[Congressional Record Volume 143, Number 160 (Thursday, November 13, 1997)]
[Senate]
[Pages S12552-S12554]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                RECIPROCAL TRADE AGREEMENTS ACT OF 1997

  Mr. GRASSLEY. Mr. President, on another matter, I want to speak for a 
minute on the failure of fast-track trade negotiating authority for the 
President of the United States and the action of the House of 
Representatives this past weekend.
  Last week, the Senate voted by a margin of 68 to 31 to proceed to 
debate on the fast-track bill. I believe without a doubt it would have 
passed here and would have been passed by a very huge bipartisan 
margin. But the leadership in the House decided not to bring the bill 
to a vote and risk a defeat on such an important issue for our Nation. 
The leadership of the House decided that on the advice of the President 
of the United States because he could not deliver even 20 percent of 
the Democrat vote, the vote of his own party, in the other body.
  Unfortunately, the result is the same. The President of the United 
States still does not have the negotiating authority that every other 
President since Gerald Ford has had. How ironic that the Democratic-
controlled Congresses in the past granted fast-track authority to a 
Republican President--such as Gerald Ford, Ronald Reagan, and George 
Bush--and yet Democrats in this Congress refuse to give the President, 
a President from their own party, the same authority. Who would have 
thought that the President could not convince one-fifth of his own 
party to vote with him on such an important issue? This was a big win 
for leaders of labor unions in Washington. They proved that they have 
more influence with Democrats in the House of Representatives than the 
President of the United States does. But it was not a win for the rank 
and file union members, the workers who manufacture the products or 
perform the services that would be exported throughout the world.
  It was not a win for the farmers of America either who increasingly 
depend on foreign markets for a big share of their income. It was a big 
loss for working men and women of this country.
  I know some may question my qualifications for drawing these 
conclusions. You might say, how can a Republican Senator substitute his 
judgment for that of labor leaders? So I would like to read a few 
quotes from a Washington Post editorial of November 11.
  As you know, Mr. President, the Washington Post has often taken the

[[Page S12553]]

side of labor against Republican policies. So I believe they might have 
some credibility on this issue, as well.
  Labor opposed fast track because they believe that liberalized trade 
leads to American companies relocating to other countries and American 
workers losing their jobs to imports. They also argued that fast track 
was flawed because it didn't give the President authority to force 
other countries to adopt our labor and environmental standards.
  The Washington Post, for one, believes that the lack of fast-track 
authority actually makes it more likely that Americans will lose their 
jobs. The Washington Post says that the President, not having 
negotiating authority, makes it more likely that American workers will 
lose their jobs.

       . . . while fast track's defeat may be good news for a few 
     unions . . . it certainly doesn't help the vast majority of 
     American workers. With the President less able to knock down 
     trade barriers overseas, U.S. manufacturing firms will have 
     more, not less, incentive to relocate, to get footholds, 
     inside closed markets.

  That bears repeating, Mr. President. Without fast track, companies 
have more incentive to relocate. That's because high trade barriers may 
prohibit U.S. companies from exporting to a foreign market. In order to 
sell in that area the company would actually relocate there.
  Why would we want a trade policy in this country that would make an 
American company go to some other country to make a product to sell in 
that country, when if you reduce the barriers in that other country 
through these negotiations, that company could stay in America and 
export to that country and become competitive?
  Just within the last 2 weeks, I had a CEO of a major corporation in 
Des Moines, IA, our capital city, who said if the President doesn't get 
this authority and the barrier to Chile reduced through trade or 
through trade negotiations, then he was going to have to move there to 
build to do the business in South America that he wants to do.
  The United States has one of the most open economies in the world. 
Our average tariff is just 2.8 percent. Many other countries have 
virtually closed markets. According to the World Bank, for instance, 
China's average tariff is 23 percent; Thailand, 26 percent; the 
Philippines, 19 percent; Peru, 15 percent; Chile, a flat 11 percent 
tariff.
  It can be difficult for American companies to export to a country 
like China that places a 23-percent tariff on our goods. The tariff 
prices our goods out of the market. One alternative for these companies 
is to actually move their plants to China and avoid paying that tariff.
  The preferred alternative, Mr. President, and the one that is going 
to benefit American workers and, hence, benefit the entire economy, 
because American workers are very productive, is obviously to negotiate 
with China to lower tariffs, bring their tariffs down to our level. 
Then the companies can stay here, employ American workers and export 
their goods to China.
  But we can't negotiate these tariffs down without the President fast-
track authority. That is why fast track is so important. It leads to 
lower tariffs in foreign countries. Most importantly, it leads to the 
preservation of American jobs.
  Fast track also leads to the creation of new jobs. Exports already 
support 11 million jobs in this country. Each additional $1 billion of 
sales of services or manufactured products creates between 15,000 and 
20,000 new jobs. These jobs pay 15 percent to 20 percent higher than 
non-export-related jobs. In Iowa, companies that export provide their 
employees 32 percent greater benefits than nonexporting companies.
  All of this is in jeopardy without our passing a bill giving the 
President the authority to negotiate. As the Washington Post puts it, 
``[w]ith exports growing more slowly, or not at all, fewer new jobs 
will be created.'' So the failure of fast track hurts the workers of 
this country.
  Mr. President, the editorial has one final comment on labor's 
concerns with worker standards in other countries. ``Less trade 
certainly won't improve the standards of overseas workers, for whose 
welfare many Democrats claimed concern. And with the United States 
Government hamstrung, Japan, the European Union and developing 
countries will have a greater influence in shaping world trade 
policies. How hard do you think they'll push for improved labor and 
environmental standards?''
  Mr. President, I don't often say that the Washington Post is right. 
Economic stability and prosperity are the only proven means of 
increasing labor and environmental standards. The United States, due to 
our affluence, has the luxury of imposing high labor and environmental 
standards. Other countries don't yet have this ability. But increased 
trade will bring this economic stability, and it will lead to higher 
labor and environmental standards in other countries as well.
  Cutting off trade, or failing to pass this legislation, reduces our 
influence in these other countries and it increases the influence of 
countries such as Japan and the European Union. Can we trust Japan and 
the European Union to advance America's interests in world trading 
negotiations? The Washington Post correctly assumed that we cannot. 
Only the President of the United States, and the Congress working in 
conjunction with him, because that is what this legislation can do, can 
advance our interests and protect our interests. Only we can influence 
other countries to improve their environment and labor standards, to 
improve human rights, and to embrace democracy through the process of 
international trade that brings people together rather than keeping 
people apart.
  That is what I am most concerned about. The failure of fast track 
leaves a vacuum of leadership in international issues. Up until now, 
this vacuum had been filled by the United States. Ever since World War 
II, to some extent going back to the Reciprocity Act of the 1930's, 
since 1934, the United States has led the world in reducing barriers to 
trade, and we have benefited greatly from this leadership.
  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 in any other country. 
These are the benefits that we have enjoyed because we have been 
willing to lead on trade.
  I'm afraid that our leadership may now be questioned by our trading 
partners after last weekend's events. These countries are going to move 
on without us. They are going to continue to form regional and 
bilateral trading arrangements that won't include the United States. 
The United States won't be at the table to protect our interests. And 
the losers in all of this will be the American workers, the loss of 
jobs, and the consumers won't have the benefit that they now have.
  Mr. President, I hope we can return next year and we can have a 
rational debate about what trade means to this country--because somehow 
that has been lost in the process--and how important it is for the 
President of the United States to have fast track authority, to be the 
living representation of America's moral leadership, to lead in free 
and fair trade, which we have done for 40 or 50 years.
  We have already lost 3 full years without this legislation and the 
opportunity to lead; 20 agreements we have missed out on. We cannot 
afford to wait any longer.
  I ask that the Washington Post editorial be printed in the Record.
  There being no objection, the article was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Nov. 11, 1997]

                          The Fast-Track Loss

       Trade liberalization benefits most people, but it also 
     invariably hurts a few. Those who are helped--as goods become 
     cheaper, as standards of living rise, as exports grow--often 
     don't attribute their good fortune to rising trade, which is 
     after all only one component of a complex economy. Those who 
     have lost their jobs or believe they have lost their jobs to 
     overseas competition, on the other hand, don't hesitate to 
     affix blame. In the political process, the losers and 
     potential losers naturally lobby vociferously; the winners, a 
     larger but more diffuse group, don't. To rise above the 
     special interests of the losers (while taking into 
     consideration their legitimate needs) and vote in the overall 
     interest of society is what we should expect of our 
     politicians--it has something to do with statesmanship. And 
     until now, every Congress since President Ford's time has 
     managed to do just that. But this Congress, in failing early 
     Monday morning to approve

[[Page S12554]]

     trade-negotiating authority for President Clinton, did the 
     opposite--it caved in to the special pleaders. Washington 
     insiders will measure the defeat in its impact on Mr. 
     Clinton--whether it spells the beginning of his lame-
     duckhood, and all the rest. But the more serious damage is to 
     U.S. economic leadership--America's ability to help shape the 
     global rule book--and, potentially, to global economic 
     prosperity.
       The post mortems will find no shortage of culprits. Mr. 
     Clinton overpromised on NAFTA and underdelivered on the 
     promises he made to Congress to win NAI approval. He waited 
     too long to push for renewed negotiating authority--known as 
     ``fast track,'' because it allows him to negotiate treaties 
     that Congress can reject but not amend--and then don't even 
     have legislation ready when he finally, this fall, began the 
     campaign for what he called his most important legislative 
     priority. More broadly, his inconstancy over the years left 
     many members of Congress unwilling to put faith in his 
     promises and assurances. Businesses, which generally support 
     free trade, jumped into the fight too late and too half-
     heartedly. And 25 Republicans congressmen who could have 
     provided the margin of victory but who withheld their backing 
     in a failed effort to extort support from Mr. Clinton for an 
     unrelated (and unjustified) proposal to gut America's family-
     planning assistance overseas, also bear responsibility.
       But of course the lion's share of blame--or credit, as they 
     would have it--goes to Mr. Clinton's fellow Democrats and 
     their backers in organized labor. In the end, fewer than 45 
     of 205 House Democrats were ready to stand by their 
     president. In part, this reflects the growing importance of 
     union contributions to political campaigns. Since the 
     Democrats lost control of the House, businesses have shifted 
     their giving heavily to Republicans; total Democratic 
     receipts from political action committees have gone down, and 
     the union share has gone up--to 46 percent in 1996.
       Of course, most Democrats said they were voting on the 
     merits, not the dollars. But while fast track's defeat may be 
     good news for a few unions, such as in the textile trades--
     though even that is arguable--it certainly doesn't help the 
     majority of American workers. With the president less able to 
     knock down trade barriers overseas, U.S. manufacturing firms 
     will have more, no less, incentive to relocate, to get 
     footholds inside closed markets. With exports growing more 
     slowly, or not at all, fewer new jobs will be created. Less 
     trade certainly won't help improve the standards of overseas 
     workers, for whose welfare many Democrats claimed concern. 
     And with U.S. government hamstrung Japan, the European Union 
     and developing countries will have a greater influence in 
     shaping world trade policies. How hard do you think they'll 
     push for improved labor and environments standards?
       Mr. Clinton yesterday withdrew his proposal before it could 
     go down to defeat, and he said he intends to try again in 
     this Congress. The signs are not auspicious, but you never 
     know. Maybe next time the greater good will prevail.

  Mr. GRASSLEY. I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Coats). The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. LAUTENBERG addressed the Chair.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.

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