[Congressional Record Volume 145, Number 152 (Tuesday, November 2, 1999)]
[Senate]
[Pages S13632-S13640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
AFRICAN GROWTH AND OPPORTUNITY ACT--Resumed
Pending:
Lott (for Roth/Moynihan) amendment No. 2325, in the nature
of a substitute.
Lott amendment No. 2332 (to amendment No. 2325), of a
perfecting nature.
Lott amendment No. 2333 (to amendment No. 2332), of a
perfecting nature.
Lott motion to commit with instructions (to amendment No.
2333), of a perfecting nature.
Lott amendment No. 2334 (to the instructions of the motion
to commit), of a perfecting nature.
Cloture Motion
The PRESIDING OFFICER. Under the previous order, the clerk will
report the motion to invoke cloture.
The legislative clerk read as follows:
Cloture Motion
We the undersigned Senators, in accordance with the
provisions of rule XXII of the Standing Rules of the Senate,
do hereby move to bring to a close debate on the substitute
amendment to Calendar No. 215, H.R. 434, an act to authorize
a new trade and investment policy for sub-Sahara Africa.
Trent Lott, Bill Roth, Mike DeWine, Rod Grams, Mitch
McConnell, Judd Gregg, Larry E. Craig, Chuck Hagel,
Chuck Grassley, Pete Domenici, Don Nickles, Connie
Mack, Paul Coverdell, Phil Gramm, R. F. Bennett, and
Richard G. Lugar.
The PRESIDING OFFICER. The question is, Is it the sense of the Senate
that debate on the substitute amendment No. 2325 to Calendar No. 215,
H.R. 434, an act to authorize a new trade and investment policy for
sub-Sahara Africa, shall be brought to a close?
The yeas and nays are required under the rule.
The clerk will call the roll.
The legislative clerk called the roll.
Mr. NICKLES. I announce that the Senator from Arizona (Mr. McCain)
and the Senator from New Hampshire (Mr. Gregg) are necessarily absent.
The yeas and nays resulted--yeas 74, nays 23, as follows:
[Rollcall Vote No. 344 Leg.]
YEAS--74
Abraham
Akaka
Allard
Ashcroft
Baucus
Bayh
Bennett
Biden
Bingaman
Bond
Breaux
Brownback
Bryan
Burns
Cochran
Coverdell
Craig
Crapo
Daschle
DeWine
Dodd
Domenici
Durbin
Enzi
Feinstein
Fitzgerald
Frist
Gorton
Graham
Gramm
Grams
Grassley
Hagel
Harkin
Hatch
Hutchinson
Hutchison
Inhofe
Jeffords
Johnson
Kerrey
Kerry
Kohl
Kyl
Landrieu
Lautenberg
Leahy
Lieberman
Lincoln
Lott
Lugar
Mack
McConnell
Mikulski
Moynihan
Murkowski
Murray
Nickles
Robb
Roberts
Rockefeller
Roth
Santorum
Schumer
Sessions
Shelby
Smith (OR)
Specter
Stevens
Thomas
Thompson
Voinovich
Warner
Wyden
NAYS--23
Boxer
Bunning
Byrd
Campbell
Cleland
Collins
Conrad
Dorgan
Edwards
Feingold
Helms
Hollings
Inouye
Kennedy
Levin
Reed
Reid
Sarbanes
Smith (NH)
Snowe
Thurmond
Torricelli
Wellstone
NOT VOTING--2
Gregg
McCain
The PRESIDING OFFICER. On this vote, the yeas are 74, the nays are
23. Three-fifths of the Senate duly chosen and sworn having voted in
the affirmative, the motion is agreed to.
Amendments Nos. 2332 and 2333 Withdrawn
Mr. LOTT. Mr. President, I ask consent that amendments 2332 and 2333
be withdrawn.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendments (Nos. 2332 and 2333) were withdrawn.
Mr. LOTT. Mr. President, I remind the Senate pending is the trade
bill with the substitute amendment pending in the first degree. Cloture
was invoked; therefore, there is a total time restriction of 30 hours,
including quorum calls and rollcall votes. Under an additional consent,
relevant trade amendments are in order in addition to the germaneness
requirement under rule XXII. Those additional first-degree trade
relevant amendments must be filed by 2:30 today.
I urge all Senators to offer and debate their amendments in a timely
fashion. I request relevant amendments not be abused so we can complete
this very important trade legislation.
I yield the floor.
The PRESIDING OFFICER (Mr. Enzi). The Chair recognizes the Senator
from Delaware.
Mr. ROTH. Mr. President, I thank my colleagues on both sides of the
aisle for their support for the cloture motion. The vote reflects the
strong bipartisan support for the bill.
I also want to extend my thanks to the distinguished majority and
minority leaders, who worked so hard to find the compromise that would
allow the bill to move forward.
Due to their hard work, we have the opportunity to send a clear
statement to our neighbors in the Caribbean, Central America, and
Africa that we are willing to invest in a long-term economic
relationship--a relationship of partners in a common endeavor of
expanding trade, enhancing economic growth, and improving living
standards.
Most importantly, this bill will also send a clear signal to our
trading partners around the world who will join us shortly in Seattle
for the ministerial meeting of the World Trade Organization. It signals
that the United States is prepared to engage constructively in the
wider world around us and to provide the leadership necessary to
achieve our common goals.
Most importantly, the bill means we will fulfill our commitment to
the American workers and firms that will benefit from this bill--a
commitment that means $8.8 billion in new sales and an increase of
121,000 jobs over the course of the next 5 years in the U.S. textile
industry alone.
As I have emphasized again and again in this debate, this is not a
bill that is good just for our neighbors in the Caribbean and Central
America or our partners in Africa. This is a bill that is good for our
workers here at home as well. It is a ``win-win'' situation
economically for American workers and our friends abroad.
I look forward to working with my colleagues over these coming hours
to fashion a still stronger bill that would further those goals.
Let me emphasize once more the strong bipartisan support reflected in
the vote just taken. The motion for cloture carried by a vote of 74-23.
I urge my colleagues to move as expeditiously as we can because time is
limited. As we all know, the Congress is coming to the end of the
current session and we want to make sure everybody has the opportunity
to bring forward their amendments. It is important we do so in a
fashion to expeditiously conclude action on this important piece of
legislation.
I yield the floor.
The PRESIDING OFFICER. The Chair recognizes the Senator from New
York.
[[Page S13633]]
Mr. MOYNIHAN. Mr. President, I wish to join most emphatically with my
revered chairman in congratulating the Senate today, in thanking the
majority and minority leaders. We have risen to a moment which was
ominously in doubt.
Last week, as the week progressed, two things took place: One, on the
Senate floor, as we now have established, we had 74 votes just to
proceed with the bill--we will have more when this is done. Even so, we
found ourselves in a procedural tangle not unknown to the body which
was thwarting the will of an emphatic majority--and not just a majority
for this legislation but a majority for a tradition of openness in
trade that began 65 years ago with the Reciprocal Trade Agreements Act
of 1934 at the depths of the Depression, the aftermath of the Smoot-
Hawley legislation, with our system of government very much under
challenge. That challenge would grow more fierce and would end in the
great World War.
We were then, even so, confident enough of the promise of trade that
we could go forward in this matter. We have been going forward for 60
years. However, 5 years ago we stopped. The President did obtain the
approval of the Congress for the World Trade Organization. I shouldn't
put it that the President ``obtained'' the approval of the Congress;
Congress approved what Congress had sent our negotiators to obtain.
There was a little side ripple there. An international trade
organization was to have been one of the main institutions of the
Bretton Woods system created in 1944. The International Bank for
Reconstruction and Development--we call it the World Bank--the
International Monetary Fund were created; the International Trade
Organization didn't happen.
Finally, we caught up with ourselves and we created the World Trade
Organization which I believe now has 134 members with 30 observers
currently applying for membership. I said there were two ominous, even
menacing moments. The second was that there was almost no attention
paid in the press and media to this week-long frustrating, seemingly
unavailing effort. We have been on this a week and we got nowhere. No
one noticed. It is as if no one cared.
We woke up. Yesterday, the Washington Post in a lead editorial on
this subject noted neither the administration nor the Congress had done
anything they needed to do, and that at the end of this month the World
Trade Organization will meet in Seattle. Our Ambassador, our Trade
Representative, Ambassador Barshefsky, will open the meeting. Our
President will be there, along with heads of state. We will be talking
about the next round of global trade negotiations. They can take 9, 10
years. They are fundamentally important.
But our President will not have the authority to enter these
negotiations--or rather to send the resulting agreements to the
Congress for expedited consideration. If he were to have had the sub-
Saharan African legislation fail and the Caribbean initiative of
President Reagan fail; if we were to have, in effect, allowed the Trade
Expansion Act of 1962, President Kennedy's measure that led to the
Kennedy Round, like the Uruguay Round, expire and say to the 200,000
American families who are displaced by trade, as others are, that we
should let economic forces work their way and tell them, that's too
bad; if we allowed the Generalized System of Preferences to expire and
say, no matter, how would our representatives look? What would they
say? What could they undertake? Very little.
It would be a moment in trade that would be shameful, after 65 years
of bringing the world out of the depths of the Great Depression, now,
in the longest economic expansion in the United States, the longest
economic expansion in history.
For so many years we talked about ``the longest peacetime
expansion.'' No, no, this expansion is greater even than that from
World War II. This is what trade has brought us. Not just trade, but
without trade expansion we could not have had this economic expansion.
Now, at least, we can go to Seattle and say: Here are our bona fides.
We are still players. We still want to go forward.
So, Mr. President, let the games begin. We have a long debate before
us. It will be a bipartisan debate. The Senator from Delaware, the
chairman of our committee, will be leading the debate. His deputy, if I
may so deputize myself, will be at his side across the aisle. Let us
now proceed, being of good heart and great expectations.
I yield the floor.
Mr. ROTH. Mr. President, I ask the distinguished Senator from New
York if he could articulate the importance of the legislation before
us.
Mr. MOYNIHAN. I certainly could attempt to do so. I would not risk
overstatement. There would be a setting in which, having given the
President negotiating authority for a new round of international trade
talks, having arranged for Trade Adjustment Assistance to be continued
as it has been for 37 years, we could say: The particular matters
before us will be part of the trade negotiations--and so forth. We
could say we will get to it next year.
But we don't have that negotiating authority. The President goes to
Seattle emptyhanded. The only thing he can bring with him is the trade
legislation we have before us--which we still have to take to the
House. But this is all the United States can show the world, the world
which has been following us for all these years.
So I hope, at a very minimum, the sense of tradition--even, if I may
say, of honor--will drive us forward in this matter.
Mr. ROTH. I would like to refer to fast track. Like my colleague, I
am very unhappy that this authority has not been extended this
President.
Mr. MOYNIHAN. And, sir, that this President did not ask for it when
he could get it.
Mr. ROTH. That is correct. That is correct.
I also point out our committee in the last 2 years reported this
legislation out because there is strong bipartisan support for fast
track to be granted to the President, this President, by both
Republicans and Democrats.
Mr. MOYNIHAN. Sure.
Mr. ROTH. Unfortunately, there has not been strong leadership from
the White House on this matter. It seems to me it is a matter of grave
concern. But since that has not happened, I do agree with what my
colleague has just said, that it is important we act on this
legislation so it becomes clear to our friends and neighbors around the
world that we continue to plan to provide leadership in this most
important area of trade.
Mr. MOYNIHAN. Yes, sir, and that it becomes clear to our friends
around the world, as you say, and our friends downtown--give them
heart; give them something to show.
Mr. ROTH. Absolutely. I applaud and congratulate the Senator from New
York for his leadership, not only during the current session but down
through the years in this most important trade policy. We look forward
to bringing home the bacon in the next 30 hours on this important piece
of legislation.
Mr. MOYNIHAN. I thank the chairman.
The PRESIDING OFFICER. The Chair recognizes the senior Senator from
South Carolina.
The PRESIDING OFFICER. The Chair recognizes the Senator from South
Carolina.
Mr. HOLLINGS. Mr. President, the distinguished managers of the bill
offered the $8 billion figure in sales and some 121,000 jobs. The truth
is, we know from the Labor Department statistics that we have lost
420,000 textile jobs nationwide and some 31,200 textile jobs in South
Carolina alone. They said NAFTA was going to create 200,000 jobs. They
claim today it is 121,000. In Mexico itself, it was going to create
200,000 jobs. We know textiles alone lost 420,000, and it is undisputed
that 31,200 jobs were lost in the State of South Carolina.
I ask unanimous consent to print two articles with respect to the
economy and how it has worked in Mexico, one from the Wall Street
Journal and the other from the American Chamber of Commerce in Mexico.
There being no objection, the articles were ordered to be printed in
the Record, as follows:
[[Page S13634]]
[From the Wall Street Journal, Sept. 27, 1999]
A Decade of Change
(By Jonathan Friedland)
the have-nots: the free-market revolution promised so much; To many in
latin america, it has delivered so little
Texcalitla, Mexico.--Liberalization, privatization,
globalization. Mary Garcia may not be aware of them in so
many words, but she has felt their impact from behind the
two-frame stove of her cinder-block cafe, the Avenida
Nacional.
Perched alongside the highway that was once the main road
between Mexico City and the resort city of Acapulco, Mrs.
Garcia's restaurant used to serve dozens of plates of rabbit
stew to travelers daily. But early this decade, amid a severe
downsizing of the Mexican state, the government let private
contractors build a swift toll road between the two cities
that bypassed the Avenida Nacional.
Mrs. Garcia has far fewer clients nowadays. Not only that,
but the taxes she pays have gone up, in part because of the
new road. The Highway of the Sun, as it's called, has been
such a financial disaster that the government bought it back
two years ago from the companies that built it. The same
thing happened with a dozen banks, a pair of airlines and 25
other highway projects. After botched privatizations, they
are back in the hands of the government, and taxpayers are
facing a bill that may total as much as $90 billion.
``I am all for progress,'' Mrs. Garcia says wistfully,
straightening up the place settings in her empty restaurant.
``But this kind of progress is killing us.''
From Texcalitla, here in Mexico's rural Guerrero state, to
Tierra del Fuego at the southern tip of South America, there
are a lot of people who feel the same way. For many Latin
Americans, the free-market revolution that has swept the
region in the past decade hasn't delivered the kind of
progress they were told it would--easier lives, better
incomes and a more secure future. Instead, it has confirmed
many of their worst fears about capitalism.
Since Chile embarked on its free-market experiment in the
late 1970s, widespread domestic market liberalization,
privatization of once-unwieldy state asset holdings and a
removal of barriers to foreign competition have made Latin
America a much healthier place in purely macroeconomic
terms. Government finances are in better shape than ever.
Foreign direct investment is up, and inflation rates have
fallen. And Latin Americans have access to a wider variety
of goods and services than ever before.
But there has also been a big downside to the move from
closed to open economies. Buffeted by forces beyond their
control--such as the woes of other emerging markets as far
afield as Russia and Indonesia--Latin American economies have
posted frustratingly inconsistent growth rates in recent
years. Job creation has actually slowed while overall
unemployment in the region has remained stable, according to
Inter-American Development Bank statistics. That means that
more Latin Americans work in the informal economy than a
decade ago, and that income distribution, uneven to begin
with, has generally grown more so.
In fact, from 1980 to 1996, the latest year for which hard
data are available, the trend has been for an ever greater
percentage of national income to end up in ever fewer hands
in all Latin American countries except Costa Rica and
Uruguay, says Elena Martinez, regional director of the United
Nations Development Program. Unlike their bigger neighbors,
Costa Rica and Uruguay have kept a lid on competition and
have struggled to maintain their state-run social-welfare
systems.
Elsewhere, in Argentina, Brazil, Mexico and other
countries, the pattern has been this: A handful of
entrepreneurs, often with close ties to their country's
political elite, have gotten richer. The middle class, never
large to begin with and traditionally propped up by plentiful
government jobs, urban food subsidies and trade barriers that
kept inefficient companies alive, has shrunk. And the poor,
whose safety net, never strong, has been strained by demands
for fiscal austerity from the international financiers these
countries depend on, keep getting poorer.
``In the 1990s, Latin American policy makers have put their
emphasis on overall performance, on making sure the
macroeconomic indicators were lining up,'' says Gert
Rosenthal, a Guatemalan economist. ``But there is a growing
consensus that something is terribly wrong when you have this
and 40% of your population is in worse shape than before.''
The negative balance of the free-market experiment for many
Latin Americans has tipped the scales away from support for
further reform. Leading presidential candidates in Argentina,
Chile and Mexico--three countries with elections over the
next year--are all emphasizing the need to put people before
markets. ``There is a search for a kinder, gentler form of
capitalism,'' says Lacey Gallagher, head of Latin American
sovereign ratings at Standard & Poor's Co. in New York. ``It
is sad, but the reform process in a lot of countries is
getting stuck because political support for reforms has
dwindled so much.''
No one thinks Latin America will return to the days of
import substitution and uncontrollable deficit spending, or
that social revolution is on the horizon. But observers like
Ms. Gallagher worry that although they have embarked on
the free-market path, many Latin American economies aren't
yet flexible enough to adapt to change in the global
economy. Nor can they deliver an improved standard of
living to the majority of their citizens. ``The first-
stage reforms, which most Latin American countries have
already been through, worsen income distribution, make
economic cycles more profound and raise unemployment,''
she says. ``The payoff comes with the second-stage
reforms.''
But those reforms, which include strengthening tax
collections, making taxation fairer and labor laws more
flexible, and streamlining institutions like courts and
schools, have run into public opposition mainly because of
the financial and social costs associated with the first
round of reforms. Politicians generally realize these are the
steps they have to take, but in the fledgling democratic
environment in which they operate, consensus building is a
painfully slow process.
In Argentina, for instance, President Carlos Menem has
tried for several years to scrap the country's antiquated
labor laws, but he can't because still-powerful unions
believe the old rules are the only remaining safeguard for
their workers. Lately, Mr. Menem hasn't pushed the point
because his Peronist party, built originally upon a base of
fervent worker support, needs union backing to prevail in
presidential elections scheduled for October.
Economists say the cost of the delay has been high.
Argentina, which pegged its currency to the dollar earlier in
the decade to quash triple-digit inflation, has entered a
nasty recession because of a big currency devaluation by
Brazil, its No. 1 trading partner. With its inflexible labor
laws, Argentina can't reduce wages to remain competitive. The
result: Output has fallen and unemployment has soared.
A similar though less pressing dilemma faces Mexican
President Ernesto Zedillo. In March, he floated a plan to
gradually privatize the country's electrical sector, arguing
that the government doesn't have the resources to invest the
$25 billion needed over the next few years to increase the
power supply. While many Mexicans agree with the president's
basic point--that state funds ought to be spent on things
like health and education rather than power plants--few trust
the private sector to do the job properly.
It isn't hard to see why. Mexico's privatization binge has
been plagued by costly blunders that have many wondering
whether state finances are truly better off now, and whether
the Mexican economy is truly more competitive than before, as
the government contends. ``It isn't obvious to most Mexicans
that their lives have improved as a result of these
programs,'' says Luis Rubio, a Mexico City development
expert.
The toll roads provide a case in point. With the passage of
the North American Free Trade Agreement on the horizon and an
urgent need to upgrade Mexico's crumbling road infrastructure
to handle a surge in trade, former President Carlos Salinas
de Gortari embarked on a crash public-works program in which
private construction companies built a network of pay-as-you-
go highways. But in the government's rush to get the job
done, unrealistic traffic and income projection's were
made, local banks were muscled into coming up with the
financing, and companies without the necessary management
skills were signed up to do the work.
``Although it had a private-sector complexion, it was
really an old-fashioned public-works program,'' says William
F. Foote, a former banker who has studied Mexico's toll-road
blitz. ``It was done without reference to the realities of
the market.''
That quickly became clear. Projects were plagued by cost
overruns, and once the roads opened for business, neither
truckers nor travelers could afford the high tolls demanded.
Within a few years, the government stepped in to take over
many of the roads, leaving the companies that built them to
accept a more gradual return on their investment. Those
companies are, in several cases, still waiting to be fully
reimbursed and claim that their weak financial condition is
mainly due to their toll-road commitments. Meanwhile, roads
such as the Highway of the Sun remain glittering and
desperately short on traffic.
The fact that the road hasn't delivered on its promise
isn't lost on Graciela Martinez, an elderly woman sitting
under a tree near one of its toll plazas. Mrs. Martinez, who
sells iguanas for a living, stands up to show off her product
each time a vehicle slows to pay the toll. There haven't been
any sales today, she says solemnly, because city people don't
appreciate a good lizard.
But, she jokes, the dearth of traffic does have an upside.
While it isn't great for here pocketbook, she says,'' at
least it's easy on my feet.''
____
[From the American Chamber of Commerce of Mexico--Business Mexico,
April 1997]
What's Wrong With This Picture?: Optimistic Investors Overlook Mexico's
Consumer Spending Gap
By Nicholas Wilson
At first sight Mexico seems like an investor's dream: a
country of 93 million people, number 13 on the world list of
natural wealth per capita, recently opened virgin markets,
[[Page S13635]]
and a government that is rapidly forging trade agreements in
the Americas and aboard. Mexico, however, is also home to
grinding poverty, so just how big is its market? The reality,
according to economists, is that only between 10 percent and
20 percent of the population are really considered consumers.
The extreme unequal distribution of wealth has created a
distorted market, the economy is hamstrung by a work force
with a poor level of education, and a sizable chunk of the
gross domestic product is devoted to exports rather than
production for domestic consumption. Furthermore, worker's
purchasing power, already low, was devastated by the December
1994 peso crash and the severe recession that followed. Even
optimists do not expect wages in real terms to recover until
the next century. `They say there are more than 90 million
consumers in Mexico, but less than 20 percent earn more than
5,000 pesos (US$625) per month. The rest of the population
lives just above subsistence level,'' says Pedro Javier
Gonzalez, economist at the Mexican Institute of Political
Studies. the figures make grim reading: the National
Statistics Institute (Instituto Nacional de Estadisticas,
Geografia e Informatica, INEGI) and the Banco de Mexico
estimate that nearly 68 million Mexicans live in poverty.
About a million homes do not have electricity and potable
water, and adult illiteracy is 13 percent. According to
UNICEF's most recent report there are 9 million Mexican
children living in extreme poverty (one third of Mexico's
population is under 15 years old); 800,000 between the ages
of 6 and 14 years working in various productive sectors; and
60,000 ``street kids,'' a number that is increasing by 7
percent annually. The United Nations says poverty is most
extreme in the informal sectors of the world's economies. The
World Bank estimates 42 percent of Mexico's economic
population is employed in the informal sector; the Finance
Secretariat put the figure at 50 percent during its recent
clampdown on tax evaders. The informal economy includes
street vendors as well as largely self-sufficient campesinos
who ``effectively neither buy from nor sell to the rest of
the economy,'' says Gonzalez. The formal sector, however, is
not exactly made up of affluent consumers either. Sixty
percent of the registered work force earns between one and
two minimum salaries per day, according to a recent study by
the Worker's University of Mexico (Universidad Obrera de
Mexico). The minimum wage is currently worth about US$3.00
per day. ``Minimum wage guys don't buy imports,'' says one
analyst who preferred to remain anonymous.
overly optimistic
Despite the poverty indicators, foreign investors often
sound cheerful to the point of being almost blase about the
economic and social statistics. ``NAFTA will connect the
world's largest market (the U.S.) to the world's largest city
(Mexico City) says David Dean, promoter of a superhighway to
facilitate transport between the free trade agreement's
member nations. Yet many of Mexico City's inhabitants don't
even have access to drainage, electricity or basic education.
``Mexico has a teledensity of 6-8 telephone lines per one
hundred people, compared to 60 per hundred in the U.S.
There's a lot of potential in Mexico,'' says recently arrived
Bill Ricke, Global One international telecommunications
consortium president.
The potential is here, economists agree, but it is unlikely
to be developed in the near future with most of the
population living in abject poverty. Telefonos de Mexico
(Telmex) last year disconnected more customers for not paying
their bills than it connected. ``Nearly all of the (US$4
billion) long distance telecommunications market in Mexico is
accounted for by businesses. Individuals only make
international calls in extreme emergencies,'' says economist
Patricia Nelson. In reality the market is only about the top
15 percent of earners and businesses, she says.
Export businesses account for nearly 25 percent of the
gross domestic product (GDP), which in 1996 totaled US$326
billion. In 1980 export businesses only accounted for 10
percent of the GDP, says Gonzalez. At the same time, the
domestic demand per capita has actually shrunk in the last 20
years, he says. Given the population's low purchasing power,
production for the domestic market is minimal. Therefore, the
proportion of GDP represented by the export sector is
distorted, and is higher than in many developed countries,
says ING Barings economist Sergio Martin.
The average salary in Mexico is only US$3,720 a year.
It now takes a worker 23 hours to earn enough to purchase
the goods included in the ``basic basket,'' the price of
which has shot up 913 percent since 1987, compared to 8.3
hours 10 years ago, according to a report from the National
Autonomous University of Mexico (Universidad Nacional
Autonoma de Mexico, UNAM).
select few
Another distortion in Mexico's market is the eye-opening
difference between the rich and poor. Writer Carlos Fuentes
describes Mexico as a country where 25 Mexicans earn the same
as 25 million Mexicans. In the last two years, the 15
wealthiest families' fortunes leapt from the US$16.4 billion
to US$25.6 billion, which is equivalent to 9 percent of the
GDP or 23.9 million annual minimum wages.
The result in economic terms is that ``there is a market
for luxury Mercedes cars, yet little demand for reasonably
priced shoes (relative to a country with Mexico's
population),'' says Gonzalez. There are nearly 100 million
Mexicans yet there are only 2 million credit cards, adds
Martin. ``As some people have more than one it means that
less than 2 percent of Mexicans have credit cards and some of
them have limits of 1,000 or 2,000 pesos (US$125 or 250).''
Education, or the lack of it, has also played a role in the
steady widening of the gap between rich and poor since Carlos
Salinas took office in 1988. Between 1987 and 1993, urban
workers with higher education saw their wages jump 100
percent, whereas poorly educated workers (50 percent of
workers have only a primary school education) saw their wages
climb only 10 percent.
The rising poverty is a continual thorn in the government's
side. While its tough macroeconomic policies have drawn
praises from the international financial community, the
benefits have not trickled down to the poor. ``I don't see
the government doing anything to address the wealth
imbalance,'' Gonzalez says. Many think the government had
better get started, however, if it wants to make its newly
opened markets attractive to foreign investors. Moreover,
there may be social and political consequences if only a
handful of Mexicans continue to enjoy the fruit of the
economic reforms. ``I think we're living on borrowed time,''
said U.S. Ambassador to Mexico James Jones at the end of last
year. ``This generation of adults will probably survive on
hope but I think over the next five to ten years if that
isn't translated into benefits and real opportunities, you're
going to have demagogues rise up who want to turn the clock
back.''
Mr. HOLLINGS. Mr. President, the reason I included these articles is
because my distinguished mentor, the senior Senator from New York,
voted with me on NAFTA and that is against NAFTA. We had misgivings. Of
course, the proof is in the Wall Street Journal and the American
Chamber of Commerce articles about how they are making less down there
4 to 5 years since the enactment of NAFTA. We were told it was going to
create a positive balance of trade. We had a $5 billion-plus balance of
trade at the time of enactment. Now we have a $17 billion deficit in
the balance of trade with Mexico since NAFTA.
We were told it was going to solve the immigration problem. It has
worsened. We were told it was going to solve the drug problem. It has
worsened. As I said before, there is no education in the second kick of
a mule. We have been through this exercise about how we are all going
to put our arms together and hug and love and help our neighbors. Fine
with me if it really would work that way. It has not worked that way
and is not about to work that way in sub-Sahara and the Caribbean. I
will get into those items in just a few minutes.
With respect to the morning article--I try to get into the Wall
Street Journal because a lot of my crowd in South Carolina reads it.
They have me as the old isolationist: Hollings: ``Info revolution
escapes him.''
Really? I know a good bit more about the information revolution than
the Wall Street Journal does. I helped bring a good bit of it to South
Carolina, in fact, with my technical training for skills. I was in
Dublin, Ireland, and walked into the most modern microprocessing plants
of Intel outside of Dublin. My friend, Frank McKay, was there. He said:
Governor, I want to show you your technical training program. We sent
two teams to Midlands Tech in Columbia, SC, and we reproduced what was
there, and that is how I got it up and going and operating and in the
black.
I told this to Andy Grove when he came by, and he thanked me again. I
know a little bit about the information revolution. I am all for it. My
problem is, on the one hand, it does not create the jobs they all
advertise.
The Wall Street Journal ran an article about Wal-Mart and General
Motors. Wal-Mart exceeded the number of employees of General Motors for
the first time.
I ask unanimous consent this article be printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, Aug. 28, 1997]
Labor: The Changing Lot of the Hourly Worker
For decades, the U.S. has been evolving from a
manufacturing economy to a service economy. But Labor Day
1997 marks a milestone: Earlier this year. Wal-Mart Stores
Inc., the discount retailer, passed General Motors Corp. as
the nation's largest private employer.
The shift is more than symbolic. Union jobs with lush pay
and benefits, like those
[[Page S13636]]
held by GM assembly-line worker Tim Philbriek, are
disappearing. In their place are nonunion jobs like that of
Nancy Handley, who works in the men's department at a
Missouri Wal-Mart.
Both punch a time clock, and share a stake in their
employers' success. The Wal-Mart workday is less physically
taxing than GM's, but the hours are longer and the pay barely
supports even a thrifty family. Still, Wal-Mart offers a
measure of responsibility and path of advancement to hourly
workers, thousands of whom are promoted to management each
year.
Mr. HOLLINGS. Mr. President, I want the Wall Street Journal to read
its own articles.
The leading line:
For decades, the U.S. has been evolving from a
manufacturing economy to a service economy. But Labor Day
1997 marks a milestone: Earlier this year, Wal-Mart Stores,
Inc., the discount retailer, passed General Motors
Corporation as the nation's largest private employer.
General Motors' average hourly wage is about $19 an hour; including
benefits, it is $44 an hour. Whereas at Wal-Mart stores, the average
hourly wage is $7.50; including benefits, $10. In manufacturing, the
salary is four times that in the service economy. That is why they are
all talking about this wonderful economic boom that has to do with the
service economy, so much so that the labor unions I see have buddied up
with the American Chamber of Commerce. The American Chamber of Commerce
has gone international. They are not representing Main Street America.
On yesterday, Monday, November 1, ``Corporate, Labor Leaders Both
Trumpet Backing for Clinton's Trade-Talk Plan.'' I ask unanimous
consent this article be printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the Wall Street Journal, Nov. 1, 1999]
Corporate, Labor Leaders Both Trumpet Backing for Clinton's Trade-Talk
Plan
(By Helene Cooper)
Washington.--Depending on how you look at it, the joint
letter from corporate and union leaders supporting the
Clinton administration's agenda for global trade talks, was
either a huge win for big business or for labor unions.
The way corporate America tells it, the letter was a
victory for pro-trade American companies because John
Sweeney, head of the AFL-CIO, signed it. ``How are the labor
unions going to protest in Seattle [at the upcoming World
Trade Organization's big powwow] if Mr. Sweeney is saying
labor supports the trade agenda?'' asked Frank Coleman,
spokesman for the U.S. Chambers of Commerce.
Indeed, Mr. Sweeney's decision to back the Clinton trade
agenda rankled the more militant unions, such as the
Teamsters and the United Steelworkers of America.
But AFL-CIO leaders said the letter shows Mr. Sweeney at
his savviest. For one thing, the AFL-CIO is backing Vice-
President Al Gore's presidential campaign and wants to
minimize political damage to his election chances by
hammering him on trade.
More significantly, several big company chieftains,
including John E. Pepper, chairman of Procter & Gamble Co.,
Maurice ``Hank'' Greenberg, head of American International
Group Inc., and Robert Shapiro, head of Monsanto Co., also
signed the letter.
The letter calls for a working group to be established
within the WTO to study core labor standards and trade, and
marks the first time many of America's biggest companies have
agreed to support U.S. moves linking trade liberalization
with labor standards.
``The U.S. government must further ensure that any
agreements enable the United States to maintain its own high
standards for the environment, labor, health and safety,''
the Oct. 25 letter said.
For years, Republican lawmakers, backed by big business,
have resisted linking trade expansion with labor and
environmental issues. While last week's letter makes no
mention of using trade sanctions against countries with poor
labor standards, Thea Lee, the AFL-CIO's trade policy
director, said that is labor's ultimate goal. ``What we want
is the ability to use trade rules to protect worker rights,''
Ms. Lee said.
While AFL-CIO leaders still plan to show up in force in
Seattle this month to protest WTO policies they see as
antilabor, they also said it's important to get a seat at the
table so that union views can be represented.
Whether the Clinton administration will get the rest of the
WTO to sign on to its labor agenda for the Seattle meeting
remains to be seen. Developing countries, in particular, have
fought linking trade and labor, and many of these countries
see the establishment of a working group as the beginning of
a move to do just that. These countries are bound to fight
the issue in Seattle.
America's labor unions are hardly united on the matter.
Teamsters spokesman Bret Caldwell said he was ``shocked'' and
``disappointed'' in Mr. Sweeney. ``We in no way agree that
the administration's trade policies are good for working men
and women,'' he said. ``The Teamsters will play a very active
role in demonstrations in Seattle.''
Mr. HOLLINGS. Mr. President, ``Mr. Sweeney's decision to back the
Clinton trade agenda rankled the more militant unions, such as the
Teamsters, and the United Steelworkers of America.'' Those are the
manufacturing jobs. Just as the fabric boys divorced themselves from
apparel and now can toot for this kind of legislation, the head of the
service economy, John Sweeney, has forgotten about manufacturing jobs,
and he is going along. That is why we got this overwhelmingly
bipartisan majority.
But back to the point, this is what disturbs this particular Senator,
that we are hollowing out the manufacturing strength, the industrial
backbone of the United States of America.
The so-called service economy or information technology, or
information society, strikingly--why don't they read the November 5,
1999, edition of the London Economist that has just come out? On page
87, there is an article entitled ``The New Economy, E-Exaggeration: The
Digital Economy is Much Smaller Than You Think.'' I ask unanimous
consent to have that article printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[From the London Economist, Nov. 5, 1999]
The New Economy E-xaggeration: The Digital Economy is Much Smaller Than
You Think
Newspapers and magazines are packed with stories about the
digital economy, the information-technology (IT) revolution
and the Internet age. That their pages are filled with
advertising from IT firms presumably has nothing to do with
it. Such firms account for a quarter of the total value of
the S&P 500, and this week Dow Jones announced that
Microsoft, Intel and SBC Communications will be included in
its industrial average from November 1st. Not before time,
many say, for high-technology businesses now account for a
huge chunk of the economy. Actually, they don't.
New figures published on October 28th by America's
Department of Commerce appear to support the view that IT is
very important to the American economy. The department now
counts all business spending on software as investment
(previously, it was a cost). This has both increased the
apparent size of IT investment and boosted America's rate of
growth in recent years.
But measuring the size of the ``new'' economy is a
statistical minefield. The most generous estimate comes from
the OECD, which tracks the ``knowledge-based economy''. It
estimates that this accounts for 51% of total business output
in the developed economies--up from 45% in 1985. But this
definition, which tries to capture all industries that are
relatively intensive in their inputs of technology and human
capital, is implausibly wide. As well as computers and
telecoms, it also includes cars, chemicals, health,
education, and so forth. It would be a stretch to call many
of these businesses ``new''.
A study published in June by the Department of Commerce
estimates that the digital economy--the hardware and software
of the computer and telecoms industries--amounts to 8% of
America's GDP this year. If that sounds rather disappointing,
then a second finding--that IT has accounted for 35% of total
real GDP growth since 1994--should keep e-fanatics happy.
Perhaps unwisely. A new analysis by Richard Sherlund and Ed
McKelvey of Goldman Sachs argues that even this definition of
``technology'' is too wide. They argue that since such things
as basic telecoms services, television, radio and consumer
electronics have been around for ages, they should be
excluded. As a result, they estimate the computing and
communications-technology sector at a more modest 5% of GDP--
up from 2.8% in 1990. This would make it bigger than the car
industry, but smaller than health care or finance. In most
other economies, the share is lower; for the world as a
whole, therefore, the technology sector might be only 3-4% of
GDP.
But what, you might ask, about the Internet? Goldman
Sachs's estimate includes Internet service providers, such as
America Online, and the technology and software used by
online retailers, such as Amazon.com. It does not, however,
include transactions over the Internet. Should it? E-business
is tiny at present, but Forrester Research, an Internet
consultancy estimates that this will increase to more than
$1.5 trillion in America by 2003. Internet bulls calculate
that this would be equivalent to about 13% of GDP. Yet it is
misleading to take the total value of such goods and
services, whose production owes nothing to the Internet. The
value added of Internet sales--i.e., its contribution to
GDP--would be much less, probably little more than 1% of GDP.
This is not to deny that the Internet is changing the way
that many firms do business--by, for example, enabling them
to slim inventories--but, in the near future, as a proportion
of GDP, it is likely to remain small.
a luddite's lament
If measuring the size of the technology sector is hard,
calculating its contribution to
[[Page S13637]]
real economic growth is trickier still, because the prices of
IT goods and services (adjusted for quality) have fallen
sharply relative to the prices of other goods and services.
For example, official figures show that America's spending on
IT has risen by 14% a year in nominal terms since 1992, but
by more than 40% a year in real terms. This figure is so high
partly because it is extremely sensitive to assumptions about
the rate at which the price and quality of IT is changing.
The Commerce Department calculates that the technology
sector has contributed 35% to overall economic growth over
the past four years. But because such figures are based on
spending in real terms, the Goldman Sachs study reckons they
are misleading. In nominal terms, IT has accounted for a more
modest 10% of GDP growth in the past four years.
Another popularly quoted figure is that business spending
on IT has risen from 10% of firms' total capital-equipment
investment in 1980 to 60% today. But again, this is based on
constant-dollar figures, and so it hugely exaggerates the
true increase. In terms of current dollars (and before the
latest revisions), Goldman Sachs calcuate that business
investment in computers accounts for 35% of total capital
spending, not 60%. And even this exaggerates the importance
of IT, because much of the money goes to replace equipment
which becomes obsolete ever more quickly. The share of IT in
additional ``net'' investment is much smaller. Computers
still account for only 2% of America's total net capital
stock.
For years economists have been seeking in vain for evidence
that computers have dramatically raised productivity. One
explanation for the failure of productivity to surge may be
that official statistics are understating its growth. Another
is that much investment in IT has been wasted: hours spent
checking e-mail, surfing the Net or playing games reduce, not
increase, productivity. A third may simply be that IT is
still too small to make a difference: for the moment,
appropriately enough, you can count the digital economy on
the fingers of one hand.
That is changing, and firms are learning. And note this: if
you add in all computer software and telecoms (on the widest
definition), the share of IT in the capital stock rises to
10-12%. As it happens, this is almost the same as railways at
the peak of America's railway age in the late 19th century.
Railways boosted productivity and changed the face of
Victorian commerce. Hype is hype--but the new economy may yet
happen anyway.
Mr. HOLLINGS. I quote from the article:
. . . they estimate the computing and communications-
technology sector at a more modest 5% of the GDP --up from
2.8% in 1990. . . .
The value added of Internet sales--i.e., its contribution
to the gross domestic product--would be much less, probably
little more than 1% of the gross domestic product.
Mr. President, another popularly quoted figure is that business
spending on information technology has risen from 10 percent of a
firm's total capital, equipment and investment in 1980 to 60 percent
today. Again, this is based on constant dollar figures. And it hugely
exaggerates the true increase.
In terms of current dollars . . . Goldman Sachs calculate
that business investments in computers accounts for 35% of
total capital spending, not 60%. And even this exaggerates
the importance of [information technology] because much of
the money goes to replace equipment which becomes obsolete
ever more quickly. The share of [information technology] in
additional ``net'' investment is much smaller. Computers
still account for only 2% of America's total net capital
stock.
I want to dwell on this for a moment, for the main and simple reason
that this really is what is at issue and why the Senator from South
Carolina takes the floor. It is just not textiles. Textiles is on its
way out.
And by another headline I saw in the New York Times, on the right-
hand upper column of the front page this morning, President Clinton is
getting together with the People's Republic of China to admit them to
the World Trade Organization. You can pass the CBI, the sub-Sahara, the
NAFTA there, there, and there yonder, and pull it all around, but once
that is done, once China gets into the World Trade Organization and
starts with its transshipments and its appeals, it controls the general
assembly.
We had a resolution about 4 years ago to have hearings on human
rights within the People's Republic of China. That crowd went back down
into Africa and Australia and around and changed the vote, and they
never had the hearing.
So I am telling you, we really are going to be a minority in the
World Trade Organization. They can change around your environmental
protections, your labor protections, your high standard of living, and
everything else. And the CBI and sub-Sahara, and everything else that
we think we are doing something to help, we are going to China, I can
tell you that right now with the front page article about President
Clinton. So we know where we are headed with respect to that.
But my friend, Eamonn Fingleton, has written a book, ``In Praise of
Hard Industries.'' Obviously, I can't include the book in the Record at
this particular time. But I refer to its comparisons where the Wall
Street Journal time and time again has come out again and again with
certain misstatements.
In 1996, when everyone from the Wall Street Journal to the
Christian Science Monitor was dismissing the Japanese economy
as sluggish or stagnant or even mired in a deep slump, in
fact Japan's growth rate that year of 3.9 percent was the
best of any major economy and was significantly superior to
the rate of 2.8 percent recorded in the booming United
States. . . .
Although experts like the Economist's editor in chief . . .
predicted a decade ago that Japan's savings rate would plunge
in the 1990s, the truth is that at last count Japan was
producing $708 billion of new savings a year--or nearly 60
percent more than America's total of $443 billion . . . Japan
has now decisively surpassed the United States as the world's
main source of capital . . . Japan's net external assets
jumped from $294 billion to $891 billion in the first seven
years of the 1990s. By contrast, America's net external
liabilities ballooned from $71 billion to $831 billion.
With these things going on, you begin to worry where you are headed
with the particular trade bill.
Again, instead of doubling the volume of steel imports since 1983,
the United States remains by far the largest importer.
So we are importing the steel. We are not having a savings rate.
According to the Financial Times article that was printed in the Record
the other day:
Fears of a slide in the U.S. dollar has haunted global
currency markets for several months now. The dollar was
granted a reprieve last week following better than expected
August trade figures. But many observers believe it is only a
matter of time before the dollar succumbs to mounting trade
imbalances.
Quoting from the book I previously mentioned:
In the 1960s----
Since the distinguished Senator from New York went back 65 years--
In the 1960s President John F. Kennedy felt so strongly
about this that he ranked dollar devaluation alongside a
nuclear war as the two things he feared most.
There you go. Here we have it. We have a whole book written on it.
Why, yes, it provides jobs. The information technology society or
globalization, as they want to call it, the engine of our great
economic recovery in the United States, our wonderful world leadership,
it provides jobs for the best, the top 5 percent of the population. You
have to be highly intelligent and everything else; like I have
mentioned the 22,000 employees at Microsoft. All 22,000 are
millionaires. More power to them. But that does not give you any
exports, that does not give you any growth. That does not give you any
strength of manufacturing in the industrial economy.
That is where we are hollowing it out. That is why we cannot afford
it. I would love to help the Caribbean Basin. I would love to help the
sub-Sahara. But time and again, we have given over and over and over
again with respect to--I remember back in the Philippines we had given
there. We had other particular initiatives whereby we always sacrificed
at the textile desk.
I do not have it with me right now, but I have it down where we have
given to Turkey. We gave to Egypt in Desert Storm. We have just
eliminated, in the Multifiber Arrangement, over a 10-year period--now
we are in the 5th year--all textile tariffs and everything else of that
kind. So we do not have any protectionism about which to really talk.
We have important jobs. The textile jobs, compared to those retail
jobs--the average textile wage is $11 an hour. With benefits, it
increases that. Those are good jobs that we are trying to hold onto--
the jobs of middle America, which is the strength of the democratic
society.
Let me go right back to the particular editorial. This is how silly
they can get. I will quote from the editorial. This editorial is from
the Wall Street Journal. So I ask unanimous consent to have printed in
the Record the editorial of this morning from the Wall Street Journal.
The title of the editorial is ``The Old Isolationists.''
[[Page S13638]]
There being no objection, the editorial was ordered to be printed in
the Record, as follows:
The Old Isolationists
We've got the ideal subject for President Clinton's next
speech on the ``new isolationism'' in Congress: Senate
Democrats. They've been abetting a filibuster that may kill
the Africa and Caribbean free-trade bill that Mr. Clinton at
least claims he still wants.
No doubt they think they can get away with this because the
media have barely noticed. Jesse Helms gives affluent,
powerful Carol Moseley-Braun a hard time for an
ambassadorship, and it becomes page one race-baiting mews.
But the President's own party stonewalls a trade bill that
would help millions of Africans escape their desperate
poverty, and the story lands back among the real estate ads.
The bill has everything Dan Rather and other good media
liberals claim to love. It's bipartisan, with support ranging
from New York liberal Charlie Rangel to Texas conservative
Phil Gramm. It'd help Africa not with handouts, but by
reducing U.S. tariffs and quotas so these countries can share
in the wealth of the global economy. And it repudiates Pat
Buchanan-style trade protectionism.
It's also a helluva good political story. Fronting for the
textile lobby, Ol' Fritz Hollings of South Carolina has been
leading a filibuster like he just walked out of the 19th
century. His hilarious rants cite as protectionist
authorities both Pat Buchanan and left-wing economist Paul
Krugman.
``And so Buchanan comes out, and was the best voice we had
in a national sense. I have been talking trade while that boy
was in GoZANga. Is that the name of tat high school around
her, GoZANga?'' Ol' Fritz was yelling on the Senate floor
last week, referring to Gonzaga High School.
``We are in trouble,'' the Senator from Milliken & Co. said
later. ``This boom they are talking about in the stock market
is the information society; it doesn't create the jobs.''
Self-parody aside, his strategy is obvious: run out the
Senate clock. That's why, after more than a week of debate,
GOP leader Trent Lott wants to get on with the vote and other
Senate business. Enter Senate Democratic leader Tom Daschle,
who says he's for the bill, but spent last week aiding Mr.
Hollings by rallying fellow Democrats to support Fritz's
filibuster.
Mr. Daschle's gripe was that Mr. Lott hadn't allowed a
wish-list of protectionist amendments: Pennsylvania's steel
front-man Rick Santorum on ``anti-dumping negotiations,''
Iowa protectionist Tom Harkin on child labor, Michigan's Carl
Levin (a wholly owned subsidiary of the United Auto Workers)
on ``worker rights,'' among others. None of this has anything
to do with Africa trade.
The Senate is supposed to be full of statesmen. But on this
subject the House has been more worldly. When protectionists
tried a procedural ruse to kill Africa trade in the House,
Mr. Rangel gathered the names of 79 Democrats who would vote
for a GOP rule to limit debate. Mr. Lott has 48 or so
Republicans in favor of the bill in the Senate, but the White
House hasn't yet been able to get even a dozen Democrats for
the 60 votes necessary to shut off debate. Democratic Party
to Africa: Get lost.
These columns have often saluted Mr. Clinton's achievements
on trade policy, notably Nafta and Gatt. But it's been
downhill since then. The President hasn't pushed a trade bill
through Congress in five years, mainly because of Democratic
opposition. He's also taken to soft-selling fast-track
negotiating power lest it hurt Vice President Gore with Big
Labor. Rest assured this flagging enthusiasm for free trade
has been noted in Democratic circles.
Later this month Mr. Clinton traveles to an international
trade meeting in Seattle, supposedly to rally the world back
to the free-trade flag. But if he can't deliver through
Congress something as small as lower tariffs for Africa, Mr.
Clinton might as well stay home.
New York Democrat Pat Moynihan made the point with his
usual delicate bluntless on the Senate floor last week. ``The
chairman (Republican Bill Roth) and I were planning to spend
a few days in Seattle just meeting with people. We were not
going to speak. Dare we go? I suppose Ambassador Barshefsky,
is required to go,'' he said of the predicament the U.S.
trade rep would be in if the Africa bill failed. ``I don't
want to show my face.''
Late yesterday Mr. Daschle finally agreed to oppose Mr.
Hollings, but only after he got Mr. Lott to guarantee him
votes later on such domestic political and non-trade matters
as the minimum wage. This shows where his priorities lie.
When the final Africa trade bill votes are toted up, we'll
also see who the real isolationists are.
Mr. HOLLINGS. Mr. Daschle is right. Mr. Lott had not allowed a wish
list of protectionist amendments. You see, Mr. Lott had given fast
track to this particular bill, until this morning, he said yesterday
afternoon, but that was without notice. I went back to get some
amendments. When I was getting those amendments at 5:30, they closed
this Senate Chamber down. They didn't want amendments. Now he says you
can get amendments. Here is what the Wall Street Journal thinks:
Pennsylvania's steel front-man Rick Santorum on
``antidumping negotiations,'' Iowa protectionist Tom Harkin
on child labor, Michigan's Carl Levin (a wholly owned
subsidiary of the United Auto Workers) on ``worker rights,''
among others. None of this has anything to do with Africa
trade.
It doesn't? Child labor doesn't have anything to do with Africa
trade, with Caribbean Basin Initiative trade? It doesn't? Wait until
the Senator from Iowa comes out here and presents his amendment. That
is how arrogant they have gotten. They splash a bunch of things people
would not understand. It has everything to do with it. In fact, those
are the principal amendments the Senator from South Carolina has. If
the Senator from Delaware would agree to them, we could move on with
this bill.
Specifically, in NAFTA we had the labor side agreements. They are not
included in the CBI/sub-Sahara. In NAFTA, we had the environmental side
agreements. Not in CBI/sub-Sahara. In the Mexican NAFTA, we had
reciprocity. Not in CBI, not in sub-Sahara. In fact, when the Senator
from New York jumped back 65 years, to 1934, I didn't hear him
enunciate clearly reciprocal trade agreements of Cordell Hull,
reciprocity. They had hard, good businessmen. Trade was trade, not a
moral thing of foreign aid. That is our problem today. Too many in the
political world think about trade as aid, another Marshall Plan. And
the Marshall Plan has worked. But there is a limit to what you can give
away.
I have time and again said that two-thirds of the clothing I am
looking at is imported. One-third of all consumption in the United
States is imported right now. If this train continues, it will be over
half within the next 5 years. That is the hollowing out. If we are
going to follow the London economists and the Brits who went from the
production of goods to the providing of services--a service economy--we
are going to have minimal growth. They got a British Army, but it is
not as big as our Marine Corps. But we are going to lose influence in
the World Trade Organization, in GATT, treaties in the Mideast and
everywhere else, because money talks. We don't have those things going.
Now, Mr. President, reciprocal trade. I have an amendment on
reciprocity, one on labor rights, and I have one with respect to the
matter of the environment. It was all included. Let me just note, this
is with tremendous interest to this particular Senator because I have
just picked up this week's Time magazine. What we really have, in
essence, is the campaign finance bill of 1999. They say they are not
going to pass it, but this is the campaign finance bill of 1999.
In the middle, on pages 38 and 39, is an open-page Buyers Guide To
Congress. Down here listed is the Caribbean tariff relief, a bill to
let the Caribbean and Central American countries export apparel to the
United States duty and quota free. Then you can go down to the
contributions. The clothing firms want access to cheap-tax-advantage
offshore production both Clinton and Republicans favor as a free trade
measure.
They have in here--yes, the manufacturing and retail side is Sara Lee
Corporation, Gap, the ATMI, and everything on the one side, and the
AFL-CIO anti-sweat-shop groups. We have seen where that sort of split
is. They are going along now with service labor leader John Sweeney and
not with the manufacturing jobs in America.
Then we go to last week's edition, and we have the fruit of its
labor. We see that, in addition to Sara Lee, we have Bill Farley and
the Fruit of the Loom group. It is just embarrassing to me when you
take Farley, who already moves 17,000 jobs out of Kentucky and some
7,000 from Louisiana, and then he gets a $50 million bonus when this
bill passes. They are talking about how we are going to help working
Americans. Then, all we have to do is go back to this week's London
Economist again, in the very first part of the magazine section. We can
put that in the Record.
I ask unanimous consent that the article entitled ``Politics and
Silicon Valley'' be printed in the Record.
There being no objection, the article was ordered to be printed in
the Record, as follows:
[[Page S13639]]
[From the Economist, Oct. 30, 1999]
Politics and Silicon Valley
The rise of America's high-tech industry is not just a
windfall for presidential hopefuls. It could also be a
godsend for the liberal political tradition.
Until recently, computer geeks hardly noticed politics.
Washington was ``the ultimate big company''. Policy wonks and
political theorists--let alone the poor saps sitting in
Congress--``just didn't get it''. And the policy
establishment, doers and thinkers alike, was only too happy
to return the compliment. In the last presidential election
campaign, references to a high-tech future were vague and
perfunctory, and Silicon Valley or Seattle were not
particular ports of call. Washington, DC and the geeks
existed in different worlds.
How things have changed. According to the Centre for
Responsive Politics, a Washington watchdog group, by the end
of June this year contributions from the computer industry
were already three times those given to Bill Clinton and Bob
Dole combined during the 1996 campaign. Of the $843,000 in
direct industry contributions, over one-third went to George
W. Bush, the Republican front-runner, with the two
Democrats--Vice-President Al Gore and Bill Bradley--both
netting about half of the Texas governor's total. These
figures tell only part of the story, however. They do not
include contributions from telecommunications and biotech
companies, nor the millions of dollars the candidates have
received in fund-raisers organised by computer executives and
venture capitalists: entrepreneurs who helped fuel the high-
tech boom, and are now helping pave the way to the White
House.
Mr. Bush has courted the computer chiefs of Texas since
before he became governor, in 1995. Heading the committee of
computer luminaries advising him is Michael Dell, the
Godfather of Austin's high-tech revolution, who is actively
recruiting other computer executives into the Bush camp.
Among the other members of the committee are James Barksdale,
founder of Netscape, and John Chambers, president and CEO of
Cisco Systems. But if Mr. Bush has Texas sewn up, other
candidates have been prospecting elsewhere. In Colorado,
which now has the second-highest concentration of high-tech
jobs in the country, the state's prosperous telecom industry
has been donating generously to both Senator John McCain and
Mr. Gore. Trips to the Pacific north-west have been
especially lucrative for Mr. Bradley and Mr. McCain, with
Microsoft giving both candidates their largest computer-
industry donations to date. Nor are the contributions only
for the men at the top: the computer industry gave $8m to
congressional campaigns in 1998, more than twice what it gave
in 1994.
This money is all the sweeter for coming with few strings
attached. The computer industry has yet to develop a coherent
lobbying strategy, in which campaign donations are implicitly
exchanged for influence over the political process. This is
partly because the ``computer industry'' is really just a
collection of assorted (and often competing) interests. As
one industry analyst puts it, ``Just as there is no `Asia' to
Asians, there is no `technology community' to technology
companies.'' The interest of hardware companies are not
necessarily those of software or e-commerce companies, and
therefore a focused, industry-wide lobbying effort has been
difficult to co-ordinate.
Slowly, this is changing, as high-tech executives finally
learn the rules of political gamesmanship. Eric Benhamou,
boss of 3Com, dates the politicisation of Silicon Valley to
1996, when California's trial lawyers sponsored a ballot
measure that would have exposed high-tech companies to a
barrage of litigation. Since then the Valley has woken up to
the fact that it helps to have friends in Washington. The
government has the power to turn off one of the Valley's most
important resources: the supply of foreign brains. The
Microsoft antitrust case may even prove that it has the power
to restructure the entire computer industry. In short, the
two sides simple have to talk to each other.
The Technology Network (TechNet), a political action group
founded two years ago in Silicon Valley, has just set up a
second office in Austin, and plans to open more chapters in
the future--an attempt to influence policy at both state and
local level. Companies in Washington, DC--home of America
Online, America's biggest Internet service provider, and a
city where the computer industry has just taken over from
government as the biggest local employer--have also started
their own lobbying group, CapNet.
According to Steve Papermaster, an Austin entrepreneur who
heads TechNet Texas, there is a greater sense of urgency
within the technology industry to have more of a say in
politics. Like it or not, high-tech businesses have to work
in a world of taxes, regulation, lawsuits and legislation;
they need politicians just as much as politicians need them.
If not more: for political contributions from the high-tech
hives are still well below those that come in from such old-
fashioned sectors as banking or even agriculture. There is a
lot of catching-up to do.
the geeks and the parties
The Republican and Democratic candidates who are now
trawling the high-tech industry, hands out, hope that this
new political awareness has a partisan tinge. Republicans
seem to have more grounds for optimism. After years when it
looked as if computers favoured big organisations over small
ones, and companies such as IBM appeared to be breeding
grounds for conformism, the high-tech industry is arguably
putting technology back on the side of individual liberty.
The average computer geek is convinced that the rise of
clever machines and interlinked networks is inexorably
shifting power from organisations to individuals,
decentralising authority and accelerating innovation. Not
only big companies and big unions, but also big government,
seem to be on the point of disappearing. The sort of world
the geeks are now conjuring up is a throwback to that of the
Founding Fathers, so admired by Republican revolutionaries of
the Gingrich mould, where (morally upright) yeomen farmers
pursued happiness quite undisturbed by government.
Yet Democrats, too, think they have natural friends in the
high-tech industry. There is a growing feeling in some
quarters that--as in the case against Microsoft--government
is not always a force for evil. Indeed, the public sector may
hold the key to solving the social problems that now plague
the high-tech industry: the shortage of educated labour, the
over-strained transport system and the rapidly growing gap
between rich and poor.
Some computer bosses are already appealing to politicians
to get their act together. Andy Grove, the head of Intel, has
told congressmen that the Internet is about to wipe out
entire sections of the economy--and has warned them that,
unless politicians start moving at ``Internet rather than
Washington speed'', America may see a repeat of the social
disaster that followed the mechanisation of agriculture. The
high-tech industry is beginning to realise that it is doing
nothing less than ``defining the economic structure of the
world,'' says Eric Schmidt, the boss of Novell. And with that
realisation comes, for some at least, a heavy sense of
responsibility.
So which party will gain from the computer industry's
belated entry into politics? It is hard to say. Mr. Schmidt
points out that most computer folk are seriously
disillusioned with the established parties: with the
Democrats because they are too soft on vested interests, with
the Republicans because of their ``Neanderthal'' social
views. They think politics is not about ideology, but about
fixing things, a tidy-minded approach that comes easily to
scientists and engineers--and which carries echoes of the
earlier, not-so-crazy Ross Perot.
It is often claimed that ``libertarian'' and
``progressive'' groupings are emerging in the computer
industry. Yet these sound not dissimilar from the sort of
shifts that are occurring anyway inside the Republican and
Democratic Parties. Libertarians are represented by men like
T.J. Rodgers, the boss of Cypress Semiconductor, and Scott
McNealy, the head of Sun Microsystems, who argue that
government is being rendered largely irrelevant by the power
and speed of computers, and that the best way to deal with
problems such as the ``digital divide'' may well be to extend
the market, not invent new government programmes. This is
``compassionate conservatism''--perhaps operating even
through beneficent computer companies themselves, offering
training and education--of the sort that George W. Bush might
recognize.
The progressives, who originally appeared under Bill
Packard at Hewlett-Packard in the 1990s, have now fanned out
to a growing number of institutions, from Joint Venture-
Silicon Valley, a think-tank dedicated to tackling local
problems, to TechNet, which now consists of no fewer than 140
high-tech bosses. They argue that there is still an important
place for the government in a computer-driven economy--albeit
a much smaller and more intelligent government than the one
that currently resides in Washington. They love to point out
that government funded the research that gave birth to the
Internet, and one of their key complaints is that the federal
government's R&D spending over the past 30 years has declined
dramatically. Doesn't that sound just a bit like Al Gore?
brave new politics
It is tempting to conclude that the high-tech industry,
flush with its new success, is claiming an impact on politics
that goes far beyond the facts. Yet politics is a theoretical
discipline, as well as a practical one; and here the
collusion with high-tech is leading in fascinating
directions. Computer-folk are beginning to look outside
cyber-land for the answers to their questions about the
future of society and government. At the same time, the
intellectual and policy establishments are increasingly
looking to the Valley, and other high-tech corners, for clues
as to the shape of things to come.
The latest think-tank in Washington, DC, the New America
Foundation, is largely funded by Silicon Valley money and is
devoted to exploring the sort of political topics that will
be at the heart of the digital age: digital democracy, the
future of privacy and the digital divide. New America is in
one of the few funky bits of Washington, Dupont Circle. It
has scooped up a good proportion of the brightest American
thinkers under 40 in its fellowship programme, including
Michael Lind, Jonathan Chait and Gregory Rodriguez, and it is
making sure that these bright young things interact with the
cyber-elite at regular retreats and discussions.
So far, the person who has straddled the worlds of social
theory and Silicon Valley most successfully is Manual
Castells, a sociologist at the University of California. Mr.
Castells enjoys a growing reputation as the
[[Page S13640]]
first significant philosopher of cyber-space--a big thinker
in the European tradition who nevertheless knows the
difference between a gigabit and a gigabyte. His immense
three-volume study, ``The Information Age'' (Blackwell),
echoes Max Weber in its ambition and less happily in its
style (the ``spirit of informationalism'', for example). He
writes about the way in which global networks of computers
and people are reducing the power of nation states,
destabilizing elites, transforming work and leisure and
changing how people identify themselves.
Mr. Castells ruminates obscurely about ``the culture of
real virtuality'', ``the space of flows'' and ``timeless
time''. He also castigates the cyber-elite for sealing
themselves off in information cocoons and leaving the poor
behind. But this former Marxist and student activist cannot
restrain his enthusiasm for the way that it is diffusing
1960s libertarianism ``through the material culture of our
societies''. The result is that his sprawling boo, is now an
important fashion accessory in Palo Alto cafes.
Will the views it enshrines be more than a passing trend?
Very probably. The last time America underwent a fundamental
economic change, a fundamental political realignment rapidly
followed: the transition from an agrarian to an industrial
society in the mid-19th century soon gave rise to mass
political parties with their city bosses and umbilical ties
to labour and capital. The cyber-elite not only suspects that
changes of a similar magnitude are inevitable. It hopes to be
able to help shape the new politics.
Today's sharpest intellectuals are fascinated by Silicon
Valley for the same reason that thinkers early in this
century were intrigued by Henry Ford: the smell of huge
amounts of money made in new ways. But the Valley has more
interest for them than Motown ever had, because it deals in
the very stuff of intellectual life, information: and because
this, more than any other place, is a laboratory of the
future.
Individualism has been losing out as a practical doctrine
for the past century because the invention of mass production
encouraged the creation of big business, big labor and,
triangulated between the two, big government. this has been
the age not of Jefferson's yeoman farmer, but of William
Whyte's Organisation Man. Now, however, computers are
shifting the balance of power from collective entities such
as ``society'' or ``the general good'' and handing it back to
those whom governments once condescendingly referred to as
their ``subjects''.
This cult of individual effort, completely detached from
the old hierarchical or social structures, can be found
everywhere in Silicon Valley. The place is full of bright
immigrants willing to sacrifice their ancestral ties for a
seat at the table; almost 30% of the 4,000 companies started
between 1900-96, for example, were founded by Chinese or
Indians. The Valley takes the idea of individual merit
extremely seriously. People are judged on their brainpower,
rather than their sex or seniority; many of the new internet
firms are headed by people in their mid-20s.
The Valley's 6,000 firms exist in a ruthlessly
entrepreneurial environment. It is the world's best example
of what Joseph Schumpeter called ``creative destruction'':
old companies die and new ones emerge, allowing capital,
ideas and people to be reallocated. The companies are mostly
small and nimble, and the workers are as different as you can
get from old-fashioned company men. As the saying goes in the
Valley, when you want to change your job, you simply point
your car into a different driveway.
the disappearing state
This twofold Siliconisation--the spread of both the
Valley's products and its way of doing business--is beginning
to challenge the rules of political life in several
fundamental ways. And it is doing so, of course, not merely
in America but the world over--though America is both farther
ahead, and represents more fertile ground.
First, the cyber-revolution is challenging the expansionary
tendencies of the state. Over the past century the state has
grown relentlessly, often with the enthusiastic support of
big business. But corporatism has no future in the new world
of creative destruction. (It is a safe bet that imitation
Silicon Valleys that have been planned by politicians are
going to hit the buffers.)
The spread of computer networks is also moving commerce
from the physical world to an ethereal plane that is hard for
the state to tax and regulate. The United States Treasury,
for example, is currently agonizing over the fact that e-
commerce doesn't seem to occur in any physical location, but
instead takes place in the nebulous world of ``cyber-space''.
The internet also makes it easier to move businesses out of
high-taxation zones and into low ones.
One of the state's main claims to power is that it ``knows
better what is good for people than the people know
themselves''. But the Siliconisation of the world has up-
ended this, putting both information and power into the hands
of individuals. Innovation is now so fast and furious that
big organizations increasingly look like dinosaurs, while
wired individuals race past them. And decision-making is
dispersed around global networks that fall beyond the control
of particular national governments.
The web is also challenging traditional ideas about
communities. Americans are accustomed to thinking that there
is an uncomfortable trade-off between individual freedom and
community ties: in the same breath that he praises America's
faith in individualism, Tocqueville warns that there is
danger each man may be `'shut up in the solitude of his own
heart''. Yet the Internet is arguably helping millions of
spontaneous communities to bloom: communities defined by
common interests rather than the accident of physical
proximity.
Information technology may be giving birth, too, to an
economy that is close to the theoretical models of capitalism
imagined by Adam Smith and his admirers. Those models assumed
that the world was made up of rational individuals who were
able to pursue their economic interests in the light of
perfect information and relatively free from government and
geographical obstacles. Geography is becoming less of a
constraint; governments are becoming less interventionist;
and information is more easily and rapidly available.
So far--Mr. Castells apart--Silicon Valley has not produced
a social thinker of any real stature. Technologists tend not
to be philosophers. But at the very least, computerization is
helping to push political debate in the right direction:
linking market freedoms with wider personal freedoms and
suggesting that the only way that government can continue to
be useful is by radically streamlining itself for a more
decentralized age.
It is a little early to expect that this sort of thinking
will colour next year's campaigns; the new alliances between
politicians and the cyber-elite have mostly sprung up for the
most ancient and pragmatic of reasons. But it may only be a
matter of time before America sees, on the back of the
computer age, a great new flowering of liberal politics.
Mr. HOLLINGS. It says:
How things have changed. According to the Centre for
Responsive Politics, a Washington watchdog group, by the end
of June this year, contributions from the computer industry
were already three times those given to Bill Clinton and Bob
Dole combined during the 1996 campaign. Of the $843,000 in
direct industry contributions, over one-third went to George
W. Bush, the Republican front-runner, with the two
Democrats--Vice President Al Gore and Bill Bradley--both
netting about half of the Texas Governor's total. These
figures tell only part of the story, however. They do not
include contributions from telecommunications and biotech
companies, nor the millions of dollars the candidates have
received in fundraisers organised by computer executives and
venture capitalists: entrepreneurs who helped fuel the high-
tech boom, and are now helping pave the way to the White
House.
And on and on. If they can see it in downtown London and on Main
Street America with the headline, ``The Buyer's Guide To Congress,''
and list in this particular bill the Caribbean tariff relief bill, we
Senators don't have any pride. Is there no shame? Can't we understand
what is going on and that NAFTA doesn't help the workers in South
Carolina? We lost all the jobs. What few remain, they are saying the
high-tech revolution has passed by, and it says the info revolution
escapes them.
If I could get Gates to South Carolina tomorrow morning, I would
bring him in. He is a wonderful industry and everything else. At least
give President Reagan credit; we subsidized the semiconductor industry
by putting in a voluntary restraint agreement and Sematech.
That is why we would have Intel and otherwise gone. Yes; we have
moments of sobriety in this particular body. But it is election 2000.
It is all financing, and the buying of the Congress. They ought to be
ashamed to bring this bill.
But I will make the Senator from Delaware a deal. If he will accept a
side agreement on labor similar to what we have on NAFTA, and a side
agreement that we have on NAFTA with respect to the environment and
reciprocity, we would not even have to. Those amendments ought to be
accepted. They were on the NAFTA agreement. If he will accept those, I
will sit down, and we can go ahead and vote on this particular bill. I
make that proposal to the distinguished Senator from Delaware. After he
has had a chance to study it, I hope to hear from him because it would
save all of us a lot of time.
I have had relevant amendments, instead of the ``Hollings
filibuster'' all last week. The majority leader filibustered. He knew
how to do what he wanted to do. He filled the tree where you couldn't
put up those amendments. You couldn't put up any kind of amendment with
respect to child labor. You couldn't put up in any amendments with
respect to trade. He filled the tree. He forced fast track. It was a
bill with his amendments, take it or leave it.
I yield the floor.
The PRESIDING OFFICER. The Chair recognizes the Senator from Iowa.
____________________