[Congressional Record Volume 151, Number 56 (Tuesday, May 3, 2005)]
[House]
[Pages H2789-H2791]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                ON CAFTA

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, Bloomberg News reported today, and I read 
the quote, ``CAFTA,'' the expansion of NAFTA to all of Latin America, 
``will fail in Congress.'' And Peter Morici, a University of Maryland 
professor and former chief economist for the International Trade 
Commission, comments: ``CAFTA is in trouble because of frustration with 
Bush administration inaction on the trade deficit and the Chinese 
yuan,'' which means that we are not dealing with the difficulties of 
the exchange rate between not just China and the United States but 
several other nations.
  One and a half years ago, a 7-member Congressional delegation 
traveled to Mexico to examine the modern template for all of these 
trade agreements that is called NAFTA, the North American, I like to 
call it ``failed'' Trade Agreement, and the impact it has had on 
working families and farmers on both sides of that border.

                              {time}  2100

  The delegation included the gentleman from Illinois (Mr. Costello), 
the gentleman from Arizona (Mr. Grijalva), the gentlewoman from 
Illinois (Ms. Schakowsky), the gentlewoman from California (Ms. Solis), 
the gentleman from Mississippi (Mr. Thompson), the gentleman from Ohio 
(Mr. Strickland), and myself. Our delegation produced a final report 
entitled ``NAFTA at Ten: Journey to Mexico.'' It is included on the Web 
site, www.kaptur.house.gov.
 Mr. Speaker, at the end of my Special Order, I include for the Record 
a summary of recommendations that our delegation made to fix NAFTA. In 
that vein, during our trip we met other parliamentarians, including the 
Honorable Victor Suarez Carrera of Mexico, during that journey. 
Representative Victor Suarez Carrera is currently serving as a federal 
representative for the 16th District of Mexico City in the Mexican 
Chamber of Deputies, so he would be our counterpart.
  He made an eloquent speech saying, I plead with you, Congress of the 
United States, we the people of Mexico want good trade, not just free 
trade. He expressed a deep desire to visit our country to tell the 
American people how NAFTA was not just negatively impacting the people 
of our country but also the people of Mexico.
  And so as this Congress considers an expansion of NAFTA to Central 
America, the CAFTA agreement, to Costa Rica, El Salvador, Guatemala, 
Honduras, and Nicaragua and the Dominican Republic, we are honored to 
welcome Deputy Suarez to the United States. He will be arriving 
tomorrow with his delegation of Mexican parliamentarians. They will be 
here Wednesday and Thursday and participate in extensive talks here in 
Congress on U.S.-Canadian and Mexico Interparliamentary cooperation on 
NAFTA and CAFTA. They will also travel to other places in the United 
States.
  I want to put up a chart to show the difficulty from the United 
States standpoint. Every single year since NAFTA was signed, rather 
than the job creation we were promised, the United States has exacted 
larger and larger trade deficits with both Mexico and Canada. Those 
numbers were supposed to be exactly the reverse.
  In Mexico, wages have been lowered. And Mr. Suarez comes from an area 
called Scala in Mexico, the southeastern region of Mexico, and we were 
literally in these fields with him talking to the farmers who have been 
displaced from their land in the nation of Mexico. It was so tragic to 
hear their stories. The American people need to hear the stories from 
the people of Mexico. It is not just our workers and farmers that are 
being hurt; they are being hurt as well.
  Mr. Suarez is currently president of the Committee for the Center for 
Studies of Sustainable Rural Development and Food Sovereignty within 
the Chamber of Deputies. It is important to note he has been a leader 
and promoter of a movement in Mexico called The Countryside Cannot Take 
It Any More. He is also active in international peasant movements and 
in an inner-American network called Agriculture and Democracy.
  The objectives of our trinational meeting among parliamentarians are 
to create an intercontinental space for reflection, exchange of ideas 
and collaboration related to alternative forms of economic integration 
and trinational development that helps people better their lives rather 
than reduce their livelihoods and looks ahead to what happens next 
after NAFTA as we stop CAFTA in its tracks.
  Our effort is to foster dialogue and exchange between legislators and 
civil society organizations to further develop ideas for alternatives 
to the current framework surrounding the flawed free-trade model and to 
find better ways to achieve trinational development.
  Another goal is to identify some of the more critical impacts of the 
11 years of NAFTA, focusing on an analysis of both national level and 
sector-specific effects. And finally, we seek consensus among our 
parliaments on possible future actions that could be taken 
trinationally among legislators and between organizations and civil 
society to directly address some of the critical impacts of NAFTA and 
look

[[Page H2790]]

ahead to negotiation of a NAFTA-plus agreement.
  One of the border towns that we visited, and I put up this particular 
picture, was of women and men living in these tiny shacks who have been 
displaced from the countryside.
  Mr. Speaker, we welcome Mr. Suarez Carrera with his colleagues and 
look forward to the launching of a continental effort to speak out on 
behalf of farmers and working people of the Americas.

                    NAFTA at Ten: Journey To Mexico

 [From the Report of the U.S. Congressional Delegation, Nov. 14, 2003]


        executive summary: nafta and the future of global trade

       The North American Free Trade Agreement (NAFTA) is now ten 
     years old. At its heart, it embodies the new heroic struggle 
     of working men and women to gain a foothold in the rough and 
     tumble global economy dominated by multinational corporate 
     giants. Unfortunately, it pits local workers and farmers 
     against global investors. It pits Neustro Maiz, a peasant 
     tortilla co-op in southern Mexico, against ADM, the US grain 
     trade giant. It pits Norma McFadden of Sandusky, Ohio, who 
     lost her middle class job with benefits at Dixon Ticonderoga, 
     against Ana Luisa Cruz of Cuidad Juarez, who earns $7 a day 
     with no benefits. For NAFTA to be credible as a model for 
     future trade agreements, it must be amended. People should be 
     more important than goods. A human face to trade must be 
     negotiated. Without it, the global divide between poverty and 
     wealth will exacerbate. More popular unrest will result from 
     unfair trade, and the social compact so necessary for global 
     cooperation will be shattered.
       NAFTA is important because it serves as the major template 
     for a new global economic order integrating rich and poor 
     nations through trade and investment. Mexico, Canada and the 
     U.S. were to integrate their economies and, as a result, be 
     better positioned to compete globally. It was touted as the 
     neo-liberal model that would lift the economic condition of 
     all people. All ships, no matter how small, were to be 
     brought forward. But NAFTA worked exactly in the reverse. 
     Affected workers in all three nations saw their wages and 
     working conditions lowered. As capital moved across borders 
     with no social policies in place, NAFTA has triggered an 
     international race to the bottom as even Mexico has lost 
     218,000 jobs to China, a lower wage environment with a 
     notorious record of human rights abuses.
       Capital and wealth have become more concentrated in all 
     three nations. The middle class in the U.S. is experiencing a 
     growing squeeze on benefits and job quality. In Mexico, an 
     endless supply of ``starvation wage'' workers was unleashed. 
     Now the Bush Administration is trying to spread the same 
     model to Central America using Central American Free Trade 
     Agreement (CAFTA), and throughout the rest of the Western 
     Hemisphere with the Free Trade Area of the Americas (FTAA). 
     If these agreements are passed, it is clear that only the 
     same can be expected, that is, expanding job washout, 
     underemployment, and trade deficits in the U.S. without 
     improved living standards in the poor countries with whom it 
     trades.
       A reformed trade model among trading nations is needed that 
     yields rising standards of living for workers and farmers. 
     This must be based on transparent and enforceable rules of 
     law concerning labor, environment and business. Continental 
     sustainable wage and labor standards should be adopted. Trade 
     accords must also incorporate industrial and agricultural 
     adjustment provisions, and currency alignment. An 
     infrastructure investment plan should be negotiated as a core 
     provision of any trade agreement. Complementary systems for 
     education and safe, reliable medical care for all citizens, 
     including the over 9 million immigrants traveling as 
     itinerant labor to the U.S. every year, must be addressed as 
     central concerns of integrated economies.


                            recommendations

       Policy reforms are essential to amend NAFTA and other trade 
     agreements that have yielded such huge U.S. trade deficits, 
     job washout, and lowered standards of living.


  A continental assessment of NAFTA should be launched to address its 
                              shortcomings

       An intracontinental parliamentary Working Group on Trade 
     and Working Life in America, comprised of U.S., Mexican, and 
     Canadian members, should be established with the goal of 
     amending NAFTA to address its shortcomings. Such a working 
     group should analyze the results of NAFTA and its impact on 
     workers, farmers, and communities. The Working Group should 
     defIne a sustainable wage standard for workers in each 
     country and a continental labor registration system along 
     with enforceable labor and environmental standards. It would 
     identify the massive continental labor displacements that are 
     occurring, often with no social safety net in place. It would 
     explore options to deal with divergence in education and 
     health as well as currency fluctuations and impact of trade 
     on infrastructure, investment, and migration. It would 
     harmonize inequitable tax systems and augment credit systems 
     for the safe and non-usurious continental transfer of 
     remittances by mobile workers. It would also propose funds in 
     the form of adjustment assistance to cushion continental 
     economic integration. The organization would include as a key 
     component an intracontinental Agricultural Working Committee 
     to address the hardships faced by farmers and farm labor in 
     all three countries.


              Trade agreements should yield trade balances

       If NAFTA were working in the interest of the U.S., there 
     would be a trade surplus with Canada and Mexico, as the U.S. 
     exported more than it imported. Exactly the reverse is true. 
     In 2003 the NAFTA trade gap equaled 100 billion--$42 billion 
     with Mexico and $85 billion with Canada. This represents a 
     serious drag on U.S. gross domestic product and a loss of 
     wealth. Indeed the U.S.-NAFTA trade balance with low-wage 
     Mexico as well as Canada has turned decidedly more negative, 
     and worsened each year, contrary to NAFTA's stated aims. When 
     a trade agreement yields major and growing deficits for more 
     than three years, it ought to be renegotiated.


               DEVELOP AN ALTERNATE TRADE BLOCK PARADIGM

       Trade agreements must be structured to achieve rising 
     standards of living for a broad middle class not just the 
     capital class. The current NAFTA model fails to address the 
     root causes of market dysfunction and growing U.S. trade 
     deficits i.e., the managed market and regulated trade 
     approaches being employed by its European and Asian 
     competitors. With NAFTA, the U.S. chose a low wage strategy 
     to meet this real competition from trading counterparts that 
     were gaining global edge. The U.S. must counter the managed 
     market and regulated trade approaches of its major 
     competitors.


                 HARMONIZE QUALITY OF LIFE UP, NOT DOWN

       Rather than allowing transnational companies to set the 
     rules of engagement, democratic nations first should forge 
     international trade agreements with the world's developed 
     democracies and then invite in developing nations to 
     participate in this ''free world'' Global Trade Organization. 
     Such an effort holds the potential to transition these 
     nations upward to the same democratic, legal, and 
     environmental systems of the free world. Instead, the trade 
     relationships that have been forged link the economic systems 
     of first world democratic nations to Third World, 
     undemocratic, non-transparent systems. Social concerns like 
     education, environment, infrastructure, labor conditions, and 
     health have been ignored. The downward ``race to the bottom'' 
     push of NAFTA continues to be felt in the U.S. as well as 
     Mexico and Canada.


  TRADE ACCORDS SHOULD PRODUCE LIVING WAGE JOBS, LESS POVERTY AND AN 
                          IMPROVED ENVIRONMENT

       If NAFTA were working, more good U.S. jobs would be 
     created, outnumbering job losses. In Mexico, workers would 
     experience a rising standard of living. Exactly the opposite 
     is true. Conservative estimates indicate the U.S. has lost 
     880,000 jobs due to NAFTA. These jobs are largely in U.S. 
     companies that merely relocate to Mexico paying ``hunger 
     wages.'' Wages in Mexico have been cut by a third. If NAFTA 
     were working in the interest of Mexicans, there would be a 
     reduction in poverty, a growing middle class, and 
     environmental improvement. Instead there is a rollback in 
     wages, deplorable working conditions, and growing economic 
     concentration of wealth in a few hands, forcing huge social 
     dislocation.
       As U.S. jobs are sucked into Mexico, not only do more 
     people vanish from the middle class but also U.S. schools 
     lose property taxes. In a state like Ohio that has lost 
     nearly 200,000 jobs to Mexico, the economic decline is 
     visible. Ohio's income growth is declining. In 1999, 
     according to Ohio Department of Development statistics, 
     citizens in Ohio lost $30.7 billion in total income compared 
     to the past year. The state itself lost $15 billion. As a 
     result, college tuition has increased with average student 
     undergraduate debt rising to record levels of $18,900. 
     Nursing homes are understaffed with low paid workers, and the 
     ranks of uninsured Ohioans has risen to 1.3 million. The 
     State is raising taxes on everything from sales, to gas 
     and to property to try to fill the gap of a fleeing 
     private sector. Quality of life is sliding backwards. 
     NAFTA-related environmental enforcement remains largely 
     nonexistent. If NAFTA were working, environmental 
     improvement in Mexico would be upgrading; it is sliding 
     backward.


TRANSITION U.S./CANADIAN DISPLACED WORKERS TO COMPARABLE EMPLOYMENT AND 
 MEXICO'S WORKERS AND PEASANTS TO LAND HOLDING AND LIVING WAGE STANDARD

       NAFTA--displaced workers in the U.S. largely have been 
     abandoned in their efforts to reposition to new employment. 
     Unemployment benefits expire, training is inadequate, and 
     health benefits expire or are unaffordable. Experienced 
     workers rarely find jobs with comparable payor benefits. 
     Mexico's vast underclass, underpaid, and exploited, lacks a 
     living wage, affordable elementary education, basic health 
     care, and systems to gain property ownership and affordable 
     credit even for basic purchases. In order to move forward 
     with any future trade agreements, NAFTA must acknowledge its 
     human toll and respond accordingly. NAFTA provisions have led 
     to the displacement of thousands of small business, 
     industrial and agricultural workers throughout the U.S., 
     Mexico and Canada. Little provision has been made to assist 
     these workers, farmers, and communities with any transitional 
     adjustment assistance. In Mexico, this has

[[Page H2791]]

     caused masses of people to stream toward the border and the 
     maquiladora zones in search for jobs.
       The North American Development Bank, which was established 
     to help local communities build their human and physical 
     infrastructures, has been an abject failure. It should 
     promote economic investment in those regions of Mexico and 
     the United States where jobs have been hollowed out due to 
     NAFTA, or infrastructure is needed. Bank assets could be 
     enhanced by financial contributions that flow from trade-
     related transactions.


  CREATE NEW CONTINENTAL LAW ENFORCEMENT BODY TO COMBAT GROWING CRIME 
 ALONG U.S.-MEXICO BORDER REGION RELATED TO BORDER WORKERS, DRUGS, AND 
             UNSOLVED MURDERS OF HUNDREDS OF MEXICAN WOMEN

       The United States Departments of Labor and Homeland 
     Security should be tasked not only with stopping the 
     trafficking of bonded laborers but devising a continental 
     labor identification card. Along with mass migration, the 
     border has seen an explosion in the illicit drug trade. Law 
     enforcement officers on both sides of the border must battle 
     smuggling in narcotics and persons. A continental working 
     group should be directed to recommend a new solution for 
     combating crimes that result from the illegal drug and bonded 
     worker trade that spans the border.


                        NAFTA AT TEN (1993-2003)

       Congress narrowly passed the North American Free Trade 
     Agreement (NAFTA) in November 1993, after an emotional and 
     protracted political struggle that engaged the entire nation. 
     (Final Vote: 234-200--Republican: 132 ayes; 43 noes. 
     Democrats: 102 ayes; 156 noes. Independent: 1 no)
       Wall Street confronted Main Street. The full weight of the 
     legislative battle was best reflected in House deliberations 
     (http://thomas.loc.gov). Never had a trade fight garnered 
     this type of attention from the general public. Multinational 
     corporations, many displaying their products on the White 
     House lawn and using offices in the U.S. Capitol itself, 
     lobbied hard to change the laws and relationships that govern 
     wages and working conditions for the majority of America's 
     workers.
       The workers and people of U.S., Canada, and Mexico all 
     would be affected in major ways. Their livelihoods, 
     communities, and the standard of living on the continent were 
     at stake. Congress became the only venue in which their 
     concerns were given some voice.
       The evaluation of America's ten-year experience with this 
     agreement is crucial. In 2004, debates loom over expansion of 
     NAFTA into other poor and middle-income countries in Latin 
     America through the Central American Free Trade Agreement 
     (CAFTA) and the Free Trade Area of the Americas (FTAA).
       Is the ``NAFTA trade model'' worthy of expansion? Or does 
     it need to be fixed?
       NAFTA was a precedent-setting economic agreement. At the 
     time of its passage ``free trade'' was relatively a new 
     concept. It had been employed in rare circumstances, only 
     recently in U.S. history, just since 1985, when the U.S. 
     signed a ``Free Trade'' agreement with Israel to eliminate 
     all duties on trade between the two countries over a six year 
     period. Certain non-tariff barriers remained for agricultural 
     products. But Israel was a small country with a middle class 
     population of six million. Its integration with the U.S. 
     market of over 250 million consumers at the time was 
     accomplished with minimal disruption. Unfortunately, NAFTA's 
     flawed, untested architecture has served as the ``model'' for 
     successive trade agreements negotiated by the U.S. with 
     developing nations which have huge impoverished populations, 
     such as China. As a result, the U.S. has amassed trade 
     deficits with most nations in the world and, a loss of U.S. 
     jobs and growing stress on middle class living standards.
       The NAFTA ``agreement'' should actually have been 
     negotiated as a ``treaty'' due to its wide-ranging impact--
     socially, economically, environmentally, and politically. 
     Yet, its authors cagily used the legislative vehicle of an 
     ``agreement'' to stifle debate since Congress cannot amend 
     trade agreements. A ``treaty'' would have allowed much closer 
     scrutiny allowing time for amendment and full debate. A 
     treaty would have been a more appropriate approach in view of 
     the collateral damage NAFTA has caused especially to poor and 
     working people across our continent. NAFTA is very imperfect 
     legal basis on which to forge the terms of engagement for the 
     people of the American continent.


                  reforming the trading block paradigm

       One of NAFTA's central aims was to stimulate a North 
     American trading bloc that could compete with anticipated 
     competition from a unified European Union. As well, Japanese-
     Asian integration had been already eating into global market 
     share the U.S. had dominated, particularly automotive 
     production. But rather than addressing root causes of market 
     dysfunction and growing U.S. trade deficits--the managed 
     market and regulated trade approaches being employed by 
     European and Asian competitors to gain global edge--with 
     NAFTA, the U.S. chose a low wage strategy. This has had real 
     consequences.
       Mexico's workers have been dispossessed by a global 
     economic system that preys on their weakness rather than 
     securing for them the rights and opportunities won by first 
     world workers over the last two centuries. There has been no 
     improvement in economic conditions for the vast majority of 
     workers of Mexico since NAFTA. Moreover, U.S. workers 
     continue to lose middle class jobs. A similar plight afflicts 
     the European Union as it struggles to integrate the 
     corruption-ridden, emerging states of the former Soviet 
     Union. In Asia, Japan--the second largest market in the 
     world--remains a closed and a formidable economic powerhouse 
     having surpassed the U.S. in 1985 as the world's premier auto 
     producer. Its protected internal market and bold 
     manipulation of Chinese, Korean, and other Asian labor-
     intensive operations has allowed it to gain growing market 
     strength. It secures its internal production, exploits 
     cheap labor elsewhere, and exports those goods to first 
     world markets or invests in them.
       NAFTA aimed at continental ``free trade'', i.e., tariff 
     elimination, between U.S., Mexico and Canada. Yet by the 
     early 1990's, most tariffs already had been reduced between 
     the three nations, with an effective overall tariff rate of 
     about two percent. Indeed, NAFTA concerned something else. 
     Its unstated aim was to provide a government sanctioned 
     insurance scheme for rising investments by transnational 
     corporations in low wage nations starting with Mexico, which 
     was close to the U.S. market, and where subsistence labor was 
     plentiful. NAFTA accelerated the shipping out of U.S. jobs. 
     For unlike tiny Israel, the populations of Mexico and Canada 
     totaled over 125 million persons: Mexico's largely poor 
     population equals over 100 million and its workers fearful 
     about organizing trade unions to gain living wages. The low 
     wage pull was irresistible.
       By the early 1990's, the U.S. was already falling behind 
     Europe and Asia as its global trade deficit in goods rose 
     with each passing year. With NAFTA's passage, the export of 
     U.S. jobs to Mexico exploded. Mexico started to import vast 
     quantities of Chinese products that then backdoored their way 
     into the U.S. The U.S. job market began to shift millions of 
     jobs to third world environments as reflected in rising 
     global trade deficits. Outsourcing of production and 
     services, even of American icon products like Amana, Brach's, 
     Hoover, and the PT Cruiser, became commonplace and 
     accelerated.

                          ____________________