Congressional Record, Volume 143 Issue 155 (Friday, November 7, 1997)

[Congressional Record Volume 143, Number 155 (Friday, November 7, 1997)]
[House]
[Pages H10334-H10340]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

{time} 2115
THE BENEFITS FOR THE UNITED STATES OF SUPPORTING FAST TRACK AUTHORITY

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 1997, the gentleman from Arizona [Mr. Kolbe] is recognized
for 60 minutes as the designee of the majority leader.
Mr. KOLBE. Mr. Speaker, tonight I come here to this House, along with
my colleague, the gentlewoman from Connecticut, to talk about an issue
that we believe is so critical to the future of this country; that is,
trade.
In the end, though, trade is not really about statistics. It is not
really about numbers. It is not, in a sense, even about jobs. It is
about the opportunities for jobs. It is about the opportunities that
American consumers have to make choices. It is about getting lower
prices for goods and better quality, of having competition. Yes, it is
about American leadership. It is about our place in the world. It is
whether the United States is going to lead on trade or whether we are
going to follow on trade.
The fact of the matter is there are very few countries in the world
that benefit as much from trade as the United States of America does. I
would just like to begin with this one chart, which shows how American
businesses and American workers have benefited by the fact that U.S.
exports have increased more than 3,000 percent in the last 35 years.
It is not that far back to 1961, when we look at the value of U.S.
exports, they were less than $100 billion, around $50 billion. It did
not reach $100 billion until about 1973. Then it has simply taken off
since then. The most steep rise is in the last 2 years, the last 4
years, since 1993. Even as Americans continue to worry about trade
deficits, we continue to have a very substantial growth in exports.
What does that mean? Does exports mean something to other than just a
number on a chart, other than a line on a chart? It means a great deal.
It means a lot about the growth. Growth, of course, means something
about the jobs that are available to Americans.
This chart demonstrates the difference between jobs in the total
civilian employment, which has been rising, this red line down here,
which has been rising fairly steadily. But if we look at the export-
related jobs as an index, this is on an index basis, we can see that
the export-related jobs are growing much more rapidly.
In other words, the great economy that this country is enjoying
today, the tremendous benefits that we all enjoy from having a low
unemployment rate, from having the ability to have a second car, from
rising incomes and wages, the vast majority of that has come from
export-related jobs.
These are not jobs that are poor-paying jobs, they are better, much
better, on average than the jobs that we have in the United States that
are service economy jobs. Export manufacturing and service-related jobs
pay, on average, about 16 percent more than a job that is totally or
solely domestic-oriented.
So I would point out to my colleagues who have engaged in this debate
about fast track, and whether or not the United States should continue
to promote more jobs, that the bottom line really is that there really
is not much choice. Our growth, our future, depends on creating these
kinds of jobs so that our children and grandchildren will have jobs in
the future. That is really what it is all about.
I know tonight we are going to want to talk a little bit, my
colleague and I, a little bit about what fast track really means, and
what it really means for America. But I think these charts right here
demonstrate why trade is so important for America.
We, more than any other country in the world, have benefited from the
tremendous increase that we have had in trade. Let me just show one
more chart here that I think is very interesting, because we often hear
that it is only the Boeings, it is only the Cargills, or Chryslers or
General Motors that benefit from trade. But the fact is that small- and
medium-size companies account for, in dollar volume, 30 percent of all
of our exports. And if we look at it in terms of numbers of companies,
96 percent of the companies that are trading overseas are companies
that have less than 500 employees.
So it is the small- and medium-sized businesses. Yes, they do not
sell as much as Boeing. No, they do not sell as much as Ford, Chrysler,
or IBM. But they, too, benefit from trade. Ninety-six percent of our
companies with under 500 employees are the ones that are engaged in
trade overseas. So it is not just the large companies, it is small
companies as well, and it is in middle America, it is in the towns of
Iowa and in the streets of Connecticut, and yes, in my State of
Arizona, where people benefit because they have the ability to engage
in trade overseas.
Mr. Speaker, I yield to the gentlewoman from Connecticut, Mrs. Nancy
Johnson, an individual who serves on the Committee on Ways and Means
and has been instrumental in helping to carry this argument to the
American people, and who I know has some thoughts about this.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I would like to have the
gentleman put the chart back up that shows just how much of America's
economy depends on exports, that first one. The U.S. exports have
increased 3,000 percent in the last 35 years. I do not think most of
the people in America are conscious that 30 percent of our economic
growth is the result of exports.
We saw in the gentleman's next chart how the number of jobs
associated with exports is growing far more rapidly than the number of
jobs associated with domestic sales. That is what fast track is all
about. It is about whether or not we are going to be at the table to
negotiate new markets for our exports.
I was thinking, as my friend and colleague, the gentleman from
Mississippi, Mr. Gene Taylor, spoke about the jobs lost in his district
to international competition, about the jobs lost in my district to
international competition, and nothing is more agonizing than to see a
factory close or a business fail, because that is not just a business
failure, that is people out of work.
But competitiveness has nothing to do with fast track. Those
factories closing has nothing to do with fast track. In fact, if we do
not negotiate access to new markets, if we cannot get American goods
into new markets, far more factories will close because the issue is
twofold.
The first issue is competitiveness; the second issue is open markets.
We have to be competitive. You go down to your grocery store, you go
down to your drugstore, you go down to the hardware, you go down to the
department store. Any store in every American community has imports and
domestically-made products.
America has to be able to sell the highest-quality, the lowest-cost
product right here in their own hardware stores and department stores
and grocery stores and pharmacies, and they also have to be able to
sell the highest-quality, lowest-cost product in every other nation in
the world in order for us to succeed.

[[Page H10335]]

Americans, I think, sometimes do not realize that of the 21 top
technologies in the world, the most sophisticated technologies, as the
Department of Commerce defines them, we are the low cost-high quality
producer in 20 of those 21 top technologies. That is why we saw
American exports increasing 3,000 percent. That is why we saw the line
going up steeply in recent years.
It is because in recent years we have recognized that to be strong,
to hire our people, to pay good wages, to have a rising standard of
living, we have to be the most competitive Nation in the world. That
means we have to have the highest-quality, lowest-cost product both
here and abroad.
We are proving we can do it. In my district we are shipping
sophisticated machine tools all over the world. We are shipping top
quality airplane engines all over the world. But we are also shipping
sophisticated lock systems all over the world. We are shipping Lego
toys made in my district all over South America. We are number one in
many, many, many product lines, and because of that, we are shipping
all over the world.
When we see those charts that show that more and more of America's
economic well-being depends on her sending goods abroad, and when we
see the number of jobs associated with producing those products to sell
abroad, it tells us that we have to have markets to sell into. The only
way we get markets to sell into is being at the negotiating table to
open those markets. That is all fast track negotiating authority is all
about. It is just giving our government the authority to be at the
table, to make the deal, to open other people's markets to American-
made products.
I want American inventions to produce American jobs to make American
products to sell in every market in this world. We cannot get there
unless America is at the table negotiating to open markets for American
inventions made by American workers shipped by American companies into
every market. That is what fast track authority is about. It is about
negotiating market opportunities for American products.
Remember, 96 percent of the world's consumers are in other countries.
Only 4 percent of the world's consumers are here. So if we want to see
more goods sold, and we want to see a rising standard of living in
America, we have to not only have competitive products to sell into
those markets, but we have to have trade agreements that open those
markets to American products.
Mr. KOLBE. Reclaiming my time, Mr. Speaker, I think the gentlewoman
has made a very good point, and one I think we need to explore a little
bit more. The gentlewoman serves, of course, on the Committee on Ways
and Means, which has the primary jurisdiction over trade issues.
I have listened to a lot of these discussions that have gone on on
the floor here, and I think there has been a lot of misinformation
about what fast track really is about. So before we come back to some
of these figures on trade, maybe we ought to just talk a little bit
about what fast track really means.
Fast track is a process. A lot of people right now are talking about,
oh, we do not want to get into another agreement. We may not get into
another agreement. That is down the road. But fast track says whether
or not we are ever going to be at the table talking about these trade
arrangements and trade agreements. Because the fact of the matter is,
the world is moving ahead on trade. Whether we are there or not, they
are going on and moving ahead.
We have scheduled, and I am sure the gentlewoman knows, we have
scheduled in this coming year talks in Geneva, where the World Trade
Organization is located, and we are one of the 150-plus members now of
the World Trade Organization. Talks are scheduled to go on on
intellectual property. We are the leading exporter in the world of
intellectual property. We are talking about computer software, we are
talking about all the elements of movies and records and tapes and CDs,
all those things in which we are a tremendous exporter of that
intellectual property.
Now, the rules governing that and protecting our intellectual
property and making sure we can trade that overseas, those are going to
be decided. If we are not able to sit in those negotiations, we are
going to be out of it.
Mrs. JOHNSON of Connecticut. Mr. Speaker, if the gentleman will yield
further, we often talk about America as the entrepreneurial society. We
talk about ourselves as inventive, as creative. There is absolutely no
question but that we invent more new products in America than any other
nation.
We are an inventive Nation. Consequently, we invent a lot of great
ideas and great products that other countries say, ``Hey, great
product. We are not going to put the research and development in it,
they already did it. We are going to just counterfeit it, copycat it,
produce it, and undercut them in price,'' because, of course, they did
not have to carry the costs of research and development.
We are the most inventive Nation. We create the most new products. We
want the whole world trading community to have a high standard of
protecting inventions, protecting patents, protecting copyrights,
because those are American jobs. If we are not at the table to make
sure that that standard is high and that other nations have to come
into compliance promptly, then other nations who want the standard low
and compliance to take many, many years will win.
And who loses? The inventive Nation that creates the new products,
because we are not protected against other countries counterfeiting our
products, copy-catting our products, back-engineering our products, and
then undercutting us in the market.

{time} 2130

So invention means we want to be at that table to drive the American
standard of intellectual property rights protection, as we call it, to
be the international standard. And that is why we need to be there, we
need negotiating authority. We have to drive those decisions to
recognize the high standard that invention and creativity and American
ingenuity have always created for the market and ought to be protected
worldwide.
Mr. KOLBE. Reclaiming my time, I appreciate what the gentlewoman from
Connecticut has just said. As she well knows, at the other end of the
technology sale, you might say, is agriculture, that we have a very
technologically innovative agricultural industry. At the other end is
agriculture.
We are, again, the largest exporter of agricultural products in the
world. Those talks are scheduled to take place in the year 1999 in
Geneva. And the question is, will the United States be there pounding
on the table, hammering at the door, demanding that other countries,
Europe in particular, which has very high protective tariffs against
our agricultural products, which we can and would love to sell to
Europe and the rest of the world, whether we are going to be able to
get those tariffs lowered, whether we are going to be able to sell more
of our products overseas, more wheat, more soybeans, more of the grains
and the rice and all the specialized products.
Mrs. JOHNSON of Connecticut. More dried milk if you are a dairy
State.
Mr. KOLBE. And more dried milk if you are a dairy State. That is
exactly right.
So whether it is high technology at one end or whether it is
agriculture at the other end, those talks are very vital to us.
And then finally, in the year 2000, investment services. The
gentlewoman from Connecticut [Mrs. Johnson] comes from a State where
this is extraordinarily important. Insurance and investment and
brokerage services, those are absolutely vital. Financial services are
absolutely vital. The United States again is the leader.
And we have gotten the World Trade Organization to agree that these
are the three areas that are going to be the next areas for discussion
for lowering the barriers to our trade in goods and services with the
rest of the world.
And now, if we turn away from fast track, if we deny fast track to
the President, and I think we need to explain exactly what that means
``fast track,'' but if we deny that, we are saying to the rest of the
world, we are not going to be at the table, we are not going to be
discussing this or negotiating on behalf of the United States.
I wonder if the gentlewoman from Connecticut [Mrs. Johnson] would
just,

[[Page H10336]]

since people might be wondering, what does she mean when she says
``fast track''? If I have somebody out there asking this question, I
wonder how the gentlewoman from Connecticut [Mrs. Johnson] would
answer: So why do we need fast track in order to sit down at the table
and negotiate with the world, with the European Union, or with any
other country?
Mrs. JOHNSON of Connecticut. This is why we need fast track. Really,
it is so very simple. We think of sitting down together as a family and
we have a dispute and a problem, and one kid wants one thing, one kid
wants another thing, one kid wants another thing, dad wants another
thing, mom has another opinion. And we get together and decide, we are
going to do this much because Jenny wants it; we are going to do this
to consider Don's concerns; we are going to do this to consider the
twins' interest, and mom and dad. And we get a package, and we all
agree. It is not everything Jennifer wanted. It is not everything Don
wanted. It is not everything mom wanted. It is not everything dad
wanted. And the twins are kind of miffed because they did not get X, Y,
or Z. But they all got something and they all could see that, while
they got something, the other member of the family got something; and,
so, this agreement was good for everyone. It was not everything anyone
wanted, but it was something everybody wanted and would serve
everybody's interest.
Now, everyone has to commit to that agreement. If they do not commit
to that agreement, it falls apart. Well, when we go to negotiate with
10 other countries or 20 other countries about how agriculture products
are going to move in the world market, everyone has to trust that
everyone at the table means what they say and is going to deliver on
the agreement.
And so, at the end, and this is always the way it is in international
agreements, it is the way it is in families, it is the way it is at any
level of negotiations, whether it is union or whether it is not union
or wherever it is, at the end, there are a lot of things we can agree
on, and then there are some things that are hard, and at the end there
are a few things that are very, very hard.
And people have to make hard decisions about what is most important
to them, what is most important to you, and then you strike the deal
that you know is in the end best for everybody and will serve
everybody. It is at that point, it is at that point when we put the
final nail in the deal, the final seal on the passage, that everyone
has to know everyone who is part of that deal will be able to deliver.
If our President does not have fast track authority, then he will not
be able to deliver. The other countries that are parliamentary
democracies automatically can deliver because their prime minister can
just do whatever he has negotiated. Our prime minister, our President,
has to bring the package back and we have to pass new law.
Now, can the new fast track bill that came out of the Committee on
Ways and Means, on which I serve, recognizing that we do want that
negotiator to commit to something that we will not pass? It is true we
could defeat it, but we want them to agree to something that will serve
our interest and that we can support.
So in the new legislation, we have structured a lot of consultation,
a lot of involvement by elected Members of the House and Senate, so
that, at the end, that deal will be struck in a way that will not only
be in America's interest but broadly supported by America's
representatives.
Mr. KOLBE. I think my colleague has given an excellent example of
exactly how fast track works when she is talking about countries and
how it relates to the same kind of thing with families.
The bottom line in a government setting is that no one wants to go
into a negotiation and put their cards on the table and get the best
deal if they do not know at the end that the deal is a done deal.
Now, they recognize that they have to go back to their countries and
get approval of it. But they do not expect to take that agreement back
to the country and have it picked apart, amended, changed, and added
to. And that is exactly what would happen if we did not have fast track
authority. It becomes like any other bill that is introduced in
Congress; it gets amended, it gets changed.
Now, fast track does allow the Congress a very significant role in
the whole process of this negotiation. We are involved, and my
colleague's committee particularly is involved, in the consultation
throughout all of these negotiations so that at every step of the way
we know how the negotiations are going and we can say, this is not
going to fly, Ambassador Barshevski, who is our trade representative,
this is not going to fly if you bring this back, or, you need to add
this to it, or, you need to do that. So we do have a role as the
process goes forward.

We have used this fast track, I think the gentlewoman from
Connecticut [Mrs. Johnson] can correct me if I am wrong, but we have
used this fast track procedure for more than 20 years now since, I
think, 1974 when we first added it after the Tokyo Round, because we
found at that point that trade was becoming not the simple thing of
just lowering tariffs, but there were other things that had to be done.
There were nontariff barriers, complex issues that had to be dealt
with, and these discussions became much more complicated than they had
been before.
So we went to this process of fast track. And every President since
Richard Nixon, that means Jimmy Carter, Ronald Reagan, George Bush, and
President Clinton, well, not President Clinton, he has not had fast
track authority given to him, but every President up to President
Clinton has had fast track authority granted to that President. Now we
have been without it for 3 years, and we have not been able to engage
in the kind of serious negotiations that we would like.
I do not know if my colleague would agree, but I think we would find
ourselves at a tremendous disadvantage if we do not have this fast
track authority.
Mrs. JOHNSON of Connecticut. One of the things I think is not being
noticed, and of course it is because most Americans do not have time to
notice, they are busy and we are not at the table, but let me tell my
colleagues what happens when we do not have fast track authority,
because it is happening to us now.
We do not have fast track authority, so we cannot negotiate with a
lot of the South American countries that have traditionally bought
American products, like to buy American products, are disposed toward
doing business with us, but in the last couple of years have been
making deals with other people because we are not positioned, we do not
have the negotiating authority that they can trust.
So, recently, Canada negotiated a very good trade agreement with
Chile. It meant that there would be no Chilean tariffs on their
communications equipment. That dropped an 11 percent tariff under
Chilean law on Canadian communications equipment. Not long ago, we
lost, an American company lost a very big deal in Chile, not because
they were not the top quality producer, not because they were not the
lowest cost producer, but because when we added their price of their
quality product and the 11 percent tariff, they were higher cost than
the Canadian company that was higher priced but did not have the 11
percent tariff.
So our failure to have negotiating authority is already losing us
customers in South American nations. And if that happens too much, we
lose jobs. We do not just lose customers, we lose jobs.
Mr. KOLBE. I appreciate what the gentlewoman from Connecticut [Mrs.
Johnson] is saying. And I think that is important, that we keep in mind
that we really are not just talking about some kind of abstract thing,
we are talking about people who are out there in American companies
every day, union people, nonunion people, working, making widgets,
making all kinds of manufactured goods, providing all kinds of
services, and these goods are being sold overseas.
My colleague talked about the example in Chile. And I would like to
point out in a kind of an aggregate or macroeconomic sense the kinds of
opportunities that we lose if we are not able to engage in these trade
negotiations. Here is just a list of some of them.
For example, the Latin American trade negotiations have roughly a
$300 billion import market. That is exports

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from the United States, imports into Latin America. The President of
the United States called all the Latin American countries, all the
countries of the western hemisphere, together for a summit, as my
colleague knows, in December of 1994. And we made a commitment. We got
a commitment to come to a free-trade agreement with all the American
countries of Latin America, Central America, North America by the year
2005.
These are countries that heretofore had been largely closed. Many of
them were not democracies. They had import substitution kinds of
economies. They were completely closed. They were poor economies. They
were not doing well. We did not have many markets there. But now the
world is changing, and these countries are changing, they are growing,
they have growing economies and growing hunger for American exports.
And there is a tremendous opportunity out there. And the question is,
are we going to try to sit down with those countries and negotiate a
trade agreement for the Latin American countries, $300 million worth?
That is just the first one here.
The agricultural negotiations that we talked about earlier with the
World Trade Organization are worth roughly $600 billion in the global
market.
Mrs. JOHNSON of Connecticut. $600 billion.
Mr. KOLBE. $600 billion that we are talking about that are available.
Mrs. JOHNSON of Connecticut. Our whole economy produces $1.5 trillion
of goods each year. So $600 billion is more than a third of our whole
economy.
Mr. KOLBE. Here we go here with WTO, the procurement negotiations. We
are talking about government buying goods, whether it is some countries
are not completely privatized, they have state-owned aircraft
industries, or, of course, we are talking about defense industries and
other things, telephones and telecommunications. We are talking about a
trillion-dollar global market that is available to us there that,
again, if we are not going to engage in these procurement negotiations,
which is also scheduled to take place in Geneva, it does not mean we
will not be able to sell anything. I do not think any of us would try
and suggest that nothing is going to be sold. But we will not have the
access to this market that other countries will have that are going to
have the rules that they are going to devise these rules.
Mrs. JOHNSON of Connecticut. Can we make that a little clearer. A lot
of countries have state-owned, state-operated companies that produce
telephone equipment, transportation equipment, energy, and we are
moving in the world toward privatizing those companies and letting
anyone in the world compete.
If we are not allowed to compete, we do not get those jobs, we do not
get that production. If we are allowed to compete, we have to be very
good to get the deal. But we need to be able to be there at the table,
and if we are not at the table, then those countries who like having
that government control, even if it produces a higher-cost product for
their people and lower quality, they like the control.
So if we are not there to push them and say, open that market, let us
have a chance, let everybody have a chance, and it will make your
industries better and raise the standard of living for your people, if
we are not there to do that, then at the table we only have those
countries who want a lower standard. And that is bad not only for our
country, but for the world.

{time} 2145

Mr. KOLBE. The gentlewoman is absolutely right. Just two more that I
would like to point out when we talk about fast track, the lost
opportunities really pile up. Here we have got the world trade
negotiations on services which are worth $1.2 trillion. Finally we have
got the Asia Pacific, this is the APEC. Again President Clinton has
made a commitment with the Asian countries that we are going to try to
have a free trade agreement by 2010 that is worth $1.7 trillion. The
bottom line is we add all these up and we have a cumulative effect of
nearly $5 trillion, just in these areas of negotiations.
These are not just fantasy. These are not wannabes, these are not
maybes. These are things that are scheduled to occur, negotiations on
these kinds of trade opportunities. We will lose, not all, but we will
lose a significant part of this if we are not able to have a trade
agreement that favors us, that gets the things that we need in order to
have access to these markets. I think the gentlewoman would agree with
that.
Mrs. JOHNSON of Connecticut. They are scheduled to occur and they are
going to occur. These negotiations are going to go on whether we pass
fast track or whether we do not pass fast track. Just last year, just
in one year, we lost $2.3 billion due to copyright piracy; that is,
people just outright counterfeiting American products, copycatting our
products, ignoring our copyrights. That is just one year, $2.3 billion.
These negotiations are going to go on. Who is going to be at the table?
We are going to be at the table, too. But at the end when the deal has
to be done at the end, when those hard decisions are made, those
countries who pirate our products, who make a fortune off our research
and development, who steal American jobs from our people, they are
going to be able to do that final deal, and we are not. The deal they
strike is going to be for a lower level of protection and many, many
more years for countries to come into conformance. If we are at the
table, we can say, ``Uh-uh.''
People who invent the idea have the right to own that idea, and their
employees have the right to the jobs to produce that product, and we
have the right to support our people as a result of our inventiveness,
and we will set that standard higher and we will require compliance
sooner if we are there to drive the final deal. If we are not, it will
be our loss.
Mr. KOLBE. The gentlewoman has made a point that suggests something
that I think is very curious in this debate that we have been having
about trade and about fast track. I know the gentlewoman has talked to
many businesses and plant managers and supervisors all over her
district as I do throughout Arizona and around this country when I
travel. American business is not afraid to compete. We are able to
compete. We want to compete. They want to get out there and compete. It
strikes me as very curious that some of our colleagues here in Congress
seem to be a lot more fearful of this competition than our own
businesses and, frankly, I think our own workers are. I have never met
a worker in one of my factories in Arizona that was not willing to
compete. They know they can make good products. All they want to do is
have a fair shot at selling that product overseas. That is what these
trade negotiations are all about.
I just note, point out to the gentlewoman here, when we talk about
the U.S. and its role in trade, it is overwhelming. Our trade, our
value of our goods and services that we export in 1996 is $849 billion.
That is about a sixth of our total GDP, and it is a huge amount. This
is just the exports, not the import side of it. Compare that to other
countries like Germany at 609 and Japan at 468. We are so far and away
the biggest exporter in the world that we still dominate the world. Yet
some people would say, gosh, we are afraid of this, we are afraid of
trying to expand these markets. If we do not have fast track, I can
tell the gentlewoman that the happiest people in the world are going to
be the European countries when it comes to the agricultural
negotiations. They have been resisting opening up their markets for
years and they will be delighted that the United States will not be
there in Geneva pounding on the table insisting that those negotiations
be opened up.
Mrs. JOHNSON of Connecticut. They will be delighted. And yet just in
Connecticut, just Connecticut, manufacturing has increased. Connecticut
manufacturing exports, $500 million more just during the first half of
1997 over the first half of 1996, $500 million, a half a billion
dollars more in manufactured exports went out the door from Connecticut
plants in just the first half of 1997. If you are expanding production
at that rate, you are hiring people. And if you are selling abroad,
your wages are higher than domestic companies. So in Connecticut, we
are selling more abroad, the jobs we are creating in that sector, not
all jobs. I absolutely acknowledge that, but more and more jobs are
associated with exports and those jobs on average pay 16 percent more.
So if you want your kids to do

[[Page H10338]]

well, you want to live in a State that exports a lot so your kids can
get into exporting industries so they can have the opportunity to have
higher paying jobs and good livings.
Mr. KOLBE. I think that the gentlewoman has suggested something that
I think is indicative of the problem that we face in trying to make
this appeal on trade and make the sale. I am sometimes puzzled as to
why it is so difficult for us to make this case. I think one of the
reasons is that whenever there is a plant that closes or moves some of
its operations to an offshore setting, which by the way is not
necessarily bad because they may be sourcing many of the materials from
this country itself, but when they move that down there, if a plant
closes in Missouri and they move the assembly plant to Mexico, that is
a big headline and 200 jobs get lost because a plant moved to Mexico,
or as we have seen this last week where Fruit of the Loom announced it
is going to move some of its, where they manufacture underwear, they
are going to move some of that to Mexico and to some of the Caribbean
countries and jobs are going to be lost. Yes, I agree that is tough.
That is tough for the people who are losing those jobs. But what never
makes the headlines is the fact that on that same day, all over the
country, hundreds of companies hired new people, one, or two, or 20 or
50 because they got some contract to sell some product into Mexico or
to China or to Germany or elsewhere. There is never a story about that,
because we do not see it. It is not visible. You do not open a factory
just to sell to another country. But when you close a factory and move
it to another country, it is a different story.
Yet the fact is the doomsayers that we hear from people who are
against fast track, who are against this kind of opportunities, these
trade opportunities for America say that they do not trust us, they do
not believe that Americans can compete, businesses believe they can
compete and since 1993, since the last time we had fast track authority
for the NAFTA agreement and the GATT agreement, we have created 12
million new jobs in this country.
I want to talk a little bit in the remaining time about NAFTA,
because that is one of the things, the North American Free-Trade
Agreement, that Members sometimes say, ``Oh, this is just all about
NAFTA.'' We know that fast track is not about NAFTA, but it is a
curious thing that since the North American Free-Trade Agreement went
into place, we have, as the gentlewoman knows, we have provisions in
that legislation that is called trade adjustment assistance where a job
that is lost, is certified it is lost because the factory moved a job
or a plant or closed the plant and moved it overseas because of the
trade agreement, they qualify for special assistance. A total of
125,000 jobs have been certified as having been lost because of that.
You say 125,000 jobs seems like a lot, but when you remember that
during that same time we created 12 million new jobs, you begin to see,
well, maybe we benefited a lot from this because a lot of these new
jobs were coming because we were selling more wheat to Mexico, we were
selling more automobiles to Mexico, we were selling more petroleum
drilling equipment to Mexico, and so forth. So the bottom line is that
the numbers of the aggregate numbers are overwhelmingly in favor of
trade. We are at the lowest unemployment level that this country has
had in years. We are at the highest wage growth, personal income growth
that we have had in years. This comes because we have had trade. I know
the gentlewoman has worked hard on these issues in Connecticut with
some of her companies and trying to encourage more trade and exports. I
think we agree that that really is the future for the people that we
represent to be able to have these opportunities for trade.

Mrs. JOHNSON of Connecticut. One of the hardest things today and all
of us feel it in every one of our districts, it is really hard to see
plants that really are not producing a top quality good gradually have
to lay people off and go under. But that has nothing to do with
negotiating authority. It has to do with the fact that consumers today
demand very high-quality products at a reasonable cost and they have a
choice of products from all over the world. For America to be
competitive and American companies to be successful, they have to be
the best and the lowest cost in their own local market, around the
Nation and across the seas. The exciting thing is that they have risen
to this challenge. It took years to do it but I can tell the gentleman,
I represent the best workers in the world. They do top quality work
individually, they work together well as a team, they day in and day
out, you walk into any factory in my district and they can tell you
stories about how the latest move that some group in that factory has
made to identify by thinking, by working together, to identify a way to
cut costs, improve quality, improve productivity together, same men and
women, same hours, same equipment, thinking smart, working as a team,
and doing a far better job than we used to do. It is truly exciting and
we are frankly in so many areas absolutely the best. So we are
competitive. One of the things that makes me saddest in this whole
trade debate is the idea that somehow trade policy sends jobs abroad.
Any American company could establish their factory here or abroad 10
years ago, 5 years ago, 1 year ago, today. They will have that right
tomorrow, they will have that right 10 years from now. If they were
going to go to the lowest wage company, because some of my friends say
to me, ``Well, gee how can we compete with 25 cents an hour?'' We have
been competing with 25 cents an hour. We do compete with 25 cents an
hour, and we win. Why? Because we are far better. We produce a far
better product at a reasonable cost. So that is not the issue.
Companies establish plants abroad for only two reasons: First, to feed
their high-technology production capability here in America, and
sometimes because trade laws force them sometimes to sell in a market,
you have to be there.
I had a company in Connecticut that had a plant in Mexico because
under the old rules, they had to produce in Mexico to sell in Mexico.
As soon as we passed NAFTA, they closed their plant in Mexico and came
home. Why? Because they could produce better here. Now with the free-
trade agreement, they could sell into Mexico without having a factory
in Mexico.
Mr. KOLBE. So despite the fact that the wages they would have had to
pay in Mexico, or they did pay in Mexico were a fraction, maybe a tenth
of the amount.
Mrs. JOHNSON of Connecticut. Much lower. Because Connecticut is a
high-cost State, and they pay high wages.
Mr. KOLBE. So they were paying a tenth as much in Mexico. They moved
the production back to Connecticut. The answer is because of the
productivity that they have.
Mrs. JOHNSON of Connecticut. You bet they did. Because it was a
better work force, and a higher quality product.
Mr. KOLBE. And more capital investment and more technology. That is,
of course, what countries like the United States have. That is the
advantage that we have.
Let me just tell the gentlewoman my example that I always use is the
copper industry in my own State. Copper was riding high back in the
1960's and 1970's and right up to 1982 when the world copper price
collapsed. Half the mines in Arizona closed as a result of that. The
other half were struggling selling copper at below the market price, so
they were losing money with every pound of copper that they were
selling. They knew that in order to stay competitive, they had to make
some big changes. What they did was they put a tremendous investment in
capital into those mines. We now have the most technologically advanced
copper mines in the world in Arizona. Everything is computer
controlled, they use robots, they use all kinds of things. The bottom
line is yes, there is half the people working in the copper industry in
Arizona but there is still a copper industry and they are producing
more copper today than they were in 1982 with less than half of the
number of people. The result is they can compete and they can
outproduce in copper Chile, which is a medium-priced country in terms
of wages, Zambia which is at 25 cents an hour or Zaire or Guinea or
those other countries which are at the very rock bottom there. We can
still beat them because we have much more productivity. Being able to
invest in capital and

[[Page H10339]]

in technology and have a well-trained work force is really the key to
being able to compete.

{time} 2200

But I have not found any American companies that are afraid of that.
They all want to be able to do that.
Mrs. JOHNSON of Connecticut. Well, I agree they are able to compete,
but they have to be able to get into a market.
Mr. KOLBE. They have to get into market. They cannot do it if we do
not----
Mrs. JOHNSON of Connecticut. Right.
Mr. KOLBE. Agreements with other countries and let them in.
Mrs. JOHNSON of Connecticut. Right, under the old rules, Mexico had
tariffs of 20, 30 percent on a lot of it.
Mr. KOLBE. In some cases it was as much as 100 percent.
Mrs. JOHNSON of Connecticut. Right, so if you had 100 percent
tariffs, I do not care how good you were producing in the United
States, you could not sell in Mexico with 100 percent tariffs.
Now, under NAFTA, Mexican tariffs have come way, way down. Yes,
American tariffs have come down a little bit, too, but they were low to
begin with. Now they are a little lower. Mexican tariffs were high to
begin with. Now they are down low. Some of them are completely wiped
out. One-half are wiped out. Others are there, but they are much
smaller. So now you can sell into Mexico, and you can compete. You do
not have to be there to produce.
So lower tariffs means jobs stay in America.
I gave you earlier that example of the Canadian company that got the
big deal in Chile, though the American producer was lower cost and
higher quality. But we did not have the tariff relief. We had to pay 11
percent tariffs. So we lost the deal. If we had the same tariff relief
that Canada had had, if we had been able to be at the table and
negotiate those tariffs down like Canada did, we would have gotten that
order, and those orders feed jobs.
So what is sad about this fast track deal is that those who oppose
fast track think they are protecting American jobs when actually you
protect American jobs by being at the negotiating table, opening
markets and driving international standards to American standards,
because American standards are higher in every area than most of the
rest of the world.
So if we can open markets, we can compete. If we open markets, our
competitive companies go in, sell goods, and that allows them to hire
and create jobs.
So if you care about the jobs of your kids, you have to be in lots of
markets, because remember, again, 96 percent of the consumers are
outside the United States. So if your kids are going to have jobs, you
have got to be able to sell into all the markets of the world, and that
is what we are talking about. We are talking about letting the
President be at that table with a power to negotiate agreements that
are good for American producers. And if they are good for American
producers, they are good for American workers because they will sell
American goods and create American jobs and pay American salaries to
good, solid Americans to sell American products made by American
people.
It is exciting. It has meant that we are a very prosperous Nation. It
will bring prosperity to our children, and without fast track the
possibility of a continual rise in our economic growth is truly, truly
compromised.
I do not want to be too pessimistic, but one could paint rather grim
scenarios about economic growth without fast track.
Mr. KOLBE. Well, I think the gentlewoman is absolutely right, and I
think we do not want to be apocalyptic about that, and certainly the
world will go on, and the United States will continue to trade, but we
will trade on much more difficult terms and not as well as we would do
if we have trade agreements, and those can only come about if we have
fast track authority to allow the President to negotiate those trade
agreements.
We have been talking a bit this evening about NAFTA, and I just want
to take a minute to talk about it, because if you listen to some of the
opponents of fast track authority, you would think that the North
American Free Trade Agreement, or NAFTA as it is called, that links the
United States, Mexico and Canada in a free trade agreement is the only
agreement we have ever negotiated under using the fast track authority.
But the fact is we have had four other critical agreements, and those
are the 1979 Tokyo Round of GATT talks, General Agreement on Trade and
Tariffs; the 1985 U.S.-Israel Free Trade Agreement; the 1988 U.S.-
Canada Free Trade Agreement; and the 1994 Uruguay Round of GATT talks.
Now in that last round, of course, GATT became the World Trade
Organization, so we talk now about WTO.
But those four rounds, all of which made significant breakthroughs
for the United States in the areas of not just of tariff barriers, but
of allowing us access to different markets, were absolutely critical
for us.
Now, I want to just focus for a moment on the North American Free
Trade Agreement in Mexico because a lot of people shy away from this
and say, oh, we should not talk about that, and it is very important to
understand that this fast track authority is not about Mexico, it is
not about NAFTA, it is about allowing the President of the United
States authority to negotiate all kinds of trade arrangements.
But I still take on the issue of NAFTA and confront it head on
because I believe that when the book is written, and I think some of it
is already being written, it will be demonstrated that the North
American Free Trade Agreement has been a good agreement for not just
Mexico, but for the United States as well.
Yes, it is true that we had a trade surplus before NAFTA, and today
we have a trade deficit with Mexico. But it was not NAFTA that caused
that. It was the collapse of the Mexican peso, where all of a sudden
after the collapse of the Mexican peso that had nothing to do with
NAFTA and everything to do with some ill-founded policies that were
followed by the previous administration in Mexico and the mishandling
of a currency devaluation, the collapse of that peso, the result of
that is that suddenly anybody trying to buy something when they are in
Mexico from another country is going to pay a lot more in dollar terms,
and anybody outside of Mexico buying something in Mexico is going to
pay a lot less. And so the Mexican exports to the United States went
up, and U.S. imports to Mexico or exports to Mexico went down by
comparison.
But let me just give a couple of facts to show why I think we can say
that NAFTA has worked in terms of leveling out the dips and making it
less of a slide than would otherwise be the case, because in 1982 we
had a similar, almost equal, amount of devaluation of the Mexican
currency. When that occurred in 1982, U.S. exports to Mexico dropped 49
percent; repeat that, 49 percent our exports dropped, and it took us 7
years for us to restore the level of exports to Mexico that we had
before 1982.
In 1995, when the peso was devalued, that time about the same amount
of devaluation, that time we had a 9.4-percent drop in U.S. exports to
Mexico, and it took us 1 year to get back up over the level of exports
that we had before that time.

And so I think we can see that the NAFTA agreement, the reason for
that, people say, well, so what does NAFTA have to do with that? Why
was that the case? Well, what happened in 1982 was that when you did
not have an agreement, when they have a peso devaluation, a country
tries to trade itself out of that, they slap on import quotas, the
hundred percent tariffs, licensing requirements, all the things that
make it impossible for an American exporter to get their products into
Mexico while they are able to export, take advantage of the peso
devaluation and export to the United States.
With NAFTA, Mexico, and with other free trade agreements, the other
countries cannot do that. They are not able to resort to that kind of
thing in order to what I would call beggar thy neighbor approach, and
so as a result of that, Mexico was, although our exports to Mexico
dropped, those that were able to get the money, to get their hands on
the cash in Mexico, were still able to buy. And so our exports to
Mexico did continue. They dipped, but within 1 year we were back up
over where we had been before.

[[Page H10340]]

So I would say, quite frankly, to my colleagues who decry the North
American Free Trade Agreement, the NAFTA agreement, I would say, you
are wrong, it has worked, it has done precisely as we wanted.
And I will yield, and we only have just about 5 more minutes, and we
are going to close up, and I will yield to you, and then I will end.
Mrs. JOHNSON of Connecticut. Let me just mention that one of the big
issues in the NAFTA negotiations was the failure of Mexico to enforce
their own labor laws. They look good on paper, but they did not enforce
them, and we have learned something from those NAFTA negotiations.
In those negotiations we made what is called a side agreement, and as
a result of that, Mexican investment in enforcement of their own labor
laws has increased 250 percent. In other words, we forced them to try
to start enforcing their own laws, which were good on paper and lousy
in reality, and in this new fast track authority we specifically
include the right for the United States to negotiate the enforcement of
domestic laws in labor and environment because lots of countries have
good-sounding laws, but they do not enforce them, and that does make it
harder for us to compete. So we have now expanded this negotiating
authority to include enforcement of domestic laws because we did learn
from those negotiations in Mexico the need for that breadth.
So this time we are not only asking for the President to have
negotiating authority, but we are asking for that authority to reflect
the experience that we have in what defends America's interest and what
strengthens our own future and creates opportunity for our people.
Mr. KOLBE. I think the gentlelady's comments are right on target, and
I think they summarize exactly why America needs to have fast track
authority, why the President of the United States needs fast track
authority, why we need to be able to pursue opportunities.
Opportunities for trade means opportunities for jobs for Americans.
It means opportunities for American consumers. It means opportunities
for our children and opportunities for the future. None of us in this
body should be afraid of the future. The American people are not afraid
of the future.
And this issue about fast track is not a partisan issue. It is an
issue about whether we are going to lead, lead for ourselves and lead
with the rest of the world.
And Republicans and Democrats alike have spoken out strongly on the
issue of free trade, and I would like to simply end tonight with some
quotations that I think very well express the importance of why we need
to have these kinds of trade agreements.
The current Secretary of the Treasury, Bob Rubin, said this: We are
now at a crossroads. The question before Congress is whether to grant
the President fast track so that we can continue to open markets,
expand trade and raise standards of living here at home, or to refuse
and watch as U.S. workers and businesses lose out in access to the
opportunities in the global economy.
Brent Scowcroft was a White House national security adviser in
President Reagan and President Bush's administration, and he said this:
We cannot say we will lead on NATO and regional security, but not on
trade. We cannot say we will lead on democracy and human rights, but
not on trade. And we cannot say we will lead on the environment, but
not on trade.
Senator Dole, Robert Dole, the former majority leader and Republican
Presidential nominee this last campaign, said, global trade is
inevitable and Presidential fast track authority is indispensable if
America is to lead the community of nations into the next century.
And finally, the President of the United States, President Clinton,
has said this: We owe it to the working men and women of America and
around our entire country to level the playing field for trade so that
when our workers are given a fair chance, they can and they do
outcompete anyone anyplace in the world.
My colleagues, I appreciate my colleague from Connecticut
participating with us this evening. I think it is very clear where the
merits of this argument lie. We are confident about America's future,
and I think we are confident that fast track authority will lead us
into a brighter future for our children.

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