HONORABLE ENI F. H. FALEOMAVAEGA

Introduction

Whether or not canned tuna is included in the Andean Trade Preference Expansion Act (ATPEA) is no longer just a local issue. The issue of preferential trade treatment for canned tuna is now an international trade matter of great concern. As the Ranking Member of the House International Relations Subcommittee on East Asia and the Pacific, I can assure you that American Samoa is at the heart and center of this international debate. Our efforts to create a level playing field are being followed by Thailand, Indonesia, the Philippines, Vietnam, Cambodia, Brunei, Malaysia, Lao, Myanmar, and Mexico. Each of these nations understands that preferential trade treatment for the Andean countries will affect the global tuna industry.

As a matter of record, I am submitting a letter from the Association of Southeast Asian Nations addressed to the U.S. Secretary of Commerce which clearly states that these nations feel that that ATPEA will adversely affect the ASEAN tuna industry. I am sharing this letter because it makes the point that American Samoa is not alone in its concerns.

Although Heinz has tried to dismiss our concerns and pretend that the ATPEA will not affect American Samoa, it is important for the members of our Legislature to understand that the ATPEA will affect our local economy. As has been repeatedly stated, the only market for tuna from American Samoa is the U.S. Therefore, duty-free treatment for canned tuna from Ecuador equals financial problems for American Samoa. If Ecuador is granted the same trade privileges as the U.S. Territory of American Samoa, Ecuador will become American Samoa's number one competitor in the U.S. market.

Growth of the Andean Tuna Industry

To understand the serious implications this legislation holds for American Samoa, we must first take a look at the growth of the tuna industry in Ecuador and other Andean countries. Since the enactment of the ATPA in 1991 -

Up 229%	Tuna factories in the Andean countries have increased from 7 to 23.
Up 400%	Production capacity has increased from 450 to 2,250 tons per day.
Up 257%	Direct employment has increased from about 3,500 to 12,500 new employees.
Up 567%	Exports to the U.S. have grown from about $15 million to over $100 million annually.

In the past ten years, the Andean tuna fishing fleet has also grown from about 20 obsolete vessels to 90 modern fishing vessels. Today, the Andean Pact nations have the largest fleet in the Eastern Pacific Tropic (EPT) and control more than 35% of the catch.

Ecuador and Colombia also have the capacity to process 2,250 tons of tuna per day.

2,250 tons per day x 5 days (or 240 days per year) = 540,000 tons of tuna or 48.6 million cases per year.

American Samoa processes about 950 tons of tuna per day.

950 tons x 5 days per week (or 240 days per year) = 22,800 tons of tuna or 20.5 million cases per year.

48.6 Andean cases + 20.5 million Samoan cases = 69.1 cases.

What American Samoa Needs to Know

American Samoa needs to know that the U.S. only consumes 46 million cases of canned tuna per year. American Samoa also needs to know that the U.S. has NEVER extended duty-free treatment to canned tuna from a country that has the capacity to supply the entire U.S. market and wipe out the economy of American Samoa.

I also think it needs to be stated that the Southeast Asian Nations and Mexico are so concerned about Ecuador ruling the U.S. market that they have hired independent lobbying firms in Washington to protect their interests and represent their views before the U.S. Congress.

Ecuador also is continuing its lobbying effort. As you may know, the Minister of Foreign Affairs, the Honorable Heinz Moeller, has visited with the White House Administration, the Secretary of Commerce, the U.S. State Department, and with key members of Congress to gain support for the inclusion of canned tuna in the ATPEA.

Minister Moeller also requested a meeting with me on Janaury 22, 2002. Accompanying the Minister was the Ambassador of Ecuador, the Honorable Ivonne A-baki, and other Chief Ministers.

The Ecuadorian Delegation shared its concerns about the on-going drug problem in Latin America and made a compelling argument that expanded trade benefits would assist the Andean countries in curbing drug production. However, I made it clear to Minister Moeller that the people of American Samoa do not grow drug crops. We do not export drug crops. Our economy, whether up or down, is in no way associated with drug production.

American Samoa does not need and has not asked for preferential treatment to rid ourselves of illegal trade. Instead, we have built on the principles of fair trade. More than 100 years ago, we established relations with the United States and freely pledged our allegiance to uphold the principles of democracy. More than 40 years ago, we welcomed the tuna fishing and processing industry to our remote islands. We worked, we toiled, we built. Today, our economy is more than 80% dependent on the U.S. tuna industry.

As a Senior member of the House International Relations Subcommittee on the Western Hemisphere, I fully support Ecuador's efforts to curb drug production. But I firmly believe that the issue of preferential treatment for canned tuna should be debated on its own merits. I do not believe a discussion about tuna should be couched in the rhetoric of an anti-drug campaign. However, if we want to talk about drugs, I want to be perfectly clear.

I do not believe American Samoa should be penalized for practicing the principles of fair trade. I do not believe American Samoa should be placed at a trade disadvantage because it has no past or present affiliation with drug production. The fact of the matter is whether or not canned tuna from Ecuador is given preferential trade treatment has little to do with whether or not drug production in Latin America will be curbed.

Beyond this, Ecuador is not lacking for products or commodities to export. In fact, Ecuador has substantial oil resources and a GDP purchasing power parity of $37 billion. Ecuador exports $5.6 billion in products and commodities, including petroleum, bananas, shrimp and coffee. According to some analysts, two-way trade between the United States and the Andean region has more than doubled to $28.5 billion a year since enactment of the Andean trade agreement in 1992. With this kind of growth, are we really supposed to believe that Ecuador has to corner the tuna market in order to fight the drug war?

I believe it is important for the people of American Samoa to know that Ecuador is rapidly becoming the 3rd largest supplier of albacore to the U.S. If Ecuador is allowed duty-free access, it will become the largest supplier of light meat tuna to the U.S. No matter what others may contend, this will affect the local economy of American Samoa and the global tuna industry at large.

What Lies Ahead

In August of 2001, the U.S. Senate Finance Committee held a hearing on the matter of S.525, the Andean Trade Preference Expansion Act. Star Kist testified at this hearing. At no time did Star Kist inform our local Legislature, the Governor's office, or my office that it intended to support an international trade measure that would wreak havoc in the global tuna industry and cause insurmountable financial problems for our Territory.

Star Kist, of course, is under no obligation to inform any of us of its intent. However, after a 40-year relationship together, common courtesy dictates that Star Kist would have considered our views and asked for our input before arbitrarily supporting a trade agreement that seriously threatens our way of life. Star Kist maintains that it did not inform any of us because the ATPEA will not affect us.

My friends, the U.S. Congress knows that the ATPEA will affect American Samoa. Ecuador knows. Mexico knows. The Southeast Asian nations know. The U.S. State Department knows. The U.S. Trade Representative knows. Chicken of the Sea knows. Bumble Bee knows. The U.S. boat owners know. Governor Sunia knows. Our people know. The ATPEA will affect American Samoa.

As you are aware, I brought this matter to the attention of the Governor and the Fono on August 24, 2001. From August to present, I have worked to build a strong base of bi-partisan support to protect the interests of American Samoa. In October, more than 10,000 residents of American Samoa joined me in this effort. In November, Governor Sunia pledged his support. Today, the Fono is also considering whether or not to take a more public stand in this international trade matter.

On a personal note, I am appreciative that the Fono has taken the initiative to hold this public hearing. I am also grateful for those in our local business community who have been courageous enough to stand up and be counted. I thank them for their letters of support. I thank everyone who stands united in protecting the interests of American Samoa.

As a matter of record, I believe it is important to reiterate what has already transpired so that the Fono can determine what path it may wish to pursue. In October, the U.S. House took up H.R. 3009 without a hearing and passed the ATPEA with the understanding that a compromise would be reached on the issue of canned tuna. Congressman Bill Thomas, Chairman of the House Ways and Means Committee, gave me his personal assurances that he would work with me to protect American Samoa.

In December, the Senate Finance Committee considered S.525. Prior to the mark-up, Senator Daniel Inouye (D-HI), Senator Daniel Akaka (D-HI), Senator Frank Murkowski (R-AK), Senator Ted Stevens (R-AK) and Congressman Randy "Duke" Cunningham (R-CA) joined me in sending a letter to Senator Max Baucus, Chairman of the Senate Finance Committee. In this letter, we expressed our opposition to the inclusion of canned tuna in S.525.

We also worked with Chicken of the Sea, Bumble Bee, and the U.S. tuna boat owners to craft a compromise amendment. Although Star Kist objected to our compromise, we gathered enough votes to secure its passage. Senator John Breaux (D-LA) was kind enough to offer the amendment. Senator Majority Leader Tom Daschle (D-SD), Senator Max Baucus (D-MT) -- Chairman of the Senate Finance Committee, Senator Orrin Hatch (R-UT) -- Ranking Member on the Senate Finance Subcommittee on International Trade, Senator John Rockefeller (D-WV), Senator Frank Murkowski (R-AK), Senator Kent Conrad (D-ND), Senator Blanche Lincoln (D-AR), Senator Robert Torricelli (D-NJ), Senator Olympia Snowe (R-ME), and Senator Craig Thomas (R-WY) supported our compromise in a 11-9 vote.

S.525 has since been reported out of Committee and is scheduled to be taken to the floor of the Senate in late February or early March of 2002. Once S.525 is reported out of the Senate, the House and Senate will then conference. During these discussions, the final terms of the Andean Trade Preference Expansion Act (ATPEA) will be determined.

Where We Stand

Although American Samoa cannot protect is market-share indefinitely, the Andean countries must compromise. We cannot, we must not allow the Andean countries limitless, duty-free access to the U.S. market. If we do, we stand to lose. For every million cases that enter the U.S. duty-free, American Samoa will lose -

• 270 jobs
• $18 million in processing revenue
• $5 million in utilities, overhead, local economy
• $1.5 million in wages
• Thousands of dollars in lost tax revenue

To minimize our loss, the compromise amendment limits the amount of duty-free canned tuna that Ecuador can send into the U.S. The compromise also includes a provision to ensure that the tuna is caught by Andean or U.S. flag ships. Chicken of the Sea, Bumble Bee, and the U.S. tuna boat owners support this amendment. Star Kist does not. To date, Star Kist has offered no compromise of its own. Ecuador, on the other hand, has agreed to continue discussions

One interesting development is that the Ecuadorian boat owners have agreed to support our source of origin provision. The source of origin provision ensures that the tuna is caught by Andean or U.S. flag ships. We have included this provision because more than 56% of the flag ships in the Eastern Pacific Tropic (EPT) are non-Andean. We have also included it because Ecuador is rapidly becoming the third largest exporter of canned/pouch albacore to the U.S. yet harvests very little of the raw tonnage.

In fact, nearly 39% of all albacore is harvested by Japan. Taiwan harvests 27%. The EU harvests 15%. The U.S. harvests 7%. Much of this albacore is caught in the Western Pacific Tropic (WPT) and is off-loaded on our docks in American Samoa. However, if Ecuador gets unlimited, duty-free access, albacore will be unloaded in Ecuador and our docks will go dry.

As a case in point, StarKist recently purchased 1,000 tons of albacore in Taiwan at a retail value of approximately $7 million and shipped it on the Longshoon to Ecuador. Needless to say, StarKist is the only act that opposes our source of origin provision.

For the life of me, I do not understand StarKist. Why is it that StarKist supports Taiwan? Why is it that StarKist supports Ecuador? Why is it that StarKist supports every low cost labor area in sight but cannot bring itself to support the people on whose back it built its billion dollar industry?

Part of the answer lies in albacore. More than 30% of tuna sold in the U.S. is albacore. More than 70% of the tuna sold in the U.S. is light meat. There is approximately three times as much profit in albacore as in light meat tuna. If we do not protect our albacore market, I can assure you our docks will go dry.

Ecuador understands this. This is why Ecuador boat owners support our source of origin provision. Why should Taiwanese fishermen fish in their waters? Why should Taiwanese fisherman pocket the profit from albacore? Ecuador will not stand for this and neither should we.

Ecuador is committed to developing its own albacore fishing industry. We should be committed to doing the same. Why do we let Japan and Taiwan harvest the albacore of the Western Pacific Tropic? Why haven't we developed our long-line albacore business? The U.S. government excluded American Samoa from the Fair Labor Standards Act more than 40 years ago on the promise that the tuna industry would help us build our fisheries. Where has StarKist been for the past 40 years?

For more than six months, StarKist has repeatedly testified that there is no room to expand in American Samoa. Yet our albacore fisheries could and should be developed. If StarKist is our friend, let our partner join with us in building an albacore industry for the Pacific Island nations. Chicken of the Sea stands willing to assist us. What about StarKist?

Conclusion

I am deeply disappointed that StarKist continues to insist that the ATPEA will not affect American Samoa. Every thoughtful person, every thoughtful nation, every thoughtful company engaged in this discussion knows that the outcome of the ATPEA will affect American Samoa one way or the other. It is unconscionable that our friends at Heinz would intentionally lead this Fono and our people to believe otherwise.

I stand firmly committed to working out a fair and reasonable compromise. I want to be helpful to our canneries. I want to be helpful to our boat owners. I want to ensure that the interests of American Samoa are protected. With this understanding, Minister Moeller and I will resume discussions in early February. I am hopeful that the Fono will be able to deliberate on this matter prior to these discussions so that we may be united in this time of national crisis.