[Congressional Record Volume 155, Number 47 (Wednesday, March 18, 2009)]
[Senate]
[Pages S3328-S3331]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


   NOMINATION OF RONALD KIRK TO BE UNITED STATES TRADE REPRESENTATIVE

  The PRESIDING OFFICER. Under the previous order, the Senate will 
proceed to executive session to consider the following nomination, 
which the clerk will report.
  The legislative clerk read the nomination of Ronald Kirk, of Texas, 
to be U.S. Trade Representative.
  The PRESIDING OFFICER. Under the previous order, there will be 90 
minutes of debate on the nomination, with the majority controlling 30 
minutes and the Republicans controlling 60 minutes.
  The Senator from Arizona is recognized.
  Mr. McCAIN. Mr. President, as you noted, we will consider the 
nomination of Mr. Ron Kirk as the next U.S. Trade Representative.
  With some reluctance, I will vote to confirm Mr. Kirk's nomination. I 
think it is pretty obvious Mr. Kirk has been less than forthcoming on a 
number of trade issues that affect this country, and some of the 
positions he has articulated are very dangerous for this Nation's 
future. I have come to this floor on numerous occasions and argued 
against the provisions that have

[[Page S3329]]

been signed into law in omnibus bills recently, one of them ``Buy 
American,'' the other, of course, the latest being the barring of 
Mexican trucks into the United States of America.
  The signal that sends to the world is that the United States is on a 
path of protectionism. That shows at least a majority of Members of 
this body have ignored the lessons of history. That lesson, obviously, 
we learned in the Great Depression, when isolationism and protectionism 
turned our economy from a deep recession to the worst depression of 
modern times. That is what protectionism and isolationism does.
  So we now have a predictable result of killing the program which 
would allow, in keeping with the North American Free Trade Agreement, a 
solemn treaty signed by then-President Clinton, that Mexican trucks 
would be allowed into the United States.
  Before I go much further, though, I wished to comment on the issue 
that is consuming the American people and the Congress today; that is, 
the AIG bonuses paid to executives. The simple lesson is, if we had not 
bailed out AIG, we would not be worried about the bonuses. I spoke out 
against the bailout of AIG at the time when it was first proposed when 
AIG was in trouble.
  I, along with every other American, share anger and obvious 
displeasure that these bonuses were given to executives who obviously 
did not deserve them. But we should not have bailed out AIG. We should 
have let them fail and reorganize.
  I would also like to point out that another area of the bailout that 
Americans should be equally disturbed about is the $20 billion that 
went to foreign banks. American taxpayers are paying now $20 billion to 
bail out foreign banks. Have we not enough trouble here at home and 
enough areas of the country that need Government assistance than to 
send $20 billion to foreign banks?
  There is an obvious need for increased transparency, increased 
oversight, and far more careful stewardship of American tax dollars. 
The numbers we are talking about are, indeed, staggering. I would point 
out, again, we are committing generational theft by these kinds of 
expenditures of American taxpayers' dollars and mortgaging our children 
and grandchildren's future.
  The direction of our trade policy has hardly been more important in 
recent years, given the enormous economic challenges we are facing 
today, with unemployment rising, consumer confidence dropping, and our 
growth rate stagnating, at best.
  American exports. American exports have been one of the few bright 
spots in a terrible economic situation. Until last quarter, the export 
sector of our economy grew at a faster rate than other sectors during 
the past several years. In the face of this fact, and mindful of 
history lessons, Congress and the administration should be working to 
break down remaining barriers to trade.
  However, we are doing the opposite. Since the beginning of this year, 
Congress and the administration have taken several steps designed to 
choke off access to the U.S. market which invites retaliation from our 
foreign trading partners.
  American business and workers will suffer as the result of these ill-
considered moves. Last month, as I mentioned, Congress adopted and the 
President signed into law--again, one of the consequences of these 
omnibus bills that are thousands of pages, that nobody knows what is 
included, they are designed to be a ``stimulus'' or ``spending bill,'' 
and we stuff policy provisions in them, which people may not know about 
for weeks or even months.
  We find out that these are egregious in the case of ``Buy American'' 
and in the case of the American trucks. Both of them send a signal to 
the world that America is going down the path of protectionism.
  The results, as far as Mexico is concerned, are unfortunate, very 
unfortunate, but predictable. The reaction of our friends and allies 
throughout the world to the ``Buy American'' provisions is predictable. 
They are angry and they are upset. I cannot say I blame them.
  Now, the ``Buy American'' provision required funds appropriated in 
that bill--this is a policy change, remember, adopted in a ``stimulus 
package,'' that we purchase only American-made steel, iron, and 
manufactured goods.
  As we debated this provision, many of our closest partners expressed 
great concerns about the implications of this course of action. The 
Canadian Ambassador to the United States wrote:

       If Buy America becomes part of the stimulus legislation, 
     the United States will lose the moral authority to pressure 
     others not to introduce protectionist policies. A rush of 
     protectionist actions could create a downward spiral like the 
     world experienced in the 1930's.

  When then-Candidate Obama said he would ``unilaterally renegotiate'' 
the North American Free Trade Agreement, the Canadian response was: 
Yes, and if you do that, then we will sell our oil to China. Then, 
later, Candidate Obama changed his position to saying: Well, that 
wasn't exactly what he meant. Then, President Obama said: Now we are in 
favor of free trade. But yet President Obama did not veto either one of 
these bills, which sends a signal to the world that the United States 
has embarked on a protectionist path. He should have vetoed those 
bills, especially the one on Mexican trucks.
  A European Commission spokesman noted:

       We are particularly concerned about the signal that these 
     measures could send to the world at a time when all countries 
     are facing difficulty. Where America leads, many others tend 
     to follow.

  Others lent their own voices to those cautioning against a terribly 
ill-timed protectionist act.
  While some Senators may have taken comfort in last-minute language 
added to require that implementation of the ``Buy American'' provisions 
be consistent with our international obligations, I worry very much 
about the effect this and other steps will have on the global trading 
system. For decades the United States has led global efforts toward 
free and open trade and investment. We abandon this leadership at our 
peril.
  The ``Buy American'' provision was not the only step in the 
protectionist direction. There have been other protectionist measures, 
and we are already seeing the fallout from such unwise decisions. Mr. 
Kirk agreed during his confirmation hearing:

       [I]f the United States raises barriers in our own market, 
     other countries are more likely to raise barriers against our 
     products.

  We have that evidence already. On Monday, the Mexican Government 
announced it will increase tariffs on 90 American agricultural and 
manufactured goods in direct retaliation for our recent decision to ban 
Mexican trucks from traveling beyond commercial zones. Although the 
Mexican Government is yet to specify the 90 different goods, it has 
announced that its decision would affect $2.4 billion worth of exports 
from 40 States. The Mexican Ambassador had an article in the Wall 
Street Journal this morning.
  I ask unanimous consent that it be printed in the Record, along with 
an editorial from this morning from the Arizona Republic.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

             [From the Wall Street Journal, Mar. 18, 2009]

                     Congress Doesn't Respect Nafta

       Nobody can argue that Mexico hasn't worked tirelessly for 
     more than a decade to avoid a dispute with the United States 
     over Mexican long-haul trucks traveling through this country. 
     But free and fair trade hit another red light this past week.
       Back in 1995, the U.S. unilaterally blocked the 
     implementation of the North American Free Trade Agreement's 
     cross-border trucking provisions, just as they were about to 
     enter into force. In response, and after three years of 
     constant engagement, Mexico had no alternative but to request 
     the establishment of an arbitration panel as allowed under 
     Nafta. A five-member panel, chaired by a Briton and including 
     two U.S. citizens, ruled unanimously in February 2001 that 
     Washington had violated the trucking provisions contained in 
     Nafta, authorizing Mexico to adopt retaliatory measures. Yet 
     once again, Mexico exercised restraint and sought a 
     resolution of this issue through further dialogue.
       Unfortunately, Mexico's forbearance only seemed to make 
     matters worse. In 2002, Congress introduced 22 additional 
     safety requirements that Mexican trucks would have to meet, a 
     measure that was clearly discriminatory as these requirements 
     were not applied to U.S. and Canadian carriers operating in 
     the U.S. Mexico worked assiduously with the U.S. 
     administration to find a solution to this problem.
       Finally, in 2007 an agreement was reached that included the 
     implementation of a demonstration program in which up to 100 
     carriers from each nation would be allowed to participate. 
     This program was designed precisely to address the concerns 
     voiced by

[[Page S3330]]

     those opposed to cross-border trucking. The demonstration 
     program, launched in September 2007, was an unmitigated 
     success. During the 18 months that the program was in 
     operation, 26 carriers from Mexico (with 103 trucks) and 10 
     from the U.S. (with 61 trucks) crossed the border over 45,000 
     times without any significant incident or accident. Moreover, 
     according to reports of both the Department of 
     Transportation's inspector general and an independent 
     evaluation panel, Mexico's carriers participating in the 
     program have a safety record far better than that of all 
     other carriers operating in the U.S.
       The demonstration program also underscored the benefits of 
     free and fair cross-border trade, given the lower costs that 
     would result from ending the requirement that short-haul 
     trucks be used to transfer cargo at the border from the long-
     haul trucks of one country to those of the other. Thus, for 
     example, one participating carrier saved over $600,000 a year 
     by cutting trip times and fuel costs, while another saved an 
     estimated $188,000 in transfer fees in the nine months that 
     it participated in the demonstration program.
       These savings benefit consumers and enhance North American 
     competitiveness. Moreover, a streamlined system would also 
     cut pollution, since fewer and newer Mexican long-haul trucks 
     would replace smaller and older trucks that now huff and puff 
     their way to the border. Unfortunately, notwithstanding these 
     benefits to businesses and workers, and to the safety of our 
     roads and the health of our environment, a small but vocal 
     group has consistently blocked progress on this issue. It has 
     now finally managed to stop the demonstration program by 
     defunding it through the 2009 omnibus spending bill.
       In confronting this situation, the government of Mexico--
     after over a decade of dialogue and engagement in which it 
     has asked for nothing more than U.S. compliance with its 
     international commitments and with the rules of the game that 
     provide for a level playing field--has had no alternative but 
     to respond by raising tariffs on 90 U.S. products that 
     account for approximately $2.4 billion in trade.
       Today, opponents within Congress continue to allege 
     concerns related to the safety of America's roads--yet they 
     cancelled the very program designed to address such concerns, 
     and which had been producing positive results. After all, the 
     cross-border trucking program that was defunded had been 
     demonstrating not only compliance by Mexico's long-haul 
     trucks with U.S. regulations, but a superb and unmatched 
     record of safety. It is precisely because of our firm belief 
     in the importance of cross-border services that the 
     government of Mexico will continue, as a sign of good-faith 
     and notwithstanding the countermeasures announced early this 
     week, to allow U.S. carriers to provide trucking services 
     into Mexico under the now-defunct demonstration program 
     guidelines and criteria.
       Mexico is the U.S.'s second-largest buyer of exports. It 
     remains a steadfast supporter of free and fair trade, and 
     will continue to work actively and responsibly during the 
     coming weeks and months with Congress and the administration 
     to find a solution that will allow safe Mexican trucks onto 
     U.S. roads under Nafta rules.
                                  ____


               [From the Arizona Republic, Mar. 18, 2009]

              U.S. in the Wrong by Blocking Mexican Trucks

       America is picking a food fight with Mexico over trade. 
     Congress set it off by canceling a pilot program that allowed 
     Mexican trucks to operate on U.S. highways--a blatant 
     violation of the North American Free Trade Agreement.
       Mexico responded Monday by announcing that it will jack up 
     tariffs on 90 U.S. agricultural and manufactured products. 
     About $2.4 billion worth of exports from 40 states will be 
     affected.
       Under NAFTA, we agreed to give Mexican trucks access 
     beginning in 1995, increasing efficiency and lowering costs 
     for consumers.
       But U.S. trucking interests and unions have been trying to 
     block the move for years with scare stories about safety. 
     Actually, thousands of Mexican trucks, which were 
     grandfathered in, have operated safely here for years. The 
     pilot program set high standards for vehicles and drivers. 
     The real issue isn't safety but competition and profits.
       President Barack Obama, who was cool to NAFTA during the 
     campaign, must step up to ensure the United States finally 
     follows its treaty obligations. The White House says he is 
     working on a new version of the pilot program that responds 
     to congressional concerns. It needs to happen quickly.
       Sen. John McCain, R-Ariz., is sounding a timely warning 
     that this dispute could lead to more protectionist measures.
       Let the trucks roll.

  Mr. McCAIN. The Mexican Ambassador says, in part of his article:

       The U.S. Congress, which has now killed a modest and highly 
     successful U.S.-Mexico trucking demonstration program, has 
     sadly left my government no choice but to impose 
     countermeasures after years of restraint and goodwill.
       Then and now, this was never about the safety of American 
     roads or drivers; it was and has been about protectionism, 
     pure and simple.

  He is right. It is also a testimony to the influence of the Teamsters 
Union. Elections have consequences.
  He goes on to say:

       It is worth noting that this takes place shortly after 
     Mexico announced it would unilaterally reduce its industrial 
     tariffs from an average of 10.4% in 2008 to 4.3% by 2013, and 
     that it has underscored its commitment, along with its other 
     G-20 partners, to push back on protectionist pressures.

  What has been particularly frustrating in this long and uphill battle 
has been the fact that the Congress continues to move the goalposts.
  Importantly, he concludes:

       Mexico is the U.S.'s second largest buyer of exports. It 
     remains a steadfast supporter of free and fair trade, and 
     will continue to work actively and responsibly during the 
     coming weeks and months with Congress and the administration 
     to find a solution that will allow safe Mexican trucks onto 
     U.S. roads under Nafta rules.

  Again, NAFTA was signed by President Clinton 14 years ago. Part of 
that agreement was that Mexican trucks would be allowed into the United 
States. Study after study has concluded that Mexican trucks operate as 
safely as U.S. trucks do.
  Today, on goods America buys coming from Mexico, the truck, after 
crossing the border, if it is Mexican, has to stop. The goods are 
offloaded onto another truck, moved to another truck that is American-
owned and loaded onboard that truck. Meanwhile, there are 
CO2 emissions and the cost and expenses of the delay are 
passed on to the American consumer.
  I repeat, Mexico is the third largest trading partner of the United 
States, behind Canada and China, and the United States ranks first 
among Mexico's trading partners. United States trade with Mexico 
totaled $368 billion in 2008. We have close and growing ties between 
our two Governments. Right now there is an existential threat to our 
southern neighbor from drug cartels. The violence on the border is at 
unprecedented levels. Acts of cruelty and murder are taking place 
beyond belief. People are being beheaded. There is the assassination of 
police chiefs and others. The corruption is very high. Why should we 
care? One reason we should care is because of violence spilling over 
from the Mexican border into ours.
  The other reason is, there is between, according to estimates, $10 
and $13 billion worth of revenue in receipts from the sale of drugs in 
the United States. It is the United States that is creating the market 
that is creating the drug cartels and violence on the border that has 
ensued. The Mexican Government is trying--maybe for the first time in 
as serious a way as they are now--to bring under control these cartels. 
The corruption reaches to the highest level. The violence is incredibly 
high. We need to do what we can to help the Mexican Government bring 
these cartels under control and try to eradicate them because they do 
pose an existential threat. We cannot afford to have a government that 
is full of corruption and controlled by drug cartels on our southern 
border, not to mention the impact it has on illegal immigration.
  What did we do? We took steps in violation of our obligations under 
the North America Free Trade Agreement that will have precisely the 
opposite effect and have prompted retaliation that will only serve to 
harm American workers, consumers, and our Nation's relationship with 
Mexico.
  During these difficult economic times for many American businesses, 
the ability to sell products on the world market is essential to our 
economic recovery. The Financial Times wrote in an editorial published 
yesterday:

       The retaliatory duties are a legitimate response to a U.S. 
     violation of a trade deal . . . but this does not bode well 
     for bilateral relations just under two months into the Obama 
     administration.

  It goes on:

       We hope cooler heads prevail and prevent any deterioration 
     of the bilateral relationship. Both nations have too much at 
     stake--and trade as well as security issues.

  I could not agree more.
  The Arizona Republic published an editorial that reads:

       With the economy in tatters, it's no time to mince words: 
     The United States is in the wrong. Under NAFTA, we agreed to 
     give Mexican trucks access beginning in 1995, increasing 
     efficiency and lowering costs for consumers.

  The editorial continues:

       Around the world, countries are considering trade barriers 
     that could have disastrous consequences for the world 
     economy.

[[Page S3331]]

     The United States must put the brakes on trade restrictions, 
     not fuel them.

  I am aware there is a sizable block of public opinion that believes 
we should close our borders to everybody and everything, that somehow 
Mexican trucks are unacceptable, that legal immigration is something we 
ought to do away with. I understand all those arguments. But I also 
urge those who say that trade with Mexico is not important to 
understand the facts: They are our third largest trading partner; we 
have a trade surplus; it is important to have our relationship good as 
we help them battle the drug cartels; and, most importantly, 
protectionism and high tariffs led to the Great Depression.
  Congress passed NAFTA in 1993 and President Clinton signed it into 
law in 1994, which mandated the opening of our southern border to 
Mexican trucking operations to allow the free flow of goods and 
services between the two countries. Last year, language was slipped 
into a fiscal year 2008 spending bill that sought to strip funding for 
a pilot program with Mexico that would allow a limited number of 
Mexican trucks to enter the United States. Now the administration says 
it will try to create ``a new trucking project that will meet the 
legitimate concerns'' of Congress. I don't understand how the 
administration can create a new trucking project to comply with NAFTA, 
when Congress explicitly barred any money from being spent toward such 
activities. The President should not seek to create a new project to 
circumvent the terms of the legislative language. Rather, he should 
have vetoed it in the first place.
  The administration's eliminating the Mexican cross-border trucking 
program will harm millions of American consumers who could benefit from 
lower prices on many goods manufactured in Mexico and then distributed 
in the United States.
  According to the U.S. Department of Transportation, refusing entry 
into our country of Mexican trucks carrying Mexican-made goods adds 
$400 million to the price of Mexican imports which is, of course, 
passed on to the American consumer. Mr. Kirk has made some statements 
broadly supportive of international trade, but he has also made 
comments suggesting protectionism might not be so bad after all. During 
his confirmation hearing, Mr. Kirk stated:

       Not all Americans are winning from [trade] and our trading 
     partners are not always playing by the rules.

  He suggested the administration may abandon the free-trade agreement 
we have concluded with South Korea, one projected to increase the 
United States GDP by $10 to $12 billion. He said the pact ``simply 
isn't fair.'' He emphasized he does not have ``deal fever'' when it 
comes to trade agreements. Again, it is up in the air as to what the 
fate of the Colombia Free Trade Agreement would be, sending a clear 
signal that we would be punishing the Colombian Government for their 
assistance in trying to combat drug cartels.
  Our trading partners, including Canada and Mexico, don't seem 
interested in strengthening agreements that have served them and us 
well for years. Rather, they would like to see the United States 
fulfill its own trade obligations and look for further ways to open 
markets to the free flow of commerce. The free flow of commerce has 
been a founding principle of U.S. economic policy for many decades and 
a key factor in our rise to prosperity and greatness. It is for this 
reason I hope Mr. Kirk and his colleagues in the administration will 
reconsider their stance and help build, not damage, the consensus 
behind free trade. After all, we have seen a terribly destructive 
pattern unfold before.
  In 1930, as the United States and the world were entering what would 
be known in history as the Great Depression, two men, Mr. Smoot and Mr. 
Hawley, led the effort to enact protectionist legislation in the face 
of economic crisis. Their bill, the Smoot-Hawley Tariff Act, raised 
duties on thousands of imported goods in a futile attempt to keep jobs 
at home. In the face of this legislation, 1,028 economists issued a 
statement to President Herbert Hoover, wherein they wrote:

       America is now facing the problem of unemployment.
       The proponents of higher tariffs would claim that an 
     increase in rates will give work to the idle. This is not 
     true. We cannot increase employment by restricting trade.

  Mr. Smoot, Mr. Hawley, and their colleagues paid no attention to this 
wise admonishment, and the Congress went ahead with protectionist 
legislation. In doing so, they sparked an international trade war as 
countries around the world retaliated, raising their own duties and 
restricting trade, and they helped turn a severe recession into the 
greatest depression in modern history.
  I do not intend to oppose the President's nominee for U.S. Trade 
Representative. I remain very concerned about the direction of our 
trade policies at a time of economic peril. I urge my colleagues and 
the administration to heed the lessons of economics and heed the 
lessons of history.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. The majority leader is recognized.
  Mr. REID. Mr. President, I ask unanimous consent that the vote on 
confirmation of the nomination of Ron Kirk occur at 2 p.m. today, with 
the remaining provisions of the previous order governing the 
consideration of this nomination in effect; that upon resuming 
legislative session, the Senate then proceed to vote in relation to the 
following amendments in the order listed; further, with respect to H.R. 
146 and the provisions of the order governing vote sequences remaining 
in effect: Coburn amendment No. 680, Coburn amendment No. 679, Coburn 
amendment No. 675.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Wisconsin.
  Mr. FEINGOLD. Mr. President, I ask unanimous consent that I be 
allowed to speak for up to 8 minutes as in morning business and that 
the time not count against debate time on the Kirk nomination.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.