[Congressional Record Volume 143, Number 153 (Wednesday, November 5, 1997)]
[Senate]
[Pages S11716-S11753]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




         RECIPROCAL TRADE AGREEMENT OF 1997--MOTION TO PROCEED

  The Senate continued with the consideration of the motion to proceed.
  The PRESIDING OFFICER. Under unanimous consent, the Senator from 
Minnesota is recognized.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, it is the role of national governments 
to establish the rules within which companies and countries trade. That 
is what trade agreements do. They set strict rules. If, for example, a 
country does not enforce respect for patents, trade sanctions can be 
invoked.
  Mr. President, you can bet that U.S. companies get right in the face 
of our negotiators to make sure that the rules in these agreements 
which protect their interests are ironclad and will be strictly 
enforced. That is what companies do. You can be absolutely sure that 
U.S. companies would laugh in the face of negotiators if they were told 
that their concerns were legitimate but could be pursued just as 
seriously in less enforceable side agreements.
  My point, Mr. President, is that it is fine to represent the 
interests of the companies. We should do so. But we are also elected to 
represent other people in our country, not just large multinational 
corporations. We are elected to represent the majority of people.
  I say, Mr. President, that we should take a very strong interest not 
only in representing the majority of people in our country but also in 
representing a lot of people, ordinary citizens, wage earners, ordinary 
people in the countries we trade with. Because if they do not make 
enough money to demand the products that we produce, then we are not 
going to do well.
  Mr. President, I think this fast-track agreement, which extends on to 
NAFTA and GATT, is deeply skewed toward large corporate interests. That 
has been our recent experience with trade agreements. And I want to 
talk a little bit about what has happened with NAFTA.
  NAFTA has been in operation for 3 years. And we heard a lot about 
what NAFTA was going to do for all of us. We have an opportunity now to 
look at the results with NAFTA. They include loss of jobs, suppression 
of wages, and the weakening of food, safety, and pollution laws.

  Mr. President, if we repeat these mistakes, we are only going to 
condemn ourselves to replicate some of NAFTA's worst measurable 
consequences. Let me draw for colleagues from a respected Economic 
Policy Institute report. This report was issued in September of this 
year and titled ``NAFTA and the States: Job Destruction is 
Widespread.'' EI's study concluded that ``an exploding deficit in net 
exports with Mexico and Canada has eliminated 394,835 U.S. jobs since 
NAFTA took effect in 1994.'' The report argues that this job loss 
contributed significantly to a 4-percent decline in real median wages 
in the United States since 1993. Minnesota, according to this report, 
lost about 6,500 jobs due to the NAFTA-related trade deficit between 
1993 and 1996, contributing to about a 3.8 percent drop in real median 
wages.
  Mr. President, last month the Institute for Policy Studies and United 
for a Fair Economy published a study which tracked the performance and 
actions of a number of companies which belong to a major corporate 
coalition which is advocating passage of fast track. The study found 
that the 40 companies which are members of the America Leads on Trade 
coalition, from whom all of our offices have received pro-fast-track 
materials regularly, cut jobs in 89 U.S. plants under NAFTA. The study 
also documents that almost 13,000 workers who were laid off by members 
of this coalition, America Leads on Trade, qualified for NAFTA 
retraining assistance. And while jobs were being cut by these firms, 
these firms' profits soared and the salaries of their CEO's were 
significantly higher than those of executives in other leading firms.
  Mr. President, again, looking at the record with NAFTA, according to 
Public Citizen in a report released in September of this year, U.S. 
food imports have skyrocketed while U.S. inspections of imported food 
have declined significantly. The report charges that ``imports of 
Mexican crops documented by the U.S. Government to be at high risk of 
pesticide contamination have dramatically increased under NAFTA, while 
inspection has decreased.''
  Mr. President, our experience with NAFTA can't be dismissed. Jobs and 
wages in the United States have gone down. We have this paradox over 
the last 20 years of workers' productivity going up but real wages 
going down. Wages have gone down in Mexico, too,

[[Page S11717]]

despite the fact that some workers in Mexico are performing high-skill, 
high-productivity labor. Our trade balance has dramatically worsened 
with respect to Mexico. This is all in the last 3 years, post-NAFTA 
agreement, and the number of U.S. firms that have not only relocated to 
Mexico but just as importantly have threatened to relocate to Mexico 
have effectively held wages down. Mr. President, this is a classic 
tactic used in any effort to organize--companies just simply saying, 
``We will go to Mexico.''
  Violations of fundamental democratic rights--we care about those 
rights--as well as basic human and labor rights continue to occur 
regularly in Mexico. And a NAFTA side agreement has not significantly 
improved Mexico's environment--the environment degradation goes on at 
the Maquiladoras--nor have they done anything to raise the wages or 
living standards of the people. When I visited the Maquiladora I 
thought the environmental degradation was horrifying. I could not 
believe little children that I saw working in the plants. When I talked 
to people, they were quite often terrified to even talk to a U.S. 
Senator for fear of losing their job.
  Mr. President, I simply will say it one more time, we should be 
engaged in trade agreements, we should be a vital part of an 
international economy, and we are, but we can do it without injuring 
people in communities in our country and we can do it without injuring 
people in communities in other countries if we have the inclusion of 
enforceable labor rights and environmental provisions right in the 
agreements themselves. We don't have any like that in this fast-track 
proposal.
  Mr. President, I said at the beginning that I wouldn't support this 
agreement on the principle of democracy alone. To lock ourselves into 
trade agreements up to the year 2001--other countries in Latin America, 
Caribbean countries, Asian countries--without even knowing what those 
agreements will entail, to not be able to come out here on the floor of 
the U.S. Senate and introduce amendments to fight for people in your 
State or South Carolina or Iowa or Washington or any other State, I 
think denies us as Senators what is really the most cherished and I 
think most sacred responsibility we have, which is the responsibility 
to be out here fighting for people.
  These trade agreements affect the quality of life of people in 
Minnesota and all across the country. I believe that in the absence of, 
as a part of this trade agreement, clear fair labor standards and 
environmental standards and human rights standards, these trade 
agreements will continue to do exactly what NAFTA has done--depress the 
living standards of people in the United States and people in other 
countries, lead to further violation of human rights in other 
countries, not do one positive thing about environmental degradation, 
and ultimately it will be a good deal for large multinational 
corporations and a very bad deal for the people in Minnesota and the 
people across the country.
  Mr. President, by way of conclusion, I oppose this agreement because 
of the fast-track procedure alone. I think it is profoundly 
antidemocratic. I oppose it because of the empirical evidence that has 
come in about NAFTA. It is quite clear to me this will lead to a 
depressing of living standards of people in our country and people in 
other countries. And finally, Mr. President, I oppose this agreement 
not because I am not an internationalist. I am the son of a Jewish 
immigrant from Russia. I am an internationalist. We are in an 
international economy. I want our country to lead the way. But I want 
the United States of America to lead the way as an economic power in 
this international economy by advocating our values. Our values respect 
human dignity, our values respect human rights, our values respect 
protecting children's lives, our values respect the environment, and 
our values respect fair labor working conditions for people. That is 
what is lacking in this agreement. That is why I am in such profound 
opposition to it.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Hutchinson). The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, I yield myself such time as I might 
consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. GRASSLEY. Mr. President, I support fair trade because trading 
creates jobs in America. A billion dollars worth of trade creates 
18,000 jobs. Those jobs pay 15 percent above the national average of 
jobs in America. In my State of Iowa, corporations that export pay 32 
percent higher benefits than corporations that don't export. If we are 
going to continue to grow as a Nation, we are going to have to be able 
to export more to create good paying jobs in America.
  Why do we, from time to time as a Congress, give the President 
authority to negotiate trade agreements? The power to regulate 
interstate and foreign commerce is very clearly a power given to the 
Congress by the Constitution. It is one of the 17 explicit powers 
mentioned in the Constitution. Congress guards its constitutional 
authority very carefully.
  But we have found that it is very difficult for Congress, made up of 
535 men and women, to negotiate with 132 different countries who are 
part of the GATT process. Congress, for the large part, can't even 
negotiate agreements among its own Members a lot of times. So you can 
see the difficulty of Congress as a body reaching an agreement with 
foreign countries on how to reduce barriers.
  So from time to time under very strict guidelines we delegate some of 
our negotiating authority to the President. But we don't do it in a 
willy-nilly fashion. We do it with safeguards to make sure that 
Congress' constitutional power to regulate interstate and foreign 
commerce is protected. And we do it for a short period of time. We also 
keep the power to deny the President the ability to negotiate with a 
specific country, if we don't want the President to do that. We make 
sure that the President and his people consult with Congress on a very 
regular basis so that we know what is going on, but more important, so 
the negotiators know what Congress wants negotiated or doesn't want 
negotiated to ensure the negotiations reflect the will of Congress. 
Then, obviously, nothing can become the law of our Nation if it is not 
passed by the Congress of the United States and signed by the President 
of the United States.

  So we are very cautious in giving the power to negotiate. But we do 
it for two reasons: First, it is very impractical for Congress to 
negotiate with foreign countries, and quite frankly it is something 
that the President does on a regular basis on a lot of foreign policy 
issues. But more important we have seen opportunities for America's 
economic expansion happen because we have reduced barriers to trade 
since World War II. We have a track record of knowing our economy can 
expand when we export. We have a track record of knowing that jobs are 
created if we export. And we have a track record of knowing that those 
jobs that do export pay very good wages.
  So we start with the proposition that we want to have an expanding 
economy, that we want to create jobs and we want to create good jobs 
because that has been the track record of expanding foreign trade over 
the last 50 years. We move forward with confidence, giving this 
President, as we have given Republican and Democrat Presidents in the 
past, the authority to negotiate trade agreements. And we are confident 
that the workers and consumers of America will benefit as a result of 
giving the President this negotiating authority.
  We have seen barriers to trade around the world reduced from an 
average of 40 percent 50 years ago to an average of 5 percent today. 
Those are tariff figures. We have seen still, countries have higher 
barriers to trade--both tariff and nontariff trade barriers--than what 
we have in the United States. They are up here and we are down here. So 
it is a given. It is common sense, the extent to which the President 
can get these other countries to reduce their tariff and nontariff 
barriers to trade to a level equal to or closer to ours, it levels the 
playing field for our people, both large and small business, and that 
will create opportunities to export and enhance the economic well-being 
of our country.
  So I rise strongly in support of S. 1269, the Reciprocal Trade 
Agreement Act of 1997, and I urge my colleagues to vote aye on further 
motions to proceed and to take up the bill. Mr. President,

[[Page S11718]]

this debate is long overdue. The President has lacked the authority to 
negotiate trade agreements since the completion of the Uruguay round 
agreements in 1994.
  Since then, the United States has, as far as I am concerned, 
relinquished its leadership role that we have had over the last 50 or 
60 years in international trade issues. And the rest of the world will 
not wait for a long period of time for the United States to act but 
will move on without us.
  This bill will restore the United States to its rightful position as 
the world's leader in international trade. If nothing else, it's going 
to reassert the moral authority of the United States to be a leader in 
fair trade negotiations around the world, as we have been for the last 
60 years.
  Since the original reciprocal trade agreements of 1934, the United 
States has taken this leadership role in reducing barriers to trade. We 
learned from the Smoot-Hawley legislation, we learned from the Great 
Depression of the 1930's, and we learned from the results of World War 
II that protectionism is not only bad economically, it's bad from the 
standpoint of promoting peace throughout the world. As I said, in the 
period of time since the United States started this process of reducing 
barriers to trade--not only our own barriers, but other barriers in 
other countries--we have seen global tariffs drop from an average of 
over 40 percent to about 4 or 5 percent today. This dramatic opening of 
world markets has led to an explosion of economic growth since World 
War II, and the United States has been the primary beneficiary of this 
growth.
  American workers are the most productive, highest paid workers in the 
world. American companies produce the highest quality products, and 
American consumers have more choices of goods and pay less of their 
income on necessities, such as food, than consumers anywhere else in 
the world. These are the benefits of fair trade agreements.
  Americans have enjoyed these benefits only because, through U.S. 
leadership, we have convinced other countries that freeing up trade and 
leveling the playing field for everybody is critical to economic 
growth, not only in our country, but around the world. And we have led 
by example. We have lowered our own tariffs to show our willingness to 
trade with the rest of the world, and to show that trade is beneficial 
to workers as well as consumers and not something to be feared. This 
bill reestablishes the United States in this leadership role.
  This bill will allow the United States to continue on the path of 
economic growth and prosperity, and will show the way for other 
countries as well. Free and fair trade creates jobs--stable, high-
paying jobs. Exports support more than 11 million jobs in our country. 
These jobs, as I have said before, pay 15 percent higher wages than 
other jobs. In my own State, exporting companies have 32 percent higher 
benefits than nonexporting corporations.
  Trade is a major component of the economic growth of even the most 
recent decade. It is estimated that exports, as a share of gross 
domestic product, grew by 39 percent and accounted for nearly 50 
percent of the total U.S. economic growth between the years 1986 and 
1992. This year, total U.S. trade will be 30 percent of our total GDP. 
These statistics show that trade is important to this country. It's 
important to the well-being of our economy.
  This bill will allow the United States to maintain its competitive 
advantage in the global economy. Trade negotiating authority is 
necessary to remove barriers to our exports and, hopefully, some day 
remove all remaining barriers to our exports. These barriers are taking 
money out of the pockets of American farmers and workers. But without 
this bill, the rest of the world will continue to raise barriers to our 
products. We will remain on the sidelines--where we have basically been 
since 1994.
  Since trade negotiating authority expired back then, over 20 major 
trade agreements have been consummated. The United States was not a 
party to any of them. Do the opponents of this bill believe that other 
countries are looking out for the interests of the United States when 
negotiating these agreements? We had an opportunity to be at the table. 
Of course, nobody is going to look out for the interests of the United 
States, except our U.S. negotiators. We in the Congress are going to 
see that they look out for those interests. We can deny the President's 
authority to negotiate with a specific country. We will consult with 
the President of the United States on a regular basis on how those 
negotiations are going, and advise the President on what should be 
negotiated. Finally, we have an opportunity to enact the final product 
of any negotiations.

  Now, I said that we have had 20 agreements negotiated, where the 
United States was not a party. But I can show in some of those 
negotiations where U.S. economic interests--and maybe humanitarian and 
nonpolitical interests, or political interests have also been hurt.
  Chile is a good example of what we have sacrificed by not having 
trade negotiating authority. In 1992, President Clinton promised Chile 
that it would be part of the North American Free Trade Agreement. Five 
years later, Chile has a free trade agreement with Canada and with 
Mexico--the other two partners of the North American Free Trade 
Agreement--but not with the United States. Chile is an associate member 
of the MERCOSUR countries, which is a trading block composed of Brazil, 
Argentina, Paraguay, and Uruguay. Yet, Chile is still not a member of 
NAFTA. You might say, so what; you don't like NAFTA and you are 
applauding. But in the process, American workers and farmers are 
beginning to feel the consequences of this inaction.
  An American company recently lost a $200 million telecommunication 
contract to a Canadian company that enjoys preferential treatment under 
its trade agreement with Chile.
  American farmers currently supply 90 percent of Chile's free grain 
imports. Those are exports from states like Iowa, Minnesota, Nebraska, 
and Illinois. But our biggest competitors for this market, Argentina 
and Brazil, enjoy an 11-percent tariff advantage over American farmers. 
And whether or not we are going to continually supply feed grains to 
Chile--it is only a matter of time before we lose this important 
agricultural market. What will the opponents of this legislation say to 
the farmers of their State and the workers of their State when these 
workers and these farmers lose their jobs and lose income because this 
market is lost because we have an 11-percent disadvantage? This bill 
allows us to compete for these markets once again.
  The economic benefits of trade negotiating authority are very clear. 
But let's remember that trade is also an important foreign policy 
initiative. Free and fair trade is humanitarian, as well as it is 
economic. Free and fair trade promotes liberty and freedom around the 
world. This bill is going to help increase the standard of living of 
our trading partners and, with it, enhance the stability of their 
political and economic systems. And when you enhance the political and 
economic systems, you open the door, through trade, for the United 
States to export its democratic principles of liberty and freedom. We 
are seeing enhancement of these institutions in countries where freedom 
and liberty was foreign to a lot of people. Economic intercourse opens 
the way, opens the door; it is a window of opportunity for other things 
that we in America believe in, which you can't put a dollar and cents 
value on. We know that when Americans travel overseas, when we enhance 
our business opportunities with other countries, this sort of rubbing 
shoulders with people of other countries has benefits that go way 
beyond just the dollars and cents of free and fair trade.
  The people we trade with experience American values through the goods 
they purchase and the relationships they form when trading with us. In 
time, it is likely that they will insist that their own government 
uphold these values as well. We have seen it happen in Latin America, 
Eastern Europe, and someday--I am optimistic--we will see it happen in 
China.
  Many scholars believe that a country must attain a certain standard 
of living and economic stability before democracy can even begin. 
Trade, and not foreign aid, is the mutually preferred method of 
achieving economic growth and economic stability, which is a forerunner 
of political stability.

[[Page S11719]]

  Since 1986, I have hosted, on six different occasions during the 
month of August in my State, week-long tours of Iowa by foreign embassy 
ambassadors. In other words, the embassies here in Washington, DC, send 
their ambassadors and/or trade representatives. I hear from these 
people coming to my State of Iowa, again and again, from these 
international guests, that a mutually beneficial and healthy trade 
relationship is much preferred over foreign aid from the U.S. 
Government. While foreign aid can be fleeting, trade builds and expands 
economies. This, in turn, fuels the democratization process. So this 
bill helps our trading partners help themselves.
  Mr. President, the opponents of this bill want to turn back the 
clock. They prefer a time when this country could afford to be 
isolationist, when we could consume all in America that we produce, and 
we didn't have to worry about exports, and when economic growth could 
be sustained then by domestic production alone.

  Reminiscing about those past days may make for good political 
rhetoric. But that sort of rhetoric is dangerous because it simply 
ignores the economic facts of today's world. They ignore the benefits 
beyond economics that come from trade. Because, like it or not, we are 
in a global economy. Our jobs and standards of living have become to 
some degree dependent on trade with other countries. We can't afford to 
build walls around this country, and we can't afford to turn inward. If 
the United States were to do that, other countries would do it as well. 
And that could be dangerous. I just saw a quote recently, that I 
believe to be accurate. ``If merchandise is not going to cross borders, 
soldiers will.'' It is a preventive of war. It is a promotion of peace 
when we trade.
  We must lead. We still have all the advantages: A highly skilled, 
educated work force; we have technology, capital, and, most important, 
a sense of entrepreneurship that not only benefits America, but when 
this is promoted around the world, it is going to benefit all of the 
economies of the world. We also have the most stable economic and 
political system the world has ever known. The United States has the 
most to gain by leading and the most to lose by sitting on the 
sidelines.
  This bill is the first step back into reasserting our moral authority 
to lead in leveling the playing field in international trade, an 
authority that we have exercised since the 1930's.
  Mr. President, I want to remind my colleagues that the question is 
not whether future trade negotiations will occur. They are happening 
right now under our very noses between countries all over the world. I 
have cited 20 specific examples since 1992. Rather, the question is 
whether the United States will be at the negotiating table protecting 
the interests of our citizens for the good of this country and for the 
good of the world.
  This legislation must become law.
  I yield the floor.
  Mr. KENNEDY addressed the Chair.
  The PRESIDING OFFICER (Mr. Roberts). The Senator from Massachusetts.
  Mr. KENNEDY. Mr. President, I support free trade between the United 
States and other countries.
  Mr. President, I yield such time as I might use from the Senator from 
South Carolina.
  The PRESIDING OFFICER. The Senator is speaking on the time of the 
Senator from South Carolina.
  The Senator is recognized.
  Mr. KENNEDY. Mr. President, I support free trade between the United 
States and other countries. I have supported fast-track authority in 
the past, and I wish I could still do so.
  But this fast-track bill is grossly one-sided and unfair. It goes the 
extra mile to protect intellectual property rights and other rights of 
business. Yet it puts major roadblocks in front of any effort to 
protect the rights of workers.
  The bill lists 15 so-called principal negotiating objectives. 
Negotiators are directed to pursue these matters vigorously in trade 
talks with other nations. One of the objectives urges negotiators to 
seek strict enforcement of laws protecting copyrights, patents, and 
intellectual property. The bill even directs negotiators to seek 
criminal penalties for violations of intellectual property rights.
  But the bill is silent about any corresponding effort to promote 
workers' rights. Negotiators are forbidden to encourage other countries 
to improve worker protections. Any provisions designed to strengthen 
labor protections or improve another country's enforcement of its labor 
protections cannot be given fast-track treatment.
  No previous fast-track bill took such a one-sided and discriminatory 
approach. For example, the 1988 fast-track law included a specific 
objective to ``promote worker rights,'' and this was an important part 
of the legislation.
  The present bill is unprecedented. It's fast-track for business and 
no track for labor, and that isn't fair.
  We should not make it impossible to use other countries' desire for 
access to U.S. markets to urge improvements in working conditions. 
Leaders in other countries often say their door is open to such 
initiatives. But this bill actually prevents our negotiators from 
taking advantage of such opportunities. It prevents the United States 
from using the incentive of access to our markets to persuade a country 
to improve working conditions for its employees, even in cases where 
the issue is prison labor or child labor. There is nothing fair about 
that.
  The bill also prohibits fast-track consideration of any provision 
that would modify U.S. labor or environmental standards. Any agreement 
that seeks to create internationally-recognized worker rights--such as 
a ban on child labor or prison labor--could not be considered under 
fast-track procedures, because it would restrict the power of the 
United States to refuse unilaterally to modify our own laws in these 
areas. There is nothing fair about that.
  The bill denies our negotiators the power to push for improvements in 
another country's labor protections. And it denies our negotiators the 
power to push for improvements on a multi-national basis as well. Under 
this legislation, there could be no effort to improve worker 
protections in any forum. There is nothing fair about that.
  Congress should not handcuff our ability to negotiate improvements in 
agreements setting basic labor standards that apply to specific nations 
or to all nations. Instead, we should use the trend toward 
globalization of markets to raise the level of employee protections 
around the world.
  We tried to accomplish this goal in the North American Free Trade 
Agreement in 1993. The labor and environmental side agreements that 
accompanied NAFTA were designed to strengthen labor standards and 
establish a forum for resolving disputes.
  Many have criticized the effectiveness of these side agreements, and 
with good reason. In 1994, Mexican workers who tried to organize a 
union at a Sony Corp. plant in Nuevo Laredo were fired, and some were 
beaten. This brutality violated Mexican law, and the NAFTA enforcement 
authorities found that the Mexican Government had failed to comply with 
its obligations under the labor side agreement. But none of the 
employees was rehired, and no fines were assessed against either the 
Mexican Government or the company. The side agreements were not 
enforced.
  Weak as they are, side agreements like these are barred from 
consideration under the present bill. Such side agreements could not be 
given fast-track treatment. They would be subject to full debate and 
amendment in both houses of Congress.
  But under this defective fast-track bill, an agreement making it a 
crime to infringe a copyright would be given fast-track treatment, and 
rushed through Congress with limited debate and without amendment.
  This double standard is unacceptable. Trade affects goods and 
business profits, but it affects workers' lives and health as well. We 
can't deny the linkage. Yet this bill treats property rights far better 
than it does labor and environmental protections. Surely the life or 
health of a working man or woman deserves at least equal priority.
  It's also true that NAFTA has failed to live up to our hopes. The 
Labor Department has certified that 127,000 American workers lost their 
jobs as a direct result of trade with Mexico and Canada under NAFTA. 
Some experts say the number may be as much as four times higher.
  The administration has announced that it will seek hundreds of 
millions

[[Page S11720]]

of dollars more for trade adjustment assistance to help workers 
dislocated by foreign trade. When American firms move their American 
plants to foreign countries in search of higher profits through cheaper 
labor, the American workers left behind pay a heavy price.
  Trade adjustment assistance can help, but to many workers, it is 
little more than funeral expenses. It's obviously not enough to offset 
the anti-worker, antilabor bias of this discriminatory fast-track bill.
  The five measures the administration announced earlier this week, 
through the World Trade Organization and the World Bank, are another 
small step in the right direction on labor issues. But again, four 
studies and a promise don't fix the problems with this bill.
  I urge the Senate to reject this unfair approach. This bill puts the 
rights of business on a pedestal, and leaves the rights of workers in 
the gutter. That kind of discrimination is unacceptable. No worker 
should be treated with less dignity than a compact disk. I oppose this 
legislation, and I urge my colleagues to defeat it.
  Mr. GRAMM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Texas.
  Mr. GRAMM. Mr. President, I rise in support of the fast-track 
legislation, and I yield myself so much time as I might use.
  The PRESIDING OFFICER. The Senator is recognized.
  Mr. GRAMM. Mr. President, I think it is important that people 
understand that the debate about fast track is a debate about trade. If 
we reject fast track in the Congress, we are sending a signal to the 
whole world that the United States of America, which has been the 
strongest proponent of trade in the post-World War II period, is 
backing away from that commitment. If we reject fast track, we are 
saying to the world that the position we have taken in the post-World 
War II period is a position that we are now vacating. We are saying to 
emerging markets all over the world that we are not going to be the 
dominant force in trade on this planet.
  That message, in my opinion, would be a devastating message for world 
trade. It would be a devastating message in terms of America's 
leadership. And I am prayerfully hopeful that in the end reason will 
prevail and that we will not send that message.
  Mr. President, I have had an opportunity, as a Member of the Senate 
for 13 years and as a Member of the House for 6 years before that, to 
speak on many subjects. My colleagues have heard me speak on the budget 
on many occasions. I think my colleagues understand that I have great 
passion about that subject. But as compared with world trade, the 
budget is a secondary issue. The issue that we debate today is the most 
important issue that we will debate during this Congress.
  Americans by and large do not understand the trade issue. One of the 
great frustrations of my political career has been that of all the 
issues that we deal with, the hardest issue to get people to understand 
is the trade issue. This is not a new problem. Disraeli, the British 
Prime Minister in the 19th century, once said, ``Not one person in 
10,000 understands the currency question, and yet we meet him every 
day.'' And by ``the currency question,'' he meant the value of the 
pound relative to foreign currency in international trade. What 
Disraeli said would certainly be reflected in the debate here today.
  I would like in my speech to try to do several things.
  No. 1, I want to try to explain why this issue is so critically 
important.
  No. 2, I want to respond to those who say they are opposed to 
expanding trade, that they are opposed to fast track because they are 
concerned about low-wage workers, because they are concerned about 
child labor, because they are concerned about poverty, because they are 
concerned about the environment.
  Finally, I want to do something that we don't do enough of here, and 
that is we don't attack this trade issue head on.
  I know I have many colleagues who come to the floor and talk for 
endless hours about how wonderful it would be to build a wall around 
America and go hide under a rock somewhere, how if we could simply 
imitate the economic isolation of North Korea, that all would be 
wonderful and well in America. And generally those of us who know 
better don't take the time to come over and respond. I want to be sure 
I take the time to respond today.
  First of all, trade is critically important. The most important 
contribution of America in the post-World War II period has been the 
explosion of world trade. We didn't rebuild Europe with the Marshall 
plan. We didn't rebuild Japan with foreign aid. We didn't stop 
communism in Greece and Turkey with economic assistance. I don't in any 
way mean to criticize the Marshall plan or the Truman doctrine. They 
were both critically important. They sent a very clear signal to the 
world that we intended to learn from the lessons of World War II and 
that we were going to resist the expansion of communism. But what 
stopped communism in Europe, what preserved freedom in Greece and 
Turkey, what rebuilt Japan, what created an economic miracle in Taiwan 
and Korea, what changed the balance of power, what won the cold war, 
what tore down the Berlin Wall, what liberated Eastern Europe, and what 
set more people free than any victory in any war in the history of 
mankind was the growth of world trade.
  By opening up American markets and expanding trade first with Europe 
and Japan, then with a special focus on Turkey and Greece, then with a 
focus on Korea and Taiwan, we literally created a wealth machine, and 
that wealth machine brought prosperity to America such as we had never 
imagined possible. It created new, massive economic superpowers in 
places like South Korea, a poor agricultural country.
  South Korea is a perfect example. In 1953, they had a per capita 
income of $50 a year. They were devastated by the Korean conflict. But 
through world trade their per capita income grew to over $6,000.
  The same thing happened in Taiwan. And the attraction of that 
economic growth in Taiwan, in Hong Kong and Singapore, the sheer 
ability of the market system in world trade to feed the hungry, to 
create opportunity and freedom and happiness, the shift in the balance 
of power that that economic explosion created literally tore down the 
Berlin wall and liberated Eastern Europe. And while Chiang Kai-shek had 
long since been in the grave, the economic miracle on the little island 
that he fled to and the economic miracle in Hong Kong built by world 
trade was so powerful that it literally forced mainland China to begin 
to change its system and converted an enemy into a trading partner. It 
holds out the great prospect of creating cooperation with the one 
country in the world that can be our rival in the 21st century, and 
that is China.
  Now, we know the lessons of the 20th century. We know the wars that 
involved conflicts over resources; where Germany invaded Russia to get 
access to resources; where the Japanese invaded Manchuria to try to get 
access to mineral resources that in many cases were denied in trade 
agreements around the world. We know the totalitarianism of the 20th 
century.
  When I am talking about trade, I am not just talking about goods and 
services. I am talking about a profoundly moral issue, a moral issue 
that really boils down to the question of whether we are going to 
repeat, beginning with a vote on fast track, the policies that created 
the terrible crises that we faced in the 20th century.
  Did we learn from history or are we going to repeat it? I hope we 
learned. This is a profoundly moral issue because it is about freedom. 
It is about doing something about grinding poverty that for the great 
mass of mankind literally beats down the humanity of working men and 
women and their children all over the world.
  Mr. President, I respect my colleagues and I know they mean well, but 
it is hard for me to sit here and listen to people say that they want 
to reduce trade because they are concerned about poverty. It is very 
difficult for me as an old economics professor to sit here and listen 
to people say, ``Well, I would like to trade with China or Mexico or 
Chile or any other place in the world but I am concerned that workers 
are poor. I am concerned about child labor. And so as a result I do not 
want to trade.''
  Why does child labor exist? In the War of 1812 we had 8-year-olds in 
the

[[Page S11721]]

Navy. We had child labor in America up until the Civil War. Why did we 
have it? Why does it exist all over the world in poor countries? It 
exists because it is a product of poverty. Wages are low because of 
poverty. Working conditions are poor because of poverty. If you really 
care about workers in another country, you want to trade with that 
country because only by trade, only by expanding prosperity both here 
and there can we do something about child labor, can we do something 
about poverty.
  So if you really care about workers' rights in other countries, you 
do not solve their problem, you do not deal with child labor by 
building a wall between us and that country. You eradicate child labor 
by promoting trade, which promotes prosperity, which allows parents to 
put their children in schools and keep them there until they are 
educated.
  So I reject the argument that is made by people who oppose trade and 
oppose fast track, because that is what this fast track debate is 
about. It is about trade. It is about whether we are going to continue 
to trade or whether we are going to start building walls. And I totally 
reject the idea that those who oppose this bill are protecting low-
income workers and children.

  I am protecting low-income workers and children. The policy that I 
promote of trade, expanded economic opportunity, expanded freedom and 
expanded prosperity, that is the only system in history that has ever 
done anything about poverty. Trade, free enterprise, individual 
freedom, those are the great tools for destroying poverty. So if you 
really want to stop child labor in the world, if you really care about 
workers' rights, then join the President and join me in tearing down 
barriers and expanding trade.
  Likewise, I reject the notion that those who want to promote a good 
environment worldwide can do it by preventing trade. I ask my 
colleagues, and I ask those who are listening, to understand that the 
population of the world is growing, that people are going to be hungry, 
and unless we can create an economic system worldwide that is going to 
feed them, they are going to continue to destroy the environment in 
their countries.
  Environmentalism, the concern about your surroundings, is a product 
of affluence. You can only be concerned about the environment when you 
have enough to eat. And if you really care about the environment, if 
you really are concerned about global warming, if you are concerned 
about the expansion of pollution, you ought to be for trade because 
trade creates prosperity, and prosperity makes it possible for people 
to improve the technology and in the process to improve the 
environment.
  Our colleague from Massachusetts talked about Mexico. Mexico is a 
relatively poor country, but as a Senator from a State that shares 
1,200 miles of border with Mexico, I can tell you that the expansion of 
trade with Mexico has meant bringing 1990's technology into Mexico, 
especially along the border, to replace 1950's technology, and the net 
result is that our new investments and the expansion of growth and 
opportunity in Mexico give them the first real opportunity that they 
have ever had to improve their environment.
  So if you really care about workers and children, if you really care 
about the environment, use the one tool, the one tool that we have that 
can help people in other countries share in the great bounty we share, 
and that tool is trade.
  Now, I have never heard so much poor mouthing in my life as the poor 
mouthing we have heard about trade. You would think Americans are a 
bunch of incompetents, that our workers are all these guys standing on 
assembly lines with big pot bellies, who are, in the words of that old 
country and western song, ``having daydreams about night things in the 
middle of the afternoon.''
  In listening to our colleagues, you would think that we are just 
complete incompetents and that we need to build a wall around America 
to protect us from having to compete with other people.
  That is totally out of sync with reality. America dominates the world 
market. Study after study of competitiveness concludes that America is 
the lowest-cost producer in the world of manufactured products, not 
because we have low wages but because we have skilled workers and 
because we have the best tools in the world. We dominate the world 
marketplace. We are the world's largest exporter, the world's largest 
importer. Our living standards are 20 percent higher than Japanese 
living standards. Germany has a living standard about 74 percent of our 
level. The American economy has grown in the last 10 years by 17.8 
million new permanent, productive, taxpaying jobs. And since employment 
in Government has declined, this represents a net addition to the 
number of people who are involved in the marketplace creating goods and 
services. That is 5.7 million more jobs than Germany and Japan combined 
have created in the last 10 years.
  And yet, to listen to our colleagues, our jobs are running offshore; 
our jobs are going to Japan; our jobs are going to Germany; our jobs 
are going to China. We have the highest levels of employment we have 
had in the history of the country. We have created 17.8 million new 
jobs in the last 10 years. Our economy is booming. And yet to listen to 
our colleagues pour ashes over their heads and talk about helpless, 
incompetent Americans, you would think we were incapable of producing 
or selling anything.

  The reality is that in 10 years our exports are up by 130 percent. 
The exports of Europe are up by 55 percent. The exports of Japan are up 
by 24 percent. But if there is one thing that I could rejoice in, it is 
we are not hearing people say today, as they did in this debate 2 years 
ago, that we ought to copy Japan. We used to have Members of the Senate 
who would get up and talk about how wonderful it would be if our 
economy could be like Japan's, if we put up barriers to cheat our 
consumers and drive up the price of goods, if we had Government and 
business conspire to have these massive plans to dominate the world 
market. If we could just do what Japan does, they said, things would be 
wonderful. I do rejoice that nobody says that anymore. They don't say 
it anymore because the Japanese economy is on its back.
  Government-dominated trade fails. The marketplace succeeds. You hear 
all of these tales of woe about how manufacturing jobs every day are 
leaving the country. The truth is that our exports in manufacturing are 
up 180 percent in the last 10 years. That is nine times the rate of 
growth of manufacturing exports in Japan. That is six times the rate of 
growth in exports in Germany.
  One of the problems the President has on fast track today is that for 
the last 6 years he has pussyfooted with all these protectionists. He 
has engaged in little acts of protectionism and now all of a sudden he 
comes back to the same proponents of protectionism that he has been 
coddling with political favors for 6 years and says, ``Oh, by the way, 
we have a profound national interest now and you have to stand up for 
trade.'' No wonder he is having trouble. The President has been on 
three sides of a two-sided issue for 6 years. But he is on the right 
side of this issue, and I am very proud to be with him.

  Let me make another point about trade. Let me give two examples of 
how we benefit from trade even when we are not buying goods from 
abroad, and then I want to talk about how we benefit from trade by 
buying foreign goods.
  Some of you will remember that in the 1980's, there was this massive 
push to get Ronald Reagan to protect the American automobile industry. 
In fact, I bought a Chevrolet truck in 1983. It was a clunker. That 
truck never was any good from the first day I bought it until the Lord 
provided somebody from an ad in the newspaper who came and bought that 
truck. Everything you can imagine happened to it. And, if you will 
remember, in the early 1980's, all these protectionists were coming, 
banging on our doors, saying, ``We are going to be driven out of the 
automobile industry. General Motors is going to be broke. Ford is in 
crisis. Chrysler is on the verge of collapse and has to have a 
Government bailout.'' Thank God Ronald Reagan said, in essence, 
``compete or die.''
  In 1983 you didn't want to buy a car or truck produced on Monday 
because on Monday autoworkers were still thinking about the weekend. 
And you didn't want to buy a car or truck produced on Friday because on 
Friday they were thinking about the coming

[[Page S11722]]

weekend. And you probably didn't want to buy one produced in the middle 
of the week because they weren't doing much thinking. I am not just 
talking about people on the assembly line, I am talking about all those 
white collar managers in all those fancy offices in Detroit. They were 
getting their fannies kicked because they were doing a rotten job and 
they were ripping off the American consumer. So, rather than make tough 
decisions and go to work, they came to Washington and they whined and 
they begged and they pleaded and they said, ``Protect us, protect our 
jobs.'' And they wrapped themselves in the American flag. It was our 
duty, they said. We couldn't let all our automobile jobs go to Japan 
and Korea and all those places where people worked hard. So we were 
supposed to protect them.
  Ronald Reagan said no. And what happened? Well, in 1991, I bought a 
new truck. This time I bought a Ford, but that didn't make the 
difference. In fact, I just recently bought a Chevrolet with the same 
result. That 1991 truck was the best vehicle I have ever bought in my 
life. Not only did I drive it; now my son is driving it. It has never 
broken down. It has never had a major mechanical problem. It is an 
absolute marvel.
  Where did it come from? I owe the quality of that truck to the 
Japanese and to the Koreans, and I would like to thank them today. I 
owe it to them because they forced companies and the United Auto 
Workers to stop this crazy system where workers and managers were 
always in conflict. So when I bought that Ford Explorer in 1991, the 
United Auto Workers were proud to have their name on it along with Ford 
Motor Co. Quality was job 1.
  I never will forget when General Motors said they had to determine 
whether they were going to be in the automobile business in the year 
2000. They are still the automobile business, big time in the business. 
They are producing some of the best cars and the best trucks in the 
world.
  If we had engaged in protectionism in 1982 and 1983, we would be 
getting the same lousy cars, the same lousy trucks, and we would be 
paying more. In fact, when Bill Clinton became President and, as a sop 
to the automobile industry and the labor unions, put a tariff of 
several thousand dollars on sport utility vehicles, what do you think 
happened? The price of sport utility vehicles went up by thousands of 
dollars. It was just theft, reaching right in the pockets of working 
families and pulling out thousands of dollars. That is an example of 
what I am talking about.
  I think one of the mistakes we made--I am not going to go much deeper 
into this--but one of the mistakes we made is that we talk so much 
about jobs we forget why we work. There are a few people in America who 
have remarkable jobs. I see two of them here today who are at least 
listening to me with one ear, two Senators. If we could afford to do 
this job for nothing, we would probably do it for nothing. But most 
Americans work because they want to earn money to buy things. The end 
result of economic activity is consumption.

  It never ceases to amaze me how perverted things get. I will give an 
example. We now have a suit filed with the International Trade 
Commission by salmon producers. I think we have about 500 people in 
America, mostly in the State of Maine, who are involved in growing 
salmon. They have filed an unfair trade practice suit against Chile. 
Chile produces massive amounts of salmon. They have a comparative 
advantage because they raise salmon all year long. They start out with 
eggs, they produce these little fingerlings, they feed them--the whole 
process is absolutely an economic marvel. When the salmon are 14 
pounds, they harvest them, they clean them, the fillets are shipped 
fresh to America and Europe. And what has happened? Salmon prices have 
gone down dramatically.
  Salmon is a superior product. When I was growing up I never ate any 
salmon. Rich folks ate salmon. Salmon has the right kind of 
cholesterol, as our colleague from Alaska would say. Because of the 
ability of Chile to produce salmon, literally tens of millions of 
Americans have changed their diets, and now eating salmon is becoming 
almost as common as eating steak.
  So what now are we doing? Right now we have the International Trade 
Commission which, thanks to a President who today is for trade, is full 
of protectionists, and they are in the process of determining whether 
we should literally take quality food out of the mouths of tens of 
millions of Americans. Does that make any sense whatsoever, to take 
food out of the mouths of tens of millions of people to protect the 
jobs of 500 people. God never granted them or anyone else the eternal 
right to be in the salmon business.
  An argument that carries no weight here but carries weight with me--
and I always love to make it because I feel good when I make it--is, 
who gives anybody that right? Who has the right to tell me, a free man 
in a free country, that some 500 workers in the State of Maine can rob 
me by making me buy their product instead of buying a cheaper, better 
product produced somewhere else? Who gives them the right to do that in 
a free country? Am I only free to go to the street corner and shout, 
``Bill Clinton is a dope,'' or ``Phil Gramm is crazy''? Or do I have a 
right to do something that is real, like go and use my money to feed my 
family in the way I choose? The argument for protectionism is really an 
argument for theft.
  I want to give another example. Every day we hear about textiles. 
Every day we hear this clamor of protectionist arguments about how we 
have to protect textiles. And do you remember this big deal about how 
we were successful in reducing tariffs to China and so now we are not 
going to be importing as many textiles from China. It was just hailed 
as a great victory.
  Well, go to the places where real, honest-to-God Americans shop and 
look at the quality goods and look at the prices. By protecting the 
textile industry, we are literally taking the shirts off the backs of 
children of working families in this country, and nobody seems to care. 
It is astounding to me in the U.S. Senate that we all care about 
producers, but nobody cares about consumers. We can get a couple of 
rich executives, business owners, textile manufacturers to come to 
Washington and holler, and pretty soon we are falling all over 
ourselves to protect them from competition. Nobody seems to care that 
American children and their parents pay twice what they should for 
textiles today.
  The paradox is that it is a losing battle. Britain lost the textile 
industry to New England, because the textile business is noncompetitive 
in a high-wage country. The exception, of course, is the part that is 
done by machines. We dominate the world in machine-made textiles, in 
fact, we are making a lot of money in the textile business today, but 
where you have to do hand work and where you have a lot of people 
involved, you tend to be noncompetitive.

  This is not a new phenomenon. England lost the textile mills to New 
England, and then New England lost them to the South. In fact, the 
Congress first adopted the minimum wage to try to prevent textile mills 
from moving from New Hampshire to Georgia. But it didn't do any good; 
they moved anyway. And New Hampshire is much better off for it because 
they became a high-tech State.
  Japan has lost the textile industry, Korea is losing the textile 
industry, and China will lose the textile industry, because the textile 
industry, at least in hand work, goes where there are low wages. But to 
protect a handful of jobs, we are willing to literally steal from 
millions of working families. Every day these arguments are made and 
people cloak themselves in the American flag when they are arguing for 
greedy, petty special interests to cheat the consumer. And I thought 
somebody ought to say something about it.
  Now, I want to sum up with three quotes. I thought about a way to end 
this speech, and I want to end it with a quote from Ronald Reagan, one 
of the last things he ever said on trade during his Presidency. But I 
want to quote first from a Democrat, a Member of Congress from New 
York, who was a Member of Congress at the turn of the century. Nobody 
has ever heard of him, but I discovered him in reading a biography on 
Winston Churchill. I discovered him because Bourke Cockran, from New 
York, was a friend of Churchill's mama, and he profoundly influenced 
Churchill on trade. In fact,

[[Page S11723]]

Churchill changed parties several times, as we all know, but he never, 
ever changed his position on trade. Churchill from the beginning of his 
career to the end of his career was a free trader. He was a free trader 
principally because of Bourke Cockran, who was one of the great orators 
in the history of this country. I just want to read a short statement 
from him because it says more than I can. I am not a very good reader, 
and so I apologize. We forget what trade is about. In the midst of all 
this special interest and ignorance that dominates this debate, we 
forget what it is about.
  Cockran is an American. He is in London. It is July 15, 1903. America 
is a protectionist country. England is the only country in the world 
that has relatively open markets. Cockran is speaking to the Liberal 
Club in England, and ``liberal'' at the turn of the century means what 
``conservative'' means today--freedom. With this relatively short 
paragraph he sums up what trade is about. I want to read it: ``Your 
free trade system makes the whole industrial life of the world one vast 
scheme of cooperation for your benefit.''
  He is talking to the British people.

       At this moment, in every quarter of the globe, forces are 
     at work to supply your necessities and improve your 
     condition. As I speak, men are tending flocks on Australian 
     fields and shearing wool which will clothe you during the 
     coming winter. On western lands, men are reaping grain to 
     supply your daily bread. In mines deep underground, men are 
     swinging pickaxes and shovels to wrest from the bosom of the 
     Earth the ores essential to the efficiency of your industry. 
     Under tropical skies, hands are gathering, from bending 
     boughs, luscious fruits which in a few days will be offered 
     for your consumption in the streets of London.
       Over shining rails, locomotives are drawing trains, on 
     heaving surges, sailors are piloting barks, through arid 
     deserts Arabs are guiding caravans, all charged with the 
     fruits of industry to be placed here freely at your feet. You 
     alone, among all the peoples of the Earth, encourage this 
     gracious tribute and enjoy its full benefit, for here alone 
     it is received freely, without imposition, restriction or 
     tax, while everywhere else, barriers are raised against it by 
     stupidity and folly.

  That speech could be given today about the United States of America. 
Ultimately, England went protectionist, and when it did, it declined as 
a world power. Ultimately, America promoted trade, and when we did, we 
rose to world prominence.
  What a different world we live in than the world we have evolved 
from. We now have leaders who talk about trade as a problem, who talk 
about imports as if something is wrong with buying something from 
someone else.
  When Pericles was delivering his funeral oration, honoring the dead 
of Athens, one of the great speeches in history, he talked of trade as 
a sign of greatness. Once a year, they had a ceremony where they would 
bring the bones of Athenian warriors who had died defending Athens 
during that year, and they would all be buried together.
  When Pericles came to the point in the speech where he wanted to 
explain how you could know that Athens was a great city, here is what 
he said, and interestingly enough, he measured the greatness of Athens 
by its imports. What a far cry it is from today; what he understood, we 
have forgotten. And he understood it 2,500 years ago:
  ``The magnitude of our city draws the produce of the world into our 
harbor, so that to the Athenian the fruits of other countries are as 
familiar a luxury as those of his own.''
  Only a great country has the capacity through trade to get the whole 
world to work cooperatively to promote its prosperity.
  Trade is like love. That is the miracle of this thing. It is not as 
if we are getting rich by trade at the expense of other countries, 
because trade makes us rich and it makes them rich. It is like love: 
The more of it you give away, the more of it you have. That is why it 
is magic. That is why it is so hard to understand.
  I want to end with a quote from Ronald Reagan. President Reagan has 
never gotten the credit he deserves for standing up for trade. It was 
one of his great achievements in an era that was dominated by 
protectionism. But here is what he said, and I urge my colleagues, 
especially on my side of the aisle, people who love Ronald Reagan, to 
look at these words before we have our final vote on this issue. Ronald 
Reagan said this about trade, and it is so accurate in terms of fears 
versus hopes:
  ``Where others fear trade and economic growth, we see opportunities 
for creating new wealth and undreamed-of opportunities for millions in 
our own land and beyond. Where others seek to throw up barriers, we 
seek to bring them down; where others take counsel of their fears, we 
follow our hopes.''
  I am for free trade. I am for the fast-track bill. These two issues 
cannot be separated. We have colleagues who say, ``Oh, I'm for trade, 
but I'm against fast track.'' We all know that without fast track, we 
are not going to have an expansion in trade. We all know that without 
fast track, Europe will tie itself to South America in their new free 
trade area, and we will end up with less and less trade and less and 
less influence and with less and less prosperity.
  So the issue here is trade, and the issue is freedom. Do you care 
about working people in America and around the world? If you do, you 
ought to be for trade, because trade will raise our living standards, 
and it will raise the living standards of others. If you are really 
concerned about child labor, about low wages, about grinding poverty 
around the world, the way you help do something about it is through 
trade. You don't do something about it by building a wall around 
America. If you really care about the environment, you are not going to 
improve the world environment by promoting poverty. We are going to 
promote it by expanding trade and by expanding prosperity.

  This is a very important vote we are going to have. We have not voted 
on anything in this Congress that is more important than giving the 
President fast track. If we reject fast track, we are saying that 
special interests dominate the trade policies of America, that the 
world's great trading nation, the most successful nation at trade in 
the history of the world, the nation that has benefited more from trade 
than any other country in the history of the planet, we are going to be 
saying that for the first time in the postwar period we are giving up 
our position of world leadership in trade, that we fear to trade.
  I don't say that, and I don't believe it. I hope that we are going to 
give the President fast-track authority and continue a process that 
will continue our prosperity and economic growth. I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. DORGAN. Mr. President, I yield as much time as he may consume to 
the Senator from North Dakota, Senator Conrad. Because no one else is 
on the floor and because of the time balance, I ask unanimous consent 
that Senator Feinstein from California be allowed to follow the 
presentation by Senator Conrad.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, let me say, the Senator from Texas, 
Senator Gramm, as always, makes an interesting and a challenging 
presentation. He is a very capable Member of the Senate.
  I will say, I listened with great interest. One of the areas I think 
where we want to discuss some disagreement is whether, as he proposes, 
the American people do not really understand the issue of trade. I 
think the American people do, in fact, understand the issue of trade, 
and that is precisely what is requiring and causing this kind of 
discussion in the U.S. Senate.
  Having said that--I will expound on that at some later time--let me 
yield now to my colleague, Senator Conrad.
  The PRESIDING OFFICER. The Senator from North Dakota is recognized.
  Mr. CONRAD. I thank my colleague from North Dakota, Senator Dorgan. I 
also listened with great interest to the remarks of our colleague from 
Texas, Senator Gramm. I, too, was struck when he said the American 
people don't understand trade. I must say, I disagree. I think the 
American people understand it very well. I think they understand that 
freer trade is in our interest, but I also think they understand that 
sometimes we don't do a very good job of negotiating these trade 
agreements with other countries, and, as a result, we quite often find 
ourselves at a disadvantage. That is not in America's interest. We 
ought to do a better job.
  When it is a question of this fast-track proposal, I must say, I 
favor fast

[[Page S11724]]

track, but I don't favor this fast-track proposal because it is flawed. 
It should be fixed, but there has been no serious attempt to fix it.
  Mr. President, without question, we are the most competitive nation 
in the world. Others have higher barriers erected against our goods 
than we have erected against theirs, and that is why fundamentally it 
is in our interest to negotiate trade agreements with other nations to 
reduce their barriers to our exports. There is no question that is in 
America's economic interest. For that reason, I voted for the GATT 
agreement, the General Agreement on Tariffs and Trade. But I also 
recognize that the devil is in the details, and we have seen that both 
with the Canadian Free Trade Agreement and the North American Free 
Trade Agreement. There were flaws in those trade agreements, serious 
flaws that should have been fixed before America signed off on those 
trade agreements.
  Before I go further into the details of what was wrong with NAFTA and 
the Canadian Free Trade Agreement and how those flaws came about, I 
would like to report to those who are listening on what happened in the 
Senate Finance Committee in considering the fast-track legislation that 
is before us, because I find just the process that has led us to where 
we are today disturbing.

  Senator Gramm said this is the most important measure this Congress 
will consider this year. I don't know about that, but certainly it is a 
very important measure. I would guess the American people think, well, 
the committees have gone over this, they have debated it, they have 
discussed it openly and freely, Members have had a chance to offer 
amendments. That is how the process usually works around here, but that 
isn't what happened on this bill that is before us today. No, no, 
something quite different happened.
  We had a meeting, a closed meeting, outside of the public eye in the 
back room of the Finance Committee. A number of us had a chance to say, 
look, we think there are flaws in this legislation that ought to be 
fixed. The chairman told us he didn't want any amendments when we went 
out into the formal session. I didn't know that he meant by that that 
he wouldn't permit any amendments, but that is what happened, because 
when the closed meeting ended and we went out into public session, 
something occurred there that I have never seen in my 10 years in the 
U.S. Senate. There was no debate, there was no discussion, there were 
no amendments, because none were permitted.
  Instead, this legislation was combined with the Caribbean Basin 
initiative and the tax provisions of the highway bill. They were 
wrapped all into one vote, no rollcall. The three of them together were 
voice voted, and no amendments were permitted. That is what happened. 
That is not my idea of the legislative process.
  What are the advocates of this legislation so afraid of? Why can't we 
have votes on amendments? Why can't we have a debate? We certainly 
didn't have it in the Senate Finance Committee that has the 
jurisdiction over this legislation. I think I found a number of reasons 
maybe why they don't want to have amendments considered and they don't 
want to have a chance for debate and discussion. Maybe it is because 
there are flaws in this agreement and they would just as soon not 
discuss those flaws.
  Mr. President, I think I detect at least three serious flaws in what 
is before us. First of all, we have to understand what fast track is 
all about, and I think every Member here understands that fast track 
means that individual Members give up their right to amend legislation 
implementing trade agreements.
  That is a remarkable thing, because the greatness of this body is 
that every Member has a right to offer amendments on every bill in 
order to alter it, change it, to fix it. But we give up that right 
under fast track. The idea is that that is important to do, so that the 
President can negotiate trade agreements, because other countries would 
be reluctant to negotiate if the resulting agreements were then subject 
to amendment on the floor of the Senate.

  Mr. President, the idea is that in exchange for giving up the right 
to amend, that Congress will be fully consulted in negotiating those 
trade agreements. It is called consultation.
  Mr. President, I have been here now through GATT, through NAFTA, and 
through the Canadian Free Trade Agreement. And I think I can report, 
without fear of contradiction, that the notion that Congress is 
consulted is largely a formality. It is more of a wave and a handshake 
than it is any kind of serious consultation with Congress. None of that 
would matter so much if it did not mean that we lose the opportunity to 
correct flaws in agreements before they are signed off on by our 
country. Before Congress is faced with an up-or-down vote, you approve 
it all or you kill it. Under fast track, it is all or nothing.
  That is what is seriously wrong with what is in front of us. We have 
given up the right to amend but we have not gotten in exchange any 
serious consultation process to try to prevent mistakes from being made 
before agreements are reached. That is not in America's interest.
  The result has been, in previous agreements, that very serious flaws 
have been included that were injurious to America's interests.
  In a minute I will discuss one that has affected my State and 
affected it seriously.
  The second point I want to make, the second flaw that I have detected 
in this legislation, is we still have no means of correcting previous 
agreements that contain mistakes.
  I know people who are listening must think, ``How can that be? I 
mean, we have a circumstance in which we enter into trade agreements, 
but there is no mechanism for fixing mistakes that are contained in 
agreements we have already entered into?''
  Well, as shocking as that might seem, that is precisely what we have. 
We have a circumstance in which, if there is a mistake in a previous 
agreement, there is no mechanism for fixing it.
  Some will say, who are trade experts and listening, ``Well, the 
Senator is not right. We do have a way of fixing things. We can file a 
section 301 case.''
  Well, let me just say, for people who are not aware of the technical 
details in trade legislation, section 301 is like an atom bomb. Section 
301 means we take retaliatory action against a country. But they, under 
trade agreements we have signed, can then retaliate against us. And 
guess what happens? If we go the route of a 301, which is rarely done--
rarely done--the country that we retaliate against for an unfair trade 
practice retaliates in turn against us. Obviously, then our country is 
very reluctant to take such an action.
  That leaves us without any practical way to fix the mistakes in past 
agreements. I was prepared, in the Finance Committee, to offer an 
amendment as part of the negotiating instructions to our trade 
negotiators that they ought to pursue a mechanism for fixing trade 
agreements that are flawed. Is that such a radical idea? Sounds like 
common sense to me. We ought to have a way of fixing agreements that 
have mistakes that are flawed.
  Mr. President, I am not just talking theoretically here. I am talking 
out of practical experience, of a bitter experience, that my State had 
with the so-called Canadian Free Trade Agreement.
  In North Dakota, we produce Durum wheat. We produce the vast majority 
of Durum wheat produced in the United States. In fact, nearly 90 
percent of the Durum produced in America is produced in North Dakota.
  Durum, for those who may not be familiar with that term, is the type 
of wheat that makes pasta. Of course, pasta has enjoyed a dramatic 
increase in consumption in this country, and North Dakota has been the 
place that has provided the raw product.
  Well, in the Canadian Free Trade Agreement there was a flaw, there 
was a mistake, and that provided an enormous loophole for our neighbors 
to the north to put Durum wheat into our country on an unfair basis. 
And you know what happened? Canada took advantage of that loophole, 
that mistake, that flaw, and before you know it, they went from zero 
percent of the United States market--zero--to 20 percent of the United 
States market.

  I have a chart that just shows what occurred in Durum after the 
Canadian Free Trade Agreement.
  This is before the Canadian Free Trade Agreement. You can see they 
had zero percent of the U.S. market--zero.

[[Page S11725]]

  After the Canadian Free Trade Agreement, and its flaw, Canada started 
dramatic increases in exports to the United States. In fact, they 
reached this level, which represented 20 percent of the U.S. market.
  We then were able to put limitations in place--something we could no 
longer do because of succeeding trade agreements that we have signed--
and we were able to reduce their unfairly traded Canadian grain back to 
a more tolerable level. But we cannot put this kind of limitation in 
place anymore. So we are left with a circumstance where one of the 
major industries in my State is vulnerable to unfair competition.
  Some would say, ``Well, it sounds to me, Senator, like you're just 
afraid of competition out in North Dakota.'' Oh, no. We are not afraid 
of competition. We are ready to take on anybody, anytime, head to head 
in any market anywhere. We are among the most competitive agricultural 
areas in the world. But we cannot take on the Canadian farmer and the 
Canadian Government.
  And that is what we are being asked to do. Because, while the 
Canadian Free Trade Agreement says--and says clearly--neither side 
shall dump below its cost in the other's market, in a secret side deal, 
never revealed to Congress, our trade negotiator at the time told the 
Canadians, ``When you calculate your cost, you don't have to count 
certain things. One of the things you don't have to count, you don't 
have to count the final payment made by the Canadian Government to the 
Canadian farmer.''
  Guess what the Canadians did? They dramatically decreased the 
payments that count, and they increased the amount of their final 
payment to the Canadian farmer. And they do not have to count one penny 
of the final payment for the purposes of determining whether they are 
dumping wheat below their cost into our market. I know that is a flaw. 
That is a mistake. That is unfair. But you go and try and fix it, and 
what you will find is there is no mechanism for fixing past flawed 
agreements.
  I think we ought to tell our negotiators, as part of their 
negotiating instructions, ``Go and try to get a mechanism for fixing 
trade agreements that have mistakes.'' But that amendment could never 
be offered in the Senate Finance Committee because no amendments were 
permitted. Why? I have never seen that in my 10 years in the U.S. 
Senate in any committee on which I have served. No amendments 
permitted--none. That reminds me of a different country and a different 
time--not the United States.
  Well, the third C that I talk about is currency valuation, because I 
think that, too, is something we ought to consider.
  There is no consideration in these trade negotiations about the 
currency stability of the country with whom we are negotiating.
  NAFTA is a perfect example of what that can mean.
  This chart shows that in the NAFTA agreement we were able to secure a 
tariff gain of 10 percent by that trade agreement because we were able 
to convince Mexico to reduce their tariffs by that amount. So we got a 
tariff gain of 10 percent in terms of our competitive position.
  Mexico, shortly thereafter, devalued its currency by 50 percent, 
completely overwhelming and negating what we had accomplished in the 
trade negotiation. Is it any wonder that we went from a trade surplus 
with Mexico before NAFTA to a $16 billion trade deficit with Mexico 
today? But nobody wants to talk about it, nobody wants to have an 
amendment offered that deals with this question.
  All I am asking is that when we are negotiating with a country, that 
we ought to get a certification from our President that he has examined 
the currency stability of the country with which we are negotiating so 
that he can assure us that there is little risk of a dramatic 
devaluation that would completely wipe out what we accomplished at the 
trade negotiating table.
  Common sense. It just makes common sense. You look before you leap. 
You examine the currency stability of the country with whom you are 
negotiating so that you can assure yourself they are not going to have 
a dramatic devaluation that wipes out what you accomplish at the trade 
negotiating table.
  That amendment was never considered because, again, no amendments 
were permitted in the committee.
  Mr. President, I would like to be able to vote for fast track. I 
believe in freer trade. But I also believe that there are serious flaws 
in this fast track proposal that deserve debate and discussion and 
votes on amendments. We were denied all of those in the Senate Finance 
Committee. I have never seen it in 10 years in the U.S. Senate. We are 
now going to have a chance here on the floor to offer those 
amendments--at least, I hope we are--I hope the majority leader is not 
going to come out here and fill up the tree and prevent amendments 
being offered by Members.
  Mr. President, this is a serious matter. Senator Gramm again said 
this is the most important vote we are going to have in the Senate this 
year. Again, I am not sure I would put it at the very pinnacle, but no 
question this is an important matter.
  The fact is, the United States has a lot to gain and a lot to lose. 
We have a lot to gain if we really accomplish freer trade in this world 
because we are the most competitive nation on the globe. We have a lot 
to lose if we negotiate flawed agreements. We have a lot to lose if we 
continue on the path that leads to a nearly $200 billion trade deficit 
in part because the United States has not been tough enough in 
negotiations with other countries.
  It seems to me these three C's that I have outlined--of consultation, 
of correcting prior agreements that have flaws and, third, that we 
consider the currency valuation of the country with which we are 
negotiating so that we can be confident they will not engage in a 
dramatic devaluation and completely offset what we have accomplished at 
the negotiating table--are commonsense measures.
  I hope my colleagues, when I have a chance to offer these amendments, 
will carefully consider them because this is an important matter. We 
have a chance to make this fast-track proposal much better, to guard 
the interests of the people of the United States much better.
  Mr. President, I will conclude as I began. I have supported well-
crafted trade agreements. I was proud to vote for GATT. But I have 
opposed those agreements that I thought were flawed and not in the 
national interest.
  Now, again, all Members are going to have to make a decision and a 
determination. And I say to them, as a member of the Finance Committee 
that considered the legislation before us, that it is flawed, and it 
ought to be fixed. Hopefully, we will have the opportunity to do that 
on the floor of the Senate, which we did not have in the Senate Finance 
Committee.
  I thank the Chair and yield the floor.
  Mrs. FEINSTEIN addressed the Chair.
  The PRESIDING OFFICER (Mr. Gregg). The Senator from California.
  Mrs. FEINSTEIN. Mr. President, I ask unanimous consent for such time 
as I may consume.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. FEINSTEIN. Mr. President, I rise this afternoon to offer my 
views on this fast track proposal before the Senate. I have followed 
the debate very carefully. California has a significant stake on issues 
of international trade, an important engine driving the California 
economy today.
  In recent weeks, we have heard a great deal about fast track, often 
with broad, sweeping claims. Some have said those voting against fast 
track are protectionist, xenophobic or antitrade. Others have claimed 
fast track is the Sun, the Moon, and the stars. I want to take a few 
minutes to describe just what I think fast-track authority is all 
about. Fast track is the abrogation of congressional authority to have 
some leverage on trade agreements and the ability to offer amendments 
on the floor.
  This fast-track bill provides the President, for the remainder of his 
term, plus an optional extension, the authority to negotiate any trade 
treaty in the world and bring it rapidly to this body, without an 
opportunity to offer amendments. Article 1, section 8, of the U.S. 
Constitution gives the Congress responsibility over economic matters. 
Through fast track, we are effectively abrogating this responsibility.
  There is no State in this Nation that has a more important role on 
issues of

[[Page S11726]]

trade than the State of California. The stakes are very high.
  California is the seventh largest economy on Earth. We are the 
economic powerhouse and the economic engine of the Nation, responsible 
for 13 percent of the Nation's economy and 20 percent of the Nation's 
export.
  Free and fair trade is an integral part of California's economic 
future. But free and fair trade can only be brought about through a 
level playing field, with everybody playing by the same rules. My job 
as a U.S. Senator is to stand up and articulate my State's interests 
when its needs and concerns are not being taken into consideration. 
Simply stated, fast track gives the President total authority to 
negotiate any trade agreement.
  Is fast track absolutely necessary? We have heard a great deal of 
comment and concern, calling for the passage of fast track: ``We have 
to do it, we have to do it, you are un-American if we don't do it.'' 
But the fact of the matter is this President has concluded 220 trade 
agreements, and only 2 of them, the GATT Uruguay round and the North 
American Free Trade Agreement, have required fast-track authority.
  In fact, other than GATT and NAFTA, there have only been three 
additional agreements in the Nation's history that have been adopted 
through the fast-track process: the Tokyo round of GATT in 1975, the 
United States-Canada Free-Trade Agreement in 1998 and the United 
States-Israel Free Trade Agreement in 1989. These are the only five 
agreements in the history of our Nation that have been passed using the 
fast-track process.
  Yet we have seen exports increase in our country by 50 percent since 
1991, without fast-track. Today, exports are 30 percent higher than 
they were in 1993. The trade growth and the trade agreements are 
occurring without fast-track authority.
  Now, it may well be if I were the President of the United States, I 
would want to have fast track, too. It would make my life simpler. I 
would not have to deal with a Congress that can sometimes be 
recalcitrant or difficult and, at our best, obstreperous, and at our 
worst, an actual impediment.
  However, the Senate is supposed to be a deliberative body and I feel 
sometimes no legislation is better than just any legislation. Yet with 
this fast track matter, we have seen a great rush. We are told we can't 
wait until next session or next year to have more thoughtful 
consideration on this issue. We have to do it right now.
  I must tell you, the stakes are very big for my State. Fast track 
forces me to give my authority to offer changes. I give up my ability 
to pick up the phone and tell the administration, ``Hey, if you 
negotiate this, I'm going to try to amend it on the floor because it 
disadvantages industries in my State.''
  The bottom line is, I think, the argument that the United States 
can't negotiate trade agreements without fast track, based on the 
record, are incorrect. Senator Byron Dorgan has ably pointed out that 
the agreements that have been the subject of fast track, have been 
followed by a growing negative trade balance. Yet we can't do anything 
about it so we don't talk about it.
  Under NAFTA, a $1.7 billion trade surplus in 1993, after NAFTA's 
passage, grew to a record trade imbalance of $16.3 billion by 1996. Our 
trade deficit with Canada has also grown, more than doubling from $11 
to $23 billion annually.
  We can't amend NAFTA, we can't change NAFTA. All we can do is give 6 
months' notice and withdraw. The stakes are very big now, and 
withdrawal is not apt to happen politically.
  The GATT agreement, which I voted for, has contributed to the largest 
merchandise trade deficit in U.S. history, rising in each of the last 4 
years to an all-time high of $165 billion today.
  I think these mounting trade deficits should be a loud and clear 
message that America should negotiate better trade deals rather than 
give up congressional responsibility through fast track. To me, these 
experiences say, ``Go slow. Fast track may well backfire.''
  Yet, through fast track, we are saying we have to proceed quickly, we 
have to give up all scrutiny, we have to give up all right of 
amendment: do it fast, do it fast.
  I would like to discuss one area where we face significant concerns. 
Right now, the international financial markets are more complex than 
ever. Today's international trading picture is more diverse and 
complicated than ever before. Take, for example, the currency problems 
some Southeast Asian nations are experiencing, which may well create a 
very unanticipated result.
  Earlier this month, the International Monetary Fund announced it is 
preparing an emergency line of credit for Indonesia. The Indonesian 
rupiah has dropped more than 18 percent against the dollar since late 
September. Thailand received a $17 billion loan from an IMF-led 
consortium in August, which represents the second largest IMF rescue 
package ever.
  Indonesia and Thailand now join the Philippines as Asia's former 
``economic tigers'' who have looked for IMF emergency help due to 
financial crisis. As you may recall, following NAFTA, the United States 
extended the largest loan package to Mexico when it faced financial 
crisis and the peso was devalued. Much to Mexico's credit, this loan 
was promptly and fully repaid.
  Many knowledgeable people involved in the Pacific rim trading theater 
believe these currency fluctuations are very serious harbingers of 
things to come. In many of these countries, banking practices may also 
be a subject of concern, with loans extended to those with political 
clout, rather than the most worthy. These currency fluctuations may 
foreshadow major banking scandals in the future.
  If you combine questionable banking practices with currency 
fluctuations, we may see a scenario in which the only course open to 
some of these nations is for them to press harder to increase their 
exports and erect import barriers, regardless of what the trade 
agreements say. Further, the United States does not have a great record 
in enforcing many of the agreements that are on the books. As a result, 
U.S. manufacturers would lose exports and market share.
  Free and fair trade is an integral part of California's economic 
future. But under fast track, California's two Senators could very 
easily get rolled despite the State's enormous economic stake. Many 
States, each with two Senators, don't have nearly the economic 
interests that we do. My State could face an agreement that very much 
disadvantages California's industries, and I would have no opportunity 
to try to correct that.
  We are the leading agricultural State in the Union, home to 10 
percent of the Nation's food processing employment.
  The California wine industry is the Nation's leader, producing 75 
percent of the wine and 90 percent of the wine exports.
  We are the leading high-technology State, providing 20 percent of the 
Nation's jobs in high technology.
  We lead the Nation in entertainment, providing 50 percent of the 
Nation's production.
  We are home to 5 of the Nation's 10 largest software firms. We are 
the Nation's leader in biotechnical and pharmaceutical products, 
providing as much as 30 percent of the Nation's output. Yet, under fast 
track, I am asked to give up any opportunity to fight for my State's 
interests on the floor of the U.S. Senate if they are disadvantaged by 
a trade agreement negotiated by the administration. I cannot agree to 
those restrictions.
  Let me talk for a moment about specific concerns with S. 1269, the 
Finance Committee bill. I have listened intently to the debate other 
the past several weeks. I have scrutinized amendments which may be 
offered to this legislation. In my view, the major deficiencies in the 
fast-track legislation before the Senate have not been addressed. In 
some ways, the legislation before the Senate today is weaker in 
addressing those concerns than in prior fast-track laws.
  Under S. 1269, trade negotiations that involve issues such as 
protecting U.S. manufacturing, labor, or environmental standards, 
cannot be included in the fast-track process but will have to be dealt 
with separately where they could be the target of amendments, Senate 
filibusters, or bottled up in committee and never see the light of day.
  Let me give an example. Unlike previous fast-track laws, S. 1269 
requires

[[Page S11727]]

that a provision of a trade agreement, to be entitled to receive the 
protection of fast track, must be ``directly related to trade.''
  Previous fast-track laws have provided fast-track benefits to those 
provisions of an agreement that ``serve the interests of U.S. 
commerce'' and are ``necessary and appropriate'' to carry out the 
agreement.
  So what is the practical effect of the changes? If a trade agreement 
included a component to fund border cleanup, these cleanup provisions 
could not be protected by fast-track rules because they are not 
considered ``directly related to trade.'' They would have to proceed 
through the regular legislative process, subject to amendments, 
filibusters, with no certainty the provisions would ever receive a 
vote.
  For example, NAFTA implementing legislation reduced tariffs in 
Mexico, Canada, and the United States and created the Border 
Environmental Cooperation Commission and the North American Development 
Bank to fund environmental cleanup. Although adopted in the NAFTA fast-
track approval process, these two entities would not be eligible for 
fast-track if they were included in a future trade agreement brought 
under S. 1269's fast-track authority.
  S. 1269 limits congressional opportunity to remedy worker safety, 
wage, and environmental concerns. Section (2)(b)(15) of the bill seeks 
to prevent foreign governments from ``derogating,'' or reducing, a 
country's laws or regulations to provide a competitive advantage to its 
domestic companies or to attract investment to the country.
  That sounds good, but what about those countries who have weak or 
even no environmental or labor standards in the first place? There is 
no provision in this legislation that would obligate countries to enact 
fair labor or environmental laws or to remedy serious inequities that 
already exist between the United States and other countries.
  Furthermore, because efforts to address these inequities would not be 
considered ``directly related to trade,'' any agreement addressing 
these issues would not be protected under fast-track rules but would be 
subject to amendment, filibuster, and other procedural rules that could 
prevent them from ever seeing the light of day.
  Additionally, even in those cases where a country has derogated or 
failed to enforce environmental or labor laws, S. 1269 sets up an 
impossible enforcement standard. Not only must the United States prove 
that a country waived or reduced a law or regulation, but it must also 
prove that it did so to obtain a competitive advantage. Under this 
legislation, the onus is on the United States to prove a country's 
motives.
  Let me give you some examples of the competitive disadvantage U.S. 
manufacturers would face, disadvantages the United States would be 
unable to require other countries to correct:
  PCB's and benzene are prohibited in the United States in order to 
protect public health and safety, but they remain legal, low-cost 
solvents in Mexico. This reduces a Mexican company's manufacturing and 
cleanup/disposal costs to the disadvantage of United States companies, 
but raises significant health risks.
  Mexico has a significant problem monitoring and controlling hazardous 
waste. Less than 20 percent of the industries producing hazardous waste 
in Mexico, 70 out of 352 industries, report proper hazardous waste 
disposal. Fewer than 20 percent of those industries meet their 
obligations. A 1995 report indicates that up to a quarter of all 
hazardous waste, about 44 tons daily, originating in the industrial 
border area in Mexico, the maquiladora area, simply disappears with no 
documented end point. No U.S. companies could get away with that. But 
companies in Mexico are able to get away with, undermining public 
health and safety, and gaining a cost advantage along the way.
  In Tijuana, 7 miles south of California, lead and arsenic is, today, 
collecting in an uncontrolled pile. In the United States, these 
materials, which are found in every battery, can only be handled in a 
``contained or controlled'' environment to protect against leakage, and 
they are buried in clay or porcelain-lined pits. In Tijuana, no cleanup 
has occurred.
  I would like to offer another example. Molded plastic, such as the 
simple types of chairs or tables in many backyards, emits toxic fumes 
during the molding process. In the United States, the fumes must be 
captured during manufacturing under what's called an exhaust hood. But 
in Mexico, the cheaper manufacturing process is conducted in open air 
without an exhaust system, allowing for the release of the harmful 
toxins.
  Now, these are specific, ongoing examples of disparities in 
environmental standards that serve as either an inducement for 
manufacturers to lower their standards, or a competitive disadvantage 
to U.S. manufacturers who are required to meet higher standards to 
protect public health and safety. They also are part of the sucking 
sound that Ross Perot described, in which U.S. industries are drawn to 
Mexico to manufacture, because they don't have to abide by the higher 
standards in the United States. There is no remedy for this under this 
fast-track law.
  Without a remedy available as part of trade negotiations, these 
disparities in standards only encourage the flow of more jobs to areas 
with the lowest standards and, hence, the lowest manufacturing cost. 
The low-cost areas will include many Asian countries in the future.
  Now, I would also like to give you a specific example illustrating 
the problems and why I feel so strongly. The example involves the 
California wine industry, which represents 75 percent of the Nation's 
output of wine and 90 percent of the Nation's wine export products.
  NAFTA had an immediate negative impact on the California wine 
industry. Coincident with NAFTA, Mexico gave Chilean wines an immediate 
tariff reduction, from 20 to 8 percent, and a guarantee of duty-free 
status within 1 year. By contrast, United States wines face a 10-year 
phaseout of a much higher Mexican tariff, disadvantaging them in the 
Mexican market.
  The result was predictable: United States wine exports to Mexico, 
following NAFTA, dropped by one-third, while Chilean wine exports to 
Mexico nearly doubled. Chilean wine picked up the market share lost by 
United States wineries dominated by California.
  During the NAFTA debate, the administration pledged, in writing, to 
correct inequities within 120 days of NAFTA's approval. I would like to 
quote from a letter from the U.S. Trade Representative:

       . . . I will personally negotiate the immediate reduction 
     of Mexican tariffs on U.S. wines to the level of Mexican 
     tariffs on Chilean wines and, thereafter, have hem fall 
     parallel with future reductions in such tariffs.

  You would think that at least by today, 3\1/2\ years later, the 
tariffs would be equal. Not so. Three and one-half years later, they 
remain enshrined in law and there seems to be nothing we can do about 
it.
  As a matter of fact, as a result of an unrelated trade dispute, 
Mexico actually raised tariffs on United States wine to the pre-NAFTA 
level of 20 percent, an increase above the 14 percent rate it had 
reached. The 20-percent tariff remains in effect today, representing a 
wipeout of United States market share to the Chilean wine entering 
Mexico.
  From Mexico's standpoint, the strategy is clear. You keep the tariffs 
up for a period of time, eliminate United States market share, and 
another country comes in that doesn't face those tariffs and builds up 
sales and market share. That is exactly what has happened, chapter and 
verse.
  GATT, which I supported, also contained monumental inequities for 
this important industry. This time, the problem was in the European 
Union, and this is how it worked. Even though the United States had the 
lowest tariffs of any major wine producer, United States negotiators 
agreed in the Uruguay round to drop our tariffs by 36 percent over 6 
years, while the world's largest wine producer, the European Union, 
dropped its tariffs by only 10 percent.
  As a result, the current U.S. tariff on all wine products is an 
average of 2.4 percent, compared to the EU's current average tariff is 
13 percent.

  GATT also disadvantaged California's entertainment industry, which 
allowed European restrictions on U.S. programming to persist. Europe 
didn't accept the GATT commitments on the audio-visual services. 
Instead, the EU

[[Page S11728]]

maintained its 1989 European Union Broadcast Directive, which limits 
the market for U.S. movies and television broadcasting. France, for 
example, requires that 40 percent of all feature films and transmission 
time must be of French origin, while 60 percent must be of EU origin, 
leaving only 40 percent of the market open for United States 
competition.
  So, you see, GATT and NAFTA, both the product of fast-track during my 
time here in the Senate, left California industries with significant 
disadvantages. During those negotiations, I called the administration 
and I said, ``These are huge industries in my State and they will be 
hurt under this agreement.'' And I was effectively rolled. Why should 
I, or any Member of this body, give up our opportunity to stand on this 
Senate floor and move an amendment to protect an industry within our 
State?
  That is what fast-track does, ladies and gentlemen. That is what 
fast-track does.
  Through fast-track, we knowingly abrogate our responsibility, despite 
the requirements of the Constitution of the United States, article I, 
section 8, which gives that authority to the Congress of the United 
States.
  As I said earlier, if I were President, I might want fast-track 
authority. I am not; I am a U.S. Senator. I am elected to protect the 
people and the industries and the workers in my State.
  Now, there are ways that the legislation can be strengthened. One is 
to require that tariffs in other countries be reduced first, before we 
commit to deeper reductions in already lower United States tariff 
levels. All too often, the price of modest tariff reductions abroad is 
deeper reductions in the United States. U.S. producers need a level 
playing field.
  Another important area for improvement is stronger enforcement. We 
need stronger enforcement tools, if trade barriers are not lowered as 
provided for in the agreement. A recent report from the American 
Chamber of Commerce in Japan said more effort must be dedicated to 
enforcement of existing trade agreements.
  We can have appropriate environment and labor incentives built into 
these agreements.
  I have always believed that the American dream was that workers on a 
plant production line, by dint of his or her work, could buy a home, 
buy a car and earn enough to send his or her kids to school. The 
American dream, to me, has always been that, by dint of labor, you can 
have all of the opportunities in this great country.
  I didn't run for the U.S. Senate to preside over the diminution of 
the California worker or the American worker. I didn't run for the U.S. 
Senate to see that a 60 cents an hour minimum wage standard would 
prevail. I ran for the U.S. Senate to try to see that this American 
dream enables somebody, by the dint of their labor, to buy a home, buy 
a car and send their kids to good schools, so that the next generation 
can do better than the previous generation. I don't think that is an 
unrealistic dream. It has always been the dream of America. We can have 
appropriate environment and labor incentives.
  Another area for reform is an effective dispute-resolution process. 
Farmers face phytosanitary disputes on the border all the time. 
Arbitrarily, countries and border agents can deny access to products 
like wheat in China or grapes in Australia or citrus in another country 
because of some claim somewhere. These barriers may have little basis 
in science or public health, but may reflect political judgments.
  In conclusion, let me only say that I represent a huge State. I don't 
serve on the Finance Committee. The only opportunity I have to protect 
the industries and people of my State is the ability to stand up on 
this floor and introduce an amendment and say to the administration, 
``If you do this, I am going to filibuster the bill, I am going to 
amend the bill, and I am going to protect the people of my State.''
  Fast track is a total surrendering of this ability, without knowing 
what agreements are coming down the pike, without knowing what I am 
going to be asked to accept, or the industries are going to be asked to 
do. Fast track has to be reviewed in that framework because that is the 
true framework in which this decision is going to be made.
  I thank the Chair. I yield the floor.
  Mr. GRAHAM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. GRAHAM. Mr. President, I speak on behalf of the passage of the 
legislation which will soon be before us which will authorize the 
President to enter into negotiations on behalf of this Nation as it 
relates to trade and trade-related matters.
  Mr. President, we refer to this legislation as fast track. As with a 
number of other policy issues here in Washington, I consider these 
words to be nondescript. They do not convey what it is we are being 
asked to vote upon.
  This legislation first establishes a framework within which the 
President of the United States can conduct negotiations. In essence, it 
is analogous to a board of directors of an organization telling its 
executive that it can negotiate a particular contract but stipulating 
what the conditions of that contract must be and what the limits of the 
negotiating authority are. When that negotiation reaches a conclusion, 
and if that conclusion is a trade agreement, when that agreement is 
returned to the Congress where the Congress has a single ``yes'' or 
``no'' vote but cannot modify the agreement, and in the case of the 
Senate surrender some of the prerogatives relative to extension of 
debate and other procedural advantages which are normally available to 
us as individual Members of the Senate, the question is, why will the 
Congress today be willing to do this? Why have Congresses over the past 
two or three decades been willing to pass such legislation and transfer 
a portion of their authority to the President? The answer is very 
simple. That is, if we do not do this, we don't have the opportunity to 
enter into trade negotiations because our trading partners will not 
come to the table.
  Why would countries like Great Britain, France, Argentina, and Japan 
not want to come to negotiate with the United States unless the 
President had this authority? Most of those countries have some form of 
a parliamentary form of government in which the executive branch and 
the legislative branch are effectively merged. Therefore, when the 
Prime Minister speaks on behalf of the Government of the United 
Kingdom, as an example, he or she is not only speaking as the head of 
the executive branch but speaking as the head of the legislative branch 
and as the head of the political coalition which controls the 
Government. So what the Prime Minister says at the negotiating table 
there is the political capability and expectation of his or her ability 
to deliver on behalf of the Government of the United Kingdom.
  In the case of the United States, we don't have this integration of 
the executive and the legislative branch, and frequently the President 
is not the head of a coalition that effectively controls Government. We 
have one of those examples today in which the President is of one 
political party, the leadership of the Congress is of another. So our 
trading partners would say, why should I sit down with the President to 
negotiate the best agreement that I can? And, like all agreements, 
trade agreements contain a heavy component of compromise. You gain some 
benefits in area A, and you give some benefits in area B in order to 
reach an agreement that both sides will feel is advantageous. Our 
trading partners would say, why would we agree to such a treaty knowing 
that then Congress is going to come back, and in area B where we got 
our principal benefits they will try to offer a series of amendments to 
strip us of those benefits?

  So the product that would finally emerge would not be one that both 
sides would feel is balanced and that can be supported.
  So, the reason that we have this process is because without it we 
never get to the question of whether we would have a negotiated 
agreement because the other parties would not sit with us to enter into 
that discussion.
  So, this is fundamentally a question of does the United States wish 
to negotiate trade agreements, or do we wish to sit in the stands while 
the other nations of the world negotiate trade agreements that will 
have an impact upon us?
  I know that this debate is heavily affected by history. Much of that 
history

[[Page S11729]]

is a result of the North American Free-Trade Agreement and negative 
experiences that people have had under the North American Free-Trade 
Agreement.
  I come from a State that has felt that sting of the North American 
Free-Trade Agreement, particularly as it relates to agriculture. Our 
congressional delegation was very concerned about this in the days 
leading up to the final vote on the North American Free-Trade 
Agreement. We secured what we thought were some protective 
understandings from the administration. And I am sad to say that 
through a combination of inadequate enforcement and a failure to keep 
commitments we were very disappointed, and many sectors of our 
agricultural industry were adversely affected. Learning from this 
lesson--not what some have learned, which is we should wash our hands 
of this process and have nothing more to do with attempting to 
negotiate trade agreements, or to be involved when other people are 
negotiating trade agreements--the lesson that I and others have learned 
is this time we are going to put these concerns into writing in the 
legislation which sets the parameters for the negotiation and not 
depend upon promises of what will happen after the negotiation has been 
concluded.
  So, in this fast-track legislation as passed by the Senate Finance 
Committee there are a number of provisions that are intended to provide 
that enhanced level of confidence that agreements reached will be 
agreements enforced, that commitments made will be commitments 
realized.
  Let me just quote from page 8 of the Finance Committee's version of 
this legislation beginning on line 6:

       Agriculture: The principal negotiating objectives of the 
     United States with respect to agriculture are in addition to 
     those set forth in various sections of the Food Security Act 
     of 1985 to achieve on an expedited basis to the maximum 
     extent feasible more open and fair conditions of trade in 
     agricultural commodities by . . .

  And then a series of specific points are mentioned. Let me refer to 
three of those specific points.

       Specific requirements for negotiators to account for the 
     unique problems of perishable agricultural products, 
     including disciplines on restrictive or trade distorting 
     import and export practices;
       Two: Requirements to address market access for the United 
     States agricultural products, including removing unjustified 
     sanitary and phytosanitary restrictions;
       Three: Protection against unfair trade practices, including 
     State subsidies, dumping, and export targeting practices.

  All of those, Mr. President, and more are listed in the fast-track 
legislation that is before us.
  In addition to that, in the report language submitted by the Senate 
Finance Committee, there is a requirement for the President to account 
for foreign unfair or trade distorting practices for specific sectors, 
particularly perishable agricultural products, citrus fruit, and fruit 
juices.
  So, we have learned some of the lessons of the recent past and are 
now applying those lessons in terms of the parameters of 
the negotiation in this fast-track agreement.

  Why do we need to be there in the first place? We had this experience 
in the recent past. Why not just step back, defend our position in 
America, and let the rest of the world take its place?
  I believe, Mr. President, that we are facing a stark choice; that is, 
a choice as to whether the United States is to maintain its leadership 
position in the world, to be at the table writing the rules of 
international trade so that those rules will take into consideration 
our circumstances, our expectations, and our economic interests. Or, 
are we to retreat from the world, and allow others to write the rules 
to their advantage?
  Mr. President, we represent only 4 percent of the customers of the 
world. Ninety-six percent of the people on this planet are not 
residents of the United States of America. We cannot maintain our 
growing economy and its standard of living unless we reach out to that 
96 percent of our fellow human beings who do not live in our country. 
We cannot maintain our current record level of economic growth and 
expansion and prosperity and full employment without active trade. The 
United States has already opened its borders to foreign goods. We have 
recognized the benefit to our people of having access to goods and 
services that are produced outside the United States. We have done so 
most dramatically by reducing our tariffs to an average level of 2 
percent. That is the average level of tariff on products coming into 
the United States. But our products going out of the United States 
trying to reach that 96 percent of mankind who are not U.S. residents 
face tariffs that exceed 10 percent on average.
  As an example, the country which is specifically mentioned in this 
legislation as being authorized for the President to negotiate 
membership in the North American Free-Trade Agreement is Chile. In 
February of last year, I visited Santiago. We learned from the United 
States-Chilean Chamber of Commerce that the average tariff against 
United States products in Chile is 11 percent. The average United 
States tariff against Chilean products is the 2 percent, which is the 
worldwide average.
  In a discussion with several businesses, some of which are United 
States, some of which are non-United States, as to what would be the 
effect of the United States entering into an agreement which would 
reduce Chilean tariffs against United States products, the answer was 
universally that it would lead to a substantial increase in the Chilean 
purchase of United States products.
  As an example, one firm that was in the boat building and boat repair 
business said that they bought their sheet steel and their machine 
tools from Europe because at the current level of tariffs Europe was 
more economically competitive, but that with a lowering of Chilean 
tariffs against United States products, the opening of a free trade 
relationship between the United States and Chile, they would shift 
their purchases of those products to the United States to the 
substantial benefit of our country.
  Chile is a relatively small country, a population of about 15 
million. It is about the same size as my State of Florida. But it is a 
country which has had a dynamic market-driven economic growth over 
recent years. It has had a powerful influence on other developing 
countries in South America, and in the world. Establishing this 
relationship with Chile would be a strong United States recognition of 
the progress that this country has made, and an encouragement for 
others to follow Chile's example.
  Unfortunately, Mr. President, most of the debate about fast track has 
in fact focused on our own hemisphere, and specifically on the 
expansion of the North American Free-Trade Agreement.
  That is certainly an important part of this fast-track authority, but 
it may be secondary in its importance to the U.S. economy to a series 
of important sectoral negotiations which are going to commence under 
the GATT agreement to which we have already agreed.
  Under the GATT agreement beginning in the next few years, there will 
be a series of negotiations on specific economic sectors. I would like 
to focus on one of those sectors which will be the topic of 
negotiations in 1999. And that is agriculture. This is important to us 
because agriculture represents the area of trade in which the United 
States has the greatest surplus with the world. The largest area in 
which the United States has an advantage in terms of export over import 
is in agricultural products.
  What are we going to be trying to accomplish at the 1999 agricultural 
sectoral negotiations? Some of the objectives of the United States will 
include reducing foreign tariffs in consultation with the U.S. 
agricultural industry on fruits and vegetables. Today, for example, 
Japan imposes a tariff on oranges which is as high as 40 percent. Other 
countries have similarly high tariffs on citrus products and other 
processed fruits and vegetables. One of our principal negotiating 
objectives will be to drive down those barriers to U.S. agricultural 
products in important markets.
  Another objective will be to increase or eliminate tariff rate 
quotas. These are the limits on the amount of goods that the United 
States can export to a country before it faces high and often 
preventive levels of tariffs. We want to see those quota limits as high 
as possible or totally eliminated. This is another important objective 
of our negotiations.

[[Page S11730]]

  Mr. President, our distinguished chairman has asked to have the floor 
returned to him, and I shall do so by just summarizing to say that two 
other important agricultural objectives are to eliminate export 
subsidies and to eliminate state trading enterprises which have both 
distorted the agricultural market. If we do not pass this legislation, 
the United States will not be at the table in 1999. We will not have 
the opportunity to advance our goals.
  There are risks involved in extending to this President the same 
authority that we have granted to Presidents over the last two decades, 
but I believe the greater risk for the United States is to stand on the 
sidelines and let others write the rules that will determine our 
economic well-being. I believe the United States needs to be there. We 
need to be there with a sense of strength, pride, and confidence in our 
ability to negotiate an agreement. And if the President is found to 
have acted in a foolish way that is contrary to U.S. interests, we have 
the responsibility and the power to reject that agreement with a 
decisive ``no'' vote.
  Mr. President, I appreciate the leadership which our chairman has 
given on this matter. I know what a strong supporter he has been on the 
issues.
  I ask unanimous consent to have printed in the Record the draft of an 
amendment which I intend to offer, assuming that we move to proceed to 
this matter, which relates to increased enforcement responsibility for 
the executive branch relative to any treaties that it might negotiate.
  There being no objection, the amendment was ordered to be printed in 
the Record, as follows:


                            amendment no. --

 (Purpose: To require a plan for the implementation and enforcement of 
 trade agreements implemented pursuant to the trade agreement approval 
                              procedures)

       On page 41, between lines 16 and 17, insert the following 
     new section and redesignate the remaining sections and cross 
     references thereto accordingly.

     SEC. 6. ADDITIONAL IMPLEMENTATION AND ENFORCEMENT 
                   REQUIREMENTS.

       At the time the President submits the final text of the 
     agreement pursuant to section 5(a)(1)(C), the President shall 
     also submit a plan for implementing and enforcing the 
     agreement. The implementation and enforcement plan shall 
     include the following:
       (1) Border personnel requirements.--A description of 
     additional personnel required at border entry points, 
     including a list of additional customs and agricultural 
     inspectors.
       (2) Agency staffing requirements.--A description of 
     additional personnel required by Federal agencies responsible 
     for monitoring and implementing the trade agreement, 
     including personnel required by the Office of the United 
     States Trade Representative, the Department of Commerce, the 
     Department of Agricultural, and the Department of the 
     Treasury.
       (8) Customs infrastructure requirements.--A description of 
     the additional equipment and facilities needed by the United 
     States Customs Service.
       (4) Impact on State and local governments.--A description 
     of the impact the trade agreement will have on State and 
     local governments as a result of increases in trade.
       (5) Cost analysis.--An analysis of the costs associated 
     with each of the items listed in paragraphs (1) through (4).

  Mr. GRAHAM. Mr. President, with that, I again express my appreciation 
to our chairman for his leadership and urge our colleagues to follow 
that leadership by supporting this important legislation.
  The PRESIDING OFFICER (Mr. Coats). The Senator from Delaware.
  Mr. ROTH. I thank the distinguished Senator for his words of support.
  I now yield 10 minutes to the distinguished Senator from South 
Dakota.
  Mr. DORGAN. Mr. President, might I ask unanimous consent that 
following the presentation by the Senator from South Dakota, I be 
allowed to yield up to 20 minutes to the Senator from Colorado?
  Mr. ROTH. That is fine.
  The PRESIDING OFFICER. Is there objection? The Chair hears none, and 
it is so ordered.
  Mr. JOHNSON. Mr. President, I thank the distinguished chairman of the 
committee and thank him for his leadership on this extraordinarily 
important issue for our Nation.
  I rise in support of the motion to proceed on fast-track negotiating 
authority, and I rise as one who as a Member of the other body cast a 
vote ``no'' on NAFTA and ``yes'' on GATT, and one who appreciates that 
the judgment on the final merits of negotiated trade agreements is 
something that comes next; that what we have at hand here is a critical 
procedural issue about whether in fact this administration, as past 
administrations, will have the authority to go forward to at least be 
at the table on trade arrangements.
  So I am very mindful that today we are talking about process and not 
a final trade agreement, and that all of us as Members of this Senate 
will reserve our judgment on the merits of whatever negotiated 
agreement comes back to us for our ratification.
  The Reciprocal Trade Agreements Act of 1997 simply provides the same 
basic structure and authority for this President as has been provided 
for past Presidents of both political parties back to President Ford. 
And if anything, this act strengthens the hand of Congress. It provides 
for more notification, more consultation, and in fact explicitly 
restricts Presidential authority in areas not specified in the act. The 
ability to negotiate under fast track has in fact expired with the 
approval of the Uruguay round of 1994, and we find ourselves now with 
great urgency having to deal with this procedural issue.
  I think we need to understand, Mr. President, that we go forward or 
backward on trade. There is no such thing as the status quo. We live in 
a nation that historically has had very few restrictions on the import 
of products into our Nation. Most of the trade barriers that need to be 
dealt with in this world are barriers to the export of our goods 
abroad. If the United States does not lead on trade, the harsh reality 
is that others will displace our role with arrangements of their own 
that may very likely be harmful to the American economy, to American 
workers, to American jobs, and certainly to American agriculture.
  Even in this hemisphere there are others who seek to displace the 
American leadership role. The European Union currently is attempting to 
negotiate trade agreements with leading South American nations by 1990, 
claiming that their future is with Europe rather than with the United 
States. Other bilateral, other regional arrangements are in the process 
of being negotiated. All of this goes forward with the United States on 
the sideline unless we extend this authority to the President because 
it is only by being engaged in international trade that we can expect 
to lead toward not only our economic prosperity but democracy, 
security, and improvement of the environment, dealing with drugs, 
dealing with terrorism, dealing with weapons of mass destruction.
  The United States cannot be a leader for human rights but neglect its 
role on trade. I think it is important for the Members of this body to 
recognize that what we have before us is not a referendum on NAFTA. It 
is not a referendum on any previous trade agreement. It is, in fact, an 
acknowledgement that we live, however, in an interglobal economy, that 
we live in that reality, and that reality requires us to become 
involved in engagement and in a leadership role. Cowering behind walls 
of fear about trade does a disservice to us all, including workers, the 
environment and human rights.
  The United States represents only 4 percent of the world's population 
but 21 percent of the world's gross domestic product. It ought to be 
obvious to us all how critically important trade is to the United 
States.
  In my home State of South Dakota, 1 of every 3 acres of land 
throughout the State planted to crops is in effect planted for the 
export market. We simply cannot allow other nations to forge regional 
and bilateral trade arrangements without the United States even being 
at the table. And that is the question, that is the fundamental 
question before this Senate: will we bring the United States to the 
table to be a player, to be a leader, or will the United States cower 
on the sidelines and allow other nations to go forward with 
arrangements that may or may not be beneficial to American workers and 
the American economy?
  Fast track is not about a particular trade agreement. It is not about 
politics, although there are, admittedly, some in the other body who 
would tie this agreement to collateral, unrelated issues involving 
international family planning or even antipublic school agendas, and so 
on. Hopefully, this will not be brought down by those kinds of

[[Page S11731]]

irrelevant side issues. We should not be involved in ideology. What in 
fact we have here is an issue that is about jobs, about economic 
growth, about world competitiveness.
  Other nations simply will not put forth their best offers at the 
table with our trade representatives if they know they will then have 
to renegotiate the entire matter with coalitions of Members of Congress 
and unending domestic political turmoil in our own Nation.
  Trade is critically important to my own State of South Dakota. Its 
export trade has increased from $700 million to $1.2 billion in the 
past 5 years. Demand continues to grow. But, in fact, so does 
competition from suppliers, and the need for fair trade and fair access 
continues to be great. I am pleased with the administration's 
agricultural initiatives. I am pleased with their support for S. 219, 
of which I am a cosponsor, the Value Added Agricultural Products Market 
Access Act of 1997, which would allow for the U.S. Trade Representative 
on a annual basis to identify nations that deny market access for value 
added U.S. agricultural products or that apply standards for import 
from the United States not related to protecting human, animal, or 
plant life or health and not based on science.
  Our red meat exports are now at a record level of $2.4 billion. I am 
pleased that the administration has directed the Secretary of 
Agriculture to improve the availability of livestock import data, and 
the Secretary of Agriculture, in cooperation with the livestock 
industry, to work on guidelines for voluntary labeling of meat and meat 
food products.
  Agricultural exports nationally have grown 50 percent from 1990 to 
1996, from $40 billion to a now record $60 billion. And in the current 
environment where we no longer have a farm price support system in 
place, it is all the more important that every possible tool be brought 
to bear to expand farm income, farm prices, and the competitiveness of 
one of America's great economic sectors.
  I am pleased that agriculture will, in fact, be an explicit goal of 
the President's negotiating authority.
  So again, Mr. President, this is not a referendum on past trade 
agreements, but it is a referendum on whether the United States will 
continue to be a leader or even a participant in international trade or 
whether we will succumb to fear, whether we will in fact enter the 21st 
century in retreat rather than as the global leader in economic issues, 
which this Nation deserves and which this Nation needs.
  I yield back my time to the distinguished chairman.
  The PRESIDING OFFICER. The Senator from Colorado.
  Mr. CAMPBELL. Mr. President, as we debate whether to proceed to the 
consideration of S. 1269, and on the larger question whether to provide 
the administration with fast-track authority, we have heard a number of 
arguments for and against this issue. As the debate continues, I 
suppose we will hear some things repeated over and over from different 
colleagues. I don't know a Senator, though--I think I can honestly say 
I don't know a Senator in this body who does not want to do what is 
best for American workers, American families, American farmers, 
American consumers, and the Nation at large.
  I think most of us, certainly me, certainly Senator Dorgan, believe 
that we are protrade. We believe that international trade is important. 
We know that we would like to see a time when there are very few 
barriers, very few tariffs, very few quotas--if any. I know, as many of 
my colleagues do, that if we had no barriers whatsoever, American 
manufacturers, farmers, producers could compete with anyone and in fact 
win in that competition on a level playing field. It seems ironic to me 
that we will go through this effort on legislation that, if it 
ultimately does pass both the House and Senate, will limit the 
deliberative and representative processes that are now at the heart of 
the legislative branch of Government.
  Essentially, fast track provides the administration with the 
assurance that any trade agreement it negotiates will come to Congress 
as a privileged piece of legislation. That means Congress must consider 
a trade agreement within 90 days of when the administration formally 
submits it to this body. In addition, there will be no hearings, no 
markups. The enacting bill will go to the floors of both the House and 
the Senate where debate is limited to 20 hours and no amendments are 
allowed.
  Mr. President, 20 hours of debate is not very long for an important 
issue such as international trade, when you consider there are 100 
Senators whose States are heavily impacted by an extensive agreement, 
such as NAFTA was. It seems even more ludicrous to believe that the 20 
hours of debate in the other body, the House, with 435 Members, would 
provide a fair hearing. That would come out to about 3 minutes per 
Member, as I understand it. Finally, after the debate is finished, the 
House and the Senate would only be able to vote ``yes'' or ``no'' on 
the entire agreement. For such an agreement, such as NAFTA, that 
translates into a vote on a document of about 1,000 pages long with no 
public input whatsoever.
  Fast-track authority is truly a unique procedure. If this authority 
is granted to the administration, Congress is essentially giving the 
President powers that I believe are supposed to be reserved for this 
body in our Constitution. First, it allows the President to control the 
agenda and determine when trade agreements are considered. More 
important, and second, it gives the President the authority to actually 
write the legislation upon which Congress will act. Added on top of 
this is the fact that I, as just one Member of the Senate, would not be 
allowed to offer any amendments on the final enacting bill, whether I 
liked it or disliked it. I am sure many of our colleagues have not yet 
decided how they will vote, and I certainly can count as well as 
anybody, and I think probably the tide might be going against us. But I 
for one do not believe we were elected to be rubber stamps for the 
administration, and on fast track that simply reduces this body to 
rubberstamp status.
  Article I, section 8, of the Constitution of the United States of 
America provides Congress with the authority to regulate commerce with 
foreign nations. The Constitution also gives the President the 
authority to negotiate with foreign countries. So let's not be misled 
when people say the President needs fast-track authority in order to 
negotiate. He can do that at any time. This is simply not true. Fast-
track authority gives the President additional powers which our 
Founding Fathers had reserved solely for the Congress.
  I don't believe most of us are isolationists. I believe in free 
trade. In fact, in this day and age I think we all understand and agree 
that free trade is an important direction to go. But, quite frankly, I 
think many us do not support these pell-mell rushes to judgment. We get 
tired of the old argument that anyone who opposes fast track must be a 
protectionist and that the opponents of fast track are trying to hinder 
free trade.
  I have to tell you, if it got right down to who we are supposed to 
protect, whether it's the CEO's of multinational corporations or 
foreign-owned corporations or American corporations and American jobs, 
I would have to plead guilty that I prefer to protect our jobs and our 
corporations and our country. But these kinds of claims sound like 
something from a tabloid, designed to stir the emotions of the American 
public.
  I think, more important, when we talk about free trade we also have 
to link it to what is fair. We often hear that bandied around--fair 
trade. Like many of my colleagues, I am sorely disappointed in some of 
our past trade agreements that this country has entered into because I 
don't think they were, basically, fair to us. Before we continue to 
offer this extraordinary power to the administration, I think Congress 
has a responsibility to review past policies. Senator Dorgan has done a 
marvelous job. I think he has done it very well, pointing out the trade 
deficit, as an example. With every trade agreement we have made under 
fast track in the past, the trade deficit has actually gone up for 
America and not down. We got the worst end of every single agreement 
that was negotiated under fast track.
  For those who argue that if we fail to grant fast-track authority to 
the President, other countries will refuse to negotiate with the United 
States and the United States won't even be allowed to

[[Page S11732]]

sit at the negotiating table, that is absolutely ludicrous. This is the 
largest economy in the world. There will always be a place at the table 
for any international agreements.
  Let's consider that fast track has been used only five times. Yet 
without it, the Clinton administration, as an example, has successfully 
negotiated 198 agreements. I think that speaks for itself whether fast 
track is needed. We are an economic powerhouse. The world knows that. 
It is in the best interests of other countries throughout the world to 
negotiate with us. That is evidenced by the 198 agreements that our 
trade representatives are so proud of that did not need fast track. So 
we really ought to do away with these scare tactics that are kind of 
designed to stampede us like sheep to voting for something in the last 
waning days of Congress without giving it a slow, deliberative 
understanding of what we are going to do and what we are going to put 
in place.
  Supporters say we need the agreements so we don't get bogged down in 
Congress and load it with amendments. I understand this is a slow 
process, and we are often accused of taking too much time. We often do 
add many things to the amendments. But I think most of those amendments 
are done in good faith. But if we are sent here to try to deal with 
good, fair trade agreements, I don't think there is a big problem. I 
don't think we should have to worry about it that much without fast 
track. The bottom line is we are here to represent this Nation and our 
own constituents from the States from which we were elected.

  I know my constituents did not vote for me to send me here to this 
great institution to give away their voice, to not let them be involved 
in it. I think most Senators feel the same way. We didn't get elected 
to represent Mexico or Chile or Japan or some other country. We got 
elected primarily to represent this Nation and our own States.
  I realize that this debate over granting fast-track authority to the 
administration is not to be a critique of NAFTA. But if fast track has 
been used only five times, then we have no choice but to bring up NAFTA 
if we are going to consider the merits of fast track. Just about 4 
years ago, Congress passed NAFTA implementing legislation, and that was 
an over-1,000-page document. It was hailed as a major achievement that 
would create jobs and not cost jobs in America. I concede that NAFTA 
has benefited several segments of our society. There is no question 
about that. But I think, looking at it in toto, it has cost more than 
it has gained.
  Jobs is the perfect example. In October, 1993, I sent a letter with 
several other Senators to the U.S. Trade Representative, Mickey Kantor, 
in which I asked about the potential loss of jobs and what the 
administration planned to do about displaced workers.
  In his response to me in November, 1993, Mr. Kantor replied that 
``NAFTA would account for no more than 400,000 jobs lost over 15 
years.'' I quote that directly from his letter. Perhaps those 400,000 
jobs aren't important to some people--unless it's your job or unless 
it's the breadwinner of your household. Then it becomes very important.
  While I heard a whole number of figures on the number of jobs created 
by NAFTA used as evidence of NAFTA's success, many of those figures 
seem to discuss jobs that have been created basically as a result of 
increased U.S. growth that would have happened with or without NAFTA. 
Many of them dealt with the service industry jobs, too, but not hard, 
well-paying manufacturing jobs. I know that we need to increase our 
exports, and I think that we are trying to do that. We need to look at 
that in balance, about our imports, too.
  The Economic Policy Institute did just that. According to the 
Institute's recently released study, 394,835 jobs have been lost as a 
result of NAFTA. That was a net loss of jobs. I don't hardly consider 
that a success in our negotiating deals with foreign countries. I 
believe we simply cannot have a strong nation if we do not have a 
strong manufacturing base. Those jobs that left primarily were 
manufacturing jobs. If, Heaven forbid, we should get into some major 
international conflict, there is simply no way we are going to field 
strong military might from America if we have to import all of our 
parts for our apparatus from foreign countries.
  In effect, we might ask the question: Did it help workers anywhere? 
In my opinion it certainly didn't help the workers in Mexico under the 
NAFTA that we did pass. The maquiladora factories that sprang up 
overnight across the border are still paying poor wages, a dollar an 
hour or less in most jobs. Many of the workers live in substandard 
housing. Their children drink contaminated water. There is still a high 
incidence of sickness among those children. So it didn't help workers 
on our side of the border, and it didn't help workers on the other side 
of the border either.
  The problem is, we are coming close, now, to our targeted adjournment 
date, perhaps this Friday. And to meet that date, we may be forced to 
consider fast track within a more limited amount of time than we should 
to be dealing with this issue.
  But I think Senators will do the right thing. They will do what they 
can. Those of us who disagree with it, as he does, certainly commend 
Senator Dorgan for the leadership role he has taken. I believe it is 
time America stopped being referred to around the world as ``Uncle 
Sucker'' and return to that status that we had at one time being Uncle 
Sam, a nation of proud workers, manufacturing good-quality material for 
the rest of the world.
  I yield the remainder of my time.
  Several Senators addressed the Chair.
  Mr. MURKOWSKI. Mr. President, I ask unanimous consent for 2 minutes 
to introduce a bill as in morning business at this time.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered. The Senator from Alaska is recognized.
  Mr. MURKOWSKI. I thank the Chair.
  (The remarks of Mr. Murkowski pertaining to the introduction of S. 
1373 are located in today's Record under ``Statements on Introduced 
Bills and Joint Resolutions.'')
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Mr. President, the time, I understand, is winding down 
until 5 o'clock when we have a vote this afternoon on the motion to 
proceed. I wanted to take just a few minutes to comment on some of the 
things that we have heard in the last couple of hours. I believe 
Senator Hollings is on his way to the floor. He will be taking some 
time. We have several other speakers on this side. But I would like to 
take a moment to respond to a couple of the things that we have heard.
  First of all, I feel this is a good debate. It is about time we had 
this debate in this Chamber. Many of us have wanted to have a 
discussion about trade and trade issues for some long while. But the 
opportunity to do that has been limited. Now that fast track has been 
brought to the floor of the Senate is a very good and useful 
opportunity for that debate.
  A speaker a couple of hours ago came to the floor of the Senate and 
said the problem that he has on this issue is the American people don't 
understand trade. It occurs to me that the American people understand 
trade. They well understand the trade issue. It occurs to me that some 
of the people here in Washington, DC--yes, maybe even in Congress--
don't understand trade.
  When the American people see a trade strategy that results in 21 
straight years of trade deficits, getting worse year after year, 
setting new records year after year, I think the American people 
understand that there is a problem. That is just lost, apparently, on 
some Members of this Chamber, and perhaps some administrations who are 
engaged in trade policies that are not working.

  So I think it is not accurate to suggest that the American people 
don't understand trade. Oh, they understand it all right. They 
understand it when they see factories close and move to Mexico or move 
to Indonesia or move to Sri Lanka. They understand it when they see 
their jobs leaving. They understand it when they can't compete with 
products that are produced at 12-cents-an-hour labor or without the 
requirement to clean up their emissions or without the requirement to 
have a safe workplace. The American people understand that. And, that 
is precisely what drives a lot of this discussion.
  We are told there are 50 chief executive officers of major 
corporations on

[[Page S11733]]

Capitol Hill today lobbying and discussing with Members of Congress why 
fast track is important. The point I would like to make is that there 
is not necessarily a parallel interest between our country's interest 
and the interests of the American people and these 50 CEO's who have an 
interest in maximizing profits for their stockholders.
  It is likely, in fact, it is certain, that in a number of board rooms 
and executive offices in this country that the chief executive officers 
must evaluate where can they produce more cheaply. Each of these CEO's 
is asking, ``Where can I move my manufacturing jobs? Where can I and 
how can I shut my factory here and move the jobs overseas in order to 
access cheaper labor, in order to escape the requirements of air 
pollution and water pollution laws, or in order to escape OSHA and the 
requirements of a safe workplace? Where can I do that, without giving 
much thought as to whether it benefits the American economy, but in 
order to maximize my corporate profits?''
  That would be the interest, it seems to me, of most CEO's: the return 
to the shareholder and the maximization of corporate profits. That is 
not necessarily parallel with the interests of our country. It might 
well be that the parochial interests of a corporation to move its 
production facilities to Indonesia or to move its production facilities 
to Thailand or Sri Lanka is in the company's best interest, but 
certainly not in our country's best interest.
  So we will, I assume, hear from CEO's today with many of them on 
Capitol Hill helping President Clinton push for fast-track trade 
authority.
  The point I make is that their interest is not necessarily parallel 
to the interests of this country. I am not saying they are un-American. 
I am just saying they have an interest in disconnecting from American 
manufacturing where they can maximize profits by moving their 
manufacturing elsewhere, and that is not necessarily in this country's 
interest.
  A statement earlier this morning brought a smile to me. It was a 
statement by one of the speakers who said, ``What we have here are two 
sides: One believes in free trade.'' It is like ``We are on that 
side,'' they say, ``and we believe in free trade, motherhood and 
tourism. So we are good guys.''
  You can't wear hats in the Senate or whomever said that would 
certainly have put on a huge white hat. It undoubtedly would be a very 
large white hat. Then he would have thrown dark hats somewhere to the 
other side of the Senate, because this speaker said that you believe in 
free trade and expanded American economic opportunity, or you believe 
in going to a kind of North Korea, building a wall around your country 
and then going to hide under a rock. That was the example.
  That is, obviously, the first argument one hears in a debate about 
trade by someone who wants to describe the opponents as being unworthy 
and possessing arguments totally without merit: ``We are for free 
trade; you're a North Korea kind of person, you want to put up a wall 
and go hide under a rock.''
  The fact is, no one that I have heard speak is talking about putting 
up walls around our country. I voted against fast track previously. I 
believe in expanded trade. I don't believe in putting up walls. I 
believe our economic health is tied to our ability to expand economic 
opportunity through trade. I just happen to believe our current trade 
strategy doesn't do that nearly as effectively as we could if we as a 
country had a little bit of nerve and some will to say to our trading 
partners, ``You have a responsibility to us, and that responsibility is 
to open your market to American producers.''

  The Washington Post editorial is not a surprise, obviously. The 
Washington Post has been blowing a trumpet for this trade strategy all 
the way up the trade deficit chart, year after year, as bigger deficits 
grew. Year after year, the Post has given merits to this failed trade 
strategy. The Washington Post says the following about the position of 
those of us who have opposed fast track:

       To a large extent, this is simply putting new clothes on 
     old-fashioned protectionism, but fast-track opponents also 
     make an argument geared to the changing conditions of a 
     globalizing economy in which companies are freer than ever to 
     locate across borders, and so workers find themselves more 
     than ever competing across borders.

  I always find it interesting that there is no journalist I am aware 
of--certainly no politician--but no journalist who ever lost their job 
because of a bad trade agreement. But they sure do give us a great deal 
of advice on trade, and for that we are very thankful.
  There is one song, one note that comes from the Washington Post. It 
is that you are either for the current trade strategy and, therefore, 
fast track, or you are a protectionist. The Washington Post, in my 
judgment, in its editorial, errs by suggesting that those who don't 
support the current trade strategy are protectionists.
  Is it being a protectionist to decide that a trade strategy that 
results in the largest trade deficits in history year after year isn't 
working? Is it protectionist to be concerned about a trade strategy 
that results in an increasing, a mushrooming trade deficit with China, 
ratcheting up now we expect it close to $50 billion, or a trade 
strategy that results in mushrooming trade deficits with Japan this 
year, expected to reach $60 billion this year? Incidentally, that means 
that every year as far as the eye can see, backward and forward, we can 
talk about a trade imbalance with Japan of $45 billion, $55 billion or 
$65 billion a year. Is it really the case that those of us who believe 
that this does not serve our country's interest are protectionists? Or 
could it be possible that those of us who believe that trade deficits 
hurt our country and trade deficits detract from our economic 
opportunity are those who are supporting change, positive change that 
would help this country and assist this country in improving its 
economic future?
  I don't expect that those in this town who have only one note to 
sound on trade will ever concede the point. It seems to me that they 
think the proof is in the economy. We have a decent economy in this 
country. I don't deny that. Unemployment is down some. Inflation is way 
down. Deficits are down, way down. There is no question that the 
American economy has improved.
  But, I would make this point. You can live in a neighborhood and see 
a neighbor who looks wonderfully prosperous, not understanding that all 
of those cars in the driveway, the house, the clothes, the jewelry are 
all on a credit card or some mortgage instrument somewhere and that 
person, while looking very prosperous, is not far from real trouble.
  The point I have made repeatedly is these ballooning trade deficits, 
the largest in our country's history, are troublesome. You don't hear 
one word on the Senate floor about them.
  I heard a presentation today I thought was a good presentation in 
favor of fast track. I thought it was well-constructed, well-delivered 
and persuasive. But, there was not one word about the trade deficit, 
not one word about the imbalance in our trade relations with our 
trading partners, with China, with Japan, with Mexico, with Canada. Not 
one word. Why? Because they only talk about one side of the issue.

  Can you imagine a business that says, ``I want you to evaluate me, 
and here is how I want you to evaluate me. I want you to evaluate me 
based on my revenues, and I will not tell you about my expenditures 
because that is irrelevant. Just look at my revenues. Aren't I healthy? 
Aren't I doing well?''
  You could probably conclude that if you only look at the revenue 
side. But what if you look at the expenditure side and see they far 
exceed revenues? Would you then not conclude that the business is 
running toward trouble? I would think so. That is exactly what happens 
on this issue of international trade on the floor of the Senate. They 
talk about exports and ignore imports.
  I heard a description of how many additional automobiles we send to 
Mexico. What a wonderful opportunity, we are told, to send automobiles 
to Mexico under the United States-Mexican free-trade agreement. They 
say, ``Did you know that we have gotten more cars into Mexico?'' Yet 
the number of cars coming from Mexico into this country dwarfed that 
export number by so much you can hardly describe it. We now import more 
cars from Mexico into the United States of America than this country 
exports to all the rest of the world.
  Let me say that again because it is important. We now, after NAFTA, 
import more automobiles manufactured

[[Page S11734]]

in Mexico than we export to the entire rest of the world. How can 
anyone brag about NAFTA producing an accelerated opportunity for us to 
send cars to Mexico when, in fact, that quantity is totally dwarfed by 
the number of new automobiles now manufactured in Mexico that used to 
be manufactured in this country, and are shipped from there to here?
  Despite the attempts of some to portray it as such, the question is 
not whether we are involved in international trade. It is how we are 
involved in international trade. Will this country continue to 
countenance a system in which we accept less than fair treatment from 
our trading partners?
  Another person on the Senate floor within the last hour said the 
following: ``If we are not involved through fast track in trade 
negotiations, there will be trade agreements going on around the world 
and we won't be a part of them.''
  I would like one person in the U.S. Senate to describe to me a 
substitute for the American economy, the American marketplace. Is there 
another place on Earth? Spin the globe, look at all of them. Look at 
every country, every city. Is there another place on the globe that has 
the power and the potential of this marketplace? The answer clearly is 
no.
  Do you really believe that if we defeat fast track that those 
countries that desire to access the American marketplace are going to 
say, ``Well, all right, if we can't access the American marketplace, we 
choose Kenya.''
  ``OK, if we can't access the American marketplace, now we're going to 
set our sights on Nairobi.''
  ``We are going to set up an office in Kinshasa; that is our future.''
  Does anybody really believe that? There is no substitute for the 
American marketplace. Why is it that we are the country that must be 
dangled on the end of a string? Why is it that those of us who stand up 
and say it is time for us to demand and require fair trade with respect 
to China, fair trade with respect to Japan, and, yes, with Mexico and 
Canada and others--why is it that we are subject to being called 
protectionists? Is it because the interests of the international 
economic empires now are to construct a trade regime in which you have 
no economic nationalism? Is it because if you exert some sort of 
economic nationalism, you are a protectionist?
  They construct a trade regime in which they proscribe for our country 
a circumstance where they want to produce elsewhere and sell here. Why? 
Profits. Is that wrong? No, it is not wrong from their standpoint, but 
is it always in our country's interest to say what is in the corporate 
interest is in the American interest? Not necessarily.
  There are circumstances where we should say that it is not fair 
competition for those businesses that stayed here in America. They 
didn't move anywhere. They stayed here. And they produce here. It is 
not fair for them to have to compete in circumstances where they cannot 
get their product into a foreign country because that market is closed 
to us, but the foreign country can get its product into our market to 
compete with that business that stayed here. By the way, that producer 
in the foreign country can produce that garage door opener, that 
bicycle, or those shoes, paying 12 cents an hour, and put them on the 
store shelves of America and drive the American businesses out of 
business.
  One of the Senators earlier said, ``Well, if that is the way it is, 
that is tough luck. Let them hang on the walls of Wal-Mart. That is 
what America is all about. Let them hang the cheaper product there, and 
it's good for the consumer to be able to access a cheaper product.''
  I ask, how is that consumer going to pay for that cheaper product 
without good jobs? And where are the good jobs in this country going to 
be unless this country demands on behalf of its business and its 
employees, its workers, that when we trade, our agreement to trade with 
other countries and our desire to trade with other countries be 
constructed on a set of rules that are fair. We need a set of rules 
that says, no, not that you are to mirror exactly what we do in all of 
these areas, but a set of rules that would say to those countries, 
``There's an obligation that you have in your trade relationship with 
our country. And that obligation is to have fairness and access to 
marketplaces. If our market is open to you, your market must be open to 
us.''
  If we don't have the nerve and the will to do that, what on Earth 
will our future be?
  If I read these articles--one printed recently by one of the major 
newspapers by a fellow who is describing the trade deficit. He said, 
``Trade deficit. What does that matter? I have talked to economists. It 
doesn't matter. Let me explain what a trade deficit is.'' He said, 
``That's like somebody saying to you, `I will trade you $10,000 worth 
of pears for your $5,000 worth of apples.' ''
  That uninteresting and irrelevant example in this article, describing 
why the trade deficit is just fine, I guess, represents a view in this 
town that as long as you are trading more, it does not matter. Its a 
view that as long as you are exporting more, it doesn't matter if your 
imports increase fiftyfold, and that somehow we are better off as 
result.
  At the end of the day, you are better off when this country has 
retained a strong manufacturing base and has required, through the 
exertion of some nerve and some will to say to its trading partners, 
``You have a responsibility to the United States of America. And that 
responsibility is to treat us fairly in international trade. And this 
country will not sit around and will no longer take any closed markets 
to our products when our markets are open to your products.''
  Mr. SARBANES. Will the Senator yield?
  Mr. DORGAN. I will be happy to.
  Mr. SARBANES. The Senator from North Dakota is making an extremely 
important point. The assumption is trade, by definition, is good; but 
the focus is all on exports and not on the balance of trade.
  This is what has happened to our trade balance since 1975. You can 
see this incredible deterioration that has taken place. We are running 
negative trade deficits year in and year out. And the consequence of 
doing this, I say to my distinguished colleague, is this is what has 
happened to the American net foreign investment position.
  The United States, in 1980, was a creditor nation to the tune of 
about $400 billion. In other words, we had claims on others. We were a 
creditor nation. And now that has deteriorated so that the United 
States now, when we add in what the trade imbalance will be this year, 
will be about a $1 trillion debtor nation. We have gone from being the 
world's largest creditor nation to being the world's largest debtor 
nation. And then everyone comes along and says, ``Well, no one wants to 
focus on this issue. No one wants to pay any attention to it.''

  I mean, the Senator from North Dakota has been absolutely right. He 
said, ``Look, there are two sides to this thing. There are your exports 
and there are your imports.'' Yes, we are getting additional exports, 
but we are getting far more imports.
  As we get these imports, and we get this deterioration in our trade 
balance--look at that. Since World War II, we have been running a 
positive trade balance, modest but positive, year in and year out. And 
this is the deterioration that has taken place in it over the last 20 
years.
  And, of course, each year we run these large trade deficits --$100 
billion, $150 billion, $120 billion trade deficits year after year 
after year. It is offset somewhat by the service, but not enough. I 
mean, the net is reflected in this chart, which is not quite as bad as 
the previous level but still shows us year after year showing these 
deficits.
  The consequence of that--these amount to about $1.5 trillion over 
that period of time. We have been running a trade balance deficit since 
1975 of $1.5 trillion. And the consequence of doing that is that our 
net asset position is absolutely deteriorating.
  Look at this chart. This is what has happened. This is the U.S. net 
foreign investment position. In 1980, before we got this tremendous 
decline, we were a creditor nation, the world's largest creditor 
nation; in other words, others owed us. And now we are the world's 
largest debtor nation. And by the end of this year, it will be to the 
tune of $1 trillion--$1 trillion.
  Now, you cannot go on doing this indefinitely. You can do it for a 
period of time, but you cannot do it indefinitely. In any event, the 
whole time you are

[[Page S11735]]

doing it, we are taking on an increase in volume of foreign 
indebtedness through these large and persistent trade deficits--the 
losses sustained every year by buying more goods from others than they 
are buying from us.
  And we are undercutting the Nation's capacity for mass consumption by 
declining wages and loss of high-income employment. As the Senator from 
North Dakota said, they said, ``Well, your consumers can buy cheaper 
products.'' But then the question is, ``Well, suppose they're not 
working? Suppose they've been thrown out of a job by these 
importations?'' They can't buy anything. They can't buy anything.
  Mr. DORGAN. If the Senator from Maryland would just yield. I guess I 
have the floor. I am yielding to the Senator from Maryland.
  Let me understand what you are saying. I held up the Washington Post 
and I cited the discussion on the floor of the Senate. The Senator from 
Maryland now comes to us and says, ``You know, we've got these huge 
deficits,'' and all these other folks say, ``Gee, we're moving in the 
right direction. What we need to do is more of what we've been doing.'' 
Did the Senator graduate in the bottom of his high school class? Is he 
a protectionist? Is that all this means? Or does the Senator from 
Maryland understand what the rest of these folks don't, that deficits 
in the long term have to be repaid?
  Mr. SARBANES. That is right. We are not driving the right trade 
bargains. Something is wrong with a trade policy that gives you this 
deterioration in your net foreign investment position. Something is 
wrong with a trade policy that takes the United States, in less than 20 
years, from being the largest creditor nation in the world, in other 
words, people owe us, and in 20 years makes the United States the 
largest debtor nation in the world. Something is wrong.
  The Senator is absolutely right to focus on it. Everyone says, 
``Well, we succeeded in selling $3 billion worth of airplanes to China 
on this visit that they had.'' Our trade imbalance with China is over 
$40 billion and increasing all the time. It is increasing all the time. 
It may soon surpass the trade deficit with Japan. The consequence is 
that we are selling to them far less--far, far, far less--than they are 
selling to us.

  Mr. DORGAN. On the question of Chinese airplanes--which is an 
interesting departure point--the Chinese are going to need 2,000 
airplanes. They bought a few from us, but the fact is they have been 
buying from Europe as well, even as their trade surplus with us 
mushrooms way, way up.
  What they have been saying to this country--I know some of the 
corporate folks won't like me to say this because they are all nervous 
about this--but the Chinese say, ``Yes, we'd like to consider buying 
some of your airplanes, but you must manufacture them in China.''
  Mr. SARBANES. That is right.
  Mr. DORGAN. This is a country that has a huge surplus with us. 
Instead of buying what they need that we produce here in this country 
with American jobs, they have been saying, ``Well, we'd like you to 
consider manufacturing that in China.''
  That is not the way trade works.
  Mr. SARBANES. ``Consider'' is not the right word. They do not say, 
``We would like you to consider.'' The Washington Post ran an article 
just the other week, and here is the heading of the article: ``China 
Plays Rough. Invest and Transfer Technology or No Market Access.'' And 
that article then described how China forces U.S. companies to transfer 
jobs and technology as a price for getting export sales. So, in effect, 
what they say is, ``We won't take any of your exports if you don't give 
us the investment and the technology so we can then produce them 
ourselves.''
  So what are our people doing? In order to get these short-run 
exports, they give away the capacity to maintain a long-run position. 
And the Chinese, in effect, extract that capacity out of them. So, yes, 
they make a short-run purchase, but at the same time they are getting 
the investment and technology so they do not have to make long-run--not 
only will they not make long-run purchases, but, mark my word, they 
will be exporting these products themselves elsewhere in the world.
  Not only will they, in effect, close our people out from getting into 
the Chinese market; they will become their competitors in other markets 
on the basis of the investment and the technology that our people 
transferred to China in order to get these short-term sales.
  That is exactly what is going to happen. And the consequence of that 
is our trade position will continue to deteriorate, and we will go on 
to become an even bigger debtor nation.
  Mr. HOLLINGS. Will the Senator yield?
  Mr. SARBANES. Certainly.
  Mr. HOLLINGS. I really appreciate the distinguished Senator bringing 
the issue into sharp, sharp focus. It so happens that I had been 
looking at the Investor's Business Daily. Just reading a sentence:

       The surge in imports prompted economists to revise down 
     their first-quarter growth statistics.

  And, again, just here in Business Week, dated November 3, on page 32:

       Because of the widening in the August trade deficit for 
     goods and services to $10.4 billion, from $10 billion in 
     July, trade is likely to have subtracted a full percentage 
     point from overall demand growth.

  The distinguished Senator has chaired the Joint Economic Committee 
for years and understands this. That is why we are losing our own 
growth. We are trying to invest, trying to bring about economic growth, 
but not looking at the import side, as the distinguished Senator has so 
clearly brought to the attention of all the colleagues here, that we 
actually should be growing much faster, and saving, excepting these 
cancerous deficits in the balance of trade.
  I really appreciate the Senator from Maryland, and I apologize for 
interrupting, but I hope he will continue.
  Mr. SARBANES. The Senator is absolutely on point.
  Just let me read you two quotes from two very able authors. One is 
Benjamin Friedman, who is a professor of economics at Harvard, and his 
book called ``Day of Reckoning.''
  I again want to go back and emphasize the fact that we have gone from 
being the world's largest creditor nation to now being the world's 
largest debtor nation. This is the deterioration that has taken place 
in the U.S. net foreign investment position.
  This is what Professor Friedman says about that:

       World power and influence have historically accrued to 
     creditor countries. It is not coincidental that America 
     emerged as a world power simultaneously with our transition 
     from a debtor nation, dependent on foreign capital for our 
     initial industrialization, to a creditor nation supplying 
     investment capital to the rest of the world. But we are now a 
     debtor again, and our future role in world affairs is in 
     question. People simply do not regard their workers, their 
     tenants and their debtors in the same light as their 
     employers, their landlords and their creditors. Over time, 
     the respect and even deference that America has earned as 
     world banker will gradually shift to the new creditor 
     countries that are able to supply resources where we cannot, 
     and America's influence over nations and events will ebb.

  That is the big issue that is behind all of this. That is the issue 
we really ought to be debating. The whole direction in which--everyone 
comes out here and says--you know, I listened to the President 
yesterday. He said, ``We've got trade.'' I will not quarrel with that. 
``I'm trying to negotiate good trade agreements with other 
countries.'' But look what is happening to us. We have had this 
incredible deterioration in our trade balance and this represents $1.5 
trillion dollars of deficits over the last 20 years. This is what has 
happened to our net foreign investment position.

  This is a devastating chart when you think about what it has done to 
the United States. William Wolman, chief economist at Business Week, 
had this to say, and it ties right in with the Senator's comments about 
economic growth, ``The Implication of Debtor State for U.S. Economic 
Growth.''

       The transformation of the United States from a major 
     international creditor to an international debtor has major 
     implications for future United States economic growth. It is 
     no accident that back in the 1950's and 1960s when the United 
     States was a creditor nation interest rates were lower here 
     than they were abroad and the dollar was a strong currency. 
     But since the United States has become a debtor nation U.S. 
     interest rates are higher than those in the other industrial 
     countries, and the dollar, despite its revival in 1996, has 
     become a weak currency. The effect is, of course, to squeeze 
     the average

[[Page S11736]]

     American standard of living both because Americans are forced 
     to pay high real interest rates for what they borrow and 
     because a weak dollar means that America must produce and 
     export more goods to earn foreign currencies than it had to 
     when the dollar was a stronger currency. Debtor status has 
     the same effect on a country as on citizens of that country. 
     What is in effect the disposable income of the United States 
     is under downward pressure, just as surely as the disposable 
     income of its highly indebted citizens.

  You can't get people to focus on this. Trade has two sides to it: 
What you export and what you import. If you import more than you 
export, you will be running trade deficits. If you are running trade 
deficits, that means people abroad are accumulating claims against us 
that we have to pay off over time. So we have now gone from being a 
creditor country to being the world's largest debtor country. We 
continue to be a world power but how long can you sustain that 
position? It is not as though we have stopped the hemorrhaging.
  If we run a $125 billion trade deficit, our net position will 
deteriorate another $125 billion. This line will continue to go down as 
long as we are running a negative trade debt. Suppose we cut it in 
half, suppose we reduce it from $120 billion to $60 billion, which 
would be a terrific accomplishment. Say you do that in a year's time, 
you reduce it from $120 billion to $60 billion, the net position 
deteriorates another $60 billion, another $60 billion. The next year 
you cut it to $30 billion, it deteriorates another $30 billion. We are 
getting ourselves deeper and deeper into the hole. We can't get anyone 
to focus on this.
  The distinguished Senator from North Dakota I think has brought our 
attention back to an exceedingly important point, and I thank him very 
much for yielding to me to make these points.
  Mr. DORGAN. I appreciate very much the comments of the Senator from 
Maryland. As always, he is on point. I chided him a bit about his 
position in his high school class, but I suspect he was right at the 
top.
  I yield 15 minutes to the Senator from South Carolina.
  Mr. HOLLINGS. I thank our distinguished colleague for continuing 
along with the very thought that the Senator from Maryland provokes 
here which is so important to this particular debate, the fact that we 
should realize the arithmetic of import jobs as well as export jobs. 
The cumulative sum total, that 1975, 22 years, is right at $1.90 
trillion.
  Now, they like to use 20,000 jobs created for every $1 billion in 
exports. The Department of Commerce changed that to 14,000 some 2 years 
ago and that has been their figure. Using the same figure--because I 
want to refer specifically here to the special study the Presidential 
Commission on the United States Pacific Trade and Investment Policy 
recently released its final report and it stated ``from 1979 to 1994, 
twice as many high-paying jobs in the United States economy were lost 
to imports as were gained from exports.''

  Now, using the arithmetic of $1 billion equals 20,000 jobs, that 
would be some 38 million jobs that were lost over that time period, or 
using the lower figure of 14,000, it would be some 27 million lost 
jobs.
  Yes, we can talk that the economy is up and going but you get right 
to the point of understanding why we have 2.8 percent unemployment in 
Greenville County but 14 percent unemployment in Williamsburg County, 
and the people back home understand this trade problem better than many 
on the floor of the national Congress. They continue to see 6,375 jobs 
leave. Levi Strauss fired one-third of their employees, 11 plants in 5 
States making jeans. Where have they gone? They are going offshore. 
They have been transferring them offshore, and after they let them go, 
they have to announce, as they do under the plants closing notice--they 
never announce it during the middle of the debate on the House side, 
but the lawyers had to comply with the plant closing notice. That is 
what is happening. We are getting Honda, I am getting BMW in South 
Carolina, I have Hoffmann-La Roche. I appreciate it and I am working 
hard, but I am looking at the basic jobs here paying $7 an hour. As I 
was pointing out with the Oneida plant they are closing in Andrews, and 
they have some 487 workers, the average age is 47 years old. Washington 
tells them, ``Retrain, retrain, retrain.'' Well, tomorrow morning, say 
we have 487 skilled computer operators. Are you going to hire the 47-
year-old skilled computer operator or the 21-year-old? You are not 
taking on the health costs and the retirement costs for the 47-year-
old, so this little rural town is high and dry.
  They understand at home that we are losing out. We are making great 
gains, but all this downsizing and everything else like that has 
stagnated wages in our economy. In that sense, we are going out of 
business. We have been giving away the store. We have Senators running 
around here, ``If we are going to continue to lead''--we are not 
leading, my dear Senator. We are not leading in this thing.
  I wish they would have adopted Adam Smith and free markets but they 
have adopted Friedrich List, that the strength of a nation is measured 
not by what it can consume but by what it can produce. We have to have 
the economic strength if we are to be a world leader. That is what we 
are losing. That is what is at stake. That is what is in the 
conversation here.
  These colleagues that come and say the President can't get at the 
table--come on. He has been at the table in 200 agreements.
  Mr. SARBANES. Will the Senator yield?
  Mr. HOLLINGS. I yield.
  Mr. SARBANES. The Senator is absolutely right. When you talk about 
trade you have to talk about trade balance. Now, we ran a trade balance 
from the end of World War II until 1975. We were exporting a little 
more than we were importing. The imports that were coming in were 
causing dislocation in our economy, no question about it. But at the 
same time we were gaining a plus from the exports. In fact, there were 
a little more exports than there were imports.
  What has happened, as the Senator from South Carolina points out, we 
are now importing far, far, far more than we are exporting. In fact, as 
he points out with respect to trade goods it has been an almost $2 
trillion deficit since 1975. Everyone comes along and says, ``Look, we 
have a little more exports.'' Look at how many more imports we have. 
All of those imports are costing people jobs. So the displacement of 
jobs taking place by the increase in imports far, far, far exceeds the 
additional jobs gained from the expansion of exports.
  That is what people have to understand and they are not understanding 
it. To the extent we run these trade deficits then we end up losing our 
position as a creditor nation.
  This is a devastating chart, showing the United States in a creditor 
position in 1980, and look what has happened to us. We have come down 
just like this, and by the end of the year we will be at $1 trillion 
deficit debtor status. Debtor status, $1 trillion, the United States. 
In 1980, less than 20 years ago, we were in a creditor status to the 
tune of $400 billion. So there has been an almost $1.5 trillion 
deterioration in our international position in less than 20 years. It 
is the very thing the Senator from South Carolina is talking about.

  Mr. HOLLINGS. And that is not leading. That is not leadership. You 
and I as Senators are concerned with the economic strength of the 
United States, with the work force and otherwise. We want to get back 
where we are leading.
  The people should understand global competition, ``You ignorant 
Senators, you protectionists.'' They better understand when China 
orders $3 billion they order one-half for themselves and from countries 
like Japan that make the electronics. That Boeing 777, they make the 
tail section--they don't give you the order unless you put the 
manufacturing facility in country. I know, I had a GE turbine plant 
when I was Governor. Brazil told them they would not order those 
turbines unless, they put the plants down in Brazil. So the GE plant at 
Gadsden, SC, has closed down and gone to Brazil. We are speaking from 
actual experience.
  It is not any fanciful conjuncture here about leading and not being 
at the table. Yesterday, Senator, right in the Committee of Commerce, 
we passed the shipbuilding agreement, the OECD shipbuilding agreement 
that has been negotiated with some 13 countries in Europe and in the 
Pacific, and we did that without fast track. We had an

[[Page S11737]]

international telecommunications treaty earlier this year, with 123 
countries, without fast track.
  What we are trying to do is get them to have a chance to stop, look, 
listen, debate the things like we did with the most important arms 
treaty, SALT I, and the intermediate missile treaty. All of those were 
without fast track but they act as if our poor President is not allowed 
to come to the table. He is at the table. We want him at the table. But 
we just want to have a chance to look and see before we vote.
  Mr. SARBANES. Will the Senator yield?
  Mr. HOLLINGS. I yield.
  Mr. SARBANES. The American market is still the most lucrative market 
in the world. They want access into the American market.
  I cannot accept for a moment in these bilateral dealings, countries 
won't negotiate a trade agreement with the President which could then 
be submitted to the Congress for the Congress to consider, to amend if 
it deemed it advisable, and to vote on. We have done that consistently, 
as the Senator pointed out, including the telecommunications agreement, 
a very complicated measure. We do it in arms control agreements. They 
are open to amendment and are a far more serious matter than a trade 
agreement.
  I want to say one other thing to the Senator because he talked about 
the Chinese getting the investment and the plants in their own country, 
and he uses the example that occurred in Brazil. The Chinese don't make 
any bones about it. They don't like to conceal it. The Washington Post 
had an article last week, and here is the heading to the article, 
``China Plays Rough: Invest and Transfer Technology or No Market 
Access.'' Invest and transfer technology or no market access.
  The article went on to describe how China forces United States 
companies to transfer jobs and technology as a price for getting 
exports sales. They say, ``We will take the exports but you have to 
give us the investment and the technology,'' and that means in the 
future they won't take other exports because they won't need them. They 
will have the investment and the technology to produce the goods 
themselves, and I predict not only will they do it for themselves they 
will then be producing and selling them internationally, and they will 
go from being an importer of American high-technology products to being 
an exporter themselves of high-technology products from the investment 
technology that we are compelled to give to them.
  Mr. HOLLINGS. You go right to the point.
  In Shanghai, General Motors agreed not only to build a plant there in 
order to produce and sell cars in the People's Republic of China, but 
more particularly, to design the most modern computer equipment that is 
going to Shanghai, as we speak, to design the automobiles. They have 
taken it out of Detroit and are putting it into downtown Shanghai so 
all our brain power and our wonderful technology is being exported like 
gangbusters, and they talk about us leading and the President can't get 
at the table.
  Come on, they have to get with the program here and understand that 
as Senators and Congressmen we have a responsibility with respect to 
this economy, and the work force that is the highest, most productive 
in the entire world. You can go over to the Bureau of Labor Statistics, 
economic section of the United Nations, and No. 1 for the last 20 years 
has been the United States, not Japan. Japan is down there at No. 6 or 
7 now. So our workers have been the most productive. Who hasn't 
produced, Senator, is you and I up here. That is what I am trying to 
get over to our fellow Senators so they will understand the problem we 
are confronting.

  Mr. DORGAN. I wonder if the Senator will yield for a moment.
  Mr. HOLLINGS. Yes.
  Mr. DORGAN. There is this blame America strategy that has been around 
for years that, if you can't compete, whatever the situations are, 
tough luck. That means in a free-trade circumstance, jobs might go 
elsewhere, but consumers benefit by cheaper imports.
  The interesting thing about this is, most of our large trading 
partners--especially, for example, Japan and China--are engaged in 
managed trade, not free trade. We, on the other hand, have always been 
a leader in what is called free trade.
  I described yesterday watching two people dance at a wedding dance 
when I was a kid. He was dancing a waltz and she was dancing a two-
step. It didn't work out well. They were dancing different dances. In 
international trade, what is happening to us is, we are confronting 
Japan, for example, with whom we have an abiding yearly massive trade 
deficit of $40 to $60 billion every year, as far as you can see back 
and as far as you can see forward. We have that kind of trade deficit. 
Why? Because Japan has a managed trade strategy, and that is the method 
by which they trade with us.
  We, apparently, are perfectly content to say, ``Well, if that is the 
way it is, there is nothing we can do about that.'' But there is 
something we can do about that. We can provide a little real 
leadership, with a little nerve and will, and say to Japan that part of 
the price for this trade agreement and for their ability to access the 
American marketplace, a marketplace that has no substitute anywhere on 
this Earth, is to open their markets completely to American goods and 
not to do it tomorrow, or next month, or next year, or even the next 
biennium--do it now.
  But this country doesn't have the nerve or the will to do that. In 
fact, it was left to some little maritime commission, finally, to raise 
this issue on a $5 million fine and say, ``That is fine. If you want to 
play that game and you won't pay your fines, then you can't dock your 
ship in this country.'' One little commission--an unelected 
commission--was the only body I know of that finally had the will and 
nerve to say that is not the way we do business here. Fair is fair. In 
trade, we demand and require fair trade and fair access.
  So, the comments that both the Senator from Maryland and the Senator 
from South Carolina have made are right on point. The thing that 
baffles me is that those of us who desire to force open foreign 
markets, to reinforce open markets, and do more than just chant about 
free trade, but really seek to force open foreign markets and unlock 
the opportunities in this country for our producers and our workers, we 
are the ones that are called protectionists. What on Earth are they 
talking about?
  Mr. HOLLINGS. Will the Senator yield?
  Mr. DORGAN. I am happy to yield.
  Mr. HOLLINGS. I will never forget the second inauguration of Ronald 
Wilson Reagan. It was in the rotunda, and you and I were there, 
Senator. President Reagan said, ``I solemnly swear that I will 
faithfully execute the office of the President of the United States and 
will, to the best of my ability, preserve, protect, and defend the 
Constitution of the United States.''
  We have the armies who protect us from enemies from without, and the 
FBI protects us from enemies within. We have Social Security to protect 
us from the ravages of old age. We have Medicare to protect us from ill 
health. We have clean air and clean water to protect our environment. 
We have safe working places and safe machinery.
  Our fundamental duties here are to protect. Be invited, if you 
please, to the Council of Foreign Relations, run for President of the 
trilateral commission. They asked, ``Are you a protectionist, 
Senator?'' I had to say, ``Yes, the truth of it is, I believe that is 
my fundamental responsibility here.'' They say, ``If you are a 
protectionist, you are not enlightened, you can't see the world and 
understand competition.'' When you are losing your shirt, as the 
Senator from Maryland said--through 22 years of negative trade 
balances--all they want to talk about is the exports and not the 
negative side of the equation.
  I cited on yesterday our experience with President Kennedy and the 
extreme action that he took when 10 percent of domestic consumption of 
textiles, clothing, was represented in imports, and he thought it was a 
crisis, and he put in his seven-point practice. Now two-thirds of the 
clothing within the sight of my debate here this afternoon is imported, 
83 percent of the shoes, 53 percent of the ferroalloys, 59 percent of 
the cooking and kitchenware, 64 percent of the mineral processing 
machinery, 61.4 percent of the machine tools for metal forming, and 
44.1 percent of nonmetal working machine

[[Page S11738]]

tools--you can go right on down the list. There is the majority of 
automatic data processing machines, diodes, electrical capacitors and 
resistors. That is at 70 percent right now. I remember having the 
capacitor plant of GE, and I have lost it now. It has gone overseas. 
You have 100 percent of tape recorders, tape players, VCR's, and CD 
players. You can go right on down. I remember that we could not engage 
in Desert Storm, the gulf war, unless we got the displays from Japan. 
That is why I had to put the ``buy America first'' provision for ball 
bearings in the defense bill. We are fighting a rear guard action so 
that we would be able to defend the country, much less be economically 
strong.
  The NAFTA tent is being pitched on the front lawn of the White House, 
and the corporate jets are descending on National Airport offloading 
the Nation's top-paid CEO's to lobby for the administration's effort to 
renew fast-track trade authority. Of course it is no longer referred to 
as fast track. Instead the administration has offered a clumsy 
euphemism--normal trade authority--to obscure the fact that the sole 
purpose of fast-track is to stifle debate by subverting the Congress' 
constitutional obligation to regulate foreign commerce. Yet there is 
nothing normal about a $100 billion plus trade deficit, nothing normal 
about Congress abandoning its constitutional responsibilities, nothing 
normal about stagnant wages and an erosion of our manufacturing base.
  The administration argues that they need fast-track authority because 
no one will negotiate with the United States unless they have fast 
track. A more likely scenario is that the administration would prefer 
that Congress not review a legacy of poor trade deals; eroding 
manufacturing strength and a trade policy that puts the interests of 
the multinational corporation before working-class Americans. While the 
administration embraces the Fortune 500's agenda, it has turned a cold 
shoulder to those who have been left behind by globalization, the 
working men and women of this country.
  The end of the cold war has created a seismic shift in the global 
economy. The American worker has now been thrown into bare knuckle 
competition against the new entrants to the global economy: countries 
whose productive and motivated work force will accept much less than 
our workers. As globalization has increased world trade, the American 
worker has faced an all out assault on their wages, benefits, and 
overall standard of living.
  Instead of engaging in a debate on the impact of this changed world, 
our trade policy remains a prisoner to a cold war mentality, treating 
trade as a stepchild to foreign policy, continuing to serve up 
unilateral concession after unilateral concession in the hope that our 
trading partners will be converted by the persuasiveness of our elegant 
economic models and focusing exclusively on export statistics, failing 
to consider the impact of imports or even the nature of the exports 
themselves.
  Rather than facing this new era of fierce economic competition with 
the hard edge realism that places the national interest in our own 
hands, we will be relying on multilateral institutions like the WTO to 
protect our national interest. Now we will be asked to embark upon a 
course which is bound to produce asymmetrical market openings and in 
which the people, through their elected representatives, will be shut 
out.
  The sad truth, however, is that it is impossible to have an honest 
debate about trade policy, the trade deficit, or the erosion of our 
manufacturing sector. Instead of focusing on the present and future, 
pictures of Smoot and Hawley will be dusted off and put on display. The 
proponents of fast track will unleash a barrage of hyperbolic rhetoric 
declaring an end to civilization as we know it if we fail to pass fast 
track.


                                 NAFTA

  If the proponents of fast track insist on engaging in a debate about 
the past, then let us examine how the rhetoric and the agreement has 
stood the test of time. During the NAFTA debate we were told that a 
failure to pass NAFTA would have a devastating consequences for the 
United States and Mexico. If NAFTA failed, Mexico's economy would 
collapse, drugs would flood across the border, immigration would 
increase, and dangerous leftists, who were denied the presidency thanks 
to massive electoral fraud, would replace Carlos Salinas, a man 
virtually canonized both by United States officials and by a 
synchophatic press blind to the endemic corruption that permeated his 
regime.
  Three years later what has NAFTA wrought? The Mexican economy 
collapsed, wages fell by 40 percent, two million Mexicans sank further 
into poverty, and America's trade surplus with Mexico disappeared, 
replaced by a $15 billion annual deficit. United States factories 
accelerated a move to Mexico, not to supply a Mexican consumer market, 
which even the American Chamber of Commerce in Mexico concedes does not 
exist, but to ship products into the United States. Of our $54 billion 
in exports to Mexico in 1996, more than 50 percent were components sent 
to the mequiladora region alone. Those exports will never see the 
Mexican consumer market. Rather, the overwhelming majority, over 98 
percent according to the Mexico Department of Commerce--[SECOFI] will 
return to the United States as finished products. Moreover, according 
to Cornell professor Kate Bromfenbremmer, United States employers 
continue to use the possibility of movement to Mexico as leverage to 
limit wage gains.
  Meanwhile, the Asians and Europeans, the ones that were supposed to 
be the losers as a result of NAFTA, have maintained trade surpluses 
with Mexico. They poured money into building new factories in Mexico 
taking advantage of Mexico's cheap labor force and duty-free access to 
the United States market.
  As for the political situation in Mexico, since NAFTA was passed 
Mexico has suffered a peasant rebellion, a wave of assassinations and 
kidnappings, and an explosion in drug trafficking and money laundering. 
Carlos Salinas, the American Enterprise Institute's Man of the Year, is 
living in exile while the popular leftist opposition leader Cuauhtemoc 
Cardenas is elected mayor of Mexico City and an anti-NAFTA opposition 
coalition took control of Mexico's Congress. Just Friday, Salinas' 
brother confessed to widespread corruption in the New York Times.


                            OTHER AGREEMENTS

  It is not just the NAFTA claims that fail to stand the test of time, 
overstating the benefits of trade agreements is a time-honored 
tradition. When we ratified the Tokyo round of the GATT it was hailed 
as a significant achievement that would open markets and create 
millions of new jobs in manufacturing. In the end, the only market that 
opened was ours, and the results were disastrous. From the end of the 
Tokyo round to the Uruguay round we lost two million manufacturing jobs 
and posted over $1.5 trillion worth of trade deficits.
  A generation later the Uruguay round has delivered the same 
disastrous results as the Tokyo round. Since passage of the WTO, we 
have recorded two of the largest trade deficits in our history. Last 
year alone, the United trade deficit in goods was $191 billion. In 1995 
our deficit was $173 billion. If this trend continues this year, the 
1997 trade deficit could exceed $200 billion.
  Moreover, our trade deficits with the so-called big emerging markets 
[BEMs]--markets that this administration has targeted for future 
growth--are appalling. The big emerging markets include: Argentina, 
Mexico, Brazil, Poland, Turkey, China, South Korea, Taiwan, Hong Kong, 
Phillippines, Vietnam, Brunei, Malaysia, Thailand, Singapore, 
Indonesia, India, and South Africa. Since the completion of the Uruguay 
round, the trade deficits with these countries have exploded. In 1993, 
the United trade deficit with these countries was $43 billion. After 
being the subject of focus by the Clinton administration, the trade 
deficits with these countries had widened to $77 billion in 1996. 
Moreover, with the recent Asian currency devaluation these deficits are 
poised to explode.
  The countries themselves recognize the value of devalued currency. On 
October 17, Taiwan devalued its currency not because it was under 
attack, not because the country's fiscal policies were unsound, but 
merely to remain competitive with the other Asian tigers as an 
exporter.
  Multinational companies also recognize this. Cheap currency, along 
with cheap labor, encourage U.S.-based multinationals to locate new 
factories

[[Page S11739]]

abroad. The results are devastating for the American worker. The New 
York Times recently published a chart showing that the majority of GM's 
new component factories are outside the United States. Many of these 
facilities are located in Mexico. These factories won't supply the 
Mexican consumer market. Rather they will employ cheaper labor for 
imports into the United States.
  At the same time that GM opened these new plants across the globe, 
its U.S. employment declined by over 25 percent. This decline did not 
occur during a devastating recession. Rather it occurred during a 
period of sustained growth. GM is not alone. In 1985, General Electric 
employed 243,000 Americans, by 1995 it employed only 150,000 and 
according to executive vice president Frank Doyle, ``We did a lot of 
violence to the expectations of the American work force.'' Another 
leading U.S. company IBM, now employs more people outside the United 
States than here in America and has shrunk to half its former size. Yet 
these are the companies that are lobbying for fast track. The same 
companies are asking for fast track are the ones that are cutting jobs. 
In fact our largest exporters have not created a net new job in the 
1990's.
  While our trade deficits continue their unabated rise, domestic wages 
stagnate, and job security vanishes, the administration and its 
corporate allies continue to tout export-led growth as if it were a 
wonder drug that will cure our economic ills. Unfortunately, the only 
wonder about export-led growth is how a handful of our largest 
companies account for 80 percent of our total exports. These are the 
same companies who have spent most of the 1990's downsizing their work 
forces and moving production off shore. This off-shore shift is 
reflected in trade balance deficits as far as the eye can see. Is it 
any wonder that these companies are paying up to $100,000 a piece to 
push fast track. This small investment will enable them to save 
millions by taking advantage of an abundant supply of cheap labor. The 
real fast track is how quickly manufacturing jobs can be moved abroad.
  So in this era of free trade, what kind of jobs are we creating? Are 
they the high-technology, high-wage jobs of the future? Not according 
to the Department of Labor. In cataloging the occupations with the 
greatest growth in the future, Labor believes that the following 
occupations offer the best opportunity for growth: cashiers; janitors 
and cleaners; retail salespeople; waiters and waitress; registered 
nurses; general managers and top executives; systems analysts; home 
health aids; guards; and nursing aids.

  Only one high technology job on the list and no occupations related 
to exports. Moreover, a recent study suggested that our best paying 
jobs are the ones that are subject to the most competition from 
imports. That makes perfect sense. Manufacturing jobs pay better than 
service industry jobs. Is there any doubt that our trade policy should 
be designed to expand these opportunities?


                  II. LABOR AND ENVIRONMENT STANDARDS

  During this limited fast-track debate, we have heard time and time 
again that it is inappropriate for the United States to dictate changes 
in other country's domestic laws. This argument is heard most 
frequently when labor and environment standards are suggested as 
appropriate topics for trade negotiations. In fact, Ambassador 
Barshefsky has stated, ``it is not realistic to suggest that countries 
will rewrite their domestic labor and environmental laws for the 
privilege of buying more of our goods.'' Yet apparently these 
countries, including the United States, have no trouble changing their 
domestic copyright and patent laws for just that purpose.
  Moreover, the recent IMF bailout of Indonesia, like many IMF rescue 
packages, contained a number of provisions affecting domestic rules 
that have an economic impact, including banking laws, domestic 
corruption rules, and government spending decisions. In an example 
closer to home, the United States, in the United States-Japan framework 
negotiations, agreed to reduce its budget deficit, as part of that 
overarching trade agreement. In fact, that's what fast track is all 
about, changing domestic laws as a result of trade agreements.
  In addition, U.S.T.R. recently concluded negotiations designed to 
harmonize drug and medical device standards and the administration is 
seeking authorization to begin the process of harmonizing 
transportation and automotive environmental standards. If it is 
acceptable to harmonize vehicle standards, what is wrong with 
harmonizing labor rules and industrial environmental standards?
  The question then is not whether domestic laws can be changed as a 
result of trade negotiations, it is whether labor and environmental 
standards have an impact on trade, competitiveness, and the overall 
economic standing of the United States. To that question the answer is 
undoubtably yes. Permitting products made under substandard working 
conditions to enter the United States, gives those products an unfair 
advantage. The result is pressure to U.S. wage rates, with tacit 
approval of substandard labor rules abroad.
  These imported products come from countries with no minimum wage, 
social security, environmental rules, worker compensation, or 
unemployment insurance and they pressure U.S. wage rates which continue 
to decline. Median U.S. family income is 2.7 percent below 1989 levels. 
Moreover, when adjusted for inflation, the incomes for the bottom 60 
percent of households have fallen over the past 7 years. In addition, 
last year, during what is generally considered to be a good economic 
year, the median earnings of full-time male workers fell. Can there be 
any doubt as to why the OECD declared that the United States had the 
widest pay disparity in the industrialized world between the highest 
and lowest paid employees?
  Failure to address this issue, offers tacit approval for unsafe 
conditions around the world. In his recent book, ``One World Ready or 
Not,'' Bill Greider discussed devastating industrial accidents around 
the world resulting from a failure to enforce basic workplace 
standards. Perhaps the most chilling example involved a fire in 
Thailand at the Kader industrial toy factory that officially killed 188 
and injured 469. The actual toll was undoubtedly higher. This death 
toll far surpassed the Triangle Shirtwaist Co. fire of 1911. The United 
States' unwillingness to address this issue, by requiring that products 
entering the country be produced in a safe and humane manner, must 
ultimately bear some of the responsibility for this tragedy.
  We must begin addressing these issues. Without labor reform abroad, 
we are destined to merely create export platforms designed to provide 
the United States with cheap products produced in a fashion that has 
not been acceptable to the United States for nearly a century. The end 
result will be to first reduce U.S. wages and then, in time, our labor 
and environmental protections.
  However, history offers us a simple solution. Like Henry Ford earlier 
this century, the United States can seek to raise wage rates and 
provide workers with the opportunity to purchase the products they 
manufacture. Moving others higher is an infinitely better choice than 
the United States moving lower.


             iii. QUALITY OF PREVIOUS FAST-TRACK AGREEMENTS

  The administration claims that fast-track authority is normal trade 
negotiating authority. However in the 221 years since the drafting of 
the Declaration of Independence, only five trade agreements have been 
approved through the use of fast-track authority: first, the Tokyo 
round 1979 trade agreement; second, the United States-Israel free trade 
agreement; third, the Canada-United States Free-Trade Agreement; 
fourth, the North American free trade agreement; and fifth, the Uruguay 
round trade agreement in 1994. It is now appropriate to review what has 
happened in the aftermath of each of these agreements to determine 
whether U.S.T.R. was successful in their negotiations. Unfortunately, I 
believe the answer to this question is that these negotiations have 
resulted in poor agreements and in poor results for the United States. 
After each of these agreements, the United States' trade deficit with 
each of the targeted countries degraded, in many instances 
significantly. Moreover, after the two multilateral trade agreements, 
the overall U.S. merchandise trade deficit has increased.

[[Page S11740]]

  The 1979 Tokyo round agreement was designed to eliminate worldwide 
non-tariff trade barriers with a specific emphasis on the Japanese. In 
1978, before the agreement was reached, the United States-Japan trade 
deficit was $11.7 billion. The U.S. merchandise trade deficit with all 
of our trading partners was $5.8 billion. By 1996, the United States-
Japan deficit had reached $47 billion and was $191 billion, before 
technical adjustments, with the rest of the world. This sad story is 
continued in each of the subsequent fast track agreements. Prior to the 
United States-Israel trade agreement in 1985, the United States 
maintained a surplus of several hundred million dollars with Israel. 
That surplus began to degrade immediately following the agreement and 
by 1996, the United States had a $400 million deficit with Israel. The 
same pattern has become apparent in our free-trade agreements with 
Mexico and Canada. With Canada a $10 billion deficit became a $21 
billion deficit by 1996. The Mexican situation is equally poor. A $3 
billion deficit with Mexico became an approximately $17 billion deficit 
by 1996. Last, following the Uruguay round, the American trade deficit 
has moved from $166 billion in 1994 to $191 billion in 1996 and with 
the Asian currency crisis could easily top $200 billion in 1997. Now we 
are being asked to approve fast-track free trade negotiations with 
Chile. How long will the 1996 U.S. trade surplus of $1.8 billion last?


                        CONGRESSIONAL AUTHORITY

  Clearly our trade policy has failed to yield tangible results, but as 
Jack Kennedy once said, ``Our task is not to set the blame for the 
past, it is to set the course for the future.'' It is time we 
articulated a trade policy that promotes the interest of working 
Americans. The first step is to give the people a voice in trade policy 
by taking back Congress' constitutional authority to regulate foreign 
commerce.
  If we can be trusted to ratify arms control treaties and the chemical 
weapons convention, what is it about trade agreements that make them so 
significant that the Constitution must be suspended and debate and 
amendments limited?
  We have been told time and again that agreements would unravel if 
Congress was allowed into the process. Yet, when an administration 
needs to garner votes to secure passage of a trade agreement, the 
bazaar is opened and the agreements are amended.
  It is of course untrue to say that fast track precludes any 
amendments. Trade agreements cannot be amended on the Senate floor. 
Instead, amendments to agreements are cut during the process of putting 
together implementing legislation. This is a procedure in which the 
Finance Committee takes on the aura of the College of Cardinals. Behind 
closed doors deals are cut, three puffs of white smoke appears and a 
trade agreement secures enough votes for final passage. This is a 
wonderful process if you happen to benefit from it, like the sugar 
industry or the citrus farmers who secured last minute changes to the 
NAFTA. It is not, however, what our Founding Fathers envisioned.
  Instead of trying to stifle debate we should be encouraging it, 
debating who the winners and losers are as a result of our trade 
policy, both at home and abroad. Debating what we gain and what we 
lose, the proponents of fast track want to frame this debate as a test 
of American leadership. In one sense it is about leadership. Real 
leadership would be to break with the failed policies of the past while 
standing up for the principles that are the foundation of our 
democracy. Real leadership would be to show confidence that the 
agreements that are negotiated are able to stand up to full and 
vigorous debate, rather than being negotiated removed from review.
  Real leadership would be to stand up for the children who toil in the 
sweatshops of the world turning out products bearing the logos of our 
great consumer products companies. Real leadership would be to 
acknowledge that the world has changed, that Asia has embarked on a 
different model of development and that we are not going to convert 
them into clones of America. Most of all, real leadership would be to 
stand up to predatory trade practices that are laying waste to our 
manufacturing sector, not just with rhetoric, but with deeds.
  The hope and promise of America is that an ever-rising tide will lift 
all boats. Those that are pushing for fast track have been tossing 
Americans overboard to gain ballast in the global economy. We in the 
Congress see it every week when we go into the communities that have 
been ravaged by the global economy. I see in my own backyard; the 
shattered dreams of the workers at Oneita Mills and United 
Technologies. They deserve a voice, which is the birthright of all 
Americans, and fast track takes that voice away.
  I ask unanimous consent that an article and a chart on this subject 
be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                          Trade on Wrong Track

                            (By Pat Choate)

       The question is not whether we will live with more 
     globalization, for we surely will, but to what purpose, under 
     what rules, and determined by whom.
       As to purpose, trade is not a religion, as actions of the 
     Clinton administration seem to suggest.
       Rather, trade is a tool of macroeconomics, no greater or 
     lesser than fiscal, monetary or exchange-rate policy.
       Simply put, we trade for the benefit it brings--more and 
     better jobs and a higher living standard.
       Yet current U.S. trade policies are generating precisely 
     the opposite result.
       Indeed, even as trade is becoming a growing portion of our 
     gross domestic product (GDP), it also is a growing drag on 
     GDP growth by 1.6%.
       In short, our current trade policies are harming the 
     nation, including its consumers and workers.
       The goal of trade negotiation is to set rules by which 
     global commerce operates.
       But this administration and the Republican congressional 
     majority are openly advocating little more than 19th century 
     laisez-faire capitalism.
       No trade-related protection for the environment or worker 
     rights.
       No guaranteed workplace health and safety standards.
       No prohibitions against child labor.
       Such rules do nothing but create a race to the bottom 
     between developed and underdeveloped countries.
       Finally, and perhaps most importantly, the fast-track 
     battle now before Congress raises the question of who will 
     decide the rules of globalization--the president and his 
     corporate trade advisers or the American people through their 
     elected congressional representatives.
       Contrary to administration assertions, President Clinton 
     already has the authority to negotiate additional trade 
     deals.
       Other nations will negotiate.
       Over the past four years, for instance, the United States 
     concluded 200 trade deals without fast-track.
       What the president really is seeking is a truncated 
     legislative procedure by which Congress virtually preapproves 
     any trade agreement that he makes.
       Correctly, the administration emphasizes the importance of 
     trade to the nation.
       For this very reason, Congress should consider proposed 
     trade agreements under its normal constitutional 
     congressional procedures.
       This alone guarantees a full and open consideration of 
     whether these deals truly are in our national interest.
                                                                    ____



                               1966 Data


                                  Ratio imports to domestic consumption
        Industry/commodity group                           (in percent)
Metals:
  Ferroalloys......................................................52.8
  Machine tools for cutting metal and parts,.......................44.3
  Steel Mill products..............................................16.7
  Industrial fasteners.............................................29.5
  Iron construction castings.......................................46.2
  Cooking and kitchen ware.........................................59.5
  Cutlery other than tableware.....................................31.8
  Table flatware...................................................63.6
  Certain builders' hardware.......................................19.5
  Metal and ceramic sanitary ware..................................18.2
Machinery:
  Electrical transformers, static converters, and inductors........38.6
  Pumps for liquids................................................29.6
  Commercial machinery.............................................19.7
  Electrical household appliances..................................18.2
  Centrifuges, filtering, and purifying equipment..................51.2
  Wrapping, packing, and can-sealing equipment.....................26.7
  Scales and weighing machinery....................................29.8
  Mineral processing machinery.....................................64.2
  Farm and garden machinery and equipment..........................21.7
  Industrial food-processing and related machinery.................23.0
  Pulp, paper, and paperboard machinery............................34.4
  Printing, typesetting, and bookbinding machinery.................54.8
  Metal rolling mills..............................................61.4
  Machine tools for metal forming..................................61.4

[[Page S11741]]

  Non-metal working machine tools..................................44.1
  Taps, cocks, valves, and similar devices.........................27.6
  Gear boxes, and other speed changers, torque converters..........30.5
  Boilers, turbines, and related machinery.........................48.0
  Electric motors and generators...................................21.1
  Portable electric hand tools.....................................27.4
  Nonelectrically powered hand tools...............................34.1
  Electric lights, light bulbs and flashlights.....................31.0
  Electric and gas welding equipment...............................18.4
  Insulated electrical wire and cable..............................30.9
Electronic products sector:
  Automatic data processing machines...............................59.3
  Office machines..................................................48.0
  Telephones.......................................................26.2
  Television receivers and video monitors..........................53.4
  Television apparatus (including cameras, and camcorders).........74.7
  Television picture tubes.........................................33.8
  Diodes, transistors, and integrated circuits.....................60.6
  Electrical capacitors and resistors..............................68.1
  Semiconductor manufacturing equipment and robotics...............21.9
  Photographic cameras and equipment...............................84.0
  Watches..........................................................95.9
  Clocks and timing devices........................................54.9
  Radio transmission and reception equipment.......................47.9
  Tape recorders, tape players, VCR's, CD players.................100.0
  Microphones, loudspeakers, and audio amplifiers..................67.6
  Unrecorded magnetic tapes, discs and other media.................48.2
Textiles:
  Men's and boys' suits and sport coats............................39.4
  Men's and boys' coats and jackets................................56.3
  Men's and boys; trousers.........................................37.7
  Women's and girls' trousers......................................47.9
  Shirts and blouses...............................................54.8
  Sweaters.........................................................71.1
  Women's and girls' suits, skirts, and coats......................55.9
  Women's and girls' dresses.......................................26.9
  Robes, nightwear, and underwear..................................51.0
  Body-supporting garments.........................................37.0
  Neckwear, handkerchiefs and scarves..............................55.5
  Gloves...........................................................68.5
  Headwear.........................................................50.5
  Leather apparel and accessories..................................70.2
  Rubber, plastic, and coated fabric material......................86.4
  Footwear and footwear parts......................................83.1
Transportation equipment:
  Aircraft engines and gas turbines................................47.5
  Aircraft, spacecraft, and related equipment......................30.5
  Internal combustion engine, other than for aircraft..............19.9
  Forklift trucks and industrial vehicles..........................21.5
  Construction and mining equipment................................28.6
  Ball and roller bearings.........................................24.9
  Batteries........................................................26.4
  Ignition and starting electrical equipment.......................22.3
  Rail locomotive and rolling stock................................22.8
  Carrier motor vehicle parts......................................19.5
  Automobiles, trucks, buses.......................................39.0
  Motorcycles, mopeds, and parts...................................51.8
  Bicycles and certain parts.......................................54.5
Miscellaneous manufactors:
  Luggage and handbags.............................................76.9
  Leather goods....................................................37.4
  Musical instruments and instruments..............................57.7
  Toys and models..................................................72.3
  Dolls............................................................95.8
  Sporting Goods...................................................32.0
  Brooms and brushes...............................................26.5

* 1996 data from ITC publ. 3051.

  Mr. HOLLINGS. I yield now to our distinguished colleague from 
Maryland the remaining time that I have.
  The PRESIDING OFFICER. The Senator from Maryland is recognized.
  Mr. SARBANES. Mr. President, I want to get into the Record the 
figures that underlie this chart on the deterioration in the U.S. net 
foreign investment position.
  In 1976, the United States had a $180 billion positive net position. 
We were a creditor nation, to the extent of $180 billion. That rose 
until, in 1980, it hit its peak at just under $400 billion. That is 
net. That is in our favor, $400 billion. Since 1980, that has begun to 
deteriorate, as we can see. It crossed into the minus figures in 1986, 
at minus $13 billion. In 1986, 11 years ago, we were at $13 billion 
minus. Since then, it has come down and we were at $870 billion in 
1996, and it is estimated that the 1997 figures will go to $1 trillion 
in debt, in a debtor position.
  This is incredible that, in just over 10 years, we have gone from 
balance in our net foreign investment position to a $1 trillion debtor 
position. I mean, we have been adding it at the rate of $100 billion, 
$120 billion, and $150 billion a year because of what happened to our 
trade balance, which the able Senator from South Carolina pointed out. 
So we have now come down to the point where we are $1 trillion in a 
debtor position--the world's largest debtor country.
  Now, these are the issues we ought to be addressing. Fast track 
doesn't begin to address that issue. All fast track is trying to do is 
get the Congress to give up its right to review these agreements. 
Everyone says, well, we ought to do that. Look at how we have been 
doing on the trade front. Well, how have we been doing on the trade 
front? Look at this deterioration over the last 20 years. By 
coincidence--perhaps not so much by coincidence--ever since we started 
doing fast track, we started getting deterioration in the trade 
balance, year after year. I think these trade agreements need to be 
brought back to the Senate to give us a chance to review them. If they 
had to come back here and be reviewed, not on a ``take all or nothing'' 
basis, which, of course, is a loaded deck because as soon as that 
happens, then the argument they make to you is not economic; it is 
political.
  If the President negotiates a trade agreement, let's say, with Chile, 
and then he brings it to the Congress on fast track, all or nothing, 
then we start asking economic questions about the trade agreement. We 
say, well, you know, this balance here doesn't seem to work. You don't 
open up their market the way you should and so forth. The next thing 
they say to you is, oh, well, we have to approve it; otherwise, the 
political relationship will go to pieces. That is what we were told on 
the Mexico agreement. We had debate on the floor of the Senate, and 
piercing remarks were made about the economics of that Mexican 
agreement and how it would not work and how disadvantageous it was. 
Well, then the argument shifted in order to try to push it through. The 
administration didn't talk anymore about the economics of it; they 
started talking about the politics of it. They said: Well, Mexico is 
our next-door neighbor. If we don't approve this trade agreement, we 
will have a crisis in our relationship.
  In effect, that was probably true. But that's the argument that then 
is used, not the economic argument. So I think these agreements ought 
to be brought to the Senate. We ought to have a chance to amend them, 
if we choose to do so, not give away or derogate our authority in that 
important regard. Frankly, I think if the agreements have to come to 
the Senate in that form, they are going to negotiate tougher 
agreements.
  If the administration knows that those agreements are going to be 
submitted to the Congress and subject not only to the up-or-down vote 
of the Congress, but also subject to amendment, they are going to have 
to negotiate a much tighter agreement that will withstand scrutiny. And 
I think it will achieve a better balance, a better balance between our 
opportunity to go into the other countries' markets and their 
opportunity to come into our market because, clearly, what has been 
happening for the last 20 years is that our market has been opened up 
far more than other nations have reciprocated.

  Mr. HOLLINGS. Mr. President, right to the point, with respect to how 
you make your agreements and the charge now that this is not a 
referendum on NAFTA and Mexico, at the time NAFTA came up with respect 
to Mexico--I had voted for the free-trade agreement, the North American 
Free Trade Agreement with Canada, because we had similar economies: 
individual rights, appeal processes, open markets, those kinds of 
things, and a revered judiciary.
  I will never forget that my colleague from New York, the 
distinguished senior Senator, Senator Moynihan, said, ``How can you 
have free trade when you

[[Page S11742]]

don't even have free elections?'' Well, we look to the European 
experience. The Europeans found out that the free-trade approach did 
not work. They taxed themselves $5 billion to build up the entities of 
a free market in Greece and Portugal before they admitted Greece and 
Portugal into the Common Market, and they did just exactly that.
  Instead, we were told, no, Mexico was a prototype, said the Secretary 
of the Treasury and the Vice President of the United States. We went 
pell-mell headlong, and everything they contended has gone awry the 
other way. They said that Mexican wages would be up. They have gone 
from $1 an hour down to 70 cents an hour. The American Chamber of 
Commerce in Mexico City says that 60 million Mexicans are living in 
poverty, and 25 Mexicans make as much as 25 million Mexicans. They said 
that we would have a plus balance of trade. Instead we went from the 
plus balance to a negative balance. They said immigration would be 
better. It is worse now. They said drugs would be better. It has gotten 
worse. Just look at the morning Washington Post.
  You could go right on down. Everything they said happened the other 
way. As a result, we never have really built up the entities of a free 
market like, for example, we have in Chile. I said 4 years ago I would 
be glad to vote for a free-trade agreement with Chile. They have a 
revered judiciary, they do have free-market rights. They have labor 
rights, they have rights of appeal. So there it is. When they say NAFTA 
referendum, yes, it is. There is no education in the second kick of a 
mule, Mr. President.
  We understand when they gave us that fast track on it that we were 
getting in trouble. But they wouldn't listen. Now is the time to stop, 
look, and listen, and deliberate and consider the agreement itself and 
not fall for this parliamentary booby trap of the White House just 
opening up the bazaar and selling off line-item vetoes over on the 
House side as fast as they can trying to change that CBI vote they got 
on last evening over in the House of Representatives. So the bazaar is 
open. They are trying to buy off the votes. They are amending while we 
are talking about having hopefully the right to amend.
  I yield the floor.
  Mr. GORTON. Mr. President, more than almost any other debate in this 
Senate this year, this one seems to me to pit hope versus fear, to pit 
the lessons of history against the blindness to those lessons. One 
Senator, who will remain nameless, this morning made the statement that 
free-trade arrangements arising out of fast-track proposals like this 
would harm not only the people of the United States, but the people of 
the other nations entering into such a free-trade proposition.
  Mr. President, that exhibits a blindness to what history has shown us 
for more than half a century. Without exception, each liberalization of 
trade policies on the part of the United States that had been met by a 
liberalization on the part of our trading partners has benefited the 
people of both countries. We are in an extended and significant period 
of economic gains today, as we speak here, in the aftermath of a series 
of policies carried out by administrations, both Republican and 
Democratic, to free trade across the entire world. The North American 
Free-Trade Agreement and the most recent General Agreement on Tariffs 
and Trade all reflect the increasing dependence of all of the nations 
of the world on trade and the fact that all can prosper from a greater 
degree of free trade.
  Now, Mr. President, I think it's possible to find examples in 
history, perhaps to find a few examples of the present day, of nations 
that have tried to create a sense of self-sufficiency with little, if 
any, foreign trade of any commodity whatsoever. When one searches out 
such examples, however, Mr. President, one finds, in every case, that 
those countries are poverty-stricken and show no particular movement 
out of that poverty-stricken nature. It is only when these nations free 
their economy and tend to free their trade policies that they begin to 
prosper.
  It's also possible, I suppose, to imagine a United States which, in 
every single commodity consumed in the country, was a more efficient 
producer than any of its trading partners and, therefore, would have no 
need for imports at all. But, of course, that doesn't happen in the 
real world. One's very success would create fields in which we continue 
that domination and other fields in which countries begin to catch up 
with us.
  Trade is a two-way street. Trade is a benefit not just to those who 
work in the trade field, but to consumers who are permitted a greater 
choice of higher quality goods at lower prices than would be the case 
if trade were restricted. That, of course, does inevitably result in 
losers in our economy because, as we export more, as we produce more 
for export, we also, as a prosperous American society, have more money 
to spend and often choose to purchase imported goods in some areas.
  There are many occasions on which it can be argued that there isn't a 
huge increase in employment resulting in freer and greater trade. But 
it is extremely difficult to argue the proposition that export-oriented 
industries, generally speaking, in the fields in which American 
production is most efficient and effective, whether industrial or 
agricultural, pays its employees far more than do those unskilled 
trades that are affected by foreign competition, and which jobs are 
more likely to be lost because someone else can do a better job than we 
do.
  So even if total employment is a zero-sum game, which it is not, the 
wages and salaries of those involved in trade-oriented occupations will 
be much higher than those occupied in fields that are artificially 
protected from foreign competition.
  Now, does that mean, Mr. President, that under any and all 
circumstances we should be indifferent to the antitrade activities of 
some of our trading partners? Certainly not. As this body knows, I have 
been highly critical of some of the trade policies of this 
administration with respect to China, with respect to Japan, and 
sometimes with respect to the European Community, when those policies 
have imposed artificial restrictions on American producers. I wish that 
this administration took a much stronger stance last week with respect 
to Chinese restrictions on our goods, given the huge nature of our 
bilateral trade deficit. But the fact that we can criticize the 
administration for not having more eloquently and more decisively 
supported American interests is not an argument against granting our 
administration the opportunity to negotiate free-trade agreements. It 
is, if anything, an argument for it because, without exception, Mr. 
President, the nations, particularly in Latin America, with whom we are 
likely to negotiate free-trade agreements, have greater tariffs and 
greater restrictions against our goods than we do against theirs at the 
present time. So it is clear that a reciprocal lowering of those 
barriers at both ends will benefit a wide range of exporting industries 
in the United States.
  Now, should we provide the President, at the same time, with more 
tools to defend American interests? We certainly should. For example, I 
support the efforts of my colleagues, Senator Grassley and Senator 
Daschle, in proposing to amend this legislation with the text of S. 
219, the Agricultural Products Market Access Act of 1997. That bill 
would set up a system for agricultural trade identical to that used to 
identify violations of intellectual property rights, the special 301 
procedure. The bill would require the Office of the U.S. Trade 
Representative, annually, to designate as priority countries those 
trading partners having the most egregious trade barriers to American 
agricultural products. The USTR would then have the power to 
investigate those countries to determine whether countervailing 
measures are merited.
  My State, Mr. President, is a great producer of agricultural products 
for export, just as it is of intellectual properties and of aircraft. 
We believe in the prosperity that comes from free trade. We want that 
free trade to be truly free in both directions, and no power that we 
could grant the President is more likely to lead to that free trade in 
both directions than the fast-track legislation that is before us now. 
That legislation, Mr. President, should be passed.
  Mr. SARBANES. Mr. President, what is the time situation?
  The PRESIDING OFFICER. The Senator from Maryland has 41 minutes and

[[Page S11743]]

50 seconds. The Senator from Delaware as 77 minutes.
  Mr. SARBANES. Mr. President, in view of that, I think the other side 
should now use some of its time since we are down now to 40 minutes and 
they have almost double as much.
  How much is on the other side?
  The PRESIDING OFFICER. Seventy-seven minutes.
  Mr. SARBANES. They have about twice as much time as we have.
  The PRESIDING OFFICER. If neither side yields time, the time will be 
charged equally to both sides.
  Mr. SARBANES. Mr. President, I ask unanimous consent that we go into 
a quorum call and the time to be charged to the other side.
  The PRESIDING OFFICER. Is there objection?
  Ms. COLLINS. I object.
  Mr. ROTH. I object.
  Mr. SARBANES. I am glad to see the chairman of committee. We are down 
to 40 minutes and there are almost 80 minutes on the other side. And as 
we approach the conclusion of the debate I think it would be reasonable 
at this point for the other side to use some of its time.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER (Ms. Collins). The Senator from North Dakota is 
recognized.
  Mr. DORGAN. Madam President, my understanding is that the other side 
may not use all of its time and would then perhaps want to yield 
whatever they don't use and have a vote earlier than 5. I understand 
that the unanimous-consent request that was entered into calls for a 
vote no later than 5 o'clock. So presumably, if all of our time is used 
and they yield back whatever time they don't use on that side, they 
would expect to have a vote earlier than 5 o'clock.
  Mr. ROTH. That is correct.
  Mr. DORGAN. Madam President, we have about four Members on our side 
that still desire to speak on this matter. We have alerted their 
offices. We expect some of them to be here momentarily and expect to 
use the remaining time. I think that is the purpose of the Senator from 
Maryland asking to reserve the 40 minutes. I certainly have no 
objection.
  Mr. SARBANES. All I am trying to protect again is the situation in 
which all time is used up on this side and then there are 80 minutes 
left on the other side.
  Mr. ROTH. I say to the distinguished Senator from Maryland that at 
this time we only have one request. So we probably are going to yield 
back time. We are waiting to see if anybody else wants to speak.
  Mr. DORGAN. The Senator from Maryland is simply asking if we could 
preserve 40 some minutes that we have. Will the Presiding Officer 
indicate to us the time available?
  The PRESIDING OFFICER. The amount of time remaining is 38 minutes and 
48 seconds.
  Mr. DORGAN. We will not seek to delay the vote. If the Senator's 
expectation is to try to get to a vote before 5 we would not seek to 
delay that but we would like very much to have a couple of minutes to 
try to make sure we get the speakers here so we have the 38 minutes 
available for the remaining speakers. If it turns out we don't need 
that, we would be happy to yield that back as well. We have now 
requests for speakers that are available to use the time.
  Mr. ROTH. Why don't we just go ahead and call for a quorum, and take 
it from both sides equally? We are now checking to see if we need to 
preserve time.
  Mr. SARBANES. The problem about that solution is it will then use up 
part of the 40 minutes that we have left which the Senator has 
calculated is needed in order to complete the remainder of his speakers 
that we have.
  Mr. ROTH. How much time do you need for that?
  Mr. SARBANES. Forty minutes.
  Mr. DORGAN. We desire to use all of the 40 minutes. As I understand 
the Senator from Delaware, he is now checking to preserve that. It 
would not be our intention to delay the vote to the extent he is going 
to yield time. We certainly understand the vote can be held earlier. We 
are now making certain that those who asked to speak come to the floor 
to have the opportunity to do so. If that gets substantially delayed, 
we would understand the Senator's desire to proceed. I do not want to 
lose, at least to the extent we can prevent it, the 40 minutes that is 
available.
  Mr. SARBANES. If the Senator will yield, our people are not here 
because we had calculated that the time would go back to your side. And 
the fact there is so much of an unbalance, I think demonstrates that.
  Mr. ROTH. I have a request from the distinguished Senator from 
Pennsylvania. I will yield him 5 minutes of my time. I yield 5 minutes 
to the junior Senator from Pennsylvania.
  The PRESIDING OFFICER. The Senator from Pennsylvania is recognized.
  Mr. SANTORUM. Thank you, Madam President. Hopefully this will provide 
an opportunity for the chairman to get some of the Members to the 
floor, and break up this discussion which is using all of your time.
  Let me first rise, having sat in the chair for the last hour. I 
listened to much of the debate. As someone who has been listening and 
who voted against NAFTA, someone who had some of the same concerns that 
the Senator from South Carolina voiced about the structure of the 
Government, judicial system, and other things, and as a result I felt 
very comfortable voting against NAFTA. But in the House I voted for 
fast track because I believe that it is important for us to continue to 
expand our trade horizons. We are not debating the trade agreement. We 
have seen lots of things about the trade deficit, balance of trade, and 
all of these other things. But that is not really at issue here because 
we are not debating a trade agreement. We are debating really a 
process--not an agreement.
  And the process is for the ability of the President to be able to sit 
down and negotiate a deal that is going to open up markets around the 
world, hopefully in South America. The Senator from South Carolina said 
he was ready to vote for an expansion of NAFTA to Chile possibly. We 
may have that opportunity. I don't think we get to that opportunity, 
which I think is an important one for this country, unless we have 
fast-track authority for this President. I would like to see the same 
frankly for Argentina and Brazil. I think it would be a tremendous 
opportunity for this country to expand our markets in the hemisphere to 
countries that are capable of competing on a fair basis with this 
country. Those are great opportunities for American workers as well as 
for better economic and diplomatic relationships between the countries 
in North and South America.
  So, I see this not only as economic but also as a cultural and 
diplomatic opportunity for us. But it does not happen unless we put the 
process in place for the President to negotiate these agreements.
  I know the Senator said there are lots of other agreements that have 
been negotiated. That is true. But these are major negotiations. These 
are negotiations that without a structure such as fast track I don't 
believe you are going to get an honest negotiation with one side 
sitting across from the other and saying, ``Let's put together our best 
agreement. Let's work on give and take. You give. I give. We work on 
all of the details on how we structure a formalization of free trade 
between to two countries.'' And say, ``Oh, by the way, after I have 
given up some and you have given up some, and we have been able to 
negotiate as best we can to a final agreement, I am going to take it 
back to the Congress, and they can change it and put it all back in our 
favor.''
  I don't know of too many countries that are going to be willing to do 
that, who are going to be willing to sit down in the first place and 
say, ``We are going to negotiate with you in good faith, and, by the 
way, your good faith means nothing because you cannot stand behind your 
word because the Congress can come, amend, and change what we 
negotiated in a final agreement.''

  That is what makes this debate somewhat vexing in my mind because we 
are talking about all of these horrible inequities that have resulted 
as a result of our trade policy. The people who are arguing against 
fast track want to continue our trade policy. This policy they say is 
so bad, they want to keep it in place by not allowing the President to 
negotiate better agreements with other countries or in the

[[Page S11744]]

world bodies to be able to open up trade to create a better trade 
opportunity for us around the world.
  So I don't understand, and frankly, I am a little disturbed that we 
keep hearing the rhetoric of bad trade and horrible agreements at the 
same time not wanting to change those to make them better for this 
country. I think fast track is the opportunity to do that.
  Mr. SARBANES. Will the Senator yield?
  Mr. SANTORUM. Certainly. I am happy to yield.
  Mr. SARBANES. In 1975 we first provided fast track. On this chart, 
this is 1975. Look at what happened with the trade balance.
  Mr. SANTORUM. I am accepting the Senator's arguments as true--that in 
fact what you are signifying happened is true. By staying there and not 
changing things does the Senator think things would get better? To me 
that is the sin of when you believe that you tried the same thing, and 
you are going to get a different result by trying the same thing. Then 
you start to wonder what the thinking is.
  Mr. SARBANES. I say to the Senator, if he is supporting fast track, 
he is the one who wants to try the same thing because this was all 
under fast track.
  Mr. SANTORUM. I voted against NAFTA. So I think I have some 
legitimacy here. I am not debating that some of the agreements we have 
entered into in this country--you can't say only the ones entered into 
under fast track. We have entered into a lot of other agreements that 
have had an impact. But I am not debating that there are agreements 
that have not been beneficial to the balance of trade to this country. 
What I am debating is that by not changing any of those agreements 
somehow things are going to get better. That is really the argument 
here--unless we make change in those agreements things will not get 
better. We cannot make those changes unless we have fast track.
  The PRESIDING OFFICER. The Senator's 5 minutes have expired.
  Mr. MOYNIHAN. Madam President, will the distinguished chairman yield 
to me 3 minutes?
  Mr. ROTH. I yield the distinguished Senator 3 minutes.
  The PRESIDING OFFICER. The Senator from New York is recognized.
  Mr. MOYNIHAN. Madam President, I simply would wish to say that I have 
listened with great respect to the Senator from Maryland as regards the 
time sequenced in which the fast-track legislation went into effect and 
the foreign trade deficit began to grow.
  I say two things.
  The first is that the essentials of the fast-track negotiations have 
been in place since 1934. Nothing that discontinuous occurred in 1974. 
What simply was required was at that time the trade negotiations turned 
from tariffs on things--machines, iron ore, oil, whatever--to the 
question of the more complex but growing area of services, intellectual 
property, and matters like that. That is what impels us to give the 
President negotiating authority beyond the simple reduction of tariffs.
  The reciprocal trade agreements that began back in 1934 said the 
President may cut these tariffs up to 50 percent, and proclaim it after 
he has reached it to his satisfaction and agreement. The increase in 
the trade deficit corresponds precisely to the onset of enormous 
budgetary deficits by the Federal Government. It is elemental 
bookkeeping of economics--that unless you have a very high savings 
rate, which we do not have, you will finance a Federal deficit by 
borrowing from abroad, and that borrowing will take the form of 
imports. In economics this is a fixed equation. One side equals the 
other. And at just that moment, as the Senator from Maryland pointed 
out, deficits begin to grow, we have the second oil shock followed by 
the huge deficits of the 1980's. They are an equivalence which comes 
almost at a level of bookkeeping. They have to happen.

  Now, we have on point where our deficits are disappearing and we 
should have every reason in the world to think that trade deficit will 
disappear as well--it need not do--if our savings remain at the low 
level they are. But if they return to a normal level, which we hope 
they will, now that the deficit is not using them up, or now that more 
resources are available, that deficit will shrink dramatically, or we 
will have to write all the textbooks over again.
  The PRESIDING OFFICER. The Senator's 3 minutes have expired.
  Mr. MOYNIHAN. I thank the Chair.
  Mr. SARBANES. Will the Senator yield? Will the Senator yield me 2 
minutes?
  The PRESIDING OFFICER. Who yields time?
  Mr. SARBANES. Will the Senator yield for a question?
  The PRESIDING OFFICER. Who yields time?
  Mr. ROTH. I yield 2 minutes.
  Mr. MOYNIHAN. Of course.
  The PRESIDING OFFICER. The Senator from Maryland is recognized for 2 
minutes.
  Mr. SARBANES. Madam President, in light of the comments, I ask 
unanimous consent to have printed in the Record a press release from 
the Economic Strategy Institute entitled ``New ESI Study Finds Causes 
and Costs of Trade Deficit More Complex Than Traditional Economic 
Rhetoric.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

New ESI Study Finds Causes and Costs of Trade Deficit More Complex Than 
                     Traditional Economic Rhetoric

       Washington, DC.--For years mainstream economists and 
     economic journalists explained away public concern over the 
     U.S. trade deficit by arguing the true cause of the deficit 
     was the huge U.S. federal budget deficit and, more recently, 
     low U.S. savings. However, a new study released today by the 
     Economic Strategy Institute refutes these traditional 
     explanations and argues they are no longer adequate to 
     explain what is, in reality, a significantly more complex 
     problem negatively affecting a wide variety of economic 
     statistics, including aggregate demand, gross domestic 
     product, the budget deficit, business financed research and 
     development, wage rates, and exchange rates.
       Titled The Trade Deficit: Where Does It Come From and What 
     Does It Do?, the study examines the recent trends in the U.S. 
     federal budget deficit and the U.S. savings rate over the 
     past decade and uses an economic model to examine the costs 
     of these deficits to the U.S. economy.
       In contrast to a decade ago, private savings now exceed 
     private investment, the U.S. economy continues to grow at a 
     slower pace than the global economy, and net inflows of 
     foreign private investment are smaller. From 1986 to 1996, 
     the United States achieved a $92 billion improvement in the 
     sum of its private savings balance and government deficits; 
     yet, the trade deficit and the broader current account 
     balance only improved by $29 billion and $5 billion, 
     respectively. In 1997, the combined federal and state deficit 
     continues to fall, yet the trade deficit will again exceed 
     $100 billion, while the current account deficit will be about 
     $150 billion.

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                            Net foreign                                         
                                                              Private savings   Federal and State     U.S. growth       Global growth         private          Net exports      Current account 
                                                              less investment      deficits \1\        (percent)          (percent)        investment \2\    (billions of $)    (billions of $) 
                                                              (billions of $)    (billions of $)                                          (billions of $)                                       
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1986.......................................................              -12.4             -152.6                2.9                3.4               89.5             -140.0             -153.2
1996.......................................................                9.0              -82.0                2.4                3.8               66.8             -111.0             -148.2
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ These figures include both government current spending and receipts, and governmental capital spending and borrowing for roads, schools, equipment, etc. The federal current spending       
  deficit and the combined federal/state current balances are the figures cited in daily news accounts and political discussions of taxes, spending and deficits. The federal/state current     
  deficit fell from $82.6 billion to $5.1 billion from 1986 to 1996, and should be in surplus in 1997.                                                                                          
The capital spending deficit represents the addition of new capital assets (roads, buildings, etc.) and new liabilities (bonds) on the government's balance sheet, and it is not an item on the 
  government's current income and expenditure statement; however, it is part of the nation's combined public and private capital financing needs and is an element in the national savings      
  balance. Notably, the government capital deficit increased only $12.1 billion from 1986 to 1996, and the marked improvement in federal and state finances was attributable to genuine progress
  in federal/state current spending deficit.                                                                                                                                                    
\2\ See Footnote 1.                                                                                                                                                                             

       Authored by Dr. Peter Morici, director of the Center for 
     International Business at the University of Maryland and an 
     adjunct senior fellow at the Economic Strategy Institute, the 
     study examines the old chestnut that the current account is 
     simply the other side of an immutable accounting identity--
     the difference between domestic savings and investment--and 
     finds that is becoming increasingly clear that trade and 
     current account deficits are strongly influenced by forces 
     quite separate from U.S. fiscal policies and domestic savings 
     and investment behavior.

[[Page S11745]]

       Morici argues that most economists overlook the fact the 
     accounting identity can and does work in reverse. Increased 
     foreign demand for U.S. securities, instigated by events 
     independent of U.S. government policies and business 
     conditions, can powerfully influence the U.S. current account 
     deficit and domestic economy.
       For example, in the 1990s, the Japanese, the Chinese, and 
     other governments have dramatically increased their purchases 
     of U.S. government securities, propping up the value of the 
     dollar against other currencies. This has helped to sustain 
     both their trade surpluses and U.S. trade deficits, even as 
     the United States has put its fiscal house in order. In most 
     cases, he argues, these purchases are not market-driven 
     decisions made in response to higher U.S. interest rates. 
     Rather they often reflect policy decisions to block exchange 
     rate adjustments, and reduce internal pressures on national 
     governments to revise protectionist trade polices and the 
     reliance on export-driven growth.
       ``Other things being equal, one would expect U.S. 
     government budget balances and trade and current accounts to 
     be correlated,'' Morici argues. ``This is not the case, 
     however, which reflects the strong influence of other, 
     offsetting factors. Significantly, these statistics do not 
     imply that government deficits have little consequence for 
     U.S. external balances. Rather, they illustrate that simple 
     accounting identities do not justify blind assertions of 
     causality.''
       To analyze how U.S. fiscal policies, the actions of foreign 
     governments, or abrupt shifts in private investor sentiment 
     may affect trade current account deficits and the domestic 
     economy, Morici constructed a model of 1996 macroeconomics 
     activity and potential GDP for the study and analyzed the 
     trade and current account deficits may instigate in markets 
     for domestic goods and services, capital, and foreign 
     exchange. He found trade deficits impose costs on the U.S. 
     economy in several ways:
       In the near term, trade deficits may reduce aggregate 
     demand, and lower real GDP by redirecting labor and capital 
     away from export and import-competing activities, where these 
     resources are generally more productive.
       Eliminating the trade deficit, through a combination of 
     reduced government deficits and foreign government purchases 
     of U.S. securities, would increase real GDP by $44 billion or 
     about 0.6 percent.
       Eliminating the trade deficit would increase business-
     financed R&D by an estimated 3 percent. Production function 
     studies indicate that the R&D-capital elasticity of output-
     per-hour in the private business sector is about 0.19. This 
     implies that persistent trades deficits have lowered the 
     growth of labor productivity and potential real GDP in the 
     United States by about 0.5 to 0.6 percentage points per year. 
     Trade deficits appear to be responsible for a significant 
     share of the slow down in the growth of U.S. productivity and 
     GDP in recent years.
       In addition to these dead-weight losses, persistent trade 
     deficits impose other, distributional consequences. The same 
     forces that give rise to trade deficits also raise the 
     exchange rate for the dollar by about 7 percent. This lowers 
     the prices received for exports and import-competing 
     products, and lowers the wages and profits earned by workers 
     and firms in these industries. In turn, prices, wages, and 
     profits are higher elsewhere in the domestic economy.
       Given an estimate of the share of the economy whose wages 
     and other factor prices are substantially influenced by the 
     prices of traded goods and services, the amount of income 
     redistributed may be estimated. In 1996, exports plus imports 
     were about 24 percent of GDP. By these estimates, 1.6 percent 
     of GDP is being transferred through reduced wages and 
     payments to other factors. If a much more conservative 
     estimate of the share of factor markets affected by trade is 
     applied, this estimate of income transferred become 0.6 
     percent of GDP, which is still a formidable figure.
       ``These estimates,'' Morici argues,'' go a long way toward 
     explaining the fierce resistance to continued globalization 
     encountered from workers and firms whose present and 
     prospective incomes have been adversely affected by this 
     process.''

  Mr. SARBANES. It says:

       For years mainstream economists and economic journalists 
     explained away public concern over the U.S. trade deficit by 
     arguing the true cause of the deficit was the huge U.S. 
     Federal budget deficit and, more recently, low U.S. savings.

  Exactly the argument the Senator from New York has just made.

       However, a new study released today by the Economic 
     Strategy Institute refutes these traditional explanations and 
     argues they are no longer adequate to explain what is, in 
     reality, a significantly more complex problem negatively 
     affecting a wide variety of economic statistics, including 
     aggregate demand, gross domestic product, the budget deficit, 
     business-financed research and development, wage rates, and 
     exchange rates.

  And then it goes on in effect to say that this traditional analysis 
is really simplistic; it doesn't really answer the situation. It is 
almost dismissive of any trade deficit problem. In fact, if you look at 
the movements here, there is not a direct correlation between the 
various factors the Senator talked about. I mean you have a decline in 
the goods trade balance here at the time the trade deficit is still 
going up.
  Mr. MOYNIHAN. We held tightly.
  Mr. SARBANES. I am sorry. You have an improvement in the trade 
deficit when the deficit was going up. Then here the deficit has been 
coming down, the domestic deficit, yet the trade deficit has been 
worsening.
  Mr. MOYNIHAN. May I simply say to my friend that I admit the 
complexity of this matter.
  Mr. SARBANES. Absolutely.
  Mr. MOYNIHAN. I do no more than argue what economists now believe, 
that they may have to change their mind. I don't in any way contest. 
But I am just saying tomorrow when we have more time I wish to discuss 
this at greater length.
  Mr. SARBANES. Does the Senator see any problem with running trade 
deficits?
  Mr. MOYNIHAN. There is no alternative when you have a huge budget 
deficit, sir.
  Mr. SARBANES. What do you do when you don't have a budget deficit and 
you are still running large trade deficits?
  Mr. MOYNIHAN. Then you better rewrite your textbooks.
  Mr. SARBANES. That's what I think needs to be done.
  Mr. MOYNIHAN. That has not happened yet.
  Mr. SARBANES. That is why I wanted to submit that study for the 
Record.
  Mr. MOYNIHAN. That hasn't happened yet.
  Mr. SARBANES. The real world may be ahead of the textbook writers.
  Mr. MOYNIHAN. That's been known to happen.
  Mr. SARBANES. Yes, it has.
  Mr. ROTH addressed the Chair.
  The PRESIDING OFFICER. The Senator from Delaware is recognized.
  Mr. ROTH. I ask unanimous consent that the vote occur on or in 
relation to the motion to proceed to S. 1269 at 4:20 today, with 
Senator Dorgan or his designee in control of 40 minutes, and Senator 
Roth or his designee in control of the remaining time, with the 5 
minutes prior to the vote in control of Senator Roth and the 5 minutes 
prior to Senator Roth's time in control of Senator Dorgan.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. ROTH. I now yield 10 minutes to Senator Chafee.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. CHAFEE. Madam President, thank you. I thank the chairman for 
yielding me this time.
  Madam President, some have argued that fast-track procedures are 
either unnecessary or that they are a threat to Congress' 
constitutional authority, or both.
  The answer to that is fast track is none of the above. It is both 
necessary and constitutional. First of all, fast track is absolutely 
critical if the United States is to continue to expand global market 
opportunities for American manufacturers and service providers and 
their workers. Without fast track, no President can assure our trading 
partners that the terms of a hard-won agreement will not be rewritten 
by Congress. That is the problem.
  Now, sometimes it is worthwhile to look at history. In 1934, Congress 
approved the Reciprocal Trade Agreements Act, which gave the President 
authority to lower tariffs with our trading partners. That worked fine 
for several decades. This was when we still had an emerging global 
trading system which primarily relied on tariffs. Between 1934 and 1945 
the United States concluded 29 bilateral agreements for tariff 
reductions. When the GATT system came into being in 1948, the system 
still worked. Tariff reductions were the main focus of five successful 
negotiating rounds between 1947 and 1962.
  But here comes the modern system. By the 1960's, the world trading 
system had become much more sophisticated and so had trade barriers. In 
1962, the Kennedy round began, and for the first time the negotiations 
addressed not just tariffs but nontariff problems such as antidumping 
measures. When the negotiations concluded on the Kennedy round in 1967, 
the Johnson administration brought the agreement back home, but 
Congress promptly passed legislation nullifying part of the Kennedy 
round agreement, effectively

[[Page S11746]]

amending the deal that had been so carefully worked out with the GATT 
nations.
  The result. What happened? The Kennedy round went into effect without 
our participation. The message which that sent to our trading partners 
was obvious. Hard-fought trade deals with the United States will not 
stick. And the corollary lesson to the United States was equally clear. 
Before the United States will be allowed back at the negotiating table, 
it must restore its credibility by demonstrating its ability to stick 
to a deal.
  Therefore, when the Tokyo round began, President Ford appealed to a 
Democratic Congress for a solution. The dilemma was noted that our 
negotiators cannot expect to accomplish the negotiating goals if there 
is no reasonable assurances that the negotiated agreements would be 
voted up or down on their merits. So a set of procedures was developed, 
the so-called fast track. As has been noted here many times, that fast-
track authority has been extended to every President, Democrat or 
Republican. It has been authorized or reauthorized or extended four 
times, and it is the means by which every major trade agreement since 
the 1970's has been implemented.
  In mid-1994, fast-track lapsed, and since then our trading partners, 
quite rightly, have questioned our ability to stick by a deal, and they 
have been reluctant to deal with us. Some have cited the fact that the 
administration has concluded all but a handful of 222 trade agreements 
without fast track. ``You don't need fast track. Why, we had 222 
agreements without it.''
  That is misleading. There are 200 plus agreements listed by the 
administration as accomplishments, but look at the list. Most of the 
agreements tend to be small, product-specific arrangements like an 
agreement on ultra-high-temperature milk or the List of Principles for 
Medical Devices. They are certainly important, but they hardly qualify 
as major stimuli to our national economy.
  In contrast, the handful of agreements that require fast track are 
the critical, comprehensive, multisector agreements that address both 
tariff and nontariff barriers.
  Now, let's get to this constitutional argument that has been tossed 
around. Fast track represents, it is said, a surrender of Congress' 
constitutional duty under article I of our Constitution, which says 
that ``The Congress shall have Power . . . To regulate Commerce with 
foreign Nations. . . .''
  Under fast track, Congress' role in trade negotiations has not been 
diminished or disregarded. Clearly it would be impossible for 435 
Representatives or 100 Senators, all of whom believe they are qualified 
to be President--indeed, I believe there has been a terrible 
overlooking that they are not chosen as President--each of these 
individuals could not carry out at the same time our trade 
negotiations. Now, what fast track does is it allows the President to 
carry out the negotiations but imposes strict requirements for ongoing 
consultations to ensure that Congress' voice is heard.
  Madam President, it has been my privilege to have served on the 
Finance Committee for 19 years now. When we have a fast-track measure 
come up, there is constant consultation with that committee and other 
Senators on the negotiations that are taking place that subsequently 
fast track will be asked for. So the Israel, Canada, Mexico, and 
Uruguay Round Agreements were guided by thousands, literally thousands, 
of briefings and discussions between the negotiators and Members of 
Congress or their staffs. Congress will continue to be consulted. So, 
indeed, we do write the legislation to implement these agreements, and 
Congress' authority is not being constitutionally revoked or the 
Constitution is not being overridden.
  Madam President, the fast-track partnership has guaranteed Congress' 
continued fulfillment of its constitutional role in international 
negotiations.
  Now, is every Member of Congress going to be satisfied? No, 
apparently not, as we have heard this afternoon and yesterday. But will 
the partnership produce agreements that have taken into account a broad 
variety of U.S. interests and views? That is absolutely true.
  I would just briefly like to touch on what happens if we do not 
approve fast track. That is the argument in the Chamber here. Do not 
have it. I know that it is always prefaced by the opponents saying, 
``I'm not against free trade,'' and then they proceed to inveigh 
against fast track.
  The United States is the world's largest trading nation, the largest 
exporter and the largest importer. We are the giant of the world trade 
area. We enjoy prosperity today in large part because of our trading 
activities.
  This is what Dr. Alan Greenspan said a week ago, on October 29:

       The quite marked expansion in trade has really had a 
     pronounced positive impact on rising living standards. Since 
     1992, exports have been responsible for one-third of our 
     economic growth. Trade now represents a solid 30 percent of 
     our GDP, and our exports continue to rise. This export 
     activity supports some 11.5 million well-paying jobs across 
     the Nation.

  They certainly do in my State where we are very, very grateful for 
our trade and where we believe the opportunities for trade should 
increase. Our exports from small Rhode Island hit $1 billion last year, 
with projections for this year estimated at $1.2 billion. State 
officials in my State count on exports as a key element in our economic 
growth and are aiming to reach $2 billion in exports by the year 2000, 
which is only what, 3\1/2\ years from now.
  If we want to continue this prosperity, we must continue to advance 
trade liberalization worldwide. In order to do this, we must have fast 
track.
  Now, there is urgency to this. We are seeing the southern nations of 
this hemisphere--Brazil, Argentina, Paraguay, Uruguay--mount an 
aggressive effort to develop a free-trade region throughout the Western 
Hemisphere. Chile, which is more than a little tired of waiting for us, 
has completed separate trade agreements with Canada and Mexico as well 
as Colombia, Venezuela, Ecuador, and they are reaching out to Central 
America and Asia likewise. Mexico has concluded agreements with 
Colombia, Venezuela, and Costa Rica, and are talking to the other 
nations including the Caribbean nations.

  The European and Asian nations are getting in on this. Both the 
European Union and the Southeastern Asian nations are courting the 
South American countries. Chinese and Japanese officials are eyeing the 
major Latin American nations.
  The United States is in real danger of falling behind all of this. 
That has ramifications for American workers and their families.
  One example that hits close to home for Rhode Islanders is Quaker 
Fabric Co., a Fall River, MA, textile firm employing 1,800 workers--
many of them Rhode Islanders. Quaker recently lost a $1.8 million 
annual contract in Chile to a Mexican competitor whose product is 
exempt from Chile's 11-percent tariff thanks to the Chile-Mexico trade 
pact. And Quaker was told by an Argentine buyer that he was switching 
to a Brazilian fabric supplier whose product, while of lesser quality, 
is not subject to a 25-percent tariff. Quaker's president tells me that 
if Quaker could just gain equal footing in the region with its Latin 
competitors, the company could boost export sales and add 200 more 
jobs.
  It is examples like these that have spurred the National Governors' 
Association and the U.S. Conference of Mayors--whose members are keenly 
interested in economic growth--to strongly endorse fast track 
reauthorization.
  Opponents of fast track would have one believe that there are other 
options than fast track. That is not true. If we want to play in the 
trade game, if we want to make agreements with trading partners, if we 
want to continue to engage in the world of trade, we must have fast 
track. If not, we cannot enter into significant agreements with our 
partners, and others will quickly move in to fill the vacuum--and reap 
the jobs--we have left behind.
  In sum, fast track is in the best interests of the United States. It 
is a necessary prerequisite for negotiations; it is constitutional; and 
it is critical for economic and job growth in our nation. I urge my 
colleagues to support the pending legislation.
  Mr. DORGAN. Madam President, I yield 10 minutes to Senator Reed.
  Mr. REED. I thank the Senator for yielding.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.

[[Page S11747]]

  Mr. REED. Madam President, I am here today to comment once again on 
not only the fast-track agreement but also the overall context of U.S. 
trading. The discussion between the Senator from Maryland and the 
Senator from New York pointed out the complexity of looking at the 
trade deficit. But there are some things that are quite clear despite 
the complexity.
  In 1980, we had a surplus of roughly $2.3 billion. By 1996--we have 
now a deficit of $165 billion. That is the time in which fast track has 
been operative. That is the time in which fast track has been the 
centerpiece of our legislative efforts, our international efforts to 
increase trade in the world.
  This deficit right now is a result of many things. It is a result of, 
in some respects, our fast-track policy. But it is a result also of our 
inability, I think, to deal with some of the more basic issues in 
international trade, dealing with some countries that utilize access to 
our market but at the same time deny us access to their market. It is a 
phenomenon also caused by the proliferation of multinational 
corporations that move their operations, in many cases, out of the 
United States because of our environmental laws, because of our labor 
laws, because of many stringent requirements that raise and maintain 
the quality of life and the standard of living here in the United 
States. And they have gone to other countries. In fact, some of our 
policies have encouraged their departure.
  One of the striking differences between this fast-track bill today, 
1997, and the fast-track bill that was adopted in 1988, is that we have 
neglected to include within the principal negotiating objectives 
attention to the rights of workers of our potential trading partners. 
We have also neglected to include currency coordination, which is an 
important aspect of ensuring that a free-trade system operates 
appropriately and correctly. We have also narrowed significantly the 
scope of concerns which we can address with respect to the environment.
  Regardless of our budget situation, we will have contributed to the 
further deterioration, if this bill passes, of our trade position, 
because we have included increased incentives to deploy capital from 
the United States from other parts of the world to developing 
countries, which effectively will mean that they will be our 
competitors.
  I know, when the Senator from Maryland and the Senator from New York 
were talking, they were talking about the overall trade balance, making 
the distinction between our trade balance and our Federal deficit. But 
I think if you just aggregate that trade balance, you will see clearly 
that in terms of manufactured goods we are consistently losing. And 
that is the most prescient, tangible point with respect to the 
arguments that, because of some of these trading rules, literally our 
good manufacturing jobs are going overseas.
  Mr. SARBANES. Will the Senator yield on that point?
  Mr. REED. I will be happy to yield.
  Mr. SARBANES. Since 1974, our trade deficit on merchandise goods is 
$1.8 trillion. In just over 20 years, $1.8 trillion. Up until 1975 we 
had been running modest surpluses every year in our merchandise trade 
deficit. So there has been a dramatic deterioration.
  Mr. REED. The Senator is quite correct--reclaiming my time. It 
illustrates his point, that there may be, in fact, countervailing 
foreign investments in this country to make up for our budget deficits, 
but that does not explain the phenomenon of losing consistently and 
persistently the battle for the sale of manufactured goods from our 
suppliers to other countries around the world.
  Mr. SARBANES. If the Senator will yield further? To the extent there 
are such investments, those then become claims which foreigners hold 
against us. So what has happened is we have gone from being a creditor 
nation in 1980, where we were a creditor nation to the tune of $400 
billion, to today where we are a debtor nation to the tune of $1 
trillion. So, because they sell more to us than we sell to them, they 
build up claims against us and we become a debtor. Now we are the 
biggest debtor nation in the world.
  Mr. REED. Again, the Senator is absolutely correct. Frankly, to move 
to an analogy which is a little more colloquial but perhaps just as 
compelling, if we were managing a professional baseball team and we 
lost every year for 10 or 15 years, I don't think we would be managing 
that baseball team.
  That is essentially, if you charge us as managers of our 
international trade policy, we have lost every year for the last 
several decades. The trade policy has to be changed. Frankly, I don't 
believe anyone here is advocating that we could not use a good fast-
track procedure. The argument is this is not a good fast-track 
procedure; that we are neglecting several of the most critical items 
when it comes to realistic competition between countries in the world 
today for international trade. We are totally neglecting the 
differential between our wage structure, particularly our manufacturing 
wage structure, and the wage structures overseas. We are neglecting it 
by simply saying that is not important to us, we don't care if workers 
in Third World countries are making 2 or 3 cents an hour or 20 cents an 
hour, when our workers are making $6 or $7 an hour or more. We don't 
care about that.
  We should care about that because, frankly, that is one of the 
reasons why we have a huge trade deficit, particularly in manufactured 
goods. Because there are incentives now, huge incentives, to deploy 
capital from the United States into these countries so that they can 
set up manufacturing plants. And we have seen it consistently. We have 
seen it even deliberately, blatantly, in the sense of finding places 
where the labor laws are so lax that there are incentives for companies 
to move in.
  In Malaysia it was an explicit condition of the movement of many 
American manufacturers into that country that Malaysia would not have, 
or enforce, strong labor laws. They would not give their workers the 
right to benefit from these new industries coming in and developing and 
selling successfully in the world economy.
  Is that wrong? It's wrong for those workers, which is a concern. But 
what is more of a concern for me, it is wrong for our workers because 
how can we expect to be competing against workers with new, modern 
technology based on new capital investments, workers who are as well 
skilled as ours may be, in a world in which they are paid a fraction of 
what is the minimum wage here in the United States?
  Then you can also look at the issue of environmental quality, which 
is so important. It is not important in just a touchy-feely sense; we 
want to make sure there are forests and the streams are filled with 
fish, et cetera. It is really a very practical sense.
  When a group of multinational countries now can go into Mexico, set 
up new manufacturing plants and literally take all their effluent and 
just pour it into the local sewer--something they could never do in 
their home country, not in the United States, not in Europe--that is an 
advantage for them to go there. We have to recognize that. We can't be 
naive and sloganize here on the floor and say it's just free trade, and 
free trade. Free trade makes sense if there are the conditions for free 
trade: That there are, in fact, complementary monetary and fiscal 
policies in each country; that there is, in fact, respect for workers' 
rights and workers' ability to organize.
  One of the assumptions underlying free trade is that when workers are 
displaced by imports in one sector of the economy, they move to a more 
efficient job in another sector of the economy. And we know that is not 
the case. It doesn't happen. Maybe it will happen in 50 or 100 years. 
But in the lives of Americans today, and their children's lives, that 
doesn't happen. We see dislocation. And we see dislocation that can be 
avoided, at least minimized, if we adopt strategies in this fast-track 
legislation that will direct the President to deal with these issues, 
to deal with them aggressively and to come back to us with an agreement 
that does talk about how we are going to raise the standard of living, 
through trade, of individuals in our trading partners' countries; of 
how we are going to deal with environmental issues in those countries; 
how are we going to make sure that currency valuations changes, 
manipulations, don't undercut all that we think we have gained at the 
bargaining table.

  The classic example of course is Mexico. We went in and reduced 
significantly, we thought, the tariffs that the

[[Page S11748]]

Mexicans would charge us, the tariffs that we would charge them, 
thinking that now our goods would move back and forth freely. All of 
that was wiped out by a 40-percent reduction in the value of the peso; 
the purchasing power of Mexican citizens who might want our goods. And 
to not be concerned about that, to not elevate that issue of currency 
coordination to a major negotiating objective is absurd. It is 
particularly absurd within the last 2 weeks when all we have read about 
is the currency attacks in the Far East and Thailand, in all of these 
countries, leading to a shock wave on Wall Street.
  The PRESIDING OFFICER. The Senator's 10 minutes have expired.
  Mr. REED. I request an additional 3 minutes.
  Mr. DORGAN. I yield an additional 3 minutes to the Senator.
  The PRESIDING OFFICER. The Senator from Rhode Island is recognized.
  Mr. REED. Let me just, in the remaining 3 minutes, say that 
individuals, colleagues who come to the floor and just talk slogans 
about free trade have not, I think, understood what is going on. Why 
does Japan run a $47 billion a year surplus with the United States? 
Because they exclude our goods. Why does China run a multibillion-
dollar surplus with the United States? Because they exclude our goods; 
and because they manipulate their currency to reduce the wages, 
effectively, of their workers; because they are insensitive to 
environmental quality; because they claim, for cultural reasons, 
historical reasons, they don't have to abide by intellectual property 
rules or anything else.
  Those are the real issues that we face concerning our ability to 
compete in the world economy. What does this legislation do about those 
things? Ignores workers' rights; ignores environmental quality; and to 
a great degree it ignores currency coordination as major negotiating 
objectives. In effect what we said is: Listen, we are going to give the 
President fast-track power to do everything except what is most 
important to be done. And that is our objection. No one is here on the 
floor saying that we can withdraw from the world trade economy or we 
should withdraw from the world trade economy. What we are saying is 
let's negotiate agreements that will benefit all the citizens of this 
country; that will benefit working men and women throughout this 
country; that will ensure that they have a fair opportunity to work and 
earn wages that are decent. And that is not going to happen under this 
agreement.
  What we have to do, I believe--and I hope we can--is ensure that the 
negotiating objectives are changed; that we do provide the President 
with the directions, with the incentives, with the authority to go out 
there and talk seriously about all these issues. Frankly, there was 
some discussion before that our trading partners won't take us 
seriously. What they won't take seriously is any President of the 
United States talking about workers' rights, about environmental 
quality, and about a strong stable currency coordination in the world, 
if we pass this fast-track agreement. Because we basically told them we 
are not interested. What we are interested in here is promoting capital 
deployment from the United States into areas of the world that don't 
treat workers properly, that don't care about the environment, and may 
or may not manipulate their currency to maintain the advantage they 
have against the United States.
  This is not an agreement that we should support. If we want fast 
track, let's get it right, let's do it right. This is not the right way 
to go.
  The PRESIDING OFFICER. The Senator's additional time has expired.
  Mr. DORGAN. Madam President, I yield 10 minutes to the Senator from 
California, Senator Boxer.
  The PRESIDING OFFICER. The Senator from California is recognized for 
10 minutes.
  Mrs. BOXER. Madam President, I compliment my colleague, Senator Reed, 
for his very astute remarks. I thank the Senator from North Dakota for 
putting together what I think is a very excellent presentation. He has 
been carrying it through and I am proud to stand with him and the 
others who feel that we should not grant fast-track authority in this 
particular case.
  Madam President, as a student of economics, I learned that if you 
listen to an economics debate you will find that people generally fall 
into categories.
  When it comes to trade, I believe there are three categories. First, 
it is the free-trade-or-nothing category where you can't tell them 
anything about the evils that could come. They don't want to see the 
statistics about what happens to the downward pressure on wages. They 
don't want you to tell them even that there is any degradation to the 
environment. I call it the see-no-evil category. They don't want to 
know.
  Then there is another category which is the no-trade-no-matter-what 
category. I think those are the ones who don't want to hear any of the 
benefits that can come from trade. Maybe they are a little long run 
they say, or maybe we need to work more closely to make sure that the 
problems are resolved, but they don't want to hear that. That is the 
hear-no-evil category.
  Then there is this third category that I think a lot of my colleagues 
are in, and I certainly put myself in that category. And that third 
category is the fair-trade category, not the free-trade-at-any-cost 
category, not the no-trade-no-matter-what category, but the fair-trade 
category.
  I want you to know, Madam President, I have voted for fast-track 
authority several times. When it came to Canada, when it came to 
Israel, when it came to the GATT, I was there, because I felt when our 
administration, whoever it is, Republican or Democratic President, 
negotiates with countries who have similar standards of living, similar 
environmental laws, I don't fear downward pressure on wages, I don't 
fear downward standards for the environment, I don't fear downward 
standards on food safety, because when we are dealing with countries 
who care about what we pay, who have the same values in terms of worker 
rights and environmental rights, I feel comfortable giving fast-track 
authority to the President.
  I have to say that in this case, I feel very uncomfortable about 
giving this authority. I have been trying to find out what is the 
minimum wage or the wage paid for a manufacturing job in Indonesia, in 
Malaysia which are countries that, as members of APEC, may very well 
will be part of this authority. I have not been able to find out the 
minimum wage or the average wage for manufacturing jobs is in those 
countries. I am told that a statistical abstract put out by the 
Department of Labor does not contain the average hourly wage for 
manufacturing jobs in those countries. I am also told that the 
Department of Labor's statistical abstract does not contain the hourly 
manufacturing wage for Chile either. Rather, someone at CRS 
extrapolated from other available information to come up with an 
approximate hourly wage in Chile of $2.32. This compares to an 
approximate average hourly salary of $17.74 in the United States for 
manufacturing jobs.
  So here we have colleagues willing to hand over authority to make 
agreements with countries that we don't even know what they pay their 
workers, let alone what their environmental laws are.
  It seems to me there has to be a better way. I was listening to 
Senator Byrd's speech, and when he said, ``Why are we here?'' I think 
that is a reasonable question, because if you read article I, section 8 
of the Constitution, it grants Congress the sole power to regulate 
trade and commerce with foreign nations and to make all laws which are 
necessary to carry out that power.
  Once in a while, we cede away our power. As I said, there have been 
times when I felt it was OK to do that. But in this case, when you 
don't even know who it is you are dealing with, what they pay their 
people, what their environmental laws are, it makes very little sense, 
and I think it puts our workers and our environment at great risk. The 
benefits of trade, under these circumstances, will certainly not 
outweigh the disadvantages.
  I represent the largest State in the Union, along with Senator 
Feinstein. I have watched the NAFTA. It was a close call for me on the 
NAFTA. I wound up saying no, because I believed the same problems 
existed then: the downward pressure on wages; the lack of environmental 
laws.
  I have to say that as you look at the different analyses as to 
whether NAFTA has worked--did it do better or

[[Page S11749]]

not--as we have already heard today, we went from a trade surplus of 
about $5.4 billion with Mexico in 1992 to a trade deficit of more than 
$17 billion in 1996.

  Increased trade. Who benefited? Ask the California wine industry, I 
say to my friends. I represent the proudest wine industry maybe in the 
world. Those wines that are made in California are world renowned. Yet 
United States wine exports to Mexico have dropped by approximate one-
third. United States wines face a 20 percent tariff in Mexico.
  However, coincident with NAFTA, Mexico gave Chilean wines a tariff 
reduction from 20 percent to 8 percent and guaranteed duty-free status 
within a year. But U.S. wines were subject to a 10 year phase-out of 
the 20 percent tariff. Ambassador Kantor, who I believe really wanted 
to make something good happen, promised to negotiate, within 120 days 
of NAFTA coming into force, a reduction of Mexican tariffs on United 
States wines--it did not happen. In fact, Mexican tariffs on United 
States wine and brandy are still at their pre-NAFTA levels, as a result 
of an unrelated dispute regarding corn brooms.
  So as my kids used to say when they were younger, it is time to take 
a time out. Take a deep breath, see where we are on the agreements we 
have already signed that haven't lived up to their promises.
  Sometimes when my colleagues--and I just heard one of them on the 
floor--talk about fast track, they get this energy. It is almost an 
out-of-control enthusiasm. I think sometimes when you go on a fast 
track, you go too fast. What is the rush? Why not allow this Congress 
to do our work? I didn't come here to exert downward pressure on 
workers' wages. I came here to make life better for the people of 
California. I didn't come here to see our environmental laws degraded, 
yet we have already seen examples of trade policy pressuring the United 
States to lower its environmental protections. Look at what recently 
happened with our dolphin protection laws. A trade deal with Mexico 
prevailed over our law and resulted in our law being weakened. In 1999, 
the definition of our beloved ``dolphin safe'' label could change 
because of trade pressures--not because we love dolphins any less. They 
just take a back seat.
  We saw shipments of poisoned berries come into our country. If we had 
enough inspectors there would probably be a better chance that these 
situations would not occur. Time out, folks, before we see that kind of 
situation expand. Sure, there will be more trade. But is that the kind 
of trade we want, where we have to recall berries because we don't have 
enough inspectors?
  I invite my colleagues to go down to the San Diego border. The border 
infrastructure is inadequate for the amount of trade. The new trade 
with Mexico as a result of NAFTA has placed severe stress on our 
southern border transportation infrastructure. According to the 
California State World Trade Commission, the result has been 
bottlenecks and traffic jams at border crossings, safety hazards, and 
declining environmental quality in the areas around the ports of entry. 
Why don't we do first things first? Why don't we bring these agreements 
to the Senate, to the House, let us debate and, to my colleague who 
says, ``Well, every Senator wants to be President so it would be 
impossible because we are all so,'' I assume he meant ``egotists that 
we would write it our way,'' I say I know a few Senators who don't want 
to be President. As a matter of fact, most of them don't. Most of them 
want to be Senators.
  I have seen this U.S. Senate work on chemical weapons treaties, all 
kinds of treaties that were difficult, and do you know what, Madam 
President? We did the job. That is what we are sent here to do, not to 
throw the ball over to the Executive and say, ``It's yours, we don't 
care about wages, we don't care about the environment, we're just for 
trade at any cost.'' I hope that we don't take that course.
  If you want to look at the jobs lost through NAFTA, the Department of 
Labor certified that there were 116,418 workers who notified them in 
April 1997 that they would lose their jobs as a result of NAFTA. There 
are estimates that go as high as 400,000 job losses. That is just job 
losses. What about the downward pressure? What about those who leave 
manufacturing jobs and have to go to service-sector jobs which pay 
less? That is the kind of disparity we see.

  I ask unanimous consent for 3 additional minutes.
  Mr. DORGAN. I yield the Senator 3 additional minutes.
  Mrs. BOXER. I thank my colleague for the additional time.
  So when we look at the issue of trade, there are some who say the 
most important thing is the efficient flow of capital. Capital will 
flow to the low-wage countries, and that is the only thing we should be 
concerned about.
  But it seems to me in the United States of America, going into the 
next century, we have to value not only the flow of capital, which I 
believe ultimately will flow to the most efficient place, but we have 
to value the workers, we have to value the environment and we have to 
value our quality of life.
  I ask unanimous consent that these documents from environmental 
organizations be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     [News Release From National Wildlife Federation, Oct. 8, 1997]

    Environmentalists Unified on Fast Track: Change It or Reject It

       Washington, DC.--Today, the National Wildlife Federation, 
     National Audubon Society and Defenders of Wildlife called on 
     Congress to reject fast-track trade bills currently under 
     consideration until they guarantee that meaningful 
     environmental safeguards become part of future international 
     trade agreements.
       Despite rhetoric to the contrary, neither of the fast-track 
     bills offered by the Senate Finance or House Ways and Means 
     Committees satisfies the objectives for green trade 
     negotiations recommended by the groups. One key problem with 
     these bills is that they establish new and stringent 
     restrictions on the President's ability to negotiate 
     environmental safeguards in future trade agreements. 
     ``Instead of merely including the word `environment' in the 
     fast-track proposals as a way of appeasing our concerns, we 
     urge Congress and the Administration to begin addressing 
     strong environmental standards among our trading partners,'' 
     said Barbara Bramble, Senior Director for International 
     Affairs at the National Wildlife Federation.
       The environmental groups assert that neither bill offers a 
     comprehensive agenda for the environment in trade 
     negotiations. They both fail to insist that negotiators 
     create a level playing field to ensure that trading partners 
     compete fairly by enforcing environmental laws. They provide 
     no specific objectives for improving the transparency of the 
     World Trade Organization (WTO). And they fail to ensure that 
     environmental agencies like the Environmental Protection 
     Agency (EPA) are active participants in trade policy 
     negotiations. ``We must find a stronger voice for the 
     environment during trade negotiations, which are now 
     dominated purely by commercial interests,'' said Dan Beard, 
     Vice-President for the National Audubon Society.
       Also extremely troubling is the fact that none of the bills 
     explicitly exclude the so-called Multilateral Agreement on 
     Investment (MAI) from fast-track consideration. The MAI would 
     make it much easier for multinational corporations to freely 
     move capital and production facilities without responsibility 
     for environmental performance, and would create new 
     litigation hooks for corporations to sue national governments 
     over environmental standards. Already under NAFTA, the U.S.-
     based Ethyl Corporation has filed a $251 million lawsuit 
     against Canada because the Parliament banned the import and 
     interprovincial transport of a toxic gasoline additive. ``We 
     must ensure that international trade pressures such as the 
     MAI and NAFTA do not accelerate the `race to the bottom' for 
     investments in poorer areas of the globe,'' said William 
     Snape, Legal Director for Defenders of Wildlife.
       Strong economies and clean environments are two sides of 
     the same coin, assert the three conservation groups. ``Our 
     vital national interests are best served when trade 
     negotiators bring home agreements that simultaneously 
     strengthen our economy and protect our environment'' said 
     John Audley, Trade and Environment Program Coordinator for 
     National Wildlife Federation. ``The fast-track bills offered 
     by Congress fail this test and we must accordingly reject 
     them.''
       The National Wildlife Federation is the nation's largest 
     conservation group, with over 4 million members and 
     supporters across the United States. The National Audubon 
     Society, with approximately 600,000 members nationwide, is 
     dedicated to protecting birds, wildlife and their habitat. 
     Defenders of Wildlife has over 200,000 members and 
     supporters, and seeks to protect all native plants and 
     animals in their natural habitats.

[[Page S11750]]

     
                                                                    ____
                                League of Conservation Voters,

                                 Washington, DC, November 4, 1997.
     U.S. House of Representatives,
     Washington, DC.
     Re: H.R. 2621, the Reciprocal Trade Agreement Authorities Act 
         of 1997--Oppose Anti-Environmental Fast Track Trade 
         Negotiating Authority
       Dear Representative: The League of Conservation Voters is 
     the bipartisan, political arm of the national environmental 
     movement. Each year, LCV publishes the National Environmental 
     Scorecard, which details the voting records of Members of 
     Congress on environmental legislation. The Scorecard is 
     distributed to LCV members, concerned voters nationwide and 
     the press.
       This week, the House is likely to vote on H.R. 2621, the 
     Reciprocal Trade Agreement Authorities Act of 1997. The bill 
     establishes new and stringent restrictions on the President's 
     ability to negotiate environmental safeguards in future trade 
     agreements. This legislation does not satisfy the objectives 
     for green trade negotiations recommended by national 
     environmental organizations. In particular, H.R. 2621:
       fails to require that trade rules do not undermine 
     legitimate environmental, health, and safety standards;
       fails to insist that our trading partners enforce strong 
     environmental laws in order to establish a high, level 
     playing field as a basis for international economic 
     competition;
       fails to mandate increased opportunities for public 
     participation in World Trade Organization deliberations and 
     dispute resolution that might affect environmental, health, 
     and safety safeguards;
       fails to ensure that US government agencies with 
     responsibilities for environmental protection, resource 
     conservation, and public health and safety are active 
     participants in trade negotiations which could effect policy 
     matters under their authority;
       does not explicitly exclude the Multilateral Agreement on 
     Investment (MAI) from fast-track consideration, an agreement 
     that would allow investors to sue for compensation before 
     international tribunals if pollution laws are alleged to 
     reduce their property values;
       fails to provide for environmental assessments of trade 
     agreements early enough in negotiations to influence the 
     outcome of those negotiations and
       does not provide Congress sufficient leverage to ensure 
     that trade agreements serve the broad public interest.
       LCV's Political Advisory Committee will consider including 
     votes on H.R. 2621, The Reciprocal Trade Agreement 
     Authorities Act of 1997, in computing LCV's 1997 Scorecard. 
     Thank you for consideration of this issue. If you need more 
     information, please call Betsy Loyless in my office at 202/
     785/8683.
           Sincerely,
                                                     Deb Callahan,
                                                        President.

  Mrs. BOXER. Madam President, you will find a huge number opposing 
this fast-track legislation. The National Wildlife Federation basically 
says that they are against it for one reason. They have no assurances 
that the Environmental Protection Agency of America will be active 
participants in the trade negotiations. There are many other 
organizations which I don't have the time to name at this point.
  We have to make a choice. We have to decide, if we value our workers 
as much as we value the free flow of capital, we have to ask ourselves, 
do we value clean air and clean water as much as we value the free flow 
of capital?
  We have to say, do we value our safe food supply as much as we value 
the free flow of capital? And do we feel that it is important to have 
an adequate infrastructure in place of inspectors at the border to make 
sure the food supply is safe, to make sure that our products are being 
treated fairly? And should we even care about a positive trade balance? 
Sure, you open up the doors, but what has happened to us, as my 
colleagues brilliantly pointed out, is the balance of trade has 
flipped, and where we used to be predominant and we sent more exports 
than we took in imports, we see a reverse. We now have negative 
numbers.
  So I believe, again, in summing up, that we do have three choices: 
Free trade at any cost; see no evil; don't tell me about the problems; 
no trade at any cost; don't tell me about the good parts of trade; and 
the middle course that my colleagues are taking, which is fair trade. 
Yes, trade is crucial, it is important. We are part of one world, but 
we in the U.S. Senate who care about values and American jobs and an 
American environment, who care about clean and safe food, who want food 
safety laws in place, also want to have an opportunity to alter or 
amend trade agreements as we deem appropriate and necessary.
  Thank you very much.
  The PRESIDING OFFICER (Mr. Allard). The Senator's additional time has 
expired.
  Mr. HAGEL addressed the Chair.
  The PRESIDING OFFICER. The Senator from Nebraska is recognized.
  Mr. HAGEL. Mr. President, thank you. I yield myself 4\1/2\ minutes.
  The PRESIDING OFFICER. The Senator is recognized for 4\1/2\ minutes.
  Mr. HAGEL. Mr. President, today the United States is unilaterally 
disarmed in the intense global competition for new markets. For the 
first time since 1974, the President lacks fast-track authority to 
negotiate agreements that would help open up new markets and reduce 
international barriers to U.S. exports.
  This failure means slower economic growth, lost markets overseas, and 
fewer opportunities for high-paying jobs. Fast-track authority allows 
the President to submit to Congress a clean vote on trade agreements 
negotiated with other countries.
  Under our Constitution, the Congress alone has the power to ``lay and 
collect . . . Duties'' and ``To regulate Commerce with foreign Nations. 
. .''
  The Constitution, however, uniquely empowers the President to send 
and receive ambassadors and negotiate with foreign powers. Over 20 
years ago, the fast-track mechanism was created to accommodate this 
divided authority. Renewal of fast-track authority will enable our 
Nation to continue pressing for world economic systems based on free 
markets, free trade and free people.
  As a nation, the continued growth of our economy depends on trade. In 
the past 50 years, trade share of the world's gross domestic product 
grew from 7 percent to 21 percent. Today, trade makes up 24 percent of 
the U.S. economy.
  This decade, export growth has created 23 percent of all new U.S. 
jobs, and those export-related jobs pay 13 percent more than the 
national average.
  Clearly, our economy will suffer without the ability to continue to 
negotiate timely new agreements to further open foreign markets to U.S. 
goods, commodities and services.
  Those opposed to renewing the President's fast-track authority argue 
that the lack of such authority does nothing to hinder the President's 
ability to negotiate new trade agreements. Unfortunately, this is not 
the case.
  No nation will enter into a major new trade negotiation with the 
United States if the product of those negotiations can be picked apart 
in the U.S. Congress. With any agreement that can later be unilaterally 
changed or amended by the Congress, we run the risk of having no 
agreement at all.
  As long as the President lacks the ability to present such agreements 
to the Congress for our clean approval or disapproval--and bad 
agreements deserve to be defeated--our Nation will be endangering its 
ability to compete in today's competitive global economy.
  Our Nation should be working aggressively to reach new agreements 
that will expand free trade and open up the emerging economies of Asia, 
Latin America, Eastern Europe to American exports. We should be 
building on the major achievements of the last global trade talks. 
These talks, the Uruguay round of the General Agreement on Tariffs and 
Trade, for the first time, established rules for services and 
agriculture goods, two areas where the United States leads the world in 
global competitiveness.
  Instead, the United States is losing opportunities for economic 
growth and job creation. It is time to do what is right for American 
workers, farmers, ranchers, and businesses. It is time to restore fast-
track negotiating authority for the President.
  I hope that my colleagues take a good look at this and do support 
fast-track authority for the President.
  Mr. President, I yield the floor.
  Mr. DORGAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. DORGAN. Could the Chair inform me of the circumstances with time 
remaining?
  The PRESIDING OFFICER. The Senator from North Dakota controls the 
time from now until 4:15; and then at 4:15, the Senator from Delaware 
will control the last 5 minutes.
  Mr. DORGAN. Mr. President, let me then use the remainder of my time 
and begin by quoting from a letter written by Mr. Kevin Kearns, the 
president of the United States Business and Industrial Council. I ask 
unanimous consent that it be printed in the Record.

[[Page S11751]]

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                        United States Business and


                                           Industrial Council,

                                 Washington, DC, November 5, 1997.
     Hon. Byron L. Dorgan,
     U.S. Senate,
     Washington, DC.
       Dear Senator Dorgan: I understand that Members of Congress 
     will be lobbied intensively over the next several days by 
     Chief Executive Officers of major multinational corporations 
     belonging to The Business Roundtable as part of their 
     campaign to pass the fast track trade bill.
       I am writing to emphasize to you and to other Members of 
     Congress that these companies do not speak for the entire 
     American business community. Far from it. In fact, they 
     represent only the tiny handful of giant multinational firms 
     that have monopolized the benefits of current trade policy, 
     and that now seek to further extend their advantages at the 
     expense of smaller American companies and their employees. 
     Over the last two decades these large multinational companies 
     have done much more to send good jobs and valuable 
     technologies overseas than to create them here at home.
       In fact--and I find this quite ironic--many of these large 
     multinationals no longer consider themselves American 
     corporations. Their CEOs make this point openly and proudly. 
     One therefore wonders what business they have lobbying the 
     U.S. Congress at all, since they are apparently not American 
     corporate citizens but citizens of the world. Perhaps they 
     should be up in New York lobbying the United Nations rather 
     than in Washington lobbying the U.S. Congress. In fact, the 
     first question Members of Congress should ask them during 
     their lobbying visits is, ``Do you represent an American 
     company?''
       I can assure you that the 1,500 members of the U.S. 
     Business and Industrial Council are American-owned and 
     managed companies. They typify the vast majority of American 
     businesses that have been impacted negatively by U.S. trade 
     policy. Since they are run day in and day out by their 
     owners, many are not large enough to, nor are they interested 
     in, moving the bulk of their manufacturing overseas. They are 
     interested, however, in preserving the American manufacturing 
     base and in creating additional wealth for themselves, their 
     employees, and their communities here in the United States.
       Some have been victimized by predatory foreign trade 
     practices such as dumping and subsidization--and by the U.S. 
     Government's neglect of their problems. Still others find 
     themselves under pressure to cut wages and benefits in 
     response to the slave-labor wage rates or adversarial 
     practices of foreign competitors. Many that are engaged in 
     international trade have been pressured by foreign 
     governments to source abroad or to transfer key technologies 
     as the price of doing business in that foreign country.
       But most important, they have been hurt--as have most of 
     our citizens--by years of poorly run trade policies that have 
     given us massive, growing trade deficits year after year. 
     These deficits, in turn, cut the U.S. economic growth rate 
     significantly--by as much as 2 percentage points in recent 
     years.
       The Census Bureau's latest figures show dramatically just 
     how few American companies have profited from recent trade 
     agreements. At last count, only 6 percent of the nation's 
     690,000 manufacturers exported at all, and the percentages 
     are much lower for service companies. Large companies--with 
     500 or more workers--accounted for fully 71 percent of export 
     value, even though these firms comprised only 4 percent of 
     total exporters. And fully 11 percent of U.S. exports were 
     generated by just four individual companies.
       Yet despite this domination of trade flows by the big 
     multinationals, these firms have not created a single net new 
     American job in some 25 years. Another way of looking at job 
     creation is this: all the net new employment in the U.S. 
     economy in recent years has been created by companies with 
     fewer than 100 employees--the overwhelming majority of which 
     do not export at all. Although fast track proponents tout the 
     job-creating benefits of international trade, those jobs on a 
     net basis are not being created in the United States.
       USBIC's members and their counterparts don't have plush 
     Washington offices. They do not maintain large public 
     relations staffs. They can't hire expensive lobbyists, and 
     they're too busy running their companies to jet in and out of 
     the nation's capital themselves, like the corporate elite. 
     All these owner-operators do is try to turn a profit, support 
     their families, create jobs, and help sustain the local 
     communities they have been a part of for generations. In 
     opposing fast track, they are acting first not as business 
     interests but as citizens dismayed at the nationwide cost of 
     25 years of falling living standards and rapidly growing 
     income inequality. They are well aware that these latter two 
     facts of modern American life cannot promote a stable 
     business environment or a stable country over the longer run.
       These businessmen understand that the nation urgently needs 
     a new trade and international economic strategy that lifts 
     incomes, strengthens families and communities, allows 
     entrepreneurs to make a profit here at home, and ensures 
     America's future prosperity. They strongly oppose fast track 
     renewal, and hope that members of Congress will distinguish 
     the special interests of the multinational corporations from 
     this overriding national interest.
       Please feel free to have Members or their staffs contact us 
     directly for the small and mid-size business point of view on 
     fast track. We will be pleased to try to answer any questions 
     promptly and forthrightly.
           Sincerely,
                                                  Kevin L. Kearns,
                                                        President.

  Mr. DORGAN. Mr. President, let me quote from this letter. I will not 
read it all, but, Mr. Kearns, who heads an organization called the 
United States Business and Industrial Council says:

       I can assure you that the 1,500 members of the U.S. 
     Business and Industrial Council are American-owned and 
     managed companies. They typify the vast majority of American 
     businesses that have been impacted negatively by U.S. trade 
     policy. Since they are run day in and day out by their 
     owners, many are not large enough to, nor are they interested 
     in, moving the bulk of their manufacturing overseas. They are 
     interested, however, in preserving the American manufacturing 
     base and in creating additional wealth for themselves, their 
     employees, and their communities here in the United States.
       Some have been victimized by predatory foreign trade 
     practices such as dumping and subsidization--and by the U.S. 
     Government's neglect of these problems. Still others find 
     themselves under pressure to cut wages and benefits in 
     response to the slave-labor wage rates or adversarial 
     practices of foreign competitors. Many that are engaged in 
     international trade have been pressured by foreign 
     governments to source abroad or to transfer key technologies 
     as the price of doing business in that foreign country.

  And then he goes on in his letter. Let me read the conclusion:

       USBIC's [the Business and Industrial Council] members and 
     their counterparts don't have plush Washington offices.

  He is pointing out the large number of CEOs who have flown into 
Washington to lobby on behalf of fast track. He said:

       [Our businesses] don't have plush Washington offices. They 
     do not maintain large public relations staffs. They can't 
     hire expensive lobbyists, and they're too busy running their 
     companies to jet in and out of the nation's capital 
     themselves, like the corporate elite. All these owner-
     operators do is try to turn a profit, support their families, 
     create jobs, and help sustain [their] local communities they 
     have been a part of for generations. In opposing fast track, 
     they are acting first not as business interests but as 
     citizens dismayed at the nationwide cost of 25 years of 
     falling living standards and rapidly growing income 
     inequality. They are well aware that these latter two facts 
     of modern American life cannot promote a stable business 
     environment or a stable country over the longer run.

  Mr. President, this has been a rather interesting discussion. I 
listened to much of the debate with great interest. As I mentioned, 
there have been a number of, I think, good presentations today. I do 
say that there are differences of opinion that are very substantial.
  There are some who think that the current trade strategy is just 
fine, and that it works very smartly. They think it is a wonderful 
thing for our country, and we just need to do more of it. That is the 
group that says, ``Let us pass fast track. If we don't, somehow America 
is headed for trouble. But things are going fine. We like the way 
things are. Our trade policy works. Let's continue it.''
  Others of us think that swollen and bloated trade deficits, that 
reach record levels year after year, are heading this country toward 
trouble.
  General Custer, incidentally, lived for 2 years near Bismarck, ND, 
before he left for what is now Montana to meet Sitting Bull and Chief 
Crazy Horse. And because I am from North Dakota, we know a great deal 
about the history of that campaign.
  We know by reading the book, ``Son of Morning Star,'' for example, 
that General Custer sent his scouts ahead to try to figure out what was 
ahead of him. And the scouts really reported, ``Gee, things look pretty 
good. Things are going pretty well here. Things look pretty good around 
the next hill or the next bend.''
  Of course, we now know from historical accounts things really did not 
go very well for General Custer and the 7th Cavalry. I find today an 
interesting group of colleagues who might well qualify for that 
scouting assignment. ``Things are going pretty good. The road up ahead 
looks pretty bright. If we just keep doing what we're doing, our 
country is going to be just fine.''

  I have observed, during other discussions, especially in fiscal 
policy, people came to the floor of the Senate and said, ``Let's run 
things like you would run a business.'' I would ask my colleagues this: 
After hours and hours of

[[Page S11752]]

debate about trade, is there anyone here who would stand up and tell 
me, if you ran a business the way this country runs its trade policy 
that you would be doing fine? Wouldn't everybody in this Chamber 
understand and agree that if you ran a business the way this country is 
running its trade policy, you would be broke?
  How many CEO's would go to their boardrooms and say, ``Listen, I 
would like to have a talk with you. I want to talk about our receipts. 
I want to talk about all the sales we have and all the money that is 
coming in.'' And the board says, ``Well, that's fine, Mr. CEO or Mrs. 
CEO, but could you tell us a little about your expenditures?''
  The CEO knows the expenditures far exceed the receipts, but the CEO 
says, ``No, no, we're not going to talk about expenditures. Are you 
crazy? We're going to talk about receipts. We're going to talk about 
how well I'm doing.''
  That is the message we have been hearing out here on the floor of the 
Senate for hours. ``Gee, look how well we're doing. Look at these 
exports. Look at these exports, sales.'' They are ignoring, of course, 
the massive quantity of imports coming in, displacing American 
manufacturing capacity in this country, and putting us in a swollen and 
mushrooming trade deficit situation, that if judged as a business would 
render us unable to continue. And yet we have people say, ``Gee, this 
is going just fine. This is just the right road for us.''
  It is not the right road for us. The right road isn't protectionism. 
The right road isn't to put walls around our country. The right road 
isn't to retreat from the global economy.
  But the right road is to insist in this country that we have some 
courage to stand up and tell, yes, the Japanese and the Chinese and the 
Mexicans and the Canadians, and so many others, that we expect and 
demand more of you. We expect fair trade.
  Is there someone in this Chamber who wants to stand up and tell us 
they are opposed to fair trade? Does that person exist? Is there 
someone willing to do that? Who here is opposed to fair trade? Maybe I 
need to ask it when more Members are present in the Chamber. But is 
there someone who will say, ``No. Me, I'm opposed to fair trade.'' I 
don't think so. I don't think there is one person in this Chamber who 
will volunteer to say, on behalf of their constituents, they oppose 
fair trade.
  Why then do they insist that those of us who believe that we ought to 
expect fair trade in our trade relationships, why do they insist that 
somehow we don't act in the best interests of this country and in the 
best interests of this country's future economy? I do not understand 
that.
  With respect to whether it would be Japan or China, or many other 
trading partners, who are worthy partners and good trading partners of 
ours, it would seem to me to be in this country's best interests to say 
to those countries, which expect a balance in trade that is a fair 
balance, ``You cannot run $50 billion, $60 billion a year, every year, 
in trade deficits with us.''
  Now, they will continue to do it as long as we allow them. You can 
only expect that someplace in these other countries those folks are 
sitting around saying, ``We don't understand why they let us keep doing 
this, but it's a wonderful thing. It strengthens us and weakens them.'' 
They would say that I presume. Because when they have big surpluses 
with us, we become a cash cow for their hard currency needs and it 
weakens our country.
  They must surely be puzzled why no one in this country has the nerve 
and the will to say, ``Stop it. We won't allow that. We won't allow 
these huge trade imbalances. We expect and demand, not only reciprocal 
trading opportunities with you, open markets from you, but we demand 
some reasonable balance of trade.''

  Now, we were told just a few minutes ago that the reason we had a 
trade deficit is because we had a budget deficit. Simple, except that 
does not work. Our budget deficit is going way down, and our trade 
deficit is going way up. I know that is what they used to teach in 
economics. I used to teach economics. As I said this morning, I 
overcame that experience.
  But as the budget deficit has been going way down; the trade deficit 
is going way up. So how does it work then with those who have been 
claiming now for years that we simply have a trade deficit as a matter 
of calculation because we have had a fiscal policy deficit?
  Stephen Goldfeld once said that, ``An economist is someone who sees 
something working in practice and then asks whether it can work in 
theory.''
  Can we fail to observe here that the budget deficits are going down, 
way down. They are down 5 years in a row, but the trade deficit is 
going up? Can we fail to notice that or fail to explain it? Or do we 
simply cling to the same tired economic doctrine about trade that has 
been proven wrong?
  When I was a young boy, I had a neighbor who was a retired person. 
His name was Herman. And Herman used to order everything through the 
mail that he could get that promised him one thing or another. Now 
Herman had rheumatism. And I went over to Herman's one day, and he was 
sitting there with a box that was plugged into the wall with a cord. It 
was a wooden box with some wires leading to two metal handles. And he 
explained that he had purchased this from a catalog because it was 
supposed to cure his rheumatism. He was sitting in his chair there 
holding on to these handles. He held on to them for 6 or 8 months, I 
guess. It did nothing to help him with his rheumatism, but that was a 
box he bought because that he thought it would deal with his 
rheumatism.
  We have a lot of folks around here sitting with those metal handles 
because someone claimed that this trade strategy we have works. All the 
evidence suggests it does not.
  One of these days, one way or another, we ought to take a look at the 
evidence and decide when something doesn't work you ought to change it.
  The first law of holes is that when you are in a hole, you might want 
to stop the digging. When you see trade deficit after trade deficit, 
year after year, that reaches record levels--and this year the 
merchandise trade deficit will be very close to $200 billion--it is 
fair for us to ask on the floor of the Senate, does this trade policy 
work? Is this trade policy in the best interests of this country? Or 
can we, with more nerve, will, and courage, stand up for the economic 
interests of this country and demand and expect more of our trading 
partners, more in the manner of policies that will benefit and 
strengthen this country?
  Mr. President, I have consumed my time. The Senator from Delaware and 
the Senator from New York have both been courteous during this 
discussion. And we have had the opportunity to have a lengthy and, I 
think, good debate. And more will follow. We will have a vote on the 
motion to proceed, at which point, if that prevails, we will be on the 
bill itself. And those of us who care a great deal about this will be, 
at that point, allowed to continue.
  Mr. President, I yield the floor.
  Mr. ROTH. Mr. President, at the outset of this debate I set out my 
reasons for supporting fast-track authority. Having heard the debate 
and the point made by my esteemed colleagues, I want to distill what, I 
believe today, our vote is about.
  First, I submit that the question before this body is whether we will 
shape our own economic future or leave our fate in the hands of others. 
We must decide whether we will allow the President to take a seat at 
the negotiating table or force him to stand outside the room while 
others write the rules for the international economy.
  A vote for fast track is a vote for a brighter American future. 
Toward that end, this bill arms the President with the authority to 
open foreign markets and allow our firms to do what they do better than 
anywhere else on Earth: That is, compete.
  Second, the making of trade policy must be a full partnership between 
Congress and the President. The bill before this House ensures that 
Congress is, in fact, a full partner in the process. Indeed, it is 
difficult to concede of any other measure where we subject the 
President's action to such scrutiny and constraints. The bill requires 
the President to notify us in advance of his intent to make use of this 
authority. He must then consult prior to and throughout the 
negotiations up to and including comprehensive consultations 
immediately before initialing an agreement. If the agreement is

[[Page S11753]]

signed, we then proceed to develop the implementing legislation in 
consultation with the President.
  After all that, Congress still exercises a veto over the President's 
action by voting on the agreement and implementing bill. Those 
conditions are necessary to ensure the President fulfills the 
objectives set by Congress. They are also needed to ensure that 
Congress and the President do, in fact, speak with one voice on trade 
matters.
  I firmly believe that bill strengthens the role of Congress and the 
trade agreements process to an unprecedented extent and lets our 
trading partners know that the President is answerable to Congress for 
any agreement he may reach.
  Third, laying the foundation for our economic future will require a 
partnership here in Congress, as well. We will not make progress toward 
our common goal of providing for America's economic future without 
strong bipartisan support for our trade policy.
  I was extremely heartened by the vote yesterday and expect to see the 
same bipartisan support for the motion under consideration and for the 
bill itself. At the same time, the debate identified important issues 
that must be fully examined in order to sustain that bipartisan future.
  As chairman of the Finance Committee, I intend to ensure that the 
committee addresses those issues of critical importance to the well-
being of every American. I look forward to working with my colleagues 
toward this end. Nonetheless, I believe we must take the first step now 
to exert the leadership on trade that only the United States can 
provide. The President must have fast-track negotiating authority. I 
urge my colleagues strongly to support the motion to proceed.
  Mr. MOYNIHAN. Mr. President, I rise simply to affirm in the strongest 
terms that the chairman of the Senate Finance Committee has been 
faithful to his duties. He has kept a committee united, minus one vote, 
in an otherwise unanimous decision. He has been meticulous in his 
concern that American workers will have their interests pursued here, 
the environment will be looked after, but ladening these matters on 
trade negotiations will only ensure they will fail and not bring the 
benefits we desire.
  I want to congratulate him. We cannot do any better than we did 
yesterday, but let's hope we do as well.
  Mr. ROTH. I ask for the yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second? There is a 
sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on the motion to proceed to S. 
1269, the Reciprocal Trade Agreements Act of 1997.
  The yeas and nays have been ordered.
  The clerk will call the roll.
  The legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Alaska [Mr. Stevens] is 
necessary absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 68, nays 31, as follows:

                      [Rollcall Vote No. 294 Leg.]

                                YEAS--68

     Abraham
     Akaka
     Allard
     Ashcroft
     Baucus
     Bennett
     Biden
     Bingaman
     Bond
     Breaux
     Brownback
     Bryan
     Bumpers
     Chafee
     Cleland
     Coats
     Cochran
     Collins
     Coverdell
     Craig
     D'Amato
     Daschle
     DeWine
     Dodd
     Domenici
     Frist
     Glenn
     Gorton
     Graham
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Hutchinson
     Hutchison
     Inouye
     Jeffords
     Johnson
     Kempthorne
     Kerrey
     Kerry
     Kohl
     Kyl
     Landrieu
     Lautenberg
     Leahy
     Lieberman
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Moynihan
     Murkowski
     Murray
     Nickles
     Robb
     Roberts
     Rockefeller
     Roth
     Santorum
     Smith (OR)
     Thomas
     Thompson
     Warner
     Wyden

                                NAYS--31

     Boxer
     Burns
     Byrd
     Campbell
     Conrad
     Dorgan
     Durbin
     Enzi
     Faircloth
     Feingold
     Feinstein
     Ford
     Harkin
     Helms
     Hollings
     Inhofe
     Kennedy
     Levin
     Mikulski
     Moseley-Braun
     Reed
     Reid
     Sarbanes
     Sessions
     Shelby
     Smith (NH)
     Snowe
     Specter
     Thurmond
     Torricelli
     Wellstone

                             NOT VOTING--1

       
     Stevens
       
  The motion was agreed to.
  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I move to reconsider the vote by which 
the motion was agreed to.
  Mr. ROTH. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.
  Mr. NICKLES. Mr. President, first, I wish to compliment Senator Roth 
and Senator Moynihan for their leadership on this very important issue 
on fast track.
  I will announce--I think it has been disclosed to both sides--that 
will be the last rollcall vote today.

                          ____________________