[Congressional Record Volume 141, Number 32 (Tuesday, February 21, 1995)]
[House]
[Page H1955]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            MEXICAN BAILOUT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Oregon [Mr. DeFazio] is recognized for 5 minutes.
  Mr. DeFAZIO. Madam Speaker, a lot of news is about trade today and it 
is all bad or it is bad if you care about the economic future in the 
United States and you care about the conditions of working people and 
wages in the United States. Might be good if you are a multinational 
corporation and looking for cheap labor elsewhere and looking for ways 
to profit. But not to further the future and the economic prosperity of 
our own Nation.
  The administration is very proud they finally struck a deal on the 
Mexico bailout. Great deal: $20 billion, $20 billion up front from the 
United States of America. Mr. Kantor, the special trade representative, 
is downright proud that we were able to get this deal. And it is a 
really bad deal for people on both sides of the border, it is an 
incredibly bad deal for the people of Mexico. It is expected that it 
will cause a recession in Mexico, it will drive interest rates up to 50 
percent in Mexico, it will cause businesses to fold in Mexico because 
most of them have adjustable loans so their rates are going up 
dramatically and quickly.
  Banks will fold in Mexico. And wages are now at 40 percent of the 
level of 1980, despite the increases in productivity.
  Well, maybe it is a good deal on our side of the border and that is 
why he is so happy. Well, maybe not.
  First off, $20 billion at least. We do not know how much money the 
Federal Reserve has secretly shipped to Mexico, how much we are 
involved in the funds coming from the international institutions.
  But it is a lot of money. And money that could have been spent 
productively here at home.
  But beyond that we have some analysis now, analysis by DRI McGraw 
Hill, a private consulting firm in Lexington, Massachusetts. It says 
that U.S. exports to Mexico will drop by $10 billion this year, leading 
to a loss of 350,000 U.S. jobs. So we are going to pay $20 billion of 
our taxpayers' money to ship 350,000 family-wage jobs to Mexico. Now 
that is a great policy.
  But they tell us do not worry, it is all short term, it all will get 
better. In fact, Chase Manhattan has a memo and it says quite frankly 
they can fix the problems down there in Mexico, they just have to do a 
couple of things. The government will need to eliminate the zapatistas 
to demonstrate their effective control of the national territory and of 
security policy, if they want to encourage further investment in 
Mexico.
                              {time}  2210

  It seems Chase Manhattan is pretty upset that they wagered--and that 
is what this is about--wagered a huge amount of money in Mexico trying 
to get obscene rates of return. Now they are upset that the junk bonds 
they bought have turned truly to junk and are worthless.
  These are policies that are not in the long-term interests of the 
United States of America, nor the people of Mexico. It is time that we 
began to get straight about our trade policy in this country.
  I introduced legislation earlier this year to repeal the benighted 
NAFTA Agreement, and at the time people thought, ``Well, that is a 
pretty far-out thing.'' I would say, given the events since then, given 
the massive bailout, given the huge loss of jobs we now admit we are 
going to suffer into the indefinite future, is it not time to revisit 
that agreement?
  It is not good for people on either side of the border. It causes 
tremendous harm.
  Let us rip it up and start over again.

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