[Congressional Record Volume 145, Number 43 (Thursday, March 18, 1999)]
[Extensions of Remarks]
[Pages E483-E484]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    AFL-CIO MAKES GOOD SENSE ON TRADE

                                 ______
                                 

                           HON. BARNEY FRANK

                            of massachusetts

                    in the house of representatives

                        Thursday, March 18, 1999

  Mr. FRANK of Massachusetts. Mr. Speaker, one of the most important 
issues on which many of us are now working is to forge policies which 
allow us to get the benefits of the global mobility of capital while 
dealing with the negative impacts that accompany that movement of money 
throughout the world in the absences of sensible, humane public 
policies.
  No organization in America has done as much to articulate the 
important, principles that we need to follow in this regard than the 
AFL-CIO, and the statement on Trade and Deindustrialization issued by 
the AFL-CIO's executive Council last month is an excellent presentation 
of this problem. A significant number of us here in the House believe 
that unless we are able to embody these principles in legislation, the 
chances of adopting further trade legislation will be substantially 
diminished, an support for international financial institutions will be 
similarly negatively affected. Because the AFL-CIO does such a good job 
of spelling out the approach that is economically, morally and 
politically called for in dealing with the international economy, I ask 
that the Council's statement be printed here.

                     Trade and Deindustrialization

       The financial crisis that began in Asia more than a year-
     and-a-half ago continues and spreads. The countries hit first 
     struggle to recover, and new countries succumb to the 
     contagion. Millions of workers have lost their livelihoods in 
     the crisis countries and hunger and poverty have grown 
     alarmingly. The United States is not immune, and many 
     American workers are already paying a high price for global 
     turmoil.
       It is clear that the crisis is neither temporary, nor 
     easily fixed. The cause of the crisis is systemic, and 
     solutions must go straight to the heart of a global trade and 
     investment regime that is fundamentally flawed. Deregulated 
     global markets, whether for capital and currencies, or for 
     labor and goods, are not sustainable. They produce 
     speculative, hot money explosions and a relentless search for 
     lower costs that devastate people, overturn national 
     economies and threaten the global economy itself. The so-
     called Washington consensus on ``economic reform''--trade and 
     investment liberalization, privatization, deregulation, and 
     extreme austerity--is a recipe for instability, social 
     strife, environmental degradation, and growing inequality, 
     not long-term growth, development, and broadly shared 
     prosperity.
       The combination of the global financial crisis and long-
     term trends in trade and investment have inflicted deep 
     wounds in the U.S. manufacturing sector. The United States 
     has lost 285,000 manufacturing jobs since March of 1998. 
     Trade-related job loss will likely grow in 1999, as the trade 
     deficit in goods is projected to climb from about $240 
     billion in 1998 to close to $300 billion this year.
       This trade imbalance is accelerating industrialization in a 
     broad array of industries--

[[Page E484]]

     steel, textile, apparel, auto, electronics, and aerospace. No 
     region has escaped the ravages of the crisis.The impact is 
     not only job loss, but also the quality and composition of 
     jobs, and therefore the distribution of income. Despite the 
     recent growth in wages, the typical American worker's real 
     hourly compensation is lower today than it was almost a 
     decade ago--even as productivity grew by 9 percent.
       We must address these problems by insisting upon a set of 
     principles that will guide our trade, investment, and 
     development policies at home and in all of the multilateral 
     fora. We will strenuously oppose any new trade or investment 
     agreements that do not reflect these principles, and we will 
     work to remedy the deep flaws in our current policies.
       First, excessive volatility in international flows of 
     goods, services, or capital must be controlled. Countries 
     must retain the ability to regulate the flow of speculative 
     capital in order to protect their economies from this 
     volatility.
       Second, we must not allow international trade and 
     investment agreements to be tools which businesses use to 
     force down wages and working conditions or weaken unions, 
     here or abroad.
       Third, we need to pay more attention to the kind of 
     development we aim to encourage with our trade policy. Our 
     current policies reward lower barriers to trade and 
     investment, and encourage developing countries to dismantle 
     domestic regulation. These policies encourage developing 
     countries to grow by tapping rich export markets abroad, 
     while keeping wages low at home. This focus on export-led 
     growth short-changes developing countries and places undue 
     burden on our market.
       As Congress considers trade initiatives this year, and as 
     the Administration prepares to host the World Trade 
     Organization (WTO) ministerial in November, they must 
     adhere rigorously to these principles. This requires that:
       The U.S. government must radically reorder its priorities, 
     so that our trading partners understand that enforceable 
     worker rights and environmental protection are essential 
     elements in the core of any trade and investment agreements. 
     Unilateral grants of preferential trade benefits must also 
     meet this standard. The African Growth and Opportunity Act 
     and the proposed extension of NAFTA benefits to the Caribbean 
     and Central America fall far short and are unacceptable.
       We should strengthen worker rights provisions in existing 
     U.S. trade laws and enforce these provisions more 
     aggressively and unambiguously to signal our trading partners 
     that failure to comply will not be tolerated.
       The U.S. government must enforce the agreements it is 
     currently party to, before looking to conclude more deals. 
     China's failure to abide by the 1992 memorandum of 
     understanding and the 1994 market-opening agreement must not 
     go unchallenged, and China's recent jailing of trade 
     unionists is yet more evidence that WTO accession should be 
     denied. Congressional approval should be required for China's 
     accession to the WTO.
       Current safeguard provisions in U.S. law are clumsy and 
     ineffective. We must strengthen and streamline Section 201 
     and the NAFTA safeguards provisions, so that we can respond 
     quickly and effectively when import surges cause injury to 
     domestic industries. Until this can be accomplished, we 
     should be ready to take unilateral action to protect against 
     import surges when necessary.
       Immediate steps must be taken to address the flood of 
     under-priced imported steel coming into our market. U.S. 
     workers must not be the victims of international financial 
     collapse.
       Fast track--the traditional approach to trade negotiating 
     authority--has been decisively rejected by Congress and the 
     American people. Trade negotiations are increasingly complex, 
     and Congress must have a stronger consultative role. 
     Congressional certification that objectives have been met at 
     each stage must be required before the negotiations can 
     proceed. Both the process of negotiation and the 
     international institutions that implement these agreements 
     need to be more transparent and accessible to non-
     governmental organizations.
       We need to address the problems faced by developing 
     countries more directly, by offering deep debt relief and 
     development funds as part of an overall program of engagement 
     and trade. Trade preferences linked to improved labor rights 
     and environmental standards change the financial incentives 
     for countries seeking market access and increased foreign 
     direct investment; debt relief and aid can help provide the 
     resources necessary to implement higher standards.
       The U.S. government needs to address the problems of 
     chronic trade imbalances and offset agreements, whereby U.S. 
     technology and jobs are traded for market access.
       But before Congress and the Administration craft 
     fundamentally different trade policies, we must take urgent 
     steps to fix problems in our current trade agreements. NAFTA 
     has been in place for five years now and has been a failure.
       We must strengthen the labor rights protections in NAFTA, 
     so that violations of core labor standards come under the 
     same strict dispute settlement provisions as the business-
     related aspects of the agreement.
       We must renegotiate the provisions on cross-border trucking 
     access. It is clear that fundamental safety issues are far 
     from being satisfactorily addressed. The safety of our 
     highways must not be compromised for the sake of compliance 
     with a flawed trade agreement.
       The safeguard provisions in NAFTA have proven ineffective 
     in the cases of auto and apparel imports, which have surged 
     unacceptably since NAFTA's implementation in 1994. These 
     provisions must be corrected. We must insist on an equitable 
     sharing of automotive production among the three North 
     American countries, so that all three countries can benefit 
     from growth in the North American market, as well as sharing 
     in its downturns. And we must ensure that the investment 
     provisions of NAFTA, which grant new powers to corporations 
     in their disputes with governments, are fixed and not used as 
     a model for any future agreements.
       In addition to fixing trade policy, we have to make sure 
     that our policies toward investment, development, taxation, 
     and the international financial institutions support 
     economically rational, humane, and worker-friendly rules of 
     competition. We must change the rules of the international 
     economy, not so we can have more trade, but so we can build a 
     better world, for working families here and abroad.
       Finally, it is important to remember that the United States 
     has the right to withdraw from trade agreements to which it 
     is a party. The U.S. government should undertake an 
     aggressive review of existing trade agreements to determine 
     whether they adequately protect U.S. interests or whether the 
     U.S. should exercise its withdrawal rights.

     

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