[Congressional Record Volume 143, Number 36 (Wednesday, March 19, 1997)]
[House]
[Pages H1175-H1178]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NAFTA TODAY
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 1997, the gentleman from Michigan [Mr. Bonior] is recognized
for the remaining 30 minutes as the designee of the minority leader.
Mr. BONIOR. Mr. Speaker, I thank the gentleman from New Jersey [Mr.
Pallone], the gentlewoman from Texas [Ms. Jackson-Lee], and the
gentleman from California [Mr. Farr].
I want to commend them for their discussion here this evening, and
echo their comments with respect to making sure that we have campaign
finance on the floor of the House of Representatives, so all sides and
all issues and all facets of this complex issue can be heard by the
American people, and we can make some decisions that will move us away
from this terribly corrosive system we are now engaged in.
Mr. Speaker, I would like to kind of shift gears here and talk about
something that has been very important to I think the country, an issue
that will be before this body very shortly. That is trade. I am joined
by my distinguished colleague, the gentleman from Pennsylvania, [Mr.
Ron Klink], who I think will also share some views and comments on
NAFTA.
[[Page H1176]]
That is what I want to talk about today, because we are about to
embark upon another fast-track agreement which will get us into a
series of trade agreements with not only Chile but other Latin American
countries, and other countries around the world. My concern is that it
will be done without proper labor protections and environmental
protections. That is why I think it is important to review the NAFTA
debate.
Four years ago we had a major debate over the North American Free
Trade Agreement. For those of us who fought the treaty back then, one
that protects human rights and labor rights and environmental rights,
that is what we wanted, we came to the floor of the House, and we are
here again tonight to describe the flaws as we see it in NAFTA.
Four years ago, we had a vigorous debate that lasted months, and it
culminated in a dramatic finish here on the House floor in a very
important vote for the country, and, indeed, for the country of Mexico
and Canada as well.
Then we watched as NAFTA took effect. We did not come to the floor
night after night and say, it is not working, it is not working, it is
not working. We hoped that we were wrong, that it, indeed, would work.
But we knew, I think, not only in our minds but we knew in our hearts
that the treaty was flawed and it could not work. Many of us saw
problems. We saw major problems.
Those of us who fought for a better treaty back then are just as
determined today to make sure that the faults of NAFTA are addressed
today, because today this debate, as I said, is moving into a new
phase. Supporters of NAFTA now want to expand it to new countries. Let
me tell the Members, expanding it now would be like building a new room
onto your house when your kitchen is on fire and your roof is
collapsing.
Before we expand NAFTA, we have to fix it. There are a lot of things
to fix. It is no longer a question of theory. We have had about 38
months to look, to digest, to understand, to take apart, and to see
what effect it has had on workers here in this country and in Mexico,
and in Canada. NAFTA has had 38 months to prove itself. We have seen
the effects that NAFTA has had on our families and our jobs and our
communities, and the news is not good. I think by any measure people
have to understand that NAFTA has been a failure.
Let us look at our trade balance with Mexico, the simplest measure of
performance. I have a chart right here. Before NAFTA, before NAFTA we
had a $1.7 billion surplus. Thirty-eight months later we have a $16.2
billion trade deficit with Mexico.
NAFTA proponents will say trade has expanded 20 percent between the
countries. That is true, but it is expanding in the wrong direction. In
1993, before NAFTA, we had this surplus. Now we have this deficit. That
means that we are going in the wrong way, Mr. Speaker. Our trade
deficit with Mexico is now at a record $16 billion.
NAFTA proponents will argue that the reason we have this deficit,
which causes jobs, is because they had this thing called the peso
devaluation. For some of the Members who are not familiar with what
happened in Mexico right after NAFTA, the value of their currency, the
peso, which was way overvalued, and we said so on the House floor, and
we said it would be a terrible mistake to go ahead with the treaty,
with the peso overvalued the way it was driven up by the speculators,
we said that that was happening and was going to continue to happen,
and it would fall apart, and it would have a dramatic effect on the
workers.
That is exactly what happened. When the peso crashed, Uncle Sam came
in to try to rescue them by providing them loans. In addition to that,
we had the Mexican workers wake up one morning and 40 percent of the
value of their savings, their life savings, the currency they had in
their pocket, was gone through devaluation. You can imagine waking up
and finding 40 percent of your worth just gone the next morning.
NAFTA proponents argue that the peso devaluation really was the
problem, and that is why we have the deficit. But the facts do not bear
that out. The trends were in place long before this peso devaluation.
If the peso devaluation were the only reasons, other nations would
suffer the trade deficit as well, but when we look at the record in
trade between Japan and Mexico, and the European countries and Mexico,
we will find that they have maintained their surpluses before, during
NAFTA, and after the peso crash. Our trade balance had become a deficit
4 months before the peso crash. It had been trending that way for
several months prior to that. So the facts show that NAFTA is the cause
of this deficit, not the peso devaluation.
Next, let us take a look at the job claim by NAFTA proponents. I will
get this chart down here. I think this is pretty self-explanatory: Jobs
Lost Under NAFTA.
Remember back in 1993, when we debated this, we all kept hearing that
the proponents said we would create 200,000 jobs, 200,000 jobs. We
heard that figure over and over again. NAFTA proponents practically
guaranteed us that 200,000 more jobs would be created if we passed
NAFTA.
{time} 2015
But using their own formula, which is based on the numbers of jobs
created through a certain dollar amount of trade, we have lost over
600,000 jobs or job opportunities since NAFTA took effect. And by using
a very narrow definition by the Department of Labor, which includes
only those workers who have applied and then been certified for NAFTA
unemployment benefits, more than 110,000, 110,000 U.S. workers have
already been certified under the NAFTA unemployment program.
Thousands more have filed for the benefits and have not been
certified but some eventually will get them. So the figure on the job
loss was not 200,000 created, as the NAFTA supporters told us time and
time again. It is somewhere between 600,000 and 110,000 that we know of
and have been certified. And not all workers qualify for those
benefits, as I said.
Workers in more than 1400 factories in 48 States have applied for
these NAFTA job retraining programs. But as we all know too well, these
workers will not likely be moved into high-tech and high-wage jobs, as
trade theory suggests.
In fact, listen to this number, 65 percent of workers who were laid
off ended up with lower paying jobs; 65 percent of the workers
displaced in this country who were laid off ended up with lower paying
jobs.
When we debated NAFTA, many corporations stepped forward to say that
jobs in the U.S. depended upon NAFTA's passage. They promised to create
jobs in America. Corporation after corporation, multinational after
multinational corporation said they were going to create jobs.
Next chart: Broken promises under NAFTA. Ninety percent of companies
failed to deliver on their promise to create U.S. jobs if NAFTA passed,
90 percent. In the weeks to come, we will be going through all of these
corporations, corporation by corporation, plant by plant, worker by
worker, to let you know how this has unfolded. But tonight let me just
give you one example.
Let us start at the end of the alphabet with Zenith, well-known TV
maker. Here is what Zenith said in 1993 during the NAFTA debate. It
said, Contrary to numerous reports that companies like Zenith
Electronic Corporation will transfer all of their production facilities
to Mexico as a result of NAFTA, the NAFTA offers the prospect of more
jobs at the company's Melrose Park, Illinois facility.
Here is what Zenith did. Zenith announced late last year that it was
laying off 800 of its 3000 workers at Melrose Park. In addition, 510
workers have been certified for NAFTA trade adjustment assistance at
Zenith facilities in Springfield, MO and Chicago, IL.
So these are the real life facts and the real life effects of NAFTA,
and we will be making sure that the public understands what other
corporations have said and what they have not delivered.
Let me talk about what I think is the real crux and the problem with
NAFTA and what it has done to the workers here in this country. I want
to talk about the Mexican workers a little bit later as well.
What has really happened here in this country is the downward
pressure on U.S. wages that has resulted from
[[Page H1177]]
the North American Free Trade Agreement, the downward pressure on
wages.
There was a study done at Cornell University for the Department of
Labor. And listen to this, they found that 62 percent of U.S.
employers, 62 percent, threatened to close plants rather than negotiate
with or recognize a union, implying or explicitly threatening to move
jobs to Mexico, 62 percent. People wonder why 80 percent of the workers
in this country have had their wages basically frozen or decline for
close to the past 20 years. It is that bargaining chip. It is that
downward pressure on wages. It is the leverage they have because of
agreements like this and, I might also add, because people are not
standing up for their collective right to join together and bargain.
Unions in this country made the middle class. At their zenith, at
their height in the 1940's in this country, when almost 40 percent of
the private sector employees in this country belonged to unions, you
saw incomes rise, benefits rise, health care, pensions. Down to about
12 percent today, union membership. They do not have any power at the
bargaining table today, the workers do not. The companies, they say to
these folks, listen, you want a higher wage, you want a livable wage,
you want health care benefits for your family, you want a guaranteed
pension, I will tell you what, we cannot afford it, we are going south,
you keep this up.
And yet you look at CEO salaries in America today. They are out of
sight. They are paying this guy at Disney, we all grew up on Disney,
loved it, watched it, Michael Eisner, $776 million, 10-year contract,
$776 million. I mean, am I missing something here? Did Mickey Mouse
negotiate a peace treaty in the Middle East? What enables somebody to
accumulate $776 million?
So these are the discrepancies that are occurring here in this
society between the highest income earners, the top people at these
corporations, these multinationals and workers who are having their
wages bargained down at the table.
Let us take another example. At the Connor Rubber near Fort Wayne,
IN, in the midst of the union's first contract negotiations, the
company decided to close the plant and move to Mexico. Same union
pulled an organization petition at a neighborhood subsidiary of Connor
Rubber. The union official who was organizing the subsidiary said that
wages were lacking, their benefits were lacking, but they also wanted a
job.
So this is having a dampening effects on wages in America. Fifty-
seven percent of Americans now say their purchasing power is worse than
it was before NAFTA, 57 percent.
And the situation in Mexico is even worse. As I said, the Mexican
economy basically collapsed. The maquiladora, the area along the U.S.
and Mexican border in Texas and New Mexico, Arizona and California,
production has soared but wages have fallen by 25 percent. When we
debated NAFTA, the maquiladora workers were making $1 an hour; now they
are making 70 cents an hour. Workers who try to form unions are being
fired or thrown in jail.
I was down there a month ago. I visited some of these villages and
colonias in Tijuana and talked with some of these leaders and these
workers. One of these leaders told me at his community colonia in the
community house where there were lots of people, he said to me,
Congressman, I went there and talked to the company about slowing down
the line because a lot of the people who lived in this community were
losing fingers and hands. Instead they sped the line up. So we
organized and we stopped work, and they fired me. And they threw me in
jail for trying to organize a union.
That is what we are up against and that is what is happening and that
is what is going on.
NAFTA has not created to a consumer market in Mexico. It has created
an export platform. As a nation we now ship more consumer goods to
Switzerland than we do to Mexico. A good example is the auto industry.
From 1994 to 1995, production in the maquiladora for the domestic
Mexican market plummeted 72 percent, but production for exports to the
United States grew by 36 percent. We are selling fewer cars to Mexico.
Folks there do not have the money to buy it. When your income drops 40
percent overnight and when they are paying you 70 cents an hour, it is
hard to afford to buy an automobile.
As a result, our trade deficit in the auto sector ballooned to more
than $15 billion. And meanwhile the environment is suffering the
consequences as well. Families along the border continue to live near
and bathe in and drink water that the American Medical Association has
called a cesspool of infectious disease, a cesspool of infectious
disease.
Human health risks on the U.S. Mexican border. The estimated cost to
clean up the border is $20 billion. Remember the debate we had here
about the North American Development Bank which was set up to fix these
environmental and health problems? After 38 months the bank has yet to
make a single meaningful loan for the public good. They have made a
loan to a private development for $2.5 million, but that is a far cry
from the $20 billion in infrastructure needs that they need in order to
fix the environment along the border.
What is more, NAFTA has helped create what some call a wave line
border check. Listen to this: 11,000 trucks now pass over the border
from Mexico every day, 11,000. For every truck that gets inspected, 199
do not. They are just waved through, for God knows what is on those
trucks. They are just waved through.
Every single week we seem to see another story of corruption at the
highest levels of the Mexican government. Is this tragic? Yes. Is it
permanent? It does not have to be. We still believe that NAFTA can be a
force for progress. We still believe we can create a consumer market in
Mexico.
But before we ever think about expanding NAFTA to other countries, we
need to fix a very flawed NAFTA here. We need to give workers the same
kind of labor and health protections that we gave companies for things
like intellectual property. We need to include labor and environmental
standards in the core agreement, not in some flimsy side agreement. And
we need to raise Mexico's standard to our level, not lower ours to
theirs.
We need to make noncompliance subject to sanctions, not just
consultations. And we need to remember this is not just about markets
and trade barriers, this is about jobs and living standards. It is
about human rights and human dignity.
Workers on both sides of the border are mistreated by multinational
corporations and indifferent governments. But they remain brave and
they remain hopeful. And until they have a voice to speak for
themselves, we must continue to be their voice.
There are more people in this Congress, I might add to my colleagues,
who voted against NAFTA four years ago than voted for it, and many who
voted for it say that they would never vote for it again. We look
forward to this debate.
I yield to the gentleman from Pennsylvania [Mr. Klink], who has been
so eloquent and strong on this issue of protecting jobs and expanding
job opportunities and harmonizing Mexican benefits to our level instead
of bringing ours down to theirs.
Mr. KLINK. Mr. Speaker, I thank my good friend, the gentleman from
Michigan, the minority whip, for again leading us in this issue. And I
just want to underline, first of all, before I start, some of the
points that the gentleman made because they are very important.
No. 1, he pointed out the fact that we are not against free trade.
Those of us who come here to the well and who have said this is a
flawed NAFTA agree that a NAFTA agreement can be good. We can negotiate
something that can work. We can have free trade with Mexico, with
Canada, with Argentina, with Chile, with the Caribbean Basin, with
Europe, but it has to be fair trade. And we got the short end of the
stick.
His other point that he made at the very beginning is one that is
very important. After we lost, it was a very close vote, it was a very
hard fought vote, many of us put our sweat and our tears and our lives
for many months into fighting for the working people of this country,
something that we felt very strongly was going to be flawed, but when
NAFTA passed, we went back to work doing other things. We did not come
to the well of the House day after day, week after week, month after
month, pointing to every small thing
[[Page H1178]]
that occurred and blaming it on NAFTA. We did not say that because so
many people in America got a cold or the flu it was NAFTA's fault, just
because a factory closed down here and closed down there, it was
NAFTA's fault. We did not make that point.
We wanted to be wrong. We were hoping that the promises of 200,000
jobs that were made by the proponents of NAFTA would take place and
that many of those jobs would occur in the gentleman's district in
Michigan and my district in Pennsylvania and some of our other friends
in Ohio and California and across this country.
{time} 2030
That was our hope. Unfortunately, that has not occurred.
As my friend pointed out, what really we have seen is promises
broken. All of those companies, many of those companies which came out
making all kinds of promises, telling us all of the wonderful things
that were going to occur, we called them the NAFTA poster companies.
They would come out with fancy flyers saying we are going to create
these jobs. Indeed, 60 of the 67 companies that made specific promises
about jobs that would be created, in fact have not fulfilled those
promises of job creation. In many instances they have eliminated jobs.
Some of those companies are no longer even doing business with Mexico.
The gentleman's point about the fact that when NAFTA passed we had a
small $1.7 billion a year trade surplus with Mexico, and now we have a
booming trade deficit with Mexico, I would remind all of my colleagues
this occurs, Mr. Speaker, at a time when we are including as exports to
Mexico the factory equipment that we are sending down there by
companies that have closed down their factories in this country and are
moving that factory equipment and those jobs to Mexico. That counts as
a surplus. That counts as goods that we are selling to Mexico. That is
not legitimate goods and services. Those will, in fact, be used against
us.
The increase of the U.S. trade deficit with Mexico and Canada has
cost, we believe, about 420,000 jobs. Half a million jobs.
Mr. BONIOR. Good paying jobs, in many instances.
Mr. KLINK. The gentleman is correct. These were good paying jobs. And
as the gentleman said, when these workers were displaced they did not
get good paying jobs.
My State of Pennsylvania is one of the top two in NAFTA trade
adjustment assistance applications. For those people that do not
understand, that is a very complex procedure that you qualify or you
apply for benefits based on the fact that you lost your job because of
NAFTA. Not everyone who has lost their job because of NAFTA has
qualified for NAFTA TA benefits or even applied for them. So this is
only one part of the puzzle when we try to determine the precise number
of jobs that we have lost in this country. That is very convoluted.
Mr. BONIOR. The gentleman makes a good point. And the other piece I
want to talk about for just a second with him is, it was 60-some
percent, I think it was 65 percent I mentioned, of people who lost
their jobs as a result of NAFTA and jobs moving to Mexico, people who
have found other jobs have found them at lower pay. If an individual
was making maybe $12 an hour, they may have found another job but it
may be at $7 or $8 an hour.
So what happens when that occurs in a family? Their standard of
living is diminished considerably, so they go out and get another job.
They have 2 jobs, 3 jobs, to make sure that income level in the family
is where it had been. What does that do?
Mr. KLINK. If the gentleman will yield, that is when they find out
they have less time to put into their family and their community.
Mr. BONIOR. That is correct. They are not there for soccer for their
kids, they are not there after school when their kids come home, or to
help with PTA and the other community efforts. That is the untold
factor here that we are dealing with as a result of this downward
pressure on wages and job loss.
I thank my colleague for raising that point.
Mr. KLINK. When we heard all of these predictions about the 200,000
jobs that were going to be created almost immediately by this NAFTA
agreement, there was an assumption by both the Bush and the Clinton
Administrations. This had been started during the Bush administration
and then was finished by the Clinton administration. Both
administrations made their predictions based on the fact that they
anticipated we would have a trade surplus with Mexico for at least 15
years. Immediately, the year after NAFTA passed, we went into a trade
deficit with Mexico.
The shift from a small surplus of $1.7 billion back in 1993 to a
deficit of $16 billion in 1996 in trade with Mexico really has to be
explained by the devaluation of the Mexican peso. And, as the gentleman
said just moments ago, and I think he did a great job of explaining it,
NAFTA was responsible for that devaluation.
Then what occurred in this country, and I do have a copy of the study
from Cornell University that the gentleman talked about, it is called a
Final Report, the Effects of Plant Closing or Threat of Plant Closing
on the Right of Workers to Organize. He is absolutely right, 62 percent
of the employers in this country, 62 percent of them said ``We will
close our plant rather than to negotiate a contract with you'' or ``If
you want to form a union, we are closing our plant. We can now go to
Mexico.''
That happened all across this country, if we read this report, which
the proponents of extending fast track so that we can expand this
horrible agreement without fixing it, they do not want us to read this
report.
Mr. BONIOR. Mr. Speaker, I thank my colleague for his comments, and I
apologize to my friend from California. I know he wanted to make a
comment about fast track, and I am sorry, I did not realize we were
short on time.
I thank my colleague from Pennsylvania for coming out and talking to
us this evening about his views on this issue, and we look forward to a
hearty debate. And, again, I say to my friend from California, I look
forward to participating with him in this as well.
____________________