[Congressional Record Volume 140, Number 137 (Tuesday, September 27, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 27, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
               THE GENERAL AGREEMENT ON TARIFFS AND TRADE

  Mr. DORGAN. Mr. President, I came to the floor today primarily to 
talk briefly about GATT, the General Agreement on Tariffs and Trade. It 
does not mean very much to most people in this country. Yet GATT, or 
the General Agreement on Tariffs and Trade, the trade agreement that 
will come to the Senate and the House for approval, is one of the most 
significant pieces of economic policy and trade policy we will confront 
in a quarter of a century.
  It will be done, if some have their way, in a matter of a day, or a 
couple of days, or a week, sliding through the House and the Senate 
under a procedure called fast track.
  Fast track is just what it sounds like. In basketball they call it 
fast break. In trade they call it fast track. It means they are running 
down the court as fast as they can to get to the other end before 
anybody else gets set up for defense.
  Fast track on trade policies means that when a trade bill comes to 
the floor of the Senate there are no opportunities for amendment. You 
will approve it as is.
  GATT, a trade agreement with many, many nations around the world, 
will now be brought to us under a procedure called fast track. It will, 
in my judgment, disserve this country's economic interests if we decide 
to try to push GATT through the keyhole in the next week or 2 weeks 
under fast track without a thoughtful national public debate about what 
our trade policy ought to be.
  The fact is our trade policies are in disarray and have been for a 
long, long time. We are heading this year to the second largest trade 
deficit in the history of this country. If the pattern holds true, this 
year's trade deficit--that is, what we purchase versus what we export--
will be around $145 billion. This is not a deficit we owe to ourselves. 
It is one we have to pay at some point. And we will pay that with a 
decreased standard of living in this country.
  Fortunately, this administration has pursued better trade policies 
than the two previous administrations. Nonetheless, our trade policies 
are still out of kilter. Our trade deficit with Japan is about $60 
billion; with China, $24 billion. Those are just examples.
  GATT, although it will not be discussed in the bars and the barber 
shops and cafes around the country, represents the rules by which we 
trade with each other in this world.
  When I studied and taught economics, we taught about the doctrine of 
comparative advantage in which under a perfect world order each country 
would do what it does best and then trade with the other. That would be 
the most efficient world order. The assumption by those who preached 
free trade and a free market system--Adam Smith and Ricardo and the 
others--was first of all that capital is not mobile. Today it is mobile 
in an instant.
  Second, back in the good old days you not only had capital that was 
not mobile, but you had nations rather than corporations.
  Today, capital is mobile instantaneously to move any place in the 
world; and, second, today we have corporations rather than nations. 
Corporations encircle the globe as world citizens and decide here is 
what we want to do, here is how we want to produce, and here is how we 
want to access markets.
  The big corporate interests are saying is we want to produce where it 
is cheap to produce and sell in the established markets. We, as a 
country, have decided it is just fine with us if all of that happens 
because our consumers are advantaged by cheaper goods.
  The problem is our consumers used to have jobs in which to pay for 
those cheaper goods and, of course, when the production moved away the 
jobs also left. So now this country has a lower standard of living with 
lower wages than we had on average--adjusted for inflation--a decade 
ago, and more and more production jobs moving elsewhere. And most of 
the new jobs in this country are jobs that pay less.
  What does all of this mean? It means that we are heading toward what 
is called the British disease if we keep believing this kind of trade 
policy represents our economic interests. If we decide, as a country, 
that we should continue to measure our economic health based on what we 
consume rather than what we produce, we inevitably, as a country, will 
face a future in which our economy is atrophied.
  Put yourself in the shoes of a corporate enterprise that is a world 
citizen doing business all around the world. Its interest is to its 
stockholders. How does it make maximum profits with the resources it 
has under its command? Let us assume that this corporation produces 
shoes.
  In fact, let me cite just for a moment a piece that I think was in 
Business Week, that I read about a corporation employing someone who 
produces shoes. A corporation employs a woman outside of small town in 
Indonesia to work in a manufacturing plant for about 14 cents an hour. 
She works 10\1/2\ hours a day, 6 days a week, and makes about $35 or 
$37 a month. There is about 1\1/4\ hour labor in the pair of shoes that 
she makes. So, the pair of shoes, which is sent back to our market to 
sell for $80, has about 20 cents labor in their construction.
  A corporation that decides, I am going to make a pair of shoes or a 
jacket or shirt or whatever, has an opportunity to look at various 
approaches around the world on how it wants to produce. And for the 
same money, it has this opportunity--for the same manufacturing wage it 
can decide to do the following: It can hire 1 American, or it can hire 
23 Filipinos instead. It can decide to hire 42 workers in India as 
opposed to the 1 American. Or it can decide to employ 80 people in 
China as opposed to 1 American.
  Let me rephrase that, because I think it is important to understand 
what GATT is about. GATT says let us have free trade. It does not talk 
about standards, or wages, or livable conditions, at least in a way 
that is enforceable.
  We have minimum wages in this country. We have worker safety 
standards. We say you cannot employ kids except under certain 
circumstances and restrictions. We are not going to have 10-year-olds 
working in coal mines anymore because we have certain child worker 
standards.
  So my point is, we have decided the rules in our country so that 
those who work are able to get some sort of livable income. But GATT 
says let us begin trading and competing with other countries, many of 
whom have no similar kinds of rules.
  So we are saying, all right, if you want to produce something, you 
take a jet, you circle the globe and look for the opportunity to 
produce at the least cost. American workers, you compete. We are now a 
team. We have the U.S.A. jersey on. We are a competitive team to 
produce shoes or shirts or refrigerators. And this team of ours, with 
our average manufacturing wage in this country of about $15.50 or $16 
an hour, is competing. For an hour of labor you have the opportunity as 
producers, as a corporate producer, to hire 1 American, to hire 23 
residents in the Philippines for the same wage for the same hour of 
work, or to hire 42 people from India, or to hire 82 Chinese.
  What do you decide to do? You decide increasingly the production of a 
good many items will be done in areas where you can hire 80 people for 
the price of 1, as long as there is no price to access the marketplace 
back here in America.
  We tell corporations they can go hire those 80 people for the price 
that you pay for 1 American, and the product of that you can ship back 
into our marketplace without any problem at all because our marketplace 
is open and there is no access charge. You can just have free access. 
It does not matter.
  I am saying that makes no sense for us. Yes. We should have a trade 
agreement with the other countries whose economies are similar to ours.
  But does the new GATT make sense?
  Let me just show a chart of some of the wage rates of some of the 
countries involved in GATT. These are just a few because we are talking 
well over 100 countries. You have industrialized countries: the United 
States, Canada, Germany, France. As you see, Germany pays the highest 
average manufacturing wage of $25. The United States is about $16. 
Spain, Britain, and then what do you see? You see other countries. I 
could tail off on this map well down with Bangladesh, Sri Lanka and so 
on. You see China, Thailand; you see India, the Philippines.
  The question is do you have a circumstance of fair competition where 
you say to those who are producing, go ahead and produce where it is 
cheapest, and then access our marketplace?
  The American people have to understand we simply must not embrace 
trade rules that say it does not matter where you do business because 
we measure economic health based on consumers. If we continue with such 
mistaken policy, we consign ourselves to a future that is very, very 
dismal.
  We should want to compete, and we should not have to compete, for 14 
cents an hour wages. We should not want to, nor have to, compete for $1 
an hour wages. We have fought far too long in this country to bring up 
the standard of living so that families can work and care for 
themselves and improve their lives and educate their kids and provide 
opportunity for the future.
  It makes no sense for Americans to believe in this notion of so-
called free trade when we are taking about trade with countries who 
have no requirement that you must pay a living wage for work performed, 
or with countries who have no requirement on the kind of work or safety 
standards we believe to be imperative.
  I think it will not be in the best interest of the Senate, the 
Congress, or the American people if we decide in the next 2 weeks, let 
us take this giant piece of trade policy and shove it through the 
keyhole under fast track so that nobody gets a chance to catch their 
breath and ask what are we really doing here.
  I very much hope that the leaders of the Congress, the American 
people, and others, will decide this is far too important a policy for 
our country to push through Congress in a couple of weeks. We should do 
this next February, March, or April in the new Congress with a 
substantial national debate about what our trade policy ought to be.
  Is there a price for accessing the American marketplace? Is that 
price the requirement that you invest here, create jobs here, or at 
least that over there in the production sector you pay some notion of a 
living wage? Are there any requirements at all, or have we become 
slaves to this notions and slogans or so-called free trade?
  By speaking here today I know that I risk incurring the wrath of all 
the editorial writers, the business writers, and many others in New 
York and Washington, who decide that if you are not for free trade, for 
GATT, you are a xenophobic isolationist boob. That is the way they 
portray those who do not join the free-trade chants. What a bunch of 
nonsense.
  GATT is about jobs, about economic health, about American economic 
growth in the years ahead. If we cannot have a thoughtful discussion 
about GATT and our trade policy and do it not on fast track, but in a 
manner that serves this country's best interests, then I fear that the 
Congress, which ought to be the great debating place in our country, is 
not going to serve its constituents well.
  Along with several others in this Chamber, including the Senator now 
presiding, I have asked the leadership to give us an opportunity to 
have a straight up-or-down vote first on the question of waiving this 
body's budget rules in order to pass GATT. Implementing GATT is going 
to cost some money--an estimated $40 billion in 10 years--and increase 
the deficit. That is, the deficit will be increased if we pass this 
GATT agreement.
  Well, are we going to waive the budget rules? Are we unwilling to 
waive the budget rules on a whole range of things people need in this 
country, things that invest in human potential, human needs? Of course, 
we are unwilling to do that, because we have the discipline and we have 
decided there is a certain way to do things, and we ought not increase 
the deficit.
  Are we going to come to the floor and roll into fast track a budget 
waiver that says that for all the other things in this country that we 
felt were important, we were not going to waive the budget rules, but 
for GATT, that is just fine?
  It is not fine with me. We ought not waive the budget rules, and in 
my judgment, we ought not consider GATT under fast track this fall. 
This is a decision the American people ought to help make after the 
turn of the year.
  I yield the floor.
  Mr. KERREY addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from Nebraska is 
recognized.

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