[Congressional Record Volume 144, Number 67 (Friday, May 22, 1998)]
[Senate]
[Pages S5364-S5365]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       CHALLENGES FOR THIS COUNTRY: THE TRADE DEFICIT AND MERGERS

  Mr. DORGAN. Mr. President, I have come to the floor to talk about two 
challenges as we begin a break, now, for the Memorial Day recess here 
in Congress. We are talking about a wide range of things: Iran, missile 
sanctions, tobacco, appropriations bills, and a wide range of subjects. 
There are two subjects on which there is deafening silence here in 
Washington, DC, and in the Congress, and I want to talk about both of 
them because I think both are challenges for this country. One is our 
worsening trade deficit and the announcement 2 days ago that, once 
again, our merchandise trade deficit for 1 month reached another record 
$20 billion in a month; and, second, the new wave of mergers in this 
country. I want to talk about both of them just briefly.
  First, a chart. This chart shows in recent years the average monthly 
trade deficit in this country, the average monthly merchandise trade 
deficit. You can see what is happening--a month in 1991, $6 billion; it 
is now 1998, $20 billion, February through March, in a month. Some say 
the trade deficit doesn't matter much. If it doesn't matter much, they 
must be just ecstatic. If ignorance is bliss, those who think trade 
deficits don't matter have to be just ecstatic. Look at what is 
happening here. This red represents a flood of red ink in international 
trade.
  Our all-stars in international trade are our farmers. Yet, farm 
imports into this country are going up and farm exports are going down. 
I think today there is a ship docking in California with a load of 
barley from the European Union. It is going to dock in Stockton, CA. It 
has feed barley being sent into this country with a $1.10-a-bushel 
subsidy. Shame on us for letting that ship dock. That is unfair trade 
no matter how you describe it, and it undercuts our producers, 
undercuts our farmers, takes money right out of American producers' 
pockets, and it doesn't seem to matter much to anyone. It just seems 
the trade deficits are OK, there are not problems, and nobody seems to 
want to do much about it.
  That unfair trade on that boat is just one small example. The flood 
of grain coming in from Canada, unfairly subsidized grain, in my 
judgment, being illegally dumped in this country--nothing is done about 
that.
  How about the closed markets, yes, in Japan and China? Take a look at 
the figures this week and see what is happening with China. There is a 
$12 billion trade deficit in the first 3 months, $12 billion the first 
3 months with China. That is a $48 billion, nearly $50 billion yearly 
trade deficit with China. Mr. President, $15 billion the first 3 months 
with Japan, that is a $60 billion a year trade deficit with Japan. This 
doesn't make any sense. This hurts our country. Trade deficits must be 
repaid. It is not free money. And it must be repaid in the future by a 
lower standard of living in this country.
  That is not a theory. That is real. These deficits must be repaid, 
and those who react with glee to this do not understand what this 
means. It means we are borrowing, and borrowing heavily, for a trade 
system that is out of balance.
  With all due respect to all those who negotiate our trade agreements, 
I will say this: Will Rogers once said the United States has never lost 
a war and never won a conference.
  Why do we send trade negotiators overseas to lose in 3 weeks? And 
they do. I can't think of a trade agreement negotiated recently that 
represented this country's national economic interest. We have 
incompetently negotiated trade agreements and trade agreements that are 
rarely enforced, and it is time for this country and this Congress to 
understand this is heading in the wrong direction.
  I am not suggesting cutting off all imports. I am saying to our 
trading partners, as a country it is in our economic interest that when 
we take your goods, you be required to take ours. We need to get more 
wheat into China, more pork into China, more manufactured goods into 
China and Japan, more beef into Japan.
  I can spend an hour talking about these problems. Nobody works much 
on them, because trade policy too often has become foreign policy, and 
the State Department has its mitts in all of this. It worries that if 
we get tough with Japan and say, ``You can't run a $60 billion trade 
surplus with us every year,'' Japan will be miffed. Well, let Japan be 
miffed. Let's talk about this country's interests. Let's talk about our 
long-term interests.
  Having gotten that off my chest, I hope the deafening silence on 
trade deficits will no longer continue. I hope this Congress, in the 
coming months, will consider the legislation that I, Senator Byrd, and 
Senator Stevens have introduced which talks about the creation of a 
commission on an emergency basis to make recommendations to Congress to 
deal with this trade deficit, to focus on it and respond to it.
  Mr. President, I have one final item, and that is the wave of mergers 
in this country. In the last century, there have been five merger 
waves. We are in the fifth. This is far, far in excess of any mergers 
in the past.
  I want you to take a look at the line on this chart, going back to 
1983, on the number of merger deals, and it goes up like this, as you 
can see. The projected dollar amount on mergers and acquisitions is up 
to $1.1 trillion for this year.
  What does all this mean? Are mergers always bad? No. Can you get into 
a merger wave that strangles our marketplace? Of course you can, and 
that is what is happening in this country.
  I want to go through some of the mergers. Some of these companies 
decided to get married, and we didn't even know they were dating. All 
these secret talks were going on, and two companies were so fond of 
each other that they decided to get married. We have Citicorp and 
Travelers Group at more than $70 billion. They were romancing for a 
couple of weeks and announced to all of us, a huge bank and a huge 
insurance company want to get hitched.
  BankAmerica Corp., NationsBank, that is not surprising. We have banks 
throughout this list. The big banks are getting bigger. Down at the 
Federal Reserve Board, they have a list. It used to be a list of 11 
banks. It is called ``Too Big to Fail.'' It means these banks will not 
fail because we cannot let them fail; the consequences to our country 
and economy will be too significant.
  That list now is not 11, it is now 21 banks and growing. Twenty-one 
banks

[[Page S5365]]

are too big to fail. And that is what these mergers are giving us--
bigger and bigger banks, too big to fail --while the little folks out 
there, the family farmers and Main Street business enterprises, are 
apparently too small to matter. These folks have their merger risks 
guaranteed by the taxpayer, and the rest of the folks find choked 
markets and higher prices.
  Take a look at the banks. You are paying higher bank fees. Banks are 
getting bigger and merging all over the country, and customers are 
paying higher bank fees. Take a look at the meatpacking industry. Three 
or four companies control the neck of the bottle on meatpacking. It 
pushes down low prices on the backs of farmers and ranchers.

  Take a look at the airlines. We deregulated the airlines. Now we have 
about six major airlines in America that have retreated into what are 
largely regional monopolies without regulation.
  What about railroads? We've seen merger after merger after merger. 
Now we have just several major railroads left in America. What happens 
is the people on Main Street, the consumers, the farmers, and others 
are told by the railroads, ``Here is the way we are going to serve you. 
We are going to bring our cars by here. You better have what you want 
put on there in time, or you lose out. We will tell you what you pay, 
and if you don't like it, tough luck.''
  That is what a merger is. Concentration of markets means you injure 
the marketplace. When you have two big companies merge and you have one 
behemoth company, this country has lost something by diminishing the 
marketplace because you have less competition.
  Our marketplace works based on competition. When you have less 
competition and more concentration, it hurts our marketplace. I hope 
there is energy in the Congress to help the Justice Department and 
others who review these mergers to find out are they more than just 
good for the companies, are they good for the country.
  This list of the 25 largest corporate mergers completed or pending 
through May 11 is a fascinating list. There are a lot of banks, as you 
might well know, and communications companies. This next list talks 
about mergers and acquisitions over $1 billion involving U.S. companies 
between 1983-1998. In 1983, we had 10 deals over $1 billion. This year, 
there were 143 separate merger deals over $1 billion each. Of course, 
the largest ones are just behemoth, setting all kinds of records.
  I am not saying all mergers are bad all the time. I know of 
circumstances where two companies have merged and it was beneficial to 
everybody. I understand that. But we have an orgy of mega-mergers going 
on in this country today that I think does threaten the marketplace. I 
say to Joel Klein over in the Justice Department, and others, be 
active, be aggressive. He recently testified before the U.S. House of 
Representatives that he needs some more resources in antitrust to deal 
with these issues. I am somebody who says, let's give him the 
resources.
  I want this marketplace to work. It works when we have robust, 
aggressive competition. It chokes and clogs when we have concentration 
at the top. So I bring to my colleagues' attention these charts just to 
say we have gone from 10 mergers over $1 billion in 1983 to 20, 26, 34, 
35, 47--it goes on up. Now we have 143 different merger propositions 
over $1 billion each, something we ought to care about.
  There has not been anybody around this Congress for a long, long 
while to care about it. Senator Phil Hart, a great Senator for whom the 
Hart Building was named, spent a lot of his career here worrying about 
the issue of mergers and concentration. I hope, once again, we will see 
some from this Justice Department and from some in this Congress who 
will take a close look at all of these. That is not to say they are all 
bad, some might make sense, but to say there is more than one interest 
involved in these issues. There is more than one interest.
  One interest might be the two companies who want to make more money 
and grab some markets. The other interest must be the interest of the 
American people and a free-market system that will only remain free if 
we have competition and only remain free if we don't have concentration 
and monopoly that chokes down markets.
  I hope, perhaps in the coming months, that I can stimulate some 
additional discussion about this issue with some of my colleagues on 
both sides of the aisle.
  Mr. President, I see my time has expired. I yield the floor.
  Mr. WELLSTONE addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. Mr. President, out of courtesy, I defer to my 
colleague from Oklahoma, and I ask unanimous consent that I be able to 
follow him for 10 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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