[Congressional Record Volume 143, Number 57 (Tuesday, May 6, 1997)]
[House]
[Pages H2248-H2252]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 NAFTA

  The SPEAKER pro tempore (Mr. Jenkins). 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, a lot of attention has been focused on our 
relationship with Mexico, especially these last couple of days as the 
President prepared for his trip to visit Mexico and during his trip 
yesterday and today and his trip with Latin leaders in Central America, 
I believe tomorrow. He is in Mexico, the President, as we speak, 
meeting with President Zedillo on a number of important issues. They 
will be discussing drugs, they will be discussing immigration, and 
those are both very serious problems facing both of our countries. I 
wish them the best in trying to move a step or two closer to resolving 
those very difficult issues.
  The drug issue, of course, is particularly disturbing, and it is a 
two-way street. We are both to blame for the problem with drugs 
affecting both of our people. Mexico is shipping it here. Seventy 
percent of the cocaine and 25 percent of the heroin coming into the 
United States comes through Mexico. We have created this insatiable 
unfortunate demand for it in this country. We need to work on both 
sides of the border to get this under control.
  One of the problems with controlling it coming over here, of course, 
is the open border policy that we have with Mexico that was put into 
place during the North American Free Trade Agreement. And, of course, 
this open border policy allows trucks to pass over the border almost 
unimpeded, without inspection. In Texas there are about 11,000 trucks 
that will cross the border each and every single day from Mexico. One 
out of 200 get looked at, inspected, and one can read stories daily in 
the press of police finding trucks coming over the border once they are 
here, there was one story the other day in New York City where they 
opened up a truck that was carrying bananas and as they got into the 
cargo, they found cocaine, and it happens almost on a daily basis here 
in the United States. So this drug issue is a very serious one and we 
wish them all the best.
  We had a serious debate as some of my colleagues may recall in this 
Chamber not too very long ago about drugs. There will be a serious 
discussion, as I say, in Mexico City. But one issue that is being just 
glossed over, just mentioned in passing, is the performance of the 
North American Free Trade Agreement, better known as NAFTA. We had, as 
my colleagues all remember, a very vigorous and a healthy and a strong 
and a deliberative debate on this issue 4 years ago. We are now into 
the 40th month of NAFTA. It was this same agreement that in effect 
economically married our two nations. We became almost one, because we 
broke down the barriers of trade. That is what free trade is all about, 
breaking down the barriers completely. I believe that this agreement 
deserves more than just a passing reference by our colleagues, by the 
national media, and by our two leaders.
  I want to discuss on this floor tonight the issue of NAFTA and the 
prospects of expanding NAFTA, which by the way includes not only Mexico 
but Canada, expanding it to other Latin American countries, or the 
Caribbean Basin or most immediate and most discussed is expanding it to 
Chile.
  I want to discuss in just a minute or two some of the things that 
NAFTA has done, some of the devastating things that NAFTA has done to 
the workers in this Nation. But before I do that, let me mention a few 
things that it has not done, because my colleagues will hear none of 
this in the talks they

[[Page H2249]]

have in Mexico this week or the media coverage of the President's trip. 
Above all else, the supporters of NAFTA said, 40 months ago, that it 
would create 200,000 jobs in the United States and, more importantly, 
they said, it would create this huge consumer market in Mexico, a 
country of approaching 100 million people. That is what NAFTA would do, 
create this market where we could ship all these goods to Mexico, 
because they would have a strong and vibrant and prosperous middle 
class.

                              {time}  1015

  Mr. Speaker, those of us who have examined closely NAFTA for 40 
months know these claims just do not pass the test of time, and you 
know what? We have a right. We knew that you could not create a 
consumer market in the Nation where workers make a dollar an hour, in a 
Nation where business and Government and the official union annually 
agree to suppress wages through something called el pacto. It is an 
agreement between business, the government and the unions to keep wages 
low. Actually it is a broader agreement than just that. It is an 
agreement that the Government gives the business, the multinational 
corporations that come down to Mexico, that it will guarantee their 
investment by keeping wages low, by not leveling any taxes against 
these corporations, which by the way are needed in order to develop the 
infrastructure so that the people who live near the plant and work at 
the plant can live with clean air and clean water, which they do not 
now, and I will talk about that in a second.
  So the corporations pay no taxes, they pay very low wages to people, 
but it is an agreement, it is a strategy that was put together by the 
Government and the leaders of the unions in the business community. And 
we knew that the multinational corporations wanted to use Mexico as a 
labor market, not as a consumer market. And what do I mean by a labor 
market?
  Mr. Speaker, they wanted to use the inexpensive labor of a dollar an 
hour or less, and it is less now. It was a dollar an hour when we were 
discussing NAFTA. It is down to about 70 cents an hour or about five or 
six dollars a day for an 8-hour day, a productive day, by the way, 
because the Mexican workers are hard workers and good people. They have 
just got everybody against them. They have got the Government against 
them, they have got this phony union that works with the Government in 
the business community, and of course they have the multinationals 
against them, and they are all by themselves looking for someone to 
stand up and say:
  We deserve the right to earn a decent wage, we deserve the right to 
assemble, we deserve the right to bargain for our bread, we deserve the 
right to collectively bargain, the right to strike, to withhold our 
work. But they do not have that right.
  Now there is something called the maquiladora, and people when they 
hear that term used, ``What is a maquiladora?'' It is an area along the 
Mexican-American border from Texas to California. On each side of the 
border there is a strip of land. Maquiladoras refer to the Mexican area 
just across the American border in Texas, New Mexico, Arizona and 
California because workers in those maquiladora factories that line 
this border today, as I said, are no longer making a dollar an hour. 
They are making 70 cents a hour.
  Mr. Speaker, the multinational corporations took full advantage of 
the economic crisis in Mexico which contributed to this drop in the 
wages. Some of you may recall when we argued NAFTA the gentleman from 
New York [Mr. LaFalce] and myself and others got up and we said the 
peso is overvalued, it is going to crash, and when it crashes, the 
wages of the workers in Mexico will fall through the floor, there will 
be a financial crisis, and someone is going to have to bail out all 
these investors, these big shooters that invested because of NAFTA. 
Someone is going to have to take care of these big financial 
institutions.
  And so we did; we guaranteed the money. We saved a collapse, a total 
collapse, which may or may not happen in the future because I think the 
peso is starting to be overvalued again. But nonetheless, the peso 
crashed, and we said it would crash, and it was one of the reasons we 
said we did not like that NAFTA because it was overvalued.
  It was a huge financial crisis in Mexico, and people all over the 
country overnight had the value of their labor and their savings 
diminished by 40 percent. Now if you could imagine that, waking up 
tomorrow and knowing your life's savings, what you were earning that 
week, what you had saved, what you invested was 40 percent less, and 
that is what happened.
  These corporations have expanded employment in the maquiladora by 
over 40 percent since NAFTA took effect, 40 percent. In Mexico the 
workers are not buying more consumer goods. On those wages it takes 
nearly a half a day's works to buy a carton of milk, and they work. 
They work hard. They do not last too long.
  I visited 2 months ago the maquiladora down in Tijuana, and I went to 
the Hyundai plant and the Samsung plant and the Panasonic plant. You 
have got all these multinational large facilities, modern facilities. A 
lot. But you know you do not see any automobiles parked near there. 
Workers do not have the money to buy automobiles. You got an automobile 
factory in the maquiladora area. There are not any cars there. People 
do not have money to buy a car. What Henry Ford did in the early part 
of this century was say I am going to pay my workers a decent wage so 
they can buy the automobiles that they produce, and he dramatically 
increased their wages to $5 an hour.
  Mr. Speaker, they take the opposite approach, the multinationals in 
Mexico. They keep wages at 70 cents an hour so you make five or six 
dollars a day. Try to buy milk on that because the milk is not any more 
expensive or any less expensive than it is here, believe me.
  And you know, this is a remarkable fact. We sell more consumer goods 
to the small Nation of Switzerland, which is in the center of western 
Europe, small little country, a mountainous country, Switzerland, about 
6 million people. We sell more goods to Switzerland than we do to the 
almost hundred million people in Mexico. But they are making more goods 
in Mexico and shipping them here. That is exactly what the maquiladoras 
in NAFTA were designed to do.
  A surge in imports since NAFTA has exploded our trade deficit with 
Mexico. Before NAFTA, we were running about a $2 billion trade surplus 
with Mexico. We were selling them more, $2 billion worth more, of goods 
then they were selling us. Since NAFTA it is a $16 billion deficit.
  One of the reasons are obvious. They do not have a class of people 
that can buy our goods if the value of their peso devaluated 40 percent 
and they are making 70 cents an hour. What are they going to buy? And 
the other reason of course is that these corporations are establishing 
their businesses right across the border and taking advantage of this 
inexpensive labor and then shipping the products right back here, right 
back here, and it does not take a PHD in economics to figure out that 
when you are buying things from Mexico that used to be made here you 
are losing jobs.
  No, those 2,100 jobs have not materialized here as the NAFTA 
supporters said. What we do know is that nearly 120,000 American 
workers have been certified by the Government as loosing their jobs as 
a result of NAFTA, and using the same formula that NAFTA proponents 
used to estimate jobs gained in 1993 some people have suggested that we 
have lost up to 600,000 jobs.
  So that is what NAFTA has done, and let me just say something about 
the people who lost their jobs because this is an interesting story.
  People say, ``Well, you know you are talking about these job losses. 
I mean isn't the economy doing well, Bonior? I mean the unemployment 
rate is down to 4.9 percent. I mean the economy and consumer confidence 
is up.''

  Well, the fact of the matter is that those people who lost those 
jobs, they found other jobs here in this country, but studies that I 
have seen show that they have found those jobs at about two-thirds of 
what they were earning in their former jobs.
  So what happens when that occurs? Well, they work a second job, or 
the other spouse goes to work, or they are working two or three jobs, 
and what happens when that occurs? The parents

[[Page H2250]]

are not home when their children come home from school. They are not 
there to see them play soccer. They are not there to go to their school 
activities. And then the whole social fabric of our society starts to 
unravel a little bit.
  So wages have an impact not only on what you can take home and what 
you purchase and what you have in terms of security for yourself and 
your family, but they have a social consequence as well.
  The sad thing is what NAFTA has done.
  Mr. Speaker, we have discussed this before on this floor, and I want 
to discuss it again tonight. It is the issue of using NAFTA as a 
weapon, and I choose that word carefully, ``as a weapon,'' to dampen 
the efforts of workers here in America to earn a decent wage and seek 
the right to organize and collectively bargain, and I really want to 
focus on it tonight because I believe that this was the intention of 
NAFTA all along, to give corporations a license, in effect to pursue a 
race to the bottom strategy to drive down wages to bust unions and to 
move the living standard of Americans to a lower level.
  And of course, as I say, Americans resist that. They will work two 
and three jobs in order to maintain that standard of living, but when 
they do that, they give up something else that is very precious to 
them, and that is time with their families. They give up their family 
life. They give up part of their spiritual life. They give up other 
things that create an atmosphere of community and caring and loving.
  And I can tell you right now that we should not stand for this 
because our fathers and our mothers and our grandparents and our 
ancestors, they fought too hard and they fought too long over these 
past 100 years for the right to assemble, the right to organize, the 
right to collectively bargain, the right to earn a decent wage, the 
right to work in safe working conditions and on, and on, and on.
  Corporations are now using NAFTA to erode these rights, not by 
changing the law in this case, but by pitting workers against each 
other and by threatening to move jobs to the lowest cost labor market 
available, and NAFTA gives them a license to do that because it 
protects their investment in Mexico. It does not require them to raise 
Mexican standards up to ours. It practically guarantees them that they 
will not be caught because NAFTA does not give workers a real voice in 
this decision. All it does is it says, ``Let's talk.'' If corporations 
are violating worker rights, no sanctions, no fines, no consequences; 
if you are lucky, maybe a little discussion.
  NAFTA put a stamp of approval on all of this behavior, and it should 
be a crime what some of these corporations are doing since NAFTA took 
effect.
  Downward pressure on wages; look at this chart right here. NAFTA puts 
downward pressure on U.S. wages. Sixty-two percent of U.S. employers 
threaten to close plants rather than negotiate with or recognize a 
union, implying or explicitly threatening to move jobs to Mexico.
  This was a study that was done at Cornell University. Sixty-two 
percent, a study that was done which the Department of Labor refused to 
release, and you can understand why when you see these numbers.

                              {time}  2230

  Basically this says that the corporations were going to the workers 
and saying, and I will demonstrate this vividly in just a second, you 
do not take a freeze in wages or a cut in wages or a cut in your health 
care benefits or your pension benefits; we are going south and you are 
not going to have any job at all. Yet, when workers in Mexico try to 
organize and try to form unions and try to fight for better pay and to 
try to take away this bargaining chip that the multinationals and 
corporations in this country are using on workers, what happens? I will 
tell my colleagues what happens. They get thrown in jail.
  I was witness to a discussion with one of the leaders of the colonia, 
which is a village of workers who work in the Maquiladora in Tijuana, 
who told me that he got the line at this factory to stop. The workers 
protested because people were losing their fingers and their hands, and 
as a result of that, he got fired for organizing this work stoppage. 
And when he tried to organize an independent union because the union 
that was there is in cahoots with the government and the company, as 
are 95 percent of the unions in Mexico, when he tried to form an 
independent union he was arrested and thrown in jail.
  Four years ago, we put our stamp of approval on the whole schematic 
that I have just developed here.
  Mr. Speaker, let me read a passage from this Cornell study, because 
it will show our colleagues just exactly what NAFTA has done. This 
passage I am going to read discusses why companies, after an effort by 
workers to organize in the United States, have fled to Mexico at double 
the rates since NAFTA took effect than before NAFTA. I quote the study: 
The fact that the post-election plant closing rate has more than 
doubled, that is here, since NAFTA was ratified, suggests that NAFTA 
has both increased the credibility and the effectiveness of the plant 
closing threat for employers and embolden increasing numbers of 
employers to act upon that threat.
  In fact, it goes on to say, in several campaigns the employer used 
the media coverage of NAFTA debate to threaten the workers. It 
threatened the workers with moving their plant to Mexico if the workers 
were to organize. In several campaigns the employers used the media 
coverage of NAFTA debate to threaten the workers that they were going 
to move their plant if the workers were to organize.
  Mr. Speaker, let me now turn to a few examples of how corporations 
have used NAFTA to drive down wages in the United States, to do exactly 
what this Cornell study has suggested. Last week the gentleman from 
Ohio [Mr. Kucinich] reminded us that one of the most dramatic examples 
took place in Michigan.
  In 1994 workers were attempting to organize an ITT automotive plant 
in Michigan. The company was resisting. The company used the threat of 
moving to Mexico in a very blatant fashion. During the organizing 
campaign the management took apart an assembly line in the plant, 
shrink-wrapped it and loaded it on 13 flatbed trucks with bright pink 
signs that read, ``Mexico transfer jobs.'' Mexico transfer jobs.
  The same company drew employees from the Mexican facility to 
videotape Michigan workers on a production line which the supervisor 
claimed they were considering moving to Mexico. So they bring these 
Mexican workers up here, they videotape the American workers working on 
the line. The American workers say, ``What is going on?'' They say, 
``Well, we are videotaping the line because this production line is 
going to move to Mexico.''
  That type of threat is still going on today, and of course, needless 
to say, the union lost the election in that plant.
  Let me show my colleagues another chart here. Companies use NAFTA to 
drive down wages for American workers. Just 2 months ago, a company 
called NTN Bauer used this same exact flyer which can be seen trying to 
undermine an organizing drive in McComb, IL.
  As my colleagues can see, the flyer makes a blatant threat. It says 
if the worker decides to join the UAW, their jobs may go south for more 
than just the winter. The leaflet notes there are Mexicans willing to 
do their job for $3 and $4 an hour. The free trade treaty allows this.
  The fact of the matter is, these jobs are being done not for $3 or $4 
an hour, they are being done for 70 cents an hour. This is perhaps one 
of the most blatant example of how companies are using NAFTA to stop 
the wages from going up, and benefits. It is happening every day and 62 
percent of employers are doing the same thing.
  The author of the Cornell study, professor Kate Rothenbrenner, 
concluded the following, and I quote. This is her conclusion: NAFTA has 
created a climate that has emboldened employers and terrified workers. 
I want to repeat that again: NAFTA has created a climate that has 
emboldened employers and terrified workers.
  These same companies that promised to create jobs under NAFTA, but 
who are instead using it as a threat to drive down wages in this 
country, now want to expand into other nations without any protection 
for workers. This problem will only get worse because it is not only 
Mexico that is being used as a bargaining chip. NAFTA supporters, as I 
said earlier, would like to add next

[[Page H2251]]

Chile to NAFTA, but the nation of Chile is being used as a bargaining 
chip as well.
  Mr. Speaker, some of my colleagues may be familiar with a recent 
strike of workers at Goodyear Tire & Rubber Co. More than 12,500 
workers went on strike to demand decent wages and benefits and limiting 
outsourcing. That is when the company decided to produce parts in 
another country, and pretty soon we have this part and that part and we 
have the whole thing being produced elsewhere. Outsourcing of course is 
a major concern of workers in this country, especially in the 
manufacturing sector, in the industrial manufacturing sector.
  Well, as I said, one of the major issues of that strike was the 
announcement by Goodyear that it was transferring production from its 
Akron, OH plant to Santiago, Chile, resulting in 150 lost jobs in order 
to lower labor costs. So this is a trend that will continue on and on 
and on unless we seriously address the issues of wages and workers' 
rights in our trade agreements.
  People suggest to me, well, we cannot do that. We cannot address the 
environment and workers' wages and workers's rights in these 
agreements, and the reason we cannot do that is because the other 
countries that we are bargaining with will not allow it. If we just go 
along with them, and we improve their economies or we help improve 
their economies and their people become more prosperous and middle 
class, that will bring with it the freedoms that we cherish and have 
worked so hard for in this country. That is the other argument against 
the position that I and others take.
  The fact of the matter is that history has shown that if we do not 
address these things in these agreements, they just do not get 
addressed at all; that there is no countervailing force in Mexico or in 
some of these countries to bring prosperity and to bring a rising 
middle class, and there is no historical proof that when this is done, 
democratization flourishes.

  Democratization flourishes when people are allowed to assemble and 
bargain for their own bread and their own rights. The unions have 
brought depth and dignity to democracy in this country and in Western 
Europe and they can do it in Latin America, they can do it in Asia, as 
they are doing it now in Korea, by the way, they can do it in Africa 
and they can do it in other places, other developing countries. But 
they have to have the ability to come together without having the fear 
of being thrown in jail.
  All we are asking our Government to do is to take these principles 
that made us so strong, that made us the envy of the world, that gave 
rise because of organized labor to the largest and most prosperous 
middle class the world has ever known, to allow those principles, those 
democratic principles to be used in Mexico and other developing 
countries in the world. That is what we are after, so that workers 
there and workers here can benefit. Not this insatiable race to the 
bottom, to the lowest standard.
  NAFTA is a flawed agreement. It is not just about Mexico. It is about 
giving corporations a license to do this to workers.
  It is unconscionable what they are doing on the border and the 
Maquiladora area, these multinational corporations, dumping their 
sewage and their plant effluents into the rivers that the people live 
right next to, bathe in, drink out of. The American Medical Association 
said that these corporations have created a cesspool of infectious 
disease. That is their words. They refuse to be taxed in order to 
provide an infrastructure to clean up this pollution.
  These manufacturing jobs that pay a decent wage, allow workers to 
send their kids to college, talking about the jobs that we have here, 
buy a home, take a nice vacation, have a secure retirement with good 
health care, they are going to be gone unless the country wakes up and 
decides that it wants to export our worker values and principles, not 
our jobs, so that the workers in Mexico and in other places can have 
lives like we have developed over the last 100 years.
  We are creating jobs in this Nation, but they are not the types of 
jobs that can sustain this economy. We are going to wake up one morning 
and we are going to hit a hollowed bottom, a hollowed bottom, where the 
top 20 percent or the top 25 percent in America are doing very, very 
well, but then they are going to discover the folks below them, their 
earning power is slipping and slipping and slipping and slipping, and 
they pretty soon will not have the wherewithal to purchase the products 
that they once made. In the not so distant future, clearly this is 
going to catch up to us.
  Mr. Speaker, this debate we are engaged in tonight is not simply 
about tariffs, investment rules, and trade agreements, it is in essence 
about our economic future. It is about whether or not we as a nation 
will go forward with the bright and wonderful hope of exporting our 
principles of democracy and our right to organize and the right to 
collective bargaining, and all of those things that helped make us 
prosperous, or we are going to go backward and we are going to export 
greed that denies people the ability to come together in a community to 
better their own lives.
  This is nothing more than a masquerade for greed. That is what we are 
dealing with here. I do not say that flippantly. I have thought about 
this and I have tried to rationalize it from the perspective of those 
who argue on the other side, and I have looked at the data and I have 
talked to the workers, both here and there, and I have come to the 
conclusion it is about greed.
  Nobody will say no to the rapacious and inexorable march of the 
multinational corporations today, and it is very, very scary. There is 
no countervailing force. We have indifferent government, we have 
weakened, if nonexistent labor, and we have an economic, how should I 
describe it, intertwined media with the economic powers that be in this 
country, the multinationals, so that that independent message is very, 
very difficult to penetrate.
  I must say, though, that I have sensed a little bit of hope. As we 
all remember during the NAFTA debate, at least I certainly remember, I 
suspect a lot of people do, but I certainly do, the New York Times was 
unabashedly in favor of NAFTA. There was an editorial board and a 
columnist there that I respect very much for their integrity, for their 
depth, their knowledge, but I really had a serious disagreement over 
this issue. I remember coming to the floor and railing against the New 
York Times, I was so mad one evening, and taking off on a little box 
they have in the left-hand top corner of the front page every day that 
says, ``All the news that is fit to print.''
  But in the last several months, I have noticed that a few editorials 
in the Times are starting to address indirectly, not directly but 
indirectly, the question of poverty in Latin America.

                              {time}  2245

  There was one, I think, that was just this morning that talked about 
how the wealth is not reaching them because of the growth in Latin 
America, which needs to grow. It needs to grow at a 6 or 7 percent clip 
to keep up with its population growth. But the wealth has been going to 
a select few. As I just described, in Mexico we have huge numbers of 
people, huge numbers of people that are falling further and further 
behind, who are working harder and harder to make ends meet.
  So the wealth is just moving to the top, and we are exacerbating the 
problems of the poor and the working poor. I would take that argument a 
step further. The New York Times, in an editorial today, came up with a 
series of formulas to try to eradicate this problem and focus attention 
on the poor and working poor. But my suggestion to you is that until 
you get the governments and the multinational corporations dealing 
fairly and honestly and with integrity with the workers, that is not 
going to happen. It will not happen. They have enslaved, they have 
enslaved a generation of workers.
  I hope they keep examining and looking at this, because I do not 
think that they can come to any other conclusion than that. There are a 
couple of people at the Times, Abe Rosenthal, Bob Herbert, wonderful 
people, Duke Collins, who I think share my view with respect to these 
trade agreements: That we need to have them, that they are helpful to 
all concerned if done well, but that what we have been doing is taking 
us back to the 19th century and not forward.

[[Page H2252]]

  I regret to say that my President, who I respect so much on so many 
other different issues, we have such a difference of opinion on this 
one. I would like for him to go down to a maquiladora area. I would 
like for him to talk to the workers in those colonias, to see for 
himself what we are talking about here, to see the pollution, to see 
the despair, to see the hopelessness and the alienation.
  Someone is going to have to lead an international effort, Mr. 
President, on wages, on labor rights, on environmental rights. It might 
as well be us. We have benefited more than anyone else in the world. We 
have, and our European cousins. We need to share that with the workers 
in Asia and Africa and Latin America and the Caribbean Basin. We have 
to hold the multinational-transnational corporations responsible.
  In conclusion, Mr. Speaker, let me again at the end of my comments 
here wish President Zedillo and President Clinton and all the Latin 
leaders in Costa Rica tomorrow well in their discussions, and I look 
forward to a vigorous debate as we proceed to discuss this fast-track 
trade authority. With China, which will, I assume, follow that, or 
precede it, but certainly will be before us within the next 4 or 5 
months, these trade issues are terribly, terribly important because of 
the globalization efforts underway, and tearing down borders, marrying 
our countries to each other economically, and creating a situation in 
which workers will have hopefully a fair and a decent ability to 
compete.

                          ____________________