[Congressional Record Volume 157, Number 86 (Wednesday, June 15, 2011)]
[Senate]
[Pages S3806-S3808]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                            TRADE AGREEMENTS

  Mr. BROWN of Ohio. Mr. President, while it is important to address 
the Federal budget deficit, too many Washington politicians have turned 
a blind eye to the U.S. trade deficit. Working families in Ohio and our 
Nation's manufacturers haven't forgotten about the devastating effects 
of our ballooning trade deficit.
  How much bigger does our trade deficit need to get before Washington

[[Page S3807]]

wakes up and realizes we need a very different direction in trade? 
Let's put American workers and American businesses first for a change. 
Let's focus on enforcing existing trade laws and helping workers 
retrain for new jobs. Let's not pursue more of the same style of trade 
agreements that have wreaked havoc on our economy. That is really what 
the debate over the Korea trade agreement and the Panama and the 
Colombia Free Trade Agreements is all about.
  Two weeks ago, Senator Casey and I wrote a letter to the President, 
which 43 other Senators signed--in fact, it was signed by the Presiding 
Officer, the Senator from Rhode Island--affirming his decision to pass 
trade adjustment assistance for workers before proceeding to the trade 
agreements with Colombia, Panama, and South Korea. Our position on TAA 
has been consistent since we asked unanimous consent to pass TAA in 
late 2010. We need a long-term reauthorization regardless of what we do 
on these free-trade agreements.
  Senator Casey and I stood on this floor time after time, starting in 
December and into January and February, asking all of our colleagues to 
reauthorize, to extend trade adjustment assistance to those workers who 
lose their jobs through no fault of their own; they lose their jobs 
because of trade agreements this Congress passes and because of a trade 
policy this administration and Congress has followed. We are likely 
facing a situation in which TAA, unfortunately, is being linked with 
the free-trade agreements.
  If and when a deal is reached, we will examine both its contents and 
the process in moving it forward. But when it comes to American 
workers, we want at least a 5-year reauthorization of TAA, one that 
includes the 2009 reforms and provides for an 80 percent health 
coverage tax credit.
  Time and time again a Republican Member stood up and objected to our 
moving forward in helping American workers. I just don't understand, 
how people here want to pass these trade agreements knowing that 
workers will be dislocated, that plants will close down, people will 
lose jobs, and communities will be devastated because of the actions of 
this body in passing trade agreements. Yet they say, no, they don't 
want to do anything to help those workers.
  That is why we believe TAA should be separate from the free-trade 
agreements. I ask my colleagues--especially those who call the free-
trade agreements with Korea and Panama and Colombia, the same people 
who called NAFTA and CAFTA and PNTR with China job creators--if that is 
the case, what sort of message does it send about these trade 
agreements if they must be linked to assistance for displaced workers? 
They are saying the only way they want to do TAA is to connect it to 
Korea or connect it to Colombia or connect it to Panama. They are 
acknowledging, then, that when we pass these trade agreements, it is 
costing us jobs. Why would we do that?
  Because of that, Senator Casey and I want a clean vote on TAA and a 
trade enforcement package, and we want to work with our colleagues to 
shape this package.
  For the Korea Free Trade Agreement, I have two concerns. The first is 
jobs--always jobs in these trade agreements. Ever since I have been in 
either the House or the Senate, every time there is a trade agreement--
whether it is the North American Free Trade Agreement in 1993, PNTR 
with China--although not a trade agreement but allowing China into the 
World Trade Organization--or 2004 or 2005, if I remember right, when 
the Central American Free Trade Agreement passed the Congress, and now 
with Korea--the people behind these trade agreements have talked about 
all the jobs they will create. They tell us: Well, we are going to 
close our trade deficit because of these trade agreements. Never does 
that happen.
  When we passed NAFTA, we had a trade surplus with Mexico. Today, as 
Senator Casey pointed out, we have a $90 billion trade deficit with 
Mexico. When PNTR passed, my recollection from 12 years ago was that we 
had about a $10 billion or $12 billion trade deficit with China. Now 
our annual trade deficit with China is $273 billion--last year. This 
year, in 1 month it was $21 billion.
  So, it is pretty clear the promises made with regard to these trade 
agreements and the reality that exists are different things. They do 
not create jobs, they do not close our trade deficit, yet the promises 
continue. So my first problem with the Korea Free Trade Agreement is 
jobs.
  The ITC--the International Trade Commission--projects the Korea FTA 
will increase the trade deficit, especially in auto parts, 
transportation equipment, metal and iron, and textiles and apparel. The 
economy is still facing extreme challenges. Since President Obama took 
office--when we were losing 700,000 jobs a month in January and 
February of 2009--we have seen some job growth. In the last 14 months, 
we have seen manufacturing job growth for the first time since 1998. So 
things are starting to turn around. But the last thing we do when the 
economy is facing extreme challenges--the last thing we should do--is 
pass a trade agreement of this magnitude with its short-term and long-
term effects on jobs.
  Finally, we have an administration that is being a little more 
truthful when it comes to promises about these trade agreements. As I 
said, during the NAFTA timeframe, we had President George H.W. Bush, 
and then President Clinton, who said it would provide all these jobs--
200,000 jobs, I think one of them said. But this time, at least, the 
administration is not saying they expect this is going to create jobs. 
They say: This agreement is expected to support--whatever that means--
70,000 jobs.
  But let's do the math. The Congressional Budget Office said the cost 
of this trade agreement--yes, this trade agreement costs money because 
we lose a lot of money in tariffs--is $7 billion over 10 years. That 
means if we are going to support--not create but support--70,000 jobs, 
and spend $7 billion to do it, the agreement costs about $100,000 for 
every job supported--again, not created but every job supported.
  This trade pact has unusually low rules of origin, allowing goods 
from Korea that are made with up to 65 percent of their parts from 
China or other countries. When the European Union negotiated their 
Korea Free Trade Agreement, they had domestic content rules of 55 
percent, meaning that 55 percent of the components in a product had to 
come from South Korea.
  The Obama administration improved this over the Bush agreement, but 
only marginally, by saying only 35 percent has to come from Korea. That 
means 65 percent or two-thirds of the added value of the components of 
these products shipped from Korea, with basically no tariffs coming to 
the United States, can come from China or can come from a low-wage 
country with low or weak environmental laws and low worker standards 
and all of that. So it allows a back door for countries such as China 
to gain even more access to the American market.
  We all recognize that we live in a world with global supply chains. 
But this low domestic content threshold of 35 percent will clearly hurt 
American manufacturers over the long term. So let's be clear. This is 
not just a Korea Free Trade Agreement, it is effectively a global free-
trade agreement.
  Second, the Korea FTA causes me concern because it includes what is 
called the ``investor-state'' enforcement in which a corporation is 
empowered to directly challenge laws as violations of a trade pact. 
Before the North American Free Trade Agreement, there was no such thing 
as investor-state relations. That meant that a company could not sue 
another foreign government. For instance, if the Canadians were unhappy 
with some U.S. law, the Canadian Government could sue the U.S. 
Government, but a Canadian company couldn't sue the U.S. Government. So 
what these investor-state provisions do is to undermine sovereignty. It 
undermines what we have done in this body.
  We fight in this body for strong clean air laws and strong 
environmental rules and strong pure food laws and strong consumer 
protections. Under the investor-state relations, a company in Korea 
could sue the U.S. Government for those kinds of strong environmental 
workforce safety or food safety laws. We don't want to give a company 
in another country the standing to undermine our sovereignty on laws 
that were democratically attained in this country.

[[Page S3808]]

  This mechanism is not necessary for a pact between two countries with 
well-established rules of law. We didn't do that in the U.S.-Australia 
Free Trade Agreement. It did not include these investor-state 
provisions. Why would we do it now with Korea, which is also a country 
that operates under a rule of law?
  One more reason this Korea Free Trade Agreement undermines our 
sovereignty, weakens our environmental laws, weakens our food safety 
laws, and dilutes what we stand for in the American values we hold so 
dear is about jobs, and it is about these investor-state provisions 
which undermine our sovereignty.
  Before pursuing more of the same style of trade agreements that 
caused our trade deficit to balloon to more than $600 billion, why not 
focus on enforcing existing trade laws? We know some things we ought to 
be doing before we look at passing new trade agreements. We need to 
better enforce trade laws. We have done that.
  President Obama, to his credit--and again, I don't agree with him on 
these trade agreements. I think he is wrong. But to his credit, more 
than any President I think in at least 25 years, President Obama has 
begun to enforce some trade rules. He enforced on oil country tubular 
steel. His decision created hundreds of jobs in Youngstown and Lorain, 
OH. His decision on Chinese tires created hundreds of jobs in Findlay, 
OH, and other places around the State in tire-building. His and the 
Commerce Department's decision on the Chinese gaming the system on 
coated paper, an industry that still exists in this country--not what 
it used to be, but it meant jobs in southwest Ohio and all over my 
State and all over States where paper is still manufactured in this 
country.
  Another thing we should do before a new trade agreement is we should 
consider reintroducing Super 301 so that we have the tools to fight 
back when countries such as China game the system.
  I am working with the Republican Senator from Ohio, the Republican 
Senator from Missouri, the Democratic Senator from Missouri, and the 
Democratic Senator from Oregon, Chairman Wyden of the Finance 
Committee's subcommittee, to begin to enforce customs duties and make 
sure companies in countries that evade these customs duties can no 
longer evade them. That will make a huge difference in job creation.
  Those are the kinds of things we should be doing.
  Paul Krugman, who has been a free-trader most of his life, a 
columnist for the New York Times, back in December said:

       If you want a trade policy that helps employment, it has to 
     be a policy that induces other countries to run bigger 
     deficits or smaller surpluses. A countervailing duty of 
     Chinese exporting would be job creating here; a deal with 
     South Korea, not.

  This comes from a Nobel Prize-winning economist, somebody who has in 
the past been supportive of these free-trade agreements, believing that 
they have created jobs. He realizes Korea won't create jobs. Beginning 
to enforce our trade laws is the way to go.
  I will close with this. Some years ago, President Bush said that for 
every billion-dollar trade surplus or every billion-dollar trade 
deficit a country has, it translates into 13,000 jobs. In other words, 
if we have a trade deficit with China of $1 billion, that would mean we 
are selling to them $1 billion less than we are buying from them, and 
the manufacture of those products we buy versus the ones we manufacture 
and sell is a net loss to the United States of 13,000 jobs. So for 
every $1 billion trade surplus or trade deficit, it translates into 
13,000 jobs for that country.
  The trade deficit with China last year was $273 billion. The trade 
deficit we have with the entire world, the so-called multilateral trade 
deficit, was $634 billion.
  Mr. President, travel my State. Travel this country. See the kinds of 
manufacturing job loss we have had. We have lost manufacturing jobs 
from 1998, the last 2 years of the Clinton administration, all 8 years 
of the Bush administration, and the first year and a half of the Obama 
administration. We were losing manufacturing jobs through that whole 
process. Now we are starting to gain manufacturing jobs, but we can't 
continue to gain manufacturing jobs when we pass free-trade agreements 
that clearly cause more companies to shut down in our country and more 
of those companies to move abroad.
  The Korea Free Trade Agreement is a bad idea. It is imperative that 
we do what the President has said we should do and what so many of my 
colleagues have asked us to do; that is, pass trade adjustment 
assistance with a health coverage tax credit for those workers who have 
already lost jobs from trade agreements and from trade policy. It is 
the right thing to do. It is good for our country, it is good for our 
economy, and it is especially good for workers.

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