[Congressional Record Volume 143, Number 103 (Monday, July 21, 1997)]
[Senate]
[Pages S7748-S7752]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FAST-TRACK TRADING AUTHORITY
Mr. DORGAN. Mr. President, I want to visit today on the floor of the
Senate about something that will come to the Senate, according to what
I read in all the journals and newspaper articles, in the month of
September. This will be a request from the Clinton administration to
the Congress to give them something called fast-track trade authority.
This poster behind me will tell my colleagues of course how I feel
about fast track. There will not be any great suspense by those who
look at this poster to understand that I think fast-track trade
authority is the wrong track for this country. I want to spend a little
time talking about what fast track is. I expect most people in the
country are unfamiliar with the term. What is fast-track trading
authority? And why are we debating it?
Just the words ``fast track'' tell a story. We all come from towns
that have understood what the word ``fast'' means. We have all had some
folks come through our town with the modern-day equivalent of the old
covered wagon and the fellow wearing silk pants and a silk shirt and a
top hat, selling some sort of bottled medicine that cures everything
from hiccups to the gout--the fast talker, fast-buck artist. We know
about fast food and fast lanes.
This is fast track. What does fast track mean? Congress under the
U.S. Constitution has the authority on trade issues. I will put up a
chart which shows that authority in the Constitution. Fast track means
that Congress will take its authority and essentially subjugate its
authority to a process by which an administration will go out and
negotiate a trade agreement and then bring it back to Congress with an
understanding that there shall not be any amendments on the agreement.
Fast track means that every Member of Congress will be prevented from
offering an amendment to the trade agreement.
The Constitution of the United States in article 1, section 8 says,
``The
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Congress shall have the power . . . to regulate commerce with foreign
nations.'' Interpreted, it means that the responsibility for the issue
of trade resides here in the Congress. We also have an executive branch
and a President and an office of Trade Ambassador and others who go out
and negotiate trade agreement with other countries.
Of course, it is a different world now than it was. We have much more
commerce, back and forth across the oceans, country to country, and
across national borders. So then the question is, who wins and who
loses in this trade? Some would have us believe that everyone wins in
every circumstance.
I was on an interview show last Thursday in downtown Washington, DC,
with Jack Kemp. Jack Kemp has a view about trade, and he is a good
friend of mine. I like Jack Kemp a lot, but his view of trade is, ``All
trade is just fine, because everybody wins. Open it up and expand it
and everybody wins.''
However, that is not the case in international trade. There are
winners and there are losers. Yes, expanded, freer, and more open trade
is good for the world. There is no question about that. But trade rules
that are fair are required in order that one country is not winning at
the expense of the other country that is losing. I want to talk a
little about that today and how that fits with my concern about the
issue of fast track.
Now, there are a lot of things that are right in this country at the
moment. We have a country that tends almost inevitably to insist on
talking about what is wrong. But, there are a lot of things right in
this country. Our economy is growing. It has been growing for some long
while. Unemployment is down, way down. Inflation is down, way down, 5
years in a row, and is almost nonexistent. The Federal budget deficit
is down, and has been for 5 years in a row.
The fact is, there is some good economic news in this country. People
feel better about the future. Our economy rests on a cushion of
confidence. When people are confident about the future, they make
decisions that reflect that confidence. They will buy a car. They will
buy a house, buy a washing machine, or buy a television set. If they
are not confident about the future, they make the opposite choice. They
decide not to purchase that washing machine or that car or that house.
So our economy rests on a notion of confidence.
Do people have confidence about the future? At this point they do
have more confidence about the future than they had in the past. It is
because most of the fundamentals about our economy are moving in the
right direction with one exception, and that is the area of
international trade.
People look to this country and say, well, gee, in international
trade, America is remarkably successful. It is not. Two centuries ago,
this country was known as a country of shrewd Yankee traders. We could
outtrade anybody anywhere any time, the shrewd Yankee traders from that
new United States of America. What happened?
What happened was that in the last half century, following the Second
World War, our trade policy inevitably became our foreign policy. We
did not have a trade policy; we had a foreign policy with other
countries. That foreign policy drove all of the trade decisions we
made--with Japan, with Europe, with all of our trading partners.
Our trade policy was driven by our foreign policy. At the time, of
course, we were bigger, stronger, and had greater capability of dealing
in international trade. We could whip almost any of these countries
with one arm tied behind our back. That is how strong our economy was
compared to a Japanese economy that was wrecked by World War II, a
European economy that was wrecked by World War II and in tatters and
trying to rebuild. We could compete easily. We could provide
concessions to every one of those countries, even giant concessions at
that, and we did. Despite the fact that we did that, in the first 25
years after the Second World War, we saw continual wage gains in this
country up and up and up, and we did very, very well.
But then what happened was Japan and the Western European economies
were rebuilt and became very strong. And, they became shrewd, tough,
international competitors. Meanwhile, our trade policy with them was
still driven by our foreign policy.
With Japan, we began to become accustomed to deficits in
international trade relations every single year. In recent years these
have amounted to $40 to $50 billion, and even $60 billion a year trade
deficits with Japan, every single year. The same has been true with
some of our other trading partner relationships.
Now in recent times we have had a series of trade negotiations, some
of them under what is called the fast-track procedure. After every
trade negotiation we have had days of feasting and rejoicing by those
who negotiated them. They talked about how wonderful the agreements
were for America, but at the conclusion of it our trade deficit kept
growing and growing and growing.
There has been angst in this Chamber, an enormous amount of
discussion about the other deficit, the fiscal policy budget deficit,
and it is a very serious problem. Fortunately, we have made significant
progress in dealing with it.
Yet, the deficit called the trade deficit does not provoke one
utterance in this Chamber. No one talks about it, no one thinks much
about it, and no one appears willing to lift a finger to do anything
about it. I will show my colleagues and those watching these
proceedings what has happened to the trade deficit. The merchandise
trade deficit, that is, the imbalance or the deficit between what we
ship into this country versus what we ship out, is this year 21 years
old. We have had 21 straight years of trade deficits growing worse and
worse every year. It is now of legal age, since we have had 21 years of
trade deficits.
Last year, we had the largest merchandise trade deficit in this
country's history. Does it matter? Some say it does not. Some say it
just does not matter at all. It means that we are importing cheap goods
from around the world and so someone else has the American dollars that
we paid for those goods.
What will they do with these dollars? They will invest them in
America. That is what they say. I suppose that suggests it does not
matter who owns the productive facilities of our country or the real
estate of our country or who owns much of the assets of our country. I
don't happen to believe that, but I suppose some probably say it does
not matter. There are those who believe it is an international economy,
let the chips fall where they may, and if you cannot compete, you
cannot compete.
The dilemma is this: The U.S. producer and the U.S. employer can
compete with anyone in this world as long as the competition is fair.
But no U.S. worker and no U.S. employer ought to be required to compete
against someone who works 14 hours a day, is 14 years old, and makes 14
cents an hour. Yet this goes on all across the world, as I speak.
Is that fair competition? Should we expect someone in Toledo, Fargo,
Denver, or Los Angeles to have to compete against 14-cent-an-hour
wages? I don't think so. I don't think anyone actually believes that
represents fair trade.
Should we be expected to compete against a country that insists on
shipping its goods in wholesale quantity to our country but keeps its
market closed to the goods produced by American workers? I don't think
so. That is not fair trade.
Now, as a result of a number of those considerations, and others, we
have a trade deficit that continues to grow. Fast track is a process
that started back a couple of decades ago of negotiating trade
agreements under a procedure called fast track so that no one could
amend the trade agreement when it came back to Congress.
Look what has happened under fast track. There is nothing but a sea
of red ink. Is it because of fast track? I don't know. All I know is
that within trade agreements there are serious problems. For example,
the one we have with Canada results in a massive, massive problem with
a flood of Canadian grain coming into our country unfairly and we
cannot do a thing about it. We seem powerless to deal with it.
I voted against the United States-Canada Free Trade Agreement because
I thought it was negotiated in a way that was fundamentally unfair to
our country. I thought the negotiators effectively sold out the
interests of
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American agriculture in negotiating that trade agreement. Now, we find
ourselves now with a growing trade deficit with Canada, and an
avalanche of Canadian grain flooding into our country, undercutting the
price that farmers in our country received from an already weak grain
market. Is that fair? I don't think it is fair.
Let's take a look at NAFTA, the United States-Canada Free Trade
Agreement, the Uruguay round of GATT talks, the Tokyo round, all under
fast track. What happens under fast track is that we negotiate a Tokyo
round, bring it to Congress, shove it through the Congress, and say you
have no right in Congress to amend it.
Now, Congress decided that it should have no right to amend it. That
is what fast track is all about. There was fast track with the United
States-Canada Free Trade Agreement. Shove it through Congress, with no
right to amend it. None. Then there was NAFTA, the North American Free
Trade Agreement, which includes Mexico--Congress had no right to amend
it. I led the fight against fast track on this particular agreement
when I was in the House of Representatives. We lost by about 30 or 40
votes. Then the Uruguay round comes to Congress. There was no right to
amend it because fast track means that whatever they negotiate you have
to accept up or down, with no amendments.
The bars on this chart represent the merchandise trade deficits that
we have had since these trade agreements were adopted through the use
of fast track. Can anyone in this country who has not had a fifth of
Wild Turkey take a look at these and say that this is success? You have
to be dead drunk to believe this is a success. This is an abysmal
failure. Part of it, in my judgment, comes from fast track. This is a
process that says to negotiators, go out and negotiate and do what you
want to do and bring it back, and then we will have a procedure in
place that prevents any Member of Congress from correcting a mistake
you might have made. This is not success. This ocean of red ink
represents failure.
Let me take a closer look at one of them in particular, the NAFTA
agreement. The NAFTA agreement is a trade agreement that we negotiated
with Canada and Mexico together. We already had the United States-
Canada Free Trade Agreement. We rolled that into a broader agreement
which included Mexico with NAFTA. Just prior to the time the NAFTA
trade agreement was implemented, we had an $11 billion merchandise
trade deficit with Canada and a $2 billion merchandise trade surplus
with Mexico.
Look at what has happened to this country since this agreement was
phased in: The deficit with Canada has gone from $11 billion to $14
billion to $18 billion to $23 billion. Success? You would have to be
dead drunk to call that a success. That is not a success. That is a
failure.
With Mexico, we had a $1 billion surplus in the first year of the
trade agreement under NAFTA. The next year, we had a $15 billion
deficit. The next year, it was a $16 billion deficit. In other words,
we now have a nearly $40 billion combined trade deficit with both of
our neighbors.
So what does it matter, some say. ``So what? Things are going fine.
So what?'' What it means is that in the past 21 years, we have
accumulated close to a $2 trillion account deficit that will have to be
repaid with a lower standard of living in this country at some point in
the future. So what? So it means that we are inevitably weakening the
production and the manufacturing sectors of this country. No country
will long remain a world-class economy unless it has a world-class
manufacturing sector. If it does not have a strong manufacturing base,
it will not retain a strong world-class economy. You cannot have a
strong economy just selling hamburgers and insurance and so on, back
and forth to one another; you must have a strong manufacturing base.
Now, let me describe a bit about what has happened with the free
trade agreement. We were told that if the Congress passed something
called NAFTA with Canada and Mexico that we would receive products that
came from low-skilled jobs from Mexico. We were told that as a result
of NAFTA, we would have more American jobs because of the trade
agreement. Do you know that now, after a few years of NAFTA, we have
more automobiles shipped into this country, produced in Mexico, than
are shipped from America to the rest of the world?
Let me say that again because I bet most people don't believe that to
be the case. Now that we have opened these borders and we have allowed
the largest enterprises in this country to go find the cheapest labor
they can find, we now import more automobiles from Mexico than the
United States exports to the rest of the world combined.
Think about that. Why does all this matter? It matters because the
manufacturing sector in this country is critical to an economy that is
based on good jobs with good incomes. If we are going to produce shoes,
pencils, automobiles, electronics products, and we are going to do that
in Mexico, in Bangladesh, in Sri Lanka, in Indonesia, because we can
hire a worker in those areas at a fraction of the cost of what it would
require us to pay to hire a worker in the United States, what does that
mean? It means production moves offshore. Our production moves
overseas. What does that mean to the core of the economy in this
country? It is weakened.
The central question I ask about these trade relationships is whether
it is fair trade? Is it fair trade for a company to be able to just
pole vault over all of the problems in this country that they have in
producing? For example, the problem of having to overcome a prohibition
against hiring kids. We say in this country that you can't go hire a
12-year-old kid and work him 12 hours a day. That violates the Child
Labor Act in this country. We say, you can't produce a product and dump
chemicals into the air and throw chemicals into the water because we
have environmental laws that prevent you from doing that. So that
company can say, fine, if you say we can't hire kids, we can't dump
chemicals and sewage into the water and air, we will go to a country
where we can. We will produce it there and ship it back to Fargo and to
Buffalo and we will ship it to Dallas and put it on the shelves of the
stores to compete with products made in the United States, where you
have had to pay higher wages and you have had to obey child labor laws
and you have had to obey environmental laws.
I question, is that fair trade? I don't think so. Yet, that is
exactly what we are facing. Yes, we face it even close to our border,
but especially in many other places around the world.
We have a trade deficit in which 92 percent of the merchandise trade
deficit is with six countries: Japan, with nearly $50 billion; China,
$40 billion; Canada and Mexico with another $40 billion; and Germany.
I was in China last November and met with the President of China and
talked about our trade relationship. I have no idea whether I made any
impact. He was a wonderful person. China has a terrific deal with this
country. We talk a lot about most-favored-nation status here in this
Chamber. We had a vote on it last week. I didn't think we should vote
on that within an appropriations bill without any significant debate,
so I voted against that amendment. But I specifically indicated that
that wasn't a vote for me on the substance of the MFN issue. I think we
ought to have a vote and a significant debate on most-favored-nation
status for China.
But let me say this. We talk a lot about most-favored-nation status
and about human rights. Certainly human rights is very important. The
week I was in China, a fellow--I believe his name was Wang Dan--was
sentenced to 9 years in prison for criticizing the government. Those
human rights are important.
At the same there is something else that is also important. What
about a country that is exponentially increasing its trade surplus with
this country? We have become a cash cow for the hard currency needs of
China. Again, it weakens us and strengthens them. They ship us their
goods. In fact, almost half the Chinese exports come to the United
States of America, and yet, we get so few goods into China.
We ought to say to China, to Japan, to Canada, and to others, that we
expect and demand reciprocal and fair trade treatment, and if you don't
give it to us, the United States marketplace
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is not open to you. The U.S. marketplace is open to you if you treat us
fairly. Yes, we are willing to compete. We should be required to
compete. But the competition ought to be fair. If it is not, then we
ought to have the nerve and the will to stand up to these countries and
say it is not fair to this country. And, it is not fair to American
workers and to American producers either.
In September, when we have a debate on fast track, I am going to be
on the floor fighting as hard as I know how to fight to prevent us from
granting fast-track authority for new trade talks. Do I support the
trade officials? Yes, I want them to succeed. I want them to negotiate
something that they can win for a change. I am really tired of us
losing in international trade talks.
Let me give you some specifics. Last Saturday morning, in Minot, ND,
I met with a group of grain producers. These are family farmers, who
raise Durum and spring wheat. They have one problem. On the horizon of
trade problems, is this big or significant? Probably not, on the whole
horizon. But to them it is it big. You bet. In many cases, it is a
question of whether they survive and do they make it.
Here is their problem. We had a fellow named Clayton Yeutter go to
Canada and negotiate a trade agreement with the Canadians. I didn't
vote for that. I said at the time that I thought it was a terribly
flawed agreement. At that time, I didn't know of the side deal that had
not been made public. That side deal that had been made with the
Canadians was about how to compute whether or not there was a subsidy
for grains. When that was made public, it just destroyed my faith in
these kinds of negotiations.
So now we find ourselves down the road some years from the United
States-Canadian Free Trade Agreement and here's what we have. We have a
Northern border with wonderful people. They are good neighbors of ours.
We share a lot and we have a lot of commerce back and forth.
However, in the area of grain, we have had a flood of grain coming
across, especially Durum, since this agreement. For those who don't
know what that is, let me explain. Durum is the wheat you grind into
something called semolina flour and that is what you use to make
macaroni and other pasta. Eighty percent of the Durum produced in
America is produced in North Dakota. So if you are buying some noodles
or elbow macaroni or spaghetti, you are likely buying something, if it
is sourced in this country, that was raised somewhere in a field, or
grew somewhere in a field in North Dakota. The Durum market is a very
important market to our farmers.
Well, we passed the United States-Canada Free Trade Agreement and all
of a sudden, a flood of Canadian Durum came into our country, a literal
flood of Canadian Durum and, following it, other wheat and barley. But
you can't get much grain into Canada. I have told my colleagues before
about the time that I got in a little orange truck with Earl Jensen,
and we took Earl's orange truck up to the Canadian border with 200
bushels of North Dakota Durum to try to get it into Canada. They said,
``No, you can't go across the border here.''
We had a woman from Bowman, ND, who lived in Canada. She married a
Canadian and went home to Bowman for Thanksgiving, and she had a desire
to bake some whole wheat bread. So she took a sack of hard red spring
wheat--good for baking bread--and she couldn't take that back to
Canada. This was at a time when over 50 million bushels of Canadian
wheat was coming into our country. Truckload after truckload that were
clogging our roads. This lady got to the border and wanted to take in
one grocery sack full of wheat in order to make whole wheat bread.
Guess where it ended up? Dumped on the ground because you can't take
one grocery sack of wheat into Canada these days.
Are our farmers angry about this? You're darn right. Do they have a
right to be angry? Absolutely. They have a right to be furious about a
trade relationship that is fundamentally unfair to our side. Now, can
we get someone to fix it? We are trying. Mickey Kantor, a former Trade
Ambassador, took the first step. The fact is that it got better for a
time. But once again, this flood of wheat is exceeding the limits we
had agreed to with Canada.
I use that illustration only to say that this example is just but one
of the examples of problems we have with trade issues that you can't
solve anymore, because we pass trade agreements with something called
fast track. Under fast track you can't fix them when they are here. You
either have to vote yes or no, up or down, and the result is that these
flawed agreements then become law. Those treaties or agreements are
then wedded into American law and it prevents us from providing
remedies for the trade problems that exist--yes, with Japan, with
China, with Canada, with Mexico, and others.
I think it is time for us to decide to put a stop to it. I think it
is time for us to say to negotiators in trade that you go negotiate
just as all of the other negotiators do. When we send someone abroad to
negotiate arms agreements, they don't do so under fast track. We didn't
have fast-track authority to prevent any amendments on the floor of the
House or Senate on the nuclear arms reduction treaties that we had.
There was no fast track there. Why on earth, if we don't need fast
track on arms control agreements, do we need it on trade agreements?
Are our trade negotiators so weak, so inept that somehow they need fast
track when others don't?
Last Friday, the Commerce Department released the statistics that
describe what happened to our trade numbers for the month of May. It
indicated that our trade deficit in goods, the merchandise trade
deficit for the month of May, was $17 billion, just for the month of
may. That is up from $15.5 billion in the month of April. The big news
was that China's trade deficit exceeded Japan's trade deficit for the
month, for the third time in history.
These monthly statistics demonstrate another failure in trade.
Unfortunately, it is greeted with a series of yawns here in the
Congress and in this town. Were someone to try to put an op-ed piece
in, for example, the Washington Post about this issue, they would say,
no, thank you, they don't do those kinds of pieces. You can't have a
debate about trade issues in this town, because too many believe there
are only two sides of this issue. On one side there are those who say
we are for free trade, free, expanded, and open trade, and that is good
for the world. And they say everyone who doesn't subscribe to that is
somehow an uninformed xenophobic stooge who wants to put walls around
America. Those are the two camps that you are put into. You are either
for free trade, period, or you are some sort of xenophobic,
isolationist stooge. That is just a thoughtless way to deal with what I
think is a significant problem for this country.
This country needs to understand that our trade policy ought to
disconnect from our foreign policy. Our trade policy in dealing with
trade competitors who are savvy, tough, and shrewd, ought to be a
policy that cares about the well-being of this country. I believe in
open and expanded and more trade. I also demand that it be fair. If it
is not fair, we ought to say to other countries, you either get it fair
and allow entry to our products on a fair basis, or we are not going to
continue this one-way relationship.
This is not going back to some Smoot-Hawley notion of how we should
trade. It is not calling for higher tariffs; nothing of the sort. It is
demanding of other countries that we stop being mistreated. It is
demanding of other countries that those who believe they can continue
to access our marketplace must understand that their marketplace will
have to be open as a consequence of that, and the failure to open it
means that we will impose reciprocal trade treatment on our trading
partners.
Now, we are going to have a meeting in the next day or two with the
United States Trade Ambassador and the Secretary of Agriculture to talk
about the issues of United States-Canada grain. That is but one issue
among these larger sets of issues, but nevertheless it is important. I
hope that this issue doesn't continue to fester. I hope that this side,
that this Government and this country, will say to the Canadians on the
grain issue: You can't do that. We are not going to allow you to do
that.
But my experience has been, regrettably, over many years, that
standing
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up for this country's interests has been the exception rather than the
rule in trade issues. All too often our country backs away and says,
well, we don't want to ruffle any feathers here. I am just a little
tired of that.
When China wants to buy airplanes, guess what? China is a huge market
with 1.2 billion or so people, and they need to buy airplanes. So I am
told that China comes to our country and says to us, ``Well, we need to
buy some airplanes, and we don't manufacture airplanes. But instead of
buying it from you, what we want you to do is bring your technology and
produce it in China.''
I don't understand that either. This country ought not be interested
in that. When we have a country with a $40 billion trade surplus with
us, or we a deficit with them, and they need something we have, then
they ought to buy it from us off the shelf. China ought to buy more
wheat from us. They ought to buy airplanes from us produced in this
country with U.S. employees and from U.S. companies.
We ought not to continue to allow our trading relationships to be
foreign policy relationships. They ought to be economic relationships
with tough, shrewd negotiators working out relationships where the
rules are fair, where our employees and our producers can expect fair
treatment and fair ability to compete.
So, in September when the President brings to this Congress a request
for fast-track trading authority, I intend to be on the floor of the
Senate saying no. I have no idea how many of my colleagues will join
me. I know for sure as I stand here today that those of us who do say
no will be branded as some sort of isolationists. Those who do that are
wrong and thoughtless, but they will do it.
But I will insist that finally this country have the nerve and the
will to stand up for itself and its interests. I believe that my
children will inherit, just as they inherit the budget deficit, a trade
deficit that means we will have a lower standard of living in this
country unless we take action to deal with it and deal with it
effectively.
Let me conclude where I began. This country can compete on any terms
anywhere in this world as long as the rules are fair. But we have not
been able to satisfactorily conclude trade negotiations in recent
decades in any reasonable way that gives us the feeling--or at least
gives me the feeling--that we have succeeded.
Time after time after time our trade negotiators celebrate after they
have lost. They don't understand they have lost. I am not even sure
they do when they see the red ink pile up and the growing, record
merchandise trade deficit that now exists in this country.
I hope that one day we can have a thoughtful and interesting debate
about trade policy. It should not be between camps who think trade is
good or bad. Everyone ought to believe that expanded world trade,
provided the circumstances and rules of trade are fair, is good for
this world. But everyone also ought to believe that when this country
is taken advantage of with markets that are closed, rules that are
unfair, and countries that employ child labor and pollute this Earth's
environment, that is not fair trade and is not something we ever ought
to have to subscribe to.
Mr. President, once again, I expect September will be an interesting
month and a challenging month on the issue of trade largely because of
the debate on fast track. I intend to be back often to discuss this
subject.
Mr. President, I yield the floor and make a point of order that a
quorum is not present.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SHELBY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Kyl). Without objection, it is so ordered.
The Senator has 10 minutes under morning business.
Mr. SHELBY. I thank the Chair.
(The remarks of Mr. SHELBY pertaining to the introduction of S. 1040
are located in today's Record under ``Statements on Introduced Bills
and Joint Resolutions.'')
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