[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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