[Congressional Record Volume 149, Number 65 (Monday, May 5, 2003)]
[Senate]
[Pages S5698-S5699]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           THE TRADE DEFICIT

  Mr. DORGAN. Mr. President, I wish to ask another question. Why do we 
have a ceiling on Federal indebtedness? The answer is because we want 
to try to control it. But there is another form of indebtedness for 
which there is no ceiling, and that is the trade debt. There is 
definitely no ceiling on that.
  We have a foreign trade debt of about $2.8 trillion at the moment. 
Every single year, there is more and more red ink. There was a $470 
billion trade debt, merchandise trade deficit in 2002. Overall, $2.8 
trillion deficit is now about 27 percent of our GDP? How does that 
happen?
  The foreign debt comes from record foreign trade deficits. We are the 
biggest debtor in the world. As one can see by this chart, we run a 
deficit every year, and every year it grows. One-fourth of the trade 
deficit is with China; $103 billion last year alone. China is not the 
only country. We have deficits with Canada, $50 billion a year; Mexico, 
$37 billion a year. We have deficits with every major European country 
except Belgium and The Netherlands. We have deficits with every major 
Asian country except Singapore, and we are about to fix that because we 
are doing a free trade agreement with Singapore, and I am sure we will 
turn that into a trade deficit quickly. We have deficits with all the 
major countries in Latin America.
  In addition to having deficits with the countries, let me talk about 
how our deficits are constituted: A $110 billion deficit in motor 
vehicles; a $47 billion deficit in consumer electronics; a $58 billion 
deficit in clothing. I have been on the floor many times to talk about 
vehicles, so I will not do that today except to say, to use Korea as an 
example, Korea sends over 600,000 Korean automobiles every year; some 
600,000 Korean cars come in to this country.
  We sell 2,800 cars into the country of Korea. Why? Because our market 
is wide open, and the Korean market is largely closed, and nobody has 
the spine, the backbone, the nerve, or the will to do much about it. 
That is always the problem.
  If you want to use potato flakes from the United States to make fast 
food in Korea, the potato flakes will find a 300-percent tariff going 
in to Korea.
  The fact is, we have big problems in a range of areas and nobody does 
much about it. We used to have a big surplus in meat. That surplus 
declined by $1 million last year. Our deficit in livestock trade 
reached $1.5 billion last

[[Page S5699]]

year. Our deficit in vegetables and fruits reached $2.5 billion last 
year.
  These deficits come from a very simple fact: Our markets are open to 
foreign products; foreign markets are closed to ours. Too often the 
products that flood into this marketplace are products made by 12-year-
olds working 12 hours a day being paid 12 cents an hour, and it is not 
fair trade.
  Let me use Bangladesh as an example. The fourth largest producer of 
garments for the U.S. market is Bangladesh. Workers in Bangladesh get 
paid on average 1.6 cents for every baseball cap they sew, under 
contract to an Ivy League school. That same baseball cap for which a 
worker gets 1.6 cents to sew is sold on the campus of this particular 
Ivy League college for $17.
  Each year Americans buy over 900 million garments made in Bangladesh, 
and yet workers in Bangladesh still cannot make the 34 cents an hour 
they need as basic subsistence.
  If workers in one of the poorest countries of the world cannot even 
get paid 34 cents an hour, how do U.S. workers and U.S. businesses 
compete against that kind of trade?
  Some say these trade deals are a way of getting other nations to 
improve their labor and environmental standards, but the fact is, our 
trade negotiators do not think about that and do not do anything about 
that. If one needs evidence of that, take a look at the trade agreement 
that was just negotiated with Singapore, which is going to come to the 
Senate floor at some point soon for a vote.
  This agreement has a provision that would allow massive transshipment 
of products through Singapore into this country from countries with 
abysmal labor and environmental records.
  How would that work? Article 3.2 of the agreement says the products 
made in third countries will be treated as Singapore products as long 
as the products are on a list approved by U.S. trade officials, which 
includes electronics, semiconductors, computers, cell phones, 
photocopiers, medical instruments. This chart shows what it says in 
that Singapore free trade agreement.
  The Carnegie Endowment for International Peace issued a paper saying 
in that Singapore agreement this provision could very well torpedo the 
entire agreement. This is what a former senior official at the 
Department of State on labor matters wrote about what has happened in 
Indonesia:

       Government enforcement of child labor laws is weak or 
     nonexistent.
       There is a long-standing pattern of collusion between 
     police and military personnel and employers, which usually 
     takes the form of intimidation of workers by security 
     personnel in civilian dress, or by youth gangs.

  She quotes a State Department study which says:

       Institutions required for a democratic system do not exist, 
     or are at an early stage of development.

  So we have a free trade agreement with Singapore. And what happens 
with that free trade agreement? What is going to happen is we will get 
products from Burma or Indonesia which go to Singapore and are 
transshipped into this country. As long as they are going on the 
product list, what we are going to see is transshipment into this 
country of products coming from areas with abysmal records with respect 
to child labor and workers' rights.
  This Senate has decided it would like to fit itself out with a 
straightjacket by unwisely passing something called the fast track 
agreement. The President called it TPA, which was a euphemism for a 
fast-track agreement, I should say. Under fast track rules, trade deals 
come to the Congress for an up-or-down vote, and there will be no 
amendments offered under any circumstance. And this very flawed 
Singapore free trade agreement will come to the Senate under fast track 
rules.
  The fact is, our trade negotiators don't care what happens after they 
negotiate a trade deal.
  We did a bilateral trade agreement with China a couple of years ago, 
and we did it so that China could then get into the WTO. Then China got 
into the WTO. When they joined the WTO in November 2001, the Chinese 
agreed to significantly expand the amount of imported wheat that could 
come into China at relatively low tariffs. China agreed that it would 
set a tariff rate quota of imported wheat at 8\1/2\ million metric 
tons. That meant 8\1/2\ million metric tons could enter the market at 
low tariffs.
  According to the CRS, the Congressional Research Service, the Chinese 
imports were less than 8 percent of that amount. In fact, the Chinese 
Agriculture Minister was reported in the South Asia Post saying: 8\1/2\ 
million metric tons does not really mean that is what we are going to 
bring into our country.

  This is a country that has a $103 billion trade surplus with us, that 
reaches a trade agreement with us saying they are going to buy some of 
your wheat but never really intends to. What do we do about it? Well, 
we say it does not matter so much. Nobody is going to do too much about 
it.
  It is unforgivable that this goes on. In fact, a U.S. trade official 
in charge of agricultural trade with China recently said China has not 
lived up to its promise. That official said the United States would be 
justified in filing a World Trade Organization case against China. The 
same official said the evidence of unfair trade by the Chinese was 
``undeniable,'' and the Chinese themselves privately acknowledged they 
are cheating on agricultural trade.
  This official said the administration is reluctant to take action 
against China because the Chinese might be offended. The official said 
the administration is worried that a WTO case would be seen as ``in 
your face'' so soon after China joined the WTO.
  Well, what is in your face is what these trade officials are doing to 
farmers, to workers, and to businesses all around the country. It is 
not fair. In my judgment, we expect and demand that there be action to 
enforce trade agreements.
  I believe my time is about up. I am going to speak at greater length 
about China trade in the coming days, but I did want to say today that 
this is an area that is desperately in need of attention by Congress 
and the administration.
  And the Singapore trade agreement is a terrible agreement. We ought 
to pay some attention to that.
  Finally, going back to where I started, this fiscal policy does not 
add up. Everyone in the country understands it, and I hope when we talk 
about the need to increase the Federal indebtedness by $1 trillion this 
Senate will ask itself: Does this make any sense at all?
  The major subject before us is more tax cuts when we have the largest 
deficits in history for the next 10 years and a requirement to increase 
the Federal debt limit by $1 trillion.
  I come from a really small town. We had a guy living there named 
Grampy. He knew everything about everybody and everything about 
everything. I always wondered what would Grampy think if you explained 
to Grampy where we are--deep in debt as far as you can see; a 
requirement to increase the debt limit by $1 trillion; and the next big 
thing on the agenda is to cut your revenue, the benefit of which will 
go largely to the upper income people.
  I think Grampy from my hometown would say: Are you nuts? Can't you 
add? This is not higher math. This does not add up for the country and 
will not produce one new job. It will produce more despair, more 
concern, and less economic growth.
  Get your fundamentals right. Make things add up and put things back 
on the right track.
  I yield the floor.

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