Congressional Record, Volume 152 Issue 72 (Thursday, June 8, 2006)

[Congressional Record Volume 152, Number 72 (Thursday, June 8, 2006)]
[Senate]
[Pages S5646-S5653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

SUSAN C. SCHWAB TO BE UNITED STATES TRADE REPRESENTATIVE

The PRESIDING OFFICER. Under the previous order, the Senate will
proceed to the following nomination, which the clerk will report.
The assistant legislative clerk read the nomination of Susan C.
Schwab, of Maryland, to be United States Trade Representative, with the
rank of Ambassador Extraordinary and Plenipotentiary.
The PRESIDING OFFICER. Debate on this nomination shall be as follows:
Senator Dorgan for 30 minutes, Senator Conrad 15 minutes, Senator
Baucus, 10 minutes, Senator Grassley, 30 minutes.
The Senator from North Dakota is recognized.
Mr. DORGAN. I ask unanimous consent the Senator from Iowa be
recognized. I believe the Senator from Alabama wishes to be recognized.
I am happy to proceed following those two.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. GRASSLEY. Mr. President, I strongly support the nomination of
Susan Schwab to serve as U.S. Trade Representative.
It is almost 7 months to the day since the Senate unanimously
confirmed Ambassador Schwab to be Deputy U.S. Trade Representative.
During her service in that position, Ambassador Schwab has amply
demonstrated her qualifications to take over as our next trade
representative.
She successfully concluded negotiations of trade agreements with Peru
and Columbia and has been actively engaged in the ongoing negotiations
of the Doha Development Round of the World Trade Organization.
Given her strong background in trade policy, it is not surprising,
then, that Ambassador Schwab has served so well in her current
position.
Ambassador Schwab formally served as Assistant Secretary of Commerce
and Director General of the United States and Foreign Commercial
Service. That is an agency within the Department of Commerce with
people on the ground in foreign countries pushing for the interest of
U.S. businesses.
She, herself, worked abroad to advance U.S. trade objectives while
serving as a trade policy officer in the U.S. embassy in Tokyo.
Her first job in Washington was as an agricultural trade negotiator
for the Office of U.S. Trade Representative. Ambassador Schwab thus
knows full well the importance and the challenge of advancing the trade
interests of U.S. family farmers.
Ambassador Schwab also has extensive experience working for the
Congress of the United States, the very committee that I chair. She
spent 8 years during the 1980s as a trade policy specialist and then as
legislative director for then-Senator Danforth at a time when he
chaired the trade subcommittee of this Committee on Finance.
Ambassador Schwab is well aware of the important role Congress plays
in U.S. trade policy. I look forward to working closely with her in
advancing U.S. trade objectives.
In addition, Ambassador Schwab has experience working on trade issues
also in the private sector. At one point, she was director of corporate
business development for Motorola. In that position, she engaged in
strategic planning on behalf of Motorola in the continent of Asia.
More recently, she served as dean of the University of Maryland
School of Public Policy. That was from 1995 through the year 2003, and
then as president and CEO of the University System of the Maryland
Foundation, as well as serving as vice chancellor for advancement.
Her academic and private-sector experiences complement her strong
background in Government service. She is well rounded, in other words.
Given the major challenges we face in advancing a robust trade agenda,
it is especially important we have someone of Ambassador Schwab's
caliber serving as U.S. Trade Representative dealing with 149 countries
that are members of the World Trade Organization.
We need to achieve substantial progress in Doha Round negotiations,
and soon, if we are going to succeed in getting an agreement before
trade promotion authority for the President of the United States
expires next year. We still have a long way to go on those negotiations
to reach an ambitious outcome that would be acceptable to me as
chairman of the committee, but I think I can speak for the entire
Congress on that point.
We are also in the process of negotiating free trade agreements with
a number of important trading partners, including South Korea and
Malaysia. These are going to represent terrific challenges. These are
going to represent yet new challenges for her, particularly in
addressing regulatory and other nontariff barriers to trade.
It is essential our bilateral negotiations with South Korea,
Malaysia, and other nations conclude in time to be considered under
trade promotion authority which expires July next year.
In addition, it is important our next trade representative continue
to encourage meaningful regulatory reform in other major trading
partners, especially Japan and China.
I expect Ambassador Schwab to continue to push our trading partners
to come into compliance with their existing trade obligations such as
and not limited to these: Mexico's obligation under NAFTA and the World
Trade Organization regarding the importation of U.S. agricultural
products and China's obligations to protect intellectual property
rights.
Separately, I expect any bilateral agreement on Russia's access to
the World Trade Organization will be concluded on strong, commercially
meaningful terms and will not be rushed to meet some artificial
deadline. Russia must demonstrate its willingness, its ability, and its
commitment to abide by World Trade Organization rules.
It is important we remind ourselves of the tremendous benefits we
derive from open international trade because too often we hear
criticism of our trading regimes. As an example, on average, over the
past decade, our economy has created a net of 2 million jobs each year.
In 2005, our unemployment rate dropped to 4.7 percent, which is well
below the averages of the 1970s, 1980s and 1990s.

An important part of our economic success is due to our trade. During
the last decades, our exports have accounted for about one-quarter of
U.S. economic growth. Jobs created by exports are estimated to pay 13
to 18 percent more on average compared to jobs unrelated to exports.
With respect to agriculture, approximately one-third of the acres
planted in the United States are exported. Our service sector, which
accounts for almost 70 percent of the U.S. economy, is anxious to break
down barriers to our exports of services around the world.
Today our services exports account for a little more than a quarter
of the total U.S. exports of goods and services, so breaking down
barriers to our

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services exports would go a long way toward helping us improve our
trade deficit.
Therefore, we in the Congress need to recommit ourselves to securing
improved market access for our exporters, both in the Doha Round
negotiations and by means of bilateral and regional trade agreements.
I am confident Ambassador Schwab will effectively meet each of the
many challenges she will face as our next trade representative. Her
experience and her skills make it quite evident she is the right person
for the job. I urge my colleagues to join me in supporting her
nomination. Once confirmed, I look forward to working with her to
advance an ambitious trade agenda and would expect her to consult under
the law trade promotion authority with our committees when we ask her
to and when she thinks it is necessary for her to make advances to us
on that sort of communication because consultation between us prior to
a negotiation being signed is the basis for the success and the
opportunity to get such an agreement through the Congress.
Mr. SHELBY. Would the Senator from Iowa let me speak for 2 or 3
minutes as in morning business?
I support the nominee. There is no objection by Senator Dorgan.
Mr. GRASSLEY. The Senator can have whatever time he desires.
The PRESIDING OFFICER. The Senator from Alabama.
(The remarks of Mr. Shelby are printed in today's Record under
``Morning Business.'')
Mr. SHELBY. I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. CONRAD. 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. CONRAD. Mr. President, what now is the business before the body?
The PRESIDING OFFICER. The Schwab nomination.
Mr. CONRAD. I thank the Chair.
Let me indicate as a member of the Finance Committee that we had
hearings on the Schwab nomination. Let me stipulate that she is well
qualified for the position. She is a lovely person, well educated and
well trained. With all that said, after her testimony before the
Finance Committee, I decided reluctantly that I would oppose her
nomination. I want to share very briefly with the Members why I made
that judgment.
When Ms. Schwab came before the Finance Committee, I put up a chart
showing what has happened to the trade deficit of the United States.
The trade deficit soared to over $700 billion last year. I had another
chart that showed what has happened to the trade deficit with Mexico
since the NAFTA agreement. Before the NAFTA agreement, we had a trade
surplus with Mexico of several billion dollars. Now we have a massive
trade deficit with Mexico.
I asked Ms. Schwab: Is this a successful trade policy?
Her answer was: Yes.
I told her: If this is a success, I would hate to see a failure.
Because this trade policy is proving to be a disaster for the financial
health of the United States. We are spending $700 billion a year more
in purchases than we are in sales. A country cannot do that for very
long.
Then I asked her about agricultural trade policy. I asked her about
the strategy of our trade ambassador going into the trade talks and
making unilateral concessions, offering to cut support for our
producers by 60 percent on the notion that then the other side would
make concessions to us. I told her this is the strangest way to
negotiate that I have ever seen. Unilateral concessions on the hope
that the other side will follow suit--who has ever seen that in a
negotiation? That is like going to the car dealership and agreeing to
pay the sticker price. Why would you ever do that?
Ms. Schwab told me this is actually a smart trade tactic, a
negotiating tactic, that you make big concessions on the front end and
then you get tougher at the end. I don't think that is smart. I think
it is a disaster. We are in a circumstance in which the Europeans
provide five times as much support for their producers as we provide
for ours. They account for more than 90 percent of the export subsidy
in the world. We are about 1 or 2 percent. So they have us outgunned
there 70 or 80 to 1.
Our idea of a negotiation is to make major unilateral concessions and
then hope the other side gives in. What happened with this strategy?
Did Europe then follow and make major concessions in response to ours?
No. They made none.
I fear we are pursuing a trade agenda that is simply not working. I
would present as exhibit No. 1 record trade deficits, the biggest in
our history and growing dramatically.
Exhibit No. 2, NAFTA: We signed on to the NAFTA agreement. Our
leadership told us this was going to be a great success. At the time we
had a positive trade balance with Mexico. Now our trade deficit is
measured in the tens of billions of dollars a year. This is a trade
policy that is not working.
I cannot support as our trade ambassador somebody who clearly
believes that is a success. How could anyone define this as a success?
I have reluctantly concluded that if we were to have a vote, and
apparently this will be on a voice vote, I want it clearly recorded
that I would vote ``no.''
I thank the Chair and yield the floor.
The PRESIDING OFFICER. The Senator from North Dakota.
Mr. DORGAN. Mr. President, I understand there is an order with
respect to my presentation on this matter.
The PRESIDING OFFICER. The Senator has been allocated 30 minutes.
Mr. DORGAN. Mr. President, this reminds me of Madam Tussaud's wax
museum. It looks like there are people here, except there is no
movement. Month after month after month, we hear the results of
unbelievably bad trade agreements that pull the rug out from under our
workers and farmers, pulling the rug out from under our economy,
ringing up the highest trade deficits in the our history, shipping
American jobs overseas, even as we import cheap labor through the
backdoor, and no one says a thing. No one does a thing. We today have a
proposal before us to approve the nomination of a new U.S. trade
ambassador. For what purpose?
Let me describe what is happening with our trade deficit. This is the
trade deficit from the most recent year going back to 1995. We are
hemorrhaging in red ink.
These are the largest trade deficits in the history of humankind, by
far, not even close with any other country. What does this mean? This
means that we are selling part of our country every day to those who
live outside of our country. It is called the selling of America.
We seem to think that it is all right to have a trade deficit of $2
billion a day. That means that we import products more than we export
to the rest of the world, and we pay for those imports with our
currency or debt instruments. The result is at the moment the bank of
Korea holds $200 billion of our currency; the Chinese, $750 billion;
the Japanese, $800 billion; the Taiwanese, $250 billion. We are
literally selling our country with these trade deficits every day.
Trade deficits are not just about selling America piece by piece. It
is about shipping American jobs overseas and undercutting American
workers all at the same time.
Winston Churchill said: The further backward you look, the further
forward you can see. So I will look back a little bit. It is surprising
to me that we have the nomination of a trade ambassador on the floor of
the Senate and no real discussion, save that of my colleague, Senator
Conrad, about the merits of where we are headed. This country is
dangerously off-track with wildly inflated and mushroomed trade
deficits. It is getting worse, much worse, not better. Yet there is not
a whimper here in the Congress about it.
Part of the reason is that the folks who work here are not going to
have their jobs outsourced. No one wearing a blue suit and suspenders
who hangs around here is going to have their job sent to China. If that
were the case, we would have a change in trade policy immediately. But
nobody loses their job here. For that matter, no journalist loses their
job. That is why all you

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read, for example, in most of these major newspapers in support of this
trade policy that, as we can see from this chart, is a massive failure.
Just take a look at a portion of it. Two hundred billion of that $700
billion is with China alone. You can take a look at what is happening
there, dramatic growth.
Here is the trade strategy we are currently working under: exporting
good American jobs and importing cheap labor. We just finished
importing cheap labor with the immigration bill 2 weeks ago. I didn't
support that. I voted against that. I voted against the trade
agreements that have allowed us to export good jobs.
I have gone through at great length in the Senate a range of issues.
Let me use a couple to describe what has happened and what our trade
agreements are about.
We are now negotiating a trade agreement with Korea. Let me talk
about automobile trade with Korea. See if anybody cares about that, see
maybe if this new trade ambassador would care about that. Last year we
got 730,863 cars coming in on ships from Korea. They loaded all the
Korean cars on ships, sailed across the ocean and offloaded 730,000
Korean cars in the United States.
Guess how many American cars we were able to sell in Korea. Seven
hundred thirty thousand? No. Four thousand two hundred. Ninety-nine
percent of the automobiles on the streets in Korea are produced in
Korea. Why? They don't want American vehicles to be allowed into their
market. They want to send their vehicles here for sale, but they don't
want our vehicles sold in Korea.
This imbalance exists. Does anybody care about it? It doesn't mean a
thing to most people. What it means to a lot of families is they have
lost their jobs. United Auto Workers have lost their jobs. But nobody
cares much about that because nobody in this Chamber is going to lose
their job because of this imbalance in automobile trade.
Japan: 95 percent of the cars driving in the streets of Japan are
produced in Japan. Why don't we export more cars to Japan? They don't
want them. They, like China and many other parts of the world,
including Korea, want to exercise their right to send their products to
the American marketplace, but they sure don't want to have their
marketplace wide open to that which is produced by American workers.
That is the last thing they want.
Let me go back a few decades to 1970 or so. The largest American
corporation was General Motors. In most cases people who went to work
for GM worked there for a lifetime. That was their job. They were going
to retire there and did. They worked there for a lifetime, got good
pay, good benefits, good retirement. Now, 30 years later, the largest
corporation in America is Wal-Mart. Average salary, according to
published reports, is about $18,000 or $19,000 a year.
A substantial portion of their employees have no benefits. Of those
eligible for health care benefits, they pay double the amount that most
employees of corporations would pay for health care. Many of those who
do have full-time jobs at low salaries cannot afford the benefits that
are offered. So have we made progress in these 30 years?
By the way, with respect to Wal-Mart, 70 percent of the products on
their shelves is from China. Wal-Mart's pressure will lead their to
close their American operations and move them to China. The only way to
sell it the way the we want to is have it produced in China, where you
can pay a worker 33 cents an hour.
I read a month or so ago that China has finally purchased Whammo
Corporation. There are a lot of companies moving, deciding they cannot
afford to produce in America anymore. They don't want to pay U.S.
workers decent wages. They want to produce in China for 33 cents an
hour, where you don't have to worry about health care and retirement.
We have seen 4 million to 5 million American jobs gone from our
country.
I noticed in the newspaper that Chinese purchased Whammo
Corporation--Frisbee, Hula Hoop, Slip 'N Slide. It is sort of the hood
ornament on what is wrong with our trade. So Whammo is gone. What about
the steelworker in America or the textile worker in America or the
metal fabricator in America or the family farmer or the software
engineer--their jobs are gone in increasing numbers.
Alan Blinder, the former vice chairman of the Federal Reserve Board,
said recently in a Foreign Affairs article that there are roughly are
42 million to 56 million jobs in America that are subject to being
outsourced to other countries--China, Indonesia, Sri Lanka, Bangladesh,
and more.
American companies have discovered that this large planet has a
billion to a billion and a half people, and perhaps more, where if you
move the technology and capital, you can employ people in other parts
of the world for pennies. You can hire kids, you can work 12-year-olds
12 hours a day and pay them 12 cents an hour. You can ship the product
to Toledo, Fargo, Los Angeles, or Lansing, MI, and say to the American
producer and business and worker: Compete with that. The fact is, you
cannot compete with that, and you should not be asked to compete with
that.
We fought for a century in this country for the standards of
production that have made this a great place and allowed us to expand
the middle class. I have spoken before about James Fyler, who died of
lead poisoning; he was shot 54 times. Earlier in this century, he and
others were standing up for the right of people to organize, for
workers to be able to organize. We finally became a country in which
workers can organize without having to go to prison, like they do in
China. I have the names of people sitting in prison in China because
they wanted to organize workers for a fair deal. We signed the Fair
Labor Standards Act in this country and established a minimum wage and
gave people the right to organize. We did a whole series of things--
child labor laws--that have established the conditions of production,
that produced a burgeoning middle class and the strongest economy the
world has ever known. Now it is systematically being taken apart. I
know it is hard to see day by day, but you watch what is happening in
this country to the good jobs, the jobs with security that pay well,
with benefits. One by one, 1,000 by 1,000 and, yes, a million by a
million, they are leaving this country.
No, it is not just the bottom rung of the economic ladder; it is also
engineers, software producers, and others. Nobody here seems to care
very much. This Congress certainly doesn't. This Congress supports all
that. This Congress supports giving a tax break to companies that ship
their jobs overseas. Show me a company that fires all the American
workers and ships their jobs to China, and I will tell you that this
Congress supports giving that company a tax break--$1.2 billion a year
our current Tax Code spends in tax cuts to companies that ship their
American jobs overseas. It is unbelievable.
I have offered four amendments in this Senate to shut that perverse
tax break down and I have lost four times. In 2005, Bo Anderson, one of
the top executives at General Motors dealing with parts and supplies,
called 380 parts and suppliers together; he called the executives of
the parts suppliers to a meeting. He said to them that you need to be
building your automobile parts in China to reduce the cost. In other
words, move those jobs offshore, get rid of those American workers.
Delphi, which used to be the largest General Motors parts supplier,
were paying workers $26 to $30 an hour with benefits. Well, that is
over. They are in bankruptcy and, of course, it is blamed on the
workers. Nobody talked about the executives and what role they might
have had. They want to outsource the jobs, and for the jobs they would
keep here, they want to pay $8 to $10 an hour. I am wondering how you
create a country with a growing middle class and a consumer ability to
make purchases in this country if jobs are going elsewhere in search of
pennies an hour. IBM laid off 13,000 people; they are going to ship the
jobs to India. They said to workers, by the way: This is not a comment
on the excellent work you have done. See you later. Your job is gone.
The question is, What are we building and what does all this mean?
The reason I mention all of this is that all of it comes from trade
agreements. We have all of these trade agreements, and one is NAFTA
with Mexico. We turned

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a small trade surplus into a giant deficit with Mexico. It is pretty
unbelievable when you think about it. My colleague says that the
current nominee believes that the trade agreement with Mexico is a huge
success. She has not lost her job to outsourcing either. But it is not
a success by any standard. The trade deficit with Mexico and with
Canada and with Europe, with Japan, Korea, and China--it is a disaster.
Nobody seems to care much.
Now, I want to talk a little about this notion of free trade. It
sounds like such a wonderful term, ``free trade.'' Freedom. Free trade
means that you want to substitute that which we have fought for and
built, that which people have died for, that which people have debated
for a long time--what are the standards of production? What is being an
American all about? What is protecting children? What is a fair wage?
What is a safe workplace? What is the right to organize worth? It is
trading that in and saying none of that matters. The largest
corporations can pole-vault over all of it and move their factory to
China. We are taking apart that which we built for a century. That is
what the trade agreements are doing. I have shown you the red ink. So
the trade agreements are an abysmal failure.
I would like to speak now about something that we learned very
recently, involving sweatshops in the country of Jordan.
At the outset, let me say that the trade agreement with Jordan was
slightly better than all the others. I give credit to President Clinton
because they negotiated a free trade agreement with Jordan that had
standards with respect to workers' rights, for a change. So it was a
step forward--not a giant step but a step in the right direction.
What has happened to trade with Jordan since that time? The New York
Times has written an article based on some work by the National Labor
Committee. They have done terrific work investigating what is going on
in Jordan. Remember, this was supposed to have created the gold
standard for labor protection for workers, signed in 1999. But what
happened since then is that Jordan has flown in so-called guest workers
from countries such as Bangladesh and China to make products in Jordan
for export to this country. So we see products in stores such as Wal-
Mart, Target, and others, that have now, we know, come from sweatshops
in Jordan under our free trade agreement.

Here is how the New York Times describes these sweat shops:

Propelled by a free trade agreement with the U.S., apparel
manufacturing is booming in Jordan. Exports to America are
soaring twentyfold in the last 5 years. But some foreign
workers in Jordanian factories that produce garments for
Target, Wal-Mart, and others are complaining of dismal
conditions--of 20-hour days, of not being paid for months and
months, of being hit by supervisors and of being jailed when
they complain.

These factories in Jordan are flying in planeloads of workers from
the poorest countries, such as Bangladesh, to work in slavelike
conditions. They also ship in Chinese materials--textiles in this
case--to those manufacturers. What you end up with are Bangladesh
workers working up to 120 hours a week in sweatshops in Jordan piecing
together Chinese materials to be shipped into the United States under
free trade agreements to be sold in a Wal-Mart or a Target.
Is that what free trade agreements are supposed to be about? I don't
think so.
The workers at these Jordanian sweatshops testified they were forced
to work far below minimum wages, promised $120 a month, but in many
cases they were not paid at all. One worker paid $50 for 5 months of
work. It is unbelievable to see what is going on.
Then when this is exposed in the New York Times, you hear people say:
Well, we had no idea this was going on. It is kind of akin to the
French police chief in the movie Casablanca, he was shocked to find
that there was gambling taking place in Rick's Cafe. Nobody ought to be
shocked by this. This is what is going on in the world.
I am going to introduce legislation at the end of my presentation
today dealing with these issues of sweatshops and how we try to respond
to them. My legislation will establish substantial civil penalties for
the import of sweatshop goods. When sweatshop factories abuse workers
for profit, the best way to attack the problem is to take that profit
away. If the Federal Trade Commission determined that an overseas
factory was producing sweatshop labor, it would issue an order
prohibiting importation from that factory. Violation would carry a
civil penalty, and each separate violation would be a separate offense.
Also, my bill would allow U.S. retailers the right to sue their
competitors in U.S. courts if their competitors are sourcing their
merchandise from these sweatshop factories.
I feel strongly that as we come to talk about trade today and the
nomination of a new trade ambassador, we ought to talk about what is
going on in the real world. I have described previously so many
stories. I was going to talk about Maytag--you know, the repairman who
has nothing to do, and part of that is because Maytag is moving its
jobs overseas these days.
Here are the dancing grapes in this picture. I love the dancing
grapes from Fruit of the Loom. They make shorts and T-shirts that are
all over America, and they have these people dressed up as grapes. Who
on Earth would dress up as a grape? I guess a job is a job. Who is
dancing in grape suits these days? That is the way they advertise this
American underwear. Guess what. It may still be all-American underwear,
but it is not made here anymore. They danced right out of this country.
Fruit of the Loom is gone to Mexico. And it is not just Fruit of the
Loom. The best example I know is Huffy bicycles. They are now a Chinese
company. They got rid of all their Ohio workers; they fired them
because they made too much money, $11 an hour. They have now become a
Chinese company. You can still buy them here, and they produce a
product they call all-American. It is just that they are made in China.
I happen to know where. They pay 33 cents an hour there, and all those
American workers who lost jobs, who had a long career making these
bicycles at the largest bicycle plant in the world, they were told:
Your career is over. You make too much money at $11 an hour, so Huffy
has gone to China. If you had a Huffy years ago, you noticed there was
an American flag decal on the front. That is gone too. Now it is a
decal of the globe.
By the way, on the last day of work at Huffy Bicycles, when their
jobs left for China, I was told that when the workers left the parking
lot, as they drove out of the lot, they left a pair of empty shoes in
the space where their car was. It was a way of saying to the company
that you can move our jobs to China, but you are not going to be able
to fill our shoes. That is how much they cared about their jobs.

Little red wagon, Radio Flyer--I bet there is not a kid around who
hasn't ridden in that little red wagon. Of course, that was American
for a century. Gone to China. The list goes on and on. I could talk for
hours about companies.
Levi's. There is not one pair of Levi's made in America. Talk about
all-American jeans--there is not one pair of Levi's made in America. If
you wear Tony Lama boots, you might be wearing boots made in China, by
the way. The list goes on and on.
The question for this nominee for the U.S. Trade Ambassador's job is,
Do you care whether these jobs are gone from our country? Do you care
whether Americans are now asked to compete against those in other parts
of the world who make 33 cents an hour? Do you care about that? Do you
care that our workers are asked to compete against young kids, some of
them locked in manufacturing plants, some of them hand-weaving rugs,
some of them whose fingertips were scarred by putting sulfur on the
fingertips and lighting the sulfur in order to produce a scar so that
when they are using the needles on the rug and they stick their
fingers, they won't bleed? Do you care about all that?
How about a trade policy that stands up for the interests of our
country? Yes, I think we ought to trade. Yes, I think expanded trade is
good for our country. But it must be and has to be fair trade. You
cannot say to companies: All right, we have decided over a century what
the conditions of production are in this country that represent a
growing middle class and a growing economy and a humane way to do
things. We have decided that, but you

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can avoid all of that by just deciding to shut your American
manufacturing plant, move the jobs elsewhere, and if somebody messes
with you when your plant has moved overseas and they want to organize
workers for better wages, you can get the government to throw them in
prison. If somebody cares about you putting poisons in the water and
the air, pumping effluent and pollution into the water and the air, you
don't have to worry about that because you can do that with impunity.
When somebody says you can't hire children, you don't have to worry
about that because you can put kids in your manufacturing plant. And if
somebody says OSHA is going to come, you can say: There ain't no OSHA
here; I can do what I want here. And by the way, when I get the product
produced, I am shipping it to the United States of America because I
have store shelves to fill and I have American customers who want low
prices. I know, they are the same customers who are going to drive
Korean cars to the store, wear their Italian shoes, wear their
Taiwanese shirt, wear their Chinese slacks, and they are going to
wonder where all the American jobs went.
I would like to ask one of these days when we have a change in the
U.S. trade ambassador's job what they really think success is. Do you
really believe this hemorrhaging of red ink, selling America $2 billion
a day to foreign governments, foreign enterprises, do you really
believe that can continue? It cannot. That just cannot continue.
And, oh, by the way, the strategy I described earlier that I believe
doesn't add up for our country is a strategy by which we tell
companies: You can export good American jobs, and you can import cheap
labor. That was the immigration bill, the last portion--export good
jobs, import cheap labor. I am saying that doesn't add up.
At least a portion of that--exporting good jobs and importing cheap
labor--is now attended to by a desire to decide that when you export
good jobs and import cheap labor, you can run your profits through the
Cayman Islands so you don't have to pay taxes in this country.
This little house, I have told my colleagues before, this five-story
white house, called the Ugland House on Church Street in the Cayman
Islands, is home to 12,748 corporations. That is right. They are not
there; it is just a figment of someone's imagination. Lawyers have
established this address for 12,748 corporations for one purpose, and
that is to avoid paying U.S. taxes. It is unbelievable, if you think
about it.
So export your jobs, import your products here, sell them in the
United States, and run your income through the Cayman Islands. I am
just saying none of this adds up and none of it works.
I agree with my colleague who described a while ago his opposition to
this trade ambassador. I don't believe the nominee is unqualified, I
just believe there our trade policy is terribly misguided. That is
pretty troublesome because I don't think this country will have the
kind of economic strength that expands so that our kids have jobs, good
jobs that pay well with benefits in the future. I don't think it is
going to happen. I wish I were wrong. I don't think I am. Yet all this
continues in a giant silence. Nobody seems to care very much.
Let's just continue doing this. We will sell a little bit of America
every single day, keep shipping jobs elsewhere, not think much about it
because we can buy a cheap product at Wal-Mart, and it will be just
fine. Be happy. I am just saying I don't think this adds up for our
country's future.
I don't support this nomination because I want a nominee at the U.S.
trade ambassador's office who is going to stand up for a trade policy
that is fair for this country--fair trade.
A colleague just came into the Chamber who comes from a State that
has a lot of ranching. We are not getting beef into Japan at the
moment. That is a different story. It is unbelievable with the trade
deficit that we can't get beef into Japan. Let's assume that problem
was resolved tomorrow. Every pound of beef that would go into Japan
would have a 50-percent tariff on it, and that's 16 years after we had
a beef agreement with Japan. That is just a tiny little example, beef
to Japan. That would be considered a failure by any standard, a 50-
percent tariff a decade and a half after the beef agreement.
We blithely go along and say: Be happy, it will be fine, drive to
Wal-Mart and pick up an Etch-A-Sketch and be happy. It doesn't matter.
This will all work out in the end.
Mr. President, how much time remains?
The PRESIDING OFFICER. The Senator has 1 minute remaining.
Mr. DORGAN. Mr. President, I ask unanimous consent for 4 additional
minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DORGAN. Mr. President, I conclude by describing one of the
concerns I have about the silence on these issues. Some long while ago,
I was on the floor of the House of Representatives when there was a
joint meeting of Congress. A fellow named Lech Walesa was speaking to
Congress at a joint meeting.
Lech Walesa told a story--pretty unbelievable--a story, of course, I
had known from the history books. He told us this: He said it was
Saturday morning in a shipyard in Gdansk, Poland. He had been fired
from his job as an electrician from this plant. He went back into the
shipyards on Saturday morning to lead a labor strike against the
Communist government, believing workers ought to have the right to
self-determination. He went back in to lead a strike against the
Communist government. They seized him that Saturday morning and
brutally beat him, beat him bloody, took him to the edge of a fence
that was heightened with barbed wire and threw him over the barbed-wire
fence into the dirt on the other side of the fence.
He laid in the dirt face down, bleeding, having been beaten severely.
He told us he wondered what he should do next. As he lay there, he
decided what to do next. He picked himself up, climbed back over
the fence into the shipyard, right back into the same shipyard that
morning. Ten years later, this unemployed electrician was identified by
the Doorkeeper of the U.S. House of Representatives as the President of
the country of Poland--not an intellectual, not a military leader, not
a business leader, just an unemployed electrician with the guts to take
on the Communist government for a free labor movement.

They called it Solidarity. We all celebrated solidarity. What a
wonderful thing it was. We supported Solidarity. He said to us: We
didn't have any guns; the Communists had all the guns. We had no
bullets; the Communists had all the bullets. We were workers armed with
an idea. We were armed only with an idea; that is, people ought to be
free to choose their own destiny.
What is the idea here? What is the idea in America by which we fought
for 100 years for the basic standards, by which we expanded the middle
class, safe workplaces, decent wages, the right to organize? What is
that idea, and does it have value now, or have we forgotten that idea
and is there someone willing to stand for that idea today?
I hope so. I don't believe we ought to decide that which we created
is somehow unworthy as we look to the future of this country, and I
believe we ought to continue to build a place that is better for our
children. We want a place, all of us want a place we can turn over to
our children and grandchildren that is better than the place we
inherited. That ought to be the goal.
I don't intend to ask for a recorded vote, but I do not support this
nomination only because I think we are headed toward a trade strategy--
and we have been in the middle of it for some long while now--that is
injuring this country and is going to ship jobs overseas.
As I said when I started, Alan Blinder, a respected Vice Chairman of
the Federal Reserve Board, said there are 42 million to 56 million
American jobs at this point subject to outsourcing. Those not
outsourced are still going to be required to compete with others in the
world who make a great deal less money. That is not the way we are
going to continue to build the economy we believed we were building for
the last century.
I am not suggesting putting walls around our country. I am not a
xenophobe. I am not an isolationist. I am not one who believes trade is
not worthy. I do. But I think this country

[[Page S5651]]

ought to insist and lead in the area of demanding fair trade, demanding
trade be fair, standing up for our businesses, standing up for our
workers, and saying we insist on and demand fair trade.
Ms. MIKULSKI. Mr. President, I speak today in support of the
nomination of Dr. Susan Schwab to be the U.S. Trade Representative. I
have known Susan for a long time and have seen her great leadership and
vision as dean of the University of Maryland School of Public Policy.
As dean, Susan helped the school grow into one of the top public policy
programs in the Nation.
I support fair trade, so American workers can compete. Dr. Schwab has
demonstrated her commitment to this approach and to ensuring our
Nation's economic competitiveness. Our top trade representative needs
to be tough, smart, and have experience standing up for American
interests. Dr. Schwab clearly fits that bill as well.
Dr. Schwab's qualifications for this position are first-rate. She is
a former Foreign Service officer, serving in the U.S. Embassy in Tokyo
and as a trade negotiator at the USTR. The experience of serving on the
front lines of an office she will now help lead is particularly
important. Dr. Schwab also has extensive experience in both the
legislative and executive branches of the Federal Government. She was
legislative director for Senator John Danforth and served as Assistant
Secretary of Commerce and Director-General of the U.S. & Foreign
Commercial Service in the first Bush administration.
In addition to her practical experience, Dr. Schwab is accomplished
academically. While dean of the Maryland School of Public Policy, she
taught a variety of graduate courses on U.S. trade policy and
international relations. Dr. Schwab received her Ph.D. in public
administration and international business from the George Washington
University. She holds a master's in development policy from Stanford
University and a bachelor's from Williams College.
I ask my colleagues to join me in supporting this nomination.
Ms. COLLINS. Mr. President, I am pleased to offer my strong support
and endorsement of the confirmation of Ambassador Susan Schwab as U.S.
Trade Representative. During her long career in public service,
Ambassador Schwab has dedicated herself to advocating for the best
interests of the United States in the global economy. I was delighted
when I learned that the President had nominated her for the position of
U.S. Trade Representative, a position for which she is ideally suited.
Throughout the 1980s, Ambassador Schwab was as a trade policy
specialist and then legislative director for Senator John C. Danforth,
playing a major role in numerous U.S. trade policy initiatives,
including landmark trade legislation that Congress enacted in 1984 and
1988. While serving on the staff of Senator William S. Cohen and as
staff director of the Subcommittee on Government Oversight, I worked
closely with Ambassador Schwab on a number of trade issues affecting
Maine and its industries.
In particular, Ambassador Schwab worked with our staff to support
Maine's shoe industry and its workers during the industry's massive
dislocations in the 1980s. She was instrumental in helping us develop
legislation to address the industry's dire situation in those years,
including critical improvements to antidumping, countervailing duty,
and safeguard provisions. She also worked closely with our staff to
improve market access for Maine agricultural goods in foreign markets.
Ambassador Schwab's professional and personal record of service will
enable her to effectively represent U.S. interests around the world.
She will make an outstanding U.S. Trade Representative.
Mr. BAUCUS. Mr. President, I strongly support the nomination of Susan
Schwab to be our next U.S. Trade Representative. I have known and
worked with Ambassador Schwab for many years. She has had a stellar
career as a trade negotiator, a senior congressional staffer, a
businesswoman, and a university administrator and professor.
I recently read a piece about Ambassador Schwab in the Washington
Post. That article described her as ``a hard-nosed pragmatist, well
versed in arcane trade economics, and a dazzling strategist and
negotiator.''
She was described as excelling as ``a strategic thinker and consensus
builder . . . able to quickly synthesize the thinking of Congress, the
administration and special-interest groups.''
That Washington Post article is 19 years old. It is from July 1987.
By that point, Ambassador Schwab had already honed her reputation in
the international trade community.
She had already negotiated tricky agriculture agreements in the Tokyo
Round. She had already helped draft provisions of U.S. trade law--like
Super 301--that became a fixture of U.S. trade policy for the next
decade.
She had already attracted both fear and admiration among many of our
most recalcitrant trading partners.
Nineteen years later, Ambassador Schwab continues to demonstrate her
skill as a seasoned trade negotiator. In her tenure as Deputy U.S.
Trade Representative, she has settled one of the most difficult and
complicated trade issues--our dispute with Canada over subsidized
imports of softwood lumber.
She has worked tirelessly with our trading partners on trade
agreements, and she has worked to obtain consensus among the 149
members of the World Trade Organization in the ongoing Doha Round
negotiations.
Ambassador Schwab will need all of her skills to carry out the job as
U.S. Trade Representative. We have entered one of the most difficult
periods in trade policy that I can remember--both with our trading
partners and domestically.
At the top of Ambassador Schwab's agenda will be shoring up the Doha
Round. Unless something changes soon, these talks are at serious risk
of collapse.
Our trading partners continue to believe that America alone must make
the concessions necessary for these talks to conclude. They forget that
negotiations are two-way. They are give and take.
As I have told Ambassador Schwab, I will not be in a position to
support any result out of the Doha Round unless several results are
achieved: No. 1, the EU must commit to serious and meaningful
reductions in agriculture tariffs; No. 2, Brazil, India, and developing
world countries must commit to serious and meaningful reductions in
industrial tariffs; and No. 3, our key trading partners must agree to
open further their services markets.
Ambassador Schwab will also face serious challenges in our bilateral
trade and economic relationship with China. China often makes
promises--in the WTO and bilaterally--that it does not always keep. For
instance, in April, China promised to lift its ban on U.S. beef. But
China still has not done so, and it appears to be in no hurry.
In the coming months, I hope to work with Ambassador Schwab in
creating a more sustained, structured, and comprehensive dialogue with
China that allows the United States to hold China's feet to the fire on
the promises that it makes.
And we also need a better framework to seek out ways to cooperate
more effectively on issues of mutual economic interest.
Ambassador Schwab will also be responsible for negotiating the most
challenging free-trade agreements to date. Agreements with Korea and
Malaysia--our 7th and 10th largest trading partners respectively--hold
great promise. But each presents unique and difficult issues that we
must address in order to build political support for these agreements
at home.
That will be Ambassador Schwab's greatest challenge--building
political support for trade at home. It is no secret that support for
trade has evaporated.
Since Congress granted this administration trade promotion authority
in 2002, Members have been asked to take a series of difficult votes on
trade agreements with small countries of limited commercial value.
Since that time, the concerns Members of Congress have expressed
about the administration's trade strategy have fallen on deaf ears, and
since that time, support for trade among usually protrade constituents
has waned considerably.
As a result, when trade promotion authority expires next year, I do
not think Congress will renew it without major changes. I do not
anticipate new

[[Page S5652]]

fast-track authority until Congress, the administration, and all
relevant stakeholders are willing to engage in a serious discussion.
They need to answer the tough questions that remain unaddressed:
questions relating to trade adjustment assistance and other programs to
help those who may be hurt by trade, questions about the role of labor
in our trade agreements, and questions relating to the relationship
between trade and a competitive U.S. economy.
These are hard issues, and Ambassador Schwab will have to face them
head-on. But I have full confidence that Ambassador Schwab has the
skills, experience, and the guts to tackle them. Indeed, she spent most
of the 1980s grappling with very similar issues when she worked for
Senator Danforth in both the majority and the minority.
Nineteen years ago, the Washington Post described Susan Schwab as a
``strategic thinker'' and a ``consensus builder.'' We need these skills
at the U.S. Trade Representative, now more than ever.
I look forward to working closely with Ambassador Schwab and urge my
Colleagues to vote to confirm her today.
Mr. HATCH. Mr. President, today I rise to give my complete support
for Ambassador Susan Schwab who will become our Nation's Trade
Representative.
I have been dismayed that the Senate did not move more quickly on
this nomination. I have also been disappointed by the opinions, of
some, who state that her nomination is an indication that the
administration is deemphasizing trade policy.
Obviously, these individuals do not know Ambassador Schwab.
I, on the other hand, have had that privilege of working with her and
join the vast majority of my colleagues in stating that that Ambassador
Schwab is a tenacious, forceful, yet thoughtful advocate of our
Nation's trade agenda.
Our Nation is at a critical juncture. In 2005, the United States
trade deficit widened to a record $726 billion, increasing to 5.8
percent of the Gross Domestic Product from 5.3 percent in 2004, and 4.5
percent in 2003.
Many economists now describe the trade deficit as unsustainable. For
example, C. Fred Bergsten, Director of the Institute for International
Economics, has pointed out ``the United States must now attract almost
$7 billion of capital from the rest of the world every day to finance
our current account deficit and our own foreign investment outflows.''
In order to meet these challenges, we need our best and brightest
working on solutions. Solutions that ensure that that the Doha Round
lives up to its potential, while ensuring that a level playing field is
created for American farmers, manufactures and service providers.
Solutions that enable the United States to move expeditiously in our
free trade negotiations with Korea and Malaysia thereby providing
unfettered access to these markets.
Mr. President, I cannot think of anyone better suited to find these
solutions then Ambassador Susan Schwab. I am very pleased that the
Senate confirmed her nomination just minutes ago.
Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. THOMAS. Mr. President, how much time is on this side?
The PRESIDING OFFICER. Senator Grassley controls 20 minutes.
Mr. THOMAS. Mr. President, it is a pleasure for me to have the
opportunity to discuss the nominee who is before the Senate. I am
chairman of the Trade Subcommittee on the Finance Committee, so I have
had an opportunity to deal with some of these issues for some time. I
was also chairman of the Foreign Relations subcommittee on Asia and the
Pacific Rim. These are areas about which I feel strongly.
Fortunately, I had a good deal of opportunity to visit with Susan
Schwab, the President's nominee for U.S. Trade Representative.
Obviously, this is a very important position, the position that Rob
Portman had over the past 9 months or a year. He has done an excellent
job of representing the United States in a situation that is not easy.
The United States is a little different from most countries in the
world. They see us a little differently. They expect more from us than
we should be asked to give, but nevertheless that continues to be the
case. We have to seek to find equality and fairness.
Based on my discussions with her, I think she is an outstanding
selection. Senator Grassley talked about her background, and certainly
she is well prepared for the position. Her credentials speak for
themselves. That is very important in this issue.
Trade is very easy to talk about. Some of my friends on the other
side talk about trade is all bad and there is nothing right about it.
There is a lot to trade that we have to figure out. We have a lot of
demand for overseas goods and, of course, we are the biggest buyer in
the world; therefore, we are the biggest trader in the world. So it
feels a little differently. It doesn't mean we should not have fair and
equal treatment. That is what we seek to have, and that will be the
task she undertakes. She will be a strong voice for American trade
policy. I believe that is excellent, and I am so pleased.
We are the largest trading nation in the world, and the world is
changing, as we know. Twenty years ago, it was quite different.
Everyone was fairly isolated. Now, with the kind of communications we
have and the kind of transportation that is available--why, there are
billions of dollars moving around the world every day. It becomes quite
difficult. The countries are changing very fast.
We deal with China today much differently than we did 10 years ago,
as we will have to in the future. Foreign trade is not an easy matter
with which to deal. What we need to seek and do seek is fairness.
Frankly, that is a little difficult in the world because everyone
thinks that because we are such a prosperous country, they should have
special treatment. But our effort has been to have fair trade, and that
ought to be what we do, and that is what we are seeking.
I have met with Susan Schwab and talked about that point, and the
fact that we are the largest trading country in the world should not
give others an unfair advantage. We need to trade in a fair way, and I
think that is what she is committed to do, and certainly I support her
for that.

We are the largest trading nation in the world. So, of course, we are
the target of most everyone who wants to increase their sales. We also,
however, have some opportunities to increase our sales as well, and we
are doing some of that. Our demand, because the size of our economy, of
course, is large, and we are interested in pursuing those kinds of
opportunities. So trade is going to happen, and it is going to
increasingly happen as times change and the world becomes smaller.
Simply because of our ability to communicate and our ability to move
around the world, it will become smaller.
So the challenge is how we can trade fairly with these other
countries. Many of them think, Oh, you are the big, rich country; you
ought to be able to give us a lot of things. That really ought not to
be what we are dealing with. We ought to be dealing with fair trade. I
think that is the point. It is what I have talked to Susan Schwab
about, and she certainly is agreeable to that.
More than 25 percent of the U.S. gross domestic product is tied to
trade, so it is an important aspect of our economy. Ninety-six percent
of the world's consumers live outside of the United States. So in terms
of our production, we need to be involved in world trade and we need to
make it fair. And that really, of course, is the challenge.
It is easy to be critical about everything we do in trade. The fact
is, particularly with some of the commodities in my State of Wyoming,
trade is about selling our markets somewhere else. So we need to
understand that. Again, the key is fair trade and that is what we are
talking about. We need to find ways to open the world market to our
goods and our services, and we ought to be able to enter into the
market on the same basis as anyone else, and at the same time hold
others to the same considerations that we have when they come here. We
need to pursue both bilateral and multilateral negotiations, and of
course that is what we are doing. And we need strong leadership to do
it and to represent our interests in these discussions.

[[Page S5653]]

So I think that is exactly what we will be able to do. We are making
progress.
My colleague mentioned the fact of the cow business in Japan. Well,
that is a problem. Frankly, it is not a trade problem as much as it is
a mad cow disease problem. It has been handled wrong, and we are
working toward getting that resolved. Our best potential and the
largest growth we have in the beef industry and exports has been in
Asia. That is where we are now. We have been able to open up the
markets in Australia and in South Korea, and we had the markets pretty
much open in Japan until the mad cow disease came along, and now we are
in the process, hopefully, of getting them open again. So that is very
important, and we need to continue certainly to do that.
We need a strong leader to represent our interests. I think that is
exactly what we will get with Susan Schwab, and that leadership is what
we need. Bob Portman has done a very good job, and she has worked with
him, of course, in getting us into this position. So we need to have
good leadership to walk away from some of the bad agreements, the tough
agreements that we have had. The world is sometimes difficult to deal
with, but Susan Schwab will provide that leadership.
During her testimony before the Finance Committee, of which I am a
member, she stated:

It will take more than a willing spirit to forge good trade
policy in the next 5 years. It will require us to keep the
multilateral process on track in the WTO, to negotiate
commercially significant free trade agreements, and to
enforce vigorously the terms of those agreements and to
uphold the rules of trade.

So that is what we are really faced with. These smaller countries,
these countries that frankly generally have less economic strength than
we do and they always want special treatment: Well, you guys can afford
that. What we need is fair trade, and that is what trade is all about,
and that is why it takes a leader to do that. So I am very pleased that
she is there and that she is willing to do this. She is well trained to
do it.
She further stated that her success may require:

An honest, sometimes blunt, but always respectful exchange
of views, along with a willingness to compromise when
possible and the strength to stand firm when necessary.

The strength to stand firm when necessary. To me, that is probably
the most important element of the trade negotiations that we enter
into, is to be able to stand firm on what we agree on, and we ought to
be in a position to do that when we are as big a buyer as we are. We
also need to have some muscle on the other side, and we can do that.
I am pleased with the commitment she has made to reach out and listen
and consult with Members of Congress on both sides of the aisle.
Engaging Congress in a bipartisan way upfront and throughout the
process will be crucial, and she will do that. Ms. Schwab understands
this, and I am confident that she will follow through.
So I look forward to working with her. I am looking forward to one of
the important elements of our economy, and that is world trade, and
doing it in a fair manner.
Mr. President, I yield back all time on behalf of Republicans and
Democrats and ask for a vote.
The PRESIDING OFFICER. The question is, Will the Senate advise and
consent to the nomination of Susan C. Schwab, of Maryland, to be United
States Trade Representative?
The nomination was confirmed.
The PRESIDING OFFICER. Under the previous order, the President will
be immediately notified of the Senate's action.

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