*EPF210 03/12/2002
Text: Lugar Submits Bill for Free Trade Agreement with Philippines
(S. 2005 authorizes negotiation of trade deal with long-time ally) (1030)

Senator Richard Lugar (Republican of Indiana) introduced a bill into the Senate March 11 that would authorize negotiation of a free trade agreement with the Philippines.

"Both nations would benefit greatly from the elimination of tariffs and increased economic transparency that would come with a free-trade agreement," Lugar told fellow senators.

America exported more than $22.7 billion in goods and services to the Philippines in the year 2000. The Philippines is the 19th largest export market for American goods.

"The United States is the largest foreign investor in the Philippines with some $3 billion in investments and 24 percent of the foreign direct investment stock as of the end of the year 2000," Lugar said.

Lugar, the ranking minority member of the Senate Agriculture Committee and the second ranking minority member of the Senate Foreign Relations Committee, submitted S. 2005, and the proposed legislation was referred to the Senate Finance Committee.

S. 2005 would provide for expedited consideration in Congress for any trade agreement reached by the two sides under a "fast track" procedure whereby the deal is voted on without amendment.

The Indiana Republican, who sits on the Senate Select Committee on Intelligence, recalled for fellow lawmakers how Philippine President Gloria Macapagal Arroyo was "the first foreign head of state to pledge her country's strong support for the United States in the aftermath of September 11."

The Philippines, she had told President Bush, was prepared to "go every step of the way" with America in its fight against international terrorism.

"I believe increased free trade is the next step in this close and vitally important relationship," Lugar said.

Following is the text of Senator Richard Lugar's September 11 speech on S. 2005 from the Congressional Record:

(begin text)

STATEMENT ON INTRODUCTION OF S. 2005
Senate
March 11, 2002

By Mr. LUGAR:

S. 2005. A bill to authorize the negotiation of free trade agreement with the Republic of the Philippines, and to provide for expedited congressional consideration of such an agreement; to the Committee on Finance.

Mr. LUGAR. Madam President, I rise today to introduce the Philippine Free Trade Act of 2002.

My bill provides President Bush with the authority to engage the Republic of the Philippines in negotiations on a free-trade agreement, and if an accord is forthcoming, to have it considered by Congress under ``fast-track'' conditions.

The political and economic histories of the United States and the Philippines have long been intertwined. Immediately following the end of World War II, with the help and protection of the United States, the Philippine economy soared. In the mid-1980's when the circumstances surrounding the Marcos regime threatened to destabilize the country and subvert democracy in his election campaign against Corazon Aquino, the United States once again provided strong support. I was a member of a delegation of American election observers who voiced strong concerns over the conduct of the election and provided support for the rightful winner, Mrs. Aquino. Ultimately she was awarded the presidency and her administration brought greater civil liberties and freedom to the Philippine people and an even stronger relationship with the United States.

A free trade agreement with the Republic of the Philippines would hold special economic significance for the United States. United States exports to the Philippines totaled more than $22.7 billion in the year 2000. The Philippines ranks as the 19th largest export market for American goods. The United States is the largest foreign investor in the Philippines with some $3 billion in investments and 24 percent of the foreign direct investment stock as of the end of the year 2000. Both nations would benefit greatly from the elimination of tariffs and increased economic transparency that would come with a free-trade agreement.

The Philippine economy has enjoyed a mixed history of growth and development since the end of World War II. Growth immediately after the war was rapid, but slowed over time. The Philippines went from being one of the wealthiest nations in Asia to one of the poorest. Broad economic reforms designed to spur business growth and foreign investment met with success through most of the early and mid-1990s. Under the leadership of President Ramos the Philippines secured ratification of the Uruguay Round agreement and membership in the World Trade Organization.

The Philippines was not as severely affected by the Asian financial crisis as most of its neighbors but it continue to face economic challenges. Exports continue to grow but at slower rates. Despite continued slow growth, long-term prospects remain promising. The pace of economic reform is expected to accelerate under President Gloria Macapagal-Arroyo's leadership. Specifically, it is hoped that progress in electronic commerce, banking reform, and securities regulation will improve the investment and business climate.

President Arroyo was the first foreign head of state to pledge her country's strong support for the United States in the aftermath of September 11. The Philippines, she said, is prepared to ``go every step of the way'' with the United States. The U.S. was provided with the use of Filipino ports and airfields to support military operations in Afghanistan. President Arroyo defined Philippine national interests by linking the struggle against international terrorism with the struggle against the Abu Sayyaf within the Philippines.

The Philippines has proven to be a strong and steadfast ally in the war on terrorism. I am pleased that American and Filipino troops are working side by side to eliminate the threat posed terrorists linked to al Quaeda.

I believe a free-trade agreement with the Philippines would make significant contributions to the economies of both countries and strengthen our diplomatic and security relationships. It will ensure the continuance of open dialogue, peace of mind, and security between our two nations.

It is my hope that the United States and the Philippines will soon begin the process of constructing a free-trade agreement. There is much work to do and success will not come easily or quickly. But I believe increased free trade is the next step in this close and vitally important relationship.

(end text)

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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