[Congressional Record Volume 142, Number 108 (Monday, July 22, 1996)]
[Senate]
[Pages S8468-S8472]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN (for himself and Mr. Byrd):
  S. 1978. A bill to establish an Emergency Commission To End the Trade 
Deficit; to the Committee on Finance.


                     THE END THE TRADE DEFICIT ACT

  Mr. DORGAN. Mr. President, I am pleased today to come to the floor 
with my colleague and friend, Senator Byrd from West Virginia, to 
introduce a piece of legislation that we feel is important and timely. 
It is a piece of legislation that we have discussed for many months and 
are now prepared to introduce in the hope that we would be able to do 
the things necessary to allow it to become law between now and the end 
of this legislative session.
  Simply put, this piece of legislation deals with a deficit. There has 
been a great deal of discussion in the Congress in recent years about 
deficits, almost all of it dealing with the question of budget 
deficits. Those deficits are a problem and have been a problem, and we 
have tried in a number of ways, both on the Democratic side and on the 
Republican side, in different kinds of approaches, to bring down the 
budget deficit.
  I am pleased to say a substantial amount has been accomplished. The 
budget deficit has been reduced almost in half in the last 3 to 4 
years. The budget deficit is down and is coming down. In fact, a report 
just last week by the Congressional Budget Office was an 
extraordinarily optimistic report about further reductions in the 
budget deficit.
  However, there is another deficit that almost no one speaks about. It 
is called the merchandise trade deficit, and it is growing and getting 
larger. We are going to introduce a piece of legislation today that 
establishes a commission. It asks that an emergency commission to end 
the trade deficit be impaneled to review economic and trade policies, 
tax and investment laws and other incentive and restrictions that 
affect trade, with the hope that recommendations can be made that 
Congress will be able to embrace to not only reduce this trade deficit 
but also to end the trade deficit.
  I will offer a couple of charts to show my colleagues what has 
happened with respect to the trade deficit. We have had 20 consecutive 
years of trade deficits, totaling $1.8 trillion. Last year, we had the 
largest negative trade balance in history. This chart shows, and the 
red demonstrates, the merchandise trade deficit.
  These are troublesome because trade deficits must be repaid with a 
lower standard of living in the United States. You can make a more 
direct case on national budget deficits. That is money people owe to 
themselves, and except for the maldistribution of the debt, it is not 
such a big deal. I do not make that case on the trade deficit, but some 
economists might. Nobody can make a case with respect to the trade 
deficit, except this: Trade deficits must be and will be repaid by a 
lower standard of living in this country. And they must be repaid 
someday.
  This chart shows what has happened to the trade deficits. There has 
been very little discussion in the Congress about what is causing the 
trade deficit, in what direction it is headed, and how to begin to 
develop some policies to address it.
  The trade deficit also represents some other underlying problems. 
These deficits mean that we are buying more from abroad than we are 
selling to other countries. It means that jobs that normally would have 
been created in our country are created elsewhere. It means jobs are 
moving from our country to foreign countries. Less opportunity here, 
more opportunity abroad.
  When you see these kinds of policies that inherently weaken our 
manufacturing base and sap our economic strength, you have to be 
prepared to say that this is a serious problem for this country. We 
must address it. Just as we have been addressing the other deficit, the 
budget deficit, so, too, we must address this issue of 20 years of 
growing merchandise trade deficits.
  The next chart is a chart that shows that projections by econometric 
firms and forecasting firms tell us that the trend line by Data 
Resources indicates that the merchandise trade deficit will reach over 
$330 billion by the year 2006, 10 years from now. Wharton Econometrics 
projects a doubling of the trade deficit by the year 2010.
  These are the forecasting groups who say, ``Here is what we think 
will happen to the merchandise trade deficit.'' They see a doubling of 
the trade deficit. This is Data Resources: $331 billion by the year 
2006. Clearly, that is a course that this country should not accept. 
Clearly, we ought to do something about it.
  The next chart. The United States, in a very few short years, has 
moved from being in the position of the world's largest creditor Nation 
to being the world's largest debtor Nation. That has happened in a very 
short period of time. This is an astounding change in our country's 
economic position.
  Now, think of this as a neighborhood, and you look at one house over 
near a driveway with very nice shutters, a manicured lawn, a pretty 
home, with five or six cars sitting outside in the driveway. You think 
to yourself, gee, that person is really doing well--except the person 
is very close to going under, because it is all borrowed money. That is 
what is happening with our merchandise trade deficit, and why we are 
going from the largest creditor Nation in the world to being the 
largest debtor Nation in the world.
  The next chart I want to show describes our trade deficit by country. 
You will see the largest trade deficit, by far, is with Japan. We have 
had this for a long while. It is continuing and abiding and does not 
seem to change. It was nearly $60 billion last year. China was $34 
billion. Canada and Mexico together were about $33 billion. A very 
substantial problem. Six countries make up 94 percent of our country's 
trade deficit.
  Now, part of the problem is that these countries have not completely 
opened up their borders to our goods. Yet, they ship their goods to our 
country in wholesale quantities. When we want to move goods into their 
countries, we are told that we are doing better. But we are not doing 
good enough

[[Page S8469]]

because our manufacturers, businesses, and workers cannot get our 
products into those countries on nearly the same basis as they move 
their products into our country.
  One common myth with respect to this trade issue is that what we are 
importing into this country is really the product of cheap labor, and 
that low-skill, cheap labor products are being sent into this country. 
Not true. Not true at all. Seventy-five percent of what the U.S. 
imports are high-tech and value-added manufactured goods: Automobiles, 
automobile parts, electronics, office machines, telecommunications. 
That is what is coming into our country. It is not trinkets produced 
with low-wage labor. Rather, it is high-tech, value-added manufactured 
goods.

  I want to show one additional chart that describes that in the past 
25 years the imports of manufactured goods into our country has risen 
and risen and risen. Today it is at the point where imports now equal 
56 percent of our manufacturing capacity. That means imports today are 
equal to over one-half of our domestic manufacturing capacity.
  No wonder the purchasing power of hourly and weekly wages in this 
country for the vast majority of working Americans are back down to 
levels, in some cases, in constant dollars, to the 1950's and 1960's. 
That kind of downward pressure means fewer jobs in this country, and 
the jobs that exist in the manufacturing sector pay less and have less 
security.
  Now, if you take this trade deficit and calculate it with respect to 
the common calculations about jobs, they talk about 20,000 jobs per $1 
billion in exports. If we export $1 billion worth of American goods, 
they say that means we created 20,000 additional jobs. If you would use 
the same formula, it should be equally true that, for $1 billion worth 
of imports, someone else had the 20,000 jobs and we did not. That means 
that last year's trade deficit represents a loss of somewhere around 
3.5 million good jobs. Just the increase in that trade deficit from 
1994 to 1995 would mean a loss of 166,000 jobs.
  What we propose today--Senator Byrd and myself, and, hopefully, 
others who will join us--would be an emergency commission to end the 
trade deficit. We would propose that this commission review five broad 
areas of trade policy concerns: The manner in which the Government 
establishes and administers our fundamental trade policies and 
objectives, No. 1; No. 2, the causes and consequences of the 
persistence and the growth of the overall trade deficit, as well as the 
bilateral trade deficits; No. 3, the relationship of U.S. trade 
deficits to the competitive and comparative advantages within the 
global economy; No. 4, the relationship between the growth of direct 
investment both into and out of the United States and the trade 
deficit; finally, No. 5, the development of policies and alternative 
strategies to achieve a systematic reduction of the trade deficit and, 
hopefully, an end to the trade deficit.
  This would be an 11-member commission. It would have 16 months to 
present its report to Congress and the President. We do this today 
because we think it is time--probably past the time--to be thinking of 
what these trade deficits and what the projections of where the trade 
deficits are going to go will mean to this country.
  As I conclude, Mr. President, I want to make a point. I am honored to 
have Senator Byrd join me in this endeavor, and I hope very much that, 
by the end of this year, this will be law and we will have a commission 
to evaluate this and make recommendations to the Congress.
  The minute someone comes to the floor of the Senate and begins 
talking about trade and talking about trade deficits, two things 
happen: One, people start to yawn. They say, ``Well, this is so boring. 
It is uninteresting.'' They do not want to talk about it. Or, two, they 
immediately rise on their haunches, and say, ``Well, what you are is 
someone who wants to close America's borders; you are some kind of a 
isolationist; a xenophobic stooge who doesn't understand the 
complexities of international trade.''
  I do not want to close America's borders. I want more trade--not less 
trade. I want expanded opportunity for American products and workers. 
But I want to finally make sure that we reduce and finally eliminate 
the trade deficit, and have some balance in trade by deciding that it 
is important that America shall not be taken advantage of in 
international trade.
  For 50 years our trade policy was our foreign policy. And we would do 
this and that and the other thing to help various countries as a matter 
of foreign policy. Lets look at the first 25 of those 50 years. Let's 
look at income in this country for workers. After all, that is what 
really matters. At the end of the day have we increased the standard of 
living for the American worker and the American family. If you look at 
the first 25 of those 50 years their incomes went steadily upward 
because we had a trade policy that was really just foreign policy and 
we still beat everybody else in the world with one hand tied behind our 
back. In the first 25 years, incomes went steadily upward with an 
increasing standard of living. What about the second 25 years. Look at 
the graph. What you will see is a steady diminution of income and 
security for American workers.
  Often people sit around their supper table talking about their lot in 
life. They are working harder and working more hours. More people in 
the family are working. And, adjusted for inflation, they are making 
the same or less than they were 20 years ago.
  The fact is we must do something to try to strengthen and maintain a 
strong manufacturing base in this country. And the circumstances that 
relate to this chronic and growing trade deficit tend to undermine 
America's manufacturing capability. No country--none--will ever remain 
a world economic power unless it retains its manufacturing base. That 
is what is slowly eroding and being washed away by these chronic, 
troublesome trade deficits.
  Senator Byrd and I do not propose solutions or strategies that would 
have us withdraw from the global economy, or have us retreat from the 
world trade system. But we do insist it is in this country's best 
interest to achieve a balance of trade and to end these chronic trade 
deficits that injure our country's well-being and lead to a decreased 
standard of living in America.
  Mr. President, the future of our Nation is being undermined by a 
problem that simply is not getting adequate attention or concern. There 
are those who do not even acknowledge that it is a problem, despite the 
fact it has reached record proportions.
  Our Nation's trade deficit is one of the twin deficits that this 
country must address. Today the trade deficit is the larger twin, yet 
most of our attention is still focused on the Federal budget deficit. 
We need to solve these twin deficit problems, because together and 
individually they are threatening the economic security of Americans.
  Today I am introducing legislation to address this crucial problem. 
The End the Trade Deficit Act will establish a commission to develop 
plans to end the trade deficit in the next 10 years, and establish a 
competitive trade policy for the 21st century which will not only 
increase production and manufacturing in our country, but also job 
opportunities, and wages.
  Just as balancing the budget has come to represent the need to take a 
more disciplined approach to deciding our national priorities, our goal 
in ending the trade deficit must be to develop a more disciplined 
approach in deciding and carrying out our Nation's trade policies.
  Our trade deficit is symptomatic of larger economic conditions and 
questions that must be addressed. My purpose in this legislation is not 
simply to get rid of the red figures at the bottom of our trade ledger. 
Instead, it is to help develop the national economic and trade 
strategies which will rebuild the American economy and the American 
dream.


                        Growth of Trade Deficit

  Many economists predicted that our trade deficit would disappear as 
we reduced our Nation's budget deficit. That is not what is happening. 
The fact is that in the past few years we are bringing down our budget 
deficit. Yet, we have recorded back to back record merchandise trade 
deficits during the past 2 years. Our budget deficit is going down 
while our trade deficit continues to grow.
  Last year, the United States experienced its 20th consecutive annual 
merchandise trade deficit. During these

[[Page S8470]]

past two decades we have piled up a total merchandise trade deficit of 
$1.8 trillion.
  The trend line in the growth of this deficit should be of great 
concern to the American people. Last year we had the largest negative 
merchandise trade balance in the history of the United States. The $175 
billion merchandise trade deficit was larger than the $164 billion 
federal budget deficit.
  An econometric forecasting firm, Data Resources, Inc., is projecting 
that our Nation's merchandise trade deficit will continue to grow 
reaching new records in the next few years. Based on long-term trends, 
Data Resources is forecasting that the merchandise trade deficit can be 
expected to almost double during the next 10 years to $331 billion. 
Wharton Econometrics is forecasting that the U.S. merchandise trade 
deficit will double by the year 2010.
  As a result of our twin deficits, the United States has shifted from 
being the world's largest creditor nation to the world's largest debtor 
nation. Our country has gone from a net creditor position of over $250 
billion in the early 1980's to a net debtor position of over three-
quarters of a trillion dollars by the mid-1990's. The positive net 
international asset position that we had built up over the past 100 
years was eliminated in a short 6-year period during the 1980's.
  We used to earn $30 billion annually on our international assets. Now 
we are paying something in the neighborhood of $11 billion to service 
this international debt.


                      Importance of Trade Deficit

  The persistence and growth of our trade deficit is not just a concern 
of academics and ivory tower economists. It is a question of fair trade 
and fair competition. It is an issue of American jobs and the 
purchasing power of American wage earners. It is a matter of what 
opportunities we will have for our future.
  Today the bulk of the products that we import are not labor-intensive 
goods. Instead our merchandise trade deficit consists primarily of 
high-technology, manufactured items. Autos, office equipment, 
electronic goods, and telecommunications equipment make up three-
fourths of the imports.
  Imports of manufactured goods have increased from 11 percent of the 
total U.S. manufacturing gross product to over 50 percent. This means 
that rather than expanding our own manufacturing base in this country, 
we are importing more of our manufactured goods from abroad. It means 
that we are shipping jobs overseas.
  The bottom line is that we are shifting from a manufacturing, 
production-based economy with high wages, to a service-based economy 
with low wages. No wonder the purchasing power of hourly and weekly 
wages of the vast majority of working Americans are back down to levels 
we haven't seen since the 1950's and 1960's.

  Together with the record merchandise trade deficit this past year, 
the value of the U.S. dollar fell to its weakest level in history. Yet, 
despite the weakening dollar, our trade deficit has continued to mount.
  Neither the American consumer nor the American economy is making any 
long-term gains by the continuing trade deficit and the devaluation of 
the dollar. Instead, they represent an erosion of both our sovereignty 
and our economy.


                        Causes of Trade Deficits

  Our merchandise trade deficit is a result of a serious trade 
imbalances with a handful of countries. Six countries comprise 94 
percent of the U.S. merchandise trade deficit. This includes Japan, 
China, Canada, Mexico, Germany, and Taiwan. Over one-half this trade 
deficit is with only two countries: Japan and China.
  Our trade relationships are most accurately described as unilateral 
free trade. As a nation we have opened our borders wide open to almost 
anything and everything that can be produced anywhere. Unfortunately we 
pay little attention to the conditions under which these goods have 
been produced or if the competition is fair.
  At the same while the United States has one of the most open borders 
and open economies in the world, this Nation faces significant barriers 
in shipping American goods abroad. As a result, these negative trade 
balances do not reflect the actual competitiveness or the productivity 
of the American economy. Yet, there is no question that we are one of 
the most competitive economies in the world.
  Instead most of our bilateral trade deficits effectively illustrate 
the barriers that continue to exist despite hundreds of new trade 
agreements in recent years. As documented annually in the reports of 
the Office of the U.S. Trade Representative reciprocal market access 
remains an elusive goal.


                        Ending the Trade Deficit

  As a nation we need to bring the same attention and the same 
commitment to working on the trade deficit that we are giving to 
reducing our budget deficit.
  It has been a quarter of a century since the last comprehensive 
review of national trade and investment policies was conducted by a 
Presidential commission. In these past 25 years we have had only 3 
years in which the United States has had trade surpluses.
  We have witnessed massive worldwide economic and political changes in 
the past 25 years. These changes have profoundly affected world trading 
relationships.
  The cold war has ended. It is no longer necessary or even prudent for 
U.S. trade policy to take a back seat to our foreign policy objectives.
  Regional trade relationships including the European Union and the 
North American Free Trade Agreement are redefining political, economic, 
and trading geography. The Uruguay round of negotiations under the 
General Agreement on Tariffs and Trade has resulted in the creation of 
the World Trade Organization.
  Globalization is part and parcel of the increased mobility of capital 
and technology that is reshaping comparative and competitive advantages 
among nations of the world.
  While other nations and many multinational companies are enjoying the 
fruits of globalization, the United States is not realizing the full 
opportunities or benefits of its competitive capacity and productivity.
  Unilateral free trade no longer serves the interests of the American 
people, if it ever did. We need fair rules and reciprocal market access 
if our competitive economy is to thrive within a global system. I am 
not calling for trade restrictions. Rather I am calling for expanded 
trade, but with rules that are fair.


                          Emergency Commission

  The United States is once again at a critical juncture in trade 
policy development. The persistence and growth of the trade deficit 
must be reversed. We must identify the causes and consequences of our 
trade deficit.
  Rather than allowing our trade deficit to double during the next 10 
years, we need to develop a plan which would end the trade deficit in 
that time period. That is why I am introducing a bill with Senator Byrd 
today to establish an Emergency Commission To End the Trade Deficit.
  The purpose of this Commission is to develop a comprehensive trade 
strategy to eliminate the merchandise trade deficit by the year 2006 
and to develop a competitive trade policy for the 21st century.
  The bill directs the Commission to develop the necessary strategies 
to achieve a trade balance that fully reflects the competitiveness and 
productivity of the U.S. economy while improving the standard of living 
for the people of this country.
  It would require the Commission to examine our national economic 
policies, trade laws, tax laws, investment policies, and all the other 
legal incentives and restrictions that are relevant to the trading 
position of this country.
  The Commission would look at five broad areas:
  First, the manner in which the Government of the United States 
establishes and administers the Nation's fundamental trade policies and 
objectives.
  Second, the causes and consequences of the persistence and growth of 
the overall trade deficit, as well as our bilateral trade deficits.
  Third, the relationship of U.S. trade deficits to the competitive and 
comparative advantages within the global economy.
  Fourth, the relationship between investment flows, both into and out 
of the United States, and the trade deficit.
  Fifth, the identification and evaluation of policies and alternative 
strategies by which the United States can

[[Page S8471]]

achieve the systematic reduction of the trade deficit and the 
improvement of the economic well being of its people.
  This Commission would consist of a blue-ribbon panel of leaders from 
a broad spectrum of the economic life of our Nation. The members would 
be appointed by the President and the leadership of Congress. They 
would be given the responsibility to study the situation, gather 
necessary data, conduct at least seven public hearings, and evaluate 
strategies to end the trade deficit.
  The Commission would be required to present its final report not 
later than 16 months following the enactment of this bill. The final 
report would outline its findings and conclusions, and provide a 
detailed plan for reducing our Nation's trade deficits together with 
recommendations on administrative and legislative actions that may be 
required to achieve that goal.
  The Commission's report would be submitted to the President and the 
Congress for review, consideration, and implementation. To facilitate 
the Commission's report through Congress, this bill would have the 
House Ways and Means Committee and the Senate Finance Committee conduct 
hearings on the report within 6 months after it is submitted to 
Congress.


                            Time for Change

  Today it is apparent that we do not have a consensus about where we 
should go with our national trade policies. We are not even sure 
whether we have the necessary tools to effectively achieve our trade 
goals.
  Most importantly, we do not have a good set of alternatives and 
strategies to place before the American people so that they can 
effectively participate in making the decisions that are shaping their 
future.
  It is time to develop a new trade strategy for the twenty-first 
century. We can get started on this path by making our first goal to 
end the trade deficit. Once we have set that goal, then we need the 
strategies to get there. That is why I believe it is time for such a 
commission.
  I am pleased that Senator Robert Byrd is cosponsoring this 
legislation. I hope others will join us in this effort and look forward 
to working with them in moving forward on this critically important 
agenda for our future.
  Mr. President, let me now yield the floor. The Senator from West 
Virginia under the unanimous-consent agreement would also like to 
address the piece of legislation that we will introduce in the Senate 
today.
  Mr. BYRD. Mr. President, how much of the 30 minutes are remaining?
  The PRESIDING OFFICER. The Senator has 18 minutes remaining.
  Mr. BYRD. Mr. President, I ask unanimous consent that should I need 
an additional 5 minutes under the same terms and conditions that I be 
allowed to have that time.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BYRD. Mr. President, I am pleased to join with the very 
distinguished Senator from North Dakota in introducing an ambitious new 
effort on the matter of our nation's persistent and growing trade 
deficit. This legislation--as the distinguished Senator has already 
explained--would establish a Commission to take a broad, thorough look 
at all important aspects of trends involving, and solutions to, the 
growing U.S. trade deficit, with particular attention to the 
manufacturing sector.
  The trade deficit, as my colleagues know, is a recent phenomenon, 
with large annual deficits only occurring within the last 15 years, or 
so, as my colleague has explained. Between 1970 and 1995, the U.S. 
merchandise trade balance shifted from a surplus of $3.2 billion to a 
deficit of $159.6 billion. It did not reach sizeable levels until it 
jumped up to $52 billion in 1983. As my colleague has suggested, 
projections by econometric forecasting firms indicate long term trends 
will bring this figure to $300 billion or more within the next 10 
years. No one is predicting a decline in the near future. And this is 
bad news. Thus, unless we act, our trade deficit will soon exceed our 
annual appropriations for the Department of Defense.
  This legislation is committed to a goal of reversing that 10-year 
trend. The goal of the commission is to ``develop a national economic 
plan to systematically reduce the U.S. trade deficit and to achieve a 
merchandise trade balance by the year 2006.''
  While it is not clear what the particular reasons for this growing 
trade deficit may be, nor what the long term impacts of a persistently 
growing deficit may be, the time is overdue for a detailed examination 
of the factors causing the deficit. We need to understand the impacts 
of it on specific industrial and manufacturing sectors. Furthermore, we 
need to identify the gaps that exist in our data bases and economic 
measurements to adequately understand the specific nature of the 
impacts of the deficit on such important things as our manufacturing 
capacity and the integrity of our industrial base, on productivity, 
jobs and wages in specific sectors.
  We debate the trade deficits frequently. Both Senator Dorgan and I 
have participated in these debates. I voted against NAFTA. I voted 
against GATT, and for good reasons which are becoming clearer.

  So we debate these deficits frequently. We moan about them. We groan 
about them. We complain about them. But if we do not understand the 
nature, impacts and long term vulnerabilities that such manufacturing 
imbalances create in our economy and standard of living, we are in the 
dark. It appears to me that debate over trade matters too often takes 
on the form of lofty rhetorical bombast of so-called ``protectionists'' 
versus so-called ``free traders.'' But I would suggest that neither 
side knows enough about what is really transpiring in our economy, 
given the very recent nature of these annual persistent deficits.
  Certainly we know that the deficit reflects on the ability of 
American business to compete abroad. We want to be competitive. 
Certainly we know that specific deficits with specific trading partners 
causes frictions between the United States and those friends and 
allies. This is particularly the case with Japanese, as we are well 
aware, and is becoming quickly the case with China. It is clear that 
the trade deficit has contributed to the depreciation of the dollar and 
the ability of Americans to afford foreign products and American 
products as well. Less clear, but of vital importance, is the 
relationship of the trade deficit to other important policy questions 
on the table between the United States and our foreign trading 
partners. Attempts by the United States to reduce tariff and non-tariff 
barriers in the Japan and China markets, which clearly restrict access 
of U.S. goods to those markets, have been crippled by the intervention 
of other, more important policy goals.
  During the cold war, the U.S.-Japan security relationship had a 
severe dampening effect on our efforts to reduce the myriad barriers in 
Japan to U.S. exports. The same effect appears to have resulted from 
our need for the Japanese to participate in our treasury bill auctions. 
This becomes a closed cycle--the need to finance the trade deficit with 
foreign capital, resulting in regular involvement of the Japanese 
government in our treasury bill auctions, seems to dampen our efforts 
to push the Japanese on market opening arrangements. Naturally, without 
reciprocal open markets, the trade imbalance remains exaggerated 
between the U.S. and Japan, prompting further need for Japanese 
financial support to fund our national debt. Thus, some argue that the 
need for Japanese involvement in financing our national debt hurts the 
ability of our trade negotiators to get stronger provisions in the 
dispute settled last year over the Japanese market for auto parts.

  Similar considerations appear to prevail in negotiating market access 
with the Chinese in the area of Intellectual Property rights. While our 
Trade Negotiator managed a laudable, very specific agreement with the 
Chinese last year in this area, the Chinese were derelict in 
implementing it, leading to another high-wire negotiation this year to 
avoid $2 billion of trade sanctions on the Chinese, and to get the 
Chinese to implement the accord as they had promised. Again, it is 
unclear whether the Chinese will now follow through in a consistent 
manner with the implementing mechanisms for the Intellectual Property 
agreement belatedly agreed to in the latest negotiation. Intellectual 
Property is an area of great potential for U.S. exports to China. The 
Chinese have promised major action against piracy of CD's, movies, and 
other products, and to permit co-

[[Page S8472]]

production of audiovisual products and joint ventures regarding 
artists. This is a major test case of our ability to obtain appropriate 
access to the great Chinese market. We need to monitor it carefully. 
The highly trumpeted mantra about how the U.S.-China relationship will 
be one of the most important, if not the most important, U.S. bilateral 
relationship for the next half century, has a chilling effect on 
insisting on fair, reciprocal treatment, and good faith implementation 
of agreements signed with the Chinese government.
  It will only be when we truly understand the specific impacts of this 
large deficit on our economy, particularly our industrial and 
manufacturing base, that the importance of insisting on fair play on 
the trade account will become clear.
  Finally, the legislation being introduced by the distinguished 
Senator from North Dakota, [Mr. Dorgan], requires the Commission to 
examine alternative strategies which we can pursue to achieve the 
systematic reduction of the deficit, particularly how to retard the 
migration of our manufacturing base abroad, and the changes that might 
be needed to our basic trade agreements and practices.
  These are the purposes of the Commission that Senator Dorgan and I 
are proposing in this legislation. And I join with him in welcoming 
other Senators to cosponsor this legislation.
  We can either continue to blunder along without a clear sense of the 
importance of the U.S. manufacturing base or of how to protect and 
enlarge upon that base or we can begin now to gather the data that will 
lead us in the right direction for the future of U.S. trade policy.
  In other words, we can put up the right fences now or deal with a 
very sick economy and an ever-spiraling trade deficit which may take 
our economy right over a very dangerous cliff in the years ahead.
  Mr. President, there is an old poem that was written by Joseph Malins 
many years ago which I think aptly describes the situation we are in.

                         Fence or an Ambulance

     `Twas a dangerous cliff, as they freely confessed,
     Though to walk near its crest was so pleasant;
     But over its terrible edge there had slipped
     A duke and full many a peasant.
     So the people said something would have to be done,
     But their projects did not at all tally;
     Some said, ``Put a fence around the edge of the cliff,''
     Some, ``An ambulance down in the valley.''

     But the cry for the ambulance carried the day,
     For it spread through the neighboring city;
     A fence may be useful or not, it is true,
     But each heart became brimful of pity
     For those who slipped over that dangerous cliff;
     And the dwellers in highway and alley
     Gave pounds or gave pence, not to put up a fence,
     But an ambulance down in the valley.

     ``For the cliff is all right, if you're careful,'' they said,
     ``And, if folks even slip and are dropping,
     It isn't the slipping that hurts them so much,
     As the shock down below when they're stopping.''
     So day after day, as these mishaps occurred,
     Quick forth would these rescuers sally
     To pick up the victims who fell off the cliff,
     With their ambulance down in the valley.
     Then an old sage remarked: ``It's a marvel to me
     That people give far more attention
     To repairing results than to stopping the cause,
     When they'd much better aim at prevention.
     Let us stop at its source all this mischief,'' cried he,
     ``Come, neighbors and friends, let us rally;
     If the cliff we will fence we might almost dispense
     With the ambulance down in the valley.''

     ``Oh, he's a fanatic,'' the others rejoined,
     ``Dispense with the ambulance? Never!
     He'd dispense with all charities, too, if he could;
     No! No! We'll support them forever.
     Aren't we picking up folks just as fast as they fall?
     And shall this man dictate to us? Shall he?
     Why should people of sense stop to put up a fence,
     While the ambulance works in the valley''

     But a sensible few, who are practical too,
     Will not bear with such nonsense much longer;
     They believe that prevention is better than cure,
     And their party will soon be the stronger.
     Encourage them then, with your purse, voice, and pen,
     And while other philanthropists dally,
     They will scorn all pretense and put up a stout fence
     On the cliff that hangs over the valley.
     Better guide well the young than reclaim them when old,
     For the voice of true wisdom is calling,
     ``To rescue the fallen is good, but `tis best
     To prevent other people from falling.''
     Better close up the source of temptation and crime
     Than deliver from dungeon or galley;
     Better put a strong fence round the top of the cliff
     Than an ambulance down in the valley.

  I commend the Senator from North Dakota for his studious approach to 
this question and for choosing the route of prevention over the 
ambulance down in the valley. I am pleased to join him in offering this 
proposal for the consideration of the Senate, and I hope that many of 
our colleagues will join us, and that we can secure passage of the 
proposal before the 104th Congress adjourns sine die this fall.
  Mr. President, I thank my colleague for his courtesy in allowing me 
to join in cosponsoring this very important legislation. I thank him 
for his courtesy in securing the time on this day and for his yielding 
to me that I might add to the record. I yield the floor.
  I yield back such time as I may have.
                                 ______