[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.

                          ____________________