[Congressional Record Volume 151, Number 90 (Thursday, June 30, 2005)]
[Senate]
[Pages S7647-S7695]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
DOMINICAN REPUBLIC-CENTRAL AMERICA-UNITED STATES FREE TRADE AGREEMENT
IMPLEMENTATION ACT
The PRESIDENT pro tempore. Under the previous order, the Senate will
resume consideration of S. 1307, which the clerk will report.
The legislative clerk read as follows:
A bill (S. 1307) to implement the Dominican Republic-
Central America-United States Free Trade Agreement.
The PRESIDENT pro tempore. Under the previous order, there are 16
hours for debate equally divided. The majority leader is recognized.
schedule
Mr. FRIST. Mr. President, this morning we will resume consideration
of the pending CAFTA legislation. Last night we began debate under the
20-hour time limitation. We now have 16 hours remaining and we do not
expect to use the entire debate time allocated. Chairman Grassley has
indicated that he would not require all of the 8 hours remaining under
his control. Thus, I hope we would be able to yield back some time,
which would allow us to vote on this bill at a reasonable time today.
As mentioned yesterday on a number of occasions, we have two
additional appropriations measures to complete this week, one of which
is the Legislative Branch appropriations bill. It is ready for floor
consideration. That bill will require only a short debate and could be
finished without a rollcall vote.
Also, we expect to consider and complete the Energy and Water
appropriations bill. It is possible we could finish both of those late
tonight. It depends on how much debate time is used on the CAFTA bill
and also how much time Energy and Water will require.
We have a number of other items to be completed before our recess,
including the highway extension, as well as some nominations. It will
take a lot of cooperation and a lot of hard work to be able to complete
all of this. Again, there is a possibility we could finish late tonight
but, if not, we are going to complete all this business, including the
two appropriations bills, by Friday, and we could have votes into
Friday as well.
We have our jobs and our tasks laid out for us. We need to stay here
until we complete them before we leave for our recess.
Central American Free Trade Agreement
Mr. President, I want to comment on the CAFTA legislation which we
turned to last night, the Central American Free Trade Agreement. We
will vote on final passage of that agreement later today. CAFTA is a
good bill. It is a fair bill and an evenhanded bill that Members from
both sides of the aisle should be able to support in that this
legislation expands the market for America's goods and thereby grows
jobs here at home.
The agreement which President Bush signed in May of 2004 promises to
eliminate trade barriers between the United States, Costa Rica, El
Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic.
By doing so, it will level the playing field and by leveling the
playing field will stimulate economic growth which, in turn, will
stimulate job creation. America's market is already open. Nearly 80
percent of exports from the CAFTA region to the United States come into
America duty free. Those barriers are already down.
[[Page S7648]]
Under CAFTA, the six CAFTA countries would reciprocate and
immediately allow 80 percent of our exports to enter their countries
duty free, lowering that barrier. As a result, CAFTA will create our
second largest export market in Latin America, behind only Mexico. From
Washington State apples all the way across the country to Florida
oranges, America's producers will thrive.
This represents a tremendous opportunity both for sellers and buyers
and for all the people who make transactions happen--again, economic
growth, creation of jobs.
If I look back--and become a little bit provincial--to my home State
of Tennessee, we are the third largest agricultural exporter to the
CAFTA countries. Last year Tennessee businesses sold $271 million worth
of goods and services to the CAFTA region. Tennessee farmers and
factory workers rely on exports for their jobs and their livelihoods.
One plant, the Levi Straus plant in Powell, TN, for example, exported
$34.8 million in apparel last year to these countries. The Memphis-
based company, Drexel Chemical, has been exporting to Guatemala for the
last 30 years, since the early 1970s. Its chairman tells the Memphis
Commercial Appeal newspaper that CAFTA would have a tremendous impact
on her business.
She has good cause to be optimistic. Since America signed NAFTA, the
North American Free Trade Agreement, in 1993, Tennessee's combined
exports to Canada and Mexico have grown a whopping 190 percent.
Free trade grows America's businesses and puts more money in the
pockets of America's families. It is estimated that NAFTA and the
Uruguay Round generate $1,300 to $2,000 a year for the average American
family of four.
CAFTA will open the doors to 44 million new consumers of American
goods. More sales to Central America means more jobs right here at
home. Strengthening our mutual economic interest also will strengthen
our national security. Twenty years ago, only two of the CAFTA nations,
Costa Rica and the United States, were established democracies. Today,
all seven can be counted among the free nations of the world.
Unfortunately, however, the forces of totalitarianism and oppression
still hover on the edges of these young democracies. Fidel Castro still
oppresses the Cuban people and denies them precious human freedoms.
Hugo Chavez moves Venezuela closer and closer to Castro every day.
These regimes tend to work to spread their brutal methods and
totalitarian philosophies, trying to infect the rest of Latin America
and we simply cannot let them succeed.
The free nations of Latin America need our support. They deserve our
support. That support can be reflected through CAFTA. By linking their
economies with democratic capitalism, CAFTA will help gird these
nations against the threats at their door. It will strengthen their
democracies and provide a model for freedom, a model for freedom
seekers--indeed, freedom seekers around the world.
The Washington Post agrees that:
CAFTA and similar alliances provide hard evidence of
America's lasting commit to strengthening alliances, fighting
global poverty, and creating the building blocks of
democracy.
In 1823, James Monroe warned that continued European efforts to
colonize the New World would endanger American peace and safety. He
understood that advancing liberty throughout the world required that we
begin in our own backyard.
Since then, the United States has worked to protect the freedom and
independence of our hemisphere. I urge my colleagues to support growth
and prosperity. The United States has always stood for freedom and
liberty around the world. Under CAFTA we will help keep the Americas
moving forward.
I yield the floor.
The PRESIDENT pro tempore. Under the previous order the time on the
Democratic side shall be divided with 5 hours under the control of the
Senator from North Dakota, Mr. Dorgan, and 3 hours under the control of
the Senator from Montana, Mr. Baucus.
Who yields time? The Senator from Montana.
Mr. BAUCUS. Mr. President, parliamentary inquiry: Does the other side
of the aisle control any time?
The PRESIDENT pro tempore. It was previously announced that there is
16 hours for debate equally divided. The majority side is under the
control of Senator Grassley.
Mr. BAUCUS. How much time does he have?
The PRESIDENT pro tempore. He has 7 hours 54 minutes.
Mr. BAUCUS. Mr. President, I suggest the absence of a quorum, and I
ask the time be equally divided between both sides.
The PRESIDENT pro tempore. Without objection, it is so ordered. The
clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Sununu). Without objection, it is so
ordered.
Mr. GRASSLEY. Mr. President, last night we started debate on the
Central American Free Trade Agreement. Last night, in addition to the
economic factors involved in the approving of this bill, I spoke about
the national security importance of this Central American Free Trade
Agreement. I also talked--as, obviously, we do on most trade
legislation--about the benefits of the agreement to the U.S. economy in
general. This morning, I will focus on the benefits of this agreement
for U.S. agriculture.
As a Senator from Iowa and as a person who lives on and has an
interest in a family farm my son operates, I have major interest in the
U.S. agricultural policies that benefit American farmers. Moreover, as
chairman of the Finance Committee, I pay particularly close attention
to trade issues as they affect agriculture.
I consulted frequently with the U.S. Trade Representative during
negotiations on this agreement, the Central American Free Trade
Agreement. I do that because that is the responsibility my committee
has under trade promotion authority, which is a process by which
Congress delegates the process of our carrying out our constitutional
responsibility of control over international trade to the President to
negotiate because it is quite impractical for 535 Members of Congress
to negotiate with foreign countries.
U.S. negotiators went to great lengths to see that the Central
American Free Trade Agreement would be a good agreement for American
farmers. Their efforts were successful. The negotiations resulted in an
agreement that is particularly strong for U.S. agriculture and the
agribusiness community that affects so many nonfarm jobs throughout the
United States.
I am fully convinced that implementation of this Central American
Free Trade Agreement by the United States is in the best interests of
U.S. agricultural producers. That is why I go to great lengths urging
my colleagues to support it.
U.S. farmers and ranchers are well aware of the fact that the
international playing field for agricultural exports is presently far
from level. Average tariffs of other countries on imports of U.S.
agricultural products in the case of most commodities is significantly
higher than those imposed by the United States. That worldwide average
would be 60-some percent of tariffs of U.S. agricultural products going
into another country, whereas those same countries throughout the world
bringing products into the United States face an average of only an 11-
percent tariff.
It is common sense to negotiate other countries' tariffs against our
agricultural products down some or a lot and hopefully down to a point
where we are in a win-win situation for American agriculture and the
nonfarm jobs involved in the processing and handling of agricultural
products. That is our long-term goal. In fact, that is the goal we have
right now in the Doha round World Trade Organization negotiations going
on this year. That is for the entire 150 countries that are members of
the World Trade Organization. We hope that Doha round is a major
breakthrough for the reduction of high worldwide tariffs against
agricultural products.
Now, as this unequal situation I just described has clearly
demonstrated, and specifically in this trade relationship we have
between the United
[[Page S7649]]
States and these five countries of Central America, over 99 percent of
agricultural products from Central American countries coming to the
United States currently come in here not with an 11-percent average
tariff I talked about worldwide, they come in with hardly any duty--
except for an occasional product--and are duty free right now. That is
unfair to American farmers.
When we send products down there, the average bound tariff of these
five Central American countries is over 44 percent. The current trading
relationship between the United States and the CAFTA countries is not
only an unlevel playing field but also a one-way street. CAFTA farm
products do not pay tolls to enter the U.S. market today. Yet U.S.
agricultural products are charged hefty tolls to enter the markets of
these five countries. This is all going to be changed by the Central
American Free Trade Agreement. A downhill one-way street will become a
level two-lane road.
Under the agreement, the CAFTA countries will eliminate tariffs on
virtually all products. U.S. tariffs will remain largely unchanged.
After all, the vast majority of agricultural products of the CAFTA
countries already enters the United States duty free. For example, the
treatment under the agreement of the four major U.S. commodities--pork,
beef, corn, and soybeans--demonstrates how the Central American Free
Trade Agreement will remove disadvantages faced by U.S. agricultural
producers. These commodities are of importance not only to my State of
Iowa but to most agricultural States in our country.
The Central American Free Trade Agreement countries currently apply
tariffs of up to 47 percent on imports of U.S. pork. Their bound rates
reach as high as 60 percent. Under the agreement, these tariffs of the
Central American countries will be reduced to zero.
With beef, they apply tariffs of up to 30 percent on imports of U.S.
beef. Their bound rates reach as high as 79 percent. Under CAFTA, these
tariffs of the Central American countries will be reduced for our U.S.
farmers to zero.
The CAFTA countries currently apply tariffs of up to 45 percent on
imports of U.S. corn. Their bound rates reach as high as 75 percent.
Under the agreement, tariffs of CAFTA countries on corn, the
predominant product we export, will be reduced to zero, with the
exception of the Dominican Republic, in which case duty-free access
will be locked in.
Soybeans is another example. CAFTA countries currently apply tariffs
up to 5 percent on imports of our soybeans and up to 20 percent on U.S.
soybean oil. Their bound rates reach as high as 91 percent for
soybeans, 60 percent for bean meal, and 232 percent for the soybean
oil. Under the agreement, tariffs of the CAFTA countries on U.S.
soybeans, bean meal, and soybean oil will be reduced to zero.
The leveling of the playing field with regard to CAFTA countries will
result in real gains for U.S. agriculture. According to the Farm Bureau
Federation, CAFTA would increase U.S. agricultural exports to those
countries by $1.5 billion at the end of the full implementation. CAFTA
will result in dollars in the pockets of U.S. farmers and ranchers.
Recognizing that CAFTA will profit their members, numerous
agriculture and food organizations have expressed their support for
this agreement. I have a letter from 73 such groups that back the
agreement. These organizations represent diverse commodities produced
in the area regions including among the 73 the Farm Bureau Federation,
Soybean Association, Chicken Council, Corn Growers, Milk Producers,
Pork Producers, Potato Council, Turkey Federation, Rice Federation.
Moreover, six former U.S. Secretaries of Agriculture, both Republican
and Democrat, have announced their support for the Central American
Free Trade Agreement. Let me read those: Ann Veneman, Republican; Dan
Glickman, a Democrat; Mike Espy, Democrat; Clayton Yeutter, Republican;
John Block, Republican; Bob Bergland, Democrat. They all noted in a
recent letter to Congress that they back CAFTA ``because the benefits
are very significant and the costs are minimal.''
I ask unanimous consent to have that letter printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Letter From Former Secretaries of Agriculture to Members of the U.S.
House of Representatives and the U.S. Senate
Dear Member of Congress: As former secretaries of
agriculture, we understand the importance of negotiating
trade deals that minimize the costs and maximize the benefits
to U.S. farmers, ranchers, and food and agriculture
organizations. We support the Free Trade Agreement with
Central America and the Dominican Republic (CAFTA-DR) because
the benefits are very significant and the costs are minimal.
We urge you to pass CAFTA-DR quickly and without amendment.
A vote for CAFTA-DR is a vote for fairness and for
reciprocal market access. Under CAFTA-DR all of our food and
farm products will receive duty free treatment when the
agreement is fully implemented.
A vote against CAFTA-DR is a vote for one-way trade.
Virtually all of what we import from the six CAFTA countries
now enters the U.S. duty free as a result of the Generalized
System of Preferences (GSP) and the Caribbean Basin
Initiative (CBI). Yet, our food and agricultural exports to
these six nations are restricted significantly because of
high tariffs. As a result of the current one-way trade deal,
we are running an agricultural trade deficit with these six
countries.
In addition, a formal trade agreement with the United
States will help ensure the economic stability and growth
that the region needs to avoid a return to the civil wars,
insurgencies, and dictatorships of the recent past. As
economic freedom and democracy take deeper root, incomes will
increase and demand for our food and agriculture products
will expand.
Failure to approve CAFTA-DR will have a devastating effect
on U.S. efforts to negotiate trade agreements on behalf of
U.S. agriculture. The World Trade Organization Doha
Development Round would be dealt a serious blow. Other
countries would be less willing to negotiate with the United
States knowing that CAFTA-DR, a trade agreement so clearly
beneficial to U.S. interests, could be rejected by the U.S.
Congress.
The future of American agriculture continues to lay in
expanding opportunities for our exports in the global
marketplace, where 96 percent of the world's population
lives. We must not forego these opportunities, especially
when the benefits to our nation are so unmistakable.
Ann M. Veneman.
Dan Glickman.
Mike Espy.
Clayton Yeutter.
John Block.
Bob Bergland.
Mr. GRASSLEY. Most sectors of U.S. agriculture support the CAFTA. I
realize one--sugar--is a commodity we did not have their support. I
respect the sugar industry. They are very important. Outside of that
group, we have agriculture represented behind this group.
An economic study by the American Farm Bureau Federation confirms
that CAFTA will not harm the U.S. sugar program or other agricultural
commodities.
While CAFTA is important in itself for U.S. agriculture, the
implementation of this agreement would boost U.S. efforts to liberalize
agricultural trade around the world. The implementation of CAFTA would
give further momentum toward the completion of agricultural
negotiations in the Doha Round of the World Trade Organization,
negotiations in which the United States is seeking to cut tariffs,
harmonize levels of domestic support, and eliminate export subsidies.
Mr. President, CAFTA is a straightforward win for the bulk of U.S.
agricultural producers. A current one-way trading relationship will
end. The CAFTA countries will dismantle their tariffs to U.S.
agricultural products while the United States will provide little
additional access for CAFTA commodities. This will result in increased
sales for U.S. agricultural exporters, sales of up to $1.5 billion a
year by the end of the agreement's full implementation. Not
surprisingly, CAFTA is widely supported in the U.S. agricultural
community.
The CAFTA is good agricultural policy and good trade policy. I urge
my colleagues to support it.
Mr. President, I yield to the Senator whatever time he needs.
The PRESIDING OFFICER. The Senator from South Carolina is recognized.
Mr. DeMINT. Mr. President, I rise to speak in favor of S. 1307, the
CAFTA Implementation Act, because it advances America's economic and
security interests. As someone who spent over 20 years in business
before entering public service, I continue to be amazed by those in
Washington who support outdated policies that make it
[[Page S7650]]
harder and harder for American businesses to compete. Excessive
taxation, regulation and litigation are driving American employers out
of their minds and American jobs overseas. Yet too many politicians
continue to support higher taxes, junk lawsuits, and trade barriers
that effectively put signs on our beaches that say: Go do business
somewhere else.
If we are going to have the best jobs in the world, we must make
America the best place in the world to do business. This starts by
reforming our complicated Tax Code, reducing mindless Government
regulations, and eliminating frivolous lawsuits that, together, add
mountains of needless costs on our businesses. Creating a pro-business
environment in the United States also means we must open international
markets to American exports so our workers can compete on a level
playing field. CAFTA, for example, would expand the market for U.S.
goods with 44 million consumers in Costa Rica, El Salvador, Guatemala,
Honduras, Nicaragua, and the Dominican Republic.
Nearly 80 percent of goods from the six CAFTA countries currently
enter the United States duty-free. Yet American exports are taxed
virtually across the board when they enter CAFTA markets.
On U.S. motor vehicles and parts, CAFTA countries levy an average
tariff of 11 percent, while the U.S. rate is zero. On vegetables,
fruits, and nuts, the CAFTA region's average is 16.7 percent, again
compared with zero in the United States. On grains, it is 10.6 percent
to zero; and on meat products, it is 14.7 percent, while the U.S. rate
is just 3 percent. CAFTA would eliminate these disparities.
The agreement would level the playing field by eliminating 80 percent
of the tariffs on American exports immediately, with the remaining
tariffs phased out over 10 years. This would help exporters in my home
State of South Carolina like BMW, Caterpillar and General Electric, as
well as farmers and ranchers raising soybeans, peaches, pork, and
poultry. The American Farm Bureau Federation estimates CAFTA could
expand U.S. farm exports by $1.5 billion a year. Manufacturers would
also benefit, especially in sectors like information technology
products, agricultural and construction equipment, paper products,
pharmaceuticals, and medical and scientific equipment.
According to a recent economic impact study conducted by the U.S.
Chamber of Commerce, in the first year alone CAFTA would increase
output in South Carolina by $167 million and create over 900 new jobs.
In 9 years, the study shows a potential increase in output across all
industries of $701 million and the creation of over 6,000 jobs. The
South Carolina State Ports Authority has told me CAFTA will contribute
to greater economic development in South Carolina by stimulating
commerce and the shipment of freight through the Port of Charleston. In
2004, Central America represented $359 million of the total value of
the Port's business. In fact, Charleston's exports to Central America
have grown faster than the average export growth. Most exporters agree:
CAFTA is a great deal for South Carolina business.
Yet there is a small group in the textile industry whose opposition
poses a threat to this step forward. They say CAFTA will allow China to
exploit a ``loophole'' in the agreement. But they fail to recognize
that without CAFTA there will be no loop at all--just one giant hole
that China will use to destroy our industry. The truth is that a vote
against CAFTA is a vote for China. Garment factories in Central America
purchase large amounts of American fabric and yarn. In fact, the region
is the second-largest world market for U.S. textile fabrics and yarns.
Under CAFTA, these garments made in the region will be duty-free and
quota-free only if they use U.S. fabric and yarn. In fact, more than 90
percent of all apparel made in the region will be sewn from fabric and
yarn made in the United States, thereby supporting U.S. textile exports
and U.S. textile jobs. This is especially important for South Carolina
workers. In 2004, South Carolina's exports of fabric mill products to
the CAFTA region were valued at $180 million, more than half of the
State's total exports to the region.
If we going to continue to have these exports and not lose the
business to Asia, we must pass CAFTA. The American Apparel and Footwear
Association made this point in a recent letter to President Bush where
it said, if CAFTA ``is not enacted soon, U.S. apparel and footwear
companies will place more of their business outside this hemisphere.''
And the National Council of Textile Organizations recently endorsed
CAFTA, saying, Central America ``is a very important part of the
domestic industry's supply chain and we need (CAFTA) to ensure that the
U.S. textile industry can remain competitive against China.''
The elimination of quotas on Chinese textiles has eroded the
partnership the U.S. has with the Central American region. Our existing
partnership is also weakened by burdensome documentation requirements
and by the fact that it will expire soon. All of these factors reduce
the incentive to make cloth
ing in the region using U.S. inputs. CAFTA, however, will solidify and
stabilize this partnership by making the current program broader,
easier to use, more flexible, permanent, and reciprocal. The agreement
will create new sales opportunities for U.S. textile and apparel
products by providing permanent incentives for the use of U.S. yarns
and fabrics in textile articles made in the region. And it will also
give us new advantages over our competitors by promoting duty-free
access for U.S. textile and apparel exports to local markets in the
region.
I also thank the President and his administration for their efforts
to make the agreement even stronger. Specifically, I have worked
closely with U.S. Trade Ambassador Rob Portman to strengthen provisions
dealing with textile pocketing. On May 9 of this year, Ambassador
Portman wrote me about his desire to use the agreement's amendment
mechanism to include pocketing in the rule of origin. He wrote:
I assure you that USTR will utilize this mechanism, working
closely with our textile industry, to seek an amendment to
the CAFTA so that pocketing would have to originate in one of
the signatory Parties.
This is very important to textile manufacturers in South Carolina who
make pockets and want to have a strong partnership with the CAFTA
region.
It is time to stop saying ``no'' to every trade agreement, regardless
of the benefits. We must stop acting like we are operating in the
business environment of 50 years ago. We must stand up and fight for a
better deal today. We can't build a wall around our country and expect
to remain competitive. And we can't keep sticking our heads in the
sand. Instead, we must fight back with new agreements that knock down
barriers and create new markets. We must fight back and win because
that is what Americans do. We have the best workers in the world and we
can compete with anyone in the world.
CAFTA also provides a unique opportunity to promote democracy,
security, and prosperity in a part of the world that was once
characterized by oppression and military dictatorship. This agreement
is critical to the economic and political stability of these young
democracies, and it is a signal of our Nation's commitment to democracy
and prosperity in this hemisphere. As we continue to fight the war on
terrorism, America has a vested interest in making sure these countries
do not turn their backs on freedom.
I had the opportunity to personally meet with the Presidents from the
CAFTA countries earlier this year, and many of them are taking
significant political risks to promote economic freedom. We need to
stand with them. We must stand with them and pass this agreement. The
benefits of CAFTA are clear. The agreement will strengthen our economic
ties with our democratic neighbors, it will promote opportunity and
prosperity in the United States and the region, and it will strengthen
our security at home by promoting democracy and prosperity in our
hemisphere. This agreement is a forward strategy for freedom, and I
encourage my colleagues to support it.
Mr. President, again, I thank you for this time this morning. I do
stand to speak on behalf of CAFTA, and I appreciate the Senator on the
other side of the aisle yielding this morning.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I yield myself such time as I use.
[[Page S7651]]
The PRESIDING OFFICER. The Senator is recognized.
Mr. DORGAN. Mr. President, if ever there was a triumph of hope over
experience, it is bringing this bill to the floor of this Senate: a new
trade agreement with the background of failed trade agreement after
failed trade agreement, lost jobs after lost jobs, higher deficits
every year, believing this new chapter of the same failed book of trade
strategy will produce a different result. It is unbelievable to me.
But before I begin, let me ask a question. There is a substantial
lack of opportunity to ask questions on the floor because very few will
attend this debate. But I was wondering whether in this trade agreement
there is anything that has to do with exotic dancers or strip clubs. I
wonder if anyone could respond to that.
Let me tell you the reason I ask the question----
The PRESIDING OFFICER. The Senator should be aware that Senators are
not permitted to ask other Senators questions unless they have been
yielded time on the floor.
Mr. DORGAN. Let me say to the Presiding Officer, it is a fair point.
I have not directed questions to other Members of the Senate. I ask a
rhetorical question, and perhaps the Presiding Officer, in his capacity
as a Senator from New Hampshire, would respond. But I ask the question,
is there anything in this trade agreement that deals with exotic
dancers or strip clubs? And if any of my colleagues would like to come
to the floor to respond to that today, I would be glad to hear it.
Let me tell you why I ask the question. We debated something called
NAFTA on the floor of the Senate some years ago. It did not turn out
very well--huge trade deficits, American jobs rushing off to Mexico. It
did not turn out well at all. But now I discovered, going to the
computer last night, using a Google search, that NAFTA had something in
it about ``special skills.'' Let me read this to you. This is from my
Google search last evening on the computer: ``Claiming a shortage of
homegrown talent, strip clubs in Canada have used NAFTA to find new
recruits in Mexico.''
I thought, well, that is interesting. NAFTA had something that allows
strip clubs in Canada to search for dancers from Mexico? Well, I found
out what that was with a little further Google search: Employment
authorizations based on NAFTA agreements were available for
professionals, company transferees, traders, investors, and people with
special knowledge: exotic dancers, et cetera--apparently, under this
``special skills'' category. Quite remarkable, isn't it?
Did anybody know that existed in NAFTA before it was voted on? Does
anybody want to claim credit, I ask rhetorically? Does anybody want to
claim credit for a provision in NAFTA that allows Canadian strip clubs
to recruit exotic dancers from Mexico? Oh, probably not. Probably no
one wants to claim credit for that today. But, apparently, that
opportunity existed in NAFTA. It sure did.
Is there anything in this trade agreement we ought to know about? Is
there anything in this trade agreement that will probably persuade me
to come to the floor of the Senate 5 years from now, 2 years from now,
and say: Did you know about this? We probably will not learn that
today, either. Let me tell you what we should learn today. Here, as
shown on this chart, are our trade deficits. These are our trade
deficits--year after year after year. I have always wondered what
``reeducation'' means as a term--``reeducation.'' It is quite clear to
me there is no reeducation anywhere near this 50 or 60 square miles of
ground because we are about, today, in the Senate to pass another trade
agreement which is exactly the same kind of trade agreement that has
caused a massive trade deficit year after year after year, a gathering
trade debt that is dangerous to this country.
On these red lines on this chart there are no names. But I can give
you some names. And I will today. These are the people who lost their
jobs, the people who came home one night after work and said: ``Honey,
I have been fired. I worked at my plant for 19 years. I was a good
worker. I loved my job. But I got fired today. Do you know why? Oh,
they are going to still make the products I made, but they are going to
make them in China. They shipped my job to China because they found
somebody who can do it for 30 cents an hour.''
Every one of these lines has tens of thousands--hundreds of
thousands--of names of American workers who have lost their jobs.
And so in the first 4 months of this year, our trade debt is up
another 20 percent. Last year it was a record. It is up another 20, 22
percent. We are headed in exactly the wrong direction.
What is the response of this Congress? What is the response of the
President? Well, let's do some more of what we have been doing. This is
the law of holes: Create a hole and just keep digging, according to
these people.
Let me make a couple of other opening observations. This bill should
not be on the floor of the Senate. It does not comport with the
Constitution of the United States. I think everyone in this Chamber
knows that. This is a tariff bill. My colleague from Iowa described in
great detail the tariff provisions in the bill. This is a tariff bill.
A tariff bill, by the U.S. Constitution, cannot originate here. It
cannot. It must originate in the House of Representatives.
This bill is improperly on the floor of the Senate and I may today
make a constitutional point of order. Every Senator knows it is not
here in accordance with the Constitution, and yet we all put on our
dark suits and come to the Chamber and vent for hours, acting as if
nothing has changed, nothing is wrong, we have not read the
Constitution. Tariff bills must originate in the House, not in the
Senate.
So we will pass this today, I am told. I am told the votes exist to
pass this failed trade agreement. And then what will happen is the
House will take it up, take up their version of it, and at some point
it will be sent over here to be exchanged for the version we have
already completed in the Senate. The problem is, I would say to the
leaders, then there will be another 20 hours under fast track, 20 hours
of debate to which we are entitled. Perhaps this will not work out so
well after all.
I find it interesting. I must say to the majority leader, I apologize
for being irritated last night, but that irritation hasn't abated this
morning. I knew what was going to happen with CAFTA. It was negotiated
over a year ago. It was signed over a year ago and has never been
brought to this Chamber. Why? Because they don't know if they have the
votes in the House. So over a year it languished. I knew at some point
they were going to try to fold it up into a tight, little package and
sort of stick it through the keyhole before some kind of congressional
recess. Sure enough, that is exactly what they have done. Lord knows,
you don't want to have a long debate on the floor of the Senate about
trade strategy.
Having, for example, a debate of 3, 4, 5 days on one of the most
significant problems we face is not something the majority party wants,
not something the President wants. Do an agreement. Sign it up. Wait
for a year. Buy off the votes with roads, bridges and dams and perhaps
some refrigerators. I don't mean ``buy up'' votes; I mean persuade
people by saying we will support your project--that was not a sensitive
thing to say--persuade people who would have voted against you to
decide they will vote for you, if you can get 3 or 4 miles of road
somewhere near the hometown. You get enough votes, and then, a year
later, fit this into this little crevice before the July recess. Then
all the dust settles over the Fourth of July recess, and we come back
and act as if there are no trade issues.
So here we are. Some of my colleagues will speak about an issue that
I care a lot about as well--sugar. This is the first step in the
direction of deciding to take the sugar program apart and to devastate,
particularly in our region of the country, the beet growers--beet
growers in the Red River Valley of North Dakota--because they can't
compete with this kind of dump-price sugar that comes from these
regions. This agreement, in itself, will not ruin the sugar industry,
but it is going to hurt it. It is the first step in a direction, a
strategy, that will ruin the industry in which a lot of beet growers
out there, working on the farm, who got up this morning hoping they
could continue to make a living,
[[Page S7652]]
are going to be mighty concerned about where this heads. The next
agreement that will come after this is the Free Trade Area of the
Americas with Brazil and others. It is an ominous direction and is a
disservice to the one farm program that does work in this country.
I would like to read a couple things. Most of you probably know Puff
Daddy. Actually, Sean Combs is his name. He changed his name to P.
Diddy. I never understood why somebody named Puff Daddy would change
their name to P. Diddy. He is an artist, a musician. He also makes
clothing, or at least he has someone make clothing with his name in the
label.
So I held a hearing one day. We had workers, from Honduras, working
in a plant in Honduras. Their job was to sew the sleeves on the shirts
that were the Sean John label rather than Puff Daddy or P. Diddy. It
seems to me--I am not in the shirt business--that Puff Daddy or P.
Diddy might have been a better label, but they chose Sean John. So they
contracted out for shirts to be produced in a plant in Honduras.
I have been there. I have watched. I have been to Honduras. I have
watched people make cigars and various things. We had three employees
of the plant in Honduras that makes these shirts come and testify. I
invited Sean Combs to come and testify. He chose not to. Let me
describe what was said at this hearing. It is directly related to
signing up to a trade agreement with these kind of economies and the
allegation that will be made by my colleagues that there are no labor
standards that are enforceable or are enforced in these countries.
Let me read this. This was from Lydda Eli Gonzalez. In her report to
us, she talks about her job. She says:
I get up at 5 a.m.--
She is a young woman--
to go to work at 6:45. I take two buses. When I get to the
factory, I have a tortilla with beans. I buy the cheapest
lunch I can, just a small piece of chicken, rice, beans and
water.
And she describes the cost of that. And then she describes her day at
the factory:
My job is attaching sleeves to the shirt. There are
different styles of Sean Jean shirts, but for long-sleeved
shirts, a production line of 20 workers has to sew 190 dozens
shirts a day--that's 2,280 shirts. Management demands we
reach this goal, but it is impossible.
And she goes on:
They call us filthy names--you can't answer--like
``bitch,'' ``Maldito,'' ``donkey.'' You can't answer the
supervisors or they will fire you. It is very hot in the
factory. You are sweating all day. There is a lot of dust in
the air. I breathe it in. You go into the factory with black
hair. You come out with hair that is white or red or whatever
the color of the shirts we are working on. It is forbidden to
talk. You have to ask permission to use the bathroom. We have
to get a pass from the supervisor and give it to the guard in
front of the bathroom who also searches us before we go in.
You can go once in the morning and once in the afternoon.
Also they watch the time, and if you are gone more than three
or four minutes, they call you on the loudspeaker. Another
thing, the bathrooms are very dirty. There is almost never
any toilet paper or soap. They don't permit us to get up to
get water. If the worker next to you goes, you try to take
some advantage and see if they can bring just a bit of water
to you. You have to focus, work as fast as you can, to
complete the production goals, always under pressure.
She talks about being fired. She was one of 20 workers who were
fired. All the new employees are required to take a pregnancy test. If
it comes out positive, they are fired. ``Older workers suffer
harassment and discrimination because the management prefers workers
between 17 and 25 years old. When a woman gets to be 30, she can't work
in these factories. And if she can get to work and if she is working,
often she is harassed and sent to worse positions to try to make her
quit.''
She says:
They search us physically when we enter the plant. If one
of us has candy, gum or lipstick, they take it away because
they think it could stain the clothing. They search them in
the bathroom.
The point is this, this young woman, with 20 others, decided they
really needed to try to organize to see if they could improve their
lot. And 15 of them began to organize, and they were fired. You can't
organize. Workers can't get together to try to organize to negotiate
with management. They are fired--out of luck, out of a job.
These countries say to us: We have labor standards. Sure they do.
They have labor standards on the books, totally unenforced. This is
what we are signing up to.
This was Sean Combs. You remember the stories about Kathy Gifford and
others. Sean Combs, I believe, to his credit, said he did not know this
contracted labor was occurring, and I believe that he quickly took
action to deal with that and moved this kind of production away from
that plant.
But let me ask the question: Does anybody think this is the
competition for American workers that we ought to sign up for?
Shouldn't we be doing trade agreements with countries that have labor
standards? Shouldn't we decide, on behalf of American workers, that we
care first and foremost about American workers and, second, we also
care about the workers in the country with whom we are going to do a
trade agreement? What does it say about us, about our value system, to
suggest it doesn't matter?
This is about money. This isn't about workers. It is about companies
being able to access cheap labor, working under any labor conditions,
in order to boost and fatten profits.
I am well aware that there are those who take a look at those of us
who don't support these trade agreements and they say: You are just a
bunch of xenophobic isolationist stooges. You don't understand it. You
probably don't have the capacity to understand it. We are describing a
new world order. It is a global economy. Don't you get it?
I wonder when things changed in this country to decide that we should
not stand up for our economic interests. When did that happen? When did
it happen that it was OK to decide those who stood up for America's
economic interests--that is, for the demand that when we have a trade
agreement, there would be fair labor standards, fair standards with
respect to the environment, that we want to keep jobs in America--when
did it become fashionable to say: You're a protectionist. You don't get
it. You are sort of an economic nationalist. You are one of these
America-first types. Shame on you.
It seems to me the first goal of every trade agreement should be to
recognize, from our standpoint, that we are interested in standing up
for our economic interests, for our jobs. But that is not the case.
I would like anybody to explain to me these dramatic and deepening
trade deficits--which Warren Buffett, not necessarily a shrinking
violet, says is heading us toward becoming sharecroppers, and that is
exactly the case--I would like anybody to explain to me how, with this
background, the decision is made that we ought to do more of it. We are
told over and over and over again what we are doing with this next
trade agreement is we are opening foreign markets for American
products. That is absolutely nonsense. Give us a break. We have been
through this.
Later today, I will talk specifically about China because we did a
bilateral on China. We have had a lot of trade relationships with
China. The fact is, what we are doing with these trade agreements is
not opening foreign markets, to any great degree, to American goods. I
would love to take my time--and I have 5 hours allotted to me--to go
through a debate. Others probably have different views. They believe it
is fine, for example, for the country of Korea to ship us 680,000 cars
a year on boats that land on the shores of the United States so
American consumers can buy Korean cars. And then we only get 3,800 cars
from the United States into Korea. That is fine, some people might
think. I would love to debate that. Perhaps we have somebody who wants
to stand up later today during my time and have a real discussion about
that. I would be happy to do that. I don't need three people. I would
just like one person to say: ``Boy, I like the way this is going. This
sure looks good for America. And I sure like what is going to happen
with China and bilateral automobile trade, and I sure like what
happened in the bilateral with China by which we are allowed to charge
a tariff that is one-tenth the tariff charged by the Chinese in
bilateral automobile trade or I sure like the notion of what happened
post-NAFTA.''
Let me do this for a moment. I think it is important for people to
understand. We passed NAFTA, the North American Free Trade Agreement.
When we did, we had a very slight trade surplus with Mexico and a
modest deficit
[[Page S7653]]
with Canada. We very quickly turned a slight trade surplus with Mexico
into a very large deficit, and we turned a modest deficit with Canada
into a very large deficit.
The promises for NAFTA were grand promises about massive new numbers
of American jobs and so on. None of that was accurate. There were those
who stood on this floor and said, with respect to NAFTA: What that
means is, we are going to get the product of unskilled labor coming in
from Mexico. That is what that means. And so what are the three biggest
imports from Mexico now? Automobiles, automobile parts, and
electronics--all the product of high-skilled labor. They were all
wrong. No one, of course, will stand on the floor and say: I admit
that. But they have all been wrong. All we have seen is an exodus of
American jobs. This chart is a certification to the U.S. Government of
companies laying off U.S. workers due to NAFTA. We know that because
they are required to certify to the Department of Labor in order for
their workers to be available for trade adjustment assistance. Trade
adjustment assistance is a melodic, soft-tone that says: When you fire
your workers because of a trade agreement, you are able to get the
Federal Government to pay your workers a little something. It is like
extra unemployment.
So we know these companies have said: Because of NAFTA, we are laying
off workers. We want them to be eligible for trade adjustment
assistance.
Let's go down the list a bit. Fruit of the Loom. I can see the title
on the book: ``When America Lost its Shorts.'' I remember the day that
Fruit of the Loom announced that it was going to move its production
out of this country. It was headline news, going to get rid of all the
workers. Doesn't mean they are not going to make shirts and shorts any
more. They are going to make them elsewhere, Mexico and China.
Levis, 15,676 workers making Levis. There is not much more all-
American than Levis.
What a great American brand, Levi. Everybody likes them. I wear
Levis. Levis are gone. There is not one pair made in the United
States--not one. And, furthermore, the company that made Levis has
certified to the Federal Government that due to NAFTA, 15,676 employees
should be eligible for trade adjustment assistance. I will say that in
English. It means that because we passed the NAFTA trade agreement,
this company decided to get rid of 15,676 workers, and they want, under
trade adjustment assistance, to be eligible to get extra money from the
Federal Government.
Is there anybody in the Senate who knows the name of a worker that
made Levis and lost their job? I am guessing not. I am guessing that
almost every one of these 15,676 people were like every other worker in
this country--proud to get up in the morning, put on some clothes, go
to work, and feel as though they had a sense of self worth to provide
for their family and to do a job. Some probably worked 25, 30 years for
that company and did the best they could. And they had to come home and
say to their spouse: ``Honey, I have lost my job. It doesn't mean they
are not going to make Levis anymore. They are just going to make them
in Mexico or China or Indonesia or Sri Lanka or Bangladesh--you name
it. They say I make too much money.''
I have told this story repeatedly, and I will do it again even if it
bores people. Huffy bicycles is the classic one. It is the easiest to
understand. I believe Huffy has about 20 percent of the American
marketplace. You buy them at Wal-Mart, Sears, and K-Mart. Huffy
bicycles used to be made in Ohio in this country by workers who, by one
account, made $11 an hour plus benefits. Huffy wrote to me and said it
was more than that. So whatever it is--it could have been $15 or $18 an
hour plus benefits--they made a good bicycle. They had a decal of the
American flag on the front of them. They fired the workers who made
Huffy bicycles. Those workers are gone. In fact, the last job they
performed was to take the American flag decal from the bicycle and
replace it with a decal of the globe. All Huffys are now made in China
by people who work for 30 cents an hour, 7 days a week, 12 to 14 hours
a day. The folks in Ohio are told they cannot compete with that. I can
understand why. Should you be expected to compete with people who make
30 cents an hour?
So American workers lose their jobs. Do you think some people from
Huffy Bicycle, who were proud to make them for many years, and came
home to tell their families: ``I lost my job because they found
somebody in another part of the world--halfway around the world--who
will work 7 days a week, 12 hours a day, and they can pay them 30 cents
an hour--and they can hire kids, by the way.'' Does anybody in this
Chamber know the names of these people who worked for Levi's or Huffy
Bicycle or Fig Newton Cookies? Does anybody know the names of the
people who worked for the company called Radio Flyer, which makes
little red wagons? They are gone from America.
I can stand here for an hour and talk about those kinds of issues. On
this chart are the 100 largest companies certifying to the Department
of Labor jobs lost due to these trade agreements. Let me tell you
something else. You cannot get these numbers anymore. They are not
available. Do you know why? The Department of Labor won't make them
available. This chart says ``The Labor Department withheld trade
reports.'' Let me quote from this article: ``The Labor Department has
kept secret for more than a year, studies that supported Democratic
opponents of the Bush administration's new Central American trade
deal.''
There was a report paid for by public funds that documented the
working conditions in CAFTA and the Central American countries of the
type I just described, and, of course, that document was covered up,
kept secret. The official Government document from the Department of
Labor that would have provided numbers of how many jobs were lost, as a
result of certifications by companies that were going to get rid of
their workers--this information doesn't exist anymore either.
I have called the Secretary of Labor and said: You are collecting
this data and you are choosing now not to make it public. Why? She
says: I will look into it.
I placed a second call yesterday, but I have not heard back. In fact,
you cannot get this information anymore. If there is bad news, cover it
up, I guess. Don't let bad news out.
Madam President, let me just read for a moment from something written
by someone I deeply admire. I like Warren Buffet a lot. I don't know
him well, but I consider him a friend. I have met him a good number of
times. He is the second richest man in our country, or probably in the
world. He is remarkably successful. He doesn't walk the talk or sound
like somebody with billions and billions of dollars. He is just a
wonderful, remarkable guy with a great spirit. He wrote a piece to the
shareholders of his company, Berkshire-Hathaway, that was very
interesting to me. I called Warren about his speech. He said this about
the trade deficit, the current account deficit:
Large and persistent current account deficits produce an
entirely different result. As time passes and as claims
against us grow, we own less and less of what we produce.
He means that we have a trade deficit of almost $2 billion every day,
7 days a week, and it means foreign governments or foreigners have
assets in the form of American dollars, American stock, and are buying
American real estate. That is why you saw that China wants to buy a big
oil company. They have the money to do it.
With respect to the trade deficit we have with China or the trade
surplus they have with us, he says:
Should we continue to run current account deficits
comparable to those now prevailing, the net ownership of the
United States by other countries and their citizens a decade
from now will amount to roughly $11 trillion. And if foreign
investors were to earn only 5 percent on that net holding, we
would need to send a net of one-half billion dollars in
goods and services abroad every year just to service the
U.S. investments then held by foreigners.
A country that is now aspiring to be an ownership society
will not find happiness in a sharecropper society. Yet, that
is precisely where our trade policies, supported by Democrats
and Republicans alike, are taking us.
Perhaps there are some in this Chamber who think this is not the
case, that these trade policies are just wonderful, that this red ink
is just another innocent color, that these trade agreements have really
worked well for America. That is probably because nobody in this
Chamber has ever lost their job to
[[Page S7654]]
a bad trade agreement. No journalist has either, for that matter.
We have an interesting situation in this country. We have now, for
about the last 30 years, seen a dramatic change in the economies of our
country and others. It is described as a global economy. It has
galloped forward in a very aggressive way, but the rules have not kept
pace. So the largest international corporations--many of them
American--have defined the new economy in their own image. They want to
produce where it is cheap and sell into our marketplace. They want to
be able to produce, for example, in China and Indonesia and Bangladesh
and Sri Lanka and be able to sell that product to Des Moines, IA;
Fargo, ND; Denver; Chicago; or Los Angeles. That is quite a strategy
about fattening profits: Produce where it is cheap, where you can hire
kids, where you can build a factory and not worry about having a safe
workplace, where you can dump chemicals into the air and water, and
especially where you can decide if your workers want to form a union,
you can fire them just like that. If you produce there, you can produce
for pennies, take that product and sell it into the established
marketplace in the United States, and you can fatten your profits.
Pretty good deal--if you are one of the companies who wants to do it.
But the rules for this globalized economy have not kept pace at all.
There have been virtually no rules. Everyone in this Chamber knows that
we have signed up to trade agreements with countries that say to
companies: You can fire your workers if they try to unionize. Now, that
is not a comparative advantage--going back to Ricardo. Ricardo
described the doctrine of comparative advantage, which says it is
easier to raise sheep and produce wool in England and easier to grow
grapes and produce wine in Portugal; so each should do what is in its
own best interest and what it does best and then trade. So you raise
sheep, you share the sheep, get the wool in England, grow the grapes
and stomp the grapes and produce wine in Portugal, and the English
trade their wool to Portugal, and the Portuguese send wine to the
English. That is the doctrine of comparative advantage--doing what is
most beneficial and efficient for each. There is no doctrine of
comparative advantage when you have a country deciding they are going
to have 30-cent labor because we will fire people who try to unionize
because we will not enforce restrictions with respect to the
requirement that you have safe workplaces. We will have cheap labor
because we will let you hire 12-year-old kids, work them 12 hours a
day, and pay 12 cents an hour, and we will turn the other way. That is
a political advantage. That is a decision by a government to continue
to repress its workers.
Our trade agreements, historically, rather than lifting others up,
which we ought to do in trade agreements, have had the effect of
pushing American workers down. That can work for a while, but it cannot
work for a long while because, ultimately, the question is going to be
this: Who is going to buy those products made with 30-cent labor in
China? Will it be the people who lost their jobs in the United States?
Will it perhaps be one of these hundreds of thousands of people, each
just a number, but each represented by a family? Will they buy those
products when they are out of a job? You may say unemployment is not so
high here and many of these people have been rehired. Yes, many have--
at lower wages. That is the way this global economy has been working.
In my judgment, this does not work for our country. It is just not
working. My colleague from Iowa made the point--a fair point--should we
not want to lower tariffs in other countries? Absolutely. Can I remind
my colleagues, and others, that we are so ham-handed and fundamentally
incompetent in negotiating trade agreements, using beef as an example--
let's go back for a moment prior to the discovery of a Canadian cow
that had mad cow disease in the United States. Prior to that time, we
were 15 years away from a beef agreement we made with Japan in the late
1980s. Fifteen years later, after a beef agreement with Japan, a
country with whom we have had a very large deficit always--and still
do--there was a 50-percent tariff on every pound of American beef going
into Japan. What a miserable failure that is. It happens to us in
virtually every circumstance.
I will mention one additional thing. Our trade negotiators do such a
terrible job on behalf of this country. I assume they do it on behalf
of whoever sends them out with instructions. Let me ask, if during the
discussion today--and we will be here for some hours--I would like one
Senator--if we can find somebody who knows the answer to this--to tell
me, in the bilateral trade agreement with China, a country with whom we
have a giant trade deficit, an alarming and dangerous trade deficit,
how it is justified that China shall impose a 25-percent tariff on any
U.S. automobiles we sell in China, and we will impose a 2.5-percent
tariff on Chinese automobiles sold in the United States?
How is it that we have a bilateral agreement that imposes a tariff 10
times higher on U.S. cars that we sell in China than Chinese cars sold
in the United States? I want one person--I have asked this question for
years--I want one person to tell me how that happened because the
Chinese are now gearing up an automobile export industry. In fact,
General Motors has gone to court to sue the Chinese because they say
the Chinese have stolen the entire production line blueprints for a car
called the QQ. General Motors said they stole the production line
blueprints of a General Motors car. This company is called Chery, C-H-
E-R-Y, which is interesting; it is one letter away from Chevy, C-H-E-V-
Y. This Chinese company called Chery is producing a QQ car that General
Motors says is the stolen production line blueprints of a car they
have. They are doing that, and all the press says they are gearing up
for a substantial Chinese automobile export market.
Guess what. When they do that, they will find a very friendly tariff
in our country that is one-tenth the tariff that now exists in China by
virtue of acceptance of a trade agreement we have with China. It is
unbelievable to me, the incompetence of having that sort of thing
happen.
I will not go on at length. We do not make any automobiles in North
Dakota, so I am not representing the automobile manufacturers. I am
just telling my colleagues that it does not matter whether it is
automobiles or textiles or farm products.
My colleague from Iowa cares a lot, I am sure, about agricultural
products. We work together on a lot of agricultural issues. I know he
cares a lot about family farmers. Interestingly enough, when we did the
bilateral agreement with China, we had a provision in that agreement
about the number of million metric tons of wheat that China would be
expected to allow in duty free. Right after that was done, of course,
the Chinese Agriculture Minister went down to the southern part of
China and said to the South Asia Post: ``That doesn't mean anything;
that doesn't mean we are actually going to import that wheat from
America. That is just something in writing.'' Indeed, they have not.
When will we understand that promises not kept are not promises at all?
I suppose you can make a case to hook up in a trade agreement with
almost any region in the world. Somebody said to me: How on Earth can
you suggest these small countries would threaten our country? I am not
suggesting that. I am just saying when you are doing something wrong,
stop doing it, change it, and do it right. That is not rocket science.
This trade agreement, with its pathetic provisions dealing with labor
and its pathetic provisions protecting the environment, is exactly the
same as all the other trade agreements. You can say the environmental
provisions do not matter. Don't they really? We inhabit this Earth.
There are 6 billion of us. We have 6 billion neighbors on this little
planet called Earth. We circle the Sun. Somehow we end up here in the
United States--just in this place--and there is no place like it on the
face of the Earth. We are living in a fishbowl. We can clean up our
part of the fishbowl, but if somebody on the other side is pumping in
sludge, we are all breathing it. So environmental standards and labor
standards matter a lot.
This trade agreement is exactly like the others. It hooks up the
countries--and I already read the description--
[[Page S7655]]
that do not enforce their standards at all. Second, it decides we will
have another loophole by which you can transship goods through these
countries into the United States.
One of my colleagues said to me: So what, it is coming in anyway from
China. So what? The fact is, if anybody in this Chamber were one of
these statistics--and there are about 200,000 of them on this sheet--if
anyone in this Chamber were one of these statistics, nobody would say
``so what.''
``So what'' is we are losing jobs in this country. There is no social
program we work on in this Chamber that is as important as a good job
that pays well and allows people to take care of their families. There
is no social program as good as that. I am telling you, in case after
case, we are seeing good jobs leaving our country because others will
do them for less under conditions we would never accept in this
country.
I have said many times that we had people die in the streets of this
country fighting to organize as workers. People were literally killed
in the streets of America for that purpose. We had people who went to
the streets for America demanding the opportunity to work in a safe
workplace. We have been through this for a century, describing the
conditions of production in this country that were fair. And in a
moment, some companies can pole-vault over all those impediments and
say: I don't like them, never liked them; they represent regulations,
they represent things we don't support, and we are going to move our
jobs to China; and by the way, when we get there, we don't have to
worry about unions, we can fire them if they try to unionize, and if we
don't fire them, the Chinese Government will take care of them.
What is happening is wrong. I am not saying we should build walls
around our country. I am not saying we should retreat from the global
economy. I am saying we ought to recognize there has to be a set of
fair rules to represent this country's economic interest. If we do not
have that set of fair rules, then we cannot possibly succeed.
Some say the Americans can compete anywhere, we can win anywhere. We
can compete if the rules are fair. But post-Second World War, in the
last 50 years, some very shrewd economic competitors have developed in
this world.
These trade deficits I have shown describe a circumstance in which we
cannot compete with one arm tied behind our back. We cannot compete if
it is unfair. We cannot ask American families to decide if $10- or $15-
an-hour wages is something of which they should be ashamed because it
is so much more than would be paid to workers hired in Bangladesh or
China. We cannot do that to American workers without in the longer term
dramatically changing the standard of living in this country.
Others will say: You are talking about manufacturing. You should
understand that we are going to create new jobs; we are creating new
jobs. Take a look at what is happening with software engineers, with
white-collar jobs. Pick up the New York Times from last week on IBM and
then go to India and go to China and find out what kind of jobs are
coming in addition to factory jobs. It is not just factory workers. It
is white-collar jobs. It is engineers.
Every young person in this country who is in earshot of this debate
should understand their future is going to be affected by what we are
doing. Their opportunity for good jobs will be affected by what we are
doing.
I, obviously, have additional comments and additional time in which
to do it later today. We have colleagues who have been waiting. I
apologize for taking as much time as I did. This is a very important
issue. I regret very much that we are doing it this way, just sticking
it in a little keyhole crack between now and when we get out of here
for the July Fourth week. I knew this was going to happen. One year
ago, this bill got done. We did not hear about it for a year. I knew
one day we would find it stuck in a little keyhole, hoping we would not
have a real debate about trade on the floor of the Senate.
I guess now we are on autopilot. They are going to finish this maybe
late tonight, and they have accomplished their purpose, but they have
done America no service. It is no service to America to avoid facing
straight in the eye a serious problem facing this country.
Once again, to all those listening who call this protectionism, you
are just wrong. This is not about protecting in the sense of being a
protectionist and wanting to build walls around our country. It is
about standing up for American interests. It is about trade agreements
that should be mutually beneficial, not one-way trade agreements, and
it is about finally suggesting that we be hardheaded and make trade
agreements economic policies, not softheaded foreign policy down at the
State Department.
I could talk later about, for example, it is recommended we take
action against China on this and that for trade, but the State
Department says: You can't do that; that is all foreign policy. So our
country walks around half hunched over worried about lost jobs and not
willing to talk about it. And what do we do? We negotiate another trade
agreement of the same type. Is anybody thinking? Let's hope through
this debate perhaps we can begin to think through some of these issues
and turn a corner.
Let me also say it was probably impolitic of me at the start of this
discussion to ask about exotic dancers in strip clubs. I will ask again
just because it probably is impolitic if there is anything in this
trade agreement about exotic dancers in strip clubs. The reason I ask
is because in the NAFTA agreement that passed the Congress, according
to what I have found doing a Google search, Canadian strip clubs have
used NAFTA to find dancers from Mexico under the extended visas and
employment applications in NAFTA--exotic dancers were part of the
provision dealing with special skills. I am just guessing that there is
no one in the Chamber of the Senate who voted on NAFTA who would have
guessed it would have application to exotic dancers having special
skills. Maybe I am wrong.
I ask the question: Is there anything in this trade agreement that we
should know about that perhaps I will come to the floor of the Senate
and talk about several years from now, such as this?
The point I am making is, most people do not understand what is in
these trade agreements. They do not understand the circumstances and
the consequences of the trade agreements. All we hear is just more
tired-sounding platitudes about reducing tariffs.
By the way, when we passed NAFTA, as my colleagues know, NAFTA
reevaluated the peso, meaning it obliterated everything under NAFTA
with respect to tariffs almost immediately.
I will cover additional material at a later point today. I yield the
floor.
The PRESIDING OFFICER (Ms. Murkowski). Who yields time? The Senator
from Iowa.
Mr. GRASSLEY. Madam president, I yield such time as the Senator from
Colorado may use.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. ALLARD. Madam President, I thank the chairman of the Finance
Committee for yielding. I compliment him on his tremendous leadership
in the Finance Committee, particularly on the issue of trade.
I rise today in strong support of the U.S. Central America and
Dominican Republic Free Trade Agreement, known as CAFTA, and our
administration's current trade policies.
We sometimes forget what history has taught us. If we look back to
the early part of the 20th century, the early 1900s, our country was
struggling economically. One of the reasons, it was decided after a
while, is because we were too restrictive on our trade policies. We had
high tariffs on a lot of different products coming into this country.
All of a sudden, the economists began to wake up: If we liberalize our
trade policies, we begin to open trade to the entire world, and we
benefit. Lo and behold, we found our country began to do better
economically.
We forget what history taught us. We do not want to go back to some
of the old tried-and-failed solutions some of my colleagues on the
other side are talking about. They do not work. It destroys your
economy.
If we look with other countries to liberalize our trade agreements,
we raise the entire tide. Sure, other countries benefit, but we benefit
even more. We will see that as we move forward with this debate.
[[Page S7656]]
NAFTA has not hurt this country, it has helped it. It has created
more jobs, not less. So many figures we will hear presented here are
focused on one particular group, it is one side of the ledger. Nobody
talks about what has happened on the other side of the ledger when we
created more jobs, particularly on the service side of our economy.
Another point I would make is look at the poor countries in the world
today. They have more trade restrictions than those more modern
countries that are doing well economically. Doesn't that tell us
something? Doesn't that tell us that if we can get them to relax their
tariffs, they can begin to benefit with us and what is happening in the
growth of our economies? Not only do we help them, but we help
ourselves. So it is a mutual win-win agreement on these international
trade agreements.
We can look at all these trade agreements and see how they have
helped us economically. They have helped our friends and trading
allies. They have helped us to export the idea of democracy and what
free markets are all about. It is what makes a difference between our
success and many other countries that do not have a democracy, that do
not talk about how important it is to have free markets.
I rise today in strong support of this trade agreement. Prior to the
Bush administration, momentum of trade liberalization had clearly
slowed. Thankfully, Congress reapproved executive authority for trade
agreements, and with the leadership of President Bush, the
administration has made international trade a high priority for the
health and well-being of the American economy. That is good.
We have acted to strengthen the President's ability to eliminate
trade barriers with other countries. The first steps have been taken
toward a new era of trade liberalization.
At the end of 2002, the Bush administration completed free-trade
negotiations with Chile and Singapore which were first begun by the
Clinton administration in 2000. This is not a partisan issue, it is a
bipartisan issue. These free-trade agreements with Chile and Singapore
entered into force on January 1, 2004.
In 2004, the agreements with Australia and Morocco were signed and
approved by Congress, and this Australian trade agreement recently came
into force this January.
These agreements make a strong statement about the commitment of the
United States to international trade, and CAFTA continues the trend of
reaching bilateral trade agreements in our own hemisphere and abroad.
The countries entering into CAFTA are among the developing countries
that already enjoy duty-free access to U.S. markets for the majority of
their exports. That is their goods coming into our country. While these
developing countries have high tariff and nontariff barriers on U.S.
exports and impose restrictions on U.S. businesses, the agreement will
liberalize trade in goods, services, government procurement,
intellectual property investment, and address important labor and
environmental issues. We are going to let them join with us in our
economic prosperity. That is not going to hurt the United States. It is
going to benefit our economy.
Trade between the United States and CAFTA countries totaled over $33
billion alone last year. The United States exported almost $16 billion
in goods to five Central American countries and the Dominican Republic
in 2004--more than all exports to Russia, India, and Saudi Arabia
combined.
This agreement will create the second largest U.S. export market in
Latin America--$16 billion--behind only Mexico, and the 14th largest
U.S. export market in the world. The market access and trade discipline
provided by CAFTA offer an opportunity to expand U.S. exports to a
region that is already seeing high export growth rates. In fact, from
2000 through 2004 export shipments to CAFTA designations grew by almost
16 percent compared to 5 percent for U.S. overall exports.
CAFTA also helps to move the current trading relationship from one-
way preferences to a more reciprocal partnership. Currently, about 80
percent of the region's exports enter the United States duty free,
while U.S. goods exported to CAFTA countries face significant tariffs.
However, with this agreement in place CAFTA will boost opportunities
for exporters throughout the country, providing new market access for
these producers.
Specific to my home State's interests, the State of Colorado, CAFTA
immediately eliminates tariffs on 80 percent of U.S. exports and
eliminates all tariffs within 10 years, including up to 15 percent
tariffs on Colorado's exports of machinery, manufactured products, and
transportation equipment. The information technology producers will
also gain with the elimination of distribution barriers and elimination
of information technology tariffs, as well as the opening of key
information technology services, including telecommunications, and will
also protect intellectual property rights.
For Colorado's farmers and ranchers CAFTA will eliminate tariffs on
50 percent of U.S. exports immediately and most remaining duties within
15 years, benefiting beef and pork producers with the immediate
elimination of tariffs over 15 years; dairy products with duty-free
tariff rate quotas that will expand from over 10,000 tons in year 1 and
out of quota tariffs eliminated over 20 years; and finally corn, wheat,
and grain products with the immediate binding at zero of tariffs on
wheat, barley, oats, and rye as well as for corn in Costa Rica and
sorghum in the Dominican Republic and Guatemala. All remaining tariffs
on feedgrains will be eliminated over 15 years.
Clearly, this agreement greatly benefits my State of Colorado and the
Nation as a whole. I am pleased to stand behind the agreement reached
by former U.S. Trade Representative Robert Zoellick and our current
USTR, Rob Portman.
On noneconomic impact, I have already said that even if we were to
set aside all the economic benefits for continuing liberalization of
international trade like CAFTA, there are still many other reasons,
most notably humanitarian reasons. History has shown it is the isolated
closed societies that are the most brutal and repressed. International
contact brought about by increased trade with businessmen, foreign
goods exchanges, corporate presence, and marketing serves to increase
access to a higher standard of living and a better quality of life.
International trade also requires important reforms of the domestic,
legal, and business environment that are key to encouraging business
development and investment. Such reforms include providing greater
transparency for Government to strengthen the rule of law and improving
protection and enforcement of intellectual property rights. We must
always remember that America's No. 1 export is democracy, and
overreaction to our trade deficit, increasing tariffs, or other false
barriers to trade will damage not only our bottom line but also our
national security interests. We cannot allow that to happen.
Madam President, we have heard a lot of doomsday predictions from
opponents of this fair trade agreement that CAFTA will lead to all
kinds of job loss both here and in Central America. A lot of these
people said the same thing about NAFTA. Remember the great sucking
sound of jobs that were supposed to go to Mexico? Well, it just did not
happen.
Let's take a look at this chart. This is the chart on U.S. jobs from
1993 to 2004. Remember that we adopted NAFTA in 1993, I guess 1994.
What this chart shows is the number of jobs in the United States from
1993 out to 2004, that if the trade critics were right, you would
expect to see a fall in the number of jobs in the United States.
Following the passage of NAFTA, look at it. It just did not happen. The
blue line is manufacturing jobs--basically, a straight line, a little
bit of reduction on the end. And look at what has happened, though, to
nonmanufacturing jobs. This is the purple line or the light pink line,
what is happening in the growth. We simply have not lost any jobs since
the start of NAFTA. In fact, the United States had almost 17 million
manufacturing jobs in 1994. That number rose to 17.26 million by 2000.
Now it is falling only after the recession hit us in the year 2000.
That was about the time we had 9/11. In fact, after NAFTA passed, the
U.S. unemployment rate dropped.
Take a look at the U.S. unemployment rate from 1993 to 1994. In 1993,
the
[[Page S7657]]
U.S. unemployment rate was about 6.9 percent as reflected here, and in
1994, the year NAFTA passed--right in here reflected by this chart--it
fell to 6.1 percent, and then it continued to fall reaching only 4
percent in 2000. Then at its peak postrecession point, the unemployment
rate was 5.5, still lower than it was in 1994, I might add. So NAFTA
clearly did not cause massive unemployment in the United States as
predicted by trade critics.
Well, then the critics will say that maybe they were wrong with the
numbers. Maybe there was no massive loss of jobs, but NAFTA caused us
to substitute good-paying jobs for bad-paying jobs. Again, the facts
show that they were wrong. Let's take a look at real hourly wages from
1983 to 2004. What we see happening here is a drop in real hourly wages
until we get down to 1994 when we then adopted NAFTA.
Lo and behold, look what happens to wages, both the real average
manufacturing wages, which is reflected by this top line, and then what
has happened with the real hourly wages in the private sector. Look at
the climb that we have seen in real hourly wages. Real hourly wages
have risen since NAFTA for all workers. In fact, wages that were in
decline in the decade prior to NAFTA have increased steadily since the
NAFTA agreement was reached.
We also heard that NAFTA would result in the flood of cheap imports
from Mexico. Again, the critics were simply wrong. I point to this next
chart which reflects U.S. imports from Mexico prior to NAFTA, and under
NAFTA, as a share of total U.S. imports. U.S. imports from Mexico have
held fairly steady at 7 percent, as we can look across here, as a
percent of total U.S. imports, not much higher than they were in the 5
years prior to NAFTA.
We also heard that U.S. companies would start investing all their
money in Mexico because U.S. workers can't compete with Mexico's wage
rates. Again, the doom and gloom crowd was simply wrong. Look at the
chart. What we see, talking about U.S. direct investments, is that U.S.
investments didn't migrate to low-wage countries as predicted. In fact,
after NAFTA went into effect, U.S. investment in Europe increased by
48.5 percent of total U.S. investment abroad to 53.8 percent in 2003.
Here is what happened with the investment in Mexico. If we look at
the larger peaks that we have over here, this reflects what has
happened with Europe. These are modern countries that we are dealing
with, and we have the poorer countries down here. We did not see our
investments being soaked up by low-wage countries. We still continue to
maintain our trade with modern countries. So our challenge is to get
poorer countries up into our modern sphere.
In contrast, U.S. direct investment in Mexico accounted for 2.8
percent in 1994 and just 3.4 percent 10 years later. Put another way,
Europe's share of investment increased by 5.3 percentage points, and
Mexico's by .6 percentage points.
We also heard that Mexico was just too poor to buy our product so we
should not trade with them. Wrong again. Mexican consumers increased
their purchases of U.S. consumer goods since NAFTA went into effect. In
fact, U.S. exports of consumer goods are 66 percent higher in 2004 than
they were in 1993.
U.S. exports of home entertainment equipment grew from $984 million
to $1.293 billion. Exports of household goods have grown from $1.4
billion to $2.1 billion. And U.S. agriculture has benefitted. Since the
implementation of the agreement, U.S. agricultural exports to Mexico
have nearly doubled. Mexico now imports nearly $6.5 billion of U.S.
agricultural products, making them our third largest market.
It is important for all of us to realize that we can take some of
these figures, if we just talk about certain individual commodities or
certain individual industries, and we can talk about just that
particular--we can single out industries that for one reason or another
have problems. The overall figures shown on these charts indicate what
is happening with trade and what is happening with the economy as a
result of liberalizing our trade and opening it up. I don't think
anybody can deny that we have not benefitted. And I don't think that
anybody can deny those countries that have traded with us have not
benefitted. So we all benefit from this rising tide. That is why I feel
so strongly that we need to move forward. I think the doomsday
scenarios predicted by the critics did not happen. They were wrong
about the North American Free Trade Agreement then and they are wrong
about the Central American Free Trade Agreement now.
Madam President, we need to move forward. I applaud the leadership
for moving this issue forward quickly. I particularly applaud the
chairman of the Finance Committee for his superb leadership on this
particular issue. I know it is difficult and demanding, but it is
important, important to the welfare of everyone in America, not just a
few. It is important to the welfare of our trading partners, not just a
few. This is an overall policy where many people benefit, and we should
not forget that the whole economy of the United States will be better
because we have liberalized our trade. What we saw in the early 1900s
is a lesson we should not forget because we had high tariffs and trade
restrictions that did not work. Now we are in a different era. We don't
want to forget the lessons history taught us.
Madam President, I want to yield the floor and thank the leadership
and particularly Chairman Grassley on this issue.
I ask unanimous consent to have two editorials printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the (Denver) Rocky Mountain News, May 14, 2005]
CAFTA Still Critical
Six Latin American presidents made an unprecedented joint
trek to the Capitol this week in a last-ditch effort to drum
up support for the Central American Free Trade Agreement. But
the protectionist mood sweeping much of the nation appears to
have infected all too many of Washington's political elites.
At risk is America's global economic leadership, which some
lawmakers seem all too willing to trade away for support from
Big Labor, environmental groups and especially the sugar
lobby. Because it is having trouble mustering the votes for
passage, the White House has in recent days taken to
reminding Congress that CAFTA is also necessary to help
secure democracy and development in a region wracked by civil
war, drugs, human trafficking and economic stagnation over
the past two decades.
Interestingly enough, this same argument--that CAFTA is
good for our own national security--is being made by a conga
line of diplomats from both political parties, including
former Secretary of State Warren Christopher, former defense
secretaries William Cohen and William Perry, Bill Clinton's
special envoy to the Americas, Thomas McLarty, and Jimmy
Carter's trade representative Robert Strauss, to name but a
few.
CAFTA would end duties on 80 percent of the $15 billion in
U.S. exports to the 44 million consumers of Costa Rica,
Honduras, El Salvador, Guatemala, Nicaragua, and the
Dominican Republic in the Caribbean. Currently, those
countries levy average tariffs ranging from 10 percent to 20
percent on a host of U.S. goods such as motor vehicles, grain
and meat, while the U.S. rate is zero. The U.S. Chamber of
Commerce predicts U.S. sales to the region could expand by
more than $3 billion in the first year once CAFTA tariff
limits take effect. The American Farm Bureau estimates
agriculture exports--about $1.6 billion in 2003--would grow
$1.5 billion a year. Winners would include Colorado's feed,
potato, grain, pork and cattle industries.
If CAFTA fails, it will be in part because the powerful
U.S. sugar lobby has plied Capitol Hill with a fictional
doomsday scenario in which the trade pact destroys the
domestic industry. The truth is American sugar import quotas
would rise by a scant 1 percent of the total U.S. market in
the first year, and ascend over the next 15 years to a
whopping 1.7 percent. What's really at stake for the sugar
industry is prices that are two to three times the world
market.
Democrats are leading the assault on CAFTA, claiming the
pact's requirement that the countries enforce their own labor
and environmental standards is too weak. But this objection
ignores the fact that wherever U.S. companies plant
themselves in the world, labor and environmental standards
invariably rise over time. Voting CAFTA down would surely
deal a blow to Central America's reform-minded political
leaders. But defeat would also mean the loss of new markets
for U.S. workers and farmers, a failure that could cripple
America's ability to forge more far-reaching trade
liberalization in the coming years.
____
[From the Denver Post, Mar. 26, 2005]
CAFTA Worth Our Support
In two weeks, Congress starts debating a treaty that will
shape America's future role in our hemisphere. Since
lawmakers previously gave President Bush ``fast track''
authority to negotiate the pact, lawmakers
[[Page S7658]]
can't change any provisions in the Dominican Republic-Central
American Free Trade Agreement (CAFTA)--they can only vote yes
or no. We think that vote should be yes.
CAFTA is modeled on free trade deals Congress OK'd a decade
ago with Mexico and Canada, in 2000 with Jordan and in 2004
with Morocco. CAFTA would eliminate trade barriers on most
goods and services and encourage commerce among the United
States, the Dominican Republic, Costa Rica, Honduras, El
Salvador, Guatemala and Nicaragua.
The issue splits Colorado's congressional delegation.
Leaning in favor of it are Republican Reps. Bob Beauprez of
metro suburbs and Marilyn Musgrave of the Eastern Plains.
Leaning against it are Democratic Reps. Mark Udall of Boulder
and John Salazar of the Western Slope. Undecided are
Democrats Sen. Ken Salazar and Rep. Diana DeGette of Denver,
and Republican Reps. Joel Hefley of Colorado Springs and Tom
Tancredo of the metro suburbs. Sen. Wayne Allard, a
Republican, declined comment.
Colorado's sugar beet farmers oppose CAFTA because they say
it will let cheap, subsidized sugar flood U.S. markets. While
concerns may be understandable, Congress shouldn't let one
industry decide U.S. hemispheric policy.
The real arguments in favor of CAFTA involve global issues
and the future of our hemisphere's small democracies. Central
America will never rival U.S. economic clout--but China is
trying. CAFTA could help the Western Hemisphere better
position itself to compete with China's burgeoning
industries, Central American leaders say.
As a tool that can help rebuild Central America's
struggling economies, CAFTA also has a political dimension.
Although Costa Rica has been a stable democracy for more than
a half century, its neighbors endured dictatorships, civil
wars and insurgencies through the 1990s.
Central America's democracies are still fragile, and its
governments need to show their impoverished people there's a
hope for a brighter future. CAFTA is one tool to nurture that
hope.
U.S. foreign policy interests would be well-served by
helping to build prosperity and freedom among all the nations
in our hemisphere.
The PRESIDING OFFICER. Who yields time? The Senator from Montana.
Mr. BAUCUS. Madam President, I yield 20 minutes to the Senator from
Massachusetts, and ask it be taken off the time allocated to the
Senator from North Dakota.
The PRESIDING OFFICER. The Senator from Oregon.
Mr. WYDEN. Madam President, because we have a number of Senators on
the floor--I am happy to defer to my senior colleagues, but if we could
establish a kind of queue? I know Senator Leahy has a statement. I am
interested in speaking on CAFTA. I ask the distinguished Senator from
Montana, could we see if we could get an order among the Senators who
are on the floor?
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. I modify the request: 20 minutes to the Senator from
Massachusetts taken from the time of the Senator from North Dakota;
when he has finished, 5 minutes to the Senator from Vermont, that time
to be taken off the time allocated to the Senator from Iowa. Then,
following that, I yield 15 minutes to the Senator from Oregon, that
time to be taken off the time allocated to me.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Massachusetts.
Mr. KENNEDY. Madam President, I wish my friend from Colorado were on
the floor. I listened very carefully to his description of the state of
our economy from 1993 on. As we remember, President Clinton was elected
in 1992. I think modern economists would say we had the longest period
of economic growth and price stability in this century--certainly in
this century, and for at least 100 years during that period of time.
That is what is reflected in these numbers.
To tie those into questions about lost manufacturing jobs in terms of
NAFTA, it is better to look at the various analyses, the business
analyses that have been done. The EPI studies show that more than
900,000 manufacturing jobs have actually been lost due to NAFTA.
I am proud of the record of President Clinton. I was proud to vote in
support of his economic policies, to put that into play. As a matter of
fact, it did not have a single vote here by a Republican in the Senate.
It does reflect in the strong economic indicators that the Senator from
Colorado showed, but relating that to what were the manufacturing jobs
that were lost, in terms of NAFTA, I did not hear explained very
closely.
I support free trade. I have long voted for trade agreements that
truly leveled the playing field for our country and for our workers.
Will the Chair let me know when I have 3 minutes left?
The PRESIDING OFFICER. The Chair will do so.
Mr. KENNEDY. Free trade removes unfair barriers to American goods and
world markets and creates a fair playing field for competition between
American workers and workers abroad. Free and fair trade creates jobs
and strengthens our economy. But this Central American agreement is not
free trade. I urge the Senate to reject this unfair agreement.
Especially at this time when American workers are deeply concerned
about their jobs being outsourced overseas, the Bush administration is
wrong to negotiate an agreement that refuses to protect them. I am
coming back to that in a moment. It allows participating countries to
use labor practices that fail to meet international standards. It means
that American workers, the best in the world, will be forced to compete
with countries whose workers are abused and exploited. That is not fair
trade.
I am for progress and economic development in Central America, dating
back to President Kennedy's Alliance for Progress. But this agreement
does nothing to improve labor rights for the workers in the CAFTA
nations. All it asks is that they enforce their existing laws. It does
nothing to create a community of nations that respects the basic rights
and dignity of workers.
Most CAFTA nations give their workers no real rights such as an 8-
hour day, overtime pay, or protection against discrimination. Laws in
some CAFTA nations are even hostile to organized labor. Workers in El
Salvador, Nicaragua, and Honduras can be fired for joining a union or
even intending to organize a union. In Nicaragua, strikes are
prohibited without government permission. Even where laws do exist,
violations often cannot lead to fines or sanctions.
Those working conditions are not just what I have to say. There is an
excellent study that was commissioned by the Department of Labor to
review the working conditions among these countries that would be
affected by this agreement. When the results came in, what did the
administration do? They tried to hide the report. They went out and
pulled all the paper that the study had been written on. What the study
showed very clearly--and I will read the excerpts. The Government-paid
study concludes:
Countries proposed for free trade status have poor working
environments and fail to protect workers' rights. The
department instructed its contractors to remove the reports
from its web, ordered it to retrieve paper copies before
they could be made public, banned the release of the new
information from the reports, and even told the contractor
it could not discuss the studies with outsiders. The
working countries are so bad in those countries that the
administration's own independent report stated so. Do we
have anything in this particular agreement that will do
anything about it? Absolutely not.
Have we at other times tried to do something about the conditions in
these other countries? We certainly have. The agreement which stands
out is the Jordanian agreement. In the Jordanian agreement they have
very clear understanding about what the Jordanians were going to do to
try to realize the international labor standards. No. 1, they were
going to eliminate slave trade; No. 2, they were going to make advances
moving ahead on child labor; No. 3, they were going to permit the
organizing of various labor organizations with real enforcement going
in there, and penalties and sanctions if there were a violation. In
other words, under the labor provisions in the Jordanian agreement that
was passed by this body, we were moving forward, upward, to meet the
international labor conditions. That is what ought to be in this
agreement.
But is it in this agreement? Absolutely not. Were there any
provisions in this agreement that, as a result of this agreement,
American workers would get some kind of compensation for loss of their
jobs as we have done at other times? Absolutely not. That proposal was
defeated in the Finance Committee.
In other words, we are leaving American workers out there, high and
dry,
[[Page S7659]]
and are asked to go ahead and pass this without any serious effort to
provide at least some protection for workers in those countries where
there are going to be profits that will certainly not trickle down to
the workers in that country and where real American workers will pay
with the loss of their jobs because of this agreement.
CAFTA does not just ignore international standards for Central
American workers; it also fails to include the aid for American workers
likely to be displaced. When the Senate Finance Committee debated this
agreement, it recommended that CAFTA include aid for displaced American
workers, but the White House ignored the bipartisan recommendation. The
President effectively abused his power and presented Congress and the
American people with a take-it-or-leave-it plan. We know it can be
better and we should reject this defective agreement, send it to the
White House and go back to the drawing board.
Although CAFTA is the administration's top trade priority, it
actually does very little to reduce the Nation's growing overall trade
deficit. Trade in the region accounts for less than 1.5 percent of
total U.S. trade. It will barely lead to any improvement in GDP, an
increase of only one-tenth of 1 percent. Instead of a policy to reduce
our trade imbalance with China and deal with its currency manipulations
and WTO violations, the administration has spent more than a year on
this trade agreement that will do embarrassingly little to improve jobs
and the economy. It is out of touch with sensible trade priorities for
this country and ignores the needs of American families.
I want to take a few moments to show the pressure American families
are under and why they are wondering why we are considering this
legislation that provides no protection even for the workers in those
countries and why it will accelerate additional pressures on American
workers. Look what is happening in this country. More than 37 million
Americans, 28 percent of the workforce, work more than 40 hours a week.
Nearly 1 in 5 workers work more than 50 hours a week. More than 7.4
million Americans are working at 2 or more jobs, and 300,000 have 2
full-time jobs. Americans' work hours have increased more than in any
other industrialized nation. American workers are working longer, are
doing better, are increasing their productivity. Is there any
recognition and respect for this extraordinary achievement? I certainly
do not see it.
What do we have here? Workers are not benefiting from their work.
This chart shows there is an increase in productivity from 2001 to
2004. Productivity is growing 43 times faster than wages.
Generally, in our country, when we have seen the expansion in
productivity, we have also seen a growth in American workers' wages.
That is the way it has been since we have been an industrial nation,
with the exception of the present, current time. Currently, workers
have been increasing their productivity--they are working longer, they
are working harder, and they are increasing their productivity--but
effectively their wages are stagnant.
What kind of life do these American workers face? They face an
increase in their health insurance. Their wages are stagnant, their
health insurance costs increase 59 percent; college tuition for their
children is up 35 percent; housing is up 36 percent; and gas 38
percent. We just passed an energy bill. You would have thought in an
energy bill we would try to do something about the cost of gas that
working families and middle-income families are paying every single
day. Right? Wrong. Wrong. We did nothing. We did nothing about the
increased cost of gas.
We took care of the major companies that are producing it, but
effectively we have done nothing that has helped the workers in that
particular program.
Look at what has happened. This President is the first President
since Herbert Hoover to lose private sector jobs. These are the
figures: 2001, 111,622,000 were working in the private sector. Now we
are 111,598,000 in May of 2005. We have seen the reduction of jobs that
are available in the private sector. There has been some growth, but it
has all been in the public sector, not the private sector.
I saw the earlier presentation of the Senator from Colorado. He
talked about the recoveries we have had. We have seen in this recovery
of this administration, it is the lowest one we have had in recent
years. What we find now is, as a result, we have 7.6 million Americans
who are out of work; 1.6 million more unemployed than in 2001. These
are the numbers of Americans who are out of work. The ones who are
working are working longer and working harder.
This is a quote from Kevin Hassed, director of Economic Policy
Studies, the American Enterprise Institute, which is a conservative
institute:
Usually at this point in a recovery job creation is
skyrocketing, but so far that hasn't happened: It's not a
partisan issue, it's a fact. The labor market is worse than
in a typical recovery.
These are the economic conditions. Now we have of those 7.6 million
Americans, they are trying to compete for job openings. There are 3.6
million job openings in this country. These are hard-working Americans,
trying to compete for a limited number of jobs.
Another very important point to know about the condition of American
workers is the number of those who are long-term unemployed. We have
seen that grow from 680,000 in 2001 to this in May of 2005, up 1.5
million. These are the workers who have been unemployed for 26 weeks or
longer. This is an indication of the stagnation of our economy. Here we
have seen 2.8 million manufacturing jobs lost over the period since
2001. There it is, 2.8 million jobs lost, manufacturing jobs lost. They
have been lost in virtually every one of the States; 47 States have
lost manufacturing jobs. Now we are being asked to pass another piece
of legislation that is going to accelerate that? That is what this
legislation will do.
We know what is happening to the American workforce. They are working
longer, harder. They have a greater increase in productivity. Their
wages are flat. The things they pay for are going through the roof. And
we know those workers are going to lose their jobs. What jobs are out
there for them? This is the growth in the next decade, low-paying
occupations. Seven of the ten fastest growing occupations pay $27,000 a
year: Retail, food prep, cashiers, janitors, waiters, customer reps,
and nursing reps.
We should be in the Senate debating and arguing how we can ensure our
workforce is employed in the country that has the greatest economy,
certainly the greatest national security, and the greatest military. We
want to keep it that way. The way to keep strong is with a
manufacturing base. The way to do that is invest, invest, invest;
invest in those workers to make sure they have good training, upgrade
their training, invest in innovative and creative ways to expand our
ability to manufacture and expand.
Are we debating those issues? No, we are trying to pass legislation
that is going to put workers that do have jobs at greater risk. That is
what this does.
It is against this background I mention the latest UNICEF study from
2004 revealed Costa Rica has 127,000 children working in their plants.
Guatemala, virtually the same. Those countries are virtually the same.
Will this legislation get those children out of those plants and
factories? No. Absolutely, no.
The interesting aspect, there is one limited program sponsored by the
Labor Department that permits the Labor Department to inspect plants
and factories across the country regarding employment of child labor.
What did this administration do? It cut the guts out of it, 80 percent
of the appropriation. They cut the guts out of it. Does this add up or
make sense; an 80-percent reduction in appropriations of the program
that provides the inspection for child labor in these countries? The
children are going to be in those sweat houses. Our workers will be
losing jobs. The American workers are going to be losing jobs. There is
virtually no penalty. Actually, yes, there is a penalty that could be
imposed against the country but not against the specific industry. The
industries really do not care. Those countries will be negotiating
those penalties.
It does not have to be this way. We ought to be able to have a
program that is going to be fair to American workers, uplift the
working conditions of those countries around the world,
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and also be something that all members of this Senate would be proud to
support. That is not this legislation. It is heavily flawed. As a
result, there will be not only enormous numbers of people in that
region that are going to be exploited, but we will pay for it with the
price of American workers.
I yield back my remaining time.
The PRESIDING OFFICER (Mr. Burr). The Senator from Vermont, under a
previous order, is recognized for 5 minutes.
(The remarks of Mr. Leahy are printed in today's Record under
``Morning Business.'')
The PRESIDING OFFICER. Under the previous order, the Senator from
Oregon is recognized for 15 minutes.
Mr. WYDEN. Mr. President, I have decided to support CAFTA. Because I
know I will have a lot of welts on my back for it, I want to take a few
minutes to describe how I arrived at my decision.
A special concern to me is that if CAFTA is rejected, China will have
yet another opportunity to grow its economy and strengthen its economic
base at America's expense. Why Americans would want to do that defies
logic.
China is already an economic juggernaut. But as of now, they are not
going to get duty-free exports to Central America. Only the United
States has that prospect, and only with CAFTA-DR. If America walks away
from this agreement, does anyone really think the Chinese will sit on
the sidelines? As the kids say, ``hello!''
The Chinese would love the opportunity to get an economic toehold in
our backyard. I, for one, don't think we ought to give them that
opportunity. Personally, I believe we ought to be more vigilant in
terms of watchdogging trade with China than we have been. That is why
last week I pushed the Bush administration to immediately move to do a
review of the proposed purchase of Unocal by China's state-run oil
company under the Exon-Floria law, to examine the national security and
economic implications of a deal that is essentially unprecedented.
If you are a free trader--and I am willing to be called that--you
ought to protect your interests. That is why I favor, for example,
doing a vigorous review of that proposed purchase of Unocal, and I also
propose standing up for our interests in Central America rather than
walking away from the region and handing the Chinese yet another golden
economic opportunity to strengthen their economic base. In my view, it
will be an opportunity we have given up, and gratuitously so.
My view is that with respect to international trade, we ought to make
things and grow things in the United States of America and then sell
them around the world. Particularly, I want to sell more value-added
products made in the United States of America. There is an opportunity
in Central America to sell those value-added products made in the
United States such as health care equipment, energy production and
conservation goods, computer chips, communications gear--a whole host
of products. The reason I say that is that the Presidents of various
countries in Central America have written me indicating they are
prepared to now make those purchases. They are interested in U.S.
suppliers.
Some have asked, how is someone in Central America going to have the
money to purchase these health care products and chips, computers, and
communications gear? The reality is, the first purchases will be made
by governments in Central America. The governments have indicated to me
they are the ones that want to spend on our value-added
products: computers and chips and energy-production devices.
For example, Honduras is starting a ``Telephony for All'' program.
They intend to increase dramatically the number of telephones, wireless
devices, and the various technologies that will allow them to be part
of the information age. We ought to make sure those products are made
in our country and sold there. We will have an opportunity to do more
of that under this agreement, which will allow us to send American
exports into Central America duty free.
Now, I would be the first to say this is not the agreement I would
have written. For example, I feel very strongly about using the Jordan
Free Trade Agreement as the model for labor and environmental
standards. I think it is a major mistake that was not done. I also
think our inability to get a strong trade adjustment package into this
legislation is something the Senate will greatly regret.
I see my good friend from Montana on the floor, Senator Baucus. He
has championed Trade Adjustment Assistance, along with myself and
Senator Rockefeller and Senator Coleman. We got 54 votes in the Senate
not long ago for our bipartisan legislation to try to assist workers
who are adversely affected by trade.
It seems incomprehensible that we cannot modernize this program. It
is decades old. It ought to be extended to service workers. There is
bipartisan support for it in the Senate. It would be yet another
message to the workers of this country, who are out on the shop floors,
that we are concerned first and foremost for their well-being.
So I am going to continue to come back and prosecute this cause with
the Senator from Montana. The chairman of our committee, Senator
Grassley, knows full well how strongly Senator Coleman and I feel about
it, because it is unacceptable to me there is not a trampoline for
workers who are adversely affected by trade to get other family-wage
jobs. We ought to have that opportunity for them to bounce back when
they are adversely affected by trade. We have it in other areas. The
failure to extend it to service workers, who could be affected by this
and other trade agreements, I think is a major mistake.
There are other changes I would have wanted, particularly in the
pharmaceutical area. I think this legislation is not well conceived in
that it clearly favors brand names over generic ingredients. But I will
say to colleagues that even with these concerns--the inability to have
a modernization of the trade adjustment program and some of the labor
issues addressed in the way I would--it is a bigger mistake to reject
this agreement. If you reject this agreement, you send a message to
China: You ought to head for Central America as fast as you can because
you have an opportunity to get a toehold in America's backyard.
You are denying the opportunity to a lot of American exporters,
people in Oregon and other states who make those value-added products,
the high-skill, high-wage products and technologies to sell those goods
in Central America.
I want colleagues to know I have met with a lot of those companies
and the governments in Central America. I would like to see us bring
them together. There is no reason why energy production and
conservation products made in our country, and computers and chips and
health care technologies, should not be sold in Central America, when
the governments in that part of the world are prepared to make major
purchases.
Let's do more to try to make sure those purchases come from American
exporters rather then Chinese exporters. I urge colleagues to support
the agreement.
The PRESIDING OFFICER. Who yields time?
The Senator from Montana.
Mr. BAUCUS. Mr. President, I ask unanimous consent that the following
Senators be recognized in this order: Senator Roberts, 15 minutes, with
the time to be taken out of the time allocated to the Senator from
Iowa, Mr. Grassley; Senator Harkin, 20 minutes, with the time to be
taken out of the time allocated to the Senator from North Dakota; and
Senator Graham, 15 minutes, with the time to be taken out of the time
allocated to Senator Grassley.
The PRESIDING OFFICER. Is there objection?
The Senator from North Dakota.
Mr. DORGAN. Mr. President, might we at this point find out what time
remains of the three allocations of time on this bill? You can proceed
with the unanimous consent and then perhaps give us the time remaining.
The PRESIDING OFFICER. The Senator from Iowa has 7 hours 7 minutes
remaining. The Senator from Montana has 2 hours 50 minutes remaining.
Mr. BAUCUS. Two hours 50 minutes?
The PRESIDING OFFICER. Two hours 50 minutes.
Mr. BAUCUS. Thank you.
The PRESIDING OFFICER. The Senator from North Dakota has 3 hours 52
minutes remaining.
Mr. DORGAN. I thank the Presiding Officer.
[[Page S7661]]
The PRESIDING OFFICER. Is there objection to the unanimous consent
request for Roberts, 15 minutes; Harkin, 20 minutes; and Graham, 15
minutes?
Without objection, it is so ordered.
The Senator from Kansas is recognized for 15 minutes under the
previous order.
Mr. ROBERTS. I thank the Presiding Officer.
Mr. President, today I rise in support of the Central American and
Dominican Republic Free Trade Agreement called CAFTA. I also want to
state a word of caution in regards to an issue that is commensurate
with this vote; and that is the waning support for free trade in this
country, more especially in farm country.
It was not long ago when the prospect of expanding our trading
opportunities with our neighbors across the ocean--the 96 percent of
the rest of the world in terms of trade--was met with great optimism
and urgency. I do not know of anybody who made a farm speech who did
not say: OK, point No. 2, point No. 3--in the laundry list of things
they were trying to get done in Washington--without involving trade and
expanding exports. Times have changed.
Today I think we are suffering from what I call ``trade fatigue.''
That is to say, many times we oversell and we overestimate what is
going to happen in regard to the expectations of a particular trade
agreement. We oversell it. I know that many more times we overcriticize
them. As a result, in farm country, I think our producers of food and
fiber are a little weary and a little wary of this animal we let out of
the chute called free trade.
There have to be better examples, specific examples, in regard to how
our producers basically benefit from free trade during very challenging
times in farm country--a time when we see a lot of industry
concentration going on and consolidation, not only in farm country but
throughout our entire economy.
Well, I am privileged to represent the State of Kansas where farm
exports support over 47,000 jobs, both on the farm and in food
processing and transportation. Farm exports from the State of Kansas
are estimated at $3 billion, compromising one-third of all farm income.
Our State is the Nation's top exporter of wheat and the second largest
beef exporter, both of which rely heavily on increased market access.
In short, an opportunity such as CAFTA is going to be essential for
Kansas.
But in my hometown of Dodge City, and in the rest of farm country,
you hear the discussion of trade and exports, and there is some
reservation, not expectation. I do not think it is isolationism. I do
not think it is protectionism. Too many times farm organizations and
commodity groups are looking out for their own commodity interest
instead of the big picture, which involves opportunity for all American
farmers and businesses.
Perhaps more importantly, this is an issue of national security and
stability, just south of our border as well. Let me touch on that.
Our country has benefitted from trade agreements with Chile,
Australia, Canada, and Mexico. Since NAFTA was signed--you do not get
the specific instances of this in the press; you always get the
instances of somebody who has suffered economically or seen their job
outsourced or whatever--but basically, these Kansas exports to Canada
and Mexico combined have increased by more than 120 percent. In the
first year of the Chilean Free Trade Agreement, our Kansas exports to
Chile actually grew by more than 9 percent.
CAFTA will build on this trend by securing 44 million new consumers.
Under the agreement, half of the current U.S. farm exports to CAFTA
countries will become duty free immediately. This includes high-quality
cuts of beef and cotton and wheat and soybeans--major commodities.
Under the existing World Trade Organization commitments and tariff
preferences, most exports under CAFTA countries already enter the U.S.
duty free. However, U.S. exports could face potential tariffs of up to
250 percent in the case of beef. Despite these tariffs, why, our
producers in Kansas exported to CAFTA countries a total of $23 million
last year.
Earlier this month, the U.S. Census Bureau reported that our Nation's
international trade deficit measured $57 billion. That was a $4 billion
increase from previous reporting. As we face the growing competition in
global agriculture, it is more important than ever to secure duty-free
rates in these countries.
Now I want to touch on this business of security just south of our
country. As chairman of the Intelligence Committee, and as a member of
the Armed Services Committee, I must stress this agreement is not only
about expanding market access. We are talking about stability,
stability within these countries, and our own national security.
Specifically, I am talking about the big issues of immigration, drug
trafficking, and energy.
If you put in Mexico and Venezuela, for instance, albeit they are
adjacent to the CAFTA countries, we are talking about 23 percent of our
energy supply. I do not think it is an exaggeration to say that without
this trade agreement we run the risk of these countries falling prey to
others who have far less interest in democracy and stability than in
manipulation and power within these countries. I do not want to go back
to the days of the 1980s. I do not want to go back to the Nicaraguan
situation and Danny Ortega. That is not in the best interests of these
countries in the region, and it certainly is not in the best interests
of our national security.
So given this reality, it is difficult to understand how the
interests of one commodity--one commodity; and I am talking about
sugar--has largely outweighed the potential for regional stability in
CAFTA countries. In the past, whether in trade agreements or trade
disputes, whether it be in farm bills or budget reconciliations, our
commodity and producer groups sank or swam together. We either hung
separately or we basically tried to hang together.
But today that is not the case. And, I am not trying to pick on the
sugar industry or the sugar representatives or the hard-pressed sugar
producers in the United States. It is just that I am terribly concerned
that instead of ``one for all and all for one,'' we have ``all for one
and one for one.'' And that is not right in regards to how we approach
this from the standpoint of the agriculture interests in this country.
Sugar is already under one of the most protected U.S. agricultural
programs. In fact, when compared to the rest of the world, our
producers enjoy the highest world price for their product. I know about
their cost inputs. I know about the difficulty, but my previous
statement is correct. In recent years, we have journeyed down a
dangerous road in our negotiations with the Australian Free Trade
Agreement and now with CAFTA, by allowing the singular interests of one
commodity to dictate the livelihood of a comprehensive and well-
intended agreement. I do not think it is right for one commodity to
dictate in regard to their self-interests to the detriment of other
interests in agriculture.
I remember the whole-herd dairy buyout, which pretty well ruined the
entire beef industry. I do not want to go down that road again. I think
this is an example of that case.
Under CAFTA, during the first year of the agreement, allowable sugar
imports will amount to only a little more than one day's U.S.
production--one day. The Secretary of Agriculture pulls out of his
pocket two sugar packets and says that is what every consumer will have
in extra supply in regard to the CAFTA agreement. Despite the nominal
projected effect on the U.S. sugar prices and production, our domestic
sugar industry has demanded that they go unharmed by this and,
plausibly, by any other trade agreement.
Despite efforts by the administration and others to try to reach some
accommodation, many in this Congress support the sugar industry--and I
have as well. As chairman of the House Agriculture Committee during
1996 and through six farm bills, I tried to be helpful to the sugar
industry. Every time we have a reconciliation bill, every time we have
an appropriations bill, every time we have any votes on a farm bill, we
have tried to be of help to the sugar industry. Usually those votes are
very close, by two votes, four votes, five votes in the House of
Representatives, and the same happens in the Senate. So you stand up
and say: OK, let's really try to stay together in regard to
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the agricultural lobby and be fair to our producers nationwide, nobody
singled out. I am saying to the sugar industry, you may win this
battle, but you may also lose the war.
Sugar's insistence upon receiving special treatment makes it very
likely that the rest of agriculture, which overwhelmingly supports
CAFTA, may opt not to participate in sugar's defense the next time that
program faces a WTO challenge, budget reconciliation measure, and the
endless amendments to end sugar's support program during the next farm
bill. Let that warning be heard.
Some of my colleagues have expressed their concern--we just heard
Senator Wyden, the distinguished Senator from Oregon--in regard to
labor and human rights standards in the CAFTA countries, arguing the
agreement does not set strict enough standards in these areas. I am
concerned about the environmental concerns in these countries and the
labor concerns in regard to these countries and the human rights
standards, but trade agreements are not the appropriate forum for
addressing these issues. Basically the country will say: Thank you very
much. We are a sovereign country. We are not going to trade with the
United States. We will trade with somebody else. We will address these
problems on our own. It is a little bit impervious in regard to that
concern.
I don't think we can expect these countries to establish and value
the same high labor standards we have overnight. Rather, we should
encourage and facilitate the emergence of such standards.
Today the most important question is not what happens if we approve
CAFTA but, rather, what would happen if we don't pass this agreement.
Only an ocean away, China is aggressively pursuing opportunities to
compete in both the high tech and production agricultural sectors. We
have only gotten a glimpse of the economic capability and resources of
this country. Furthermore, we face additional and continued threats and
allegations from the WTO in regards to our international food aid and
export programs. I am talking about our food aid and export programs.
The recent cotton case brought by Brazil is one of the most serious
agriculture trade disputes we have ever faced. And farm country has not
awakened to this challenge. The Senate has not awakened to it. The
ramifications of this decision in this case are far-reaching and could
potentially affect every section of our farm export programs.
If we fail to approve CAFTA, we stand to lose credibility in these
negotiations and, in turn, the ability to aptly protect the food aid
programs and the development assistance that are essential in our war
against terror and our efforts to prevent children in the Sudan from
going hungry.
We have not come this far to take one step forward in the WTO and,
with our other bilateral trade negotiations, to take two steps backward
by failing to approve CAFTA. If we do not approve CAFTA, I don't know
what we do with the Free Trade in Americas Act. I don't know what we do
as we go into the WTO negotiations facing the Brazil challenge. I don't
know what we do in the next farm bill in regard to how we structure the
farm bill if we do not rely on trade and exports, at least to the
realistic degree that we should. What do you do? Do you write the farm
bill and say: Go back to your domestic production and then pay a higher
subsidy for which we do not have the budget dollars? I don't think so.
I urge my colleagues to support this agreement. It is in the best
interest of the United States, not only on behalf of agriculture and
all the other business activities that will benefit from the agreement,
but also from a security standpoint as well.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
Iowa is recognized for 20 minutes.
Mr. HARKIN. Mr. President, as the Senate debates the Central American
Free Trade Agreement implementing legislation today, we know that it
has been more than 13 months since the United States and its six
partner countries in Central American and the Dominican Republic
formally signed the agreement. So what has taken so long? The reason I
think for the long delay, obviously, is that supporters have had a hard
time selling this agreement to the American people. The supposed
benefits are murky, in the distance, while the flaws are all too
obvious. This is a shame because we could have a much better agreement
that would have won broad bipartisan support.
I have evaluated CAFTA with a genuinely open mind, having supported
most major trade agreements during my three decades in Congress. I have
no philosophical or ideological bias for or against trade. Far from it.
I take a strictly pragmatic approach, and generally I am in favor of
trade. But that same pragmatism tells me that it is folly to load all
of our economic and diplomatic hopes on the slender back of inadequate
trade agreements.
As has been my practice with past trade agreements, I have carefully
weighed the prospective advantages and disadvantages of CAFTA. Under
the fast-track procedure, our only option is to vote up or down. And
late last evening, after thoroughly looking at this, I finally had to
come to the conclusion that the problems with CAFTA, as we have it
before us, clearly outweigh the very small benefits. On balance, the
facts and reasons against CAFTA are significantly stronger than the
arguments for it. Therefore, I must vote no on this implementing
legislation today.
As one would expect, proponents of CAFTA have presented a glowing
picture of the agreement's benefits, but there has been an awful lot of
overselling, in some cases outright exaggeration about how important
this agreement really is. Let's take agriculture, for example. On
paper, CAFTA appears to offer opportunities for some U.S. farmers and
negatives for others, and the magnitude of these pluses and minuses is
part of the debate. But while in theory agriculture should benefit
overall, the projected benefits are strikingly modest, and they come
many years in the future.
Economists at the American Farm Bureau Federation estimate that U.S.
agricultural exports would increase by about $1.5 billion a year when
the agreement is fully effective. That is 15 to 18 years from now. So
if we assume an average annual inflation rate of about 2.3 percent,
that $1.5 billion increase by 2024 would be only about $930 million in
today's dollars. That is about 1.5 percent of our total agricultural
exports. So the benefits 15 to 18 years from now, calculated in today's
dollars, are relatively small.
There is one other aspect to this. The International Trade Commission
of the U.S. Government also had a study. It showed that they predicted
a $100 million decline in net annual exports from the United States to
the six partner countries as a result of CAFTA. So we get a small 1.5-
percent increase in agriculture in 2024. But the International Trade
Commission says we are going to have a $100 million decline in net
annual exports from the United States.
Whether CAFTA's modest predicted benefits actually materialize is in
dispute. Average per capita income in CAFTA countries is about $1,800 a
year. Are they going to become good customers? About a third of the
population there lives on $2 a day or less. How are they going to buy a
New York strip steak or one of our delicious Iowa pork chops that some
are so optimistic that we are going to export to those countries?
Potential for big gains is further limited by the fact that we
already dominate trade in those countries. In 2003, we accounted for
about 45 percent of all merchandise exports to the region. The benefits
that CAFTA backers optimistically predict are based on the assumption
that CAFTA will spur economic growth in these generally poor and small
countries. Right now, under existing trade preference programs, these
six countries already face zero tariffs on 80 percent of the goods they
ship to the United States, meaning that additional tariff reductions
will not spur significant economic growth in those countries. Many are
skeptical of these claims about CAFTA and the economic growth in
Central American countries.
One of the reasons that has moved me to the ``no'' column on this is,
I recently had a meeting in my office with a Catholic bishop, Bishop
Alvaro Ramazzini, a senior Catholic prelate in Guatemala, who came to
my office to lobby against CAFTA. I spent time with him. I quizzed him
about it. I
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wanted to know why he felt so strongly that CAFTA would not be in the
best interest of his parishioners. He said that he and other advocates
for the poor in Central America opposed CAFTA because its benefits
would go mostly to the economic elites and it would deepen the
disparity between rich and poor. So if, as the bishop says, CAFTA would
not raise incomes broadly for Central America's people, it won't help
them and it won't help us.
The previous speaker mentioned something about Daniel Ortega. Talk
about a ghost out of the past. I am talking about the Catholic bishop
of Guatemala who came to this country a few months ago to tell us that
this would not be in the best interest of his small farmers, his
campesinos, and their families. He said it would drive them off their
farms and push them more into cities where there is no work for them.
CAFTA will make it harder for U.S. workers, farmers, and businesses
to succeed in the increasingly competitive global economy. We can
compete on a truly level playing field. It is not fair competition if
other countries allow their manufacturers or farms to disregard
internationally recognized labor rights and child labor protections or
if those countries have lax or nonexistent environmental rules. This
CAFTA does virtually nothing to deal effectively with the competitive
issues relating to labor and environmental standards. For labor, the
internationally recognized rights are pretty basic, such as the right
of association and bargaining, prohibition of forced or prison labor,
and protection of children from working at young ages or in hazardous
or exploitative jobs. I have worked for many years in the effort to
eliminate abusive child labor around the world. It is morally wrong,
and it leads to all kinds of other injustices and inequalities.
Reports from our own Department of State and the International Labor
Organization have documented labor rights and child labor problems
throughout the six countries of CAFTA. Just yesterday morning, we
learned that our U.S. Department of Labor had been hiding from us a
report it commissioned that found serious labor violations in the
countries that signed CAFTA. Right now--this is what is important--
under current U.S. law, if one of those CAFTA countries condones
abusive child labor or other violations of internationally recognized
labor rights, we can keep that country from shipping goods to us at low
tariff rates. In other words, our U.S. trade law right now allows us to
enforce international labor rights. This came about because in 2000, I
worked with then-Senator Jesse Helms to modify our Generalized System
of Preferences Program, the GSP Program, so that countries that allow
abusive child labor are ineligible to ship products to the United
States at low GSP tariffs.
The other provision is in the Caribbean Basin Initiative. It allows
our Government to deny the benefit of lower CBI tariffs to enforce the
broader set of internationally recognized labor rights; that is, if a
country is tolerating violations of international labor rights, we can
take action so that goods from that country coming into the United
States are subject to a higher tariff than is applicable to goods from
other CBI countries. In fact, we have taken action under that CBI
provision against violations of international labor rights.
So right now, as pertains to these CAFTA countries, we have strong
provisions in law to protect against child labor and internationally
recognized labor rights. Guess what. CAFTA would supersede and abolish
both of these labor rights enforcement features of our current U.S. law
with respect to the six other CAFTA countries. Talk about a giant step
backward. Five years ago, this Congress added--and the President signed
it into law--provisions that protect children, protect people who want
to organize and bargain collectively, protect against forced or prison
labor in these countries. Guess what. CAFTA does away with it.
What is happening? I thought we were supposed to be progressing in
the world, in terms of recognizing basic, fundamental human rights.
What could be more fundamental than the human right of children not to
be exploited and find themselves in abusive types of labor situations
and forced to work? Yet, CAFTA removes these countries from being
covered by those laws. It says: Fine, if one of these countries were to
use kids working in places where it would be in violation of
internationally recognized human rights labor standards, we cannot do a
thing about it--nothing. Today we could. When CAFTA passes and goes
into effect, we won't. Not too many people know that. I guess that is
the major reason why I am opposing this CAFTA--the giant step it takes
backward in protecting against abusive child labor.
Under this bill, we have no ability to hold a CAFTA country to
internationally recognized labor rights and child labor protections if
its own laws are weaker than the international standard. So we are
faced with a contradiction. One of the big reasons that I keep hearing
to support CAFTA is to boost economic and social progress in these
countries. Yet, we are taking a giant step backward in our ability to
press our CAFTA trading partners to combat abusive child labor
practices and other violations of internationally recognized labor
rights.
Elsewhere, this administration insists on social and political reform
as a condition for allocating aid to developing countries. For example,
eligibility standards for the Millennium Challenge Accounts require
progress on social and political fronts. Why should we jettison such
requirements under CAFTA? Should free trade come at the cost of
progress in combating abusive child labor practices? Of course not. It
is not acceptable for me, and it should not be for any of us. That is
the problem with the bill before us.
Again, if the President would have worked with us and consulted with
us in good faith and said we are going to keep these provisions that we
put into law in 2000 and the provisions we put in the Caribbean Basin
Initiative to protect child labor, well, you've got my vote. But they
didn't do that. In discussions with U.S. negotiators before the text
was completed on CAFTA, Members and staff made clear our concerns about
all these issues. Unfortunately, little or no effort was made to
address those concerns until after the agreement was completed and the
White House recognized it might fall short of the necessary votes. At
that point, it was too late; the final agreement had been negotiated.
Mr. President, from a broader view, the modest benefits that we are
theoretically promised 15 years from now under CAFTA simply do not
offset the harm it will do to kids and poor people and small farmers in
those countries. The modest benefits do not compensate for what is
going to happen if our small manufacturers in this country rush down
there for cheaper labor, lower environmental standards, make products
down there, pay people low wages, don't give them decent benefits,
don't recognize appropriate labor standards, use children as workers,
dump the refuse out in the environment, and then ship the products back
to the United States. That is what we are voting on here.
Mr. President, I don't consider this agreement worthy of passage.
Modest benefits, 15 years from now, may or may not be realized. But we
are taking a giant step backward in terms of protecting labor rights
and child labor and the environment. For that reason, I believe this
CAFTA bill, as it is written, is a big mistake. I do not oppose all
free-trade agreements with Central America. But for these reasons, I
oppose this one. We can, and we should, do better for our people, our
farmers, our small manufacturers but also for the poor people of
Central America and the campesinos there who need to have their
standard of living raised, not have their children working and not
going to school, not have refuse dumped into the environment which
threatens their health in the future. That is why this is unfair. That
is why it ought to be defeated. We ought to have a better trade
agreement than this one.
With that, I yield the floor.
The PRESIDING OFFICER. Under the previous order, Senator Graham was
to be recognized.
The Senator from Montana is recognized. Who yields time?
Mr. BAUCUS. Mr. President, I do not see Senator Graham here. I ask
unanimous consent that the order be vitiated, and I will yield to him
when he arrives.
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The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Montana is recognized.
Mr. BAUCUS. Mr. President, in a narrow sense, the Senate today is
considering the free-trade agreement with five Central American
countries and the Dominican Republic, but in a larger sense, the Senate
is debating how the United States can remain competitive. In a larger
sense, the Senate is debating how America can continue to earn $37,000
per person, or more, when there are hundreds of millions of people in
China who earn $1,100 per person a year.
Little agreements like that before us today cannot be the answer. It
may be a partial answer but, frankly, in the larger scheme of things,
it is really much less important than the central question facing
America today with respect to economic competitiveness. The agreement
before us today will not open enough markets for American exports to
make that much of a difference. That is clear.
No, we need a much more aggressive strategy. On trade policy, we need
to try to negotiate bigger agreements--not these small ones, but bigger
ones that have much greater commercial value. We need to open
negotiations with trading partners who represent a larger share of
American trade. There are many examples. We are not doing that, but we
should and we must. Time is ticking by. We need to give renewed
emphasis to multilateral agreements like the Doha Round. And we need to
do a better job enforcing the trade agreements we have already entered
into.
Each Senator can list many agreements the United States has entered
into with other countries, but the other countries, by and large, have
not lived up to the agreements. The most glaring example is
intellectual property. We know who the countries are that have not
lived up to their obligations to honor intellectual property rights
and, as a result, American companies are losing billions of dollars a
year. The United States must be much more aggressive in enforcing those
agreements.
We need to improve America's education. We need to ensure that we can
remain more productive than workers in other countries. That too is
clear. We need to give teachers the recognition and compensation they
need to ensure that they can help to educate the most productive
workers in the world. We need to increase the incentives for students
to study the basics--math, science, engineering. Why? So that American
students can remain the source of tomorrow's new ideas. We pride
ourselves--we have in the last several decades--in being the country
that is the most innovative and creative, and that has been true. We
also know that others are catching up. There is no reason why people in
other countries cannot be as creative and as innovative as Americans.
There is no reason--none. They are people, and we are people. They are
human beings, as we are. Their brains are the same as our brains. It
really comes down to who is the most educated, the most aggressive, who
works the hardest, and who works better together. And people in other
countries are becoming very well educated, very aggressive. They are
hungry. They are working closely together, and they are investing in
areas to increase their productivity. They are catching up very
quickly.
We also need to increase our national savings. America has an abysmal
national savings history. It will not be much longer, if that trend
continues, when we are going to face very dire economic consequences.
We have to do something about that; we are not. Our private savings
rates are zero. Americans do not save. They spend. We spend. We like to
buy refrigerators, cars, boats, clothes. We consume; we do not save.
With housing prices so high these days, what do we do? We borrow
against the equity in that house. What do we do with the borrowing? We
spend. To make matters worse, the Federal Government not only has a
savings rate of zero, it has a dissavings rate, huge deficits and
debts.
We cannot continue like this. That is one part of the agenda that we
must work on if we are going to address American competitiveness. This
agreement before us is an important debate, but it is not the real
debate. It is an important issue, but it is not the real issue. It is
only a small part of the central issue we should be facing. We need to
expand incentives for employees to save through work, for example.
There is no glamor or rocket science in this. It doesn't make the
evening news. That is one reason we don't do it because we are people
with such a short attention span. It is the instant view--what is now--
and not what can be 10, 15 years from now. We need to expand incentives
for employees to save through work, which is a small step in the right
direction to increase savings. We need to stop running massive Federal
budget deficits because they are reductions in national savings.
We need to address our outsized and very expensive health care
system. We spend twice as much on health care per capita than the next
highest country. I ask, are we twice as healthy? Of course not. We are
not twice as healthy. Why do we spend twice as much? A lot of reasons.
It is very complex, but we do. What is the consequence of that? One
consequence, clearly, is that our companies are having a very difficult
time competing--particularly our larger, older companies. They have
extremely high health care costs, legacy costs to employees and
retirees. Their competitors don't have them nearly that high.
I have talked to CEOs of large companies who say they are thinking of
locating their plants in other countries largely because the health
care costs for those employees in those countries is much lower and so
they can compete.
I remind my colleagues, this is an incredibly competitive world. It
is incredibly competitive, and just the slightest margins make a
difference. We have to, therefore, be incredibly competitive ourselves.
It is teamwork. It is Americans working together. We are not working
together.
Look at this debate. This debate is pretty sterile. One side
exaggerates; the other side exaggerates. We are not talking with each
other. We are not focusing on the real problem. I hope in future days,
weeks, and months we start to wake up and not get so involved with the
periphery. CAFTA is not really the periphery, but it is not far from
the periphery. We should, rather, focus on the central questions.
We also need to foster much greater use of information technologies
in health care. Did you know, Mr. President, that the equivalent of two
747s crashing every day is the number of Americans who die on account
of medical errors? Between 58,000 and 98,000 people a year in America
die because of medical errors. It is not true in other countries. It is
in America. Much better information technology in the health care
industry will reap immense benefits.
What is one of the reasons we do not invest in IT in America in
health care? It is pretty simple. It is reimbursement. Hospitals will
spend thousands of dollars on CAT scans and on PET scans, the latest
technologies. Why? Because the Medicare program reimburses them for
those machines. It is also competition, keeping up with the Joneses.
What is the Medicare DRG for IT? There isn't one. We have a system that
reimburses and sets up incentives that discourages development of IT in
health care, which we have to have, which will reduce medical errors.
It will have all kinds of positive consequences if we get a much better
IT system. We have to get going in this country. We are behind the
eight ball.
In sum, to be competitive, we need to have a plan. This is a bit
simplistic, but I think it somewhat makes the point. I mentioned
earlier how competitive this world is. We all know that. If we put two
teams on the playing field--by the way, I am an American. I am for the
American team. I do not want to denigrate other people or hurt other
people. The ideal is that everybody around the world is doing extremely
well. I am an American. I am on the American team. I want America to do
well.
If we put two teams out on the playing field--let's take football.
One team has a quarterback, blocking backs, the linemen, they have a
coach, a play, a plan. That is one team. The other team has 11 players
on the field. One person wants to do one thing; he wants to carry the
ball. Someone else says: I want to carry the ball. No, I want to kick.
No plan, no coach. They are out doing their own thing. They are
entrepreneurial. It is free competition,
[[Page S7665]]
going in their own directions, doing what they want to do.
Which team wins? I grant you, that is simplistic. That is very
simplistic, but I think it does make a point.
Other countries have plans. I can name them: China. China has a plan.
Japan has a plan. I think some European countries do; I am not sure. I
do not know how much better organized they are, but the main point is
we do not have a plan. I am not asking for a centralized plan where
somebody decides what everybody does, but I am asking for much greater
cooperation, much more working together so that Americans can compete.
I go back to what I said earlier. So much of this is education. It is
value added. We need to add value up here at all levels--K through 12,
continuing education, vo-tech, and so forth. Ultimately, that is where
it is at--education. There is nothing else but education--math,
science, and other areas.
I see the Presiding Officer taking notes. I can see he is listening
to me. I can tell I am making some points that maybe make sense and he
is going to do something about it. I appreciate that. I wish others
would, too.
Mr. President, I ask unanimous consent that the following Senators be
the next recognized for debate: I see Senator Graham is in the Chamber.
He will have 15 minutes, and that time will be taken out of the time
allocated to Senator Grassley. Senator Conrad of North Dakota wants 15
minutes, and his time will be taken out of the time allocated to
Senator Dorgan. Senator Thomas will be recognized for 15 minutes, and
his time will be taken out of the time allocated to Senator Grassley.
The PRESIDING OFFICER. Is there objection?
Mr. GRAHAM. Mr. President, I believe my time should come from Senator
Dorgan because I oppose the bill.
Mr. BAUCUS. I do not know that it matters, Mr. President. For the
sake of moving along, we will stick with what we have.
The PRESIDING OFFICER. Without objection, it is so ordered.
Under the order, the Senator from South Carolina is recognized for 15
minutes.
Mr. GRAHAM. Mr. President, I thank Senator Baucus. Senator Baucus
made some very telling points that I think we should all listen to in
trying to get a game plan.
I rise today as a ``no'' vote to CAFTA. I do not think that surprises
many people. The point I am trying to make with my vote is many of the
things being said about the benefits of CAFTA are very true. I think it
will help the Central American countries, the CAFTA nations that are
trying to emerge as democracies in some regard. There will be some
benefit to the economy. There is no doubt there is some benefit in any
trade agreement. But my concern is of a geopolitical concern dealing
with China.
The trade agreement we negotiated with Central America, the CAFTA
agreement, has many loopholes that China will exploit, just as they
have exploited every other trade agreement we have done. The cumulative
effect of China on our trading situation throughout the world and our
relationship is becoming devastating.
In April, the U.S. trade deficit was $62.2 billion. With China it
grows $7.83 billion per month. Since we gave PNTR status to China in
2001, the trade deficit with China has gone from $100 billion to $162
billion. It is 47 percent greater this year than it was last year.
It has been devastating to the textile and other industries. During
the first quarter of 2005, imports from China have grown 1,250 percent
for cotton knit shirts and blouses, 1,500 percent for cotton trousers,
and 300 percent for cotton and manmade underwear.
The bottom line is products coming in from China are not conforming
with international trade regimes. They are not conforming with the
standards we would like to see throughout the world.
The bottom line is they are cheap. They take advantage of trade
agreements negotiated--NAFTA and eventually CAFTA--through
transshipments. What is going to happen very clearly, to me, is Chinese
companies will move into the CAFTA. They will take material made in
China with slave-wage conditions, horrible conditions, throw a label on
it as if it were made in CAFTA, and get it into our country in a way
they could not do directly from China. It is called transshipment.
Particularly, this agreement is poorly drafted. It does not realize
exactly with whom we are dealing. The combined effect of the CAFTA
nations, in terms of a market for us, is the size of San Diego. So
those who sell this agreement as a major way to create export
opportunities for America I think are not realistic. If you took all
the combined countries' economic buying power, it is the size of San
Diego, and that is not going to fuel the American economy.
We are going to see goods from the CAFTA nations cheaper than we can
produce here. It is going to have an effect on manufacturing in my
State and other States that will be part of an overall trend that is
getting to be more than we can bear.
China will take advantage of this. It has many loopholes for China.
The rule of origin provisions requiring a yarn for arrangement is only
for the essential fabric of the garment. What that means in English is
we are trying to lock down the fabric and the yarn to be tied to our
country, to give a benefit to our textile manufacturers, and that is a
good thing. That helps us get into that market.
It does not deal with pockets, collars, and nonvisible jacket liners.
They are exempt from that yarn for arrangement. There is a side deal
having to do with pockets to address what will happen in my State. I
have about 500 to 600 workers who make pockets for garments. The
Chinese companies are going to put them out of business because the
pockets to be made in a CAFTA nation are not going to come from South
Carolina or other places in the United States. They are eventually
going to come from China because the pocket agreement, trying to
protect the pocket part of a garment, requires all six CAFTA countries
to ratify it. That is just not realistic. It is not going to happen. So
there are going to be people in my State, unfortunately, if this gets
passed, who are going to be put out of a job because China is going to
come into the CAFTA region and they are going to put American
manufacturing, when it comes to textile goods with regard to pockets,
out of business.
There are other loopholes. The single transformation provision allows
for pajamas, boxer shorts, and bras to be imported into the U.S. duty
free regardless of origin so long as they are assembled in a CAFTA
country. In other words, you can have all the material made in China
for these products and do the sewing in CAFTA, and they come into our
country, and that is going to be devastating to Fruit of the Loom and
other people who have come by to talk about it.
This agreement, like all other agreements I have voted for, except
Australia, which I thought was a pretty good deal for America, has
major loopholes within it to allow China to take advantage of it even
though they are not party to it.
The problem we have with China and the way they manipulate their
currency, the way they have no regard for intellectual property, the
way they transship by cheating, sending goods from China into other
regions of the world where we have existing trade agreements, is having
a cumulative effect.
We have lost 21.6 percent of the manufacturing jobs in South Carolina
in the last 5 years. Some of it is due to modernization. Some of it is
due to factors beyond international trade. But a lot of it has to do
with international trade that is not being fairly policed.
We have a 6.5-percent unemployment rate in South Carolina. We are
fifth in the Nation. Our State has a manufacturing-based economy. The
side deals that are being touted for people in this agreement are going
to be like most other side deals when it comes to agreements in the
last 15 years. Eighty-three percent of these agreements, according to a
report by Public Citizen, a watchdog group, were not kept, reversed, or
became meaningless.
So my concern about CAFTA is my concern about trade in general. Until
we regulate and get buy-in by the Chinese to live within the family of
nations when it comes to trading and doing business, every time we
expand an area of trade, it becomes another portal for China to enter
into our marketplace and to do things they could
[[Page S7666]]
not do in a direct relationship with the United States.
They will be able to do things in the area of textiles in the CAFTA
countries they could not do directly with the United States. It is just
not going to be textiles. Eventually it is going to be other products.
The buying power of these nations, again, combined is the size of San
Diego, but what will happen is the ability of China to exploit this
agreement is going to be much larger than the buying power of San
Diego.
I do believe that trade can help emerging democracies and that there
is a logic to the idea the President is proposing for these emerging
democracies for which we could create economic opportunity.
However, unfortunately, I believe the way this deal has been
negotiated, the way it will be implemented, and the way it will be
exploited is not going to improve the democracies in Central America
because they are going to lose jobs to China eventually. It is going to
hurt the manufacturing base of this country, which is already in
jeopardy. That is why I will choose to vote no.
I yield the floor and I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. THOMAS. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. THOMAS. Mr. President, I will take a few minutes to talk about
the topic that is on our agenda today, the CAFTA trade agreement.
Certainly, it is something in which all of us are interested. Trade
agreements are very important, of course, and whether they fit or not
they are always there and we have to deal with them.
Frankly, I have been very involved in this, partly because sugar is
one of the products from my State and it is one of the things that has
been a very controversial portion of this trade agreement.
Trade agreements are not easy. Whether we like it or not, trade moves
around the world and so what we need to do is to find a way to make
that trade work as well as we can for ourselves and for others.
Sometimes I am a little disappointed. When we passed the free-trade
agreement, I think we should have called it the fair-trade agreement.
Free trade is not always the way things are.
There is a book called ``The World Is Flat,'' talking about how there
is equality throughout the world, but it is changing. Well, it is
changing, but it has not all changed. There is a great deal of
difference between one country and another in terms of their economy,
in terms of the way it works and whether one is getting paid $2 a day
or $20 a day or $20 an hour.
So when one talks about free trade, one has to make sure that they
recognize the differences that are there. All I am saying is it is
difficult. Of course, we want to work with other countries. Part of the
reason for having CAFTA before us is we are looking for relationships
with the Central American countries. That is a good idea.
We are looking at countries that are fairly undeveloped or newly
developed, certainly a different economy than we have here. Yet we want
to strengthen those. I think over time, in terms of thinking about
trade, it is going to be important that this hemisphere be together and
be strong as we see things develop in Asia and other places around the
world. So it is important that we do this.
We are the largest Nation of purchases in the world. So we have some
strength to bargain and even though we need to be fair about it, we
need to exercise that muscle a little bit because we are in a position
to do that. So it is a matter of coming up, hopefully, with fair trade
and equality as much for everyone as we possibly can. It is not just a
matter of helping others.
There are other ways to help others. It is not just a matter of
strengthening other countries but having a relationship that is fair.
I mentioned sugar. Sugar is not the biggest industry in the world,
but it is an industry that is important to this country. It is an
integral part of our economy. It is a little unique. Agriculture is a
big thing in Wyoming, of course; mostly livestock, as one might
imagine, in the open space and so on. In our agricultural economy,
livestock produces the most by a great deal. The second actually is hay
and feed for livestock, but third in crops is sugar. So it is a
relatively large one for us.
Sugar is unique as a commodity. If one raises oats and something
happens to the price, they can raise barley or some other kind of
grain. That is not the case with sugar. With sugar, there is a high
investment in particular equipment such as thinning equipment. They
used to use Mexican workers mostly to go out with a hoe and thin sugar
beets. Well, they do not do that so much anymore. They use expensive
equipment to do it. So it is a little different.
The second thing that is different about it is that the producers now
also are owners of the processing equipment. So in our State where we
have relatively little manufacturing, we have some sugar processing
plants which are unique. It is about the only agricultural product in
our State that is processed to the extent it is ready for the grocery
store shelf when it leaves our State. So even though, as the New York
Times, I think, erroneously reported that it was not very important,
there are lots of people hired in that industry who are not farmers,
but they are producers. So it is unique and it has been treated
uniquely over time in the farm bill and other places.
So as one bargains into a trade agreement it is one of the things
that one really does not have much flexibility to work on.
Now, in regards to CAFTA, it is important that we deal with our
neighbors in that part of the world. We need to work to have a
relationship there. They need to strengthen their economy. There is no
question about that. That is a good thing. But it is a relatively small
market, about half of what some of the larger cities would be in the
United States. So we do need to work at it, but we need to understand
that it is not going to change the world in terms of what we are doing.
We have made some efforts to make it work, and I am willing to say to
my friends and others that several of us who are particularly
interested in this have worked with the sugar beet and sugar cane
growers over the country and have had a number of meetings with them,
have listened to their issues and have worked with them before. We have
also worked very closely with the Secretary of Agriculture, and I want
to commend him for his efforts to try to find some arrangements that
could make it better. We did, finally.
However, one of the strange things about this is that this trade
agreement was signed about a year ago and was not brought up to the
floor until last week. So when we heard it was coming, I think, a week
ago today, we had the very first meeting with the Secretary, with some
congressional members who were interested, and the sugar people. There
was a great deal of discussion, as there should be, but no one was
prepared to make decisions in that short time. So we tried to get back
together again, work some over the weekend and be back again on Monday.
Lo and behold, here comes the bill to the Finance Committee, of which I
am a member, before we even had our second meeting.
I tried to suggest we need a little more time and maybe we could work
something out. Nevertheless, that is where it was. Part of our problem
was we have not had much time. I do again want to say the Secretary
came in with some ideas. He still has some ideas and they are good
ones. Our new trade ambassador, Rob Portman, is doing a great job. He
has done everything he could possibly do to make this workable. Of
course, he had nothing to do with negotiating it in the first place,
but nevertheless both of those gentlemen have worked at it very hard.
There has not been time to do something.
The problem basically is that this sugar program has been one over
time that has been kind of measured in trying to hold its production to
the demand in the country. Currently, for example, there is lots of
sugar being stored in Wyoming because production is over demand and our
own sugar is not being put on the market because there is not enough
capacity for it now.
So the Secretary did agree that he could do some things until the
next
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farm bill comes up, which is 2 years from now, and I think he can. He
may have to use some CCC activities, exchange of one goods for another,
to handle a relatively small amount of sugar that could come under this
pact. The problem is, with the sugar people and others, that it is
simply about a 2-year remedy. They need to look at something much
further than that down the road.
I say to my colleagues, it is not just exactly the CAFTA agreement
that is of concern to us. It is also the fact that the NAFTA deal with
Mexico will expire in 2 years, presumably opening up the market there
not only for sugar but fructose and other things that could come here
and could have a real impact on this fairly difficult to manage sugar
industry in our country. So we have to keep in mind we are not just
talking about CAFTA, we are talking about the impact that can come from
the changes that take place in NAFTA as well.
In addition, if we do something with CAFTA--and we are--then the next
thing we are going to be looking at is other countries in Central
America, Ecuador, and Brazil--finally, Brazil, which is a big sugar
producer. So the precedent that is set with respect to sugar is one
that is very concerning to the sugar industry.
What are we going to do in the next immediate trade agreements? So
these things all go into it, and that is why a 2-year solution--even
though I really respect the fact that they tried to do something, we
still will work at it. We are not through trying to find a remedy, but
it apparently cannot fit into this. So I do, again, want to
respectfully thank them for what they have done.
In any event, those are some of the problems that we have. Finally,
one other point, and that is that there seems to be, to me at least, a
little lesson in this in terms of negotiating trade contracts. The
authority to do that comes from the Congress, asked for by the
Executive. As this is done, it seems to me we ought to have a little
more input into it before it is resolved.
What really happens in this case, at least practically, is that the
negotiators go on, and when their negotiation is finished they come to
us with a package over which in this case, because some of the
countries had already agreed to it, there really was not any
opportunity for changes in it when it came here. So I think we ought to
have more input. We could deal with this.
Two more points. One is how important this is. I got calls from the
Secretary of Defense, from the Secretary of State, the President, and
the Vice President talking about not only is the trade aspect important
but also the relationships. I do not disagree with that, but I also
have to say that I met with the six Presidents on this and they said
the same thing, that this is more than just trade. I say to them and to
myself, Why do we let this relatively little thing hold it up? Why did
we not fix that knowing it was going to be a problem before we got
there?
I think we can do a better job in the future. I think we are going to
be faced with some more of these kinds of issues. We ought to be able
to deal with them.
I am sorry we didn't have more time to perhaps come up with a remedy
before we have to vote. I voted against it the second time in the
committee. Unfortunately, I cannot support it this time. But I do hope
we can make some changes and deal with it in the future.
I yield the floor.
Mr. BAUCUS. Mr. President, I ask unanimous consent that subsequent to
the remarks of the Senator from North Dakota, Mr. Conrad, pursuant to
the existing agreement, Senator McCain be recognized to speak for 10
minutes and that time be taken from the time allocated to Senator
Grassley; following Senator McCain, that Senator Dayton be recognized
for 15 minutes and that time to be taken from the time allocated to
myself.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from North Dakota.
Mr. CONRAD. Mr. President, I thank the ranking member of the Finance
Committee, Senator Baucus of Montana, for his leadership on this issue
and for the outstanding work he does on the Finance Committee. I
sometimes wonder if Senator Baucus ever gets any sleep at night, given
the number of things on his plate.
I thank my colleague from Wyoming, Senator Thomas, who has been a
great ally in an attempt to protect an American industry from unfair
provisions that will decimate an industry that employs 146,000 people
in this country. Senator Thomas has truly been a great advocate for the
people he represents on this issue. I very much appreciate working with
him.
I support free trade that opens markets and benefits American
farmers, businesses, and workers. I supported the Uruguay Round WTO
agreement. I supported PNTR for China. I supported the Chile agreement,
the Singapore agreement, and the Morocco agreement. I did so because I
believed those deals would benefit America and the people I represent
in North Dakota. But I have come to the conclusion that our trade
policy is not working. It is not a free trade policy. It is not a fair
trade policy. Increasingly, it is a failed trade policy. This trade
policy is clearly off track.
I am beginning to wonder what are we thinking about in this town when
we look at the results of the trade policy followed by Republican and
Democratic administrations for an extended period of time. Here are the
results of this trade policy that is supposed to be such a great
success.
This chart shows the trade deficit year by year, going back to 1992.
Up, up, and away it goes. The trade deficit now totals $617 billion in
2004. For a very long time we never had a trade deficit above $100
billion in a year. Now we are over $600 billion, and the latest numbers
show we are headed for $700 billion.
Colleagues, how can anybody call this a success? If this is a
success, what would be a failure?
We keep signing these agreements that are supposed to benefit the
country and our position keeps getting worse. In the 10 years since the
North American Free Trade Agreement took effect, a period in which we
adopted the WTO agreement, China PNTR, free-trade agreements with
Chile, Singapore, Morocco, and Australia, our trade deficits have
exploded.
Up until 10 years ago, our annual trade deficit had never exceeded
$100 billion. When we look at these individual agreements, we see the
same story. Our trade agreement with Canada is one I opposed because I
thought it would be injurious to my State, and indeed it has been. When
we passed the Canadian agreement, we had a $9 billion deficit with
Canada in trade. After the great success of the Canadian Free Trade
Agreement, is the deficit less or is it more? Those who say more are
right--not just a little bit more but a lot more. The trade deficit
with Canada now is not the $9 billion we had when we entered into the
agreement. Now it is $66 billion.
The same is true with Mexico. On Mexico, remember we were told what a
great opportunity this was going to be. If we just signed up to it, our
trade relationship would flourish. At the time we entered into the
agreement, we had a $2 billion trade surplus with Mexico. Let's go back
and check the records. What is it now? Do we still have a trade surplus
with Mexico? No. Instead, we have a massive and growing deficit. We
went from a $2 billion trade surplus with Mexico to a $45 billion trade
deficit. And the very people who negotiated that agreement are now
going all over town telling us that this next one is another great
success.
I told them it reminds me a little of the German general in World War
II who said that he knew things were going bad for Germany when the
victories kept getting reported closer to Berlin. They had one great
victory after another, but the victories were all getting closer to
Berlin, as our forces approached.
You know, I look at these great successes. My question is: How many
more of these great successes can we afford? What are we doing with
these rapidly growing trade deficits that mean we are borrowing
hundreds of billions of dollars all over the world--over $600 billion
from Japan, over $200 billion from China? We have even borrowed tens of
billions of dollars from South Korea. Does anybody think that makes our
country stronger? I don't. I think it makes us weaker, more vulnerable.
What are we doing about it? We are not taking action to get China to
stop
[[Page S7668]]
manipulating its currency or stealing our intellectual property. That
is not being done. We are not making progress to reopen the Japanese
and Korean beef markets. That is not being done. We have not put a stop
to Airbus's unfair subsidies. That is not being done. We have not put a
stop to Mexico's unfair tax on beverages sweetened with corn. That is
not being done. We have not put a stop to Canada's unfair softwood
lumber subsidies. That is not being done.
We have lost focus in these WTO talks, allowing them to drift in the
wrong direction. Instead, the focus is on CAFTA. I love these CAFTA
countries. They are wonderful people. But the combined economic impact
of these countries is equivalent to Columbus, OH. This is our priority
when we have a trade deficit of this magnitude? What earthly sense does
this make?
When I look at this agreement--I am on the Finance Committee. I have
listened, at length, to our ambassadors and our negotiators, for whom I
have high regard. They are wonderful people. But they have come back
with a lousy agreement. They have gone all over America telling people
this is a great opportunity for the United States. They say 80 percent
of Central American goods come tariff free into the United States, yet
we face tariff barriers when we export to their countries.
OK, I understand that. It sounds logical and reasonable that this
might be a good opportunity for us, if 80 percent of their goods come
into our country tariff free, but our goods face tariff barriers going
into their countries that would look like an opportunity. So when you
analyze it, I assumed this would mean great progress with respect to
trade deficits. Here is the report from our own International Trade
Commission. This is not the U.N.'s trade commission. This isn't the
CAFTA countries' trade commission. This is our own trade commission.
On this chart is the conclusion they come to. That is what happens to
imports, to our imports from the CAFTA countries. This is what happens
to our exports. The import number is bigger than the export number. In
other words, our trade deficit with the region is getting bigger--and
they call this a success, when we already have record trade deficits?
This negotiating team goes down there, spends years and comes back and
says: Boy, have we done a great job. We have gotten an agreement that
increases the trade deficit with the region.
Hello. Is anybody paying attention? Not only does it make the trade
deficit with the region worse, here is what the International Trade
Commission says it will do for our economy.
After listening to these speeches, listening to this testimony about
how this is a great opportunity for America, I assumed that when they
did the analysis of what it would mean for our economy, there would be
a big plus. Guess what. Here is what the International Trade Commission
found in their report. This is not my report. This is our own
International Trade Commission report. They are the body that is
responsible for scorekeeping on these agreements. Here is what they
concluded. Here is what it would add to the gross domestic product of
the United States. I don't know if they can see that on television--
that is a zero. Any gain is so modest it doesn't even show up: Zero.
Zero is a very low number. That is what this agreement would do for
the U.S. economy, according to our own International Trade Commission--
zero.
But you know what, it also poses a very big risk, at least to one
industry in this country. The industry that it puts at risk is the
domestic sugar industry. The domestic sugar industry employs 146,000
people in this country. Apparently, our negotiators decided to just
negotiate that industry away. It is a $7 billion industry in the United
States; a $2 billion industry in the Red River Valley of North Dakota
and Minnesota. These trade negotiators who brought back a plan that
worsens the trade deficit with the region--that according to our own
scorekeepers adds nothing to the economy of the United States, adds
zero percent to the GDP--puts at risk an entire industry. It is no
wonder that our country is in trouble. It is no wonder that we are
running record trade deficits. It is no wonder that those record trade
deficits are getting even worse with a trade policy like this one.
For months, the USTR has been telling us: Don't worry. This is going
to be a little trickle of sugar that is going to come in here. You
don't have to worry. It will be equivalent to a teaspoon. I wish it
were true. It is a glib description and characterization of what it
will do. The fact is, this would threaten an entire industry. Why?
Because, under this agreement, it would permit 109,000 metric tons of
additional sugar to come in. But that is not the only agreement that is
being negotiated. If that same precedent would apply to the agreements
with South Africa, Thailand, and the Andean countries that are being
negotiated, you can see that would put us at over 500,000 tons of sugar
coming into this country, over and above what comes in now.
Every economist has said another 500,000 tons of sugar coming into
this country would collapse the price of sugar below the redemption
price, would unravel the sugar program and destroy the domestic sugar
industry.
That does not end the story. It is not just the agreements with South
Africa, Thailand, and the Andean countries that are a problem, it is
the previous agreement already entered into with Mexico under NAFTA.
For months, USDA has been saying we can absorb the CAFTA amount of
sugar because there is a cushion between our WTO import obligations and
the farm bill trigger in the sugar program. But that cushion assumed
Mexico would not export significant amounts of sugar to the United
States. Guess what. That assumption was wrong. It is just not true.
USDA just revised its Mexican sugar projections, and Mexico now is
projected to have net surplus production of over 440,000 tons. That
means under the NAFTA agreement, Mexico can send us another 250,000
tons of sugar duty free, completely eliminating the so-called cushion.
But it gets worse, much worse. Mexico's total exportable surplus this
year is now projected to be more than 900,000 metric tons. So they can
send us 250,000 duty free. But the story does not stop there. On top of
that, they can bring sugar in under what is called Tier 2, where they
pay a modest tariff, a tariff that makes it completely in their
interest to pay the small tariff on that second tier and bring in the
sugar. That means another 650,000 metric tons of sugar above and beyond
the 250,000 tons of duty free sugar. Put it all together, and over
1.151 metric tons of sugar comes into this country.
The point is this: When we put together the treaties being negotiated
and we put together what USDA has just said will be the capability of
Mexico to send sugar into this country, we are way above the amount of
sugar that would collapse the sugar industry in this country.
There has been a side deal offered to the sugar industry. I will talk
for just a minute about that deal. I have three words for those who
think the deal might solve the problems I just described: Don't be
fooled. That is not a deal, it is a figleaf. Here is why. The Secretary
of Agriculture has suggested to certain Members of Congress that he
intends to limit sugar import to 1.53 million tons. He says that will
ensure the farm bill provision that turns off marketing allotments will
not be triggered.
Unfortunately, it does not work. Why not? First, the deal is only
good for 2 years. Second, it does not address the next farm bill or
other trade agreements that are under negotiation or what happens in
2008 when the NAFTA sugar protections are gone. In fact, the way this
is structured, it almost guarantees that any additional access in
future agreements will be backloaded into 2008.
My colleagues, that creates the potential for a perfect storm that
will leave the market badly oversupplied going into the next farm bill.
Despite highly unpopular payments to foreigners to keep them from
sending us sugar--what an idea that is. Want to start paying countries
not to send us stuff? Are we really going to do that? How long will
that last? How long will it last, that we pay countries not to send us
stuff? It will make it virtually impossible to retain the program in
its current form and threaten the existence of an entire industry in
this country that employs 146,000 people.
[[Page S7669]]
I would be remiss if I did not make brief mention of the process that
has gotten us to this point--fast track. Fast track prevents Senators
from having the right to amend. Instead, we conduct what is called a
mock markup in the Finance Committee and in the Ways and Means
Committee in the House. We are supposed to be able to offer amendments
there that would change the contour and the direction of an
implementing bill as part of the Congress's constitutional
responsibility for foreign commerce. But it turns out amendments in the
Finance Committee mean nothing.
Last year, when we considered the agreement with Australia, the
Finance Committee set the precedent that if an amendment was adopted in
the so-called mock markup and a majority of the committee rejected the
proposed implementing bill, the committee action could be ignored. I
got an amendment passed in the committee. It meant nothing.
This year, with the Wyden amendment, the committee has set the
precedent that when an amendment is adopted by the committee and the
underlying proposed implementing bill is then approved by the
committee, that amendment, too, can be ignored. So now we have a
situation where this mock markup is a total mockery. It means nothing.
What has happened is Senators have given up their right to amend, and
they are left with nothing except the opportunity for a straight up-or-
down vote on the whole agreement. There is no opportunity to change the
bill in committee or in the Senate. There is no other legislation that
moves through this Senate that can be dealt with in that way. That is
not how the process is supposed to work.
In conclusion, CAFTA is the wrong agreement at the wrong time. It has
been pushed through a process that in itself is wrong. It adds $100
million to our trade deficit with the region, it puts a $7 billion
industry at risk, creates the likelihood of increased illegal
immigration, and it provides immeasurably small benefits for the
economy as a whole. It does not make much sense to me.
Here we have record trade deficits, the biggest they have ever been--
and growing--and our negotiators go out and reach an agreement that
makes the trade deficit with the region in question worse and threatens
an entire industry. They call it a success. Colleagues, I don't know
how many more of these successes we can afford.
I yield the floor.
The PRESIDING OFFICER. Under the previous order, the Senator from
Arizona is recognized for 10 minutes.
Mr. McCAIN. Mr. President, I will respond.
Mr. BAUCUS. Does the Senator want more time? We can certainly find
it.
Mr. McCAIN. I may ask for an additional 5.
Mr. BAUCUS. I make that request.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. McCAIN. I thank my friend from Montana.
The Senator from North Dakota just stated, Who pays? I wonder, who
pays when my wife goes to the supermarket and pays 13 cents more for a
pound of sugar than she does and would if we had sugar from these
countries able to come into this country?
I am not in the business of producing or selling sugar, nor are many
American families. But there are a whole lot of American families who
are in the business of buying products that have sugar in them. They
pay an exorbitantly higher price because of the protectionism that is
practiced for the sugar industry. Since when can't the United States
compete on a level playing field?
The opposition to this is clearly one that is protectionist in
nature--for an industry that, in my view, should be able to compete
with foreign producers. That is not what this debate really should be
all about.
The stakes could hardly be higher--whether we import or export sugar,
whether the Central American Free Trade Agreement passes has
implications, whether the American farm exports will enter the
Dominican Republic duty free, or whether Guatemala will be able to
increase its textile protection.
By the way, I say to the Presiding Officer, if Guatemala is unable to
export its textiles into the United States, I don't believe it will be
the United States that would be producing textiles; I believe it will
be the Chinese and others.
I don't want to be hyperbolic, but I believe the vote we will soon
take on CAFTA is one of the most important that will be cast in the
Senate this year. It is important because at stake is the future of
Central America in its economic and political dimensions and, hence,
its security dimensions. It is important because it will determine
whether the free-trade agenda as laid out by President Bush proceeds
toward a successful Doha round of global trade talks or whether the
effort will be stopped in its tracks. It is important because it will
help determine whether the invigorating effects of free trade are
experienced in our country anew or whether the protectionists are able
to erect their walls around us. It is important because it will show
whether a trade policy in America is determined by sugar growers,
unions, and other special interests or whether it is determined by
leaders who place at the forefront the interests of our Nation as a
whole.
A few years ago, we concluded a free-trade agreement with Chile.
There are certain facts that are available already. There were the
usual arguments against it from the protectionists. In 2004, the first
year the agreement was effective, two-way trade increased by 33
percent. In the first 4 months of this year, it grew even faster--45
percent. Exports from the United States to Chile have risen at still
higher rates--nearly 35 percent in 2004 and almost 63 percent in the
first quarter of this year. Preliminary numbers suggest that in 2005,
U.S. exports to Chile may nearly double those recorded in 2003. That is
what free trade is all about. That is based on the firm conviction that
most of us have that American products can compete with any in the
world.
Now, some can't. And that is terrible, and that is why we have trade
adjustment assistance. When industries in the United States are
directly affected by importation of products from other countries as a
result of trade agreements, we have trade adjustment assistance to
provide workers retraining to upgrade their ability to find other
employment. We need to do more in that area. But to somehow reject the
benefits of free trade because of the damage it may do--and I emphasize
``may''--to certain industries is very shortsighted.
We see in Latin America today a growing skepticism about democracy--
equated in the minds of many with austerity programs and lack of
improvement in the standard of living. Disturbing polls suggest that
discontent with democracy is on the rise and that large percentages
would prefer a strong man who could improve living standards to a
democratically elected leader who could not. CAFTA has the potential to
illustrate the tangible benefits that come from democracy--free market
economics and partnership with the United States.
Let me give one concrete example. The apparel industry is critical in
the regional economy, accounting for $9 billion in exports each year.
CAFTA will lift duty on most apparel and nonapparel goods, immediately
bolstering an economic sector that represents tens of thousands of jobs
in the region. The overall effect of this and other benefits would be
to help lock in Central America's political and economic gains.
Let's consider what happens if CAFTA fails. Rejecting the pact would
be seen by our Central American partners as American disengagement from
a region important to our security. Thousands of apparel production
jobs would likely be lost as they move production facilities from
Central America to China, further exacerbating illegal immigration to
the United States. It would signal to the people of Central America
that the support of the United States for their freedom and prosperity
is more rhetorical than real--even in a win-win situation for both
sides. It would have a devastating effect on our effort to lower trade
barriers with other partners around the world and to push forward the
Doha round of multilateral talks and put another notch in the post of
the special interests as they despoil the public good for their private
gain.
[[Page S7670]]
We need CAFTA. It is important to our economy. But it is also vital
to our political security and humanitarian interests in Central
America.
The former President of Costa Rica, a Nobel Peace Prize winner, Oscar
Arias, speaking of CAFTA, said it represents ``an unparalleled
opportunity to transform Central America into a dynamic economy, deeply
integrated with worldwide flows of trade and technology. We ask not for
charity, but enlightened self-interest from our northern neighbor.''
I am concerned about the state of democracy in Central America. I am
disturbed that in Nicaragua there is every likelihood we may see Daniel
Ortega as the next President of that country. I am disturbed about the
failing economy and corruption that exists in El Salvador. I am
concerned about the continuing stagnation of the economies of Guatemala
and Honduras.
Mr. President, if the countries of Central America continue to fail
economically, it will give rise to a situation that I do not want to
revisit. When I first came to the Senate, one of the overriding and
compelling challenges we faced was the rise of communism in Central
America, the influence of Castro in countries such as Nicaragua, the
Sandinistas in power, the effect it had on neighboring countries such
as Honduras and El Salvador where there was an ongoing revolution.
Billions of dollars of American taxpayers' dollars were poured into the
region in aiding El Salvador in combating others in the region.
One of the most emotional and unpleasant debates I have ever engaged
in on the floor of this Senate had to do with aid to the Contras. I do
not want to revisit those days of the 1980s. I do not want to go back
to a region that may be beset by corruption, anarchy, and possible
insurgencies.
We have another individual on the rise in our hemisphere, and his
name is Chavez from Venezuela. He espouses policies and programs that I
believe are not in the best interests of the people of Venezuela. And
he also, I believe, is having an influence in the region. If there is
anything we need today, it is strong, viable economies in Central
America, so they can progress, so they can be strong, and they can
again be allies of the United States of America, not in a military
fashion but in their advocacy for free and open societies, democracies,
and places where people can raise their families in a situation of
security and peace.
I would like to mention again, if there is one lesson we have learned
in the challenge of illegal immigration in this country, it is that if
people cannot feed themselves and their families where they are, they
will go to places where they think they can. If that means risking
their lives crossing the Arizona-Sonora border, they will do so.
Mr. President, I strongly urge--I strongly urge--my colleagues to not
only understand the trade implications of this agreement but the
political, social, as well as economic reasons for us to consider
favorably this agreement. The stakes are very high. I believe, with the
leadership of this President and the bipartisan support of this body,
we will prevail.
I thank my colleague from Montana for allowing me this time. I yield
back the remaining time.
The PRESIDING OFFICER (Mr. Burr). The Senator from Montana.
Mr. BAUCUS. Mr. President, I ask unanimous consent that the following
Senators be recognized next to speak after Senator Dayton: Senator
Kerry for 15 minutes, with the time taken from the time allocated to
me; and then a Republican Senator not yet named, for 10 minutes, with
the time taken from the time allocated to Senator Grassley.
The PRESIDING OFFICER. Without objection, it is so ordered.
Under the previous order, the Senator from Minnesota is recognized
for 15 minutes.
Mr. DAYTON. Mr. President, I thank my distinguished colleague, the
leader of our representation on the Senate Finance Committee, the
Senator from Montana, who has been outstanding in his guidance to all
of us in our caucus and in standing up for the interests not only of
his own State but for the farmers and the workers and the people of
Minnesota and America, as well as Montana. I thank him and I thank my
colleagues from North Dakota who also have been in the forefront of
this issue because they, like myself, represent people who are
seriously at risk with this agreement.
Tribute To The U.S. Capitol Police
Mr. President, before I address DR-CAFTA, I would like to take a
moment to pay tribute to the courageous men and women of the U.S.
Capitol Police, who risked their lives yesterday, once again, to help
evacuate the rest of us safely from the Capitol Complex.
This is, unfortunately, my fifth evacuation from the Capitol Complex,
beginning with September 11, 2001. This has been the best of them, if
such a word can be applied to that race against time and the possible
horror that is involved.
But as my staff and I walked out of the Russell Senate Office
Building's nearest door yesterday afternoon, which is directly across
the street from the Capitol, and hurried down the street away from the
Capitol and the buildings, I saw several Capitol Police officers who
stood directly exposed while they were calmly directing everyone else
to safety. Other officers, I am told, remained once again at their
posts inside or right outside the Capitol Building itself, helping
everyone else to exit as quickly and safely as possible.
Had the plane yesterday been a hijacked jetliner, as it was on 9/11,
it would--if it had not been shot down--have struck its target within 2
minutes of that evacuation alarm. It is questionable whether the
evacuation of everyone in this complex would have been completed by
then. But it is almost certain that the Capitol Police officers--who
were doing their jobs heroically--would have still been at those posts,
or very close to them, at that time. They kept themselves exposed to
mortal danger to help their fellow citizens escape it. To all of them
and to the other Senate staff who were involved, I say a heartfelt
thank you.
It is unfortunate, Mr. President, that exceptional virtue--to place
the best interests of other Americans ahead of one's own--does not
apply to this trade agreement called DR-CAFTA. It is a wolf in sheep's
clothing. It pretends to help American workers and American farmers, to
provide net gains to our domestic economic and employment growth, and
also to benefit the people in six neighboring countries, when, in fact,
its driving motivations are higher corporate profits and capital gains
by shifting American jobs and their production to those nearby
countries to exploit their low wages, scarce benefits, nonexistent
protections for workers, environments, local economies, and lower
transportation distances and costs than in China, India, Vietnam, and
other places, to increase corporate profits and personal wealth at the
expense of other Americans and our national economic health.
This is the era of un-American capitalism, with great riches and no
taxes for the richest Americans and lost jobs, lower incomes, and less
financial security for the rest of Americans.
Those are the facts from a decade of NAFTA, the unfortunate,
unpleasant but actual real-world economic, employment, and trade facts
resulting from 10 years of the North American Free Trade Agreement.
As with DR-CAFTA now, NAFTA's proponents prior to its enactment
peddled lots of wonderful promises and projections: that NAFTA would
create big economic gains for every country and almost everyone in
them; there would be increases in U.S. exports to NAFTA countries that
would exceed the increased imports from them; and that net gain would
increase domestic employment, domestic production, and domestic
prosperity.
They turned out to be, unfortunately, domestic dilutions. The real
net effects from NAFTA have been exactly the opposite of those
promotional fantasies. Over the last 10 years, U.S. imports from Mexico
and Canada have increased by 10 times more than our exports to them,
resulting in huge net losses, estimated to have cost over 900,000
American jobs.
Many of them have been good-paying jobs, benefit-providing, company-
pension-offering and previously secure, reliable, lifetime jobs, the
kind of jobs that create stable, secure, healthy, and prosperous
communities all across America, throughout all of our 50 States--the
jobs that were the economic engines and the social foundations for the
hard-working, productive,
[[Page S7671]]
and successful people who had those jobs for their families, who were--
and still are--themselves the greatness of America.
But those ingredients of America's greatness--those jobs that support
families, provide security, provide health benefits, provide pensions,
allow Americans to earn the American dream--they are being dissipated,
outsourced, traded away for immediate profits and financial gains for a
few, at the expense of many more dislocated workers, destructed
families, damaged communities, destitute seniors, and deficit-plagued
local, State, and Federal governments, with serious trade imbalances
that are increasing private and public debt, and having a weaker
national economy with even more serious consequences ahead.
The proponents of these free-trade agreements--and they are on both
sides of the aisle, and they come from the preceding administrations as
well as this one--remind me of the story of the crew that was blazing a
road in the jungle. After quite a bit of work, the foreman sent
somebody up to survey their progress. He climbed up to the top of the
highest available tree and looked out and said: Stop, stop. We are
going in the wrong direction. The foreman called back: But we can't
stop now, we are making so much progress.
These trade agreements have made progress but in the wrong direction.
The proponents' solution to that predicament is more of the same--yet
another trade agreement with the same bad effects for much of America.
In fact, DR-CAFTA is the worst of NAFTA. It involves countries that
have even lower standards of living than our own. The per capita
income, the average citizen's income, in those six countries range from
one-tenth of the U.S. per capita income to one one-hundredth of our per
capita income.
We are told, by those who want to pass this agreement, that it is
going to create these great export opportunities for our own
industries. But exports require people in those countries who can
afford to buy what Americans produce. There will be a marginal
increase, to be sure, if there is increased employment in those
countries. That is positive. I hope--and we should hope--that any trade
agreement we make will be good for our fellow world citizens.
However, we should make our trade agreements for our own citizens
first and foremost, and not for anyone else's, because every other
country in the world, every government in the world, whether
capitalist, Socialist, or even Communist--if it is rational in its
economic policies--makes trade agreements in its own national self-
interest. And then they try to maximize the benefits to their country
from those agreements. Unfortunately, we have seen other countries'
governments far more effective, even within the scope of these previous
trade agreements, at maximizing to their advantage, and often to our
detriment, what they can gain from the exploitation of those
agreements.
Our trade policy should not be based on free trade or fair trade or
any other kind of policy ideology or economic idolatry, as it has
almost become, but on what is the best policy with the best economic
results for the most Americans. By that measure, what is the broad
public interest--after you take the winners and the losers, which in an
enormous, complex, diverse economy such as our own, almost any trade
agreement is going to have gains and losses--you have to look at the
net effects, what is in the broad public interest, to decide what is
best for America.
The U.S. International Trade Commission--independent of all of us;
tasked by law with developing the expertise to carry out these
agreements and to analyze them and to analyze each of these proposed
agreements in advance of our voting--has already concluded by its
independent, expert analysis that under the DR-CAFTA agreement, as
proposed, the U.S. trade deficit with those six nations will increase
by an estimated $110 million per year.
That is because the increases in their imports into the United States
will be greater than the increases of our exports into those countries.
That is the net balance. That is the bottom line. That is not, as some
people say, one group's interests or another group's interests. That is
America's best combined interest, and it is exactly the opposite of
what proponents have been saying is going to be one of the benefits.
Once again, the facts, based on the International Trade Commission's
projections, but also consistent with the facts as we have seen from 10
years' experience with NAFTA, do not support the Bush administration's
false assurances and the claims of others who will benefit and are
promoting this agreement.
The response, one would hope, from the administration, in light of
that projection by the International Trade Commission that came out
about 6 months ago, would be to negotiate changes in the agreement so
that we would come out as a net winner rather than a loser. But that
has not been their response. It is to increase the advertising,
increase the paid promotions for this proposed agreement by those who
will benefit from it and by, reportedly--and I have heard this directly
from some of those involved in the sugar industry who have been in
direct negotiations with the administration--to threaten those who
oppose the agreement because they perceive, correctly, that it will
have serious negative consequences for their own livelihoods, for their
own families, their friends, their neighbors, threaten them with
reprisals in the future if they persist in their opposition, or to try
to, as we are seeing now, buy them off with some special side deal.
I don't hear anybody on either side of the argument, for or against
CAFTA-DR, who disputes the projections by the experts and the industry
itself that the American sugar industry--sugar beets in northwestern
Minnesota and central Minnesota and neighboring States, sugar cane in
other States--would be seriously and negatively affected.
The extent is perhaps debatable, but the negative effects are
indisputable, if CAFTA-DR is approved. So to tell them that they should
sign off on their own economic death warrant, or they are going to
suffer future reprisals for not doing so is wrong. It is unfair.
The latest approach has been, well, we are going to offer you this
special side deal for a couple years to buy you off. I don't know all
the details. It has just been disclosed. I don't fault my colleague in
the Senate from Minnesota who is purportedly instrumental in that
negotiation. I don't agree. I strongly disagree with the arrangement,
as I understand it. But I fault the administration for insisting that
he or others try to work out such a deal. It is like being handed a
huge lemon and being told to make lemonade. Unfortunately, with this
trade agreement, there is not enough sugar in all of America to sweeten
what is wrong with CAFTA, even for the sugar industry.
The PRESIDING OFFICER. The time of the Senator has expired.
Mr. DAYTON. I ask unanimous consent for 5 more minutes to complete my
remarks.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DAYTON. I thank the Chair.
The proponents want this agreement so much that they are going to
use--one way or another, directly or indirectly--U.S. taxpayer dollars
to subsidize domestic sugar production or to buy off some of the
otherwise imported sugar from these CAFTA countries at taxpayer expense
in order to promote a free-trade agreement. It has the added irony,
bitter irony of using tax dollars from working Americans in some cases
to subsidize an agreement that is going to cost them their jobs. It
underscores how the policy is bad economics, how it is bad trade
policy. But the proponents of it want it so badly, because of its
benefits for those companies that can outsource their jobs, based now
in the United States, and that production to nearby countries, taking
advantage of low wages there, costing American jobs, costing American
communities their businesses and their employment and their social
stability for the benefit of the wealthy few corporate interests who
are bankrolling this effort, and now, in the ultimate bitter
conclusion, taking taxpayer dollars to pay for the political grease to
get this agreement through.
If I really wanted to be Machiavellian in my thinking, I would say
also--as a big proponent of the domestic ethanol industry, which is now
just reaching, because of the world oil price, competitive parity, even
without
[[Page S7672]]
the public tax subsidy for ethanol, of price competitiveness, even a
price advantage in my State of Minnesota with regular gasoline--that by
taking this, as some reports have said, excess sugar production and
providing what will be an effective subsidy of an additional dollar for
a gallon of the ethanol produced from it, distorting the economics, the
competitiveness of ethanol, distorting the supply in the competitively
growing, successful domestic ethanol industry and trying to show how--
in this case, with sugar beets or sugar cane in this country--price
uncompetitive making ethanol is from those products is poisoning the
well, the public support, is going to reinforce those opponents of
ethanol who will then say: Look at how uncompetitive it is and how
outrageous this additional taxpayer subsidy is for the production of
ethanol from it. And in this case they will be right. And they will use
that, I believe, unfortunately, to try to poison the political and
public well of support for ethanol, which is a very important,
promising part of our energy independence and economic future.
This is a bad agreement for America. It is bad for the sugar
industry, and I oppose it for that reason. But even taking sugar aside,
it is bad for the rest of America. It is bad for American workers,
American industry. It is bad, as the International Trade Commission has
concluded, on the basis of the bottom line--the trade imbalance
increased, trade deficit with those countries increased, imports that
will exceed the increase in our exports. That means, net result, it is
bad policy, bad trade for America.
I oppose it. I urge my colleagues to do the same.
I yield the floor.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. DURBIN. Mr. President, I ask unanimous consent that I be allowed
to speak in place of Senator Kerry for 15 minutes, and that the next
speaker after me be a Republican Senator under the time Senator
Grassley was previously granted.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DURBIN. Mr. President, I come to the floor today to announce my
opposition to CAFTA. Some expect Democratic Senators to by and large
oppose trade agreements and Republican Senators to support them. I come
to this debate as a Democratic Senator who has supported trade
agreements in the past. I supported NAFTA, permanent normal trade
relations for China, trade agreements for Chile, Singapore, Morocco,
and Australia. I think globalization is as inevitable as gravity. We
have to accept the fact that America cannot be a rich and prosperous
country by selling to ourselves. Merely doing one another's laundry
will not create wealth and will not improve our standard of living. We
need markets. That is why I have supported trade agreements in the
past.
I also understand that as you expand trade, there is pain and there
is gain. We have seen it happen throughout the history of the world
that as trade expands, some industries expand with it and others
decline. When we Americans look at the course of history, we find
strong evidence that joining together democracy and free markets is a
winning combination. Expanding trade goes hand in hand with pushing the
concepts of freedom, ingenuity, innovation, efficiency--all sorts of
respect for people at every level. That is one of the reasons I have
supported some trade agreements in the past. That is the very reason I
oppose CAFTA.
I am disappointed. If there is one casualty in CAFTA, that casualty
would be the worker--not just the American worker but the workers in
Central America. We know what is happening. We have seen over the past
4 years that America has lost one out of every six manufacturing jobs
in the last 4 years and few months. It hit my State pretty hard.
Several hundred thousand manufacturing jobs in Illinois are gone, never
to return. It is happening across America. The trade policy we have
today is exporting jobs. How long can this continue?
We would like to believe that we are going to educate and train a new
group of American workers for the 21st century economy. We have to. But
in the meantime, should we be entering into trade agreements that
encourage the export of good-paying manufacturing jobs from the United
States? Should we, instead, be saying that we are going to have trade
agreements that make certain we aren't playing to the lowest level? If
we have to compete with the countries that pay the lowest wages in the
world, we will always lose.
What are we going to say to American workers? Compete at a wage level
the same as another country? If you do that, you know what is going to
happen to the standard of living. How can you provide for your family?
How can you expect to have health insurance? How can you put any money
away for your retirement, when you play to that level? That is what
this trade agreement does.
Let me tell you two specifics. Senator Ron Wyden of the State of
Oregon offered an amendment to this CAFTA agreement which said: If
American workers in the service industries lose their jobs because of
our decision to enact this trade agreement, we will help retrain them,
give them new skills and education so they can go back to work.
Displaced workers from service industries would have a fighting chance
to get back on their feet and be able to compete. The amendment was
rejected by the Bush administration, leaving these workers, who are the
victims of CAFTA, high and dry. But there are other workers at stake
here, too. I don't think it is unreasonable for us to ask, when a
country says they want to trade with us, How do you treat your workers?
Do you treat them with dignity? Do you give them a chance to bargain
collectively for their future? Do you allow child labor? Do you allow
slave labor? Why in the world would we want to get into a trade
agreement with a country that is exporting goods to the United States
because they exploit the very people who live in their country?
The language in CAFTA is the weakest language I have ever seen in a
trade agreement. It basically says to the Central American countries:
Just play by your own rules, whatever they happen to be.
That is not enough. It isn't as if we don't know what is coming. Our
U.S. Department of Labor, under the Bush administration, ordered a
study of the labor laws in the Central American countries that we are
entering into this agreement with. That study came out and made the
following report:
In practice, labor laws on the books in Central America are
not sufficient to deter employers from violations, as actual
sanctions for violations of the law are weak or nonexistent.
What does that mean? It means that if you hire children to make
textile goods or whatever it happens to be, if you exploit these little
kids in one of these countries, if you work people enormous hours
without adequate compensation, if you stop them from organizing and
bargaining collectively, the laws in Central America are not going to
be there to protect those workers. Ordinarily we say: Life is different
in other parts of the world. We shouldn't worry about it. These are the
very workers who will make the products who will compete with America.
That is what it comes down to. Are we going to continue to play to the
lowest common denominator, that as long as businesses are profitable in
their trade agreements, we don't want to know the details? That is what
this trade agreement does.
Under this administration, workers are expendable. They are
expendable in the United States, and they are expendable in the
countries that we are entering into agreements with.
That is a sad reality.
I know that there are going to be changes, and we have to accept
economic change. But wouldn't we want to stand by American workers
first and their families? We have done it in some other agreements--the
Caribbean Basin Initiative and the Generalized System of Preferences.
This agreement is one of the weakest I have ever seen when it comes to
the rights of working people. In those countries in Central America, it
is not uncommon to face blacklisting, violence, even assassination of
union organizers. It goes largely unpunished. This agreement would not
move us one step toward more civilized treatment of workers in those
countries.
If we truly care about the basic protections that are supposed to be
behind a free-market economy and democracy, we ought to protect
American workers
[[Page S7673]]
first, not rush to the bottom when it comes to labor standards. We
ought to enter into trade agreements where parties are not free to
ignore labor standards and basic human rights. That is what is at
stake.
Since this President took office, we have lost 2.8 million
manufacturing jobs--1 out of 6--and 140,000 in my home State in the
last 4\1/2\ years. It is a tragic, dismal, and shameful record of
American workers losing their opportunities. And this trade agreement,
sadly, will only make it worse.
Let me tell you about the group that, frankly, will prosper the most
from this agreement. It will come as no surprise to you if you
understand the political dynamics of Capitol Hill.
Mr. President, how much time do I have remaining?
The PRESIDING OFFICER. The Senator has 7\1/2\ minutes remaining.
Mr. DURBIN. Please advise me when I have 2 minutes.
One of the special interest groups with more power in Washington than
any others is the pharmaceutical industry. We have seen it time and
time again. When we go into a bill for Medicare prescription drug
benefits, we say: Would you not want Medicare to bargain with the drug
companies so seniors across America would pay lower prices? No way. It
was kept out of the bill so that the pharmaceutical and drug companies
can charge exorbitantly high prices to American citizens. That is why
people are going to Canada, Mexico, and Europe trying to find cheaper
drugs. It is because their Governments care, they force competition,
they keep prices down. Not our Government. Along comes a trade
agreement. What could that have to do with the pharmaceutical companies
and drug companies? There are roughly 165,000 people in the Central
American nations living with HIV/AIDS. These are low-income countries
where the people are struggling to survive and medicine is barely
affordable.
Doctors Without Borders--you may have heard of this fabulous
organization based out of France, doing wonderful work all around the
world. They provide drugs to HIV patients, and 1,600 in Guatemala
alone. They rely on generic drugs because they cannot afford the most
expensive drugs. They cost less than brand-named drugs. They can keep a
person alive with HIV/AIDS in Guatemala for $216 a year. If they had to
pay for the brand name, it would be $4,818. That is the difference--
more than 20 times the cost.
I know these patents to drug companies are important. They help to
spur innovation by rewarding companies for investing. We need a careful
balance where we allow generic drugs in these Central American
countries and not abuse the patents of the drug companies
unnecessarily. At the global level, there has been an active debate
about this very issue. We have had agreements that have been entered
into. These agreements try to strike a careful balance between allowing
more inexpensive drugs in the poor countries and still protect the
patents.
Sadly, this CAFTA agreement destroys the balance that has been
entered into in previous agreements. This CAFTA trade agreement
requires CAFTA countries to adopt provisions, such as keeping testing
data for drugs secret for longer periods of time than even required in
the United States of America. And without access to testing data, it
becomes nearly impossible for new generic companies to break into the
market and provide the drugs for these people in Central America, and
some, of course, in our region.
CAFTA will require countries to extend the lives of patents, under
certain circumstances, for even longer periods of time than is
permitted under U.S. law. This is a bonanza for pharmaceutical
companies. They will make more money out of this agreement because we
put their special interest provisions into this trade understanding.
These provisions will apply to new drugs as they are developed, not
existing generics.
The long delays that CAFTA will impose means patients will have to
wait even longer to get access to lifesaving treatment. I think when
you look at this and you understand workers are losing, you have to
understand as well that a lot of sick people with HIV/AIDS are going to
lose, too. People are struggling to survive, and they will fall victim
to the profit margins of American pharmaceutical companies. Those are
the priorities--the priorities of CAFTA.
Why aren't the American workers the priority of CAFTA? Why aren't the
workers of Central America the priorities of CAFTA? Why is America's
record of humanitarian care when it comes to using these drugs all
around the world--why isn't that the priority?
Let me speak about agriculture. I come from a strong agricultural
State. I have promoted or stood behind many trade agreements in the
past because it helped create agricultural markets. But CAFTA
countries, Central American countries, have a combined population of
about 31 million people who generally have limited incomes with which
to purchase agricultural products. The market is worth about $1.6
billion in annual agricultural exports. That is a large sum, but in the
perspective of all of the exports we have, it is not overwhelming. Many
key U.S. commodities already have open access to the Central American
market. About 94 percent of all grains imported into the six CAFTA
countries comes from the United States. This domination means there is
little room for further upward growth when it comes to agriculture. So
I think when we look at this, we have to ask a more important question:
Think about the Central American country for a moment. Think about a
subsistence farmer living in the countryside of one of these Central
American countries who is growing grain.
Assume it is corn for the moment. Think about the possibility that
this trade agreement means that more and cheaper corn will come in from
the United States to this Central American country. Think what happens
to that poor farmer and his family if he can no longer eke out a living
for himself and his family and sell enough to continue on, and he has
to leave his farm--and it happens all the time--because of this
agreement. Where does that peasant farmer go? His first stop is likely
to be a large city in Central America, San Jose in Costa Rica, or some
other city. Failing to find a job in that city, where is his next stop?
El Norte, the United States.
So as we assault the economies of Central America, without respect
for their workers, without respect for their farmers, we create
economic instability which moves families into cities first, and
finally, in desperation, to anyplace they can go to find any job to
survive. Now, there may be large companies that will make great profits
out of CAFTA. But, sadly, they are not taking into consideration what
it is going to mean to workers and to a lot of smaller companies in the
United States that will not survive this trade agreement.
If there was ever a time in our history when we should step back, as
we face the largest trade deficit in the United States, as we see
countries such as China around the world exploiting us because they are
buying our debt--the largest national deficit in the history of the
United States under the Bush administration--and understand that China
and these countries will continue to exploit us on the trade side--
China manipulates its currency, and we don't do anything about it. We
don't even talk about it. Because of that manipulation, they take away
American jobs.
This Senator has voted for trade agreements in the past. I will not
vote for this one. If we are going to have trade agreements, there
should be laws enforced on both sides, exporters and importers. Sadly,
that has not been the case. This CAFTA agreement will hurt American
workers, hurt the workers of Central America, be a bonanza for American
pharmaceutical companies, and create instability in the United States.
It could not come at a worse time. I look forward to voting against
it.
Mr. HATCH. Mr. President, I ask unanimous consent that the next
Senator to be recognized be Senator Cornyn for 10 minutes from our
time, and then Senator Kerry for 15 minutes from Senator Baucus's time,
and then Senator Vitter for 10 minutes from Senator Grassley's time.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Texas is recognized.
Mr. CORNYN. Mr. President, I rise today to lend my voice and my
support
[[Page S7674]]
for the Dominican Republic-Central America-United States Free Trade
Agreement. CAFTA would be a great benefit to the United States and all
countries involved. Momentum continues to build for this important
accord which will, notwithstanding what some have said on the floor
today, actually grow jobs in the United States and grow jobs in Central
America. It will boost opportunities for exporters in the United States
and provide additional market access for our products in Central
America. Congress should pass this important agreement for the good of
both our economy and our national security, as well as those of our
neighbors.
Economic growth brought about by free trade and free markets creates
new jobs and raises income. This growth lifts people out of poverty,
even as it spurs positive economic development. Free trade supports
sustainable development and strengthens private property rights while
encouraging competition, transparency, regional integration, and the
open flow of technology. And a strong world economy based upon free
trade and transparency advances not only the prosperity of nations but
the cause of peace and liberty around the world.
A vibrant, free market that values innovation and competition is one
of the vital components of American success. For consumers here in the
United States and the DR-CAFTA countries--Costa Rica, the Dominican
Republic, El Salvador, Guatemala, Honduras, and Nicaragua--free-trade
will provide real and tangible benefits. It will demonstrate our
commitment to the economic prosperity of that region, and it will also
encourage the spread of democracy, transparency, and respect for the
rule of law.
DR-CAFTA countries are our 12th largest export market, with nearly 44
million consumers. Currently, nearly 80 percent of products from these
countries enter the U.S. duty-free, but the average tariff on our goods
is between 7 and 9 percent. DR-CAFTA would eliminate this imbalance and
provide instead for reciprocal trade between all parties to the
agreement--this means the playing field would be leveled for American
exporters.
The benefits of this agreement are clear: When CAFTA is implemented,
80 percent of U.S. products will enter DR-CAFTA countries duty-free,
with the remaining 20 percent being phased in over 10 years. Currently,
the average tariff imposed on U.S. exports to Central America is
between 7 and 9 percent--and some farm products being taxed as much as
16 percent.
Key U.S. export sectors stand to significantly benefit from the
agreement, including medical and scientific equipment, information
technology products, construction equipment, and paper products.
As well, agriculture exports will be allowed to expand: More than
half of current U.S. farm exports to Central America will become duty
free immediately, including cotton, wheat, soybeans, fruits and
vegetables, high-quality cuts of beef, processed food products, and
wine. It is estimated that U.S. agriculture producers will increase
their exports by $900 million as a result of the DR-CAFTA agreement.
Finally, after tariff liberalization has been fully implemented, and
all economic adjustments have occurred, overall U.S. welfare is likely
to increase in the range of $135.31 million to $248.17 million. As
well, the U.S. International Trade Commission has found that the effect
of the agreement would be to reduce the overall U.S. trade deficit by
$756 million.
Furthermore, over half of current U.S. farm exports to Central
America will become duty-free immediately, and other U.S. exports, such
as information technology products, agricultural and construction
equipment, paper products, chemicals, and medical and scientific
equipment will immediately gain duty-free access.
Workers in Central America and the Dominican Republic support the
agreement. They recognize that it will help create more and better
paying jobs. This in turn will help fight poverty, lifting these
workers out of circumstances where they currently survive on only a few
dollars a day. Enhanced opportunities for economic growth will provide
these governments with additional resources for much-needed health
care, education, and basic infrastructure.
By working to alleviate poverty in Central America, we increase the
likelihood that would-be immigrants would instead choose to stay and
work in their own countries. We have seen the flow of immigrants who
flock across our borders--they come here to work hard so they can send
money home to support their families and relatives. They may be well-
intentioned, but these hard workers are doing little to help the
economy of Central Amerixa.
The young democracies of Central America still face resistance from
those opposed to the spread of democracy and economic freedom. In
supporting DR-CAFTA, the United States will stand alongside those who
support these ideals--those who believe in the rule of law, and will
demonstrate that America does not merely view Central America as a
trading partner, but that we intend to support the continued democratic
development of our neighbors.
Congress should promptly pass DR-CAFTA, as agreements that remove
unnecessary barriers to free markets are good for America, and it is in
our economic and national security interests to support a prosperous
Central America. DR-CAFTA will encourage economic prosperity,
stability, transparency, and respect for the rule of law throughout the
region. I ask that my colleagues join me in supporting this important
agreement.
Mr. President, let me focus, in the time I have remaining, on
immigration. I heard the Senator from Illinois claim that if we pass
CAFTA, it will somehow displace Central American workers and they will
be caused to immigrate--illegally, perhaps--to the United States. I
could not disagree with him more.
About a year ago, I traveled to Central America to five of the
countries involved in this agreement, and in each and every one of
those Central American countries we were told that their new
democracies' future depends on ratification of these free-trade
agreements. To a man, the leaders of those countries asked us to do
everything we can to see that this free-trade agreement passes.
While certainly we want to be a friendly neighbor if we can, I would
not support this agreement if it weren't in the best interests of the
United States on a number of bases. There is one conversation I
remember in particular that relates to the comments we just heard from
the Senator from Illinois about immigration. In Guatemala, at the
Ambassador's residence, a gentleman told me, ``We want to export goods
and services, not people.''
Mr. President, that stuck with me because what he was saying is that
by our ratifying CAFTA, we create jobs and opportunities for the people
of Central America where they live, so they don't have to come to the
United States--illegally or otherwise--to be able to support their
families. That is one of the reasons I am so strongly for this
agreement.
I am also for this agreement because these new democracies, many of
which were engaged in civil war not that many years ago--and countries
such as Nicaragua, where Daniel Ortega is hoping and praying that we
will somehow turn our back on that country and these other new
democracies--there are literally people waiting to take advantage of
America if we turn our back on these countries, and to claim that
instead we should align our interests with people like Fidel Castro,
Daniel Ortega, and others.
It is in our best interest to make sure that these new and fragile
democracies flourish, that people who live there can also find work
there and support their families. The irony is that we hear people
argue that unless we have stronger labor provisions or environmental
provisions for these agreements--this agreement in Central America--
that we somehow should not pass it. The fact is, there are strong labor
provisions and environmental provisions in this agreement. But do you
know what. The best guarantee for a good environment is democracy. The
best guarantee for good labor laws and the rule of law in these
countries is democracy.
If we turn our backs on Central America and these countries in this
free-trade agreement, critics and enemies of this country will point to
us and our actions and our rejection of this agreement and claim
victory and say that America was not serious about
[[Page S7675]]
helping; America does not care about anyone but itself, when in fact
the opposite is true.
We know, further, that the avenues used for illegal immigration up
from South America, Central America, through Mexico's southern border,
through seaports, and in the air are being used by organized criminals
who smuggle human beings, who traffic in persons, who smuggle weapons,
and who smuggle illegal narcotics. In other words, they are organized
criminals who care only about making money, and they don't care one
whit about the human suffering that they cause.
It is simply in America's self-interest that we enter into this
agreement which provides new markets for our producers in this country.
It opens our markets further to those fragile democracies and market
economies in Central America. It gives democracy a root in a way that
cements our interest and reinforces our national interest, not only in
this country, but in this hemisphere in Central and South America, an
area that could sorely use the attention after what has been called a
period of benign neglect.
I urge my colleagues to vote with me in promptly passing CAFTA as
agreements that remove unnecessary barriers to free markets which is in
the economic and national security interest of the United States and a
prosperous Central America.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Utah.
Mr. HATCH. Mr. President, I ask unanimous consent that Mr. Vitter be
recognized for his 10 minutes, and then we will go immediately to the
distinguished Senator from Massachusetts, Mr. Kerry.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Louisiana is recognized for 10 minutes.
Mr. VITTER. Mr. President, I rise today in opposition to S. 1307, the
bill to implement the Dominican Republic-Central America Free Trade
Agreement. I do it for one very clear and specific reason. CAFTA will
greatly harm Louisiana's sugarcane industry. It is, quite frankly, a
raw deal for Louisiana sugar.
Because of the great disruption in our domestic sugar market that
this agreement would cause, I have been actively opposing this
agreement since it was signed. This agreement would allow an additional
122,000 tons of imported sugar into the United States in its first year
alone, with annual increases following. These steady increases in
imports threaten to flood the U.S. market and truly devastate the
Louisiana sugarcane industry, as domestic sugar is displaced by highly
subsidized foreign imports.
Our current sugar program is designed to limit imports to help
counter unfair trade actions, and these limits help mitigate the ill
effects of dumping by other nations. Unlike programs for many other
foreign commodities, it should be noted that this U.S. sugar program
provides no cash payments and operates at no cost to the U.S. taxpayers
through cash payments as mandated by the farm bill.
Even with that existing program in import controls, the U.S. still
stands as the fourth largest net sugar importer in the world, importing
15 percent of our sugar consumption every year. Allowing more imports
from select CAFTA trading partners truly brings a potential flood to
the market, displacing even more domestic sugar. CAFTA really could set
the stage for future bilateral agreements focused on the largest sugar-
producing nations, and these impacts are compounded with other pending
changes, such as the NAFTA-mandated change that will allow Mexican
sugar complete unfettered access to U.S. markets after 2008.
When the Jesuit priests introduced sugarcane to Louisiana in the
1750s, I guess they could not have imagined that sugar would
essentially be a $2 billion industry and, much more importantly, even a
vital part of Louisiana's history and way of life for over 250 years.
It is this economic and even cultural impact and the thousands of
families who rely on sugarcane for their livelihood and their way of
life which lies behind my decision to oppose CAFTA.
The Louisiana Farm Bureau estimates CAFTA would have caused an $8.5
million reduction in Louisiana's agricultural sector, and sugarcane
constitutes one of the foundations of this important sector of
Louisiana's overall economy.
Louisiana is home to 27,000 sugar industry jobs, 15 sugar mills, 2
sugar refineries, and more than 580,000 acres of sugarcane throughout
24 parishes. All told, Louisiana alone produces 20 percent of all of
our domestic sugar.
As I said, this represents an enormous economic impact. But even more
importantly, it truly represents a culture and a valued way of life.
The administration made a last-ditch, three-part proposal to the
sugar industry to mitigate CAFTA's impact, but I truly believe that it
is untenable.
First, they committed to hold harmless the sugar program but only
through the reauthorization of the 2002 farm bill. This is something
modest, something I could and will support, but it is my understanding
that it is already the responsibility of the Secretary of Agriculture,
under this farm bill, to operate the program at no net cost and its
import trigger.
I know that sugarcane farmers in my State appreciate the Secretary's
commitment to provide this short-term relief from a flood of sugar
import commitments, but this temporary protection will not help them
avoid the flood in the medium and long term. We, in Louisiana, know a
lot about hurricanes and floods, and I fear that in the past 2 years,
our sugar industries have drowned in this flood of foreign imports.
The second component of the proposed deal from the administration is
perhaps the most problematic. If imports threaten to exceed the 1.523-
million-ton trigger in the farm bill, the Agriculture Department would
commit to compensating foreign producers for not selling their sugar
within our market. U.S. tax dollars are going to compensate foreign
producers. USDA would also establish a pilot program to divert imported
sugar into ethanol use up to the amount coming in under CAFTA.
The prospect of paying foreign producers is very troublesome, perhaps
politically untenable. Regardless of the Secretary's statement that he
has the authority to implement such a program, there are so many
unanswered questions on how it would work and if it would
be politically supportable. Do we really want to make cash payments to
foreign governments or private foreign corporations in exchange for a
commitment not to export sugar to our market? I don't think so. This
proposal is expected to cost $200 million a year.
Sending our tax dollars to our foreign competition I think is an
untenable position for a variety of budgetary, policy, and political
reasons, making this long-term proposed solution untenable.
The ethanol diversion program has its own uncertainties on how it
will work, and it seems to signal a desire to purchase foreign sugar
for possible ethanol use instead of assisting the domestic industry in
developing new markets for our own production and likely spend
significant more of the taxpayers' dollars on those foreign sources in
the process.
Third, there has been a proposal for a feasibility study on
converting sugar into ethanol to be submitted to Congress no later than
July 1, 2006. We already know sugar can be turned into ethanol because
they are doing just that in other countries.
Worldwide, more ethanol is produced from sucrose than from corn, and
we now need to jump start our own efforts and truly implement a program
to provide sugar access to the national renewable fuels program.
The Energy bill we passed this week provides for 8 billion gallons
per year of renewable fuels, most of which will be ethanol. The new
renewable fuels program would amount to more than quadruple the ethanol
currently being consumed in the U.S. So there is plenty of room to
accommodate diverse sources of ethanol, including a modest room for
sugar.
Access to ethanol was the crux of the sugar industry's proposal to
deal with CAFTA--not a study, but real access to that established
program moving forward in the Energy bill. They asked for a short-term
increase in the tax credit during the developmental phase of this
program, something that I understand was done for the beginning of the
program for corn.
With so much uncertainty facing the industry because of NAFTA, CAFTA,
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and other trade negotiations already in progress, I think this was a
fair ask from the industry, from an efficient domestic industry that
has been a robust engine for jobs in our economy for over 2 centuries.
I wish the administration could have accepted that full and robust
proposal in terms of ethanol.
Our sugar farmers and processors work hard and deserve a level
playing field. What I have been asking, what others have been asking is
not simply protectionism for our domestic industry as far as the eye
can see, but a level playing field dealing with this sugar issue on a
global WTO basis so it can be dealt with fairly so our domestic sugar
industry has at least a chance. That is exactly what I will continue to
fight for. That is precisely why I will continue to fight against CAFTA
and urge its defeat in this body and in the House.
In closing, I wish to take this opportunity to thank Chairman
Chambliss and Senator Coleman for their efforts to find a solution to
the sugar issue within CAFTA. They have been leading a bicameral
effort, working diligently. It did not yield the results I hoped, but I
salute them for their efforts.
Unfortunately, as I said, those efforts did not prevail. That is why
I strongly oppose CAFTA and why I ask my colleagues to do so, and
specifically my colleagues in the House as this measure most probably
moves there.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. FEINGOLD. Mr. President, I ask unanimous consent that I be able
to speak instead of Senator Kerry under the previous order, to be
followed by Senator Lautenberg for 10 minutes under the time controlled
by Senator Dorgan, to be followed by a Republican Senator to speak
under the time of Senator Grassley.
The PRESIDING OFFICER. Is there objection?
Mr. VOINOVICH. I object.
The PRESIDING OFFICER. Objection is heard.
Mr. FEINGOLD. Mr. President, I ask unanimous consent that I be able
to speak instead of Senator Kerry under the previous order for up to 20
minutes.
The PRESIDING OFFICER. Is there objection to the second unanimous
consent request that the Senator from Wisconsin be able to fill the
time of Senator Kerry for 20 minutes instead of 15 minutes? The Senator
from Utah.
Mr. HATCH. Mr. President, I ask unanimous consent that the
distinguished Senator from Wisconsin on the Democratic side be the next
speaker for 20 minutes, that he be followed by Senator Lautenberg for
10 minutes, and then Senator Voinovich will immediately follow Senator
Lautenberg for at least 20 minutes.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from Wisconsin.
Mr. FEINGOLD. Mr. President, I rise to oppose the Central American
Free Trade Agreement, known as CAFTA, the latest expression of the
disastrous trade policies of this administration which are,
unfortunately, a continuation of the disastrous trade policies of
previous administrations.
I hold listening sessions in each of Wisconsin's 72 counties every
year. I have held those listening sessions for over 12 years now,
listening to tens of thousands of people from all over Wisconsin. I
recently completed my 900th of those sessions, and I can say that there
is nearly universal frustration and anger with the trade policies we
have pursued since the late 1980s. Even among those who would have
called themselves traditional free-traders, it is increasingly obvious
that the so-called NAFTA model of trade has been a tragic failure.
I voted against NAFTA, GATT, and permanent most-favored-nation status
for China, in great part because I felt they were bad deals for
Wisconsin businesses and Wisconsin workers. At the time I voted against
those agreements, I thought they would result in lost jobs for my
State.
Even as an opponent of those trade agreements, I had no idea just how
bad things would be.
And things could hardly be worse. One can see the results of those
policies in hundreds of communities around my State. As one might
expect, our largest communities--places like Milwaukee, Madison, and
Green Bay--lost thousands of jobs as a result of those trade policies,
most notably NAFTA and permanent most-favored-nation status for China.
But less obvious to some may be the devastation experienced by smaller
towns and cities across my State. In those communities, the legacy of
our trade policy has been especially cruel.
Even if we only use the extremely conservative statistics collected
by the Department of Labor, statistics which many argue grossly
understate actual job loss, smaller communities all over Wisconsin have
been the victim of the trade policies of the past decade.
NAFTA's legacy of lost jobs includes places such as: Baraboo, with
190 lost jobs; DeForest, with 40 lost jobs; Elkhorn, with 354 lost
jobs; Hawkins, with 443 lost jobs; Marinette, with 54 lost jobs;
Mauston, with 48 lost jobs; Merrill, with 263 lost jobs; Montello, with
70 lost jobs; Oconto Falls, with 100 lost jobs; Peshtigo, with 95 lost
jobs; Platteville, with 588 lost jobs; Spencer, with 23 lost jobs; and
Waupaca, with 130 lost jobs.
Some might suggest that 23 lost jobs in Spencer, WI are not all that
many but when a small town loses a business, and the dozens or possibly
hundreds of jobs that business provides, the impact surges throughout
the entire community. Families are left without a breadwinner, or
sometimes even two breadwinners. Stores are left without customers. New
homes are not built. Families may be forced to move away. Schools lose
children. The tax base drops, putting an increased burden on those who
remain.
When a bad trade deal results in lost jobs, it is not only those who
lost a job who suffer.
And the suffering in Wisconsin has been considerable. Altogether,
Wisconsin has a net loss of more than 23,000 jobs because of NAFTA, and
thousands more because of the other trade agreements into which we have
entered in recent years.
Now we have CAFTA, which is based on that same failed model of trade.
I should note at this point that in too many instances, these trade
agreements have been lose-lose trade agreements. They have been bad
deals for our workers as well as the workers of our trading partners.
This is a vital point, because many who are advocating CAFTA argue
that the agreement is critical for promoting economic growth and
reducing poverty in these Central American nations. In fact, the
experience of the flawed trade model has been just the opposite.
Eleven years of NAFTA have lowered living standards in Mexico, both
for urban workers and in rural areas. Professor Riordan Roett of Johns
Hopkins wrote on this very issue in a recent column, and this is what
he had to say:
Mexican workers under NAFTA lost precipitously through the
1990s, despite the extravagant promises made by proponents of
the model on which CAFTA is based.
At least 1.5 million Mexican farmers have lost their
livelihoods under NAFTA. According to a 2004 report by the
Carnegie Endowment for International Peace, ``Agricultural
trade liberalization linked to NAFTA is the single most
significant factor in the loss of agricultural jobs in
Mexico. `` Thus far, limited employment growth in Mexico's
manufacturing sector has failed to absorb displaced rural
workers.
This does not bode well for the CAFTA countries. A 2004
U.S. International Trade Commission study on the potential
impacts of CAFTA leads one to conclude that the agreement
will displace many in the rural sector in Central America.
Following a recent visit to Guatemala, United Nations Special
Raporteur for Food Jean Ziegler determined that CAFTA will
increase hunger and poverty once the agreement fully kicks
in. . . . one is left to wonder where the displaced rural
population of Central America will find employment.
If the arguments made by the proponents of CAFTA sound familiar, it
is because they are. CAFTA's advocates are making exactly the same
arguments today that the proponents of NAFTA made a little over 10
years ago. Because our markets are already largely open, they argue, it
will be American businesses and American workers who will benefit from
this trade agreement.
It is an argument that sounds neat and simple, but let's compare the
rhetoric to the record. In 1993, before NAFTA was implemented, our
trade deficit with Canada and Mexico was $9 billion. In 2004, 10 years
after NAFTA was implemented, our trade deficit with those two countries
has ballooned 1,200 percent--1,200 percent--to $111 billion. By one
estimate, the massive
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growth of imports into this country from Canada and Mexico relative to
exports to those two countries has displaced almost one million jobs.
Giving China permanent most-favored-nation trading status and
ratifying the creation of the World Trade Organization have only made
matters worse. Our trade deficit is now more than $600 billion.
Far from improving our trade balance, NAFTA and these other trade
agreements have only made matters worse.
Our trade policy is fundamentally flawed. This is not a new problem,
nor is it the fault of only one political party. The leadership of both
parties have pushed these deeply flawed agreements, and too many
Members from both parties were ready to support them without scrutiny.
When questions were raised about the actual provisions of these
flawed agreements, supporters were quick to play the free trade card
and label those who questioned these policies as ``protectionist.''
It is somewhat encouraging that some who blindly accepted these
agreements are now beginning to read the fine print.
One might think it obvious, but apparently it needs to be reiterated,
these are not your father's trade agreements, and the elegant theories
of Adam Smith and others do not apply to the agreements we are asked to
approve. As Thea Lee wrote in a recent column in the Wall Street
Journal:
We should all understand by now that modern (post-NAFTA)
free-trade agreements are not just about lowering tariffs.
They are about changing the conditions attached to trade
liberalization, in ways that benefit some players and hurt
others. These are not your textbook free-trade deals. These
are finely orchestrated special-interest deals that boost the
profits and power of multinational corporations, leaving
workers, family farmers, many small businesses, and the
environment more vulnerable than ever.
Millions of working families across Wisconsin know this.
I sometimes think that if instead of exporting manufacturing goods
China exported editorial writers, the opinion pages of our newspapers
might reflect an understanding of this as well.
The argument we hear is that trade deals like CAFTA may cause some
short-term pain but they are ultimately good for all countries
concerned. Maybe we lose a few jobs to Mexico or China, the argument
goes, but we would also gain jobs. Each country would engage in the
economic activity for which it has a so-called ``comparative
advantage'' and everyone wins.
But this nice, neat academic theory bears little relation to what is
actually happening in the real world. And one of the reasons for this
disconnect is that in an arena that has been fundamentally changed by
technical advances, such as the Internet and the rapid flow of capital,
we are not playing by the same rules as our trading partners.
The trade agreements into which our country has entered in recent
years too often lack even the most reasonable of standards to prevent a
race to the bottom, and ensure that our businesses and workers can
compete on a level playing field.
This is certainly the case with CAFTA, which fails to include
meaningful labor standards, and the weak standards that it does include
are effectively unenforceable.
CAFTA states that member countries cannot, for their own benefit,
fail to enforce their labor laws. But the agreement also states that
nothing in the agreement ``shall be construed to empower a Party's
authorities to undertake labor law enforcement activities in the
territory of another Party.'' Thus, any protections that might be
afforded by the requirement to enforce current labor laws are left to
each government to self-enforce. This really does nothing.
Unlike the commercial provisions in CAFTA, the labor provisions
cannot be enforced through binding dispute settlement, or trade
sanctions. If a country violates its commercial obligations, sanctions
can be imposed quickly, but a violation of workers' rights is only
subject to a possible fine.
In the unlikely event that a country is forced to pay a fine, it pays
that fine to itself. While the fine is supposed to be used to fund
domestic labor initiatives, we all know that such revenues are
fungible, and there is no way to prevent a violating country from also
transferring money out of its labor budget, so the fine adds no new net
resources for enforcement. This is not an academic concern. Studies
have documented serious labor violations in Central American countries.
American businesses and American workers should not have to compete
with countries with such flawed labor records.
CAFTA also fails to include adequate environmental safeguards. What
environmental provisions there are in CAFTA are largely cosmetic in
nature.
As with worker standards, the environmental standards that are in the
agreement lack the kind of enforcement teeth provided to commercial
provisions in the agreement.
For example, while the agreement includes the establishment of a
process under which citizens can identify failures to enforce
environmental laws effectively, advocates note that the proposed
citizen process has no clear enforcement mechanism to ensure action on
public complaints. By contrast, the enforcement mechanisms for
investment related provisions are real. Investors can demand monetary
compensation of governments under CAFTA's investment rules.
In fact, any hope that CAFTA countries might, on their own,
strengthen environmental standards to make the playing field a bit more
level is undermined by the investment rules included in the trade
agreement.
Those rules allow foreign investors to challenge environmental laws
and regulations in front of international trade panels, circumventing
local courts. Moreover, the threat of having to pay investor interests
heavy monetary damages if a challenge is successful is certain to have
a chilling effect on the willingness of CAFTA government, both federal
and local, to establish the kinds of environmental protections that
might help that region and provide better balance for American firms
that must live under our own strong environmental laws.
Among the rosiest of predictions made by the proponents of CAFTA are
the positive impacts they claim for U.S. agricultural sectors. But our
experience with NAFTA again leaves me deeply skeptical of such claims.
The promises made to farmers that we heard over the early 1990s, have
largely failed to materialize.
But even setting aside for the moment the failure of NAFTA to deliver
on those promises, even if we accept the most optimistic of projections
by CAFTA's proponents, there is no scenario under which this helps
small family farmers in Wisconsin or the Nation. The American market
dwarfs the CAFTA market, so any benefits will be miniscule and
concentrated in the middlemen and large agribusinesses.
I am afraid to say that is the up side. The down side is that CAFTA
sets up an unfair playing field that could put our farmers at a long-
term competitive disadvantage.
As my visits with Wisconsin farmers have shown me, American farmers
are not afraid of competition and I would not hesitate to put them up
against any other farmers across the world on an equal footing. The
problem is that CAFTA does not provide this fairness. Instead,
Wisconsin and the rest of America's farmers are required to meet
environmental and labor standards to both keep the water, air and land
clean and at the same time pay their employees a living wage.
As I have noted, CAFTA does not require the same standards in other
countries.
Our farmers can attest that our environmental and labor standards are
very real and enforced. CAFTA does nothing to level the field on which
our farmers will be asked to compete, and that tilted playing field
apparently extends even beyond CAFTA countries.
For example, ethanol production has long been considered an
opportunity for American farmers to reap greater and consistent income
from their crops, while helping to reduce our dependence on foreign
fuel. But under CAFTA, Central American countries could become a
conduit for cheap ethanol exports to the United States, importing
unlimited amounts of ethanol tariff free even if they were blended with
50 percent ethanol from non-CAFTA countries like Brazil.
Perhaps most concerning to me is that while CAFTA would put American
[[Page S7678]]
farmers at a competitive disadvantage with the relatively small CAFTA
market, its impact could be far greater. CAFTA will likely be used. as
the blueprint for the much larger Free Trade Agreement of the Americas.
If this retreat from the principle of fair trade is repeated there, the
negative effects could be dramatic and felt throughout U.S.
agriculture.
Wisconsin has paid a heavy price for CAFTA's predecessors. Since
2000, Wisconsin has lost nearly 92,000 manufacturing jobs. NAFTA, the
GATT, and most-favored-nation treatment for China have devastated local
businesses and punished working families, taking away family-supporting
jobs, and offering lower-paying jobs, if any, in return.
When the impact of these agreements comes crashing down on people's
lives, it is clear that we have already traded away too much in a
series of bad deals.
CAFTA promises more of the same devastation brought by the agreements
that have come before it, putting our businesses, workers and farmers
at a competitive disadvantage, while also undermining the economic
development that might benefit workers, farmers and small businesses in
Central America.
This trade agreement fails on every count. I urge my colleagues to
scrap it and tell the administration to come back with a deal that is
fair to American businesses, workers and farmers, as well as the small
businesses, workers and farmers of our trading partners.
I yield the floor.
Mr. BAUCUS. Mr. President, under the order the Senator from New
Jersey is recognized next for 10 minutes. I ask unanimous consent he be
given an additional 5 minutes, total of 15, and the time to be taken
out of the time allocated to Senator Dorgan.
The PRESIDING OFFICER. Without objection, it is so ordered. The
Senator from New Jersey is recognized.
Iraq
Mr. LAUTENBERG. Mr. President, I thank the Senator from Montana.
Today I want to discuss the speech made by the President Tuesday night
about Iraq. I think it is encouraging that the President is reaching
out to the country and attempting to explain his policy in Iraq. But I
think, to be more effective, the President has to be candid and upfront
with the American people.
Frankly, in my view, the credible speech on this subject should have
come from the Oval Office, not from a stage with uniformed service
people all around. Apparently, a patriotic backdrop behind the
President, and rows of soldiers in dress uniforms, was necessary to
speak to the American people about the crisis our country faces in
Iraq. It was, I thought, good theater, but not a very informative
speech. Maybe that is why the soldiers didn't applaud until the White
House staff urged them on.
Tuesday night's staged show reminded me of another Hollywood-type
event, when President Bush declared ``mission accomplished.'' We all
remember this picture very clearly. It was on an aircraft carrier, with
signs up--their authorship was denied by lots of people. The Navy
personnel were standing there directly behind the President. The speech
took place on May 1, 2003, just slightly over 2 years ago, when the
President said to the country at large that major combat was over in
Iraq.
How wrong he was. Before the ``mission accomplished'' speech on May
1, we had lost 139 people and had about 500 of our troops wounded.
Since President Bush's ``mission accomplished'' declaration, we have
lost 1,594 Americans in Iraq--versus that 139, 2 years ago. Almost
1,600 versus 139; and 12,000 seriously wounded versus 500 at the time,
in that 2 years.
It has been a terrible 2 years. Despite the gigantic banner and the
theatrical presentation on the aircraft carrier 2 years ago, the
mission was not accomplished then and it is not accomplished now. In
fact, the mission isn't even close to being accomplished, as all of us
in America, and I am sure the President is included, would like to see.
We are not going to solve our problems in Iraq through spin and photo
ops. We will solve these problems only with a tangible plan that gets
our troops home and then we will all truly celebrate mission
accomplished. Not only are we not seeing a plan, but high level
administration officials seem to be in serious disagreement about the
status of the insurgency. One day we saw Vice President Cheney say that
the insurgency is in its ``last throes.'' Then a few days later we see
Secretary Rumsfeld say that the insurgency could last ``12 years.''
This war has turned into a quagmire and Americans want to hear what
changes we are making to address our growing difficulties in Iraq, and
unfortunately a lot of what we heard from the President Tuesday night
was rhetoric. Unfortunately, much of the President's rhetoric focused
on September 11. But simply referencing September 11 over and over
again does not explain how we are going to move forward in Iraq. In
fact, it only serves to remind the American people that our most
dangerous enemy, Osama bin Laden, is still on the loose, and we are all
perplexed by the statement made by Mr. Goss, the head of intelligence,
that we know where Osama bin Laden is. I don't know why we don't go get
him if we know where he is.
Nearly 4 years after the 9/11 attacks, Osama bin Laden, the leader of
the terrorist group that killed almost 3,000 Americans, including 700
of our neighbors and friends from my State of New Jersey, continues to
inflame his terrorist network. Al-Qaida cannot be effectively
dismantled unless we capture bin Laden, and getting him should be our
No. 1 priority, but it seems it has moved its way down on the
President's priority list.
I urge President Bush not to use September 11 again as a way to
support our failures in Iraq. The American people would rather you
simply address the problems and fix them.
Poor planning for the war in Iraq is causing serious long-term
problems for our military. Mainly we are failing to meet our recruiting
goals. Yes, I know we had a blip up in the present month, but in May
the Army fell about 25 percent short of its recruiting target. That is
after they lowered their target. The Army also missed its monthly
targets in April and March and February of 2005, each month worse than
the one before. In February it fell 27 percent short. In March the gap
was 31 percent short. In April it was 42 percent. Things are so bad
that the Army is contemplating $40,000 signing bonuses for new
recruits. It reminds me of some of the bonuses offered athletes who
sign contracts. That may rival what professional ballplayers get. And
the Army is perhaps going into a new deal that allows for very short
enlistment periods, as low as 15 months of active duty.
The National Guard and Reserves are even farther behind in recruiting
this year. The Army Reserve met only 82 percent of its May recruitment
goal and the Marine Corps Reserve met only 88 percent of its recruiting
goal. This raises questions. Even if the President agrees to send more
troops to Iraq, where are they going to get them? I don't think it is
simply the casualty numbers that are hurting recruiting. It is a sense
that this administration does not have a plan for Iraq--and maybe they
never did. After all, in March of 2003 Vice President Cheney predicted
that the conflict would last ``weeks rather than months.'' Now it is
years and, according to Secretary Rumsfeld, it could be over a decade
before the country is stabilized.
What about those Army service men and women who return to our country
and become veterans? Look at how they are being treated by this
administration. My Democratic colleagues Senator Murray and Senator
Byrd tried three times to increase funding for the VA this year because
they understood that veterans returning from Iraq are going to need
more help. What happened? Republicans voted those amendments down each
time. Why? Because the administration kept saying ``we don't need the
money.''
But just this week the VA Secretary, Jim Nicholson, suddenly realized
he is facing a $1 billion budget shortfall. Nicholson said it was
``unexpected.'' Unexpected? How could they not expect increased needs
from the troops coming back from Iraq? We know people are being
severely wounded there, and returning and needing a lot of attention.
What kind of message does this send to our troops? We forgot to fund
your veterans health care needs? I think it is shameful and shows a
lack of respect.
Only now, because of embarrassment, did we see the other side of the
aisle
[[Page S7679]]
vote for Senator Murray's amendment to increase VA funding. All of a
sudden a prominent member of the Republican leadership, the junior
Senator from Pennsylvania, after repeatedly opposing increases to VA
funding, has become an enthusiastic cheerleader. It is interesting how
elections motivate people.
Our service men and women and their families are getting a raw deal.
Because of the administration's lack of planning, military families are
stuck with extended tours of duty leading to family problems and
serious financial difficulties. A real eye opener is to talk to some of
the Reserve and Guard people who have returned from Iraq and find
themselves in desperate situations with family problems, upset
relationships, financial disaster. It is terrible.
The bottom line is we need plain, straight talk coming out of the
White House and not staged events such as ``mission accomplished'' in
Tuesday night's speech.
One of my distinguished Republican colleagues, a combat veteran of
the Vietnam war, recently said:
The White House is completely disconnected from reality.
And it is tragically true.
If the President wants to earn back the American people's trust on
his Iraqi planning, he needs to start by being truthful and admitting
some mistakes. So far that hasn't happened and I plead with the
President and this administration: Level with the American people. It
is a very discouraging picture out there when we see the casualties
mount and the morass thicken.
Mr. President, I yield the floor with this plea: Say it like it is.
The PRESIDING OFFICER (Mr. Alexander). The Senator from Ohio is
recognized for 20 minutes.
Mr. VOINOVICH. Mr. President, I rise today to discuss the Central
American Free Trade Agreement--CAFTA. I have been a long-time supporter
of expanding United States trading relationships. I believe trade is
vital to the long-term health of the U.S. economy and to raising living
standards around the globe. Since my days as Governor, I have worked to
open markets around the world for Ohio's exports. Exports are extremely
important to the Ohio economy. When I was Governor, exports were one of
my four economic development priorities.
During my tenure in the Senate I have supported the vast majority of
trade agreements that have been brought before the Senate. However, in
the last year and a half or so, I have been troubled by several aspects
of our trade policies that I believe severely, and understandably,
undermine the American people's support, as well as my own support, for
new trade agreements.
In particular, I believe the failure of the United States to properly
enforce its existing trade agreements has contributed to growing
skepticism of the American people about the benefits of trade. In
particular, the failure to enforce the intellectual property right
protections in our trade agreements has contributed to a proliferation
of counterfeiting and pirating of American products across the globe.
I have met with numerous Ohio business leaders whose support for
trade has been severely tested when their company's products were
counterfeited by firms operating in countries whose governments simply
refuse to live up to their commitments to protect intellectual property
rights.
I believe in free trade, but the cornerstone of free trade is the
protection of property rights. It is unreasonable to expect American
companies to compete against companies from countries that do not abide
by this basic principle.
Last year I was so troubled by the lack of enforcement of our trade
agreements I decided the United States should hold off entering into
any new trade agreements until our enforcement efforts dramatically
improved. Accordingly, I voted against the Australian and Moroccan Free
Trade Agreements. Those were not popular votes, but they were necessary
to draw attention to the need to enforce our trade agreements.
Although I have been critical of the way our trade agreements have
been enforced, I remain committed to seeing the United States continue
its leadership in promoting lower trade barriers and global trade. My
criticism is that of a friend of trade and one who wants to see the
U.S. trade policy succeed.
Accordingly, I have been very pleased with the administration's new
efforts to improve the enforcement of our trade agreements. Earlier
this year, I held a hearing by the Homeland Security and Governmental
Affairs Subcommittee on Oversight of Government Management, the Federal
Workforce and the District of Columbia, to examine the administration's
new Strategy Targeting Organized Piracy or STOP! Program which aimed to
combat intellectual property theft abroad and help small and medium
size businesses protect their intellectual property. Although much more
needs to be done, STOP! is off to a very good start.
I hope my colleagues in the Senate will familiarize themselves with
the STOP! program because it will be of great assistance to small
businesses in States that have had their intellectual property rights
infringed upon.
Mr. VOINOVICH. I am very pleased with the efforts of Secretary of
Commerce Thomas Gutierrez and my good friend Ambassador Rob Portman at
USTR to help several Ohio companies, victims of intellectual property
theft abroad. They have shown the importance of enforcing our trade
agreements and are committed to improving our enforcement record,
especially in the area of property rights. I am very impressed by how
much progress they have made during their short tenures in raising the
issue of intellectual property rights abroad, and I am confident they
will continue to work closely with Congress to address trade issues.
Our trade policies are only as good as the people who execute them. I
am pleased to say we have excellent leadership right now in Secretary
Gutierrez and Ambassador Portman. They both have a good background on
trade. Secretary Gutierrez has firsthand experience with trade issues
due to his work as CEO of Kellogg. Ambassador Portman has unique
knowledge of trade legislation as a result of his work as a member of
the Ways and Means Committee while he was a Member of Congress.
Recently, I sent a letter to the President asking him to appoint a
coordinator for all of the agencies that deal with commerce--Commerce,
the Patent Office, USTR, Homeland Security, Customs, Border Patrol, and
the Justice Department. They need someone to coordinate them so they
get the job done.
I was also pleased to hear Treasury Secretary Snow's comments earlier
this week that he is prepared to cite China if it does not address the
yuan's overvalued exchange rate against the dollar.
In light of the administration's new effort to improve enforcement of
our trade agreements and in consideration of the merits of the
agreement, I have decided to support the Dominican Republic-Central
America-United States Free Trade Agreement. Passage of CAFTA will lay
the foundation for a growing and valuable trade relationship with CAFTA
countries as well as strengthen the U.S. leadership position in
promoting global trade.
I believe CAFTA embodies precisely the type of long-term economic
planning that we too often fail to integrate into our policies. CAFTA
will not only facilitate the expansion of trade between the United
States and other CAFTA countries by eliminating most trade barriers but
will also help American companies get on the ground floor in those
developing countries, ahead of our competitors in Europe and in China.
Right now, the CAFTA countries have relatively small economies, but
they have made great progress over the last decade. Over the past 5
years alone, U.S. exports to Central America have increased by 35
percent. As these countries continue to grow, we will see growing
demands for our exports. Presently, about 44 percent of the region's
imports come from the United States, so as their economies expand, so
will purchases of American products.
Moreover, the United States has already accorded duty-free treatment
to more than 80 percent of Central American imports to the United
States under the Caribbean Basin Trade Partnership Act and other trade
agreements. As a result, CAFTA is largely a one-way lowering of trade
barriers by the CAFTA countries and will measurably improve our
opportunity to export to those countries.
[[Page S7680]]
Presently, the CAFTA countries impose high tariffs on agricultural
products, especially on several of Ohio's top agricultural exports such
as soybeans, corn, dairy products, beef, and pork. Under CAFTA, these
tariffs will be eliminated, making Ohio's agricultural exports much
more competitive in the CAFTA country. Since most agricultural products
from CAFTA countries already enter the United States duty free, CAFTA
levels the playing field and gives American farmers the same access to
the markets in the CAFTA countries. For Ohio farmers, CAFTA is a good
deal. Not surprisingly, CAFTA has received support from the Farm
Bureau, the Ohio Cattlemen Association, Soybean Association, Poultry
Association, and, of course, the Ohio Corn Growers Association.
CAFTA is also very important to the survival of the U.S. apparel
industry. Only with open access to CAFTA can American apparel compete
with China. Unless CAFTA is passed, we will see the entire American
apparel industry move to China.
CAFTA also improves the protection of intellectual property in the
CAFTA countries. Under CAFTA's intellectual property provisions, they
are obligated to ratify numerous international agreements on
intellectual property rights to which the United States is already a
signatory and will be obligated to enforce intellectual property
rights. The ratification of these agreements is a very important step
to protecting American companies from intellectual property theft
abroad. While some may argue that more needs to be done, the fact is,
if CAFTA does not pass, American companies will not have the protection
of even those basic agreements.
We often forget that trade agreements are about more than just trade.
They are key components of American foreign policy. They are one of the
best ways this country can develop better relationships around the
globe. At a time when I believe the United States badly needs to
improve its relationship with other countries, trade agreements offer
us an excellent opportunity to reach out to the other countries and
foster economic ties.
The CAFTA countries are exactly the types of countries with which we
should build better relationships. After decades of civil wars, the
CAFTA countries have made dramatic progress toward establishing
democracy and market-based economies. Because the United States is
their largest trading partner and foreign investor, the CAFTA countries
need a good trade relationship with the United States to fuel their
development and help them to continue their reforms. By passing CAFTA,
we can help ensure that our southern neighbors succeed in their reforms
and in the process greatly expand our influence in the region. I note
that President Jimmy Carter supports CAFTA for precisely this reason.
It is in the best strategic interest of the United States to see that
CAFTA countries become successful republics and do not once again fall
victim to economic crises and civil wars. The existence of stable and
prosperous countries in our southern border will not only be good for
American commerce but also good for American security.
Approval of CAFTA will also send an important signal to the countries
in the region as well as other developing countries that the United
States is committed to assisting them in building their economies. If
the United States does not develop closer relationships with these
countries, they will undoubtedly look elsewhere for help, such as the
European Union or, more troubling, to Cuba, Venezuela, or China.
Rejection of CAFTA will only clear the way for our competitors to enter
our backyard. In my opinion, a defeat of CAFTA is a victory for China
and Cuba.
In addition to rejecting CAFTA, it would greatly damage Ambassador
Portman's ability to open markets for U.S. exports at the Doha round of
WTO negotiations and with respect to the planned trade agreement with
the Andean nations and for the free trade area of the Americas. The
U.S. trading partners would have a reduced incentive to agree to open
their markets to U.S. goods because they would claim, sincerely or
tactically, that the U.S. commerce will not be willing to approve a
final agreement. To get other countries to agree to politically
unpopular reductions in trade barriers, the United States needs to have
credibility that it will do the same.
Since the end of World War II, the United States has been the driving
force in promoting trade liberalization. Because of U.S. leadership,
global trade barriers have steadily fallen for nearly 60 years, greatly
expanding world trade and helping to improve living standards around
the world.
I believe it would be unfair to Ambassador Portman to reject CAFTA
and undermine his ability to continue the U.S. leadership on trade,
especially given that he only recently assumed his post. Members who
have worked with Ambassador Portman know he is very talented and a
skilled legislator and negotiator who understands the importance of
close consultations with Congress during the negotiation of any trade
agreement. Hence, I think we have a great opportunity to improve
Congress's involvement in the negotiation of trade agreements which
would build support for future trade agreements by having Congress's
concerns addressed early in the process. Too often, it comes in too
late.
We have somebody there as our new U.S. Trade Representative--and I
have spoken to him about it--who understands because of his legislative
experience that he needs to get over here and spend some time with
Congress before the final touch is put on those trade agreements. By
voting down CAFTA, however, we would undermine Ambassador Portman's
ability to respond to our concerns in the future and negotiate better
agreements.
CAFTA is a good agreement which will further integrate the United
States in the world economy and help ensure the United States remains
the world's leader in global trading.
I urge my colleagues to vote in favor of this agreement.
I yield the floor.
The PRESIDING OFFICER. The Senator from Montana.
Mr. BAUCUS. Mr. President, I have a rough understanding that Senator
Dorgan will speak next. He is not here.
I suggest the absence of a quorum and ask consent that it be charged
equally against both sides.
The PRESIDING OFFICER. Without objection, it is so ordered.
The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. GRASSLEY. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. GRASSLEY. Mr. President, I yield myself such time as I may
consume.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. I will respond to some of the speakers through the
course of debate on this bill who pointed to a report of the
International Trade Commission on CAFTA as evidence that this trade
agreement is not meaningful to the United States.
Let me explain that the International Trade Commission is an agency
of the Federal Government, but it is an agency that is very
independent, with 9-year terms for members to serve. They do a great
deal of research in international trade and are very well respected for
the reports they put out.
This report that was referred to as evidence of this trade agreement
not being helpful to the United States misrepresents the scope of the
International Trade Commission estimates as well as the scale of the
CAFTA agreement itself. Critics point to one part of the International
Trade Commission report which estimates the tariff and quota
liberalizations under the agreement will result in zero percent change
in welfare for the United States.
Now, those critics ignore the Commission's conclusion that if CAFTA
is fully implemented, overall U.S. welfare will increase in a range of
$135 million to $248 million, with minimal impact on U.S. employment
and output.
In fact, the Commission estimates that no sector of the U.S. economy
is likely to experience a decline in output, revenue, or employment
greater than 2.5 percent once CAFTA is fully implemented.
So critics fail to acknowledge that the Commission's estimates are
based only on the tariff and quota liberalization provided under this
agreement. The Commission's estimates do not
[[Page S7681]]
quantify the other very important elements of this agreement--which the
people using this report to justify a vote against CAFTA take into
consideration--such as the benefits from an improved regulatory
environment, improved protection of intellectual property rights,
efforts at trade facilitation, and liberalization of regulations
governing investment and the provision of services we will sell to
those countries of CAFTA.
The Commission report does not attempt to quantify any broader
geopolitical benefit to the United States of improved economic well-
being and political stability in the CAFTA countries as a result of the
agreement. But the fact remains that those benefits--not referred to by
the opponents of this agreement, who find it convenient to quote one
part of a trade commission study but not the whole study--the fact
remains, then, that if you look at the whole report of the
International Trade Commission, those benefits are a part of this
agreement, as well, and will materialize and are obviously good reasons
for voting for this bill.
After some critics are done arguing that CAFTA is meaningless to the
United States, they do, however, point to another part of the
Commission's report and offer another doom-and-gloom scenario. They
point to the Trade Commission's estimates that suggest that once CAFTA
is implemented we will increase our bilateral trade deficit with these
countries by as much as $110 million. Those critics ignore the
Commission's conclusion that if you take into account likely changes in
our global pattern of trade, once CAFTA is fully implemented, then our
overall trade deficit is likely to decline by $750 million.
Now, how does the figure of $750 million get ignored, but a $110-
million figure gets taken into consideration? Well, it is quite obvious
that the people who are quoting from this report quote what benefits
their position for voting against CAFTA and do not look at the overall
beneficial impact of CAFTA on the United States.
That $750 million is a very important number. Our bilateral trade
balance with individual countries or regions may be interesting to
consider, but the one number that is of significance to our economic
health is our overall trade deficit. According to the ITC, the
International Trade Commission, CAFTA will help reduce that trade
deficit by $750 million.
Now, all the people crying about our trade deficit, are they going to
take into consideration $750 million? Why on Earth would we walk away
from that benefit, as the opponents of this agreement will have the
United States do with their ``no'' vote?
I hope this dispels the critics' misinformation about CAFTA. The fact
is, when you read the ITC report in its entirety, it becomes clear that
implementing CAFTA offers meaningful benefits to the United States,
both in terms of improving the economic welfare of the United States
and in terms of reducing our overall trade deficit.
Again, CAFTA offers us those benefits with minimal impact on U.S.
employment and output. That is not what Senator Grassley says, that is
what the International Trade Commission says. And if you add all the
other economic and geopolitical benefits that are not readily
quantified, I believe the tremendous benefit of this agreement to the
United States is then seen in its proper light.
So I urge my colleagues not to be misled by the critics. The ITC
report corroborates that CAFTA will be beneficial to the United States.
Also, let me suggest that during this debate, I have heard much talk
about the lack of Government policies concerning the trade deficit. I
am not here to justify any trade deficit. I am not here to say those
people who say it is too big are wrong. But I think I have heard left
out of this entire debate a policy that we have had under Republican
and Democrat administrations for a long period of time, and that is,
the freedom of the American consumer to have access to any product made
anywhere in the world that they want to buy. Because we believe in
freedom, we believe in choice for our consumers. We believe the
consumer ought to have the benefit of choice, of quality, and price.
And we happen to have the consumers of America buying much and saving
little.
Now, is that right? I do not know. But people who are concerned about
our trade deficit, do they want to shut off the faucet that allows our
consumers to have the choice of anything? I may be speaking too
sweepingly when I say this next sentence but I believe we let anything
into our country that consumers want to buy, except for pharmaceutical
drugs. Senator Dorgan and I have been working together to make sure the
consumer has that choice as well, to drive down prices, and give them
the best product they can get.
Now, I do not think anybody wants to take freedom of choice away from
American consumers. If we are spending too much on consumer products,
importing too much, maybe we ought to have more incentives for savings,
maybe we ought to be, without a doubt, enforcing our antitrust laws,
antisurging laws, countervailing duties to be applied, and all those
things that need to be done about the problem that exists. But our
deficit is overwhelming because of consumer products coming into the
United States.
Wal-Mart brings in $18 billion from China--$18 billion of our
imports; just one company. Now, when you go to Wal-Mart--I don't care.
I happen to go to a Wal-Mart some. I don't go there as much as I go to
our small businesses in Iowa to buy things but occasionally go there.
Are you going to take that choice away from the American consumer by
not having Wal-Mart import? I don't know. I don't see anybody
suggesting that.
Somehow we are led to believe that China is like a Japan with these
big surpluses. China has a trade deficit as well. China has 3 percent
of our national debt in bonds. Japan has 8 percent. Yet you would think
that somehow that 3 percent is a major problem.
I would suggest that what we ought to be doing here is encouraging
our consumers to buy American, buy American, or don't buy so much
consumer goods yourself, and invest that money that we send to Japan
through Wal-Mart directly in U.S. bonds. Buy American products. Do as
we did in World War I and World War II, be patriotic and buy U.S. bonds
to help our economy.
Consumers in America are king. And when consumers in America decide
to cut down on our trade deficit, it will be cut down. I think
consumers ought to continue to be king in America because that is
economic freedom, that is individualism, that is America.
Mr. DORGAN. As to the question is all this a good thing, has it
strengthened our country, or is this just gloom and doom by those who
oppose the current trade strategy, my colleague is quite right, this is
not a strategy that is just the George W. Bush strategy. This strategy
has developed over about 25 years, although I must say that this
administration is the most helpful to corporate interests that I have
seen. But it is not just a strategy of the last year or two.
But it is hard--very hard--to take a look at these devastatingly
dangerous trade deficits that get worse and worse and worse, and then
hear some people say it is getting better and better and better for us.
It is, of course, not getting better for us.
Ronald Reagan used to tell that old story about the young boy who
would look at the pile of manure and insist there must be a Shetland
pony someplace. The fact is, there is no Shetland pony here. This is
bad news. And the quicker we decide to confront it, look it square in
the eye and decide as a country to do something about it, the better
for our country.
The question is about freedom. I agree with that. It is about
freedom, freedom for the American consumer, also freedom for American
workers to be able to reasonably expect in this great country they will
be able to find a decent job that pays well with benefits. That is
freedom that is important as well.
When American workers are told on a Monday or a Friday--most
characteristically a Friday--by Maytag or by Levi's or by Fruit of the
Loom or by Fig Newton cookies or by Huffy bicycles or by Schwinn--and I
could go on--that their job no longer exists because their employer has
the freedom to get rid of them and hire somebody for 30 cents an hour--
that is freedom. Yes, that is freedom.
[[Page S7682]]
What does it do to the country we built? This country was built on a
debate in this Chamber about a wide range of critically important
issues: Should you have the right to organize as workers? Should you
have the right to expect to be able to work in a safe workplace? Should
you have child labor laws? Should you prevent dumping pollution into
the skies and the streams of this country and this world? We fought
that battle for 100 years.
Now those who want to avoid those onerous restrictions pole vault
over all of them and say: My jobs are going to China. And you American
workers? Sayonara. See you later. Goodbye. So long. It doesn't matter.
You were just tools. You were like a wrench or a pair of pliers, ready
to be thrown away when we were done with you.
I have a lot to talk about this afternoon and a fair amount of time
in which to do it. I yield to my colleague from Colorado, Senator
Salazar, 15 minutes.
The PRESIDING OFFICER. The Senator from Colorado.
Mr. SALAZAR. Mr. President, I rise today to speak on the Dominican
Republic-Central America-Free Trade Agreement. At the outset, let me
say I appreciate the efforts of Commerce Secretary Gutierrez and his
heartfelt advocacy for this agreement. I look forward to working with
him to create jobs in Colorado and on trade and commerce issues,
including future revisions to this trade agreement. I have spent the
last several months learning more about the CAFTA agreement, listening
to individual farmers and ranchers throughout Colorado on their
concerns about being left behind. Based on extensive deliberation, I
regret that I must oppose this agreement because it continues a policy
in Washington that forgets huge parts of our country. Let me summarize
my opposition to this agreement.
First, there are huge parts of our country, including the eastern
plains of Colorado, which have been forgotten by administration after
administration, and they continue to wither on the vine. Those rural
communities that continue to decline in population are going to be
impacted in a very negative way by the implementation of the CAFTA
agreement.
Secondly, I am troubled by the fact that we have not had a policy to
deal with the real geopolitical challenges that we face with Central
and South America. When one thinks back to the days of John Fitzgerald
Kennedy and his announcement of an Alliance for Progress for the
Americas, he had a strategy with respect to how we are going to make
friends both to the north and to the south, that we are going to help
to rebuild the democracies of Central and South America.
We have not seen that kind of a comprehensive policy from this
administration. Instead, what we have seen is an episodic approach to
dealing with the issues of Latin America. It is for those reasons that
I have decided to oppose this agreement.
In my State of Colorado, I have seen firsthand the forgotten America.
Surveys done by the Colorado Department of Agriculture have cited
steady declines in the number of cattle across my State. The inventory
of cattle is reported the lowest in Colorado since 1962. Furthermore,
in 2002, 60 percent of farms and ranches in Colorado had annual sales
of less than $10,000. Specifically, the eastern plains of Colorado,
which would be the place most impacted by the CAFTA agreement, is truly
the place where you see the forgotten America in its most difficult of
times. It is home to farmers and ranchers and small communities that
are vanishing, left behind by a Washington, DC, that has lost touch
with what is important to the people and to the communities of the
heartland. The eastern plains of Colorado is also home to the sugar
beet farmers of my State who, in 2002, in order to save their farms,
banded together with over 1,000 other sugar beet growers in Nebraska,
Montana, and Wyoming to form the Western Sugar Cooperative, a sugar
processing facility which continues to successfully operate today
across Colorado and the other States. In order for them to do that,
they mortgaged their homes, their farms, their ranches, their tractors
in order to be able to build this facility for the good of the rural
communities and the operations they represent.
The sugar beet growers believe that DR-CAFTA will set a precedent. It
is a precedent that will send a message to our trade representatives
that Congress will continue to allow haphazard negotiations of free-
trade agreements like CAFTA that will chip away at important industries
and programs here in the United States. I will do all I can not to let
these families and these communities continue to wither on the vine.
At the same time, the International Trade Commission has stated that
the U.S. trade deficit with CAFTA countries is projected to grow by
more than $100 million. As my good friend from North Dakota said,
speaking about the trade imbalance we are facing, this agreement will
add to the trade imbalance of our country. Therefore, other Colorado
organizations and many farmers and ranchers from throughout my State
have joined together in opposition to CAFTA. It is uncommon in my
State, frankly, to find the Colorado Farm Bureau and the Rocky Mountain
Farmers Union coming together and speaking with one voice, saying this
agreement is bad for agriculture. Yet it has happened with respect to
this agreement. They both say this agreement is bad for agriculture.
I also recognize that trade agreements are fundamentally geopolitical
documents with important impacts on our foreign policy. It pains me
personally to have to vote against this agreement. I do so because I
recognize that many of our friends in these six countries see it as an
important symbol of America's commitment to them. It pains me that I am
not able to vote for this agreement. I do so, looking back at the
history of our relationship between the United States and the Central
American countries. During the 1980s, this country spent $5 billion on
Central America in an effort to ensure that democracy and freedom
markets triumphed in that part of our troubled world. Because of the
courage and strength of our Central American friends, like
Archbishop Oscar Romero, we see a region today that is defined by
democracy and freedom, a region about which we could only have dreamed
a short 20 years ago.
It is in that context that I have come to conclude that this
agreement is a missed opportunity. Twenty years ago, you could not pick
up a newspaper anywhere in the United States without a headline on the
front page talking about some event or some episode in Central America.
Today those countries barely merit a mention in an occasional
newspaper. Presidents in the last 100 years have pursued the good
policy, the Alliance for Progress, and the Summit of the Americas, and
so forth. These policies have been pursued through administrations in
differing parties, Democrats and Republicans, but they all shared a
sense of commitment and focus on Latin America. I am sad to conclude
that the last several years have seen a policy that has been, at best,
disinterested in the issues of South America and Central America.
Consider this: The President's flagship foreign assistance program,
the Millennium Challenge, has yet to distribute a single dime to
Central America. Next, in the President's budget request for this year,
Government investments in each of the countries subject to this
agreement were cut, not increased. And finally, Latin America rarely
appears in the administration's public remarks, despite the challenges
of extreme poverty in Central America and democratic instability
throughout the Andean region of South America. Supporters of this
agreement are now telling us that to vote against CAFTA is to vote
against Latin America. That could only be true if you believe that our
policy toward this important region should be based only on a single
trade agreement. It is not. It should not be. I have personally urged
the President to work with members of both parties to reinvigorate our
policy toward this important region of our world.
Such a policy would do a number of things. For example, it would
consolidate the democratic gains the region has made throughout the
last two decades by investing in democratic parties. Instead of
deepening democracy, the United States seems paralyzed as we watch
democracy take hits in countries such as Venezuela and Bolivia. Next,
we must battle underdevelopment in the region by investing in its
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people and microenterprise, health care, and education. Instead, Latin
America is the only region that has not seen increases in U.S.
Government investment in the last several years. Finally, we should
fight corruption and deepen law enforcement cooperation to fight the
scourge of illegal narcotics that passes through Central America on its
way to our streets, affecting our kids and increasing criminality
within our own communities.
Such a policy should be, and must be, based on a vision larger than a
single agreement. I regret that the tremendous energy the
administration is now expending on this agreement has not laid out a
vision and plan for the larger challenges, such as illegal immigration,
drug trafficking, poverty, and the other issues that affect this
important region of our hemisphere. That is why, in my view, this
agreement represents a lost opportunity of action for our Nation.
Lastly, let me say that I support trade for the Americas. I support
trade for our Nation. I recognize that increased trade is good for our
economy, for our businesses, farmers, workers, and families. But again,
I wish we were here today talking about how we are opening new markets
for our producers. Even under the most optimistic scenario, when this
agreement is fully implemented, U.S. world exports are expected to
increase by only a minuscule amount, if at all, to this small region.
We simply need to do better at opening new markets, not just spend our
time fighting to keep those we already have. If we spend all of our
time fighting yesterday's battles on market access, we will miss the
opportunity to leverage the major market opportunities that we have.
That is why I have spent much of my first 6 months in the Senate
working with the Department of Commerce and State to promote new
markets, particularly for Colorado's agricultural products. That is why
I asked Secretary Gutierrez to come to Denver last weekend to speak
with Colorado's business, labor, and agricultural leaders. I am
grateful for the Secretary having made this trip. I appreciated his
candid discussion with my constituents in Colorado. That is why I have
met with the Ambassador of China to urge him to send a trade delegation
to Colorado on trade opportunities. And that is why I met with the
director of the Taiwan Economic and Cultural Office to urge Taiwan to
send a delegation to Colorado for the same reason.
At the end of the day, I am hopeful there will be a CAFTA I can
support. But just as importantly, I hope even more that we, as a
Federal Government, will redouble our efforts to promote American
exports into new markets around the world, including our own backyard.
As I have deliberated on how to vote on this important agreement, I
have thought a lot about Archbishop Romero, a courageous voice for
dignity, change, and opportunity in Central America, and the lessons
that we learned from his martyrdom in El Salvador. Shortly before he
was assassinated, he said in Spanish:
El Reino esta ya misteriosamente presente en nuestra tierra; cuando
venga el Senor, se consumara Esta es la esperanza que nos alienta a los
cristianos. Sabemos que todo esfuerzo por majorar una sociedad, sobre
todo cuando esta tan metida esa injusticia y el pecado, es un esfuerzo
que Dios bendice, que Dios quiere, que Dios nos exige.
(English translation of the above statement is as follows:)
God's reign is already present on our Earth in mystery. When the Lord
comes, it will be brought to perfection. That is the hope that inspires
Christians. We hope that every effort to better society, especially
when injustice and sin are so ingrained, is an effort that God blesses,
that God wants, that God demands of us.
This agreement is not our best work as a nation. As we try to improve
our society and the societies of Central America and the Dominican
Republic, we can do better.
I hope we get the chance to do better. I look forward to working with
the administration to craft a better agreement with CAFTA.
I thank the Chair and yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota is recognized.
Mr. DORGAN. Mr. President, I compliment my colleague from Colorado.
These have not been easy issues for him. I appreciate his position and
understand it fully. I think he has represented that position well in
the comments he offered today. We share--perhaps in some cases for
different reasons--a feeling that this trade agreement is not a good
one for our country.
I yield 10 minutes to my colleague from Michigan, Senator Stabenow.
The PRESIDING OFFICER. The Senator from Michigan is recognized.
Ms. STABENOW. Mr. President, I thank my friend and eloquent leader on
this issue, the Senator from North Dakota.
Mr. President, I rise today, also, to share my great concern about
this agreement and to oppose what I view as an unfair trade agreement.
We can do much better than this. This country has been in an economic
slump since 2001, and since then we have lost more than 2.7 million
manufacturing jobs. Certainly, in my State, it has never been more
clear as we see the headlines every day regarding job loss, jobs going
to Mexico, China, and India--every day, headline after headline.
At the same time, we have grown record budget deficits and a record
trade deficit. Workers are losing their health care and higher
education is becoming even more expensive. What is the response? Well,
the administration decides to push through a CAFTA trade agreement that
will dig the job holes even deeper. This makes absolutely no sense to
me.
This agreement will cost us jobs. It will increase our trade deficit.
It will hurt our country's middle class, the backbone of our economy,
our way of life. What makes us different from other countries is that
rather than just having a few very wealthy people and a lot of poor
people, we have a vibrant middle class, people who work hard, save, put
their kids through college, and they know they can count on having--up
until this point--a pension when they retire or they receive health
care through their jobs. All of that is at risk right now for the
people in Michigan and others around the country.
This fight that we are having, this debate, is critically important.
I think there is not a more critical debate to have on whether we are
going to continue to support American businesses and American jobs and
the American middle class. That is really what is at stake. We should
pass legislation that will be creating jobs. We should be passing
legislation that will lower the trade deficit and will create more
access to health care, lowering the cost of care and for college. There
is a lot we should be doing.
Unfortunately, I have concluded that this trade pact really moves us
backward. It will lead us to more offshoring of American jobs. It would
be better titled ``NAFTA part II.''
However, so that I am not misunderstood, I do support trade.
Obviously, the debate about trade or not to trade is not the right
debate anymore. You could not put a wall up around this country if you
wanted to. The Internet reaches anywhere. The question is, Are we going
to be smart so that we can compete up rather than down, compete in a
way that increases the middle class in other countries that will buy
our products rather than losing our middle class and exporting our
jobs? What is at stake here is really fundamental.
I have supported trade agreements in the past. In fact, I voted in
favor of six trade agreements in the last 4 years. I will give you an
example of one of them. I supported the United States-Australia trade
agreement because our economies are similar. Our workers get paid
roughly the same amount of money. Our companies can sell their products
in Australia because it has a high minimum wage, sound environmental
laws, and good labor standards. We can sell and trade back and forth.
Unfortunately, the CAFTA agreement does exactly the opposite. This
packet will ship jobs overseas and provide fewer export markets for
American companies, and it is because in these countries the minimum
wage is very low. In Guatemala, the minimum wage is 25 cents an hour. I
don't want our workers having to compete with 25 cents an hour. You
cannot live on that. Mr. President, how can we expect to export to a
market and compete with an economy where workers make 25 cents an hour,
and there are no basic
[[Page S7684]]
environmental laws and labor standards? I want to compete with a
country where you can drink their water, where they can live on their
wage, where we are competing up, not down.
I believe we should try to support agreements that actually lift up
workers in other countries as well as our own, as I said, so they can
purchase our products. That is not what this does. Tragically, the
countries involved in the CAFTA agreement are poor countries. For
example, the median GDP in Nicaragua is only $2,300 a year. And 40
percent of all workers covered under the agreement survive on less than
$2 per day. It would make sense if we were putting in place an
agreement that would raise those wages so they can buy our products.
But I fear, from what I have seen in the past, that will not be the
case. The entire purchasing power of all six of the CAFTA countries
combined is less than the purchasing power of half of the city of
Detroit.
We are not competing on an equal playing field in this CAFTA
agreement. I ask, how many Nicaraguans are going to be able to buy a
$20,000 automobile made in Michigan? We want them to buy cars made in
Michigan, by the way, Mr. President. We all know those who don't
understand history are forced to repeat it. I am afraid that is what is
happening.
When we look at NAFTA, after Congress passed NAFTA, hundreds of
thousands of American jobs were lost to Mexico. It is still happening.
Last year, Electrolux, a plant in Greenville, MI, that makes
refrigerators, announced they were going to move to Mexico, with 2,700
good-paying jobs gone. Why? So they can pay $1.50 an hour in Mexico,
with no health benefits. This is having a devastating effect on a small
town community in the middle of Michigan. That is not the only story.
There are hundreds of those.
Right now, if we use NAFTA as a comparison, we see that over the past
11 years U.S. workers have lost nearly a million jobs due to the
growing trade deficits with our NAFTA partners. During the same time
period, real wages in Mexico went down. Now, it would be different if
it were true that wages went up, as we often hear, because that would
make sense economically. But instead, in Mexico, wages have fallen,
while the number of people living in poverty in Mexico has actually
grown. It makes no sense to follow that line out again with another
trade agreement. Since NAFTA took effect in 1994, the U.S. trade
deficit with Canada and Mexico has ballooned to 12 times its pre-NAFTA
size, reaching $111 billion in 2004.
I believe we can expect more of the same from CAFTA, unfortunately.
We can do better than this for American farmers, we can do better for
American businesses, we can do better for American workers, and for
American families. I hope we will reject this proposal and send them
back to the drawing board. There are other models, other prototypes
that have gotten it right. There are other agreements we have voted for
on this floor that do a better job of creating and protecting our
middle class and our jobs and businesses in America than this
agreement. We can do better than this. We need to do better than this.
I urge my colleagues to reject this agreement.
We are once again rushing into a trade agreement that doesn't help,
and in fact, has the potential to hurt American workers and their
families.
This country has been in an economic slump since 2001. Since that
time, we have lost more than 2.7 million manufacturing jobs.
At the same time, we have grown record budget deficits and record
trade deficits. Workers are losing their health care and higher
education is becoming ever more expensive. And, in Michigan we suffer
from the nation's highest state unemployment rate.
What is this administration's response? It has decided to push the
CAFTA trade treaty that will dig the jobs hole even deeper. And, the
administration has stripped out a trade adjustment assistance provision
that would have helped workers displaced by CAFTA.
This trade pact moves this Nation backwards. It will lead to more
offshoring of American jobs.
It will cost us jobs, increase our trade deficit and hurt our
country's middle class. It will turn the haves into the have-mores and
the have-nots into have-nothings.
We should be negotiating trade agreements that involve exporting
products, not jobs and we should pass legislation that will help create
jobs, lower our trade deficit, and help working families get access to
health care and college.
However, so that I am not misunderstood I support free trade on a
level playing field. I have voted in favor of six free-trade agreements
over the past 4 years.
For example, I voted for the U.S. Australia Free Trade Agreement
because when we trade with Australia we trade on a level playing field.
That agreement works because our economies are similar and our
workers get paid roughly the same wage. Our companies can sell their
products in Australia because it has a high minimum wage, sound
environmental laws and good labor standards.
Unfortunately, the CAFTA agreement goes in exactly the opposite
direction.
This agreement will ship jobs overseas and provide few export markets
for American companies.
My State of Michigan certainly will not benefit because this
agreement does not provide a meaningful export market for Michigan
manufacturers.
That is because in order to have an export market you need to be
selling to people who can afford your goods. But the typical wage in
the CAFTA countries is very low.
Tragically, these countries are poor. For example, the median GDP in
Nicaragua is only $2,300 per year.
And 40 percent of all workers covered under this agreement survive on
less than $2 per day.
The entire purchasing power of all six of the CAFTA countries
combined is half that of the city of Detroit alone.
In Guatemala, the minimum wage is approximately 25 cents an hour.
How can we expect to export to a market where workers make 25 cents
an hour and lack basic environmental laws and labor standards?
We should try to lift up the impoverished workers in these countries
so they can purchase American made products. But this agreement will
not do that.
As we all know, those who do not understand history are forced to
repeat it. Let's take a look at what has happened in recent history.
After Congress passed NAFTA, hundreds of thousands of American jobs
were lost to Mexico. And it is still happening. Just last year,
Electrolux closed a plant in Greenville, MI, and put 2,700 high paid
workers on the street.
Despite the fact that the company was making a profit and its workers
were productive, the management closed the plant in Greenville and will
soon open a new one in Mexico.
If we use NAFTA as a comparison we see that over the past 11 years
U.S. workers have lost nearly 1 million jobs due to growing trade
deficits with our NAFTA partners.
During the same time, real wages in Mexico have fallen while the
number of people living in poverty there has grown, according to the
Carnegie Endowment for International Peace.
Since NAFTA took effect in 1994, the U.S. trade deficit with Canada
and Mexico has ballooned to 12 times its pre-NAFTA size, reaching $111
billion in 2004. Imports from our NAFTA partners outpaced exports to
them by more than $100 billion, displacing workers in industries as
diverse as autos, aircraft, apparel and consumer electronics.
I believe we can expect more of the same under CAFTA.
American farmers have also felt the impacts of NAFTA. We quickly
discovered that this trade deal was no deal because it accelerated the
agricultural products trade deficit.
Consider that in the three years before NAFTA our trade surplus with
Mexico and Canada increased by $203 million.
After NAFTA, our surplus fell by $1.5 billion.
The result is that some American crops, like tomatoes, have been
pushed to the brink of extinction.
Also, in 1994, Congress passed the General Agreement on Tariffs and
Trade more commonly known as GATT.
After we signed that agreement, we began to lose jobs to India,
Indonesia and other East Asian countries.
[[Page S7685]]
Now, workers in India are doing thousands of jobs that Americans used
to do.
They now staff call centers, provide technical support for our
computer networks, and even process our tax forms and read our medical
x-rays.
To make matters worse, we passed so called most favored trade status
for China in 1998. And since then, hundreds of thousands of Americans
jobs are now done in China.
Mr. President, you would think that after what has happened after
previous trade agreements that we would know better than to pass
another free trade agreement with countries that don't share our wage
structure, labor standards, or environmental standards.
Before we pass another free-trade agreement, why don't we first
enforce our existing trade agreements.
Currently, two of our major trading partners, China and Japan, are
violating world trade rules by manipulating their currencies, which has
the effect of making their products cheaper here and our products more
expensive over there.
Additionally, China refuses to seriously combat the rampant
counterfeiting of auto parts.
This hurts Michigan companies and costs American workers their jobs.
This is unacceptable.
That is why I, along with Senators Graham and Bayh, have introduced a
bill that would create a trade prosecutor. This ambassador-level
position within the office of the U.S. Trade Representative would be
appointed by the President and confirmed by the Senate, with the
authority to ensure compliance with trade agreements to protect our
manufacturers against unfair trade practices.
In practical terms, this prosecutor will have the authority to
investigate and recommend prosecuting cases before the World Trade
Organization and under trade agreements to which the United States is a
party.
Senator Grassley has assured me that this approach would be seriously
debated while we continue to move forward on trade reauthorization and
I look forward to working with him on this important piece of
legislation.
In addition to enforcing our current trade laws, we should pass other
legislation that would help protect our jobs.
First, we should close loopholes in the tax code that actually reward
companies for shipping jobs overseas. Senator Dorgan has introduced
such legislation to do so. Why aren't we passing that in the Senate?
Second, why don't we help our companies deal with the runaway cost of
health care so they can be more competitive overseas and keep our jobs
here?
Third, why aren't we more aggressively moving comprehensive pension
reform to help our workers and companies through this very difficult
economic time?
Fourth, while we are building infrastructure over in Iraq, why can't
we do the same here at home? Our roads, bridges, transit systems, and
sewer systems are in dire need of repair. Why aren't we setting aside
the resources now to repair them? Doing so would create hundreds of
thousands of new jobs.
Finally, why aren't we doing more to invest in new science and
technology so our companies can better compete in the future? With very
little federal funding, we are on the verge of producing a commercially
viable hydrogen car and being the leader in the world on stem cell
research.
So, Mr. President, I ask my colleagues, why aren't we using our time
to pass job producing legislation? How can we ask our workers to
compete against economies that don't allow for collective bargaining,
that don't maintain reasonable environmental standards, and don't
maintain workplace safety requirements on par with the U.S.?
It is not fair to their workers and it is certainly not fair to our
workers.
Why don't we work with these countries to help lift up their workers?
Let's work with them to raise wages, provide health care, protect their
environment and then we can enter into a free-trade agreement.
This agreement represents a race to the bottom.
A race to the bottom makes the world a poorer place--not a richer
one.
There are many things we can do to increase our trade with the world
in a commonsense way. CAFTA is not one of them.
The PRESIDING OFFICER. Who yields time?
The Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, I rise to speak in favor of this
agreement. Twelve years ago, I rose in this Chamber to speak about
NAFTA to express a vision that free trade will one day encompass all of
North, Central, and South America. Today, we have an opportunity to
further that vision by entering into an agreement that will strengthen
U.S. trade relations and promote democratic reform in Central America.
CAFTA will provide the U.S. exports with market access to Central
America, similar to the duty-free access we have given Central American
exports. Although nearly 80 percent of Central American and the
Dominican Republic exports enter the U.S. duty free, America continues
to pay high tariffs on over $1.5 billion of annual exports to Central
America, our tenth largest export market globally.
CAFTA rectifies this inconsistency by providing open market access to
U.S. goods, services, and farm product exports. Specifically, over 80
percent of U.S. consumer and industrial product exports to Central
America and the Dominican Republic will be duty free immediately upon
implementation of CAFTA. The remaining tariffs are phased out over 10
years.
Almost 20 years ago, Central American countries were ruled by
dictators and communist insurgencies creating chaos and fostering
corruption. With American support and encouragement, Central America
has evolved into a region of fragile democracies. Elected leaders are
welcoming freedom and encouraging economic diversity, while looking to
the United States for a means to develop a mutually beneficial
relationship. CAFTA allows the United States to strengthen the economic
ties we currently have with Central America and the Dominican Republic,
while supporting political stability.
History shows us that bilateral and regional free-trade agreements
promote economic growth by significantly increasing U.S. exports. In my
home State of Texas, exports to Chile have doubled since the Chile
free-trade agreement was implemented in 2004. The success of NAFTA in
the last 10 years yields similar results. Since NAFTA was implemented,
combined exports from America to Mexico and Canada have increased by
more than 150 percent in Texas, and 113 percent nationally.
CAFTA shows the same promise and encourages U.S. growth as well. One
out of ten jobs in the United States depends on exports. Similarly,
foreign companies which invest in the United States create jobs. In
fact, since 1990, foreign companies have invested more than $1.5
trillion and employed more than 6 million U.S. workers. Free-trade
agreements encourage export growth and help create jobs.
I think it is important, also, to look at this from a hemispheric
point of view. I do believe that it is important that we have free
trade from the very north, Canada, all the way through the tip of South
America. Strengthening our hemisphere will be good for America, and it
will be good for every country in this hemisphere. It will also help us
with many of the problems that we face with disparate economies. Many
of our immigration issues come from people wanting to come to the
United States because they cannot earn a living for their own families
where they live. It is not that they want to leave their countries, it
is that they are trying to provide for their families. If we have more
free trade in our hemisphere, people will be able to support their
families where they live, and we will have healthy economic relations
with those countries rather than dealing with that on the basis of an
immigration problem.
So I do think that as we are looking at the places where we can
strengthen economies, and where it is in our best interests to
strengthen economies, we should look in our own backyard. We are having
trade issues with China and with the European Union. Why not look to
our own hemisphere, our own backyard, for strengthened relationships?
That is what CAFTA will continue us on the right track to do. We have
NAFTA and now we have Canada,
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the United States and Mexico; we have Chile and we have other countries
in South America. I think the Central American agreement will add
another component to that.
I want free trade with every country in South America with which we
can get an agreement. This is a very important part of our long-term
stability and the strength of our economy and the economy of our whole
hemisphere.
I hope we will look at the big picture. I know that many Senators are
concerned about jobs in their States and the impact this might have.
Many people in Texas were very concerned about NAFTA because of the
labor being less expensive just across the border, but NAFTA has been
an overall plus for Texas, as it has been for America. We want to
continue to strengthen our relationships with Mexico, Central America,
and all the way through the tip of South America.
Mr. President, I urge my colleagues to support this agreement.
I ask unanimous consent that the time I consumed be charged to
Senator Grassley.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mrs. HUTCHISON. I yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I yield such time as I may consume from my
allocation.
There has been some discussion today about the U.S. International
Trade Commission report on the CAFTA agreement. One of the complaints
although not stated directly, is that this is an independent agency.
Funny thing, independent agencies seem to be the most reliable
agencies, at least, they are around this town. We do not get material
from them that is colored one way or the other. It is an independent
analysis.
This probably is the most devastating critique of CAFTA. We have all
of these people who load up their saddlebags and rush to the floor of
the Senate telling us how wonderful this is going to be. They pull out
all the goodies and say how terrific this trade agreement is for
America. The problem is it is at odds with the independent analysis
from the U.S. International Trade Commission.
They say effects of tariff removal under this agreement are likely to
result in virtually no benefit to our country. They say there will be
little or no benefit to U.S. consumers. It says little or no change in
U.S. production in distinct industry sectors, with one exception; the
largest decrease in production is for manufactured sugar and sugar
crops, of which the output of both will decrease.
Then it says this will increase our trade deficit by $100 million. I
don't know, maybe it is confusing to throw facts into this discussion
about theology and economics and trade and all the things that are
going on here. But here is a set of facts that is pretty hard for
people to refute. They say, I have heard: ``You have to read the entire
ITC report.'' I don't know, maybe so. I have looked at this report. I
am reading the summary and the sector results, and it says if we sign
on to this trade agreement, there is really no benefit to American
consumers, virtually no benefit to American consumers, but a detriment
to sugar producers and an increase in the trade deficit by $100
million.
I went to a really small school, but I learned in a small school that
this would add up to a net deficit for our country. I do not understand
how someone looks at this and says: ``All right, I have looked at this.
It says this is bad for our country, but I think it is good for our
country. And the problem is this is an independent agency.''
That is a problem having an independent analysis on issues such as
this that take off the rosy glasses and say: Look, here is what you are
dealing with.
Let me put a few charts up to show a few of the facts. I have said
many times that everyone is entitled to their own opinion on this
floor, but not everybody is entitled to their own set of facts. Facts
are stubborn things. Let's talk about them.
Since NAFTA began in 1994--that is the North American Free Trade
Agreement--that is when we hooked Mexico and Canada with our trade. At
that point, we had a slight trade surplus with Mexico. We have been
able to ratchet that up to a huge deficit through this trade agreement.
We had a modest trade deficit with Canada, and that has now become a
huge trade deficit through this agreement.
We have lost about 71,000 family farms. We have had a drop in
agricultural trade surplus with Mexico and Canada by 71 percent. There
have been 900,000 manufacturing jobs lost. There has been a drop in net
farm income of 22 percent.
I have told my colleagues, and I will tell them again, one day I
drove to the Canadian border with a farmer named Earl Jensen. We got up
to that border with a 12-year-old orange truck. This little old orange
truck had about 150 bushels of durum wheat on it. So in an old orange
truck, we pull up to the Canadian border. All the way to the United
States-Canadian border, we had been meeting trucks hauling Canadian
wheat into our country at secret prices which had been set by the
Canadian Wheat Board, a sanctioned state monopoly in Canada that would
be illegal in our country. All the way to our border we met these 18
wheelers hauling Canadian grain into our country.
Earl Jensen and I, with our little orange truck, get to the border,
and they would not let us through. You cannot take American durum into
Canada. It was not just us with the orange truck. There was a woman
from Bowman, ND, who married a Canadian. She went to Canada for
Thanksgiving. She got some wheat, put it in a paper sack and put it in
the car because she wanted to use that to grind up and produce whole
wheat bread. ``You cannot do that,'' they said, when she got to the
border. ``You have to dump out that sack of wheat.'' At the same time,
we were flooded with Canadian durum coming into our country.
Fair trade? Of course not. It is absurdly unfair. Nobody is willing
to do a thing about it. It all came about because of NAFTA. We had a
written agreement from Clayton Yeutter, who said representations of
good faith in NAFTA are there will not be a substantial increase of
grain trade across the border. In fact, that happened immediately by
the Canadian Wheat Board--as I said, a sanctioned monopoly that would
be illegal in this country--shipping into this country at secret prices
a massive quantity of grain, taking money right out of the pockets of
American farmers.
Earl Jensen can probably be excused, at the Canadian border stop that
afternoon, wondering how on Earth our Government policy allows Canadian
grain to flood into our marketplace, and he and I cannot drive a 12-
year-old orange truck into Canada with just a small amount of U.S.
wheat.
The answer is quite simple. These trade agreements are incompetently
negotiated, No. 1, and, No. 2, they are not enforced. That is where we
are. That is what has happened since NAFTA. All bad news: A drop in the
trade surplus in agricultural goods with Mexico and Canada; massive
lost jobs in agriculture; 71,000 family farms lost.
But it is not all bad news. It is bad news for the little guy.
Corporate agribusiness profits are up 175 percent. Pretty good for
them. The trade deficit with Mexico and Canada increased 266 percent.
There is $4.3 billion in agricultural trade deficits with these two
countries.
The point is not everybody lost. You see, the corporate agribusiness
profits went up when we lost farms and jobs. The little bee sucks the
blossom, the big bee gets the honey; the little guy picks the cotton,
the big guy gets the money. Bob Wills & His Texas Playboys sang that 70
years ago and it still applies today and it applies in these trade
agreements.
The U.S. Government estimates that CAFTA will increase the trade
deficit by $100 million. That is the ITC report I just described.
I don't know how anyone can come to the floor of the Senate and say:
I have my own set of glasses. I haven't cleaned them for a long time,
but when I look through these glasses, I see nothing but nirvana,
nothing but good news, when, in fact, no matter what glasses you wear
around here, here is the ITC report which says this trade agreement we
are about to sign onto will increase this country's deficit.
This trade agreement, of course, is one more bit of the circular
economic winds. This chart shows CAFTA will
[[Page S7687]]
allow transshipment of foreign textiles through Central American
markets from China, from Canada, down through the CAFTA countries into
the United States.
Somebody said today to me: ``So what. It happens anyway.'' Are we all
giving up on helping American jobs remain viable? I don't understand
that.
Let me talk for a moment about sugar. There has been a lot of
discussion about sugar. Sugar is an interesting commodity. I happen to
like sugar. We produce sugar beets in the Red River Valley. All of us
can be excused for liking something quite as wonderful as sugar. It, in
fact, is organic. You plant a beet in the ground, watch that green
stuff come up, and then see the growth and then pull that beet out of
the ground during the beet harvest, run it through a plant, slice it,
dice it, squash it, and get the juice out of it. It doesn't smell so
hot in that plant when they are processing it, but pretty soon you have
sugar, and most sugar in this world is traded country to country on
long-term contracts. That is the way most sugar is traded in the world,
country to country, in long-term contracts.
The sugar that is outside of that, the sugar that is left over or in
surplus is what is called dump sugar. It moves around the world at very
low prices, just pennies a pound, very low prices. That is what our
colleagues who know nothing about sugar, except the taste, come to the
floor and lecture us about: ``Well, the world price of sugar is a
nickel or 6 cents.'' Sorry, that is not the world price, that is the
dump price for sugar. You cannot raise sugar for that. You cannot grow
sugar beets for that. Most of the sugar is traded at higher prices than
that on long-term contracts.
We have a sugar industry in this country, and we have a sugar program
in this country. Some do not like it, especially those who produce
candy bars do not like it. The last time we had a debate on the floor
of the Senate about sugar, I held up a Baby Ruth candy bar and read the
ingredients. Oh, man, it is a long bunch of ingredients. Most of the
things in candy bars you cannot pronounce. But there is a lot of sugar
in candy bars, and that is what the debate has been about regarding the
sugar program.
Those who use sugar for their confections and candy bars do not want
a sugar program; they want to buy dump sugar. The sugar program has
been a good program to help stabilize prices in the country, yes, for
producers and consumers. We have had times when sugar spiked way up,
and then sugar prices came back down. Did you see a change in the cost
of a can of pop or soda, a can of Coca-Cola, Pepsi, or Sprite? Did you
ever see their prices come down when the price of sugar came down from
a high spike? No, it didn't happen.
This sugar debate has always been about those who use a lot of sugar
in candy, soft drinks, and so on. They want to buy dump sugar at dump
prices, and they would like to get rid of the sugar program.
This sugar program is one part of the farm program that has worked
consistently to provide consistent stability of income for American
farmers. Yet a relentless urge in this Chamber is to take apart the one
part of the farm program that has worked.
Let me talk about sugar and this trade agreement. This trade
agreement provides an opportunity for the movement of additional
foreign sugar from the CAFTA countries into our country. We know they
can produce sugar dirt cheap in some of these CAFTA countries. We know
when we turn to the next trade agreement under the Free Trade Area of
the Americas, they can probably produce it less expensively in Brazil
and massive quantities of it. If we are going to be the recipients of
dump sugar and be like a cork on the waves of the price of sugar, we
will be subjected to the price spikes up high and then sometimes
cheaper sugar.
The fact is we will also destroy the current sugar producers in this
country. In the Red River Valley of North Dakota and Minnesota, we have
sugar beet growers. They go out in the morning and plow the fields,
tend the crops, plant these beets. They are good people. They have a
farm program that works called the sugar program. This is the first
step in the direction of taking that sugar program apart, much to the
glee of some because they never liked it. This is the first step of
several steps because the next step in the Free Trade Area of the
Americas will be the giant step.
It is very interesting when you listen to these discussions about
sugar. The Agriculture Secretary says this will increase sugar imports
by about 1\1/2\ teaspoons of sugar a week for every one of our nearly
300 million citizens. That is an interesting way to look at it. Another
way to look at it would be that CAFTA will let in enough sugar to fill
5,389 semi-trucks. This is just the first step in the wrong direction.
This is just the first step in the wrong direction for trade. Through
trade initiatives, we have done a lot of damage to our economy--good
jobs leaving, jobs that pay well leaving, huge increased deficits. That
means that it is the Chinese, it is the Japanese, the Europeans, the
Mexicans, the Canadians who hold American dollars, American stock,
American real estate in exchange for the trade deficit we have which
grows by $2 billion-a-day--every day, 7 days a week.
I said this morning that Warren Buffett describes this as heading
toward share cropper days because others in other parts of the world
will own an increasing part of America. Piece by piece, day by day,
they are buying part of our country.
I finish with the sugar program to say this: I am not bashful at all
about supporting our economic interests in this country. I am just a
little sick and tired of people who are so quick to negotiate away our
economic interests. Every trade agreement we have seen in recent years
has negotiated away the economic interests of our country. I believe
trade agreements are beneficial if they become trade agreements that
bestow mutual benefits on the trading partners, but that has not been
the case.
Can anyone in this Chamber honestly look at the United States,
Canada, and Mexico, the three countries combined, united in a trade
agreement called NAFTA, and describe a manner in which this country
won? Can anyone describe that honestly? They cannot. In each case, we
ended up with a much larger trade deficit, and that trade deficit is a
measurement of substantially greater imports into this country than
exports from this country.
It also means, then, that we lost jobs, lots and lots of jobs. No one
wearing their Senate blue suit ever lost his or her job as a result of
this trade agreement. It is just other folks who lost their jobs,
people who loved their jobs, worked hard at their jobs, cared about
their jobs, often worked for 20, 25, 30 years, only to find out one
Friday their job was over because we negotiated trade agreements that
moved American jobs elsewhere.
When do we stop that? How much evidence does one need to decide it
ought to stop, especially with respect to the issue of the sugar
program and the sugar trade with Central America? Let us just instantly
understand they can produce sugar much less expensively than we can,
and I am going to go through some things and talk about the
circumstances of labor in Central America and describe why they can
produce sugar less expensively than we can. But they cannot produce a
living wage for their workers in Central America. So let me go through
some of those and connect it to the sugar program among other things.
Under the labor laws in El Salvador and Nicaragua, it is legal to
fire workers who belong to a union. In Honduras, it is legal to fire
workers who say they intend to organize. In Nicaragua, it is legal to
prohibit strikes without government permission. Our country wants to
sign up to a trade partnership in which our workers should compete with
countries with those labor standards? Are we thinking clearly here? Who
wants to do that? Does that not by its very definition denigrate
standards in this country? I believe it does.
This is a chart that shows something about El Salvador. This was
published some while ago:
Jesus Franco, 14, has scars crisscrossing his legs from his
ankles to his thighs and more on his small hands. For more
than half of his young life, he's spent long days cutting
sugarcane. He has the machete scars to prove it and so do his
four brothers and sisters, age 9 to 19, all of whom work in
the sweltering cane fields of El Salvador.
Jesus' story is repeated countless times across Latin
America where children even
[[Page S7688]]
younger than he is are found working in cane fields at
subsistence wages. More than 17 million children between the
ages of 5 and 14 are working in that region.
Sugarcane workers, including children, use machetes to cut
the hard, sharp stalks of thickly planted fields where there
is little room to maneuver. Children and family members said
cuts requiring stitches are common in the fields and many
more children suffer burns from the caustic fertilizer they
spread by hand.
Thirty-three percent of the sugarcane workers in the fields of El
Salvador are under the age of 18. Many children in El Salvador start
working in sugarcane fields between the ages of 10 and 13, and the
number of children between the ages of 5 and 14 working in Central
America is 17 million.
This is a young boy working in a sugarcane field in Central America.
This is a picture of the living conditions for sugarcane workers in
Guatemala. This is a picture of the type of injuries which children and
adult workers sustain while cutting sugarcane. This photo is from Human
Rights Watch.
I do not know how much more evidence is necessary to understand what
we are trying to do. The majority who believe in this trade agreement
are trying to hook this country into a competition with other countries
that have decided they can fire workers who want to unionize, that have
decided even if they have labor rules they do not need to enforce them,
that have decided it is okay to have 9-, 10-, and 12-year-olds in the
cane fields hacking away with machetes, and those are the conditions
under which we compete. That is what the majority, many in this
Chamber, will say when they vote for this trade agreement. They have
said it before repeatedly with trade agreements, and they are going to
say it again today. In the face of all evidence to the contrary, they
are going to say it again today. It is unbelievable to me.
So last evening, when I got a little cranky and objected to unanimous
consent requests and was walking around a little upset, I was upset
because of this. This trade agreement, the Central American Free Trade
Agreement, was negotiated over 1 year ago. It was not brought to the
Senate floor, not brought to the floor of the House, not brought to the
Congress at all. Do my colleagues know why? Because they did not think
they had the votes in the House of Representatives. But I knew some day
the President and the majority would say, ``We are going to vote on
CAFTA,'' and they would wedge it in right in that little corner, right
in that crevasse before we go home for a break.
Next week, we are not in session. There is a Fourth of July break.
Sure enough, last night, that is exactly what the majority leader did.
I am sure White House instructions were to get this done.
It has been over a year. We think we now have purchased enough votes,
we have given up roads and bridges and dams, and we have enough people
who are willing now to vote for this. So we are going to have this
discussion, we are going to have it now, and it is going to be done
before we go home for the Fourth of July recess, and we are not going
to have a 2-day or 3-day discussion about real things that matter a
lot.
We are going to have a discussion about flag burning, I guess, I am
told probably in the month of July. The flag is very important in this
country. It is a symbol of America's patriotism and freedom. I would
not ever make light of that, but I would say this: As disgusting as it
is, and it is disgusting to see anybody desecrate an American flag, one
might well be hard-pressed to find someone who has burned an American
flag. Look at the label. It might well be made in China because much of
our textiles come from China these days. The people who used to make
those textiles--shirts and trousers and, yes, flags--used to be
American workers, but now they are foreign. They are gone because we
have a trade strategy that says we want American workers to compete
with workers in China, Sri Lanka, Bangladesh, and Indonesia. Those
workers will work pretty inexpensively. Those are workers who can work
7 days a week, and we can ask them to work 12 hours a day. We can pay
them 30 cents an hour and that will be just fine, and American workers
cannot compete with that--that is tough luck.
I happen to think that what we have built on this little planet
called Earth, the only spot on Earth that is the United States of
America, is extraordinary. One of the reasons it is extraordinary is we
had the guts as a country, all of us did, both parties and people
marching in the streets, to do what was right. We said there is a right
way to do things and a wrong way to do things. One has capital, labor,
and all of these things that come together to produce. Both have
rights, both ought to be protected, and so people chained themselves to
the White House fence, people died in the streets of Detroit, people
manifested a belief and a passion that workers have the right to
organize, they have a right to work in a safe work plant, they ought to
have child labor laws, and companies ought not be able to dump their
sewage and chemicals into the streams and into the air. We made a lot
of progress doing that, so we have a better country because of it. We
use much more energy now than we did 25 years ago, and we have a
cleaner country.
All of those things we have done to make this a better place in which
to live, to allow jobs to be available that allow workers to provide
for their families, are now being considered largely irrelevant because
one does not have to bother with those things in production here at
home. They can just produce elsewhere, and workers can be treated like
a pair of pliers or a wrench: When you are done with it, just throw it
away, just get rid of it, just leave it somewhere else. Do not worry
about it because you can find another one 8,000 miles away. You can
transfer the capital immediately, you can transfer the technology
immediately and combine the capital and the technology with somebody
who will work for 30 cents an hour. Do not worry about the consequences
for the American workforce because if one is an international
corporation interested in shareholder profits, they do not have to say
the Pledge of Allegiance. So do not worry about that.
Those are the values we ought to be talking about when we talk about
these trade agreements, values long forgotten, in my judgment, during
these debates, values that no one wants to discuss much. That is why we
are here for 1 day on the Senate floor on an issue this important, just
wedging it right in between now and the Fourth of July recess.
As I close, I ask my colleagues to look at this one more time. This
is a trade deficit chart that tracks the loss of American jobs and
tracks the selling of America to foreign interests. Every single day,
$2 billion of American cash, American assets, American real estate,
ends up in the hands of foreign interests. It is what Warren Buffett
means when he says that we as a country are headed toward a share
cropper future. I defy anyone in the Senate to come to the floor and
tell me this is moving in the right direction, tell me this is good
news.
This is a disaster. This is dangerous for our country. This is
evidence of a Congress that refuses to stand up, that does not have the
backbone, the will, and the strength to stand up for this country's
interests and is not willing to stand up and say: ``I want to protect
America's interests.'' Why will they not say that? Because they are
worried that somebody is going to call them protectionists. Well, sign
me up, for God's sake. My interest in putting on a suit in the morning
and coming to work is to protect the economic interests of this
country. Yes, I think we have a global economy and, yes, I think trade
can be beneficial, but if trade agreements are not mutually beneficial,
then this country has no business signing up to trade agreements that
cost this country jobs and economic strength and cost us an opportunity
for a better future.
I will have more to say about a range of these issues later this
afternoon, but I hope we will continue to hear from colleagues about
the underlying premise of this set of failures and how we can turn it
around. How do we turn it around? Every kid in this country who is now
in school is going to have a future that is injured by this strategy
unless we turn it around. Only we can do that. There is no one better
able to do it than us, but we have to have the will to do it. I hope
that perhaps at the end of the day, when we finally vote, we will find
a will to quit moving in this direction and stand up for the economic
interests of this country.
[[Page S7689]]
I yield the floor.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, I spent the last few minutes listening to
my colleague from North Dakota discuss a very important issue for our
country. While he and I have come to the same conclusion as to how we
are going to vote on this issue, we have come from different points of
view to arrive at I believe a similar conclusion.
Mr. DORGAN. Might I inquire of the Senator from Idaho, my intention
was to yield 10 minutes to the Senator from Idaho off our time. Is that
the Senator's intention as well?
Mr. CRAIG. I would ask that be done, if that is necessary. Ten
minutes is clearly adequate. I need no longer than that.
Mr. DORGAN. I yield 10 minutes to the Senator from Idaho.
Mr. CRAIG. Since Congress gave the President fast-track trade
negotiating authority in August of 2002, we have had to face the
reality that comes with it. I supported giving the President that
authority because clearly the executive branch is the branch that
negotiates trade agreements.
But while giving him that authority, I said that I would look at each
trade agreement and study it thoroughly to determine whether I believed
it was in the best interests of our country to approve it, and, as
important, in the best interests of my State of Idaho. Three agreements
have been reached and Congress has dealt with all three of them. I have
voted for two of those three.
The administration has been actively pursuing a vigorous bilateral
and free-trade agenda around the world, and I believe it is in the best
interests of our country, both economically and socially, to trade
where we can, when we can, as long as it is fair and balanced and it
recognizes all of the tradeoffs involved.
Trade with foreign nations is a valuable component to promoting
economic opportunities at home. This is not a one-sided economic
playing field. If we were to produce only that which America consumed,
then, working America, half of you go home. It is clearly in our best
interests to trade and we know that.
At the same time, we should not be trading off one segment of our
economy against another. Trade agreements ought to be there to promote
general economic growth in our country. Certainly it ought to be able
to promote economic growth around the world. But in the end, when that
trade agreement is struck and implemented, we ought to be able to say
it serves all of America well.
Congress is now debating, as we speak, the Central American Free
Trade Agreement, otherwise known as CAFTA. I became involved with our
trade negotiators as the President and our then-Trade Representative,
Bob Zoellick, began negotiating with CAFTA nations. As an agricultural
State, Idaho has a large stake in these agreements, and agriculture
right now is currently learning how to restructure itself in our global
markets to remain highly competitive, to supply not only food and fiber
to America but to consumers around the world.
As many know, a major agricultural crop in my State is sugar. Idaho
is the second largest producer of sugar beets, behind Minnesota, in the
United States. Idaho's sugar industry employs somewhere in the
neighborhood of 7,000 to 8,000 people and generates nearly $800 million
in economic activities in my State. The sugar industry of Idaho and in
most other sugar-producing States has had to restructure itself in the
last several years because of the unprofitability of it. Farmers have
pooled their money, they have created cooperative processing plants to
market their sugar, and so inherently have developed large personal
investments in all levels of the production of sugar.
It is well known that the world sugar market is one of the most
distorted agricultural markets in the world and that most world sugar
supplies are simply dumped on the markets at prices well below the cost
of production. As the Senator from North Dakota was showing a few
moments ago, some of that production is done at the lowest of costs and
at a tremendous cost to human capital. U.S. producers already face an
oversupply situation, with significant quantities in storage at the
expense of the producer. Prices have slowly declined. Yet production
costs in the United States have skyrocketed.
Although the United States is the fourth largest importer of sugar in
the world--no, we have not shut the world out, we are a very large
importer of sugar--CAFTA seeks to significantly compound an already
ugly situation and set a ``precedent of no return'' for further
negotiations already underway with major sugar-exporting countries such
as Thailand and Panama. In other words, this is not the last bilateral
agreement this Senate will see before it that deals with the issue of
sugar.
CAFTA nations already enjoy duty-free quota access for sugar with the
United States. I am not prepared to trade away an industry so vital to
my State to the overall well-being of some other country's sugar
industry.
Other Idaho agricultural groups understand that those farmers who are
sugar producers also are potato producers and bean producers and grain
producers. We are not just talking about impacting one commodity. We
are talking about impacting a lot of commodities. If Idaho were to lose
the acreage that it now commits to sugar, it would have to grow
something else. It would put pressure on other commodities.
We have sought and have obtained a relatively well balanced economy
in agriculture. In my opinion, CAFTA will distort that. Our U.S.
negotiators are willing to open our markets to increased sugar imports
while other competitors maintain unfair economic advantages in domestic
subsidies and minimal market access commitments.
Myself, along with my colleagues from sugar-producing States, took
our concern with CAFTA to the administration. With the help of my good
friend and chairman of the Senate Agriculture Committee, Senator
Chambliss, we met late into the night with our trade ambassador, Rob
Portman, and with the Secretary of Agriculture, Secretary Johanns. I
must say in all fairness to them they not only listened but finally,
after well over a year and a half of me saying ``don't go there'' and
then when they did, saying ``come work with us,'' they finally fully
began to engage.
They brought forth a proposal that, in my opinion, was not all bad.
At the same time, it modified the 2002 farm bill, in large part, and it
committed U.S. money to a program to save, if you will, or maintain, if
you will, that we had told our Senators on the floor was going to have
no net cost to the American taxpayer.
As a result, while I thought it was a significantly improved
proposal, the sugar industry of this country looked at it and looked at
what they felt was a very weakened position because of CAFTA and
because of NAFTA and because of what was happening in Mexico now and
because of a position they would be placed in the 2007 farm bill
negotiations, and they simply had to say no.
Trade agreements ought not to be trading one industry off against
another. These trade agreements ought not to have to come to Idaho and
any other State and say: We have weakened the capacity of your State,
or the agricultural industry of your State in this instance, to be
competitive and to produce and to sustain ourself and your livelihood.
It is for all of these reasons that I will be voting against CAFTA.
However, I applaud this administration for their diligent and willing
work with us on this issue. In the final hours, they tried. The problem
is, they didn't try a year ago, or 2 years ago, when this issue was
being negotiated. More than once I sat down with Ambassador Zoellick
and said: Don't touch sugar. It has a very static market today. It is
in a highly competitive market. And it will be most difficult for that
industry to sustain itself, let alone sustain itself in a diminishing
market environment.
They didn't listen. We have CAFTA. Anybody can waive two little
packets of sugar around and say that is all it is about.
But what about the Colombian agreement? What about the Thailand
agreement? What about the Panamanian agreement? What about the South
African agreement? All are sugar-producing nations. All are ready to
sit down and negotiate and ask for a piece of the U.S. sugar market.
That is why the producers in Idaho and around the Nation, when provided
this last moment agreement, simply had to say no.
[[Page S7690]]
They are placed, by this agreement, in a most difficult situation. As a
result, in my support of them, I will oppose.
Again, trade agreements ought not be about trading one segment of our
economy off against another, trading winners and losers, and therefore
creating an environment that pits one head to head with another. That
is unfair. Our Government ought not be doing that.
While there are many benefits to be gained by CAFTA, there are
winners and losers. I believe the sugar producers of this Nation become
losers. I have to vote no.
The PRESIDING OFFICER (Mr. Chafee). The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I rise to make a unanimous consent
request on the order of speakers to be recognized: Senator Kerry for 20
minutes, and that is from the time of Senator Baucus; Senator Inhofe,
for 15 minutes from my time; Senator Bingaman, 8 minutes from the time
of Senator Baucus; and Senator Brownback for 10 minutes from my time.
The PRESIDING OFFICER. Without objection, it is so ordered.
The PRESIDING OFFICER. The Senator from Massachusetts.
Mr. KERRY. Mr. President, it is interesting, listening to the Senator
from Idaho, who, as he said, came to this decision from a different
place than the Senator from North Dakota, and listening to the Senator
from North Dakota; both of them have raised issues they tried to get
the administration to respond to. I am very sympathetic with the sense
they have that the administration just didn't respond to them and
really was unwilling to try to accommodate what I think are very
reasonable concepts.
In May of 2003 I sent a letter to Ambassador Zoellick, asking the
administration to delay tabling CAFTA's labor chapter until Congress
had an opportunity to consult. I wrote again in October 2003, raising
similar concerns.
All we got was a very sort of abrupt and short letter that basically
never engaged in the kind of discussion that could have benefited all
of us so we would not have the kind of divide we have in the Senate and
in the country today.
During the debate of TPA in 2002, I offered an amendment to allow
communities to be able to preserve their health and safety laws which
were being challenged under NAFTA. Even now, with a lawsuit pending
against the State of California for attempting to protect their
drinking water--imagine that. The State of California wants to protect
its drinking water and the interests of its citizens. But nevertheless
they included the very same provisions that have led to that kind of
challenge in CAFTA.
In the summer of 2003, I suggested to the administration, in the
context of the Chile and Singapore agreements, that the labor standards
achieved in those agreements would not be adequate for CAFTA. The
reason for that is in Chile, in Singapore, and in Australia--all three
agreements which I supported last year--you have capacity for
enforcement. You have specificity with respect to the laws on the books
that can be enforced. And you have a record of that enforcement. All
three of those ingredients--capacity, specificity of law, and record of
enforcement--are absent in too many of the countries that are involved
in this agreement.
We tried to get the Trade Representative to understand that there is
an evenhanded way to open a fair agreement to trade but to address
those kinds of concerns. Regrettably the labor standards in the Chile
and Singapore agreements may be good for those countries, but they
should not be applied to CAFTA because of the lack of those three
critical ingredients.
Even in this last month, as CAFTA was considered in the Senate
Finance Committee, I offered an amendment that specifically laid out
what the administration could do to fix this agreement. That amendment
lost on a tie vote--10 to 10 was the division in the Finance Committee,
in no small part a division that was that close because the
administration opposed it.
So I regret enormously that we are where we are with respect to this
agreement at this point in time. I have been in the Senate now for 21
years, and I was one of those who was on the cutting edge and leading
the effort in our party to try to make it clear that we ought to trade
and that it is important to the United States. I still believe that. I
voted for NAFTA, the Uruguay Round, China PNTR, and the many bilateral
agreements negotiated by both the Clinton and Bush administrations.
Last year, while I was not here to vote, I supported the Chile,
Singapore, and Australia agreements precisely for the reason that they
had a strong ability and a strong record of enforcement, that they had
very specific laws, and that they had the capacity to be able to
enforce those laws.
There are some colleagues who have always opposed each and every one
of these trade agreements; and there are some who have been for
everything no matter what the balance is. For a number of years now I
have been trying to suggest not as a matter of ideology, not as a
matter of party label, because I don't think this should have a party
label, but as a matter of common sense, I have been trying to suggest
that the consensus we have built globally for trade, a consensus built
around the notion that, yes, there are some winners and losers, but you
do your best to mitigate the impact on losers, that you have sufficient
trade adjustment assistance, that you do enough education and training,
that you do enough with health care and COBRA payments so people can
cover themselves with health care during a transition, that you ease
the pain, so to speak.
At the same time, as you attempt to maximize the rising of all boats
in the tide that we proverbially think about, the rising tide lifts all
boats, the fact is, in many countries, it is not lifting all boats. The
standard of living does not move at the rate it ought to. The standards
for health, safety, labor organizations, or environment do not change
in the way they ought to. All of these are quality-of-life issues and
value issues, fundamental value issues that ought to be part of our
agreements.
This is not just basic economics. Particularly when you look at the
chart showing the deficits in trade that are growing, it is hard to
make a new economic argument about it. The fact is there are larger
issues at stake in a trade agreement.
For rigid ideological reasons, over the years, we have had tension in
the Senate and a fight over whether you embrace some of these other
considerations in a trade agreement. Part of the reason we have had
such intense reactions to trade meetings around the world, with riots
in Seattle and with other demonstrations around the globe, is because
of the raging pace of globalization and the discomfort it brings to a
whole bunch of people who feel powerless to be able to do something
about it. If we, the people who have the power to do something about
it, do not choose to do so, we leave people out in the cold and hurting
even more.
The fact is, the consensus--which has been global, that has helped us
to be able to build the trade structure--is fraying. It is fraying not
just in the United States but it is fraying in other countries as well.
The administration had a unique opportunity in this agreement to try to
address some of those concerns. We all understand that opening markets
sets in motion economic transition that everyone here knows creates
winners and losers at the same time.
While you may want to mask some of that impact, the personal impact
to people's lives with an unemotional language of economics in the
Senate, the fact is if you go to Ohio, Wisconsin, Minnesota, Idaho,
North Dakota, or other parts of the country, it is having a profound
impact on communities. It is having a profound impact on the fabric of
life in America and on our ability to be able to have a long-term
strategy for success.
We all know the numbers. Since 2001 we have shed nearly 3 million
manufacturing jobs. We have endured 42 consecutive months of economic
decline in the manufacturing sector. Fifteen years ago, 20 years ago,
30 percent of America's economic pace was services and 70 percent was
manufacturing. Today, it is 30 percent manufacturing and 70 percent
services. Many of those services are not the kind of high value-added
paying jobs Americans have come to expect.
[[Page S7691]]
We have long understood if we want a broad consensus for free trade
in America, we have to make these trade agreements work for all
Americans, not just for the winners, but for the people who temporarily
are in the losing position.
In the 1990s we began to respond to that. First we looked at the
trade agreements themselves and we decided we must protect American
workers from unfair competition. American workers should compete on the
basis of pay and skill and effort. But it is unfair, fundamentally
unfair, to ask Americans to compete against child labor or against
habitually depressed wages or habitually unfair working conditions.
In the Jordan agreement of 2001, President Clinton had come to
understand that in the later part of the 1990s. His administration
moved specifically to include these other values within the four
corners of a trade agreement. We gave basic labor protections the same
standing we give in the protections we provide to corporate America. In
other words, we made a new bargain with the American worker in order to
hold on to the consensus. The bargain was very simple: We will protect
your economic interests, your job from unconscionable competition such
as child labor, just as we protect a corporation's economic interests,
which are its product, from dishonest competition such as copyright
theft. It seemed like a very fair bargain, a very fair form of
protection.
In CAFTA, we go backwards from that standard. We go backwards from
that standard for no explicable reason. Once again, our corporations
get the protections they need with an elaborate system of rules,
complaints, appeals, compensation, and strict enforcement. But all our
workers get is some flowery language with no teeth behind it.
We are going to hear that CAFTA has the strongest labor provision of
any trade agreement. That is what some folks have been trying to say.
Look at this agreement, read the language, and you realize that is once
again spin. It comes down to this: There is only one labor provision in
CAFTA that is enforceable. It is a nation's commitment to ``enforce its
own laws.'' Now, that sounds good, or it sounds like something, but in
reality this provision does nothing to protect workers because, No. 1,
there is no stipulation whatever as to what those laws are; No. 2, some
of those laws are completely inadequate; No. 3, there is no enforcement
capacity in some of those countries to enforce even the inadequate
laws, if you can understand what they are. There could have been a
stipulation as to what they are. There could have been an understanding
in the four corners of this agreement as to what standard we would try
to reach.
Moreover, if the provision does lead to an attempt at enforcement,
guess what. The maximum so-called penalty is $15 million. There is a
cap. There is no cap on the corporate penalty. But there is a maximum
cap. Guess what. It is a so-called penalty because the fine is then
returned to the offending country, ostensibly, to be used to fix the
problem, but without any real enforcement mechanism to do so.
Senator Bingaman will say to the Senate that he has secured an
agreement from Trade Administrator Portman that they will put $40
million a year into the enforcement efforts. Again, if you do not have
adequate laws and you do not have adequate specificity and you are
enforcing in a structure that has a cap on the payment and the payment
goes to the country that offended, you are not enforcing the standards
of workers.
There is another labor provision in CAFTA. It asks a nation to strive
to eliminate ``the worst forms of child labor.'' We do not even define
what the gradations of the forms of child labor are. Just the worst
forms of child labor. There shouldn't be any form of child labor. But
we are only going to seek to strive to get rid of the worst forms,
sweatshop conditions and other problems.
But if a nation fails to do that, we can only consult. In other
words, we can talk about ending child labor in a CAFTA country, but we
cannot take any action to end child labor in a CAFTA country. That is
wrong. That is contrary to the values of our country and to the
fundamental values of American workers. Words alone are not going to do
anything for kids who are suffering in work sweatshops. They will not
do anything for the American workers who lose their jobs as a
consequence of being undercut by that level of competition.
I ask my colleagues to answer a simple question: Why is there a
double standard that we are going back to when we passed an agreement
that set a higher standard, and there is no showing as to why that
standard hasn't worked, shouldn't work, and shouldn't be part of this
agreement? Why do Americans not have the same standing as a
corporation? Why don't they have the same standing to end child labor
or sweatshop conditions that corporations have to go out and protect
copyright or patent theft? Why the double standard that punishes
American workers?
I share with many of my colleagues a longstanding commitment to the
development of the well-being of Central America, but I am concerned
that CAFTA is insufficient to provide for steady and balanced economic
growth in the region. The administration claims supporting CAFTA is a
security issue. I agree, it is a security issue. It is about the
economic security of some of the more vulnerable economies in our
hemisphere. We have to ensure that a trade agreement with Central
American countries grows their economies, protects their workers, helps
them preserve their sensitive ecosystems, and, most importantly,
encourages balanced and widespread economic growth and opportunity for
all of the people in the region.
The most troubling aspect of CAFTA is that its shortcomings,
particularly the administration's indifference to our own workers, are
part of a larger problem. I will speak about that for a minute. What
CAFTA underscores is the need for a national policy to make sure
America is competitive, the leader in the global economy of today and
of tomorrow. The reality is, there is no comprehensive strategy to meet
the needs of a fast-changing playing field.
What am I talking about? Certainly when we negotiate trade deals with
nations that have an insufficient or lackluster labor record, you have
to give citizens the same standing to be able to end child labor that
corporations have to end copyright and patent theft. It seem to me it
is a pro-trade, free-trade policy that builds consensus and which
considers all Americans. But it was refused in this agreement.
After you have the agreement in place, we need to defend America's
interests. This is true of all of our agreements. The administration
has to stop giving in to competitors. The Clinton administration
brought an average of 11 trade cases to the World Trade Organization
per year. This administration has brought a total of 12 cases in the
first 4\1/2\ years.
The administration also needs--and many colleagues have spoken about
this--to take action against China's currency manipulation. We keep
hearing about it. People talk about it. And they talk about it. And
they talk about it. And they talk about it some more. The Senate has
actually voted and gone on record that the administration needs to do
something other than talk. But nothing has happened.
In the administration's recent dealings with China, according to our
trade representative, counterfeiting and piracy in China are at
epidemic levels. That piracy costs U.S. companies $20 to $25 billion
annually. We are told the problem is getting worse, not better.
According to press reports in May, the United States presented the
Chinese with a list of modest proposals to curtail intellectual
property violations. Modest proposals. We gave them a list. The Chinese
rejected the proposal outright.
What did the administration do? They did not respond by pressing the
Chinese. They did not respond by taking any particular action. Guess
what they did. They told United States companies to go file lawsuits in
Chinese courts to defend their rights. It is insulting and it is
ridiculous. It is not just putting the agreements in place, it is also
enforcing them that the American worker is asking for.
In addition to that, we have all heard about the Chinese firm
recently seeking to purchase Unocal, an American energy company. What
many people do not know is that Chinese company borrowed money from the
Chinese Government in order to make the bid. It
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should not come as a surprise since it is 80 percent Government owned.
That has upset a lot of people and generated a lot of press. But it
ought to concern us even more that we are doing the same thing in the
United States in the following way. Since the start of the Bush
administration, the Federal Government has borrowed billions of dollars
to fund our national debt and cover questionable and, some think, even
reckless tax choices in fiscal policy. Billions of dollars have been
borrowed from--guess where--none other than the Chinese Government.
Mr. President, I yield myself an additional 5 minutes off their time.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. KERRY. Mr. President, we ought to be concerned about the missed
opportunities that are related to trade adjustment assistance. The
Senate has supported trade adjustment assistance. If people lose their
jobs, they have the right to expect that we are going to try to help
transition. We have done that because we have understood the movement
to open markets means this economic transition.
Guess what. Once again, the administration has ignored the will of
the entire Finance Committee on this issue, which voted to include TAA
for service workers in the CAFTA agreement. In the Commerce Committee,
Senator Ensign held an excellent hearing on America's competitiveness.
Our witness was the administration's point person on manufacturing, Al
Frink. He told us he believes there is a shortage of skilled workers in
America. And that shortage of skilled workers is hurting our economy.
What the Under Secretary did not say, or maybe he did not know, is
that the Bush administration has resisted congressional efforts to fund
worker retraining and vocational education, which would, in fact,
address the skilled worker shortage.
The administration's indifference to competitiveness goes deeper. We
have a tax policy that rewards American and multinational companies for
housing operations abroad instead of housing them here in the United
States. It is hard to imagine a more backward tax policy. We should end
it. But for this administration, it is not only not a priority, it is
not even an afterthought.
We also do not adequately fund the basic science and research that
will produce the revolutionary technologies and products of tomorrow.
Not surprisingly, fewer and fewer American students are choosing to
study science and engineering. The Bush administration has proposed
cutting Federal research and development spending for the first time in
10 years. The story is much the same in our public schools. Bill Gates
has called our high schools obsolete because they fail to prepare our
kids to compete. Alan Greenspan said much the same thing before the
Finance Committee last week. Yet every year the administration refuses
to fully fund No Child Left Behind, seeming perfectly content to see
those kids not study science and engineering, or perhaps not study at
all. And all of this time, the administration negotiates trade deals
that remain indifferent to American workers and fail to defend our
legitimate interests at home, all the while refusing to adequately
invest in science, research, training, and ignoring the problems that
drain our businesses, such as health care.
The competition is hard at work at every single one of these. China
and India will probably turn out 300,000 engineers each over the next
year--way ahead of the United States. While our shortsighted policies
stunt our competitive advantage, China, India, and all of Asia and
Europe have developed long-term investment plans, long-term
infrastructure investment plans, long-term trade, and long-term
educational plans, all aimed at one thing: eliminating America's
economic dominance. They have national programs aimed at educating
workers, reducing capital costs, and attracting businesses. And we are
falling dangerously behind.
I was visited just the other day by the new president of MIT. Every
Senator here, I know, respects that institution. She was deeply
concerned. She expressed this enormous concern about what is happening
to the competitive advantage of our great science and technology
institutes across the country and our commitment to science as a whole
as a Government.
In the Commerce Committee, we heard how Japan and the European Union
are implementing large-scale, long-range R&D projects aimed at
developing leading-edge commercial technologies. For example, from 1995
through 2001, the emerging economies of China, South Korea, and Taiwan
increased their investments in research and development by
approximately 140 percent.
It is urgent we consider real measures to advance America's
competitiveness and forge a new global consensus on trade in our
country. That global consensus begins with a set of rules that makes
sense to the American worker, rules that work for the American worker,
even as we open new markets, which we must do.
We can do better than this trade agreement. We need to.
Mr. President, the bottom line is that CAFTA is not a good deal for
America. It is a good deal for some companies. It is a good deal for
some investors and shareholders. It is a good deal even for some of the
countries that are a party to it. But it is not a good deal for the
American worker. So I hope colleagues will help America stay at the
top, while making trade fair for Americans. And I hope colleagues will
join in saying no to this agreement in its current shape.
Thank you, Mr. President.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. INHOFE. Mr. President, I think under the UC I have been allocated
around 15 minutes. I ask unanimous consent to be granted such time as I
shall consume.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. INHOFE. Thank you, Mr. President. I think I will be able to do it
within that time, anyway.
Let me make a couple comments. I think almost none of these items
have been covered before. It is approaching this whole CAFTA idea from
a different perspective.
Let me first of all say that when this first came up, I just heard
``CAFTA,'' and I said: I am against it. I led the opposition against
NAFTA 11 years ago. I thought this was more of the same, and so I was
opposed to it. Then someone showed me how my Oklahoma farmers might be
affected.
I am not sure you can see this chart, but it shows the various
grains, cattle, meat products, dairy products, vegetables, and so
forth. The blue bars are the tariffs that are charged to our farmers,
and the others are what are charged to imports coming in. I have found
that in every case, when this is fully implemented--if it is--my
Oklahoma farmers will benefit, and benefit materially.
So I actually went and talked to some of the farmer groups that were
leaning against the agreement for a number of reasons--a number of
reasons that have been posed on this floor--only to find out they have
changed their minds and they are very much supportive.
That is not really why I am here today. I think that is something
very specific we can look at. We know it is true. I would like to look
at this in a little different way. I was distressed a little bit
because some of my very good friends in the conservative communities
were opposing CAFTA. I have gone to any lengths to try to determine
specifically what their opposition was.
There are five organizations that are conservative organizations--
they are great organizations. I agree with them almost 100 percent of
the time. Their argument was: We are against this as we are against all
treaties because anything that is this kind of a multinational thing
will infringe upon our Nation's sovereignty.
Well, I have to tell my good friends in these five conservative
organizations, there is no one who is stronger in this position than I
am. I am the guy who stopped the Law of the Sea Treaty. Quite frankly,
I think it was going to pass. It actually had passed out of the Senate
Foreign Relations Committee with a unanimous vote. I found out what was
in it. I found out we were ceding our jurisdiction--our sovereignty, if
you will--over some very important parts of the water-covered part of
the planet. I felt it was wrong. And we have not--I am not saying it is
all dead in the water right now, to use a phrase, but I think it is.
Certainly it
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has been stalled. I led the opposition. I was opposed to it. I was not
for it.
The Kyoto treaty, you all know how I feel about that. We debated
climate change on the Senate floor 2 weeks ago. I spent 2 whole days
talking about that. I think we know that under that treaty, according
to the Wharton Econometrics Survey from the Wharton School of
Economics, if we had to comply with the Kyoto treaty, it would have
cost our average family of four $2,700 a year. It would have doubled
the price of energy and gasoline and all that. We know that is true. I
led the opposition to that and was very proud to do that.
Eleven years ago, we had NAFTA. I was in the other body, in the House
of Representatives, 11 years ago. I was elected in a special election
to come over to this body. So the year they had NAFTA, I was able to
lead the opposition to the ratification of NAFTA in both the House and
the Senate. I was the only one who could do that. So I came over here
to the Senate.
I say to my good friend from North Dakota, who posed some excellent
arguments against NAFTA just a few minutes ago, this CAFTA is not
NAFTA. On the NAFTA part, I agree. I remember standing on the floor of
both the House and the Senate saying: If we pass NAFTA, that is going
to allow a Mexican trucker to pick up a load in Brownsville, TX, take
it to Tulsa, OK, and not have to comply with any of our health
standards, our environmental standards, our wage and hour standards.
Sure enough, these things turned out to be true. I do not think it was
a success. I think it was a failure.
So getting back to the ones who are for this agreement and against
it, I would have to say to the very small number of conservative
organizations that are opposing this, the vast majority of the
organizations in the conservative column are supporting it.
Listen to this. Those organizations that are supporting CAFTA include
Americans for Tax Reform, Center for Security Policy, National Tax
Payers Union, The Heritage Foundation, David Keene of the American
Conservative Union, Citizens Against Government Waste, Competitive
Enterprise Institute, Oklahoma Council of Public Affairs, The Club for
Growth, the National Tax-Limitation Committee--that is Lew Uhler and
his group--Citizens for a Sound Economy, Empower America, and the James
Madison Institute. That is just to name a few. They are the 40 most
prominent--except for 5--organizations that are supporting it.
I am very sensitive to this. Maybe I should not be that sensitive,
but I am because, according to the American Conservative Union, in
their rating, I am not No. 2 or No. 3 or No. 4 but the No. 1 most
conservative Member of the Senate. Now, I am qualifying myself for this
because I keep hearing that conservatives are somehow opposed to this
agreement, as they were NAFTA. Of course, I agreed with them back at
the NAFTA time.
Now, what kind of liberal groups are opposing CAFTA? We have already
talked about the conservative groups that are supporting CAFTA. Those
who are opposing it are Earthjustice, National Environmental Trust,
Friends of the Earth, EnviroCitizen, Freedom Socialist Party--there is
another great group--the Berkeley Fellowship of Unitarian
Universalists' Social Justice Committee, Nonviolence International,
Progressive Democrats of America, Safe Earth Alliance, Public Citizen,
Social Welfare Action Alliance, Community Alliance for Global Justice,
Gray Panthers of Austin, San Francisco Neighbor-to-Neighbor, New York
State Green Party, and the Holland Peacemakers. I could go on and on.
And we will insert more of them in the Record.
But by and large, what I am trying to get across is that virtually
every far-left, extremist, liberal group in America is opposing CAFTA.
And somebody has to say it. I was sent an e-mail from my State of
Oklahoma saying that they understood I was still undecided. The
responses are about 9 to 1 in opposition to CAFTA, and, therefore, you
cannot dare go ahead and support CAFTA.
Let me just say, on many occasions, when the people at home do not
have available to them the information that we do because that is what
we are paid to do for a living and we find out the information is
wrong, I do not mind doing that. I can explain this to the people in my
home State of Oklahoma. They do not want to identify themselves with
that group, that liberal group I just read off. And when they find out
about it, they will be very supportive.
But I only bring that up to say that if anyone is out there with the
thought that this is a conservative versus liberal issue, it is, but it
is on the other side. The liberals are opposed to it. The conservatives
are supporting it.
But I have another concern that is far greater, that far outweighs
even the benefits it might give to my farmers in my State of Oklahoma,
even the benefits that would be achieved by passing this to the very
conservative groups in America; that is, I happen to be old enough to
remember what happened in the 1980s. I remember Ronald Reagan, a great
President. I remember at that time we had Communist regimes in Grenada,
El Salvador, Nicaragua, and Costa Rica, and that they were
infiltrating--at that time, it was still the Soviet Union--they were
trying to take over America by doing it through Cuba, and then all
these organizations, all of these countries where they had taken over
the government.
By failing to pass this treaty, we could undo all of those successful
democratizations of the Reagan and the first Bush administrations. I
remember the Contras, the freedom fighters, who were down in Nicaragua
at that time, and the fight that was almost impossible; they were
fighting for their freedom. I remember those five countries that are
part of this treaty: the Dominican Republic, El Salvador, Honduras,
Nicaragua, and Costa Rica. They have all committed troops in support to
the Iraqi coalition forces and have demonstrated their support for the
global war on terrorism. They are fighting side by side with our troops
over in Iraq and Afghanistan. These are the people we want to reward.
These are not people we want to somehow punish, as though they have
done something wrong. They are fighting for freedom.
CAFTA approval for these countries and their economies should aid
security there and counter the influence by Cuban and Venezuelan
Governments under Castro, Chavez, Ortega, and others opposed to the
United States influence in the region.
I mentioned Chavez, Ortega, and Castro. They are among the anti-U.S.
forces in the region, and they are all against CAFTA. These Communists,
these enemies of the United States, Chavez, Ortega, and Castro, are all
in opposition to CAFTA. If you want to be on their side, you would vote
against CAFTA. They fear its passage would show support for and
facilitate the efforts of the pro-American countries and parties in the
region. Also, Daniel Ortega, former Nicaraguan president and Sandinista
leader, is making attempts to elevate his obsolete ideology based on
Marxist-Leninist theory. Further, upon his capture, Ortega expressed
solidarity with Saddam Hussein against what he called the Yankee
occupiers of Iraq. In other words, here is a guy who has been ousted as
President of Nicaragua, one we defeated back in the 1980s, one who was
trying to spread communism against freedom and democracy in Latin
America. He was on the side of Saddam Hussein and called us the Yankee
occupiers of Iraq.
A couple weeks ago I had a pretty bitter competition with one of my
friends here in the Senate from Arizona, Senator McCain. I disagreed
with him on an issue, and we spent 2 days debating that issue and
fighting with each other. I have to say that I wholeheartedly agree. I
happened to hear some of his remarks a few minutes ago. I share his
concern about the state of democracy in Central America. Failing
economies will create an environment in which regimes such as those of
Fidel Castro and Hugo Chavez may once again poison the future of these
nations. The historical threat of communism in Central America, the
influence of Castro in countries such as Nicaragua, and the Sandinistas
in power also affected neighboring countries such as Honduras and El
Salvador. CAFTA can protect these emerging democracies.
For example, Nicaragua, the second poorest country in the Western
Hemisphere, second only to Haiti, has a President Enrique Bolanos. He
is a pro-American President. He is facing a tough 2006 election, and
the candidate
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he is facing is none other than Daniel Ortega. Bolanos knows that CAFTA
is the keystone to his plans to boost economic growth and blunt the
political attacks of the Sandinistas. Who would have ever thought in
the last 10 years that they would reemerge, but they have. So now we
have Daniel Ortega back there trying to do some things. To quote
Senator McCain:
If there's anything that we need today, it is strong,
viable economies in Central America so that they can
progress, so that they can be strong and they can again be
allies of the United States of America, not in a military
fashion but in their advocacy for free and open societies,
democracies, and places where people can raise their families
in a situation of security and peace.
That is what Ronald Reagan did back in the 1980s.
I heard the junior Senator from Massachusetts speaking in opposition
to the agreement. I don't know whether it is because of his past
relationship with what was going on down in Nicaragua some 12 or 14
years ago, but I would like to quote from an April 26, 1985 edition of
the Washington Post. Keep in mind, this was back when we had Daniel
Ortega down there being promoted by Castro and by the Soviet Union to
try to spread communism in Central America.
The lengths to which some Democrats were willing to go in
pursuit of nonintervention were extraordinary. Sens. Tom
Harkin and John Kerry returned home from an 11th-hour trip to
Managua [Nicaragua] clutching a piece of paper signed by
President Daniel Ortega which they announced was a ``new,
bold and innovative approach'' and ``a wonderful opening.''
At their arrival home, only the umbrella was missing.
We have a difference of opinion. We don't agree. We didn't agree back
in the middle 1980s about Daniel Ortega and what the Communists were
trying to do in Central America and we don't agree today.
For those who weren't around at that time, it was a very emotional
time. The contras were the freedom fighters. They were supposed to win.
I used to go down there. There was a hospital tent that was right
across the border in Honduras. That is where they would take the
freedom fighters from Nicaragua. They would take them over there to
treat them. This tent was about the size of this Senate Chamber. It had
beds all around the periphery. In the middle, not even screened, was
the operating table. The only operations they performed there were
amputations because of all the mines that were there. And so these
freedom fighters would come in there and be mended and go back and
fight for their freedom across the border in Nicaragua. There must have
been 40 beds all the way around, people who had had these amputations.
At that time I did a pretty good job of speaking Spanish. I thought,
you kids--the average age was 16 years old because the older ones had
already been killed--you kids are fighting for your freedom, you are
fighting against this force, the Communists, supplied by Castro and the
Soviet Union. It is impossible. Why are you doing this? And I went
around and talked to each one of them. I remember coming up to a little
girl who was 15 years old. Her name was Elena Gonzales. I asked her
that question. And she looked up to me. It was her third trip back to
that hospital tent, and they had amputated her right leg a few hours
before. The blood was coming from the bandages. She looked up at me
with teary brown eyes and she said:
Es porque han tomado nuestros campos . . . han tomado todo de lo que
tenemos. Pero de veras, ustedes en los Estados Unidos entienden. Porque
ustedes tuvieron luchar para su libertad lo mismo que estamas luchando
ahora
(English translation of the above statement is as follows:)
Yes, it is almost impossible, but we are fighting. We are fighting
because they have taken our farms and ranches. Why would you in the
United States question why we are doing this? You had to fight against
the same odds for your freedoms as we are fighting now.
That little girl didn't know whether the Revolutionary War was 200
years ago or 20 years ago. But she knew we were that beacon of freedom
and that the beacon was about to go out in their country. They were
willing to fight. And they died and they won. So now we have the rest
of the story.
This is an opportunity for us to do something that is good down
there. Yes, I think it is good for my Oklahoma farmers. And yes, the
conservatives support it, and the extreme liberals oppose the CAFTA
treaty. But I think the strongest argument is that this is an
opportunity for us to keep the Ortega and Chavez and Castro forces from
undoing all the progress that was made throughout the 1980s and the
early 1990s.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I yield myself 8 minutes off the time on
this side.
I want to speak briefly about the CAFTA agreement. I start from the
proposition that increased trade with the international community can
advantage us, and it also can advantage those with whom we trade. Most
of the trade of these countries that are covered by this CAFTA-DR
agreement, most of their trade, over 70 percent of their trade, is, in
fact, with the United States. It is very much in our interest that that
circumstance remain the case. It can benefit us, and it can benefit
these countries to see that trade increase. And it is very much in our
interest, not only to strengthen our own country's economy but to see
the economies of this region strengthened.
This trade agreement comes at a time when our trade imbalance with
the world is enormous. It is the largest in the history of our country.
It is the largest in the history of any country in the world.
Unfortunately, it is continuing to grow. As far as I can tell, our own
Government has no strategy to deal with that problem. We have no
strategy to promote investment in the United States. We have no
strategy to promote the building of productive capacity or to keep this
country competitive in the global economy.
I hope very much that the Finance Committee, which I am privileged to
serve on, can play a role in developing such a strategy over the next
few months. When we had the markup of this legislation yesterday, I
discussed that with Senator Grassley and Senator Baucus. It is my hope
they will be able to schedule some hearings to begin understanding this
issue better and helping us to craft a set of proposals to help deal
with the very real problem we have in global trade.
That being said, when I look at the provisions of this DR-CAFTA
agreement, I do not see them contributing significantly to that trade
imbalance. These are countries that have exported over 85 percent of
what they send to the United States duty free. They have done that
since the implementation of the Caribbean Basin Trade Partnership Act
in 2000, and before that they were shipping most of their product into
the United States duty free under the Caribbean Basin Initiative. The
main effect of this agreement we are now debating will be to phase out
and eliminate tariffs that they currently impose upon our products that
we are exporting to them.
I don't see the basis for the claim, which I have heard on the Senate
floor and from others around the country that this agreement will
result in the further export of jobs from the United States to Central
America. The reality is that U.S. companies have many options about
where to build their next plant, where to manufacture the products that
they sell. Central America has been one of those options for a very
long time. There is nothing I know of pending here in the Congress that
would change that circumstance. In my view, this agreement would not
change that circumstance as well.
I would hope and expect that if this agreement is implemented, as I
expect it will be, we will see the encouragement of more investment in
productive capacity in Central America, but at the same time, as our
exports to that region increase, we will see more investment in
productive capacity here in the United States.
There are clearly some problems with this agreement. Many of those
have been pointed out. I don't suggest I have answers for all of those,
by any means. Two of the problems that have particularly concerned me
are, No. 1, the serious lack of attention to the enforcement of worker
rights in these countries and, secondly, the inadequate provision of
assistance with regard to the negative impacts that U.S. exports of
agricultural product into that region may cause.
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Let me talk first about enforcement of worker rights. I have urged
the administration to commit resources to this as a priority. It is not
reasonable to require U.S. producers and workers to compete with
foreign producers who do not afford their workers certain basic rights.
To begin addressing this issue, Ambassador Portman, our trade
representative, has assured me the administration will propose and will
support funding for worker rights enforcement to the extent of $40
million per year for fiscal years 2006 through 2009. Second, on
monitoring of compliance with the various requirements on worker
rights, there is a need for an independent and transparent monitoring
of the treatment of workers in these countries. I have urged the
administration to fund the International Labor Organization, or ILO,
headquartered in Geneva, to conduct ongoing monitoring on worker rights
in Central America. This would include reports that they would publish
every 6 months beginning when the agreement goes into effect and
continuing to the end of the 2009 fiscal year.
The administration has agreed to commit $3 million per year to
accomplish that task. That $3 million would come out of the $40 million
per year in funding that they are otherwise committing for enforcement
of worker and environmental rights.
I believe both of these commitments--to worker rights enforcement and
the commitment to ILO monitoring--should be a part of all trade
agreements that we have with developing countries. In addition, of
course, I hope that the actual commitment to workers' rights standards
in the language of the treaties, in any future treaties we sign, will
be stronger than we find in this agreement. I believe it is also
incumbent upon us to urge the next administration, after President Bush
leaves office, to continue with these same commitments in the future.
The other issue I mentioned is agricultural assistance--adjustment
assistance for those working in the agricultural sector. I have also
urged the administration to commit resources to allow subsistence-level
farmers to make a transition without undue dislocation problems. This
should help reduce the problem of dislocation of workers in these
countries and the additional illegal immigration to the United States
that likely would result if that dislocation occurs.
Again, the administration is committed to provide increased support
to address this issue. The level of funding is not what I would like it
to be, but if these countries do receive funding under the Millennium
Challenge Corporation grants, those funding levels should increase
substantially.
Mr. President, each of these commitments that I have referred to are
set out in a letter that Ambassador Portman has provided to me.
I ask unanimous consent that that letter be printed in the Record
following my comments.
The PRESIDING OFFICER. Without objection, it is so ordered.
(See Exhibit 1)
Mr. BINGAMAN. Mr. President, with these additional commitments, I
have concluded that I can support the implementation of this trade
agreement. I will do so when the roll is called later today.
I yield the floor.
Exhibit 1
Executive Office of the President, the United States
Trade Representative,
Washington, DC, June 28, 2005.
Hon. Jeff Bingaman,
U.S. Senate,
Washington, DC.
Dear Jeff, as the Congress considers the Central America-
Dominican Republic Free Trade Agreement (CAFTA-DR), you have
raised concerns about ongoing efforts to improve enforcement
of labor laws and to monitor progress in this regard in the
CAFTA-DR signatory countries. As you know, Congress
appropriated $20 million in FY05 specifically for projects to
improve labor and environmental law enforcement in these
countries.
The recent House Appropriations Committee mark-up of the
FY06 Foreign Operations appropriations bill increases this
commitment for the next fiscal year, with $40 million
earmarked for labor and environmental enforcement capacity-
building in the CAFTA-DR signatory countries. The
Administration is willing to support this level of funding in
the FY06 Senate appropriations bill.
Furthermore, because we are willing to make a longer-term
commitment to improve labor and environmental law enforcement
in the CAFTA-DR countries, the Administration is willing to
propose and support this same level of labor/environment
capacity-building assistance for the next three fiscal years,
FY07 through FY09.
More specifically, you have suggested the assistance of the
International Labor Organization (ILO) in monitoring and
verifying progress in the Central American and Dominican
governments' efforts to improve labor law enforcement and
working conditions.
We are willing to implement your idea. Your proposal, as I
understand it, is that the ILO would make a transparent
public report of its findings every six months. The
Administration has now consulted with the ILO and determined
that this function would require additional funding to the
ILO of approximately $3 million annually. The Administration
is willing to devote approximately $3 million of the $20
million in FY05 labor enforcement assistance monies to
support and fund this ILO monitoring initiative. To ensure
that this monitoring continues, the Administration is willing
to continue a funding commitment to ILO monitoring for the
next three fiscal years, FY07 through FY09.
The Administration also shares your goal of ensuring that
we pair expanded trade opportunities with economic
development assistance designed to ease the transition to
free trade, especially for rural farmers in our CAFTA-DR
partners. On June 13, 2005, the U.S. Millennium Challenge
Corporation (MCC) signed a $215 million compact with Honduras
targeted specifically at rural development and
infrastructure, and on the same day the MCC announced a
$175 million compact with Nicaragua that will be signed
shortly.
As Secretary Rice and I have already communicated to you,
we are willing to give high priority to negotiating compacts
with El Salvador, Guatemala, and the Dominican Republic when
those countries become eligible for MCC assistance under
higher per capita income caps next year. I anticipate that
such compacts would provide substantial U.S. economic
assistance for rural development in these countries.
In addition, the Administration has worked with the Inter-
American Development Bank (IDB) to provide new assistance,
including $10 million in new grants announced by the IDB
earlier this month for rural development and institution
building. I hope you will join me and officials from the IDB,
World Bank, and other institutions next month for an
international donors conference to discuss other ways we can
direct development assistance toward meeting the needs of
rural populations.
To address your specific concern about the period before
MCC compacts might be negotiated with El Salvador, Guatemala,
and the Dominican Republic, the Administration is willing to
support additional spending for rural development assistance
of $10 million per year for each of those countries starting
in FY07 for a total of five years, or until the signing of an
MCC compact with such country, whichever comes first. This
amounts to a $150 million commitment in transitional rural
assistance for these countries over five years.
These monies will provide transition assistance to rural
farmers in these three countries for a defined period, while
preserving a very strong incentive for candidate countries to
meet the statutory criteria to receive what would likely be
much higher levels of economic assistance under an MCC
compact. Since the implementation of CAFTA-DR requires steps
which reinforce the statutory criteria for funding under the
MCC law, I believe that implementation of the agreement will
assist these three countries to move quickly toward
qualifying for a successful MCC compact with the United
States.
Furthermore, because many of the agreement's requirements
for agriculture liberalization in the CAFTA-DR countries for
sensitive commodities--such as dairy, poultry, and rice--will
not fully occur until ten, fifteen, or even twenty years
after CAFTA's implementation date, I am confident that this
transitional mechanism provides ample time for adjustment in
the rural economies of these nations.
Sincerely,
Rob Portman.