Statement on Signing the Customs and Trade Act of 1990

I am pleased to sign into law H.R. 1594, the "Customs and Trade Act of 1990." This legislation is the culmination of many long hours of work. It was worth the effort, for the Act accomplishes a number of important goals shared by both my Administration and the Congress:

-- The extension and enhancement of the Caribbean Basin Initiative, which will continue to promote economic growth and democracy in that region;

-- The amendment of Jackson-Vanik procedures, which will facilitate cooperation between the Executive and the Congress to encourage reform in the Soviet Union and assist the emerging democracies of Eastern Europe; and

-- A new structure for U.S. customs user fees, which demonstrates our unfaltering commitment to the General Agreement on Tariffs and Trade (GATT).

Furthermore, the spirit of bipartisan cooperation that this Act represents bodes well for the coming months. We head into the fall facing the challenging tasks of completing the vital Uruguay Round of global trade talks by December and then drafting implementing legislation in 1991.

The results of this Round of negotiations, held under the auspices of the GATT, can be the engine that drives the United States and world economies into the 21st century. The agreement we reach will be the ultimate competitiveness initiative. It will open new markets for American business, help reduce prices and increase choices for consumers, and secure rigorous rules of fair play in international trade.

The Customs and Trade Act of 1990, therefore, is part of the cooperative process that ultimately will result in growth, jobs, and prosperity, not only for America, but also for the world.

Let me give special mention to three vital provisions of the legislation I am signing today.

First, this legislation makes permanent and enhances the Caribbean Basin Initiative, or CBI.

Since its inception in 1983, CBI has promoted stability, security, and the movement to democracy and free markets that we now celebrate not only in this hemisphere but around the world. This legislation will foster continued economic growth and opportunity in the region.

By enacting this bill we assure investors in the Caribbean and Central America that their investments will continue to earn returns on duty-free exports indefinitely. It further extends the range of products that receive preferential duty treatment under CBI.

Because of the success of the CBI example, I announced on July 23 that I would seek legislation for limited-duration CBI-like trade preferences for the Andean countries of Bolivia, Colombia, Ecuador, and Peru. This measure would assist these countries in eliminating the production of illegal drugs and promoting competitive activity in world markets. I hope that my proposal will be given rapid, favorable consideration once it is presented to the Congress.

America's security and prosperity depend in large measure on continued progress toward democracy and economic development in the Caribbean Basin.

Second, the Act will help the United States support the emerging democracies of Eastern Europe and encourage change within the Soviet Union.

It does so by amending Jackson-Vanik procedures for approval of the historic trade agreements the United States has signed with the Soviet Union and Czechoslovakia. These agreements provide for improved access to each country's markets; facilitate business by easing restrictions on commercial activities; and offer strong intellectual property protections.

By working together to gain approval for these accords, the way is paved for continued cooperation between the Administration and the Congress on future agreements with other countries subject to the Jackson-Vanik Amendment.

Third, the Act is another demonstration of our Nation's abiding commitment to the GATT, the international constitution of trade.

A GATT panel in 1988 adopted a finding that the structure of U.S. customs user fees violated GATT rules. This Act authorizes a new fee structure that brings us into compliance with GATT rules.

This demonstration of our dedication to GATT comes at a critical point in the Uruguay Round of global trade talks. The great trading nations of the world can choose either to open their markets so that trade can expand, and thereby create global prosperity; or, they can choose to close their markets, splinter into exclusionary trading blocs, and thereby cause dangerously diminished prosperity for all.

The United States has chosen the first path. With the cooperation and support of the Congress and the private sector, we stand committed to the successful conclusion of the negotiations by December and prompt implementation of the results in 1991.

H.R. 1594 also contains a set of provisions that will be helpful both to our environment and our economy. The Act makes permanent the current ban on the export of unprocessed logs taken from Federal lands west of the 100th meridian and would sharply restrict the export of such logs taken from State lands. On June 23, the U.S. Fish and Wildlife Service listed the Northern Spotted Owl as a threatened species under the terms of the Endangered Species Act. There can be no doubt that high levels of export of unprocessed timber have contributed to the decline in habitat that has caused this species to be listed. This legislation will help to address problems related to this listing decision. While I am supporting this provision because it assists in the preservation of critical habitat, I also note that it will ease the economic transition in areas affected by the listing of the spotted owl.

Finally, I note that one of the provisions of H.R. 1594 warrants careful construction to avoid constitutional concerns. Under Article II, section 3 of the Constitution, the President has the discretion to determine what legislative proposals he will present to the Congress, as well as the discretion to determine the procedure he will follow in formulating a legislative proposal. Section 223(b) of this Act purports to require the President, in exercising his discretion to prepare legislative proposals on "rules of origin," to take into account a particular report and obtain the advice of various entities, including committees of the Congress. In light of the President's constitutional discretion with regard to preparing and submitting legislative proposals, I will construe this provision to be precatory rather than mandatory. As always, I will endeavor to consult with the Congress about our policy on such matters.

George Bush

The White House,

August 20, 1990.