[Congressional Record Volume 151, Number 57 (Wednesday, May 4, 2005)]
[House]
[Pages H2956-H2963]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CAFTA, LIKE NAFTA, IS BAD TRADE POLICY
The SPEAKER pro tempore (Mr. Inglis of South Carolina). Under the
Speaker's announced policy of January 4, 2005, the gentleman from Maine
(Mr. Michaud) is recognized for 60 minutes as the designee of the
minority leader.
Mr. MICHAUD. Mr. Speaker, first I want to thank my good friends, the
gentleman from Ohio (Mr. Brown) and the gentleman from New Jersey (Mr.
Pallone), for allowing me to conduct this Special Order regarding CAFTA
this evening. They have been remarkable advocates of issues affecting
working families, and they have my gratitude and admiration.
Mr. Speaker, there are several Members who want to come down to speak
on this important issue, so I will at this time yield to my good
friend, good colleague and cofounder of the House
[[Page H2957]]
Labor and Working Family Caucus, the gentlewoman from California (Ms.
Linda T. Sanchez).
Ms. LINDA T. SANCHEZ of California. Mr. Speaker, this evening I rise
in opposition to the Central American Free Trade Agreement. I am glad
to see that there are other Members fighting against this deeply flawed
trade agreement.
When a trade agreement is so terrible that the Costa Rican president
says he thinks it will hurt hard-working people and that their
parliament is reluctant to even approve it, you know that it is a bad
deal. When a trade agreement is so terrible that the majority will not
even bring it to the floor of the House for a vote until a year after
signing, you know it is a bad deal. When a trade agreement is so
terrible that the Labor Department cannot even comment, they could not
even mount an effective counter-argument about CAFTA's awful labor
provisions, well, then you know it is a bad deal.
If Costa Rica cannot justify it, if the majority has no confidence in
it, and if the U.S. Labor Department cannot even defend it, then it
needs to be scrapped. There is not one single reason to support an
agreement with this many problems in it.
I would like to talk about a little comparison between CAFTA and
NAFTA, because NAFTA was supposed to be this great free trade agreement
with our partners to the south, Mexico; and, boy, did we really get the
wool pulled over our eyes. With CAFTA, we have a chance to learn from
the mistakes of NAFTA and not allow that to happen again.
They told us that NAFTA would bring jobs, but we lost jobs. They
promised that our trade would improve, but it has gotten worse with the
steadily rising trade deficit. And they told us that it would elevate
the middle class in Mexico. Well, guess what? I have been there, and it
has not.
When I visited Mexico, I went to a small town in the state of
Michoacan, where 60 percent of the men have left the town because there
is no work. These men used to be soybean farmers, but their farms have
been wiped out since NAFTA. Were these not the people that NAFTA was
supposed to help? Instead, they got nothing, and their way of life has
been decimated forever. CAFTA will have the same effect.
The gentleman from Arizona (Mr. Kolbe) has said that CAFTA will
reduce illegal immigration. Well, guess what? He said the exact same
thing about NAFTA. In fact, history has taught us the exact opposite.
NAFTA enabled cheap U.S. imports, which pushed 1.3 million Mexican
campesinos off the land. It is reasonable to think that some of them
may long have since crossed the border into the U.S. seeking economic
opportunity.
Central America is even more dependent on agriculture than Mexico is,
so the impact on illegal immigration could be even worse. We do not
want another NAFTA debacle. We do not want an agreement that hurts
hard-working people in the U.S. and other countries.
The word needs to get out that CAFTA is a rotten deal for Central
American and American workers. This agreement helps no one but big
business, which makes sense, since this administration gives them a
prime seat at the negotiating table. This is simply an expansion of
NAFTA, which broke all the golden promises that it made to the American
people.
CAFTA should be more appropriately renamed The American Jobs For Sale
Agreement, because that is what it does. I say to my colleagues, do not
be fooled twice. For those of you who were not here then, like me, do
not even allow yourself to be fooled once. I invite you to join the
growing list of opposition to CAFTA.
Mr. MICHAUD. Mr. Speaker, now I would like to yield to the good
gentleman from Ohio (Mr. Kucinich), a gentleman who has fought for the
environment and who has fought for working-family issues.
{time} 1900
Mr. KUCINICH. Mr. Speaker, I thank the gentleman from Maine (Mr.
Michaud) for yielding, and thank him for his dedication to the workers
of the State of Maine and to workers all over this country. All of
America appreciates the leadership that you have taken on this issue. I
am proud to join you at this moment.
I remember years ago hearing Ross Perot talk about the sucking sound
that would be heard once NAFTA passed. We were warned that we would be
losing millions of jobs. Well, all of these prophecies have come true.
We now seem to have learned nothing, because we have a new trade
agreement that is being delivered to this Congress that promises to do
exactly the same thing that NAFTA has done to our country.
And that is the so-called negotiated Dominican Republic-Central
American Free Trade Agreement, or DR-CAFTA for short. This legislation,
which I will refer to here as CAFTA, will be harmful to all of the
people of the signed nations. CAFTA will benefit a few and hurt the
many.
Governments will have little or no control over the investment of
foreign companies. As a matter of fact, the power of legislatures is
effectively nullified once these trade agreements are passed. National
development needs and the rights of citizens and local governments will
come secondary to the rights of foreign investors.
Moreover, investors will not have to comply with international labor
organization standards, workers rights will be undermined, especially
for women workers, for farmers, and Maquila workers. The labor rights
abuses that are currently prevalent throughout the CAFTA countries will
run rampant under this new legislation's weak labor provisions.
Countries will enjoy greater tariff benefits for goods made by
workers whose rights have been denied. Family farms in Central America
and the United States will fall victim to CAFTA, which will threaten
locally-grown produce and undermine food security. Basic public goods
and services, such as education, health care and water will become
privatized as governments lose the flexibility to subsidize these
services.
Think about this. Privatization of education, privatization of health
care. We have a private health care system, which is wrecking this
country's ability to be able to meet the needs of its people. We are
going to cause it to proliferate across Central America. The attempt to
privatize water constitutes a challenge to human dignity. We are going
to help facilitate the privatization of water with this legislation.
Expensive brand name drugs will have expanded patents, and
inexpensive generic medicines will have greater restrictions. Poor
people will not have access to lifesaving pharmaceuticals, because what
are these trade agreements about? They are about lifting of corporate
rights and dashing the rights of the common people.
The rules of trade, as first developed in NAFTA and now expanded in
CAFTA, will increase the suffering of people in all signed countries.
When CAFTA comes before Congress for a vote, I will urge my colleagues
to oppose this unfair agreement. Trade between nations does not and
should not have to lead to such negative consequences.
Trade should lift up the human condition, not degrade it. Trade
should celebrate workers rights, not destroy those rights. Trade should
take into account environmental quality principles and appreciate the
quality of our air and our water. We have new goals to set in this
country with respect to trade agreements; workers rights, human rights,
environmental quality principles must be included in all trade
agreements. We have to challenge the prevailing consensus which
delivered NAFTA to this Congress.
We have to challenge the prevailing consensus which brought the World
Trade Organization into being without any respect for the rights of
national legislative bodies or for the people that we represent.
So I want to thank the gentleman from Maine (Mr. Michaud) for leading
the way on this issue. I am proud to join with you, and I look forward
to continuing to work with you as we take a stand here on behalf of
workers not just in this country, but all over the world.
Mr. MICHAUD. Mr. Speaker, I would like to thank the gentleman from
Ohio (Mr. Kucinich) for his leadership on this issue and look forward
to working with him on this issue.
Mr. Speaker, as a co-founder of the House Labor and Working Families
Caucus, I am privileged to be here with
[[Page H2958]]
my colleagues to discuss the devastating impact that Central America
Free Trade Agreement will have on our economy here in the United
States. This so-called free trade deal promises to cripple our
industries, both in my home State of Maine and throughout the Nation.
Before coming to Congress I worked over 29 years at Great Northern
Paper Company in East Millinocket. I have seen first-hand the
devastation of the so-called free trade on Maine's economy, and I know
what it means to working families.
I could see in 1994, with NAFTA, which has been nothing but a
disaster, costing people of the State of Maine over 24,000
manufacturing jobs. In some parts of my Congressional district,
unemployment has reached over 30 percent in different labor market
areas over the last 2 years. Over 30 percent.
And often when jobs go, so do people, taking the heart and soul of
what once was prosperous communities with them. Today, the threat of
job loss is not for blue collar workers alone. Even high-tech companies
like IBM, Boeing, General Electric are taking their computer and
engineering jobs to China, India, and the Far East, while leaving
behind a long trail of pink slips.
As a Member of Congress, I have had the opportunity to meet with
several prominent free traders, like the trade Ambassador, Bob
Zoellick. They like to talk about how free trade is good for everyone
and creates jobs. But when I share the story of what happened and is
happening in the State of Maine, of the many jobs lost and the lives
that are devastated by those jobs lost, they admit to me, well, there
will be winners and there will be losers, and that is just the price of
doing business.
This is not a game. These are real people who lose jobs every day.
They are the ones who lose the jobs who can no longer afford to send
their kids to college and who can no longer afford even basic health
care for their families.
Now, do not get me wrong. I am glad that there are a lot of Federal
program benefits available to help dislocated workers. And I have
devoted myself in advocating and fighting for Federal resources to help
laid off workers. But, working people do not want a program and handout
created by Congress to clean up the mess from these so-called free
trade agreements. They just want their jobs. Each and every Mainer,
each and every American worker, should be asking, can we afford to lose
another job? Can we afford the Central American and Dominican Republic
Free Trade Agreements?
The job loss numbers show that we simply cannot afford that. From
1998 to 2004 alone, 11,724 workers in Maine were certified for trade-
related adjustment assistance. Companies like C.F. Hathaway Company in
Waterville, Gerber Childrenswear in Fort Kent, were among the hardest
hit by NAFTA.
The company that I worked for for over 29 years, Great Northern Paper
Company, announced only 2 days after I was sworn in as a Member of
Congress in 2003, they were filing bankruptcy. My coworkers, my family,
my community was devastated. And the culprit was the so-called free
trade agreements.
These agreements have created nothing but stagnant economies and
rising inequality. And CAFTA is based on the same NAFTA model. You will
hear from me and other Members this evening about the specifics of its
devastating effects tonight.
This agreement will serve to push ahead the corporate globalization
trend that has caused a race to the bottom in labor and environmental
standards. American companies are often forced to compete with foreign
corporations who are not held to the same labor or environmental
standards. This creates an unfair balance.
I have long advocated for fair trade, not just free trade. The fight
ahead is to ensure that these trade agreements are fair for our
workers, our businesses, our States. We must ensure that all trade
agreements respect workers rights to the environment, health and human
rights. And I know Members on both sides of the aisle are committed to
stopping this flawed agreement that we currently will be voting on in
the months ahead.
Mr. Speaker, I yield to the gentleman from Massachusetts (Mr. Lynch)
who is also a co-founder of the House Labor and Working Family Caucus.
Mr. LYNCH. Mr. Speaker, I thank the gentleman from Maine (Mr.
Michaud) for yielding. I thank the gentleman for his leadership on this
very important issue.
I am told that the clinical definition of insanity is the tenancy to
do the same thing over and over again and expect different results. And
this proposed Central American Free Trade Agreement is another example
of the United States continuing to enter into these so-called free
trade agreements with countries and regions of the world that give
carte blanche to corporate America to send our American jobs to other
parts of the globe.
The one thing that I have been struck with, after coming here to
Congress is, how many people in Washington, D.C. talk about job loss
like they are talking about the weather, or a natural disaster like an
earthquake. They talk about job loss like it is something that happens
beyond the control of Congress, when, in fact, much of the job loss
that we see in America today is the result of poor trade policy, and
lopsided trade agreements in which we have negotiated away our jobs and
failed to protect the American worker.
Now, given the experience that we have had thus far, with our
subsequent trade agreements with NAFTA and others, you would think that
with our experience of job loss that we have had there that when you
find yourself in a hole that you might stop digging. But, that is not
the case, because here we are facing another agreement that will
definitely ship jobs overseas.
Not only does CAFTA, the Central Free American Trade Agreement shift
jobs overseas, but it creates and perpetuates a race to the bottom
mentality, and further burdens our current trade deficit.
In 2004, the U.S. trade deficit soared to a record $617 billion, a 25
percent increase over 2003's record deficit, and more than 5 percent of
our Nation's GDP.
The Bush Administration and the corporations who profit when America
sends their jobs overseas argue that this trade deal will benefit U.S.
businesses and workers while helping member countries prosper. But, the
fact is from our own experience with NAFTA, that that is very far from
the truth.
And tonight I would like to focus my remarks on exposing the real
impact of the Central American Free Trade Agreement, and what it will
do to American workers, and also to Central American workers as well,
and our burgeoning trade deficit.
Let us first take a quick look at the North American Free Trade
Agreement, NAFTA, and its impact on our workers and our neighbor's
workers and the trade deficit. Those who advocated Congress's passage
of the Central American Free Trade Agreement often point to NAFTA as a
success story in their arguments. I think it is important to take a
good hard look, both from economic and policy implications of that
model as we consider the Central American Free Trade Agreement.
During the NAFTA debate, the proponents then argued that the measure
would, if adopted, would lead to the creation of 170,000 new jobs in
the United States. Instead, our country has lost 3 million
manufacturing jobs since the adoption of NAFTA, in 1994.
And 900,000 of those jobs lost can be directly tied to NAFTA. These
jobs were good, high-paying jobs that included benefits. They were
manufacturing jobs that have been replaced by service sector jobs that
typically pay 25 to 75 percent less, and with few or no benefits. And
while some proponents expect the Central American Free Trade Agreement
to turn out differently than did NAFTA, it is important to remember
that the six Central American countries possess an even larger pool of
cheap labor than did Mexico, and what is more, since the implementation
of NAFTA, the trade deficit with Mexico has surged from $9 billion to
$110 billion last year.
{time} 1915
So the deficit with Mexico, the trade imbalance with Mexico, has gone
from $9 billion before NAFTA to $110 billion last year.
Additionally, NAFTA did nothing to improve the lives of average
Americans; and my colleague, the gentlewoman from California (Ms. Linda
T. Sanchez), has talked about that briefly
[[Page H2959]]
prior to my remarks. This failure to improve the quality of life for
these workers has generated mass opposition and widespread distrust on
our southern border.
Amnesty International continues to report that extra judicial
tortures and murders continue. This is not democracy that we are
exporting to Mexico, and this is certainly not what the Mexican workers
signed up for.
Meanwhile, here at home this comparative advantage of subsistent
wages and a complete lack of labor and environmental protections have
led to the shift of low-wage, labor-intensive jobs from the U.S. to
Mexico.
Pursuing unrestricted free trade agreements with lesser developed
countries along the NAFTA model will continue to accelerate this race
to the bottom where jobs go to countries where the weakest labor
standards and environmental protections exist. That is bad for American
workers, and it is exploitive of foreign workers and foreign
populations.
We hear this administration talk about exporting democracy. You hear
that often in the last weeks and months with regard to the situation in
Iraq. Well, this is probably the most powerful opportunity we have to
export democracy. You do not export democracy through the Defense
Department or the Defense Secretary. You do it through trade
agreements, through the Department of Commerce and favorable agreements
with our friends and neighbors across the globe.
Are we liberating Iraq so we can move American jobs over there and
exploit them for wages of about 10 cents an hour? I certainly hope not.
And I hope that is not what our men and women are fighting today in
Iraq for. We do not express liberation in terms of working 10 to 12
hours a day for 10 cents an hour, but that is what we are proposing for
Central America.
As for the expected boon to the Mexican economy, we have seen none of
these gains, and instead we have seen NAFTA's detrimental impact on the
Mexican workers. Average real wages in Mexican manufacturing are lower
than they were 10 years ago, if you can believe that.
As companies look to cut costs further, we see factories now being
shifted from Mexico to China and India and Indonesia, always in search
of the lowest cost best exemplified by the most exploited worker.
Now on NAFTA's coattails rides CAFTA, the Central American Free Trade
Agreement. The American people are expected to buy the same bill of
goods at even higher costs. Proponents of CAFTA, the Central American
Free Trade Agreement, insist that the economic gains from this trade
agreement for American workers in business will be a windfall. But
remember what we are trading for in this case.
The combined purchasing power of all six Central American countries
that are affected by this agreement have the identical purchasing power
of New Haven, Connecticut. If you combine all of the purchasing power
in these nations under the Central American agreement, their entire
purchasing power is equal to the city of New Haven, Connecticut. That
is what we are talking about here. This is what we are going for.
What they do have is millions of low-wage workers, and that, I think,
that is the real object of this agreement. The U.S. economy has $10
trillion in gross domestic product in 2002. It is 170 times larger than
the economies of those six nations at about $62 billion combined. And
quite simply, the Central American Free Trade Agreement is not about
robust markets for export of American goods. It is about access to
cheap labor. It is about shipping American jobs overseas so they can
sell stuff back to the people who have not been laid off yet.
Like the gentleman from Maine (Mr. Michaud), who spoke earlier and
who is leading this debate, I worked in my previous life as an iron
worker for about 20 years. I worked at the General Motors facility that
used to be in Framingham, Massachusetts. It closed shortly before GM
made decisions to relocate plants to Mexico. I also worked at the
General Dynamics shipyard in Quincy, Massachusetts, as a welder prior
to that plant closing because of foreign competition and unfair trade
practices. I also worked in the steel mills in Gary, Indiana, and East
Chicago, Indiana, for U.S. Steel and Inland Steel. And I understand
those plants are now victims of foreign outsourcing as well.
So I know a little bit about the impact of off-shoring and imbalance
in our trade agreements. I know what it means to communities and
families when those jobs disappear.
Over the last 20 years, our economy has hemorrhaged jobs in the
manufacturing sector. Since 2001, 3.3 million jobs were lost. Yet these
workers were told not to worry. They were told they would be retrained
for another job; they needed more education in our new high-tech
economy. How can they not worry when unemployment is at a 10-year high
at 5.4 percent, with 80 million Americans out of a job? Personal
bankruptcies in my State rose 17 percent between the years 2000 and
2003.
How can we tell these folks not to worry when the administration is
signing even more trade agreements to ship away their jobs?
The never-ending pursuit of the lowest-cost labor is spreading, and
CAFTA will only just cement this cycle. We need to break the cycle now.
There is a pretty good book that is out there right now. It is called
``The World is Flat'' by Tom Friedman. I suggest my colleagues read it.
Mr. Friedman writes about the speed at which our jobs are disappearing
and the volume of wealth being taken from regular, average, working-
class Americans.
The biggest share of U.S. exports to the six CAFTA nations is not the
traditional job-creation kind. These are products that are not consumed
in the purchasing nations. What happens is that, for example, textiles
here in the United States are shipped to Central America where they are
fashioned and furnished into clothing which is then shipped back to the
United States and which our people, those that still have jobs, are
able to purchase. These are called exports, but in fact it is just a
cycle of us exporting raw materials and getting back finished product
which was once supplied by U.S.-based factories.
The biggest difference here is that American workers are cut out of
the picture. More than 30 percent of U.S. exports to the six CAFTA
countries consist of these roundtrip exports that cause American jobs
to be outsourced to these countries with lower labor standards.
This trade agreement is bad not only for the American workers but for
those in Central America as well.
Yesterday, The Wall Street Journal reported that Costa Rica's
resistance to the Central American Free Trade Agreement was based on
the fact that the agreement itself would be harmful to poor and
struggling workers in Costa Rica. Costa Rican President Abel Pacheco
has said that he believes that the Central American Free Trade
Agreement is bad overall for his country, and he has delayed a vote on
that until February of next year.
The reluctance of Costa Rica has surprised the White House and
undermines one of its chief arguments for the pact itself, that CAFTA
represents an urgently sought benefit for the impoverished region.
Costa Rica's ambivalence and long delay before it votes on this trade
agreement indicates its reluctance to endorse this supposed free trade
agreement. Protests in Guatemala numbering in the thousands and tens of
thousands have also been an indicator that many Central Americans do
not see the Central American Free Trade Agreement as a benefit for
their nation and for their livelihood.
As you may know, May Day marches in Guatemala, Costa Rica, Honduras,
and El Salvador have featured a myriad of anti-CAFTA signs and slogans.
As President Pacheco rightly emphasizes, more trade does not
necessarily mean less poverty.
Proponents of the Central America Free Trade Agreement have
conveniently ignored this fundamental fact: the effect of trade on
incomes in Central America and how to alleviate the adverse
consequences of trade liberalization on the poor.
This Washington consensus that opening up markets will help alleviate
poverty is just plain wrong. One reason is that the labor in developing
countries is not nearly as mobile as trade theorists assume. In Central
America, for trade to benefit unskilled workers,
[[Page H2960]]
farm laborers, for example, they need to be able to move out of jobs
that will face competition from efficient U.S. producers thanks to
CAFTA, such as drilling, corn and into exporting industries that are
likely to be selling products to the American market.
Unfortunately, there is no job mobility in Central America, and these
workers are stuck, and there will be no place for them to turn.
Trade reform has also been linked to increased income disparity as
skilled workers have captured more benefits from globalization than
their unskilled counterparts. Simply said, CAFTA will make the rich
richer in Central America and the poor poorer.
Take Mexico as a perfect example. Since NAFTA was put in place,
Mexico has lost 1.9 million jobs and most Mexicans' real wages have
fallen. The United States with its unrivaled economic clout is in a
unique position to empower workers around the world while promoting
economic prosperity here at home.
Unfortunately, the CAFTA agreement does the exact opposite. If we
pass CAFTA, the Central American Free Trade Agreement, we are rewarding
Central American countries for their poor labor rights records. We are
harming farmers in Central America by opening up their tiny markets to
our own cycle of exploitation.
Recently released reports prepared by the Human Rights Watch and
National Labor Committees provide overwhelming evidence that CAFTA does
almost nothing to protect workers. These Labor Department reports have
been suppressed because they demonstrate the Central American workers'
rights restrictions.
Thanks to my colleague, the gentleman from Michigan (Mr. Levin), the
Department of Labor has just recently released these reports.
In these reports, DOL found that the right to collective bargaining
and nondiscrimination in the workplace were nonexistent. In Nicaragua,
for example, employees can be fired for trying to organize a union,
provided they are paid twice the normal severance amount. It is bad
enough that these countries do not meet international labor standards,
but what is worse is that CAFTA is silent on the need to improve any
working conditions in Central American countries.
Instead of trade policy that is beneficial to American businesses and
workers as well as our trade partners, we have a flawed trade policy
that hurts all parties. Free trade should not mean free labor.
Likewise, free trade does not, as evidenced in CAFTA, mean fair trade.
The Central American Free Trade Agreement outlines only one labor and
environmental provision, and that is that countries enforce their own
labor and environmental laws regardless of how weak those might be.
The labor laws of the six CAFTA nations are a joke. They have been
repeatedly criticized by the U.N.'s international labor organization
and our own State Department. Violations of core labor laws cannot be
taken to dispute resolution. And the commitment to enforce domestic
labor laws, which are pathetic to begin with, is subject to remedies
that are weaker than those available for commercial disputes.
In a purely technical sense, this violates the negotiating principal
of the Trade Promotion Authority Act that equivalent remedies exist for
all parts of an agreement.
Another negative effect of the Central American Free Trade Agreement
for the Central American laborer will be felt in the agricultural
sectors of these countries. Simply put, CAFTA will destroy the Central
American small farms. And that is why we see these massive protests.
The final negative impact of the Central American Free Trade
Agreement I would like to discuss is what it will do to our trade
deficit. The U.S. trade deficit which indicates that our imports exceed
exports, has increased by $200 billion per year under this
administration. In 2003, the trade deficit reached $497 billion, and
U.S. foreign debt has increased dramatically from $1.6 trillion in 2000
to $2.7 trillion at the end of 2003.
Over the past 4 years, a 10-year budget surplus of $5.6 trillion left
by President Clinton has become a 10-year deficit of $3 trillion. And
now we are working on another plan here to export more American jobs to
countries overseas.
Secretary of State Condoleezza Rice said yesterday that the Central
American Free Trade Agreement will help the U.S. compete more
successfully in a dynamic global economy, but I cannot understand how.
How will these nations be able to help the U.S. come out of its
current trade deficit? CAFTA nations are not a robust market for
exports. The average wage of a Nicaraguan worker is 50 cents an hour.
How much in terms of U.S. exports can a Nicaraguan worker afford? They
cannot afford Folgers coffee or Tide laundry detergent. They cannot
afford cuts of U.S. prime beef at $13 a pound.
As I noted before, the six Central American nations of Nicaragua, El
Salvador, Honduras, Costa Rica, Guatemala, and the Dominican Republic
have the combined purchasing power of New Haven, Connecticut.
{time} 1930
They will not add much to the U.S. economy. They will only take
American jobs away, and make no mistake, that is what this agreement is
all about.
If companies were serious about creating robust markets for ``Made in
America'' goods, they would be working to improve the wages and working
conditions of these workers. It is only when these laborers can earn
enough to buy U.S. goods that this kind of trade agreement will be
successful for all the parties and all the countries involved.
If you consider that a typical Central American consumer earns only a
small fraction of an average American worker's wages, it becomes clear
that CAFTA's true goal is not to the increase U.S. exports. About half
the workers in this region work for less than $2 a day, placing them
below the global poverty level.
All this agreement does is exploit lowest-wage labor to the detriment
of the American worker. The Central American Free Trade Agreement does
not benefit America. Let us be honest. CAFTA benefits companies that
leave the U.S. or outsource their jobs to Central America, plain and
simple. These companies will not only exploit cheap labor with minimal
protections, but can import their products back to the U.S. under
favorable terms.
There are several simple steps we can take to mitigate the effects
that existing trade agreements have on our workers and future trade
agreements have on global labor movements.
First, instead of subsidizing large corporations that outsource
American jobs, with tax breaks for foreign production and government
contracts for companies that ship jobs overseas, we should create
financial incentives for companies to keep jobs here in the United
States. It sounds simple. It could be revolutionary in this country.
Secondly, we must act now to deal with our increasing national
deficit. The U.S. trade deficit has jumped from $70 billion in 1993 to
$618 billion in 2004. There should be no new trade agreements until we
can negotiate fair terms for our own workers.
Finally, in existing trade agreements, we need to demand and strictly
enforce all provisions protecting labor, human rights and environmental
standards. All future trade agreements should include these basic
rights and all countries should be held accountable to internationally
recognized standards.
We need a trade policy that supports domestic manufacturers, while
promoting labor standards which are similar to our own overseas. The
Central American Free Trade Agreement fails to do either.
In closing, I must say that there is a stark difference between our
policy in the United States with respect to Iraq and the policy that is
being suggested here in this Central American Free Trade Agreement. I
was in Iraq several weeks ago, and there was much talk from the White
House and from my colleagues in government about the need to spread
democracy, to export democracy. I have heard of that a lot in the
recent months and weeks, the talk of empowering people and raising
their standards of living and liberating the people of Iraq.
Then I see this Central American Free Trade Agreement and what it
does. It endorses oppression. It exploits workers. It turns a blind eye
to repressive regimes. It reinforces the complete
[[Page H2961]]
lack of hope that these people have, and it does not lift a finger to
help them.
Once Iraq is stabilized, is this the way we will treat their workers?
Is this why we pumped $200 billion into that country in the last few
years? Is that what liberation means for the Iraqi worker? Is that what
our sons and daughters are fighting for? Is that the policy that we are
going to adopt for Iraq once they are able to stand up on their own
feet and control their own country?
We should have the courage and the honesty to tell our men and women
in uniform that that is what they are fighting for if that is what we
are proposing.
Mr. MICHAUD. Mr. Speaker, I would like to thank the gentleman from
Massachusetts for his comments tonight and I really appreciate his
remarks.
Now, Mr. Speaker, I would like to yield to the gentleman from Maine
(Mr. Allen), a gentleman who I have known for some time, a gentleman
who is deeply concerned about the trade agreements and what effect it
has on our State, of the State of Maine, and I am very appreciative of
the work that he has done for the people of the State of Maine,
particularly coming into the 2nd District, which is my district, to see
the effect of some of these unfair trade agreements and the job loses
that we have.
So I now yield to the gentleman from Maine (Mr. Allen).
Mr. ALLEN. Mr. Speaker, I thank the gentleman from Maine (Mr.
Michaud) for yielding to me, my friend and colleague.
I stand here as a person who believes fundamentally that the task we
have here in the Congress is to create a stronger and more competitive
America, number 1; number 2, to encourage a broader prosperity among
citizens among all walks of life in the country; and 3, to create a
better future for ourselves and our children. It really comes down to
being pretty much that simple.
I also stand here as someone who, in the past, has voted for some
trade agreements and voted against others, and I wanted to speak
tonight on why I believe CAFTA is a bad deal for the American people
and a very bad deal for Central America as well.
Our history has shown that the free enterprise system, and free
markets in particular, are essential in order to have an efficient
allocation of resources and to encourage economic growth, but our
history has also taught us that free markets do not, by themselves,
assure that the benefits of a free economy will be distributed fairly
among the population.
In fact, in many places around the world, it is the case that wealth
and power are concentrated, and in America, in the last four years,
wealth and power have become concentrated at an alarming rate.
We are doing anything in this country but encouraging broader
prosperity. We, in fact, are doing tax cuts for the wealthiest people
in the country and making it harder every day for the middle class to
get by, to pay for their mortgage, to get a good education, to pay for
their health care, and to otherwise create for themselves and their
children the kind of life that we thought America promised to everyone.
So, some of my criticisms of CAFTA relate to the policies of our
Republican colleagues in the Congress and to the Bush administration
because when we listen to people on both sides of the aisle, both sides
of this issue, the proponents of CAFTA say the agreement will create
jobs in the United States. The opponents say it will cost jobs. I
believe that both are right. It will create some jobs in the United
States, and we will lose many, many other jobs, in all probability many
more.
So, if both are true, the question is, what are we doing as a country
to take care of those people who lose their jobs as a result of CAFTA?
The answer from this administration is nothing. The answer from this
Republican Congress is nothing, nothing at all.
Because what we have done are tax cuts for the wealthiest people,
major tax cuts in 2001, irresponsible tax cuts in 2003 that followed,
and when we look around, look what the result is. Here it is.
We have turned budget surpluses to deficits as far as the eye can
see. The International Monetary Fund says that American budget deficits
are threats to global economic stability. Our growth is sluggish,
stocks are flat, wages are stagnant. When we look at General Motors,
$1,500 of every automobile goes to health care, two-thirds of that to
retirees who are not even making the vehicles. That is not true in
Japan. It is not true in Canada. This is the year when Ontario will go
past Michigan in North America as the place where most automobiles are
manufactured. The U.S. cannot compete in this kind of playing field
because it is not level.
So if we look at the Bush administration and the Republicans in
Congress, what are they doing for people who get laid off as a result
of CAFTA, as they surely will be? Well, the budget that was just passed
by Congress cuts funds for job training, cuts funds for vocational
education, cuts funds for adult education, community development, zeros
out the section 7(a) loan program for the Small Business
Administration.
So if you lose a job because of our trade policy, and you want to
start your own business, the administration's answer is forget it, we
want to take away the ability of the Small Business Administration to
help you.
If we are going to keep America competitive in the 21st century, we
have got to invest in emerging technologies to give us a competitive
advantage. Green technologies that make automobiles, power plants and
businesses more efficient and clean would be one key area.
Our economic strength basically depends on our investment in people,
both people who are trying to get an education for the first time,
people who are trying to get an education or job training to recover
from a job loss, in industries that are cutting edge technologies for
the future. This is not what we are doing here. So we do not have the
comprehensive national plan to deal with job loss. The administration
and the Republican Congress have just watched jobs fleeing overseas,
and the response has been, ho hum, well, that is just the way the
market operates.
Now, let us turn from that and look at the trade agreements
themselves.
In CAFTA, because these are poor countries, we have got to have
strong labor provisions. The labor in Central American countries have
much weaker labor laws than we do. So a trade deal must include
provisions to prevent companies from taking advantage of that gap by
exploiting the lack of labor protections for workers in Central
America. CAFTA fails this test hands down.
The agreement requires these countries to enforce their own laws
rather than enforce internationally recognized worker rights.
Yesterday, the gentleman from Michigan (Mr. Levin) released reports
commissioned by the Department of Labor, which confirmed that laws in
Central America do not adequately protect the right to organize in
accordance with international labor standards.
The lack of enforceable standards is bad for workers in CAFTA
countries trying to lift themselves out of poverty makes it very
difficult to create a middle class in those countries, and it is bad
for American workers and businesses who want to expand international
markets without resorting to the exploitation of workers overseas.
CAFTA also fails the balance test on the environment. It is not
balanced. It does not work. It creates incentives for American
companies to move production to Central American countries where the
environmental protections are weak and lack the proper enforceable
mechanisms, and CAFTA does nothing to help.
When you look at those areas, labor and environmental issues, they
are examples of where this agreement, CAFTA, tilts too far toward
unmanaged, free markets, but there is one area where CAFTA tilts too
heavily against free markets and against competition and that area is
pharmaceuticals, no surprise.
The CAFTA agreement continues a dangerous trend of using trade policy
to extend intellectual property protections that stifle generic drug
competition and erect market barriers to affordable medicines. These
provisions are bad for public health.
Generic drug competition is proven to lower prices and expand access.
Several years ago when generic AIDS medications were introduced, it
drove
[[Page H2962]]
the annual cost of treatment in developing countries from $10,000 a
year to $300 a year, and no one can argue that that was not an
important development. But CAFTA would delay generic entry for
prescription drugs by forcing trading partners of the CAFTA countries
to accept 5- to 10-years extension of what is called data exclusivity
during which generic makers are denied access to patent holders'
clinical data that could expedite regulatory approval of generic
versions of drugs.
In other words, CAFTA gives a huge break to the brand name
pharmaceutical industry at the expense of the generic pharmaceutical
industry but, more importantly, the public health of people in Central
America.
A year ago, the Guatemalan legislature changed its law to promote the
availability of generic drugs in the Guatemalan market, and using CAFTA
as a weapon, the United States has forced the Guatemalan legislature to
repeal that legislation. In other words, we have done something for the
pharmaceutical industry by forcing Guatemala to change its laws and for
no benefit to anyone else in America.
So the bottom line is CAFTA does not work for the Central American
workers. CAFTA does not work for American workers or American
businesses. It needs to be voted down, and I want to thank the
gentleman from Maine for holding this Special Order tonight.
Mr. MICHAUD. Mr. Speaker, I thank the gentleman from Maine (Mr.
Allen). I do want to thank him especially for his leadership when we
deal with prescription drugs. He has definitely been a leader in that
area. I want to thank him very much.
Mr. Speaker, now I yield to the gentleman from New York (Mr.
Crowley), a good friend.
{time} 1945
Mr. CROWLEY. Mr. Speaker, I thank the gentleman from Maine (Mr.
Michaud) for holding this Special Order, and I thank my other ``Maine
man,'' the gentleman from Maine (Mr. Allen). I like to call them my
``Maine men,'' but they have been outstanding in their efforts to
highlight what is wrong with this free trade bill. I just really want
to thank, in particular, as I just said, the gentleman from Maine (Mr.
Michaud) for organizing this Special Order this evening.
I have been a strong supporter of trade, and as many of my colleagues
know, I have been an outspoken leader on the Democratic side of the
aisle during the past two trade agreements which passed with the
support of a Democratic majority, those two trade agreements being the
Australia Free Trade Agreement and the Moroccan Free Trade Agreement.
And I happily helped pass those agreements here on the floor of the
House of Representatives.
As I have spoken about free trade agreements in the past, I have
always been clear that I look at each free trade agreement on its
individual merits. Since the USTR began negotiations in January of
2003, I have closely followed the negotiations leading up to the
signing of CAFTA in August of last year. In my experience, this has not
been the norm for this administration. Usually, after negotiations have
concluded, they make a very strong push for passage within an average
of 55 days. It is now May 4. While the target date for a vote on the
floor is said to be before Memorial Day recess, I seriously doubt the
Republican leadership will bring up this bill when they know they do
not have the votes to pass it.
Like many of my colleagues, both Democrats and Republicans in the
House, I remain concerned about many of the provisions contained in
this agreement. I hope now that we have Mr. Portman as our new UST
representative, he will take into account the strong views my
colleagues have on free and fair trade.
This agreement weakens workers' rights and environmental standards in
six countries, but it also does not take into account the rising trade
imbalance that our country faces globally. Instead of pushing free
trade agreements down the throat of Congress, the President should
start to work on lowering the enormous deficits that he has created for
our country.
Our country needs to create the next sector of our economy so we can
finally stop the joblessness and work towards job creation. Our workers
are not only being killed by high prices at the gas pump but also in
our general living expenses. Wages continue to go down as the cost of
living continues to skyrocket.
In my colleague's own home State of Maine, paper mills have closed
and shoe and apparel manufacturing is all but eliminated because of
free trade. While it is good to say that the next generation of jobs
will be of higher value and will raise the wages of employees of the
future, I am sympathetic to a lot of my friends in rural America who
say they just do not see it.
My wife, Casey's, family is from Montana, and they do not see it
either. They do not see it when the administration continues to fight
country-of-origin labeling for meats. The administration allows
Canadian soft wood lumber to flood our market and other anti-worker
proposals of this administration. It is time for this administration to
focus on how they can end the middle-class squeeze and bring prosperity
back to our working class.
While I have the floor, I would like to discuss an article that
appeared in today's Congress Daily, which I read this morning. In the
article, one source said that Democrats, specifically my fellow new
Democrats, and I quote, ``are sewing the seeds of our own
irrelevance.'' I take offense to that comment. We clearly see that we
are relevant. We are very relevant. If we were not, do you think the
Republican leadership would still be waiting to bring this agreement to
the floor?
This late push by the administration to try to win over pro-trade
Democrats has lacked any real compromise. Unfortunately, I cannot be
there for the CAFTA agreement in its current form, but my sincere hope
is it can be renegotiated to meet the requirements of free, fair and
balanced trade; fair to the people of the Dominican Republic and
Central America that raises their wages and their standard of living;
but, more importantly, fair to the people of the United States who feel
that they are competing in a world economy where the odds are just
simply stacked up against them.
Once again, Mr. Speaker, I want to thank my colleague, the gentleman
from Maine (Mr. Michaud), for holding this Special Order this evening.
Mr. MICHAUD. Mr. Speaker, I want to thank the gentleman from New
York, and I really appreciate his efforts in this manner and look
forward to working with the gentleman to make sure we do have fair
trade agreements.
In closing, Mr. Speaker, it does not take a trade expert to see the
economic mismatch between the United States and the nations that make
up the Central America Free Trade Agreement: Honduras, Costa Rica,
Nicaragua, Guatemala, and El Salvador. The way CAFTA proponents talk,
you would think that Central America is made up of the biggest
economies in the Western Hemisphere. CAFTA nations are not only among
the world's poorest countries; they are among the smallest economies as
well.
Think about this, as the gentleman from Massachusetts (Mr. Lynch)
mentioned earlier: the combined purchasing power of CAFTA nations is
almost identical to the purchasing power of New Haven, Connecticut. The
U.S. economy, with $10 trillion of GDP in 2002, is 170 times larger
than the economies of the CAFTA nations, at about $62 billion combined.
So where are the economic opportunities for American industry and
American workers?
These kinds of questions are clearly giving people pause. Congress
typically votes on trade agreements within 55 days after President Bush
has signed a trade agreement, but May 28 will mark the 1-year
anniversary of when the President signed CAFTA. Why the long holdup?
Clearly, there is dissension in the ranks and people are wondering why
we need to make this deal. And for good reason. CAFTA is a
dysfunctional cousin of NAFTA, continuing a legacy of failing trade
policies.
Look at NAFTA's record, with 1 million U.S. manufacturing jobs lost.
NAFTA did nothing for the Mexican workers as promised. They continue to
earn just over $1 a day while living in poverty, not exactly an
exploding market for the U.S. products either. And yet the United
States continues to push for more of the same, more trade
[[Page H2963]]
agreements that ship U.S. jobs overseas, more trade agreements that
neglect environmental standards, more trade agreements that keep
foreign workers in poverty.
For U.S. workers, the only difference between CAFTA and NAFTA is the
first letter. It adds up all the same: more lost jobs. CAFTA is not
about a robust market for the export of American goods; it is about
outsourcing and accessing cheap labor markets. Trade pacts like NAFTA
and CAFTA enable companies to exploit cheap labor in other countries,
then import their products back to the United States under unfavorable
terms.
CAFTA will do nothing to stop the bleeding of manufacturing jobs in
the United States and even less to create strong Central American
consumer markets for American goods. Throughout the developing world,
workers do not share the wealth they create. Nike workers in Vietnam
cannot afford the shoes that they make. Disney workers in Costa Rica
cannot buy the toys for their children, Motorola workers in Malaysia
are unable to purchase cell phones.
Mr. Speaker, we have a historic opportunity before us to empower
workers in developing countries. We have a historic opportunity before
us to bolster our economy. When the world's poorest people can buy
American products rather than just make them, then we will know that
our trade policies are finally working.
Mr. Speaker, there are reasons why not only environmental and labor
groups but also business organizations such as the United States
Business and Industry Council, a leading group representing American
businesses, have taken a firm stance against this trade agreement. It
is because it is unfair.
I believe in free trade, but it has to be fair trade. We can no
longer continue to allow jobs in the United States to be exported
overseas when we have a need here in this country. As I stated earlier,
in my own region in the State of Maine, the labor market area has risen
over the last 2 years to, at certain times, over 30 percent. Over 30
percent of people unemployed because of that market.
So, Mr. Speaker, I hope my colleagues will join me in opposing the
CAFTA trade agreement. It is unfair, unneeded, and hopefully it will
not pass.
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