[Congressional Record Volume 141, Number 11 (Thursday, January 19, 1995)]
[Senate]
[Pages S1129-S1130]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          INTERNATIONAL TRADE

  Mr. DORGAN. Mr. President, I wanted to just touch briefly on three 
items this morning. I want to talk about some trade negotiations that 
begin today in Beijing, China. Unfortunately, it tends to glaze over 
the eyes of many people once you start talking about international 
trade.
  But I will talk about trade because on the car radio this morning I 
heard that the trade figures released this morning show that our trade 
deficit for November is now close to $10.5 billion, up 4 percent, and 
we are undoubtedly going to set another record trade deficit in the 
history of this country--the largest single trade deficit in the 
history of this country. It is a crisis, but you do not hear anybody 
around here gnashing their teeth about it. We talk about the budget 
deficit, which is also a very serious problem, but the trade deficit 
that we have with other countries must be ultimately repaid by a lower 
standard of living in this country.
  I want to talk about our trade deficit just for a moment because in 
my judgment it is out of control. It represents a bipartisan failure, 
Republicans and Democrats, jointly hugging a strategy on trade that is 
fundamentally hurting this country.
  Today, negotiators from the United States are in Beijing, China, and 
will begin negotiations with the Chinese. Our trade problem is a 
serious problem that extends in many directions, the most interesting 
of which, and serious of which, are with Japan and China. Japan's trade 
surplus with this country will exceed $60 billion again this year. 
China's trade surplus with the United States--or our deficit with 
them--will come very close to $30 billion.
  I want to show the Senate a piece of information that I think 
demonstrates why our trade policies result from a bankrupt strategy. At 
a time when China is ratcheting up this enormous surplus with us--in 
other words a deficit that we have with them--shipping us boatloads and 
planeloads of Chinese goods, flooding our market with Chinese goods, 
they also need things that we have. Among other things, they need 
wheat. They had a short wheat crop this past year and so they must 
[[Page S1130]] import a lot of it this year--about 11 million tons, the 
Department of Agriculture expects.
  Where are they buying their wheat? From us because they are flooding 
our markets with their goods and running up this trade surplus? Oh, no, 
not mostly from the United States. They are off price shopping for 
wheat in Canada and Argentina.
  I want to show a graph that demonstrates the absurdity of what is 
going on. This line represents our trade deficit with China. You can 
see what has happened there--straight up. Straight up. And this line 
demonstrates the United States share of Chinese wheat purchases. You 
can see what has happened there--down.
  As our trade deficit with China goes up because they flood our market 
with Chinese goods, they are off shopping elsewhere for wheat in Canada 
and Argentina.
  I come from a very small town. In my town, there is an obligation. If 
someone comes and buys from your business, and then you need something 
that they have, you have an obligation to go buy from them. That is the 
way it works.
  But that is not the way it works in international trade, 
unfortunately. It is a case of Uncle Sucker saying, ``Our market is 
wide open. Do what you want. You have no reciprocal obligation to our 
producers who want to sell in your market. You can go buy the things 
you need elsewhere and you can still access the American market.'' 
Something is fundamentally haywire in this trade strategy. It is 
hurting this country badly and it must stop.
  I have written to Agriculture Secretary-designate Glickman and Trade 
Ambassador Kantor today, saying when these negotiators are in Beijing 
they ought to tell the Chinese they have reciprocal obligations in our 
marketplace. They need wheat? Then they buy wheat from us. If they need 
what we produce in dozens of areas, they buy from us. They have an 
obligation. Either we, with our trading partners, are going to work 
toward balanced trade relationships or we are not. If they are not 
willing then we ought to change the trade strategy we employ with those 
trading partners--and we ought to do it soon.


                        Mexico's Monetary Crisis

  Let me make two other points. One, about the issue of the bailout for 
Mexico. I have not spoken publicly about it, but I have grave 
reservations about it. And I want to tell you why. Not that I am 
unconcerned about Mexico. It is our neighbor. It faces a financial 
crisis and we must respond in some manner.
  But it in some ways relates to what I just spoke about in our trade 
relationship with China, Japan, and others. That is, trade and business 
relationships among nations should be reciprocal: There should be a 
sharing of economic responsibilities among nations who trade and do 
business with each other. I am wondering if that kind of shared 
responsbility is happening among nations who do business with Mexico.
  What is the current account balance deficit in Mexico? Mexico has had 
to float bonds in order to underwrite a current account deficit. What 
does the current account balance deficit in Mexico result from? Largely 
from a trade deficit. Who is the trade deficit with? Us? Oh, no. No, 
very little of it is with the United States. Mostly with others.
  I do not have all the information because I cannot get it. I have 
asked for it repeatedly from those in our Government who should provide 
it, and I am going to get it today, I guess, after some delay. But at 
least the sketchy information I do have suggests that a fair portion of 
Mexico's trade deficit comes from Japan and a fair portion of Mexico's 
trade deficit comes from Europe.
  One would ask the question, then, if they issue public debt in Mexico 
to finance a current account balance, and that current account balance 
results from trade deficits, and if the trade deficits are deficits 
with Japan and Europe, should then the American taxpayer be the 
guarantor of a bailout of Mexico's trade relationship with Japan and 
Europe? Or is the new global order one in which there is a 
responsibility for other countries trading with Mexico, including 
Japan, including the Europeans, and others who have a trade 
relationship with Mexico, to own up to their responsibility?
  Why is it only America's responsibility to come forward and protect 
Mexico in a monetary crisis? In my judgment this is a time to say to 
the countries that run a trade surplus with Mexico, or who have 
otherwise caused an outflow of money from Mexico, to step forward and 
say they will bear their share of responsibility. That is an issue 
which I think is very important.

  I am greatly troubled by the call for a unilateral bailout of Mexico 
by the United States. I do not have all the information yet, but I 
intend to get it very soon. When I do, my hope is that we will be able 
to discuss this in the context of the obligations of others around the 
world. What are the obligations of the Japanese and the Europeans, and 
why are they not meeting them?

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