[Congressional Record Volume 143, Number 141 (Monday, October 20, 1997)]
[Senate]
[Pages S10834-S10837]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE FAST-TRACK TRADE DEBATE
Mr. DORGAN. Mr. President, I am going to visit today about the fast-
track trade debate that we are expected to take up here in the U.S.
Senate in the next couple of weeks. It is an interesting topic. I
expect it will be a hotly contested debate as it deals with
international trade.
I was in North Dakota last week, and I assume the presiding officer
was in Kansas and my other colleagues from here in the Senate were in
their home States. I saw an interesting editorial in the largest
newspaper in North Dakota, the Fargo Forum. The editorial says: Farm
Economy Is at Risk. Then it describes the problems that our family
farmers are facing in North Dakota including, problems of lower
production because of crop disease, the lack of moisture in some parts
of our State, too much moisture in other parts of our State, and very
low prices that they receive for their grain. The editorial talks about
an average size farm penciling out to a $23,000 loss in net worth this
year. This is for the average size farm with average production this
year.
I was thinking about this because as I travel in North Dakota I see a
great many family farmers. Most of them are descendants of the
homesteaders in this country, the people who moved out to build a farm,
and try to make a living. For some people it has been very, very hard.
In North Dakota about 200 years ago, in fact just about 7 or 8 years
less than 200 years ago, we had a visit from Louis and Clark. Thomas
Jefferson, then President of the United States, bought from Napoleon
Bonaparte the Louisiana Purchase, as it was called, for 3 cents an
acre. He bought all that land out there for 3 cents an acre. Some
jumped up in the Senate and said, why on Earth would you buy land out
there? There is nothing out there. There are Indians and sagebrush. Why
would you want that land?
If you were to equate what he paid for the Louisiana Purchase and
compared to our current budget, he paid the equivalent of $3 trillion.
This is as a percentage of what we spend today at the Federal
Government level versus what Jefferson proposed to spend on the
Louisiana Purchase. He bought for 3 cents an acre on all of that land.
This is equivalent of about $3 trillion of what we would have to pay
today. Then he sent Louis and Clark to go look at what he had purchased
to try to find a water route to the ocean out west.
I read, as the Presiding Officer and many others may have, the
wonderful book that was just published about Louis and Clark's journey.
I discovered that when Thomas Jefferson gave them the charge to go
explore that new territory, he gave Mr. Louis the opportunity to sign
vouchers for whatever he needed for the trip. Mr. Louis went to St.
Louis, MO, and he began signing vouchers. He was buying all kinds of
things in St. Louis that he felt were necessary, because he didn't know
what he was going to confront on that trip or how long it would take
him.
He hired a bunch of folks and signed vouchers for a lot of things.
They said he bought 120 gallons of whiskey for the trip. I wonder if
today the Citizens Against Government Waste would let somebody get by
with that. Well, probably not. Not 120 gallons of whiskey. Apparently,
the theory was he needed enough whiskey to get him up into and through
Montana, because at that point it was too late to turn back. I don't
know whether that was said tongue-in-cheek or not.
In any event, the chronicles of the Louis and Clark expedition are
quite wonderful. It is interesting to see our part of the country
through their eyes 200 years ago because they stayed the winter in
North Dakota. It was kind of chilly. They got hunkered down for the
winter in North Dakota. They chronicled that in their book as well.
Then, about 100 years passed, and toward the turn of this century we
had something called the Homestead Act, which led people to move out to
States like North Dakota and claim 160 acres of land and build a house
and operate a farm and raise a family, and the land would be theirs
under the Homestead Act. So my State was populated by these
homesteaders about 100 years ago. It is about as difficult a life as
one can imagine, trying to start a farm out in the prairies of North
Dakota, facing the wind, and the uncertainty of the weather. Then there
was the question of, if you plant some seeds in the ground, will you
get a crop? Will you have grasshoppers? Will you have crop disease?
Will a hailstorm come along? And then, if you get a crop will there be
a price sufficient so you can sell the crop and make a living?
Now, 100 years after the homesteaders, we discover fewer and fewer
yard lights in rural North Dakota. More family farmers are going broke.
Fewer family farmers can make a living. We continue to see the type of
editorial I just described, ``The Farm Economy Is at Risk,'' which
describes the net loss of so many family farms in North Dakota this
year.
Family farmers are the last of the free marketers in this country.
They don't ask for much. They don't get much. And they risk virtually
everything they have, based on the marketplace. Yet, one by one those
tens of thousands of family farmers, as small producers, confront a
marketplace of very large producers whose economic clout is enormous.
If you are raising a beef cow when you go to the marketplace you
confront the large beef packers, four of which control over 80 percent
of the beef packing plants in this country. So you face an economic
pressure that really is not particularly fair. The result is, generally
speaking, lower prices than one would expect to exist in a free market.
When you try to market your wheat, you confront other economic
enterprises. You confront the big millers, you confront the grocery
manufacturers, you confront the folks who are involved in the grain
trade, all of whom are large economic enterprises. Yet a family farmer
competes in the marketplace against these larger economic interests
which want lower prices. They want lower prices for family farmers,
which means family farmers lose and they win.
The reason I describe all that is we come around now to this question
about trade. The discussion in the Congress will be negotiating new
trade agreements, because the President says, and a lot of both
Republicans and Democrats say that the route to economic health is
trade. That may be. The theory is the more you trade, the better off
you are. If you read the doctrine of comparative advantage from the
great economic thinkers going back to Adam Smith and Ricardo and
others, the presumption was that every part of the world would do what
it could do best and trade back and forth. This was the doctrine of
comparative advantage. Of course, what they were talking about was
trade from nation to nation, because there were no corporations at the
advent of that kind of economic theory. But, notwithstanding that, the
provision still exists, I suppose, in the minds of some, that the route
to economic health is through trade. They believe that discussion
should not be about what kind of trade. Instead, the question should be
how much trade.
Some of us are concerned about our situation with trade. It is not
because we believe we should not have aggressive trade practices or
that we should not find ways to market our goods overseas in foreign
markets that might need those goods. It is not because we
[[Page S10835]]
believe that American consumers should not be able to take advantage of
goods produced elsewhere that they may want. Instead, we are concerned
because we see a pattern of trade in this country that is not fair to
this country and that in the long-term inevitably weakens and injures
our production and manufacturing base in America. The manufacturing
base is the center pole of a strong economy. If you weaken your
manufacturing base, you weaken the sector that provides the good jobs
that pay well and have good benefits.
We have been led into thinking, I expect, by some, that a measure of
economic health in America is not what you produce but what you
consume. Think to yourself, what are the economic indices that are used
every month to evaluate how healthy America is? It is what we consume
every month. Were sales up or down? That's the basis by which we
evaluate is America doing very well. Yet there is very little
discussion about what we produce.
I want to hold up a chart that describes the aggregate trade deficits
in recent years. Even though we have been negotiating trade agreements
and we have done a number of these trade agreements under the procedure
called fast track, which I will describe in a moment, it is very hard
to determine that we are moving in the right direction. This particular
chart demonstrates that for 21 straight years we have run merchandise
trade deficits in this country, and in most recent years we have had
the largest deficits in America's history. Last year, the year before,
the year before that, and, incidentally, this year, we will once again
see the largest merchandise trade deficit in this country's history. It
is very hard to take a look at all of this red ink and discern that
somehow we are doing very, very well.
I had written a piece about trade. Then there was an article in the
Washington Post recently. The writer of this article described this
trade agreement in ways so that apparently I and others could
understand it, suggesting that we just don't understand this. He said
that we don't understand that this is not a sign of economic trouble,
but that this is a sign of economic health. He reported the bigger the
deficits the better off you are. Let me read the description by the
writer from the Washington Post:
If someone offered to trade you $10,000 worth of apples for
$5,000 worth of pears, you'd jump at the deal. In the same
vein, we Americans can hardly be considered unfairly treated
if we obtain more imports that foreigners have slaved to
produce for our consumption in exchange for fewer exports
that we have slaved to produce for theirs.
Those of us from the middle of the country would have missed this
entire economic theory had he not written this. In fact, I have an
uncle, Uncle Harold, who would love to get involved in some of this
pear and apple trade. If someone offered to pay you $10,000 worth of
apples for $5,000 worth of pears would you jump at the deal? Yes, I
suppose you would, unless you didn't need the apples and you didn't
have the money to go in debt for the balance. That is the problem. This
is always the thoughtlessness we get on trade debate. It is that
somehow America is getting something for free. The fact is, America is
inheriting the largest trade deficits in its history and no one seems
to care very much. This writer says the economists make the point that
this is very healthy, it is a wonderful thing.
In fact, in this same article they were talking about why we have a
trade deficit. There is kind of an incestuous relationship between all
the sources. The same people go to the same sources for the same
quotes. This uses these same sources. The source, an economist, says
the reason we had a trade deficit is because America doesn't save
enough. There is an interesting thought. Companies close their American
plant and move it to Mexico because somebody in Detroit doesn't save
enough or somebody in Russell, KS, doesn't save enough? I'm sorry, I
studied economics and I taught economics and that's not a theory with
which I find credible. Maybe it's another theory that those of us in
the middle of the country don't understand.
This same source that said our problem is that we don't save enough
and that's why we have huge trade deficits said many months ago that we
have a huge trade deficit because we have mounting budget deficits. He
said that when the budget deficit goes down the trade deficit will go
down.
Well, guess what? The budget deficit has gone down 4 years in a row.
What has happened to the trade deficit? The trade deficit has continued
to increase to new record levels. So much for that theory. The same
source says, and some others say, that we have a trade deficit because
of our currency valuation. They say that we have a strong dollar and
that causes the trade deficit. But, the dollar goes up and the dollar
goes down, we still have the trade deficit, and the trade deficit
continues to grow. So much for that theory.
My point is, those who give us this malarkey about the trade deficit
somehow don't understand that these deficits, the largest deficits in
this country's history, mean that we are buying from abroad much more
than we are selling overseas, and the result is an outflow of American
jobs.
That may not mean much to people who write in the newspapers. It
probably doesn't mean very much to economists, and it probably doesn't
mean much to politicians. Because I don't know of any journalist,
politician, or economist who has ever lost a job because of a bad trade
agreement. In fact, I want someone to come to the floor of the Senate
and advise me, as we have this debate in the next couple of weeks. Give
me one name. Tell me the name of one economist, one politician, or one
journalist who has ever lost his or her job because their plant moved
overseas. It didn't happen. That is why to them this is all theory, and
when their theories are wrong, they just wake up with a new theory. It
doesn't matter.
Will Rogers used to say when there is no place left to spit, you
either have to swallow the tobacco juice or change with the times. I
say to all these economists who have delivered all this nonsense in
recent years, there's no place left to spit on these issues. You have
given us eight reasons for the trade deficit, and all of them have been
disproved. All of them have been wrong, and maybe it is time for some
new sources. Maybe it is time for some new discussion about what this
deficit means to our country.
Let me talk just for a moment about so-called free markets. The free-
market system is a wonderful system. I am not suggesting that we get
involved in managing the economy. We have a free-market system that
works pretty well. Inside our country, it is interesting, the free-
market system says, for example, that those farmers out there who get
up and do chores at 6 in the morning and do evening chores at 6 in the
evening, risk all their money and wonder what is going to happen, they
can lose $23,000 a year. At the same time the three supporting
characters on ``Seinfeld,'' a leading television program, can get
$600,000 a week. That is $600,000 a week for each of the three
supporting characters; $13 million a year in salaries. That is our
market system. That is fine.
If you are 7-foot tall and can dunk a basketball, and you are 21
years old and play for a certain team in the Midwest, you can get a
$121 million contract for 6 years playing basketball. Pay somebody to
play basketball or hire 1,000 teachers. It is the same price. One 7-
foot basketball player or 1,000 teachers; one 7-foot basketball player,
or a thousand family farmers making a profit. The market system
determines what is what, and the market system is a wonderful system,
but it produces some aberrations from time to time.
One of the problems, as we describe a market system in the context of
trade, is this: People say, ``Well, what we need to have is a market
system in which when we trade back and forth, it would be absolutely
free and unfettered.'' That leads to another question. If it is free
and unfettered trade between us and Canada, us and Mexico, us and
Japan, or us and China, why is it then that they can get their goods
into this country so much easier than we can get our goods into their
country? Why?
Let me give some examples. Canada and wheat. We have a virtual flood
of wheat coming into this country from Canada. We had kind of an
agreement about how much would come in. Last year, Canada sent in
21,000 semi-truckloads of wheat above the agreed-upon
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level. What can we do about it? Nothing, because we don't have a trade
remedy that works here. Canada sends it in through a State trading
enterprise, which would be illegal in this country, and with secret
prices, so no one knows at what price they are selling it in America.
Nonetheless, we have a wheat trade problem with Canada.
Is that free trade? No; I don't think so. I went to the border in an
orange truck, a 12-year-old 2-ton truck, with a man named Earl Jenson.
We took 200 bushels of Durum wheat from the United States to try to get
it into Canada. Guess what happened to us at the border? They stopped
us. They said you can't take wheat into Canada. All the way from the
border, we had watched semi-truckloads filled with Canadian wheat that
were coming south.
Is it fair trade? I don't think so. Is it free trade? I don't think
so.
I can describe chapter and verse about the Mexico situation, but let
me talk about both Canada and Mexico. We had the last free-trade
agreement considered under what is called fast-track procedures. First,
the agreement is reached through negotiations that are not public but
private negotiations. Then after they come from behind closed doors and
say, ``We reached an agreement,'' it comes to Congress, and Congress,
because of fast-track procedures, is prevented from offering an
amendment. The last one was called NAFTA, the North American Free-Trade
Agreement.
Just prior to the NAFTA trade agreement, our country had an $11
billion trade deficit with Canada. Now some years later, the trade
deficit has doubled. We now have a $23 billion trade deficit with
Canada. Just prior to the North American Free-Trade Agreement, we had a
$2 billion trade surplus with Mexico. Now we have a $16 billion trade
deficit with Mexico. Yet, we have people crowing on the floor of
Congress, the House and the Senate, that these have been wonderful
agreements. What kind of adding machines do they have? What kind of
logic are they using to suggest that when you find yourself in a deep
hole that things are going just great? The NAFTA agreement has been a
disastrous agreement.
In fact, the Economic Policy Institute just did a study that said we
have lost 395,000 jobs in this country as a result of the NAFTA
agreement. Those who claim, incidentally, there have been new jobs
created in this country take a look at only one side of the ledger, and
that is the amount of exports we send out. They do not consider the
amount of imports that are sent in to displace what had previously been
produced here.
For example, they would take a look at Canada and Mexico and say,
``Well, gee, we sent a little more to Canada, to Mexico, things are
doing just great.'' The problem is, we have had much, much more coming
in from each of those countries, and we have gone from a positive trade
balance with Mexico to a substantial negative trade balance. We have
doubled our trade deficit with Canada. Who on Earth can conclude that
is a trade policy on the right path?
Let's take China just for a moment. China's trade deficit has
ratcheted up, up, up and way up, and now our trade deficit with China
is $40 billion a year and moving up toward $50 billion a year. They
say, ``Well, we're supposed to have free trade with all these folks.''
There is no free trade with China. We can't get much American pork into
China. When China wants wheat, it shops elsewhere for wheat. It buys
some from us. With the $40 billion to $50 billion trade surplus it has
with us, it ought to be buying wheat from us.
When China needs airplanes and wants to buy airplanes, guess what it
says? ``We will buy American airplanes only if they are manufactured in
China.'' It is another way of saying, ``We want to trade with you, but
we want American jobs to move to China.'' That is not fair trade.
Japan this year will have a trade deficit increased by 20 percent
above last year. This year it is projected to reach $65 billion in
trade deficits that we will have with Japan. Year after year, every
year, the trade deficit with Japan goes on ranging and from around $50
billion to over $60 billion.
Is our trade relationship with Japan a mutually
productive relationship? We could talk chapter and verse forever today
about the amount of American goods we cannot get into Japan because
their markets are not open to us.
The administration says it wants fast-track authority because it
wants to open foreign markets. I want to prevent fast-track authority
because I am sick of having trade negotiators negotiate bad agreements
on the front end and then fail to enforce them on the back end. I say,
``You go out and negotiate, go right ahead, come back and let's see
what you have done. If you think these are fair agreements, you will
get them passed through the Congress. If not, you are going to get a
resounding no.'' They say, ``We can't negotiate under those
circumstances.''
It is interesting to me, there have only been five trade agreements
reached under fast-track trade authority granted by the Congress ever
in history. We haven't granted fast-track authority for complicated
nuclear arms agreements or test ban treaties. We haven't granted fast-
track authority for any of those. Only a handful of trade agreements
have had fast-track trade authority, and I ask my colleagues to
evaluate what has been the result of those trade agreements.
Mr. President, I am going to propose a number of things when we talk
about fast track. I think that we ought to establish some principles
that evaluate what is right for this country. I said when I started
that I think we ought to have expanded trade. The more trade the
better, as far as I am concerned, but I demand that the trade that we
have as a country be fair trade with other countries. We ought not
continue to swallow huge deficits year after year only to find the
countries that move their goods into our marketplace with impunity
decide their marketplace is closed to us. That is not free trade, and
that is not fair trade.
When we discuss fast track, what I am going to propose is a number of
principles that represent the basis of our trade policy:
No. 1: A principle ought to be to end chronic, escalating trade
deficits. Is that a goal of this country? If it is, we sure are not
doing well. I just showed you that the trade deficits have increased
every year. We ought to decide as a country that we ought to end the
escalating trade deficits by increasing U.S. net exports.
No. 2: A trade agreement ought to result in real growth in the U.S.
economy, provide more and better jobs and improve living standards.
Incidentally, there is no such principle that guides today's trade
negotiating.
No. 3: We ought to provide mandatory performance standards for trade
agreements together with enforcement to ensure full reciprocity. It
seems to me that when you go from a $2 billion trade surplus with
Mexico to a $15 billion trade deficit, someplace there ought to be some
snapback provision that allows Congress to look at that and say,
``Oops, that's not what we meant; that's not headed in the right
direction.''
No. 4: No trade agreement ever ought to be negotiated that doesn't
include adjustment mechanisms to prevent currency exchange rate
fluctuations from distorting the trade flows. You can't have trade
agreements and then have someone devalue their currency which wipes out
every single gain, plus 50 percent more, in the trade agreement on
lowering tariffs. That doesn't make sense. Everybody understands you
must include these. These are the principles, I think, that we must
consider when we evaluate whether we want to provide fast-track trade
authority for new negotiations dealing with international trade.
I look forward to the debate we are going to have, because this
country, I think, needs a new blueprint for trade negotiations. The old
trade blueprints are tired, worn and not working. It is no longer good
enough to have trade policies that allow those corporations who decide
that they will personally profit by finding a place in the world to
produce at very low cost and then ship the production to Pittsburgh or
Los Angeles or Fargo or Topeka just because that is good for their
profits. It is no longer acceptable to me that this ought to be a model
for trade.
If a company which is now an international concern says, look, ``My
model for the future is I want to produce in Bangladesh, I want to
produce in Indonesia, I want to produce in Sri Lanka, and I want to
ship the
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product to America,'' you say to them, ``Why do you want to produce
there?
``I want to produce there because we can hire people for pennies an
hour, a dime, 12 cents, 14 cents, a quarter, or 50 cents an hour. We
don't have the problem with pollution. We can pollute the air and the
water. We can hire kids. We won't have OSHA looking over our shoulder
because we don't have safe workplace standards, and we can just pole
vault over all those things we have negotiated and fought about for 50
to 75 years in this country. We can pole vault over all of those
problems as a producer and go overseas, close the U.S. manufacturing
plant, hire foreign workers, have no problems on pollution, child labor
and wage standards and then produce the same garage-door opener or
produce the same toothbrush or produce the same vacuum cleaner and ship
it to America.''
That might be good for these corporations, but it is not good for
America because inevitably that means diminishing America's
manufacturing base. It means moving American jobs overseas and it means
injuring this country's long-term economic strength.
That is what this debate has to be about: What is in America's
economic interests; what is in our country's long-term economic
interest; and, what will best represent the opportunity to create new
jobs and advance our country's economic interests? That is what this
debate must be about.
I hope in the coming couple of weeks, on behalf of farmers and wage
earners, and, yes, American businesses, we can decide we have a trade
strategy that doesn't now work, that causes substantial trade deficits,
and substantial amounts of American jobs leaving and moving overseas. I
hope we can decide that there is a better way and a different way. My
purpose is not to promote some kind of xenophobic, isolationist,
protectionist strategy. It is not to put walls around our country, but
to decide that the trade between us and our trading partners must be
mutually productive. We must have trade between us and Japan be
balanced trade. If they get their goods into our marketplace, then we
have a right to demand we get our goods into theirs. The trade between
us and China should be mutually beneficial; that if we have something
they want, they have a responsibility to buy it from us, and not demand
that we manufacture it on Chinese soil at a time when they have a $50
to $60 billion trade surplus with us or we a deficit with them. It
seems to me now is the time for us to demand that.
One of the reasons that I am pleased that we are finally going to
have a debate about trade is that we have not been able to have any
discussion about it. This turns instantly to a thoughtless discussion--
instantly--the minute you start turning to the issue of trade.
Finally, maybe in discussing fast track this will become a thoughtful
discussion about what is in this country's best interests. Yes,
expanded trade, but, yes, especially better trade agreements that are
better for this country and trade agreements that are enforced with
tough, no-nonsense standards, saying we represent the economic
interests of our country--not other countries but our country.
The current trade strategy, resulting in huge recurring trade
deficits, hurts rather than helps our country. Those are trade deficits
we can solve by requiring that we be able to sell more goods around the
world and by requiring that trade agreements be fair and enforced.
Mr. President, I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DASCHLE. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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