[Congressional Record Volume 141, Number 95 (Monday, June 12, 1995)]
[Senate]
[Pages S8128-S8129]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 NAFTA

  Mr. DORGAN. Mr. President, this morning I was going through some mail 
in my office and I received a letter from a young woman in Fargo, ND. I 
shall not use her name because I have not asked her if it is 
appropriate to use her name. But she is a young woman who described a 
whole series of troubles. She was left with two children as a single 
parent, no training, not many skills, and jobless. She described her 
journey through the social services system to try to find a way to get 
trained and get a job. The letter is an inspiring letter from someone 
who is now working full time--thanks, she says, to the training 
programs, thanks to the help that she received from Medicaid and 
elsewhere. So this is a person for whom a job is a way out, a job is a 
way to take care of her children. A job is, for her, substantial self-
worth and respect.
  You forget, sometimes, how important jobs are until you read a letter 
from someone like this who did not have a job and now does, thanks to a 
lot of help from a lot of people, but especially thanks to her 
determination.
  I mention this letter about jobs because jobs are very important to 
the American people, and we have 10 million people out there--give or 
take a few--who are looking for a job today and cannot find one. We do 
not have enough jobs. We do not have enough good jobs that pay good 
wages in our country.
  About a year and a half ago we debated in the U.S. Senate what is 
called NAFTA, which many people will remember, the North American Free-
Trade Agreement. The contention was, if we would link our economy to 
Mexico's economy--and Canada's, too, but especially NAFTA was about 
Mexico--somehow we would have tremendous new opportunities in our 
country, or so we were told by the prophets of the day. We were told 
that linking the American economy to the Mexican economy would produce 
a burst of new jobs and new opportunity in our country.
  Some of us did not believe that to be the case. Some of us believed 
that if you linked an economy like ours with an average wage of $l5 to 
$17 an hour to an economy like Mexico, which still pays in many areas 
50 cents or $1 an hour--in other words, linking our economy to an 
economy whose wage base is a fraction of ours--we felt it would tip the 
table so that jobs in this country would move south to Mexico. The jobs 
would move south because big producers, big corporations want to 
produce where it is cheap, and sell back into our country.
  I know it may be a sore spot with some to start keeping score on the 
actual results of NAFTA. But after 1 full year's experience of NAFTA 
and after part of this year with NAFTA, I felt it was important to come 
to the floor of the Senate and describe what has happened with the 
United States-Mexico trade situation.
  A new study has just been released by Robert Scott of the Center for 
International Business Education and Research at the University of 
Maryland. Robert Scott used to work for the Joint Economic Committee 
here in Congress, of which I was a member. He did some analysis and 
some work while on that committee with respect to NAFTA and has now 
completed an evaluation of NAFTA with respect to the job impact in the 
United States.
  I want to commend to the attention of the Senate this study by Mr. 
Scott. It is interesting, thoughtful, and I think it is the only study 
I have seen that really looks at this in an appropriate way. Mr. Scott 
takes out the transshipments between the two countries. In other words, 
if Mexico receives something that is actually produced in another 
nation--for example, computers from Asia--and does not use the 
computers but re-exports them to the United States instead, those 
computers are not really Mexican exports and so they should not be 
counted in our measurement. Or, if another nation produces something 
and ships it to the United States but we do not use and simply 
transport it to Mexico, then it should not be considered an export from 
the United States to Mexico. These kinds of transshipments do not have 
a job impact of any significant nature between our two countries.
  So, Mr. Scott takes out the transshipments and takes a look at what 
is produced in the United States versus Mexico and what is consumed in 
each country. The question is, What has happened as a result of the 
United States-Mexico trade agreement as a result of NAFTA?
  Let me show you two charts. First, the United States-Mexico trade 
surplus, again taking out transshipments, we had a very significant 
surplus in Mexico. In 1992, it was $5.7 billion. In 1993, when we had 
NAFTA passed, it was $1.6 billion. Last year it shrunk to $.5 billion. 
And, if the first 3 months of this year are any indication--and almost 
all economists say it is--we will have a $15 billion trade deficit this 
year with Mexico.
  Take a look at that and see which direction we are headed. Are those 
prophets who predicted these wonderful things for America now looking 
at their chart and saying, ``Gee, this is wonderful''? I do not think 
so. We went [[Page S8129]] from a significant trade surplus with Mexico 
now to a very significant trade deficit.
  What does that mean in terms of jobs? Mr. Scott's study shows what it 
means in terms of jobs.
  What it shows is ``The Promise.'' We have all kinds of studies 
ranging from 220,000 to 2.8 million new jobs if we would just pass 
NAFTA. That is ``The Promise.'' The reality is last year we lost 17,000 
net jobs in the United States as a result of NAFTA. This year we are 
going to lose about 220,000 jobs in the United States as a result of 
NAFTA.
  If anyone has other figures and would like to debate these, I would 
love to do so on the Senate floor. I would be glad to take time to do 
it. These are the real numbers. Take all of the transshipments out, and 
take out all of the statistical nonsense and find out what the net 
effect of jobs is. The net effect of jobs is that in the United States 
we were promised massive new job creation. And what we have gotten is a 
massive loss of jobs as a result of the United States-Mexico trade 
agreement.
  Mr. Scott's study also shows that the jobs that we have lost as a 
result of the imports coming into this country are good jobs, good-
paying jobs.
  What are we importing from Mexico? Is it items produced by unskilled 
workers? No. The top imports are electrical and electronic machinery, 
equipment and supplies, transportation equipment, automobiles, 
automobile supplies, and automobile parts. That is what is being 
shipped into this country from Mexico. Those kinds of products 
represent good, high-skill jobs. Those are the jobs this country is 
seeing displaced. Those are the jobs this country is losing.
  We note that in Mexico there is an area along the border called 
maquiladora plants. The maquiladora plants are the creation of big 
companies, many of them United States companies, building manufacturing 
and processing plants just across the border to produce in Mexico and 
ship to the United States.
  What have we seen along the border since NAFTA?
  There were about 2,000 maquiladora plants in 1994, and recent news 
reports tell us that the Mexican authorities are approving applications 
for two to three new plants, new manufacturing plants, every single 
day. At this rate of approval, the number of factories in the 
maquiladora zone in Mexico will increase by 50 percent in 1995. These 
plants are not being built to produce for Mexico. These plants are 
being built to dramatically increase exports from Mexico to the United 
States and dramatically displace jobs in the United States.
  Mr. President, I do not know how those who were paid for those 
elaborate NAFTA studies that predict massive numbers of new jobs for 
America can walk around holding their head up these days when they see 
what has happened with Mexico. Yes. Some of it is because Mexico 
devalued the peso. I understand that. But we should never have a trade 
agreement with anybody under any condition that does not have an 
adjustment for currency fluctuations anyway.
  But the point is, this country got with NAFTA what it got with the 
Canadian trade agreement, which is what it got with GATT--we lost in 
the trade negotiations; we lost in a way that hurts American workers 
and costs our country desperately needed good-paying jobs for the 
American people.
  I hope that in the coming weeks, as a result of Mr. Scott's study, we 
can have a real debate again now about NAFTA and maybe renegotiate 
NAFTA. Maybe this trade agreement was not such a good idea. If ``The 
Promise'' was nirvana, massive numbers of new jobs and a bright promise 
for America, but the reality is massive loss of jobs, big corporations 
taking advantage of the American people under trade rules they wanted 
and they pushed for, going across the border to produce in Mexico and 
to ship back into this country, maybe, understanding all of that, it is 
time for our country to decide these trade agreements do not make so 
much sense after all.
  Maybe our trade agreements ought to be trade agreements that 
represent the interests of our country, not just the interests of 
multinational companies who want to produce, yes, in Mexico, but also 
in Indonesia, Malaysia, and all around the world where they can get 
people to work for 12 cents an hour, 12-year-olds working 12 hours a 
day, to produce a product they can ship to Pittsburgh, Denver, or 
Detroit. That is not fair trade. That is not trade that helps our 
country. That is not trade that produces a vibrant, strong American 
economy.
  Every time we have these debates, those who support these trade 
agreements that, in my judgment, have irreparably injured our economy 
and have put Americans into a circumstance where they are looking for 
good jobs and cannot find them. They say, ``Well, the issue is we have 
to have competition. We have to compete. If American workers and 
American business cannot compete, then we are doomed in the 
international economy.''
  My response is: Compete with what? Do you really want the American 
people to have to compete with people working for 25 cents an hour or 
working in factories that are unsafe, working in factories that dump 
chemicals into the streets and pollution into the air? If that is what 
we should compete against, as far as I am concerned, count me out. That 
is not fair competition. It is not what we fought 50 years for in this 
country on the issue of decent living wages, good environmental 
standards, good work, and safety laws. That is not what we fought 50 
years for in this country, to surrender all of that, to give all of 
that up, because the largest enterprises in the world want to construct 
an economic circumstance where they can produce where it is cheap and 
sell into established marketplaces. Such a scheme consigns this 
country, in my judgment, to a future with fewer jobs, especially fewer 
good jobs and fewer good paying jobs.
  I hope that soon we will see more aggressiveness and more activity on 
the issue of requiring fair trade.
  Mickey Kantor and the President are confronting the Japanese on the 
trade issue, and it requires some strength and courage to do that. None 
of us want a trade war. We understand that. But this is the first time 
that an American President or a Trade Ambassador has stood up and said 
wait a second; there is a price to pay to trade with us and the price 
is fair trade. Our markets are open to you. You open your markets to 
us. That is what we call fairness in our country.
  I support the President. I do not want a trade war. It will not serve 
anybody's interests. But I want all of our allies to understand this is 
no longer post-World War II economic aid we are talking about. That is 
what our trade policy was for 50 years. Our foreign competitors are now 
strong and tough. Now we want trade fairness, and we insist on it.
  On the issue of NAFTA, let us keep score. I can understand missing 
the bull's-eye. I can even understand missing the target, we find a lot 
of folks do that around here, especially economists. But I cannot 
understand missing the bull's-eye, missing the target and shooting 
yourself in the leg instead and not have people in Congress decide 
maybe this was a bad decision. I hope all of us will rethink these 
issues and decide whether or not there is a different strategy or 
different approach that really supports good jobs in our country and 
does not give away our economic future with unfair trade strategies 
that do not work for the interests of America.
  Mr. President, I intend to send to other Members of the Senate copies 
of Mr. Scott's work, which I think is original, interesting, and good 
work that ought to point us in a different direction on trade policy.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Does the Senator suggest the absence of a 
quorum?
  Mr. DORGAN. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. EXON. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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