[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

[[Page S10836]]

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

[[Page S10837]]

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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