[Congressional Record Volume 142, Number 26 (Thursday, February 29, 1996)]
[Senate]
[Pages S1400-S1402]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          INTERNATIONAL TRADE

  Mr. DORGAN. Mr. President, today is not a particularly busy day in 
the Senate, as everyone can see. The Senate is not scheduled for action 
for a bit. We have one vote scheduled, and I think probably not much 
beyond that for the rest of the day. I had asked yesterday to take some 
time to discuss an issue today on the subject of international trade.
  I noticed in this morning's paper, the Washington Post, an article 
that says ``Trade Deficit in '95 Worst in 7 Years.'' This was not on 
the front page, but in the business section of today's paper.
  I have talked on the floor of the Senate many times in the last 2 
years on the subject of international trade. The reason I came to the 
floor today was not only because we were going to have the figures on 
what last year's trade deficit was in this country but also because 
there is in the party of the Presiding Officer an aggressive, raging, 
fascinating debate these days about trade issues. One candidate who is 
out on the hustings campaigning for votes is talking about trade in a 
particular way, and then several others are responding to it. It is 
somehow as if this were the first time trade was being discussed in 
this country.
  I have been on the floor of the Senate at least 10 or 12 times in the 
last 2 years talking about international trade. There are some trade 
myths that I want to talk about today. This will be the first of a 
series of presentations which I intend to make on trade. Today I will 
be dealing with the overview, and then in subsequent days I will be 
dealing with the problems that cause the trade deficit.
  The reason I come to the floor is the myths that exist on trade that 
are now being perpetuated in the Presidential campaigns. These are 
generally myths spread around this town that are held dear by many 
people in this town:
  First, ``Balancing the Federal budget is important; reducing our 
Nation's trade deficit is not.''
  We have two deficits in this country. We have a budget deficit in the 
Federal Government. It hurts this country, and we ought to deal with 
it. People on both sides of the aisle are wrestling with the priorities 
of how do you solve the budget problem and put our budget in balance.
  I know some on the other side say, ``Well, we have all the answers,'' 
and some here say, ``No; we have all the answers.'' The fact is 
everyone would like to do it the right way. We should balance the 
Federal budget, and we should do it with the right set of priorities. 
But, it is not the only deficit that matters. We have a trade deficit 
in this country that is very serious and that has been growing. As we 
address the budget deficit, we must also address this burgeoning trade 
deficit.
  The second myth is that more free-trade agreements will eventually 
eliminate the trade deficits.
  The more free-trade agreements we have, the higher the deficits have 
been. It is not more agreements that matters. It is the kind of 
agreements that counts. Are these trade agreements fair so that 
American workers and producers can compete and have an opportunity to 
win in international trade competition?
  Another myth is that there is a common solution for our trade deficit 
problems with our trading partners: free trade.
  There is not one common solution. Free trade is irrelevant if the 
trade is not fair.
  Fourth is that trade deficits are not very important factors in the 
U.S. economy.
  Trade deficits are critically important factors in our economy. They 
relate to what we produce. Those folks in America who measure our 
country's progress by what we consume rather than what we produce do 
not understand this. What an economy will be in the future is related 
to what it produces. The production of real new wealth is the source of 
the engine of progress for the future.
  And, finally, the fifth myth is that seeking fair trade for America 
and a level playing field for our country equals protectionism.
  I am not a big fan of Pat Buchanan. He is raising trade issues. 
Perhaps he is raising them in some ways I would not. Some parts of his 
argument have some dark edges that I do not like. Yet the fact is every 
time someone raises the question of the trade deficit in this country, 
they are called a xenophobic protectionist stooge of some type. They 
are accused of wanting to build a wall around America, or labeled as 
one of a bunch of isolationists.
  What a bunch of nonsense. You can stand up for the economic interests 
of this country, you can stand up for American producers and American 
workers, and you can stand up for the symbols and the reality of fair 
trade without being isolationist or protectionist.
  I would like to run through a series of charts and talk about where 
we are.
  The first chart is a chart which talks about the trade deficit and 
the Federal budget deficit. Actually, this is the Federal budget 
deficit that is listed both by the President and by the Congress. The 
budget deficit actually is higher than this because this includes the 
Social Security revenues. Yet, they advertise the budget deficit as 
$164 billion last year. The merchandise trade deficit is $174 billion. 
Our total trade deficit is slightly lower than that. The merchandise 
trade deficit to me represents the important aspect because it is what 
we produce and what we manufacture. This critical sector of our economy 
has a $174 billion trade deficit.
  We cannot solve the problems of the budget deficit or the trade 
deficit without understanding how they relate to each other and how 
they relate to our national economy.
  Both of the deficits undermine our country's economy. The budget 
deficit does. And, so does the merchandise trade deficit. Both are 
economic warning flags that our country needs to do a better job in 
growing our national economy. Both mean we have to give special 
attention to our wage base and to our productive sector.
  We had a budget deficit--which is really not measured appropriately--
of $290 billion in 1992. That is down to $164 billion now under this 
measurement. But the merchandise trade deficit at the same time is 
going up. It is up to $174 billion.
  Now, that represents a loss of jobs and a loss of production 
facilities in our country. I noticed in the article today, the trade 
officials said, ``Well, gee. We exceeded all previous years in our 
exports of goods from our country.'' Yes, that is true. We also 
exceeded all previous years and previous expectations of the import of 
manufactured goods into our country. The imported goods we bring in 
that are manufactured in other places around the world represents 
nearly one-half of what we manufacture in America today.
  Let me go to another chart that deals with our trade deficits. Again, 
no one wants to talk about this. Nobody will talk about it. Nobody 
comes to the Senate floor and talks about trade very much. 

[[Page S1401]]

  These red lines represent America's trade deficit. These red lines 
represent the choking of enterprise in this country and represent the 
movement of jobs elsewhere.
  This is the second straight year of records in trade deficits. It was 
not too long ago when we would have trade deficits of $5 or $10 billion 
in a year. At that time back in the 1970's we had Members of Congress, 
including some chairmen of committees, talking about emergency 
legislation to impose tariffs on this and that and the other thing. Now 
our trade deficit is burgeoning and nobody seems to care at all.
  Well, the simple fact is that these red lines mean American jobs and 
American factories are moving outside our country. They are moving from 
America to other countries.
  There are a lot of reasons for this. Some of them are probably our 
fault but most of the trade deficits that we experience are not. If you 
would look at this chart which shows the countries with which we have 
the largest trade deficits.
  First, there is Japan. We have nearly a $60 billion trade deficit 
with Japan. This has been going on year after year after year. I am 
going to come to the floor and make a special presentation just on our 
trade deficit with Japan.
  Some say, ``Well, we have to be more competitive.'' Competitive how? 
How can you compete if you cannot get into a market? It is unforgivable 
for us to not do something to bring this trade imbalance down. We ought 
to have balanced trade to Japan. We ought not have a $60 billion 
deficit.
  With China we have a $34 billion trade deficit. And, it is ratcheting 
up year after year after year. Our country is a virtual cash cow for 
Chinese hard currency needs. Because of these trade deficits, it means 
jobs are leaving America and being displaced by imports from Japan and 
China.
  With Canada we have an $18 billion trade deficit. With Mexico it is 
$15 billion. That is a combined trade deficit of over $30 billion with 
our neighbors with whom we have an agreement called the North American 
Free-Trade Agreement [NAFTA]. And that trade is moving in the wrong 
direction, too. It has been spiking way up.
  In fact 2 years ago we had a $1 billion trade surplus with Mexico. 
Now it is a $15 billion trade deficit with Mexico. Can anyone 
reasonably stand and say that this makes sense? First, we pass NAFTA. 
Then, we go from a trade surplus of $1 billion to a trade deficit of 
$15 billion.
  Then there is Germany with which we have a $15 billion trade deficit.
  You can see what is happening with these trade deficits. I intend to 
come to the floor of the Senate and talk about each of these countries. 
We need to discuss our trade situation with Japan, with China, and the 
combined deficit with Canada and Mexico. We need to discuss what causes 
it, and what we can do to deal with it. We ought to have balanced 
trade. We ought to have aggressive and robust trade between our 
countries. I would never suggest that we put walls around our borders 
or that we would in any way decide that we will not compete. But, I am 
sick and tired of people suggesting that those of us who are concerned 
about our trade deficit are somehow protectionists who are not 
interested in the well-being of our country or who want to put a wall 
around our country.
  That is not the case at all. What I want is to stop having our 
producers have their arms tied behind their backs when they are 
competing in other countries.
  Let me talk just for a moment about what these trade deficits mean. 
The common denominator is that every $1 billion in exports means 20,000 
new jobs in America. You can also compute that to the displacement of 
exports by imports coming in. What does it mean when goods are 
manufactured elsewhere and are no longer manufactured here?
  Our merchandise trade deficit this year means a loss of 3.5 million 
jobs in this country. Most of these are manufacturing jobs, and most of 
these manufacturing jobs are the better paying jobs in this country. 
Just the increase in the trade deficit from 1994 to 1995 is a loss of 
166,000 jobs. That is just the increase.
  Now, we can see a lot of press reports and a lot of newspapers talk 
about how many jobs exports create. But, have you seen a press report 
that talks about losing 166,000 jobs just because of the increase in 
the trade deficit this year versus last? I do not think so. You do not 
see many reports about this problem.
  Yet, this is a problem that relates to every family in this country. 
These families sit around their dinner tables and ask themselves 
whether life is better or is it tougher. And what they say in 60 
percent of the American families these days is that they are working 
harder. If you adjust for inflation they make less money than they made 
20 years ago, and they have less job security.
  The anxiety in this country is not misplaced. People know. People 
know why they are anxious. They are anxious because they see jobs 
leaving and they see their opportunities here to be less secure. The 
jobs they have had for 20 years with the same company are less secure. 
They know that they work harder. Their families have not kept pace with 
inflation and they are actually making less money. Is there any doubt 
about the reason that workers in this country are angry?
  What do we do about that? Well, what we do is decide that this 
country cannot do what it did 30 years ago when our trade policy was 
foreign policy. I grew up in a very small town. Every day when I went 
to school. I walked to school and understood just viscerally that 
America was the biggest, the best, the strongest, the most, and we 
could beat most any economy in international trade with one hand tied 
behind our back.
  That is not true anymore. Today we face shrewd, tough international 
economic competitors. We ought to face them in fair competition. I do 
not mind that. We can win that competition.
  But, we cannot win competition with Japan when their markets are 
closed to our goods. We cannot win in competition with China when they 
do not see and understand that when they ship all their goods to us, 
they have a reciprocal responsibility to buy their major supply of 
wheat from us. It does not make any sense to me, when I look at these 
trade relationships.
  Somehow, I think the construction of our trade policy is for large 
corporations who no longer say the Pledge of Allegiance, and do not 
sing the national anthem. By American law they are artificial people. 
They can sue and be sued. They can contract and be contracted with. 
And, God bless them, they have created a lot of wonderful things in our 
country.
  Today many of them see their role other than as an American 
corporation. They, with others, are now economic international 
conglomerates interested in profits. What they decided to do is to 
construct a new economic model. That model says, let us produce our 
goods where we pay 14 cents an hour to a 14-year-old worker, 14 hours a 
day, and ship them to Fargo or Tulsa or Cheyenne and have an American 
customer buy them.
  That may sound good because in the short term, it might give the 
customers a good deal. But what it really means in the short, 
intermediate and long term is that jobs that were producing in this 
country are now in Indonesia, Malaysia, Taiwan, Sri Lanka, Bangladesh 
and China, and all around the world.
  The American consumer also plays a role in this. All of us have 
people come up to us who are wearing shirts made in China, shoes made 
in Italy, shorts made in Mexico, driving cars made in Japan and 
watching television sets made in Taiwan, and ask us, ``When are you 
going to do something about these jobs in America? Why are so many jobs 
leaving our country?'' Well the answer is because we have circumstances 
of trade that allow our market to be wide open to virtually anyone in 
the world who wants to produce under any set of circumstances.
  We fought for 75 years on the question of what is a living wage and 
what is a fair wage. What about safety in the workplace? What about 
child labor laws? Some corporations have decided we can eclipse all of 
those meddlesome issues with one hop. We can avoid all the questions of 
hiring 12-year-olds by producing in some country that allows it. We can 
avoid all the problems of not being able to pollute the air and water 
in the United States by going to produce in a country where you can 
pollute the air and the water. 

[[Page S1402]]

  We can resolve all the questions of what is a living wage by deciding 
not to pay a living wage in some other country where the political 
leadership does not care. You can hire 14-year-olds and you can pay 
them 14 cents an hour. That is not, under any standard, fair trade, and 
it should not be allowed.
  The production from those circumstances of trade ought never come 
into this country. They should compete with American men and women, 
working day after day in factories in this country, who expect to 
compete but expect the competition to be fair.
  My intention in the coming weeks is to make a series of presentations 
about where we are in international trade and what we ought to be doing 
about it.
  First on the agenda that we ought to have is to hold NAFTA 
accountable to its promises. You cannot pass a trade agreement that had 
bountiful promises of massive new jobs only to discover that we have 
lost a massive amount of jobs in our country--and then say, oh, that 
did not matter. It does matter. Let us make sure these trade agreements 
are made accountable. If they are not, let us change them.
  Second, let us at least stop subsidizing plants that close in this 
country and move overseas. We had one vote on that last year. I offered 
an amendment. It was voted down. I tell you it does not require much 
thinking to understand that if you do not stop the bleeding, you cannot 
save the patient.
  No country ever ought to have a circumstance in which their tax code 
says, ``We'll give you a good deal. If you stay here, you'll pay taxes, 
but if you close your plant, fire your workers, and move your jobs 
overseas, guess what, we'll give you a tax break, we'll give you a big, 
juicy tax break; $300 million, $400 million a year we'll give you to do 
that. Close your American plant and move it overseas.''
  If we cannot shut that insidious provision in our Tax Code down, 
there is something wrong with us. I am going to give everybody in this 
Chamber a chance to vote on this a dozen more times until we get it 
passed. I hope we can do it on a bipartisan basis.
  Let us enforce existing trade agreements. Let us stop the dumping of 
products into this country that, by their cost, drive American 
producers out of business.
  It is sad that we do not stand up for this country's economic 
interests. That has been true of Republican administrations and 
Democratic administrations. It has been true for 20 to 30 years.
  Let us stand up for this country's economic interest to say that fair 
trade must be enforced. Let us enforce trade rules.
  Let us develop a national trade deficit focus. Yes, let us worry 
about the budget deficit and let us together solve that problem. But 
also let us together in the coming months decide the trade deficit is a 
serious national problem that erodes the economic strength of this 
country. Let us get together and decide to do something about it.
  Let us organize a worldwide conference to decide it is time for a new 
Bretton Woods Conference and talk about the new financial markets and 
the new trade relationships that will take us into the next century. 
Let us be frank. We cannot afford what has happened in the last 50 
years.
  Let me show you the final two charts. This chart shows that foreign 
imports now take over one-half of the manufacturing gross domestic 
product in this country. That is a very serious problem. If you do not 
have a strong manufacturing base, you will not long have a strong 
economy in a country like ours.
  Second, let me show you this chart. If anyone doubts the problem, let 
me show you a chart that shows the 50 years post Second World War.
  In the first 25 years, as I said, we could compete with one hand tied 
behind our back. Our trade policy was foreign policy. Everybody knew 
it, everybody understood it, and everybody accepted it. In the last 25 
years our competitors have been tough, shrewd, and often they have 
beaten us to the punch.
  Yes we still have a trade policy that is first a foreign policy. It 
is one that too often is a giveaway of American jobs to other 
countries. And you see what has happened. While we have a trade 
deficit, the other countries have a surplus.
  This chart simply shows that Japan, Germany, and other countries in 
the last 25 years have a surplus and the United States has a deficit.
  How do American workers feel about this? They had enormous wage gains 
in the first 25 years, post Second World War. In the last 25 years they 
have suffered wage losses. And it is because of this. This is something 
we can address and fix.
  I, Mr. President, appreciate your indulgence and the indulgence of my 
colleagues. I intend to come to the floor in the coming weeks with four 
additional presentations, the deficit with Japan, China, Canada, 
Mexico, and Germany. I will discuss what it is, what we can do about 
it, and what does this country have a responsibility to do to address 
these issues?
  Mr. President, I appreciate the indulgence of the Chair, and I yield 
the floor.
  The PRESIDING OFFICER. The Senator's time has expired.
  The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I would like to speak in morning business.
  The PRESIDING OFFICER. The Senator from Wyoming is advised we are in 
a period of morning business until noon. The Senator shall have 5 
minutes to speak.
  Mr. THOMAS. Thank you, Mr. President.
  Mr. President, I was interested in our colleague's remarks. Certainly 
he talks about a very important issue. There are a number of things we 
need to consider. One of them, of course, is what we continue to do to 
make business more and more expensive in this country making it more 
and more difficult for us to compete.

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