[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.
____________________