[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[House]
[Pages H3617-H3619]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              AGAINST PNTR

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Sherman) is recognized for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, I am against isolationism, against 
protectionism, and I am against this deal. Trade with China should not 
end, but we need to go back to the drawing board. We accept over 43 
percent of China's exports. They accept only .7 percent, less than 1 
percent of our exports.
  Under those circumstances, we can negotiate a better deal. This deal 
is good for profits, but it is bad for American working families. It is 
good for the Chinese Communist party. That is why they want this deal 
so badly. And it is bad for those who want to unravel the power of the 
Communist party elite in China. This deal is good for the People's 
Liberation Army and bad for American security interests.
  First let us turn to the balance of trade. This deal will make 
permanent a system that has led to the most unbalanced trade in the 
history of affairs between nations, a $70 billion trade deficit as 
contrasted to just a $13 billion market for our exports.

                              {time}  1915

  There is tremendous economic power here on Capitol Hill pushing this 
deal, but it is not from people who think they can make money by 
producing goods in the United States at labor costs of $20 and $30 an 
hour and sell them to China where people make 12 cents an hour; in 
fact, it is the reverse. The big profits, the big corporate push comes 
from those who would like to pay workers 12 cents an hour and bring 
those goods and sell them to Americans at American prices, American 
prices on which they can make tremendous profits.
  This deal makes China safe for U.S. investment, because, you know 
that whatever is produced in that factory by an American corporation 
with Chinese workers can be brought to the United States at huge 
profits permanently and without interruption, but I would like to bring 
to the attention of this House a new report issued by the government 
agency that is responsible for analyzing these trade agreements, the 
U.S. International Trade Commission, which reported today that this 
deal will increase our already enormous trade deficit and cost America 
872,000 jobs over the next 10 years.
  I should point out that this report was officially requested by U.S. 
Trade Representative Charlene Barshefsky, the primary mover in the 
administration to get us to vote for this deal. She asked for the 
report. When the report said this deal kills American jobs, she said it 
was premature.
  I can understand why she would have preferred that the report be 
issued only after we vote. I prefer to get information before we vote.
  Second, on the issue of human rights; there are those that say that 
through

[[Page H3618]]

engagement, we are going to undermine the power of the Communist 
Chinese party, but you know who does not believe that? The heads of the 
Communist Party of China. They know this deal will make them stronger; 
that is why they want it so badly.
  As for the dissidents in China, we do not know what they think, they 
have got a gun pointed to their head. Are they free to tell us? But 
most of the dissidents who have served time in China prisons and 
escaped to the United States are against this deal.
  Finally, I would like to move to the newest development of all, 
because it happened this afternoon. Two of our colleagues, the 
gentleman from California (Mr. Berman) and the gentleman from 
Pennsylvania (Mr. Weldon) went to the Committee on Rules with an 
amendment that is fully legal under GATT, and that amendment provides, 
as follows: Normal trade relations treatment shall be withdrawn if 
China invades or imposes a blockade on Taiwan.
  Mr. Speaker, I believe that the Committee on Rules will not make this 
in order, because it is not accepted by the administration, because, of 
course, it is not accepted by China. So we will be asked to pass this 
bill without the Berman-Weldon amendment, and that will signal China 
that it can continue to enjoy access to the American market even if it 
blockades Taiwan.
  We ought to make the opposite clear to them, but without the Berman-
Weldon amendment, what is the message? That amendment was brought 
before this House or brought before its official Committee on Rules, it 
is part of the record of these proceedings. We asked that we be allowed 
to make it in order. If it is rejected, then who is to blame China for 
believing that this House has endorsed permanent trade with China, even 
if they blockade Taiwan. This is now the Taiwan Blockade Authorization 
Act. Vote no.

                  WHO ARE THE TRUE DINOSAURS ON TRADE?

  The SPEAKER pro tempore (Mr. Sweeney). Under a previous order of the 
House, the gentleman from Wisconsin (Mr. Obey) is recognized for 5 
minutes.
  Mr. OBEY. Mr. Speaker, The Washington political establishment is 
looking down its collective elitist nose at those of us who are saying 
no to legislation that would provide permanent Most-Favored-Nation 
trading status for China. In their newspaper columns and at their 
cocktail parties they tut-tut that those of us raising a challenge to 
that legislation are simply trying to stop economic progress that comes 
from globalized trade and are, therefore, hopelessly old fashioned. The 
fact is just the opposite.
  Those who say that we must accept the reality of globalized trade and 
support permanent favored nation status for the Chinese without a major 
transformation of trading rules are in fact the ones stuck in the past. 
They are defending a set of absolutist trading arrangements and a set 
of useful but creaky international institutions that were established 
at the end of World War II. They give only token recognition to the 
changes that are needed in these essential but antiquated institutions.
  At the end of World War II, visionary world leaders saw Europe in 
ruins because of Hitler's mad rampage through the middle of the 20th 
Century. They correctly understood three things:
  (1) That Hitler's rise to power in the first place was driven by the 
fear and chaos that accompanied the collapse of first Europe's and then 
America's banking system--a collapse that fed the downward spiral of 
national economies on both sides of the Atlantic and produced 
catastrophic levels of unemployment and panic.
  (2) That Europe must once again be made safe for democracy by 
rebuilding its political institutions.
  (3) That America's long-term economic and political health depended 
upon rebuilding Europe's economy in order to rebuild world commerce and 
create markets for our own goods.
  To accomplish all of that, the Wise Men, as they were called, 
organized the Bretton Woods conference which established a new set of 
institutions--the International Monetary Fund and the World Bank--in 
order to help rebuild a new global economy and a new trading order. The 
mission of the Fund was to insure stability in monetary exchange. The 
mission of the Bank was to assist nations in the task of economic 
development and reconstruction.
  Those institutions helped to produce phenomenally successful results. 
The world escaped the kind of global recession in the years immediately 
following World War II that had historically followed other great 
conflicts. In the decade that immediately followed Bretton Woods, most 
of the war-torn European economies bounced back above their pre-war 
levels. In subsequent decades, the world's economy more than tripled in 
size and continued an expansion--with temporary interruptions to be 
sure--that has now lasted for more than 50 years.
  That happened despite the fact that nearly half of the world's 
population continued to struggle under the yoke of communism for most 
of that period. In fact, the powerful contrast between the prosperity 
of open market economies in the West and the desperate situation faced 
by those condemned to live under centrally-planned economies ultimately 
contributed greatly to the demise of the Soviet Empire.
  That success was accompanied and abetted by expanded trade which also 
contributed to prosperity of both America and our trading partners. The 
result was that at least through the mid-70's a rising tide lifted all 
boats. Almost all families, whether they were headed by a corporate CEO 
or a janitor at the company run by that CEO, shared in that expanding 
prosperity.
  But in the last two decades, changing realities have also changed 
results. First, the nature of trade itself has changed in three 
fundamental ways:
  (1) Fifty years ago, as my colleague Barney Frank has pointed out, 
when the post-war rules of the trading game were first established, 
products produced almost entirely in one nation were exchanged with 
other products largely produced in a different nation. Today, 
multinational companies produce polyglot products--goods and services 
produced in a number of countries and those goods and services are 
exchanged in large part for other goods and services of the same 
nature.
  (2) As trade between highly developed, high wage countries and 
underdeveloped low wage countries has become a larger and larger share 
of the mix, negative side effects have appeared in high wage countries 
like ours. A downward pressure on wages because of that expanded trade 
between very unlike economies has reinforced other economic trends and 
policy actions, producing an ever-widening income gap between the 
investing class and the working class. A rising tide no longer lifts 
all boats. In fact, the ability of those with large amounts of capital 
to pay any price necessary for what they wanted has, in the global 
economy and local neighborhood alike, driven some costs far above what 
can be afforded by those whose boats are anchored to low wages. That 
has happened with the price of housing. It has happened with the price 
of education--especially at private institutions. It has happened with 
the price of medical care.
  (3) Downward pressure on wages in economies like our own have been 
accompanied by greater incentives to minimize environmental costs that 
go into any product because we are told those products are in 
competition with products produced in countries with much less concern 
for either well-paid workers or well-protected environments. That has 
made it more difficult to protect gains that industrial countries have 
made in raising worker living standards or cleaning up the environments 
in which they live.

  And now we find in this new era that institutions which were 
established 50 years ago to promote world recovery and world trade--
institutions which at the time undoubtedly produced winners across the 
board--now often use their influence to push underdeveloped countries 
to follow practices that attract and retain investment at the expense 
of those other economic and social values.
  There's no question that in macro economic terms totally open trade 
can produce more goods at lower costs worldwide. And normally that 
would be a blessing.
  But when that becomes the only goal or at times the only result, it 
carriers a high price for those who do not possess large amounts of 
capital because their wages cease to rise. And the communities they 
live in come under pressure to allow corporations to do less and less 
to clean up pollution, all in the name of remaining globally 
competitive in a world where there are almost no restraints on the 
movement or the power of capital and ever increasing restraints on the 
power of everything and everyone else--governments, consumers, and 
labor.
  Capitalist economies cannot by definition produce equal income for 
all people. Each society needs risk takers who can amass wealth so that 
accumulated wealth can be invested to produce economic growth for the 
entire society. That is bound to produce income inequality. But as Pope 
John Paul once observed, there are certain ``norms of decency'' that 
must be respected in order to produce economic justice and the social 
cohesioin that is necessary for any economic system to function. The 
last two decades have produced just the opposite--the widest gap 
between the wealthiest 1% of our people and the least wealthy 20% of 
any time since the birth of the 20th Century.

[[Page H3619]]

  Since new globalized trading realities have helped produce that 
problem, they must also be part of the effort to fix it.
  In our society the gap in income--in education, in housing, and in 
medical care--has grown disgracefully worse. Those who in this economy 
suffer most from that fact--largely manufacturing workers in industries 
with declining employment or workers with less than average skills--
cannot be expected to roll over and say, in the words that Walter 
Cronkite used to sign off his CBS news broadcast, ``That's the way it 
is.'' As my colleague Barney Frank has noted, Alan Greenspan, the 
Chairman of the Federal Reserve, has said that we must not allow our 
``inability'' to help workers who are being injured to reduce our 
support for open trade. But, in fact, as Barney says, ``the problem we 
face is not inability, but unwillingness to do so.''
  The issue here is not really China. China just happened to be the 
country that triggered this debate. The issue is whether America's 
policymakers who have helped magnify the income gains of the most well 
off in our society by squeezing the economic positions of the most at 
risk families will recognize their moral obligation to change course. 
The issue is whether those in this society--the investing class, the 
managing elite, the venture capitalists, the multinational corporations 
who have so much to gain by further globalization will be willing to 
see a tiny fraction of that increased wealth used to help those who 
will otherwise be caught in the prop wash of their incredible 
prosperity.
  When a doctor administers cancer fighting drugs, he knows that he 
must also deal with the side effects of those drugs or his patient will 
not be able to tolerate the drug and will die. Isn't that just as true 
of the negative side effects of globalization on the lower paid, 
underskilled workers caught in the wake of economic change?
  If we are to embrace the change that globalized 21st Century trading 
produces, we must reshape the institutions that will regulate and 
govern that commerce. We need a redefinition of the role of the IMF, 
the World Bank, and other international financial institutions, and 
never institutions such as the World Trade Organization, so that the 
interest of labor and the environment are represented at the table when 
trading decisions are made--not just the interests of capital and 
governing elites.
  We need a second Bretton Woods conference to both modernize and 
humanize trading relationships or we will lose in the 21st Century the 
gains we have made in the 20th in establishing a balance of decency 
between the needs of the corporate-based market economy and the needs 
of a family-based society!
  That means a new set of trading rules, a new set of power 
relationships, a wider representation of interests at the table. And it 
means a new commitment on the part of this Congress and this society to 
much greater educational opportunity and training opportunities for 
workers and children in working class families. It means a willingness 
to do more with the tax code to provide as much reward for the work of 
the lower income working class as we provide for the highest income 
venture capitalists. It means rebuilding a health care safety net for 
the families of workers whose corporate employers are being squeezed by 
the pressures of globalization to shrink that safety net. And it means 
all of those things before and not after we give away our leverage to 
obtain them.
  Demonstrators in Seattle and Washington may have aimed their protests 
at some of the wrong targets, but that should not obscure the injustice 
which produced those demonstrations. As Barney Frank has said, ``the 
choice is not between isolation and integration, but between a global 
new deal and a global extension of the trickle down theory.''
  Those who want us to approve their rules without first changing the 
rules of the trading game that contribute to this injustice are the 
true troglodytes and dinosaurs. It shouldn't be too hard to find common 
ground, but first you really have to want to. When those who want us to 
get on with the game are willing to change the rules to minimize the 
brutality of the game for those in our society who are not economic 
superstars, then they will find a lot more of us willing to play it.

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