[Congressional Record Volume 144, Number 44 (Tuesday, April 21, 1998)]
[Extensions of Remarks]
[Page E608]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 NAFTA BELIEVERS CAN CHANGE THEIR MINDS

                                 ______
                                 

                        HON. WILLIAM O. LIPINSKI

                              of illinois

                    in the house of representatives

                        Tuesday, April 21, 1998

  Mr. LIPINSKI. Mr. Speaker, it is no secret that I have been an 
opponent of NAFTA since its inception. I have voted against the free 
trade pact, and I have opposed efforts to expand it.
  Many have accused me of being out of touch with modern economics and 
the ``global economy.'' Nonetheless, I believe the facts have supported 
my position. NAFTA has been a disaster. Americans jobs have been lost 
and our trade deficit has exploded with Mexico. I am further heartened 
in my opposition to NAFTA by the recent conversion of one of America's 
leading journalists to my point of view: Hedrick Smith of the Public 
Broadcasting System.
  Smith, who produces or hosts many important news programs and 
documentaries on PBS, recently showed NAFTA's ill effects on his 
excellent series, ``Surviving the Bottom Line.'' In addition, Smith 
wrote an analysis of NAFTA in Washington Monthly magazine based on his 
research for the documentary. Both show a damning picture painted a 
self-described ``long time free trader.''
  Smith mentions the familiar problems with NAFTA: The U.S. has lost 
several hundred thousand jobs and our balance of trade has gone from a 
$5.4 billion surplus to a $18 billion deficit with Mexico in four 
years.
  However, Smith has also uncovered some interesting reasons as to why 
this happened. His reporting showed that some of the blame goes all the 
way across the pacific Ocean to Japan and South Korea, where Pacific 
Rim industrial giants like Sony, Samsung and Panasonic have discovered 
a backdoor to the U.S. market. By setting up plants south of the border 
and exporting products made there to us they are able to avoid paying 
import duties because NAFTA eliminated those tariffs between Mexico and 
the United States.
  Just when many foreign-based firms, such as Honda, Toyota and BMW, 
has discovered the prudence in investing in plants in the United States 
to avoid import tariffs, while also paying good wages to American 
workers who in turn can afford to purchase the products they make, 
NAFTA has given these companies a huge pool of one-dollar-an-hour 
workers who can also help them avoid the same tariffs.
  Smith's reporting also confirms that rather than bringing the average 
Mexican worker up. NAFTA has had the reverse effect of depressing the 
living standard of American workers. The major culprit here is the 
notoriously weak Mexican labor unions, which are usually controlled by 
the government, and the power of the maquiladora trade associations in 
collusion with that government, which conspire to keep wages down lest 
the Mexican workers actually try to share in the wealth they help 
create. These low wages have a chilling effect that reaches far north 
of the border.
  Smith's conclusion is not hopeful: ``As long as Mexican wages are 
kept low as a matter of government policy, inadequate labor rights or 
collusion among employers, the living standard of the American middle 
class will continue to erode.''
  For the sake of our nation and for the sake of American working 
families, we must take a long, hard look at our nation's trade policies 
and the currently fashionable mentality that all free trade must be 
good trade. If we don't, I strongly suspect that Hendrick Smith's 
prophecy will come true.

                          ____________________