efforts to address narcotics and other transnational problems.
    The summit process is working. Some examples of success include the world's first anti-corruption convention which was negotiated under the aegis of the Organization of American States and 23 countries have signed it. Regional agreements to fight terrorism and money laundering have advanced. A major summit on sustainable development was held in Santa Cruz, Bolivia last December which Vice-President Gore attended.
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    The greatest challenge we face in the next year is to move forward on our free trade agenda. We are optimistic that the third in the series of trade ministerials in Belo Horizonte, Brazil, in mid-May will determine the specifics of a formal launch of the negotiations for the Free Trade Area of the Americas. But as technical preparations proceed, we are hampered by the lack of a vital tool in our trade arsenal—fast-track negotiating authority for the President, which only Congress can grant.
    As the President made clear in the State of the Union address and Ambassador Charlene Brazasky of USTR restated just yesterday in congressional testimony, we will soon seek from Congress the same type of fast-track authority that every President since Gerald Ford has had. The exact formulation of fast-track authority is under active discussion. It is our sincere hope that you and your colleagues will give that request favorable consideration.
    Another important trade priority is expanding trade opportunities to all countries of the Caribbean Basin. Financing necessary to pay for Caribbean trade enhancement was included in the President's Fiscal Year 1998 budget submission. We are in the final stages of developing legislation.
    What does greater free trade in the hemisphere mean for us? The hemisphere is one of the fastest-growing regions in the world. Today we sell more to Central America than we do to Eastern Europe. We export more to the 14 million people of Chile than to the 900 million people of India. By 2010, our experts tell us that our exports to Latin America and the Caribbean and to the hemisphere generally, including Canada, are expected to exceed those to Japan and the European Union combined. Greater free trade means contracts, orders, customers and profits for American workers and industry. At this moment, without trade-negotiating authority, we are relegated to the sidelines while other countries with economies far less robust than ours are locking in trade arrangements at a furious pace.
    Allow me to say a few words about democracy and regional stability. Naturally, free trade and greater market openings do not happen in a vacuum. This vital economic process has happened within the context of democracy and growing political stability. In your opening remarks, Mr. Gallegly, you referred to the changes in the hemisphere. They have been generally positive, but we must not let our guard down. Challenges to democracy still persist. We saw that last May in Paraguay. Early in February—just a month ago—the crisis of confidence and an outpouring of public anger led the Ecuadorean Congress to turn their increasingly unpopular, though legitimately elected, President out of office. Active U.S. diplomacy in both the Ecuador and Paraguay case, accompanied by strong statements from the international community, played a constructive part in bolstering the position of the defenders of democracy.
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    Both bilaterally and through regional institutions, we continued to direct diplomatic effort and resources in key areas: Promoting judicial reforms to address problems in legal systems; reporting NGO's and regional institutions active in human rights advocacy; working to build the capacity to carry out free, fair and transparent elections; and stimulating broader civic education efforts. Transparency in government and rooting out corruption are essential to healthy and viable democracy. Both are a central part of our agenda.
    Poverty in the hemisphere constitutes a challenge to democracy. Among its consequences are serious pressures that lead millions to migrate illegally to the United States in search of a better life. Progress against poverty has important consequences for building a broad base of consumers and better trained workers. Sustained rates of economic growth must rise. Programs aimed at the poor administered by the World Bank and the IDB deserve our support. Those resources and ours, and Mr. Schneider will talk about this, must continue to address the plight of the poorest.
    Mr. Chairman, I would be remiss if I did not mention the narcotics problem. We are totally committed to the effort to stop drugs from reaching our borders. Over the past year, many regional governments have improved their cooperation with us and successes have been registered. Coca cultivation in Peru fell 18 percent due to effective law enforcement, aerial interdiction and targeted alternate development. More than 700 hectares of coca were eradicated in an aggressive campaign in Bolivia. In the so-called transit zone, the trafficking routes have been disrupted. Other important achievements include the passage of money laundering and asset forfeit legislation in several countries and the conclusion of agreements to facilitate maritime cooperation in several key countries as well.
    But let's not kid ourselves. Despite this progress, cocaine remains in abundant supply and continues to poison our society. More heroin grown in Latin America is reaching the United States than ever before. The statistics are profoundly troubling and argue for continued and deeper cooperation.
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    In my final moment, Mr. Chairman, I would like to turn to three countries of specific importance: Mexico, Haiti and Cuba. The President's decision to certify Mexico was the right thing to do. We have worked to expand our counternarcotics cooperation with Mexico over the past several years and continue to see progress. For the first time, we have secured Mexican agreement to extradited citizens. Mexico has made far-reaching decisions on vetting all counternarcotics officials since the arrest of General Gutierrez Rebolio and new organized crime legislation gives Mexican authorities powerful tools to use against traffickers and money launderers.
    Clearly, there is a strong political will at the senior levels in Mexico to meet the enormous challenge that narcotics posed. The United States must support these efforts.
    I would like to update you a bit on our continuing efforts in Haiti. Regrettably, Haiti remains the poorest country in the hemisphere. Since the U.S.-led multinational force acted to restore the democratically elected government in 1994, there has been, however, considerable progress. Five free and fair elections have occurred and one popularly elected President has succeeded another for the first time in Haiti's history. And, notably, the number of migrants leaving Haiti for Florida has dropped precipitously.
    The Government of Haiti must consolidate democratic gains, firmly establish a rule of law and complete badly needed economic reform. We hope this Subcommittee will take an active interest in helping the people of Haiti to build a better future.
    In relation to Cuba, our overarching goal is to promote peaceful transition to democracy on the island. Our policy is rooted in the conviction that the Castro regime will not make changes unless forced to and will endeavor to retain absolute control as it has for more than 30 years. We will continue to defend the comprehensive economic embargo of Cuba, but we believe that tough economic sanctions are not enough. Change must come from within and increasing the information flow to the people of Cuba is essential.
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    Since the passage of the Libertad Act, we have worked in earnest to enforce its provisions while striving to ensure that a sharper international focus on the need to support democratic transition is forthcoming from our allies in Latin America and Europe. Ambassador Stewart Eizenstat has tirelessly directed these efforts.
    Looking to the future, we need to be sober and realistic. Castro and his associates run a massive security apparatus designed to eliminate any threat to their dominance. We believe that as more Cubans become aware of the freedom and prosperity enjoyed by the world around them, the harder it will be for the Castro regime to postpone democratic change.
    In conclusion, Mr. Chairman, though much has been accomplished in the last 4 years, I have outlined some of the tasks that remain. Disparities in income, inadequate health and education systems, fragile democracies with very weak institutions and the narcotics trade all create conditions that pose serious challenges to making a reality of the Miami vision of regional integration. I urge that you review carefully our budget request for Fiscal Year 1998 and ask for your support to provide the necessary levels of resources to achieve our goals. I look forward to working with you in coming months and will all Members of the Subcommittee. And I will be pleased to answer your questions. Thank you for inviting me today.
    [The prepared statement of Mr. Davidow appears in the appendix.]
    Mr. GALLEGLY. Thank you very much, Mr. Secretary.
    We are going to have to have a brief recess. You heard the bells. We have about not quite 5 minutes left to get to the floor but we will be back within probably 10 to 15 minutes on the outside. Thank you very much.
    Mr. DAVIDOW. Thank you.
    Mr. GALLEGLY. I want to apologize on behalf of our leadership and the floor activity, it looks like we are going to be having a series of votes at, like, 10-minute intervals. I am not in control of what is going on over there so if you want to be upset with someone, please do not be upset with me. I appreciate your patience on that. When the buzzer goes off, we will try to let you at least get your testimony finished, Mr. Schneider, and with that, I will present Mr. Schneider.
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    Mr. SCHNEIDER. Thank you, Mr. Chairman. Let me first thank you for the chance to appear before you in an atmosphere of bipartisan consensus on U.S. goals in Latin America and the Caribbean. Your statement in the Congressional Record on January 21 described with precision the opportunities and challenges facing this country as we pursue our common interests with the countries of the hemisphere. And on March 5, you, Mr. Ackerman and other Members brought resolutions to the House floor congratulating the people of Guatemala on their peace process and the people of Nicaragua on their successful election. Each resolution passed the House unanimously and I believe this marks an important bipartisan beginning in this Congress to our mutual effort to advance U.S. and Latin American-Caribbean relations. I want to applaud the Subcommittee and Full Committee leadership for these initiatives. They are noticed and they do make a difference.
    As Secretary Davidow said, this is the year of the Americas. Between now and a year from today, the President of the United States will be traveling to the region three times, culminating with the Second Summit of the Americas in Santiago. This marks an historic convergence between U.S. interests and regional interests. The Miami Summit first demonstrated the immense opportunity we have to consolidate the three transitions sweeping the hemisphere—the transition from conflict to peace and reconciliation; the transition from dictatorship to democracy; the transition from controlled economies with massive inequity to open markets and determined efforts to alleviate poverty. Each of these transitions advances fundamental U.S. interests and the role of the United States and of USAID has been central in each.
    The first transition is seeing a final end to the conflicts in Central America. Today in Guatemala, as in El Salvador and Nicaragua earlier, weapons of war are being traded for tools of peace. And, as in El Salvador and Nicaragua, USAID is a key part of that process. From building the demobilization camps that both Jeff and I have visited in recent weeks to financing part of the program that will integrate those ex-combatants through vocational education, land purchases, small business training, we will be helping refugees and displaced persons return to new homes and new lives and supporting the peace accord's historic conclusion of the rights of indigenous peoples in a new Guatemala.
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    The second transition from dictatorship to democracy was underscored at the Miami Summit. And, as we have heard, the change from two decades ago, and even from a decade ago, is significant. Today, all save Cuba have democratically elected leaders. Accepted human rights norms and due process are protected by law and, by and large, respected. Non-governmental human rights organizations are speaking out and organizing for change.
    And perhaps most important, local government is becoming more than rhetoric in a region traditionally dominated by capital cities and small political elites in a model based on their Spanish colonial history. More mayors and city councilmen and women have been elected in the past 6 years than in the previous 200 years. Increasingly, they also are acquiring resources to direct to local problems. Thinking globally and acting locally is becoming possible in Latin America for the first time. And also, as we have heard, past acceptance of corruption is being rejected with high officials, even including former Presidents, being prosecuted and convicted or impeached.
    Again, USAID is part of that story, bringing new mayors to see what others are doing in our Southwest and Puerto Rico; financing ombudsmen for human rights, anti-corruption NGO's, financial managers; training judges, prosecutors and public defenders; helping legislators get started with their own budget staff and libraries; and helping them network to learn from their counterparts and colleagues in other countries.
    The third transition is from highly protectionist economies with the most inequitable levels of income distribution of any developing region in the world to a more open, equitable and integrated economic structure. Economic systems are being transformed by a market revolution. For the fourth year, GDP grew throughout Latin America last year by an average of 3.4 percent. Five countries registered growth higher than 5 percent. Twenty countries also had at least some increase in GDP per capita and inflation dropped to less than 20 percent in the region as a whole. But poverty, as you noted, still hovers between 35 to 40 percent of the population and per capita income for the region as a whole last year was still 1 percent lower than it was in 1980.
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    Now, the potential impact of the positive economic trends on the United States is clear. You have heard the figures on exports. I simply want to note that the U.S. share of the region's imports is more than 40 percent. Again, when you have a third of the region's population still living in poverty, a successful effort to bring those people into the national economy also would mean further expansion of U.S. exports and the U.S. jobs associated with them.
    Let me simply note that USAID, again, has been a vital partner in helping in this transition. Our programs have supported policy reform at the top and microenterprise at the bottom.
    I know a lot of times recently we hear people talk of ''trade not aid.'' Let me argue that that is a false dichotomy. First, aid is crucial to enable developing countries prepare for trade by developing public understanding of the importance of privatization; by defining model statutes; exchanging information on regulations needed and those not needed; training customs, tax and patent officials; helping small businesses and small farmers understand what export markets require; and developing a stronger and fairer legal structure that protects all investors.
    Second, ''aid not trade'' can help countries extend the reach of education and primary health care in order to develop a labor force that can compete in the global market.
    Third, aid contributes directly to trade by helping sustain democratic stability.
    And, finally, aid contributes to trade by helping to ensure that the national resources of other nations are managed wisely today to permit greater trade tomorrow.
    Consolidating those three transitions is essential to protect U.S. national interest in the coming century. The geographic proximity of the region magnifies its importance in terms of direct impact on the United States.
    Following the civil war in El Salvador between the years 1980 and 1990, nearly 13 percent of the Salvador population fled, about 600,000 people, to the United States—about 250,000 at least who entered illegally. During the same time, less than 1 percent of the population of stable Costa Rica entered the United States and all were legal entrants. To the degree that we consolidate those three transitions, we reduce the pressures that prompt out-migration from the region.
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    Let me just give you other example of how USAID programs directly impact on that issue. If USAID population programs had not helped Mexico to reduce its fertility rate from 6.8 children per woman in the mid–1960's to 2.7 in 1996, one can imagine what the immigration pressures would be today.
    Threats to the consolidation of those transitions are varied. My colleague mentioned several of them. Let me also underline two, poverty and drugs. Alleviating extreme poverty is the greatest challenge facing democracies in the region today. Growth is essential but so is the removal of the barriers to access for the poor, women and indigenous peoples to education and health care, to title for their property and credit for their microenterprises. And we know that it can be done. Chile has shown that it can be done by maintaining growth levels of more than 6 percent, reducing inflation to 6 percent, and bringing poverty down from 40 percent to 24 percent since the return to democracy.
    The second challenge to the transitions is the threat from drug production trafficking and consumption. USAID plays its part in the U.S. counternarcotics effort. Our programs give support to strengthen justice systems and complement law enforcement work. Also, our programs educate citizens in those countries to the dangers of drugs. And perhaps the most critical assistance we provide is offering environmentally sound, economically sustainable alternatives to illegal drug production.
    In order to assist the transitions underway and counter the threats they face, the Administration has requested a total of $553 million for foreign aid in the region of the Americas for Fiscal Year 1998, a slight increase over the levels available to us in the current fiscal year—to be precise, $14 million more. This is a part of an overall USAID budget request which is essential to permit us to fulfill our foreign policy objectives worldwide. However, even with approval of the requested level of funding, the United States would be last among all developed nations in the percentage of GNP dedicated to development assistance. And if USAID as a whole has suffered, Latin America has endured the most devastating reduction of all. Our overall funding level has declined from a high of $1.6 billion in 1990 to the current level, barely a third of that earlier total.
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    Similarly, as a percentage of the overall agency budget, Latin America and the Caribbean has declined from 25 percent in 1990 to about 9 percent in the present budget request. Therefore, we truly believe that the budget submitted to the Congress is the absolute minimum required to help us fulfill the fundamental purpose of supporting U.S. foreign policy objectives in this hemisphere. The request of $553 million includes $273 million in development assistance, $116 million in economic support funds, $53 million in international narcotic funds, $101 million in P.L. 480 Title II, and $10 million for P.L. 480 Title III. Our budget submission broke that down by country and in my written testimony, which I have asked to have printed fully in the record, I have broken that down by function.
    Mr. Chairman, I will be pleased to answer any questions about the budget that we have submitted. As you noted in your January 21 statement, we need a policy that seeks cooperative partnerships to strengthen democracy, implement economic development policies, encourage free trade and make a renewed commitment to civilian authority, human rights and social justice. That is a vision that we in the Administration share and one which our budget request both supports and reflects. And we hope you will give that budget your close consideration and your support. Thank you.
    [The prepared statement of Mr. Schneider appears in the appendix.]
    Mr. GALLEGLY. Thank you very much, Mr. Schneider.
    We have about 6 minutes to get to a vote. If you folks can just stick with us for another 15 minutes or so, I will try to get back and I know there is going to be another vote after that. But maybe if there is another Member that comes back, have a couple of questions. If not, I just have a couple of questions and then we will wrap the meeting up here before long. I apologize for having to run again.
    Mr. BURTON. Mr. Schneider, I know I am not the chairman any more but I am still on the Committee and, in the absence of the chairman, I would like to ask you just a couple of questions, if you do not mind.
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    Mr. SCHNEIDER. Sure.
    Mr. BURTON. I really appreciate your being here today.
    On February 13, I sent you a letter regarding ongoing Nicaraguan property disputes with respect to U.S. citizens. Is it possible for you to give me an update of State Department efforts to help Americans who are being short-changed regarding those property problems?
    Mr. DAVIDOW. The property issue, Congressman Burton, is one, as you know, that has the highest priority in our relations with Nicaragua. We are dealing with a new government in Nicaragua which was not as well informed about the property issues as had been the previous one, obviously, that had more experience. I can assure you that it is at the top of our Ambassador's agenda there, the top of our agenda here when we meet with Nicaraguan officials. We do believe that the Government of President Aliman wants to do the right thing; that they are a government that has as its motivation desire to right the wrongs of the past and we are confident that we will see some movement in this regard and we will keep pushing for it.
    Mr. BURTON. Would you convey to President Aliman my concern and the concern of many Members of Congress regarding Americans' property rights down there?
    Mr. DAVIDOW. We have done so and we will continue to do so.
    Mr. BURTON. Thank you.
    I am also concerned with the implementation of the Helms-Burton Act. On the House side, we call it the Burton-Helms Act, but to give the Senators——
    Now, I hope I do not cause you to choke.
    Mr. DAVIDOW. It was not a choke, it was a sneeze.
    Mr. BURTON. Incidentally, do you know why they call the Senate the upper house? This is a true story. Before our country was formed, the House of Burgesses down at Williamsburg was a unicameral system and they decided to make it bicameral—and I want everybody to know this—and so they decided to create a Senate and they had no place to put the Senate, so they put them on the second floor. That is why they call them the upper house. Not because they are more important, but because they had no room for them on the first floor. And you need to get that message out to everybody all across this country.
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    Anyhow, I am concerned with the implementation—I thought that little education——
    Mr. DAVIDOW. I very much appreciated it. Thank you.
    Mr. BURTON. I am concerned with the implementation of the—we will give him priority—Helms-Burton Act. Could you please tell me and the Committee how Title III is working out and give us an update as to the Title III suspension? And will the current World Trade Organization dispute influence the Administration's decision on Title III?
    Mr. DAVIDOW. We think the Title III suspension is having effect under the leadership of Ambassador Stewart Eizenstat. We believe that we have been able to use that temporary suspension to focus European and Latin attention on something that those governments had not paid much attention to in the past, which is to promote a democratic transition in Cuba. We are seeing more activity on the part of the European Union and individual European Governments. We saw at the recent, or now a few months ago, meeting of the Ibero-American Summit in Chile very strong statements by leading Latin American statesmen like Caldera, Frei, Menum and others, on the issue of the need for profound change in Cuba. So we do think that Helms-Burton and the suspension of Title III have given us levers which we are using to get other countries to pay more attention to this issue.
    In terms of the World Trade Organization, we have made it very clear that our concern about Cuba, and the embargo which is now over 35 years old, and Helms-Burton are issues of national security. The World Trade Organization is designed to handle trade issues, not national security issues, and that is our position.
    Mr. BURTON. Very good. And you do not anticipate WTO putting any pressure that would change our policy regarding that.
    Mr. DAVIDOW. No. Our policy is dictated by the law of the United States.
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    Mr. BURTON. Very good.
    As you may be aware, I have been an outspoken critic of the efforts of the Mexican Government regarding their role in attempting to keep drugs out of the United States. In today's Washington Post, we came to learn that yet another high-ranking military official has been arrested for corruption and they have been involved with the drug cartel. Does the Administration still believe that even though we found another top-ranking official being involved with the drug cartel, do you still think we need to certify Mexico?
    Mr. DAVIDOW. Yes, we do feel that we need to certify Mexico and I think this is an interesting case, Congressman. We did not find this general.
    Mr. BURTON. They did.
    Mr. DAVIDOW. They did. And, as in the case of Gutierrez Rebolio a few weeks ago, in this case, according to the press reports and some other things I have seen, the general thought it was going to be business as usual. He had obviously been involved in the past. He approached another general and said, ''This is the way it works,'' and the other general said, ''The heck it is.'' Turned him in, got him arrested. I think, as in the case of Gutierrez Rebolio, what we are seeing in Mexico is a change in the way top leadership in that country and in the military view the question of corruption——
    Mr. BURTON. Well——
    Mr. DAVIDOW. And there has been a change and I think that is really to the good.
    Mr. BURTON. Well, I do appreciate them arresting these two people who were major figures and connected to the drug cartel. Of course, one of the concerns we have is that our Administration thought the former head of their Drug Enforcement Agency down there was a good guy and we found out that he was not. But the thing that concerns me, and I have been a long-time advocate of real cooperation in the drug war, especially where Mexico is concerned, is what are we going to do about extraditing known criminals, felons, to the United States for trial? There is a large number down there that we have asked for that the Mexican Government has not chosen to send to us and it appears as though some people in the military and the government are trying to protect those people by keeping them from coming up here. Some of those people are not yet incarcerated but they know where they are. They could go out and pick them up and send them up here and they are not willing to do it. How do we deal with that?
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    Mr. DAVIDOW. I think the issue of extradition is an extraordinarily important one for us in our conversations with Mexico, I might add, as it is, as you know Congressman, with a number of other Latin American countries. We have been able to make some progress in the hemisphere this year on new extradition treaties. Most Latin countries in there for reasons that date back to the Spanish colonial times, either in their penal codes or in their constitution, prohibit the extradition of their own nationals. We have been able to change that in some countries. We just signed a new extradition treaty with Bolivia just 2 months ago. And this is a top priority for us in Mexico.
    Now, there has been change in some elements of Mexico's extradition policy. In the last year and a half, more people have been extradited from Mexico, including dual nationals, than in previous years.
    Mr. BURTON. I do not have my figures in front of me. I think that we had one member that was connected to the drug cartel. He was a dual citizen that was sent up here for trial.
    Mr. DAVIDOW. Well, we have had those. We have also had several——
    Mr. BURTON. But there have not been that many.
    Mr. DAVIDOW. Yes.
    We have also had some Mexicans who have been extradited or deported on the basis that the government decided that they are guilty of heinous crimes—child molestation or murder.
    Mr. BURTON. Sure.
    Mr. DAVIDOW. In our view, the large-scale drug trafficking is a heinous crime and I think we would like to see the Mexican Government, notwithstanding any changes they may be able to make in the constitutional penal code, to adopt that view and to see these the same way.
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    Mr. BURTON. Yes.
    One more question and then our chairman ought to be back here in just a minute. And I regret not being the chairman any more because I just love getting together with you guys.
    Mr. DAVIDOW. We miss you, too.
    Mr. BURTON. Do you really? Would you mind putting that into the Post? I would like to get some good press.
    The other thing I would like to ask you about is we have decertified Colombia and I think there is justification for a large part of that. However, I have met with General Serano and I am convinced that the police down there under General Serano have been doing yeoman's service to the United States by fighting the drug cartel. He has lost hundreds, perhaps even thousands, of policemen in fighting against the drug cartel. We have met with a number of people, including our ambassador down there—not our ambassador, but our Undersecretary that works with them down there—and we got additional helicopters, Hewies and Blackhawks, down there and I think you probably had a lot to do with that, as well. So they have been fighting a valiant war against the drug cartel.
    If we decertify, we cut them off. And what I think we ought to do is—and I wish you would convey this to the Administration and the State Department—is go back and re-evaluate this. I do not mind cutting off the President, who appears to have been controlled in large part by the cartel. But those who are really fighting the drug war, we need to keep those guys on our side and keep working with them. And so it seems to me we could have a modified decertification that would still allow materials that will fight drug war against the drug cartel sent down there to assist, even though we are not going to be working hand in glove with the President. You see what I am saying?
    Mr. DAVIDOW. I understand what you are saying and I think we are very much on the same wavelength. One of the, I think, frankly, unintended consequences of decertification of Colombia was that it being the first country with which we have a very full relationship that we have decertified, after decertification took place, we studied the law. We found that we had, I believe, inadvertently cut off certain contacts with the Colombian military police, particularly foreign military financing and the International Military Education Training Program (IMET).
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    The Administration will soon be approaching Congress for consultations on the possibility of a waiver of that provision of the certification law so that we can help the police and the military in Colombia, also some other elements that I would like to mention, if I may.
    I think the business community in Colombia has finally come out of its shell. It was complacent for far too long. But in the past year, we have seen business groups and business leaders really go out and lobby for changes in legislation, changes in practice; sometimes, as you can imagine, at very great risk to themselves. And I would like to be able to find some way, perhaps through the similar waiver process, to acknowledge the role of the business community and let them know that we appreciate what they have done.
    Mr. BURTON. How is this for timing? Our chairman just got back and I have just finished my questions, so I want to thank you both. Did you have a comment?
    Mr. SCHNEIDER. I guess with respect to Colombia, I just wanted to say that we had last year and will again this year continue support to the administration of justice program to the Attorney General, Valdevieso, and that has been both very successful with respect to efforts to control the drug problem as well as building a justice system in that country.
    Mr. BURTON. Just two more quick questions.
    What happened to your hand?
    Mr. SCHNEIDER. Playing basketball, I tore a ligament.
    Mr. BURTON. You were playing basketball? Don't you realize when you get to be our age you should not be doing that sort of thing?
    Mr. SCHNEIDER. I have been told that several times.
    Mr. BURTON. One more question. What is the status of your Section 614 waiver consultations which you promised on March 1?
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    Mr. DAVIDOW. You are speaking of Colombia 614 waiver.
    Mr. BURTON. Yes, right.
    Mr. DAVIDOW. That is what I was referring to. We are up here talking on the Hill. I hope we can move very soon on that.
    Mr. BURTON. But what I am saying about the status is we are talking about it now but can you give us some idea of where we stand on it? I mean, how far down the road we are?
    Mr. DAVIDOW. We have not yet formally presented it because we are obliged to consult with the Hill first. But I think we will see some paper move on this within days.
    Mr. BURTON. OK.
    Mr. DAVIDOW. That is my own——
    Mr. BURTON. If I can be of any help in that regard——
    Mr. DAVIDOW. I know.
    Mr. BURTON. Thank you, Mr. Chairman.
    Mr. GALLEGLY. Thank you very much, Dan. And thanks to all of you for your patience with us running back and forth. They are telling me there is going to be another vote in about 10 minutes, so we are going to try to get through this and make sure that Chris or anyone else that has a couple of questions—and I do have a couple and I will ask them. But I do have a couple of others that I may want to just follow up with you later in writing and so on.
    But, first of all, Secretary, last week we had some hearings, as I mentioned before, with some fairly prominent witnesses and pretty much they were in agreement that corruption in the police forces and weaknesses in the judicial system were two critical challenges facing many of the Latin American nations. Yet the United States especially, through USAID, has been funding police and judicial training programs for several years.
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    Is there something wrong with the type of training programs that we have which, in effect, may be helping the corruption situation along? Or are we not doing enough? What is the correlation between what we are doing with our funds and the known corruption between law enforcement and judges?
    Mr. DAVIDOW. I am going to ask Mr. Schneider to answer this. But let me just say that I think that the weaknesses that we see in the judicial systems in many countries and the police systems are part of an endemic weakness of governmental institutions throughout the hemisphere and it is not just in some countries the judges or the police. It is the education system or the health system or others run by the government. And what we are finding is that this is the major task of democracies now.
    When there were authoritarian governments, it really mattered less how effective they were. Now, people view the absence of good police work or corruption in the judiciary or failures in the hospital systems as indications that democracy is not working and that is something we have to worry about.
    Mr. GALLEGLY. Well, really, more directly, the relationship between our funding of programs.
    Mr. DAVIDOW. Right, right.
    Mr. GALLEGLY. I think that is my point. Maybe Mr. Schneider could——
    Mr. DAVIDOW. My simple response is that I think we are doing the right thing but not enough of it. But let me ask Mr. Schneider.
    Mr. SCHNEIDER. I would start with that we have, in fact, had major reductions in our funding in the area of administration of justice in recent years. But I will say that there has been a significant change. In a sense, this only began as a support for change in the judicial systems and in police programs in Latin America, over the last 10 years. Nothing before that. And so you are really beginning with institutions which, as the Secretary said, are as weak and fragile as any within the democratic structures of those countries. And we are beginning now to see the change. We are beginning to see the kinds of changes, for example, that produce corruption now being discussed at the Summit of the Americas resulting in an agreement by the political leaders to take action, agreeing to sign the convention and then beginning to take actions called for within the convention.
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    Just to give you some examples—we have had criminal justice reform legislation passed, I would say in about a dozen countries, including for the first time, for example, incorporating oral procedures into the justice systems. For the first time in Colombia, as an example, Mr. Burton just asked about that, we have gotten the Attorney General to bring together police and prosecutors in, I think it is six model prosecutorial efforts that have been so successful that they are now doing it nationwide.
    With respect to corruption, for the first time, as the change to democracy occurred, you can begin getting public discussion of this. The idea, for example, that in three countries—in Brazil, in Venezuela, in Bolivia—there have been two former military dictators who have been tried and convicted for corruption. One of them is here in the United States in jail for narcotics-related offenses. But those things never happened before. Part of it is that we are training prosecutors and I have to say that they are beginning to do a much better job. I think that we need to do more and one of the things that we are doing now is we are linking the training of judges and prosecutors and the training of police. It has to be done together.
    One of the problems in the past has been that the military controlled the police systems. The transition to democracy has separated that and we have begun now to train national civilian police forces that recognize as their responsibility the rule of law. In El Salvador, after the conflict, we basically financed the creation of the national police academy—it never existed before—to create civilian police. In Guatemala, now, we are talking about the same kinds of changes as part of the effort to implement the peace accords which call for strengthening the civilian police, strengthening the justice system. They recognize that that is a fundamental requirement if the peace is going to be successful. So I think your question is absolutely on the mark. It is one of the essential threats to the democratic transition and the only way that we are going to succeed in responding to that threat is building judicial systems and police forces that respond to the rule of law.
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    Mr. GALLEGLY. Thank you very much.
    Mr. Secretary, French President Chirac, on a recent trade mission to Latin America, stated that, and I quote, ''The region's essential economic interests lie not with the United States but with Europe.'' Is this the formal beginning of a serious trade competition with Europe over Latin American markets? I saw an expression on your face, ''I saw this one coming.''
    Mr. DAVIDOW. Actually, I did not see it coming. But it is something I have been thinking about.
    During his visit, which is still going on, President Chirac seems to have stepped back from the initial statement and said, ''What we're looking for is synergy and cooperation rather than competition.'' The fact of the matter is that in country after country, the level of trade or the level of exports from those countries to the United States as opposed to Europe is very high. The United States, for instance, takes over 30 percent of Brazil's exports. France takes about 3 percent.
    The fact of the matter is is that there need not be a great competition between the European Union and the United States. We are certainly not looking for it. But what we do need, it seems to me, Mr. Chairman, is the ability to go and negotiate good, hard, fast trade agreements and that is where fast-track authority comes in. Otherwise, we will continue to see a process in which other organizations, other countries set up their own trade relations which could conceivably disadvantage us.
    Mr. GALLEGLY. Absent any sustained effort in a regional trade pact, the Mercusor nations appear to be moving on their own toward an expanded trade market. I am told that this Administration is making subtle threats to those nations not to strike out independently. Is the United States warning these nations on expansion?
    Mr. DAVIDOW. I do not think that is the case. I do not think there are subtle threats. I think what we are saying is this, that regional integration or subregional integration in and of itself is not contrary to our policy. However, when countries do engage in bilateral trade pacts or subregional trade pacts they ought to be sure that they are not taking steps that disadvantage other countries or disadvantage the prospect of moving to a Free Trade Area Agreement for the entire Americas and that is our concern—that the more bilateral, subregional list of pacts that come about, the more complicated it becomes to put together what all the Presidents have said that they want, which is a Free Trade Area of the Americas.
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    Mr. GALLEGLY. Chris, do you have a couple of——
    Mr. SMITH. I have just a few.
    Mr. GALLEGLY. Sure, because we have a vote on so I will defer to my colleague, Chris Smith.
    Mr. SMITH. I appreciate it.
    I would like to ask Mr. Schneider, and perhaps you would want to answer this—we have been getting a growing number of reports of coercion and involuntary population control in Central and South America and including Mexico and I recently got some sworn affidavits from two women who actually—and I will ask that these remain a part of the record—that actually had IUDs inserted against their will at the time of the birth of their children. I was recently in Mexico and met with a USAID person and a number of human rights organizations and when I asked if there is any coercion there, as it was being translated, the USAID person immediately said, ''No, never. Not here.'' And the people from the human rights community said, ''Yes, there is coercion.'' Matter of fact, the representatives from Miguel Pro immediately launched into a number of instances as to how it happens and its regularity, all of which was kind of denounced by the person from USAID.
    I also have a statement that was made by a doctor who worked there and I would be more than happy to have you meet with her, but she wants to stay, in terms of her name—these other two ladies went on the record with their name, but this doctor would rather not. And, just briefly, Mr. Chairman, she points out in this statement that, ''I am a medical professional who has worked in Mexican hospitals for several years. I am here to tell you today about the devastating results of U.S. family planning funding sent to Mexico. Here in the United States, family planning is voluntary. But in Mexico, it is often literally forced on vulnerable women. I have witnessed many abuses. One common practice I have seen is coerced IUD insertion.''
    You are looking at me like you are hearing this for the first time. I have been hearing this for some time now and now we are getting more and more documentation that it is going on and I saw it for myself when I talked to our USAID person who dismissed it out of hand as if it was a crock. And I find this very, very troubling.
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    She goes on to say, the one common practice is IUD insertion. ''At the time of her initial exam, the doctor says, this is when she is in for the baby, 'What are you going to do so you don't become pregnant again?' If she answers, 'I plan to have more children,' this is not acceptable. The doctors will harass her throughout her labor and delivery until she says that she agrees to use contraceptives or to have a tubal ligation.'' It goes on throughout this entire report about how women who come in and would like to have an IUD taken out are given a round-around. They are told that they should not do it. It is mostly targeted at the poor women and those who have larger families. Matter of fact, she points out in this statement that the more children a woman has, the more she will be pressured to submit to sterilization. After the third child, the pressure to accept tubal ligation is very intense.
    She points out that the Mexico's family planning program may be reducing the country's population growth but it is doing so by abusing, coercing and medically maltreating women. And then she goes on to say that even women for whom IUD assertion is contraindicated get them because they do not do an intensive background history on her particular situation.
    I read your testimony, Mr. Schneider, and you boast of these great gains in reducing fertility. And then we hear in our neighbor to the south where corruption is rife, we know, in their anti-drug efforts—I do not think it is a stretch when we get this kind of evidence to suggest that there is some corruption on the part of the medical community, perhaps at the government insistence. Our people seem to be looking the other way and coercion is going on. And I have heard this in other places and we are beginning to build a bigger and bigger case. Not only is the concern that this money is being used to bring down right-to-life laws in these countries, but it is also being used as we sit here to, in corroboration with these countries—maybe it is going through the main government disbursement—but it is being used in a coercive way. And, again, the way it was dismissed by our USAID person in Mexico City when I met with her was very, very troubling.
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    Mr. SCHNEIDER. First, I will not dismiss it. If it is occurring, it is occurring contrary to, so far as I am concerned, USAID policy and if I can have anything to do about it, it will stop. I will say my understanding in all of the programs is that these issues are, in fact, examined quite closely. I do not in any way dismiss the kind of statements that you just made and I will ask people to investigate it. I will say that from everything that I have learned—and I usually go to at least one clinic in every country that I visit whenever I travel there and ask those kinds of questions—and at least my understanding, which to some degree I will say if you look at the broad program, when you look also at statistics that are taken from polling which asks the question on a nationwide basis to women, ''If you had the opportunity, would you like to have family planning services or the ability to use contraceptive methods?'' and the overwhelming answer is, ''Yes.'' And then, ''Do you have access to—''. And then, unfortunately, because of the limited extension of primary health care services and family planning services, the percentage that have access is significantly lower.
    But, in general, I think that our programs, in fact, are meeting a need, a need that is based on the voluntary desire of the women in those countries. However, if there is any instance where what you described is happening and I find out about it, the money will stop. The programs will be halted. And I will say that any——
    Mr. SMITH. I would urge you to look at these three instances, and there are many more.
    Mr. SCHNEIDER. In the past, I could tell you that in the 4 years that I have been here, there has been one instance where in a particular clinic there was a concern on the question that you raised with respect to abortion and lobbying and whether or not we could define it as being with our money or not with our money. We stopped that program. And I will say we will take that information, we will investigate it and I will get back to you with a response.
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    Mr. SMITH. I appreciate it. Part of the problem is—and we heard this in further conversation with this doctor—that it is largely the women with larger families, like she said in her statement, but also the less educated, the more apt that these not-so-subtle coercions were used because these people are the ones least likely able to defend themselves, take it to any kind of due process. They are in a vulnerable situation and how do they fight it?
    Mr. SCHNEIDER. I will say that what I try and do sometimes is to ask them to set up and to meet with women who just simply happen to be there that day at one of the clinics and I ask them the same questions. And overwhelmingly, these women are really desperate for the kind of information that they otherwise would not have access to.
    But, as I say, I do not accept——
    Mr. GALLEGLY. Gentlemen, the second buzzer is about to go off. I understand that we have two votes after this and we have no other Members here present. I apologize, again, for the way we have had to conduct this meeting this afternoon. I do appreciate very much your testimony and your candor and look forward to continuing to work with you in the months and years to come.
    And particularly, Mr. Schneider, if you would get back to Mr. Smith on those particular——
    Mr. SCHNEIDER. Absolutely.
    Mr. SMITH. If I could just take a brief 30 seconds before we run over?
    One of the concerns that some of us have is child survival monies being used for population control and projects that were normally undertaken by the population account going into child survival. In Guatemala, we note that in 1995 the Population Council got $1.3 million. In 1996, they got $1.3 million again. But this time $1 million of it came from the child survival and not from the population account.
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    When disease is rampant, we have not even come close to eradicating these diseases to be raiding that account for the Population Council which is doing surveys. To me, it seems to be a misuse of money and maybe you could enlighten the Committee, for the record's sake, as to whether or not other projects normally funded by the population account are now being done by child survival.
    Mr. SCHNEIDER. OK. I will be happy to supply the information in detail with respect to Guatemala for the record. But my understanding is that I do not think that is done because, in a sense, it is the reverse that happens. Our population monies over the course of the past several years have been maintained and, in some instances, increased as we look at our percentage of our budget. And it is the other categories of funding that have been reduced. So, in general, it is looking for ways to meet problems in basic education, the problems in the democracy environment and enterprise. There is much more of a serious——
    Mr. SMITH. Would you provide that for the record, that accounting?
    Mr. SCHNEIDER. Absolutely, absolutely.
    Mr. GALLEGLY. Gentlemen, thank you very much and, without objection, Mr. Ackerman has a statement that will be made a part of the record.
    [At press time neither Mr. Schneider's reply nor Mr. Ackerman's statement had been supplied for the record.]
    I thank you gentlemen very much for being here and the hearing will stand adjourned.
    [Whereupon, at 3:30 p.m., the Subcommittee was adjourned.]


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