[Congressional Record Volume 143, Number 45 (Wednesday, April 16, 1997)]
[House]
[Pages H1591-H1597]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       REAL LIFE EFFECTS OF NAFTA

  The SPEAKER pro tempore (Mr. Rogan). Under the Speaker's announced 
policy of January 7, 1997, the gentleman from Michigan [Mr. Bonior] is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. BONIOR. Mr. Speaker, I thank my colleague, the gentleman from New 
Jersey [Mr. Pallone] for his remarks with respect to Armenia, and I 
thank my colleague, the gentleman from Oregon [Mr. DeFazio] for joining 
me this evening to talk about the North American Free Trade Agreement.
  Four years ago in this Chamber and around the Nation, we had a major 
debate on NAFTA, the North American Free Trade Agreement, and it really 
was a debate about our economic future and the economic future of 
Canada and Mexico as well. In many ways it was based more on theory 
than on reality. We had all sorts of studies and projections and 
promises and claims, and now we have had nearly 40 months to see 
exactly where we are, how this has worked, how it has not worked. Today 
we know about the real-life effects of NAFTA. We have the trade data, 
we have the job data, we have the environmental data. But just as 
importantly we have personal real-life stories from thousands of people 
telling us how NAFTA has affected them, what it has done to their jobs 
and their wages and their environment and the communities that they 
live in. And it is a story, a cautionary tale, that we have to start 
telling America about today, because today this debate is moving into a 
new phase.
  Now supporters of NAFTA want to expand it to new countries, and to do 
that they need a procedure that is known as fast track, and let me tell 
you what it is. Basically fast track allows the administration to 
negotiate trade agreements with other countries and then to submit them 
to Congress, and we are required here in the Congress to expedite the 
passage or rejection of that agreement without any opportunity to 
change the agreement. We are locked into either a ``yes'' or a ``no'' 
on what this negotiated.
  So we need to think long and hard before we make and grant this 
authority. It is an awesome authority in its

[[Page H1592]]

 scope and its dimensions. It is far reaching. It affects every man, 
woman, and child in this country. It affects wages. It affects job 
protection. It affects your environment. It affects the things that our 
fathers and mothers and grandparents worked so hard to get into law to 
protect you and them during eras when the free market went wild and 
greed was rampant.
  So we need to think long and hard before we make this authority, 
because as a practical matter it may be our final opportunity to 
reflect on what kind of results fast track produced for NAFTA when it 
was negotiated more than 4 years ago.
  Mr. Speaker, most of my colleagues were not yet Members of the House 
the last time this House debated fast track authority. One thing that 
those of us who have seen fast track know is this. If it does not 
require, and I emphasize require, the trade negotiations to address 
important labor and environmental issues and make those issues on par 
with tariff cuts and investment rules, make them enforceable by 
sanctions, then we are not going to get a good trade agreement. We know 
that because NAFTA and the fast track for NAFTA did not include strong 
and necessary labor and environmental components. It did not include 
any in the core agreement, and we will discuss what this NAFTA model 
has done to workers and the environment both in the United States and 
Mexico.
  Expanding NAFTA now would be like building a new room onto your house 
when your kitchen is on fire and your roof is collapsing. It just does 
not make any sense.
  Over the next few weeks we will be discussing the many aspects of 
NAFTA, but today I want to focus on just two: jobs and wages. Let us 
look at this first chart, ``Jobs Lost Under NAFTA.''
  Before NAFTA, NAFTA supporters claimed 200,000 new jobs would be 
created by 1995. That was their claim. Oh, they came to the floor and 
they said 200,000 new jobs, 200,000 new jobs. They said it over and 
over and over again during that debate that lasted for months. NAFTA 
proponents practically guaranteed we would have 200,000 more new jobs. 
But by using their own formula, which is based on the number of jobs 
created through a certain dollar amount of trade, we have lost anywhere 
from 250,000 to 600,000 jobs since NAFTA took effect. And by using the 
very narrow definition by the Labor Department which includes only 
those workers who have applied or been certified for NAFTA employment 
benefits, more than 110,000 Americans have lost their jobs.
  Now not all workers qualify for these benefits, and even though their 
jobs may have been shifted to Mexico, workers in more than 1,400 
factories in the 48 States have applied for this NAFTA job retraining 
program. Three years after NAFTA, more than 110,000 U.S. jobs, U.S. 
workers, have already been certified under NAFTA unemployment program. 
Thousands more have filed for benefits; and using the formula of the 
proponents of NAFTA, anywhere between 250,000 and 600,000 people have 
lost their jobs. Sixty-five percent of the workers who were laid off 
ended up with lower paying jobs, two out of three. Two out of three. 
They did not get the high-tech, high-wage jobs as the theory suggested. 
They got lower-paying jobs. And when we debated NAFTA, many 
corporations stepped forward to say that jobs in the United States 
depended upon NAFTA passage. They promised to create jobs in America.
  Let me show you another chart. Broken promises under NAFTA. Ninety 
percent of the companies failed to deliver on their promises to create 
U.S. jobs if NAFTA passed. Public Citizens Global Trade Watch. Ninety 
percent of the companies promised to create jobs, and even worse, in 
many cases they have moved jobs to Mexico.
  In nearly every State and in too many communities these broken 
promises have let factories shut down and hard-working men and women 
without paychecks. These giant corporations who spent millions to help 
get NAFTA passed, who said their workers would be better off, let down 
their workers, let down their communities in which they operated and 
did what they said they would not do. And these jobs come from every 
region in the country, from nearly every type of manufacturing, from 
industries like footwear and growing tomatoes and consumer electronics 
where companies are moving wholesale to Mexico, to shifts in sourcing 
and assembly by the big three automakers. These jobs are leaving in 
droves.
  Now here are just a couple of examples of these broken promises and 
job losses, and I want to lay them out for you here this afternoon. I 
want to focus on the television and electronics industry because just a 
few weeks ago I joined our leader in touring the maquiladores and 
colonias that are growing rapidly along the border, specifically in 
Tijuana.
  Tijuana now produces more televisions than any other place in the 
world. More than 10 million TV sets are assembled in Mexico annually; 
most of these are in Tijuana. In fact, there are nearly 25,000 workers 
in Tijuana who make televisions, and these workers make no more than 
$50 per week.
  There has been a massive unprecedented shift in TV production in 
Mexico since NAFTA took effect, and this trend will continue. The 
electronics industry is expected to grow by 400 percent over the next 4 
years in Mexico. But if you had listened to what these TV companies 
were saying 4 years ago, you would not have believed that any of this 
would have happened.
  Let us take a look at Zenith. For example, here is what Zenith said 
in 1993 during the NAFTA debate:
       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.

That is what Zenith said.
  And here is what Zenith did. Zenith announced late last year that it 
is laying off 800 of its 3000 workers at Melrose Park in Illinois and, 
in addition, 510 workers have been certified for NAFTA trade adjustment 
assistance at Zenith's facility in Springfield, MO, and Chicago, IL. 
Zenith, who promised its workers prosperity, gave them pink slips 
instead, and that is just the tip of the iceberg.
  In February, according to the Journal of Commerce, Thompson Consumer 
Electronics announced it would cut more than 1,800 jobs in two Indiana 
factories and shift that production to Mexico. Thompson is the company 
that makes RCA televisions. Also in February, Sylvania, which makes 
florescent lamps at Danvers, MA announced that it is shifting that 
production to Mexico, costing 160 workers their jobs.
  And finally, General Electric's record would enact the biggest 
supporters, GE. Their record shows us why we should be skeptical about 
job promises. During the NAFTA debate GE said its sales to Mexico could 
support 1,000 jobs for GE and its suppliers, ``We fervently believe 
that these jobs depend on the success of this agreement''. Well, as it 
turns out, GE jobs did depend on NAFTA, but in a very different way. 
According to the Department of Labor, GE has shifted 2,300 jobs to 
Mexico since NAFTA took effect. This includes workers in Fort Wayne, 
IN; Rome, GA; Erie, PA; and Hickory, NC. Instead of selling our 
televisions to Mexico, we are now buying them from Mexico. Thousands of 
jobs have been lost in this sector.
  Now here is the real kicker. As terrible and as disgusting as it is 
with respect to the job losses, especially by companies who said that 
they would create jobs rather than moving their companies to Mexico, 
what has even been more omnipresent, suffocating for the American 
worker, has been the downward pressure on wages, and I want to show you 
another chart that illustrates what I am talking about.
  NAFTA puts downward pressure on U.S. wages. A study that was done by 
Cornell University for the Department of Labor found that 62 percent of 
the companies, 62 percent of companies are threatening to close plants 
rather than negotiate with the union or recognize the union.

                              {time}  1630

  These companies either explicitly say or implicitly suggest that they 
will move their plant to Mexico or another low-wage Nation. Take, for 
example, 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. In the wake of this closing, the same

[[Page H1593]]

union pulled an organizing petition at a neighboring subsidiary of 
Connor Rubber. The union official who was organizing this subsidiary 
said that wages were lacking, their benefits were lacking, but they 
also wanted a job.
  This is having a dampening effect on wages in America. Fifty percent 
of Americans now say their purchasing power is now worse than it was 
before NAFTA.
  So in conclusion, before I yield to my friend from Ohio [Mr. Brown] 
and my friend from Oregon [Mr. DeFazio], I want to say that we still 
believe that NAFTA can be a force for some progress. We still believe 
we can create a consumer market in Mexico, but before we even think 
about expanding NAFTA to other countries we need to fix the flaws in 
it.
  We need to give workers the same kind of health protection that we 
give companies for things like intellectual property. We need to 
include labor and environmental standards in the core agreement, not in 
some side agreement. We need to raise Mexico and other low-wage nations 
up to our standards, not lower ours to theirs. We need to make 
noncompliance subject to sanctions, not just consultations. We need to 
remember that this is not just about markets and trade barriers, this 
is about jobs and living standards and communities and people's health, 
it is about human rights and human dignity.
  Both sides of the border have workers that are misstreated by 
multinational corporations and indifferent governments, but they remain 
brave and they remain hopeful, and until they have a voice to fight for 
themselves, we have to be their voice. There are more people in this 
Congress who voted against NAFTA 4 years ago than voted for it, and 
many who voted for it said they would never vote for it again. Before 
we expand it, let us fix it. We can fix it. We indeed can fix it if we 
have the leadership and the guts to do so.
  Mr. Speaker, the multinational corporations in America today and 
abroad, the transnational corporations, are moving through economies in 
developed and undeveloped nations alike like a great green reaper in 
the field, just plowing ahead and moving over fence rows and moving 
over all of the built-in protections that people in legislatures and 
congresses and parliaments have adopted for the last 100 years. The 40-
hour work week, the 8-hour day, labor and safety and health 
protections, pensions, health care, you name it, I could go through a 
long list, all were as a result of the excesses and the greed of the 
multinational, transnational corporations at the turn of the century 
and during or just prior to the New Deal.
  Because there was no force, countervailing force to counteract this, 
a force was developed. There was a force of people who came together 
who really cared about community, about family, about localization, not 
necessarily globalization, and they went to work and they formed a 
coalition. These were led by labor unions, but they included religious 
organizations, environmental organizations, people who cared about 
justice, and they said to this rapacious free market sense of greed 
that was out there, there are limits, there are limits to your greed.
  We are living today in a world economy, in a national economy where 
our CEO's are making 200 times more than the average worker. In 1960, 
when we were young men, the gentleman from Oregon and I, the difference 
between what a CEO made and what a worker made was about 12 to 1. In 
the 1970's it moved up to 35 to 1, then 180 to 1. Now it is 200 to 1.
  We are finding that 80 percent of the American workers in this 
society have wages that basically have been frozen or have declined 
since 1979. The top 20 percent are doing very well, but most Americans 
are struggling to make ends meet. Most Americans have everybody in 
their home working, therefore less time with their kids, less time to 
be with them at their ball games, at their PTA meetings, and then the 
whole cycle of social maladies increases in our society.
  It all starts with a good job and a good wage. It all starts with the 
respect and dignity for the people who produce. These trade agreements, 
whether they are NAFTA or they are GATT, are robbing us slowly each 
day, each week, each year, each cycle of the protections we had to 
build a stable foundation for our families. An 8-hour day, 40-hour work 
week, severance pay, overtime pay, health and safety protections, you 
name it. That was all put there to give people a base, and now the 
multinationals are taking our jobs and moving them overseas, downward 
pressure on wages, and we are seeing that same cycle repeat itself in 
history in this country.
  I thank my colleague from Oregon [Mr. DeFazio], who has been strong 
and vigilant and caring and tough on this issue, and I thank him for 
joining me this afternoon.
  Mr. DeFAZIO. Mr. Speaker, I thank the gentleman again for his 
extraordinary leadership for this so far discouraging debate and battle 
to bring sanity to the trade practices of this country.
  I think the study the gentleman just mentioned is something that the 
American people need to know about. Of course, they have not really 
heard about it, even though their taxpayer dollars paid for it.
  The study the gentleman referenced which points to the extraordinary 
use of NAFTA by the largest corporations in America to drive down the 
wages of their workers, with threats of moving their jobs to Mexico, to 
prevent unions from forming by threatening to close the plant and move 
to Mexico if the union is formed, to drive down the benefits for those 
working people and their families, put extraordinary pressures on them. 
That was all very well-documented in a study paid for by our tax 
dollars, but strangely enough, it has not been published.
  I would think, having been a Democrat for a number of years, that I 
was dealing with a Republican administration that would repress such a 
study, but no, I find out that the Clinton administration, that the 
Department of Labor is repressing a study, a documented study by a 
well-known academic economist from Cornell University, that documents 
how destructive NAFTA has been beyond the job laws, beyond the 
destruction of the environment.
  It has hit average Americans who still have their jobs in this 
country, driving down their wages, while their CEO's, as the gentleman 
mentioned, see their bonuses and stock options rise to the sky. This is 
extraordinarily discouraging. I would call on the administration to 
release this. Let us have a full and fair debate over the impact of 
NAFTA. Do not try and hide it, do not try and hide reports that point 
to the problems.
  Like my colleagues say, if we are going to consider NAFTA or 
extensions of NAFTA, let us fix it first.
  The gentleman mentioned also the fast track. I think a lot of people 
say, fast track, what does that mean? What it really means is to get an 
agreement through the Congress with no scrutiny, no change allowed by 
your elected representatives, and no accountability. That is how we got 
NAFTA, that is now how we got GATT, and that is how they want to extend 
NAFTA. What does that mean?
  Well, the administration goes out and negotiates this agreement, of 
course privileged between the administrative branch, the executive 
branch, and the executive branch of another nation, and what they tell 
us is these agreements are so delicate, of course these nations are 
desperate to have these free-trade agreements with the United States, 
but it is so delicate that they will get upset and take their marbles 
somewhere else if we allow the elected representatives of the people, 
the Congress assembled, to make a single change in a single period, a 
crossing of a T, let alone a substantive change to those agreements. 
That is fast track. That is what the administration and the Republican 
leadership want to foist upon us in the very near future in an attempt 
to extend NAFTA even further into Latin America.
  I am no rust belt Congressman, no offense to my colleagues from the 
middle part of the country with a proud industrial tradition. I come 
from what is supposed to be the brave new world of free trade, the West 
Coast of the United States, Oregon.
  I have been one of the few who stood and questioned these so-called 
free-trade policies. I was shocked to find out just today, I said to 
myself, I am going to go down and speak on NAFTA, it has been a while, 
give me some updated statistics, to find that my State,

[[Page H1594]]

the great bastion of so-called free trade is fifth out of the 50 States 
on the list for companies who have filed for trade adjustment 
assistance, fifth. We are not talking about declining, old plants; we 
are talking about one of the fastest growing States in the union losing 
jobs across the wide variety.
  Wood products, plastics, computer products, ship repair, natural gas, 
shirts, coats, clothing, sawmill machinery, circuit boards, trailers, 
and related mushrooms, we are losing the mushroom business to Mexico. 
Air crew training, natural rubber, latex gloves for nuclear plants, 
computer integrated information systems.
  These are not the declining jobs that we heard, well, there might be 
a little dislocation, but all of those workers will get better jobs in 
these new industries. These are many of the new industries we were told 
that would bring jobs and prosperity to America, to Main Street, 
America, under NAFTA, and instead, they brought disaster, dislocation, 
and a loss of hope on the part of many of my constituents and others 
across the country.
  There are some Members of Congress listening, and we are going to try 
and stop the fast track and we are going to demand a review of NAFTA as 
it stands now, and some accountability. Let us go back to those 
promises, let us look at a bill we introduced called the NAFTA 
Accountability Act.
  Let us compare the promises to the reality, and if they do not match 
up, which they do not, as my colleague has pointed out, then let us ask 
the President to go back and renegotiate the agreement in a way that we 
can achieve the goals and the promises that were first rendered to us 
when NAFTA was jammed through this Congress on the last fast track 
experience we had.
  Mr. Speaker, I yield back to my colleague if he has a comment on 
that. I see our colleague from West Virginia is here, if he would care 
to comment.
  Mr. BONIOR. Mr. Speaker, let me just make one quick point and then I 
will yield to my friend from West Virginia [Mr. Wise] or my friend from 
Oregon [Mr. DeFazio] if he wishes to continue further.
  This is the debate about the future and the past. I would submit to 
you that the proposals that have been offered vis-a-vis GATT and NAFTA 
are the past. The proponents of these treaties want to take us back to 
a day when there were no protections for our workers, when there were 
no protections for our environment, when property rights were much more 
important than worker rights and human rights. Those were things that 
we have overcome, hurdles that we have overcome for the past 100 years, 
and the proponents want to take us back to the 19th century, 
masquerading that they are taking us to the 20th century, masquerading 
that they are taking us to the 20th century in order to create this 
greed.
  What we are about is taking us into the 21st century to deal with 
very human needs of workers. That is really where the center of this 
debate has to crystallize for the American public to understand what 
has been going on. So I thank my friend from Oregon for giving us a 
picture of what has happened in a West Coast so-called trade State. It 
is not very rosy, to have him elucidate on the floor of the House just 
how many people in his district and State are affected.
  I yield to my friend from West Virginia.
  Mr. WISE. Mr. Speaker, I was very struck by the gentleman from Oregon 
in that statement, because he is correct, those of us from the Midwest 
and the so-called rust belt and traditional mining and manufacturing 
areas assume that we bear the brunt of it, and of course we look to the 
West Coast and the silicon valleys of the world, the start-up 
industries, and if anybody benefits from these type of free-trade 
agreements, and yet I think you have illustrated very well what the 
problems are.
  I believe that those who negotiate these treaties for the most part 
are operating in good faith, I believe are operating in good faith. I 
think they honestly believe that the marketplace, if left alone, 
totally alone, will produce the greatest justice for the greatest good. 
I do not think it always works that way, and I do not think that the 
human, the human content, the human problems and the human 
ramifications are taken into consideration adequately enough.
  I have not seen too many NAFTA proponents come out in the last 2 
years to talk about all of the good that NAFTA was to do. I have not 
seen anyone stand in the well, as you two gentlemen are standing right 
now, and tick off goals announced when NAFTA was put forward, goals 
achieved. If my colleagues remember, the goal was that our trade 
surplus would at least be the same, if not greater. Of course we are 
billions of dollars in the red in trade deficits.
  Mr. BONIOR. Mr. Speaker, we had a $2 billion surplus going into 
NAFTA, going into the negotiations, and the United States had a $2 
billion trade surplus. Today, 40 months later, we have a $16 billion 
trade deficit with Mexico.

                              {time}  1645

  Mr. WISE. Exactly. There were to be several hundred thousand jobs, 
good-paying jobs, to be created, was the quote. We have not seen those 
jobs. We have an economy happily that has been growing, but at a 
minimalist rate, 2.3, 2.5 percent. That sustains about the level of 
unemployment, the current level of employment, better said, but it is 
not a growth economy. It is not an economy that helps.
  The gentleman from Michigan was talking about this a little earlier, 
it is not an economy that sustains and helps middle-income people truly 
stay middle income and get ahead.
  So that is my concern as well. Now I hear talk of a whole new wave of 
free-trade agreements that may be coming to this Congress. Whether you 
call it fast track, whether it is with Chile, whether with Mercosur, 
whether with some of the other countries, and we have the North 
American-Free Trade Agreement, NAFTA, Southern Hemisphere Area Free-
Trade Agreement, that turns into SHAFTA, and I think that is exactly 
what we are looking at if we keep going down this path.
  I happen to believe that there are a number of areas we can negotiate 
true free-trade agreements. But I think we have to take into context, 
into consideration, the economic situations of the countries involved, 
the political situations; and the differentials: the labor 
differentials, the economic differentials, the environmental 
differentials, the health and safety standards.
  Mr. BONIOR. Mr. Speaker, that is a very good point. When the European 
Union came together and Portugal and Greece wanted to join the European 
Union, they were told, you have to meet certain standards. If you meet 
these standards you can come in, we will embrace you, we will have a 
trade relationship that is comparable to what we do with each other, 
with what the French do with the British, what the British do with the 
Italians. But we are not going to let you come in until you provide 
certain labor standards, certain environmental standards, certain 
standards. You have to reach a certain level.
  We had an opportunity to do that during NAFTA with Mexico. With 
Canada we have comparable standards in these areas, but with Mexico we 
do not. You cannot form a labor union there, you cannot assemble an 
independent union. You get thrown in jail.
  I was just down in Mexico. I saw and talked to people who tried to do 
that, who worked in factories where the line was moving so fast that 
members of their families and neighbors were losing their fingers and 
hands. They put on a demonstration to stop work at this plant one day, 
to get the attention of the company to deal with this problem, and the 
people who organized that were fired. Then they tried to form their own 
independent union and they were thrown in jail. That goes on all the 
time. There is no sense of justice; economic justice, certainly, let 
alone other types of justice, in Mexico today.
  So what we are saying is, well, until you harmonize upwards and 
provide people the right to organize and assemble and collectively 
bargain for their sweat and labor, and until you provide a decent 
environment where people can bathe without worrying about toxins and 
fumigants and everything else getting into their children's 
bloodstream, we are not going to deal with you.
  The American Medical Association just recently called the border, the 
Mexican border along our United

[[Page H1595]]

States border, a cesspool of infectious disease. This is 4 years 
almost, after NAFTA, when we were told it was going to get cleaned up.
  So we are asking that these countries, and they have great people and 
wonderful workers, they just need some leadership out of their 
government, and some responsibility out of these transnational, 
multinational corporations, to do what they should do naturally, help 
these people lift themselves up and provide a decent quality of living 
for them, so they do not have to face these environmental degradations.
  The gentleman is absolutely right.
  Mr. DeFAZIO. Mr. Speaker, if the gentleman will continue to yield 
just a moment, this is a common misunderstanding, because the 
administration and the Republican leadership made a great show of 
adding environmental protections to the original NAFTA agreement, 
because they saw in fact that we probably were going to beat the NAFTA 
fast track agreement on the floor.
  But it was all cover. It was not in the agreement. It was not in the 
annexes. It was not in any part of the North American Free-Trade 
Agreement. It was in fact a nonbinding side agreement by administrative 
rule by the President. It was basically to do nothing except to provide 
cover to some of our weak-willed colleagues, who were torn between the 
opposition of people concerned about the environment and other things 
with this agreement and the pressure from some of the largest 
industries and some of the largest employers in their district, who 
were going to become smaller employers in their district real soon 
after this passed.
  So this was all cooked up. In fact, there is no binding environmental 
agreement. We have seen the conditions along the border deteriorate 
dramatically. It is going to continue to accelerate and get worse. In 
fact, I do not want to bring in too many side issues, but there is the 
recent problem with the strawberries. This is a problem of lack of 
environmental safeguards in Mexico. Americans are threatened with 
hepatitis because of some strawberries snuck in here in violation of 
the standards which control our school lunch program, but in any case, 
labeled as an American product, sold to children, to schools, fed to 
children, infected with hepatitis because, again, there are no 
enforceable environmental laws in Mexico. Yet we are opening our border 
to these goods coming across. This is an incredible threat.
  Mr. BONIOR. The gentleman is absolutely right. Let me tell my 
colleague, when I was down in Tijuana we visited a battery recycling 
facility. A couple of Americans came over, established this recycling 
facility for lead batteries in Mexico. They would take the batteries 
apart.
  We visited a field probably the size of a third, maybe a half of this 
Chamber, that was covered with white lead, exposed, a field of it, 
where dogs ran through it; very toxic, very dangerous. Dogs were 
running through it, kids were running through it. And not 5 yards from 
this exposed battery field of lead was the largest dairy farm in that 
state of Mexico. When it rained and the wind washed this lead and the 
cows ingested it, of course the cows died, and of course they have had 
a huge increase of cancer and other problems in this area. That is the 
type of a situation we are dealing with here, that type of uncaring and 
lax concern.
  I could tell the Members other horror stories, but believe me, we 
have not made any progress on the environment down there. We had this 
thing called an ad bank that our friend and colleague, the gentleman 
from California Esteban Torres, worked very, very hard on, but we have 
not had one significant major loan to deal with the cleanup yet. There 
are some getting ready to be done, but we have not made any progress 
there at all.

  Mr. WISE. Mr. Speaker, if the gentleman will continue to yield, one 
of the points that I think all this brings out is if we are talking 
about trade agreements, because we are, we ought not to be looking at 
free-trade agreements. First of all, we find out they are not free, we 
end up paying a whole lot for them. We ought not to be focusing on 
free-trade agreements, we ought to be focusing on regional trade 
agreements in which the goal is to up lift a region.
  We uplift a region not just in sheer dollars and cents, the fact that 
you can move a product across a State or country line with a minimum of 
tariffs, no tariffs, and trying to compete in a race to the bottom as 
far as living standards. No, a regional trade agreement says we want to 
uplift the whole region.
  We recognize that open trade is the best way to do it, but we also 
recognize, as the gentleman was talking about with the European Union, 
we also have to bring in a whole host of other factors as well. In 
order to participate in this regional trade agreement, then you have to 
bring labor, health, safety, environmental standards up.
  A West Virginia worker can outproduce, I think, anybody else in the 
world. We are very proud of what we make, whether it is glass, whether 
it is chemicals, the coal mining that goes on, and now a whole host of 
new industries. In fact, West Virginia is now, as I recall, the fifth 
largest exporter per capita in the country. So we compete and we 
compete well.
  But our plants and workers have trouble competing. Even though wages 
may be higher, they will be more productive, but at the same time if 
they are having to bear the environmental costs of installing the 
latest environmental equipment, which the world needs, if they are 
having to bear health and safety costs that nobody else bears, a whole 
lot of other things that weigh against them, then that is not free 
trade and not fair trade. Indeed, you have not benefited people in 
Mexico either, or wherever else you want to negotiate these treaties.
  Mr. BONIOR. Mr. Speaker, that is really the other real tragic and sad 
piece of all of this, is that the people who are really exploited are 
the Mexican workers, who are caring, who produce well, who work hard, 
but yet are paid a pittance.
  We were told during the NAFTA debate, my friend, the gentleman from 
West Virginia [Mr. Wise] and the gentleman from Oregon [Mr. DeFazio] 
will remember, we argued these folks were paid $1 an hour. We were 
told, they were not going to be paid $1 an hour, they are going to get 
paid more than $1 an hour. They are not paid $1 an hour today, they are 
paid 70 cents an hour.
  The other side will argue the reason they are paid 70 cents an hour 
is because the peso was devaluated. We told them that the peso was 
overvaluated, that this was going to happen. So it is these folks who 
work these extraordinary hours, they are very productive, and they make 
$4 and $5 a day at the plants I visited. They are struggling to make 
ends meet for their family, living in dire and abject poverty.
  Many of these corporations that are hiring them are folks we have 
right in our district. They are headquartered here. You would think 
they would be interested, the corporations, in paying them a decent 
wage so they could buy some of the products, the TV's, the automobiles, 
that these people produce.
  If we go to an automobile plant on the border, we do not see any 
parking lots, because people working in those plants do not have cars. 
Many do not have televisions, and they assemble more television sets 
there now than I believe anyplace else in the world, certainly in North 
America.
  That old principle of paying people not only a minimum wage but a 
liveable wage, so they can purchase what they make and you can create a 
middle class, and when we create a middle class in Mexico, they have 
one, they have about 100 million people there, and maybe 20 million are 
middle class, but the rest are not. But when we create a larger and 
expanding middle class, then they can purchase some of the things we 
make here. But until then, we are going to continue to see escalating 
and growing trade deficits, as we have seen.
  Mr. WISE. If the gentleman will yield, Mr. Speaker, I would also note 
if there are those who are going to bring this kind of legislation to 
the floor, whether it is the fast-track agreement or free-trade 
agreements or whatever, please be aware that I think that this time 
there are a lot of people who have had the benefit of seeing NAFTA in 
application, and that there will not be the automatic hard sell 
possible that

[[Page H1596]]

was done then, as people look at these other factors.
  Or if Members are going to bring it to the floor, please have it in 
those kinds of standards that are so necessary to truly make it a 
competitive and the often-used phrase is level playing field.
  Mr. DeFAZIO. If the gentleman will continue to yield, Mr. Speaker, if 
we could just return, again to my surprise, that Oregon, so-called free 
trade, high-technology, a growing State, is No. 5 on the list for 
applications for people's jobs having been exported or dislocated.
  I would just like people to be aware of the other States. No. 4 is 
the State of Washington, again, looked at as another vital, growing, 
exporting, high-technology State, dominated, of course, by Boeing and 
Microsoft.
  Then, you know, we get to States that, well, again, Texas, I do not 
think too many of us have thought in the past about Texas as being one 
of the them. Actually they are No. 2. No. 1 is Pennsylvania, and No. 3 
is New York, and No. 2 is Texas. So what we have pointed out here is 
that there has been extraordinary job loss.
  There are those, as the gentleman pointed out, who would say that 
this could not have been anticipated. Well, who could have anticipated 
the decline of the peso? Mr. Speaker, the bottom-line truth here is 
that this agreement was never intended to create a market for American 
products. This agreement was always about protecting the movement of 
United States capital and manufacturing resources to Mexico to exploit 
the cheaper labor, the lack of enforcement of safety standards, and the 
lack of enforcement of environmental laws.
  The key part of this agreement was something that protected United 
States capital and set up an independent court of claims in case any of 
it was expropriated, because United States industry was looking back to 
the days when, in Mexico, the oil industry had been expropriated. That 
was the barrier we are talking about.
  What they did is opened up the floodgates for capital that is needed 
in this country to update equipment and productivity, so we can compete 
in world markets, to move to Mexico with impunity, to exploit their 
people and the conditions in that nation.

                              {time}  1700

  We also opened the floodgates for other foreign nations to move their 
capital into Mexico in order to obtain access to our markets. It was 
never about Mexican workers earning a dollar an hour buying the Dodge 
Ram trucks that they are building. That was an impossible equation. It 
was never a reality.
  In fact, the total purchasing power of all the people of Mexico, if 
they had spent every peso before devaluation on United States goods, 
would have been less than the purchasing power of the people of New 
Jersey. Tell me that in the United States we would enter into an 
agreement and allow New Jersey to wipe out environmental laws and its 
labor protections and all that so that we could just gain access to 
their markets because it was going to boost our economy so much. No 
offense to the people of New Jersey, the Garden State, a great State.
  The point is, this was a blip, even if every peso spent in Mexico 
could have been spent in this country, that was never the intention. In 
fact, this agreement has worked out very much the way that its 
principal proponents intended.
  United States capital has fled to Mexico. United States jobs are 
seeing downward pressure on their wages. United States jobs are fleeing 
to Mexico. The people of Mexico have seen actually a decline in their 
standard of living and a decline in their environmental conditions. Now 
they want to extend this to other countries in Latin America, the great 
new frontiers where maybe labor is even cheaper than Mexico and maybe 
they will let us despoil the environment even more than they will in 
Mexico.
  Mr. BONIOR. Mr. Speaker, Mexico was created to be an export platform, 
an export platform where countries from around the world would come, 
exploit the cheap labor, inexpensive labor. The reason it is 
inexpensive is because the government will not let workers come 
together and bargain collectively for their sweat. They disallow that. 
You get thrown in jail if you try to do that.
  So you have got a situation where the government specifically is 
trying to create an export platform country, keeping the wages low for 
its workers. And it is not just U.S. corporations. It is Japanese 
corporations, corporations from Korea, all over the globe who are 
coming to Mexico and using their labor, people who get paid less than a 
dollar an hour, and then exporting those products right back here to 
the wealthiest and the most productive and the most sought after market 
on the face of the earth, into the United States.
  We, in turn, have nothing to sell to Mexicans because they do not 
have the money to buy it. We have lots of wonderful products, but when 
you have a society with people, the vast bulk of the people are not 
working or, if they are working, they are earning a buck an hour or 
less, they are not going to be able to purchase them. It is a no-win 
situation for everybody except the multinational corporations and the 
elites in the Government who back them up and the elites, I might add, 
in the media who are part of the corporations who are engaged in this 
type of activity because it is all intertwined.
  So the gentleman is absolutely correct. It is a tragic, tragic 
situation what has occurred here. It is taking us back to the 19th 
century instead of moving us forward to the 21st century. And it is 
just terribly tragic.
  As my colleague from Oregon says, now they want to extend this to all 
the rest of Latin America and who knows where else where there will be 
continued downward pressure on wages.
  Mr. DeFAZIO. I saw a cartoon once that basically the punch line was 
that I always wondered where we are spending all this money on the 
space station, and this one economist looks at the other and says, 
well, I know somewhere way out there there may be someone who will work 
for less than 10 cents an hour.
  So I mean in part, I mean what are these brave new frontiers. Of 
course, we are having some contention over China and other countries 
that are even more oppressive or repressive than Mexico. It is an 
extraordinary race to the bottom.
  Ultimately it will undermine the strength of our Nation, which was 
created in part by the spirit of capitalists like Henry Ford who said, 
I am going to build a product that the people who work in my plants can 
afford to buy. And for many years there was a wonderful linkage between 
the owners of capital and the managers of the corporations and the 
working people, which was to say, if you produce more and do better, we 
will all go up together.
  And now, for whatever reason, they have decided to break that link, 
to both use agreements like NAFTA to push down wages in our country. In 
the heartland of our country, we are seeing people who are getting 
hardballed in negotiations. It was either Delco or Packard Electric, 
and I do not want to misspeak, but it was a producer of electrical 
components for automobiles and wiring looms and all those things. When 
the agreement came up, the company said, look, it is real simple, you 
take a 50-percent cut in your wages or all your jobs go to Mexico. 
There was nothing else in the community. And ultimately the workers had 
to accede to those demands.
  Mr. BONIOR. And that happens every day in America, in many places 
every day at the bargaining table. Sixty-two percent of the employers 
threaten to close plants rather than negotiate or recognize a union, 
implying or explicitly threatening to move jobs to Mexico or to other 
countries if they did not take a cut in pay, if they did not take a cut 
in health benefits, if they insisted on recognizing a union to bargain, 
62 percent. It is a phenomenal number.
  If I might say something here about labor unions, because they often 
get a bad rap. Let me tell you, labor unions, I was driving the other 
day and I saw this banner that was hanging over a railroad trestle and 
it said, Labor unions, the people who brought you the weekend.
  It reminded me of what they did. They did bring people the weekend. 
They did bring them their vacation. They did give them wages. They did 
a lot of things to build the middle class. They moved people into the 
middle

[[Page H1597]]

class in this country. And when labor unions were strong, when they had 
about 35 percent of the workers in this country, they are down to about 
10 percent now in the private sector, when they had that percentage, 
people's wages were up there. They were up there.
  When they had 35 percent of the work force in this country, they were 
getting a comparable amount of the productivity in wages. But when they 
started to slide and decline in their numbers in the 1960's and the 
1970's and the 1980's, what they were able to get for their workers, as 
it relates to the productivity that the workers were creating, was less 
and less and less to the point now where they get about a third of the 
productivity that they performed, their workers.
  So the labor unions are an important ingredient. Whether they are 
here in this country or in Canada or we saw them go arm in arm in Korea 
recently to demand justice and they won. We saw Parisian workers 
and German workers march arm in arm in Paris, metal workers, for their 
rights. They won.

  Workers have to come together in solidarity with church groups, with 
other workers to form a countervailing force to stop this type of 
activity against working people both here and abroad.
  Mr. DeFAZIO. Another point, I have a lot of small business in my 
district, not a lot of large manufacturers. It came to some of the 
small businesses and the Chamber of Commerce in my hometown of 
Springfield, when what had been a profitable door and window 
manufacturing company was bought out by a nonunion firm from out of 
state. And they came in with the intent of busting the union, and it 
did not take very long for the business community, the small business 
community in this small town in Oregon to figure out, you know, if the 
people who work at Morgan Nicolai see their wages go down by 50 
percent, which was what was being proposed in the busting of the union, 
they will not have the money for the dry cleaning or the restaurants or 
the new televisions and the other things.
  Actually the workers got support from the traditional community. The 
small business community in many cases has not yet made that linkage. 
But it is their livelihood that is also being threatened by this 
downward trend. It is just not people who work for wages in factories. 
It is not just union members in the public or private sector. It is 
everybody who they patronize.
  And as we drive down wages in this country, we are ripping the heart 
out of all of middle-class America. Particularly disheartening to see 
it happening in this case where not only have the workers in Mexico 
seen their standard of living go down, but America workers are seeing 
their standard of living decline, while CEO's in this country go to 200 
times average wages of manufacturing employees. What are they doing 
with all that money? They should not be so greedy. It is just 
extraordinary to me. It is a recipe for disaster, a recipe for 
disaster.
  Indeed, it is. And we are creating a hollow shell under this economy 
of ours; and some day it is going to collapse, and when it collapses, 
it is going to come down with a thud that is going to shake the boots 
off of people in this country.
  Too many folks in America are making money on money, not enough 
making it on manufacturing and building things that are important for 
our economy and for our communities.
  And when this wage issue continues to erode, as it inevitably will 
with these trade agreements, I think it does not bode well for our 
children and grandchildren. And I am very, very concerned about it and 
I am very disappointed about this tragic turn that many of our 
colleagues have bought into with respect to trade like we have to do 
this because it is the only way that we can compete.
  It is nonsense, it is crazy, and it is driving the living standards 
of a lot of our families into the ground.
  I thank my colleague for coming.
  Mr. DeFAZIO. I thank the gentleman for his leadership.
  Mr. BONIOR. And I appreciate his taking the time this afternoon to 
speak on this issue. We will be joined by others of our colleagues to 
discuss this issue as we move closer to talking about additional trade 
agreements as they come to this floor.

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