[Congressional Record (Bound Edition), Volume 145 (1999), Part 19]
[Senate]
[Pages 27379-27391]
[From the U.S. Government Publishing Office, www.gpo.gov]



             AFRICAN GROWTH AND OPPORTUNITY ACT--Continued

  The PRESIDING OFFICER. The Senator from Florida is recognized.
  Mr. MACK. Mr. President, I rise in strong support of the very 
important trade package that the Senate is currently considering. At a 
time when our global marketplace is expanding faster than ever, we need 
to ensure that the poorest countries around the world are not left 
behind.
  This comprehensive package uses trade to promote economic self-
sufficiency, at the same time allowing for broader access to American 
goods and services to these markets. While many believe the economic 
and financial answer for these underdeveloped countries may lie in 
direct financial assistance, I believe the answer is found by 
facilitating direct private investment.
  I want to share with colleagues the plight of one of these countries 
which I experienced firsthand this past weekend. I spent 2 days in 
Haiti meeting with political, business, and humanitarian groups.
  By far, the most dramatic portion of my trip was witnessing the 
extreme poverty and despair that grips that Nation. I saw the face of 
an economy suffering from 17-percent inflation and unemployment of 
between 60 and 80 percent.
  Let me tell the story of one little boy I met. Only through a 
humanitarian organization and through the support of private donations 
is this 9-year-old boy able to obtain an education. As a tool to 
economic and democratic stabilization, aid is simply not enough. Many 
children just aren't able to stay in school. They are required to work 
in order to contribute to their families' survival.
  Again, I make the point that for a good number of the people in 
Haiti, their per capita income is around $50 a year. A straight 
calculation of the per capita income is about $500. But if you look at 
the makeup of that distribution, you can see easily that there are 
literally millions of people in Haiti who live with a per capita income 
of around $50.
  If these children are to have a future, revitalization and expansion 
of economic opportunities are needed to reach the goal of economic 
self-sufficiency. By creating a framework for using trade and 
investment as a development tool, the United States will be fostering 
reform at the economic base of these countries, taking direct aim at 
lowering unemployment and high inflation rates.
  This legislation creates this framework by extending enhanced trade 
benefits to the countries of the Caribbean Basin. Since the passage of 
the North American Free Trade Agreement, U.S. imports from Caribbean 
countries have been at a distinct disadvantage. The measure would build 
on the existing Caribbean Basin Initiative program, often referred to 
as CBI, by providing additional trade benefits to Caribbean countries 
similar to that which Mexico and Canada currently enjoy.
  Since its inception, CBI has had a significant positive economic 
impact on both the United States and the Caribbean countries, helping 
to promote regional security and stability of our Caribbean neighbors. 
Opening this market even further, particularly following the recent 
devastation inflicted by hurricanes, will help to stimulate job growth 
by increasing exports and expanding market access to these countries 
for U.S. businesses.
  Another important component of this trade package establishes U.S. 
support for economic self-reliance in sub-Saharan Africa. The United 
States stands to benefit a great deal from a strong and prosperous 
Africa. By fostering growth-oriented economic policies, we will help 
support broader access to African markets for American goods and 
services. Sub-Saharan Africa makes up a market of more than 700 million 
people and is potentially one of the largest markets in the world. As 
economic reforms and market-opening measures spur growth in Africa, it 
will create new and bigger markets for U.S. exporters.
  A particularly sensitive, albeit important, provision included in 
both the African Growth and Opportunity Act and the Caribbean Basin 
Trade Enhancement Act deals with textiles. The textile and apparel 
industries have historically provided the first step toward 
industrialization in many countries. This is because production is 
fairly simple, can be done on a small scale, and often uses locally 
abundant raw material.
  In seeking to address the concerns raised by the U.S. textile 
industry, this legislation has sought compromise by restricting 
preferential treatment to apparel produced by U.S. fabric and yarns.
  Additionally, this legislation provides strong protections against 
illegal transshipment of goods through Africa or eligible CBI 
countries. We need to ensure that these countries do not become stop-
over points for products from countries not eligible for preferential 
treatment under the legislation.
  International trade has been an important part of the growth we have 
enjoyed in the United States. Since 1994, international trade has 
created more than 11 million American jobs, and accounts for 30 percent 
of our Nation's gross domestic product. Imports have helped to hold 
down inflation, lower the cost of production, provide greater choice to 
consumers, and have given incentives to raise productivity.
  As emerging markets seek to grow, it is important that the United 
States take the lead in offering these countries incentives to continue 
their economic reforms. By doing so, we will be providing the citizens 
of these emerging countries with more jobs, more opportunities and 
genuine hope. I believe a strong trade relationship is the best form of 
``foreign assistance'' we can offer another country.
  I thank the chair, and I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I want to address some of the statements 
made about the process unfolding, allegations that the majority leader 
has tied up the process.
  The truth is, we have strong bipartisan support for this legislation. 
The majority leader has tried to protect the 80 or 90 Senators who 
support the bill to make sure we focus on the merits of the bill and 
not on extraneous issues that are calculated to block progress.
  My friend and Finance Committee colleague, Senator Conrad, indicated, 
for example, he wants to raise some amendments on agriculture 
negotiating objectives and trade adjustment assistance, and these 
amendments are relevant and should be debated. They could be, if our 
friends on both sides reach agreement to work together to table 
nontrade amendments. That is what we should be about.
  Let's work together on this and begin to focus on our efforts on the 
bill. Let's not concede the debate to the opponents because of their 
procedural tactics. Let's focus on getting this bill acted upon, which 
is good for America as well as the CBI.
  Time is running out. I think it is critically important that we bring 
about a process where we can move forward on this most critical piece 
of legislation. What concerns me is it is time sensitive.
  For example, GSP has already expired. That not only works against the

[[Page 27380]]

interests of the Third World developing countries we are trying to 
help, but it works against the best interests of American companies 
that depend on this source of supply for their material.
  Yesterday, the distinguished ranking minority leader of the Senate 
Finance Committee made a very eloquent statement about the importance 
of trade adjustment to the workers who are dependent upon it. Let me 
emphasize, these are American workers--about 200,000.
  Mr. MOYNIHAN. Mr. President, 200,000 this year, up from 150,000 last 
year. This is not a diminishing program. As trade grows, this number 
grows.
  Mr. ROTH. I ask the distinguished Senator what will happen if we do 
not act on this legislation with respect to these American workers?
  Mr. MOYNIHAN. We will have broken our word to them, that by accepting 
open trade policies in the aftermath of which there would be 
dislocations, the economy at large and the society would make 
arrangements for them to transfer to other work with other skills. 
There is no reason to think that won't happen, but without assistance 
it won't, and we will have broken our word which we gave 37 years ago. 
President after President after President has reaffirmed this, as the 
Senator has in this bill.
  Mr. ROTH. Let me say to my distinguished friend, many years ago when 
the legendary Russell Long was chairman of our committee, the TAA was 
about to expire and no one was trying to save it. The chairman was 
about to rap the gavel to move on to other things. I said: Just a 
minute, sir. We have a commitment.
  That is exactly what the Senator is claiming now. I am proud and 
pleased to say the legislation was continued.
  It is a matter of significant concern to thousands of American 
workers and their families who are depending upon it. The purpose of 
this program, of course, is to enable these workers to be trained for 
new jobs, for new opportunities. We have an economy where there are, 
indeed, many jobs available. It behooves all to work to expedite action 
on this important piece of legislation.
  The other point I want to underscore and emphasize, and it has been 
addressed eloquently by the distinguished Senator from New York, who 
brings so much historical background into this picture, if we don't act 
on this legislation, it is a denial of liberal trade policies of the 
past how many years--35 years?
  Mr. MOYNIHAN. Sir, I go back to Cordell Hull and the Reciprocal Trade 
Agreements Act of 1934 which put in place the present system. As the 
Senator knows--I know our friend from South Carolina doesn't agree--the 
Smoot-Hawley tariff was a catastrophe. We have not had a tariff bill on 
the Senate floor since.
  We now are in a difficult situation with every President, Republican 
or Democrat, reaffirming. A legitimate point is made that President 
Clinton didn't send up a request for fast-track authority in 1995; it 
has been delayed and we haven't gotten it. If we haven't gotten the 
CBI, which President Reagan promised, if we haven't gotten the African 
agreements, we haven't gotten trade adjustment assistance, what do we 
take to Seattle for the conference of the World Trade Organization?
  We go as if we had thought there never should have been such an 
organization and didn't want it around. Why is it meeting in the United 
States?
  Ten years ago one would not have imagined this moment.
  Mr. ROTH. That is absolutely correct.
  The distinguished Senator raises a most important point, going back 
to the need for action being taken now. The meeting of the WTO to be 
held in Seattle is an extraordinarily important event. It can bring 
about some very significant progress for this changing world where we 
are increasingly involved in a global economy.
  It is incomprehensible that on this legislation, which has broad 
bipartisan support on both sides of the aisle, and has the support of 
the President of the United States, no action will be taken, thus 
giving the wrong signal to our friends, allies, and trading partners 
around the world as to our seriousness about moving ahead on trade 
policy. It looks as if we cannot take action.
  Regarding fast track--and I appreciate the support Senator Moynihan 
has given in committee--we have certainly tried to push fast track. We 
believed it was critically important this President, as every other 
President, have that authority. Unfortunately, it never happened.
  Mr. MOYNIHAN. The floor not being exactly teeming with Senators 
wishing to join, Mr. President, this is the point: We are at a critical 
moment; where is the Senate?
  In the absence of the Senate, let me offer some statistics about the 
centrality of trade. The crash of 1929 is part of American myth, 
tradition, history. One does not know much about American history if 
one does not know about that. In the aftermath, in 1930--the crash of 
1929 came in October--our GDP dropped 9 percent. That is a pretty hefty 
drop, but stock markets go up and then they go down. When they are up, 
there are bargains made by selling; when they are down, there are 
bargains made by buying. It tends to be cyclical and does not 
necessarily change that much in the real world. I say again, in 1930, 
GDP dropped 9 percent; in 1931, it dropped another 6.4 percent. Again, 
that is a drop, but it is leveling off.
  It was before we understood the business cycle very well, before 
just-in-time delivery, before countercyclical financing. The American 
world had never heard of John Maynard Keynes. There was learning going 
on, but it hadn't gotten to us. The Federal Reserve Board responded to 
the crash by tightening credit. They would never do that today, and 
they know why; they will show why in numbers.
  Then came the impact of Smoot-Hawley in 1932 and the gross domestic 
product dropped another staggering 13.3 percent. That is when it really 
hit. At the same time the British had created the idea of free trade by 
long argumentation, good argument--reeling from Smoot-Hawley, went onto 
Empire Preference. They drew in and they would deal with Canada and 
India and New Zealand but not with Europe, not with Germany. Recall it 
was the Economist magazine, which I understand now has a larger 
circulation in the United States than it does in Britain but comparably 
the same readership, was founded to advocate free trade as an economic 
principle that worked. It did work. Great theorists such as Albert 
Imlah demonstrated that in the aftermath.
  The Japanese, having the market here closed to them, they went to a 
Greater Far Eastern Coprosperity Sphere, which is a long way of saying 
a Japanese empire; and they invaded Manchuria, which is another way of 
saying China, and they began that process which ended in Hiroshima.
  In 1933, the same 1933 the year after GDP here dropped 13.3 percent, 
unemployment was so high and social stability so weakened that a 
frightened German middle class elected Adolph Hitler to be Chancellor. 
He was chosen in the Reichstag. The rest is history.
  I joined the Navy in 1943, at age 17, and a lot of other people 
around here did. Maybe not enough people around here did. They don't 
remember.
  Mr. ROTH. I was one of them, I might say.
  Mr. MOYNIHAN. You joined on, yes, sir. It was our generation.
  Mr. ROTH. That is right.
  Mr. MOYNIHAN. That is what we were there for, to fight wars that 
needn't have happened had the world been wiser. Not just about trade, 
of course not, but don't underestimate trade. We are not just talking 
about profits.
  Mr. ROTH. Could I ask a question of the distinguished professor? We 
are enjoying, today, one of the greatest periods of prosperity, 8, 9 
years or so, this country has undergone. Unemployment is lower than 
anyone would ever have predicted a few years ago. The future of this 
country is bright. It was only about 10 years ago everybody was 
predicting the United States was going down the drain and Japan was 
becoming No. 1. But the contrary has happened. In this period of time, 
we have

[[Page 27381]]

enjoyed the liberal trade practices that began many, many years ago--
what was the year?
  Mr. MOYNIHAN. In 1934.
  Mr. ROTH. In 1934. How can you explain the prosperity of this 
country, which has the most open markets of any, if not put it on the 
basis that a liberal trade policy does work? Unfortunately, there are 
some industries and some workers who do suffer. That is the reason we 
have TAA, to help them make the adjustment.
  Mr. MOYNIHAN. Right.
  Mr. ROTH. But overall, our country has never had a longer period of 
growth and prosperity than we are enjoying and have enjoyed. It has 
been enjoyed under two Presidents.
  Isn't it ironic we are here debating whether or not we should extend 
these policies that have worked so well to a few countries that are in 
need of some support and help? It will not only work in their 
interests, but again it will work in our interest, as I think the 
Senator pointed out, starting with the growers of cotton, people who 
make the fabrics, the apparel, the wholesalers, the retailers, and the 
consumers. It seems to me it is almost unbelievable anyone would argue 
to the contrary, that we should not continue on this path of a liberal 
trade policy.
  Mr. MOYNIHAN. Mr. Chairman, we have now reached the point where you 
and I are alone on the Senate floor as one of the epic decisions of 
this decade is about to be made. One asks Senators who might be 
listening: Where are you?
  But the answer to your question, sir, is our learning has truly 
expanded. We know more about this. I mentioned 1933. In that year, John 
Maynard Keynes published a book in the United States called ``Essays In 
Persuasion.'' It appeared the previous year in Britain. He already had 
a pretty good record. He wrote that great essay, ``The Economic 
Consequences of the Peace''--of Versailles. He was on the British 
delegation as an adviser, and he said: It is going to be awful. Germany 
is not going to get over this.
  That is a very famous essay--and it is sort of a joke. Winston 
Churchill became Chancellor of the Exchequer around 1926 and went back, 
took Britain back on the gold standard. He wrote an essay called ``The 
Economic Consequences Of Mr. Churchill,'' which he thought were pretty 
grim. And they were.
  But, in 1933, in this book, ``Essays In Persuasion,'' he had an 
introduction. It is really essays over the years. He said: The economic 
problem is just a giant muddle. He said: We will figure it out. We will 
get through it. He said: I estimate by about the year 2030, we will 
have it pretty well under control and we can go on to other issues in 
life.
  The Senator mentioned the existing expansion, the period of 
expansion. In February of the coming year, that will be in about 4 
months, we will completed a period of sustained growth of 107 months, 
the longest in history--unless we start killing it, which is what we 
seem intent on doing. Of course there are dislocations brought about by 
trade. Joseph Schumpeter--had it not been for the Great Depression it 
is generally thought Schumpeter would be regarded as the greatest 
economist of the 20th century. He is an Austrian, ended up a professor 
at Harvard. In his book ``Capitalism, Socialism & Democracy,'' he 
speaks a phrase now in wide use, of the ``creative destruction of 
capitalism.'' Sure, there comes a time when shipping the cotton to 
mills in New England no longer makes sense. They want to have mills in 
South Carolina. ``Bring the mills to the cotton,'' as the phrase was. 
It did make sense. The next thing you know you had empty mills all up 
and down the river in Lowell, MA, and, I might say, in Gloversville, 
NY, and such like.
  Yes, but did that put an end to life in Massachusetts? No. The next 
thing you know, Route 128 is creating enormous economic growth spurred 
on by computer companies. That destruction is creative because it 
brings better uses of resources into play. You get more than you had. 
Trying to keep just what you had is a formula for ruin--well, not for 
ruin, but for stagnation. I speak with some temerity. I was once our 
Ambassador to India, and I saw it happen. Tariffs you could not get 
through, government purchasing. The Soviet Union----
  Mr. ROTH. That is correct.
  Mr. MOYNIHAN. The Soviet Union, sir, what was that? Oh, yes, that was 
the place that was going to take over the world.
  I remember a meeting in Bucharest of world trade advocates at the 
time. It was an international conference about the developing world. 
The Soviet delegate absolutely swept the conference with an 
announcement that, as of this moment, as a gesture of solidarity with 
our friends in Africa, in Latin America, in Southeast Asia, the Soviet 
Union is abolishing all tariffs of imports from those countries.
  The conference went wild, but no one stopped to think: But, wait a 
minute, the Soviet Union doesn't have tariffs. Everything is bought by 
the government and put through collective enterprises, all of which 
were in ruins and eventually collapsed. This was 20 years before the 
whole system imploded.
  We are talking for democracy, talking for vitality, talking for 
expansion, talking for a tradition. As Jerry Ford said yesterday in the 
Rotunda, he came to Congress as a social moderate, a fiscal 
conservative, and a determined internationalist. He was right. Can it 
be we have forgotten all that?
  I say, again, before I yield the floor, at a critical moment in our 
economic history--a critical moment--we are hours away from ruinous 
indecision. There are three Senators on the floor. It happens we are 
all friends, perhaps have gotten to be more friends because we have 
been on the floor together for 2 days now. It is hard to understand.
  Mr. ROTH. Can I make one further observation and get the Senator's 
reaction to it? The irony of what is before us is, if we enact this 
legislation, it will help the very industries about which we are 
concerned.
  Mr. MOYNIHAN. Sure.
  Mr. ROTH. It is, as we have said before, a win-win situation.
  Mr. MOYNIHAN. It gives them a different mix of costs and profits, and 
that turns out to make them viable again.
  Mr. ROTH. I point out it is projected by the industry itself that 
adoption of this legislation will create in the next 5 years 
approximately 121,000 jobs, that it will result in markets exceeding 
roughly $8.8 billion. The purpose of this legislation is not only to 
enable the textile industry, for example, to compete better at home but 
also to be in a better position to compete abroad in other markets. If 
we do nothing, as has happened in the past, we see, for example, the 
Chinese exports increasing.
  Mr. MOYNIHAN. Right.
  Mr. ROTH. What we are trying to do is make us more competitive in the 
industry so that it not only helps the economy but, most important, 
creates jobs within the industry.
  Mr. MOYNIHAN. Mr. President, the chairman is doing this for the 
American worker. If you think otherwise, think back to opposite 
policies and what they brought the American worker in the 1930s. Don't 
think we cannot make those mistakes again. We knew enough not to do it 
then. We did not know exactly why. But 1,000 economists wrote President 
Hoover, who was a sensitive and an intelligent man. Nothing quite like 
that happened before; nowadays we get 1,000 a day. They said: Don't 
sign that tariff bill, Smoot-Hawley. Don't sign it, they said. Well, he 
did. It cost him the Presidency, but that is the least of it. I thank 
the Chair, and I yield the floor.
  The PRESIDING OFFICER (Mr. Fitzgerald). The Senator from Delaware.
  Mr. ROTH. Mr. President, yesterday, I began making some comments in 
answer to critics of the proposed legislation, and I want to take a few 
minutes to continue to answer those negative comments.
  One of the questions that has been asked is: Won't this legislation 
result in the further erosion of America's manufacturing sector?
  None of my colleagues who have risen in opposition to this bill have 
addressed its specifics. The reason is that, unlike the House-passed 
Africa bill, the Finance Committee measures are drafted in a way that 
ensures a benefit to the American industry as

[[Page 27382]]

well as our African, Caribbean, and Central American trading partners.
  I made passing reference just now to the specifics and how it would 
impact on the industry and the American worker. What my colleagues who 
oppose the bill have done is raise several general arguments against 
trade that I thought might still be helpful to address.
  One of the arguments that falls in that category is the argument that 
trade has led to an irreversible decline in U.S. manufacturing, and 
that any trade measure, even this one, would simply worsen that 
decline. Let me take that head on.
  America is not losing its manufacturing sector. By any measure, it is 
doing a lot better than some of my distinguished colleagues seem to 
think. There is no question that manufacturing has declined as a 
percentage of the U.S. economy. Manufacturing, as a portion of GDP, has 
declined steadily since 1960, from 27 percent of GDP to 17 percent of 
GDP by 1996. But does that mean the United States is losing in the 
international arena? The answer is no.
  According to the International Trade Commission, all industrial 
countries have faced a similar percentage decrease in manufacturing as 
a share of GDP from about 28 percent in 1970 to about 18 percent in 
1994.
  Does the decline in manufacturing as a percentage of GDP mean that 
American industry is in decline and output is falling?
  Again, the answer is no. In fact, America's industrial output 
expanded 62 percent for the period from 1977 through 1996. Let me 
repeat. The fact is, America's industrial output expanded 62 percent 
from 1977 through 1996, a period that critics of our trade policy think 
of as the worst stages of our industrial decline.
  American manufacturing added a net figure of 4.4 million new jobs 
during that same period, or an increase of 31 percent in employment in 
the manufacturing sector.
  These are very important statistics, I believe. It bears out what the 
distinguished Senator from New York was just pointing out.
  Are we being beaten in this measure of international competition? 
Again, the answer is no. According to a most recent edition of the 
Economist, which I think is one of the best periodicals available 
today, American industrial production is up by 35 percent over 1990.
  During that same period, Japanese industrial growth fell by 5 
percent. What a contrast. Ours grew by 35 percent; Japan's fell by 5 
percent. This was the world where our country was going to be down and 
Japan was going to take over.
  Industrial output in Germany has remained a sluggish 4 percent over 
the same 10 years, while French and British industrial production grew 
by only 8 and 9 percent, respectively.
  Is there employment available for those workers who have lost their 
jobs due to an increase in productivity? As Senator Moynihan and I were 
commenting earlier, the answer is yes. We have never seen such low 
unemployment as this country is enjoying today.
  The American economy currently enjoys the lowest unemployment in 
history and rising wages across the board, even for the unskilled who 
have dropped out of school rather than finishing their education.
  Mr. MOYNIHAN. Would my friend allow me to make a comment in the form 
of a question?
  Mr. ROTH. Please proceed.
  Mr. MOYNIHAN. In terms of how we are progressing and what we are 
learning, the Senator mentioned we have the lowest unemployment rates 
in 30 years, and for the longest time we also have had the lowest 
inflation rates.
  Mr. ROTH. That is correct.
  Mr. MOYNIHAN. Twenty years ago, statistics proved that was not 
possible. There were something called the ``Phillips Curve'' that said: 
There is a tradeoff; the lower your unemployment rate goes, the higher 
your inflation rate goes. And everyone said, oh, God, we can't get the 
unemployment rate down too much because that will spark inflation.
  If I can just be reminiscent and tell war stories in this crowded 
Chamber, where I see we are back to three Members--well, the 
distinguished Senator from Illinois is presiding; and it is an honor to 
have him in the Chair--in 1963, the Council of Economic Advisers, then 
chaired by Dr. Walter Heller of the Kennedy administration, was putting 
together the economic report. This report was created by the Employment 
Act of 1946 which gave us the institutionalized, countercyclical 
economic notions.
  They said: We should have a goal; we should set as a goal for the 
country an unemployment rate of 4 percent. Now, it won't be easy, but 
we should be bold.
  In the Labor Department we were sort of distressed because we had 
dreams of unemployment below 4 percent. So we got them to change the 
text and make it an interim goal of 4 percent--again, a dream.
  Sir, we now are routinely close to 4 percent, have been for almost a 
year. Thirty years ago, it was something you could not imagine. In a 
rousing economic report--if there is such a thing--you could say, let's 
do things that are unimaginable. Now we do not even notice when they 
are reported every month. It is working. Why put it in jeopardy?
  Mr. ROTH. I could not agree more with what the Senator just said. I 
think this is one of the brightest periods in history with respect to 
our country. I think there is enough credit for everyone to claim.
  Mr. MOYNIHAN. Sure.
  Mr. ROTH. But I think the----
  Mr. MOYNIHAN. But, sir, would you allow me? If we let this calamitous 
event take place of bringing down this trade bill there will be plenty 
of blame to go around, too.
  Mr. ROTH. I agree with you.
  Mr. MOYNIHAN. To go around and around and around.
  Mr. ROTH. As you and I have pointed out, a majority of the Senators 
on both sides of the aisle are supportive of this legislation.
  I do wish some of those who are supportive would come down and give 
their reasons why it is so important that we move ahead with this 
legislation. It would be a shame if we lost this opportunity to take a 
step forward. Because, if I might say so, we are not only losing the 
opportunity to act on this legislation, which in and of itself is so 
important, but it helps give what I think is the mistaken message to 
the world that we are no longer interested in liberal trade policy, 
particularly in view of the fact that we will be going, hopefully, out 
to Seattle in a few weeks to take the next step forward in broadening 
and liberalizing markets, making them more accessible to everyone, 
which, of course, is particularly in our interest because the United 
States has the lowest tariffs, the most open markets. It is important 
that we move ahead and begin to negotiate access to other markets.
  Mr. MOYNIHAN. May I inquire, will you say that again and again and 
again? The United States has the lowest tariffs of any major economy in 
the world.
  Mr. ROTH. That is correct.
  Mr. MOYNIHAN. The only outcome of having negotiating power and a 
negotiating round is to reduce the tariffs of other people.
  Mr. ROTH. Absolutely.
  Mr. MOYNIHAN. And it is in our interest to do it.
  We have heard talk about the subsidies of the European Union, and so 
forth. You do not get anywhere with subsidies.
  Mr. ROTH. That is right.
  Mr. MOYNIHAN. You get elected 1 year, and so forth. But the economy 
doesn't.
  Mr. Chairman, thank God, you are where you are. But where, sir, are 
the others?
  I see our distinguished friend is in the Chamber. We have reached a 
critical mass. There are five Senators in the Chamber--six. Yes, six. 
Perhaps the word is getting around that something of great consequence 
is going to happen today--or not.
  Thank you, Mr. Chairman.
  Mr. ROTH. Thank you, I say to Senator Moynihan.
  Mr. President, I yield the floor.
  Ms. LANDRIEU addressed the Chair.
  The PRESIDING OFFICER. The Senator from Louisiana.

[[Page 27383]]


  Ms. LANDRIEU. I thank the Chair.
  I come to the floor today to add my voice in support of this very 
important piece of legislation in the hope that, as we continue to talk 
about the great strengths and characteristics that make this a good 
bill and the importance of continuing this open trade, we can build 
enough support to pass it, to get over whatever procedural hurdles are 
present.
  I thank the Senator from New York and the Senator from Delaware for 
their bipartisan leadership. With all due respect to the opponents, let 
me make a few points about this African Growth and Opportunity Act.
  When the United States can do something that extends opportunity to 
countries that need our assistance while at the same time benefiting 
American workers and industry, I believe we should take that step. We 
can, by voting for this bill, elevate the commercial exchange between 
Africa, the Caribbean, and Central America--hopefully, if that piece 
can be added--and the United States. That is what this bill attempts to 
do.
  My State, Louisiana, is smart and blessed to have positioned itself 
at the mouth of the Mississippi River. It is how our State began. It is 
how the city of New Orleans and communities began hundreds of years ago 
and developed into a State.
  It is impossible to overstate the river's importance to the economy 
of our Nation, but the Mississippi River is more than just a way to 
move goods within the United States. It is also the primary artery for 
north-south trade among the United States, Canada, and developing 
countries to the south. And therein lies so much potential for them and 
for us. At this time, much of America's trade flows in an east-to-west 
direction, between Europe and the east coast or Asia and the west 
coast. We have all benefited, some to a greater degree than others, and 
there have most certainly been changes, but we have all benefited from 
that flow. While Louisiana benefits and participates, it does not make 
use of Louisiana's national geographic advantage.
  We will continue to benefit in an even greater way by increasing the 
north-south flow. For this reason, when the United States has the 
opportunity to increase trade on the north-south axis, I can be 
confident we will increase those benefits to our State and the Nation.
  Although it has come under some criticism, the best example for 
Louisiana is NAFTA. By promoting trade among Mexico, the United States, 
and Canada, NAFTA moves goods along a north-south corridor that 
naturally produces growth for our State. The results have been quite 
dramatic.
  In 5 years since NAFTA was enacted, Louisiana's trade with our 
partners has increased 134 percent. Louisiana's exports to Mexico alone 
were up 34 percent last year. This trade increase supports over 10,000 
jobs in my State and is growing every month. Thus, from the standpoint 
of enlightened self-interest, the majority of people in Louisiana 
support the expansion of trade between our other southern trading 
partners in Latin America, the Caribbean, and, yes, Africa.
  This bill is also about the United States paying more attention, 
serious attention, to a continent we have in many ways ignored. Such an 
effort is too long in coming. Until now, United States policy in Africa 
has really operated in two modes: benign neglect and cold war 
gamesmanship.
  Our Government poured aid into Africa when it was an active 
battleground in the ideological struggle of the cold war. We made many 
mistakes in our efforts to be helpful. We supported governments that 
paid only lip service to democratic principles and cared little about 
the infrastructure necessary for a modern market economy. Much of our 
aid was wasted--I am sure some of it went to very good use--and the 
series of wars and human tragedies have left the American people 
somewhat jaded about the prospects for real reform in Africa.
  Our neglect of this continent, with some exceptions, obviously, is 
starkly pointed out by our trade and investment statistics. Only 1 
percent of all United States foreign direct investment goes to Africa. 
Of that 1 percent, half of it is in the petroleum sector, which 
obviously we, in Louisiana, know something about. The majority was 
concentrated in only five countries. That leaves 43 other nations in 
Africa with virtually no contact with the American system of free 
enterprise.
  I believe the American people understand this is a continent we 
cannot afford to leave behind and we cannot afford to develop a society 
in this world of haves and have-nots. The stresses that such 
disparities produce inherently rip at the fabric of our society, cause 
upheaval, and ultimately can, as we have seen on occasion after 
occasion, decade after decade, century after century, turn to severe 
violence and war.
  The disparity between the United States and nations such as Tanzania 
or Malawi makes the difference between the rich and poor within our own 
country seem laughable. Yet we wonder where rogue nations come from. We 
wonder what prompts them to act in violent and, in our idea, 
irresponsible ways. When people in our country are not vested in the 
development of our society, when they believe they have nothing at 
stake in the community, crime and violence result. The international 
community is no different.
  Would the Sudan be a rogue state if it had a serious trade 
relationship with the United States and Europe? I do not believe so. 
Unfortunately, much of Africa finds itself ignored and divested from 
the world community. Again, the figures paint a stark picture. For 20 
years, the gap between the level of economic development in Africa and 
the rest of the world has not closed; it has widened. Declining 
commodity prices cost Africa $50 billion in export earnings. This is 
twice as much as they received in foreign aid between 1986 and 1990. 
Fifty percent of all Africans live below the poverty line; 40 percent 
live on less than $1 a day. And debt service claims over 80 percent of 
Africa's foreign exchange earnings.
  It is no wonder that, given this bleak picture, trade relations with 
Africa need a jump start, not only for Africa's benefit but for our 
benefit, for South America, for the Caribbean, and for every State in 
the Union, particularly those that have the infrastructure to offer for 
north-south trade.
  The African Growth and Opportunity Act would open up American markets 
to apparel and other goods produced in Africa, but with the right 
percentages and the right mechanisms and methods for much of those 
goods and services to also have value added here, which would preserve 
jobs.
  As the amazing growth of East Asia has demonstrated, apparel is a 
natural entry point into manufacturing and a natural source for more 
robust trading relations with the United States and Africa.
  The Senate version of this bill ensures the benefits of this 
relationship will not be one-sided but will be mutual, as only apparel 
utilizing American-produced textiles will receive the GSP benefits. 
Thus, a steady two-way traffic can develop between the United States 
and Africa. Such a system of mutually beneficial trade can only enhance 
prospects of further American investment and interest in the African 
market, creating jobs both there and here.
  For my home State of Louisiana, this is a very good deal. My friend 
and colleague in the House of Representatives, Bill Jefferson, has been 
one of the principal advocates for this legislation because he 
understands the mutual benefit for our State and many States in this 
Nation and this continent. Furthermore, as home to one of the most 
significant ports in the world, trade in either direction translates 
into highway jobs for citizens of Louisiana.
  With regard to the criticisms of some of my colleagues relating to 
the dangers of labor standards and environmental degradation, I take 
these critiques and critics very seriously. I, for one, most certainly 
don't want to be a part of any trade relationship that does not promote 
good and progressive environmental policies and labor policies. The 
only long-term answer to both of these problems is economic growth. No 
country will address labor relations

[[Page 27384]]

when 50 percent of its people live in poverty. No country can protect 
its environment when people are struggling to be kept alive. Poaching, 
deforestation, slash-and-burn agriculture, these are all the results of 
too little trade, too little investment, and too little exchange with 
more developed countries.
  This is not to say we should abandon American standards and 
principle--to the contrary--but, rather, we should look at what has 
happened in Southeast Asia. As those economies have grown, so have 
wages and so has concern for the environment. Engagement is required 
because the status quo is even less likely to produce the kind of 
environmental goals we want to achieve and to address the rights of 
workers everywhere.
  I am saddened to know that despite the importance of the African 
Growth and Opportunities Act, it is unlikely to receive a vote on final 
passage. The vast majority of this Senate, I believe, want this bill 
enacted. I understand that we are late in the year and procedural 
difficulties could absorb the little time we have remaining. However, I 
must say that when it comes to the question of world leadership, the 
Senate should make time for these kinds of discussions. The Senate 
floor has seen many items debated that have not enjoyed the broad-based 
support this legislation does. So I remain hopeful our differences can 
be worked out because this and other trade bills and provisions are so 
important to help us maintain the upward mobility we are experiencing 
in America, the tremendous growth of opportunities in jobs and wage 
improvements that can only help if these agreements are done in the 
right way in countries around the world and particularly throughout the 
Southern Hemisphere.
  I just want to end briefly with a statement about the Caribbean Basin 
Initiative portion of this bill. I had the opportunity to visit Central 
America in the wake of the hurricane in Honduras and Nicaragua. They 
were devastated, set back over a decade or two, according to some 
analysts who spoke about the devastation that hurricane wrought. It was 
a terrible time for it to hit, just when they were coming into a 
democracy and when the economies were expanding. When I visited--as 
many Republicans and Democrats did--with the Presidents of these 
nations, yes, they asked for us to help repair their highways, and they 
asked for our military to engage, particularly our Reserves, which we 
were proud to send down to help them dig out and rebuild. The one thing 
they asked for more than anything was the Caribbean Basin Trade 
Initiative so that they could work themselves up, so that they could 
help produce new jobs, not only in the Caribbean, not only in South 
America and Central America, but here in the United States of America.
  So let us learn from the past. Let us look confidently toward the 
future. Let us not cower back because the rules may be different and 
because globalization is upon us. Let us be brave and go forward, 
recognizing that global trade brings wealth and opportunity, and not 
only more to our Nation, but it is the only thing that is going to help 
close the tremendous gap of wealth in this world, which, if we don't 
close, will produce nothing but unrest, violence, and war in the 
future.
  So for all those reasons--primarily for economic development but also 
for world peace--let us be about the business of trade. That is what 
today is about.
  I yield the floor.
  Mr. ROTH. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. ROTH. 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. ROTH. Mr. President, the critics of an open and forward-looking 
trade policy would prefer to avoid a debate about the actual facts 
regarding the United States economy. Let me give you some examples.
  According to the International Trade Commission, from 1970 to 1997, 
the percentage of U.S. GDP involved in international trade more than 
doubled--from 11 percent of GDP to 25 percent of GDP. If the opponents 
of this bill were right in their criticism of U.S. trade policy, the 
United States should be facing a precipitous economic decline. In fact, 
the United States' GDP roughly quadrupled over the same time period 
from $2 trillion to $8.2 trillion.
  If the opponents of this bill were correct in their criticisms of our 
trade policy, we should have seen a dramatic rise in unemployment along 
with the predicted decline in output. In fact, from 1970 to 1997, the 
American economy produced a net increase of 33.5 million jobs.
  To put that in context, the American economy produced more than three 
times the number of new jobs than the entire G-7 industrial countries 
combined. Rather than facing the double-digit unemployment that Germany 
faces, U.S. unemployment stood near 4 percent.
  The opponents of this bill often finger our trade policy as the 
culprit in a decline in real wages from 1978 to 1997, because trade as 
a percentage of our economy doubled while real wages fell. In fact, 
while wages fell, the overall benefits of the entire package of 
compensation and benefits offered to workers actually increased by 2 
percent.
  That is not to deny that there is a growing gap between the pay of 
our highest paid workers and our lowest. There is little doubt that 
this gap has grown.
  But, we owe it our to ask three basic questions? First, is the gap, 
in and of itself, a problem if everyone is better off? Second, is the 
gap attributable to trade as the critics complain? Third, is slowing 
the pace of trade liberalization, or, worse yet, the imposition of 
actual restraints on trade, the right policy to remedy the inequality 
in wages?
  As to the first point, the growing gap in wages is not necessarily a 
problem if everyone is better off at the end of the day. As noted 
above, while wages fell at the low end, the overall package of benefits 
increased over the past two decades. Furthermore, real wages are once 
again on the rise, including at the low end.
  But, even if wages were, in fact, stagnant, trade would help. Trade 
makes a broader range of higher quality goods and services available to 
all wage earners in the economy. In other words, trade helps ensure 
that even the lowest paid sectors of the economy can get higher value 
for their dollars than would be the case without the competition trade 
brings.
  As for the second question, whether trade is the culprit in wages in 
equality, the answer is that trade has some impact, but not as much as 
the disparity in income between different levels of education.
  Education also gives you the tools to remain flexible as the 
conditions of your current employment changes or as employment changes 
generally. That is why the economy pays a premium to those who made the 
sacrifices it takes to succeed in getting a high school education, a 
college education, and post-graduate education as well.
  Our economy rewards academic achievement. There is no doubt about 
that. But, should we change that? Should we eliminate any incentive to 
achieve a higher education as a way of eliminating the wage gap? Few 
people would suggest that that is an appropriate response.
  But, that really focuses our attention on the third question--whether 
slowing the process of trade liberalization or imposing trade 
restraints is the right answer to address the wage gap. The answer is 
no!
  Imposing restraints on trade would, at best, be an indirect, 
inefficient, costly, fourth-best option. If the disparity in wages 
relates to academic achievement, trade restraints will not address the 
problem, much less solve it.
  Indeed, if the problem is one of encouraging improvements in our 
educational system and encouraging our youth to remain in school, 
imposing restraints on trade is simply self-defeating. Trade restraints 
will do nothing to

[[Page 27385]]

improve educational standards or improve school attendance or 
achievement. It will simply impose higher costs on consumers.
  And, on whose shoulders will those higher costs fall? Those higher 
costs will fall disproportionately on the lowest economic sectors in 
our society. In other words, the burden of trade restraints will fall 
on precisely on those groups that the critics of trade purport to want 
to help because of what they perceive as an inequitable gap in wages.
  Why is that so? The reason is that trade restraints like tariffs and 
quotas are hugely regressive. Our highest tariffs fall on staples such 
as food and clothing.
  That is an inconvenient fact that the critics of trade would prefer 
not to publicize. What that means is that those workers that now 
receive relatively lower wages would pay the cost for any increase in 
trade restraints, which would exacerbate the inequality between the 
high and low end of the pay scale, rather than reduce it.
  If we actually want to do something about wage inequality, we should 
avoid using the gap in wages from the high end to the low end as an 
excuse to provide protection for certain industries in this country and 
impose higher costs on consumers. Rather, we should be concentrating on 
improving our primary, secondary, and post-secondary education.
  That is but one of the appropriate responses to the rising wage gap. 
But I understand the arguments that you can't take a former textile 
worker and retrain him to be a computer programmer.
  That is why we should also pursue policies that will increase the 
amount of capital flowing within and into the United States.
  This helps those at the bottom in two ways. If the amount of capital 
increases relative to labor, it will demand more labor to fully employ 
itself and appreciate in value.
  It also raises the productivity of those at the bottom, making them 
more valuable, and they will be rewarded for such productivity 
accordingly. This can summed up succinctly by one question--which high-
school level worker gets paid the most to dig a hole, the one who uses 
a spoon, a shovel, or an excavator? The answer is obvious, and the 
difference between the three is not education, but the capital that 
they employ to produce.
  Ultimately, all economic growth is the result of risk-taking on new 
ideas that increase our productivity--thereby increasing our standard 
of living. When we lower the government barriers to risking capital, 
like we did in the Taxpayer Relief of 1997, which included a large cut 
in the capital gains tax, the creation of the Roth IRA, and cuts in the 
estate tax, capital becomes more abundant, fueling the real wage 
increases, stock market increases, and economic growth we have seen in 
recent years.
  The stability of the dollar in the past two decades, as opposed to 
the turmoil of the 1970's, has also greatly contributed to capital 
formation, not only because the tax on capital is unindexed for 
inflation, but also because currency instability increases the risk 
associated with all economic activity.
  When we lower these barriers and risks, those with capital will risk 
it on those without capital, but who possess a surplus of time, energy, 
talent, or ideas.
  These ideas, anything from a better mousetrap to the personal 
computer, allow us to produce more out of less--raising living 
standards of all sectors of the wage base.
  These are the most direct responses to the rising wage gap, and also 
the most efficient, least costly, and potentially successful answer to 
wage and income inequality. Calling for an end to trade liberalization 
will not help. Nor will opposing this bill.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER (Mr. Bunning). The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. HOLLINGS. 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. HOLLINGS. Mr. President, it is a little difficult to have 
coherence with respect to this debate. I had hoped we would avoid 
getting back to Smoot-Hawley and even Hitler. I know Pat Buchanan--one 
of the enthusiasts for competitive trade--and I think he is right on 
trade. Unfortunately, he has suggested in his recent book we ought to 
be more considerate of Hitler. A notion that is pure nonsense.
  On this issue, the Senator from New York cited Smoot-Hawley, the 
Depression, and Hitler. If you listen to the gentleman and are not 
fully aware of all the facts, one would think this is a bill to avoid a 
depression and avoid ``Hitlerism'' or some other possibility.
  With respect to Smoot-Hawley, we had a good debate some 15 or more 
years ago. I will never forget it. The late Senator from Pennsylvania, 
John Heinz, and myself had to correct that record. We got the Don 
Bedell Associates study of Smoot-Hawley.
  The crash occurred in October of 1929. That is when we all went 
broke. That could easily happen with what is going on right now, if 
some of the signs we are reading on the horizon come to bear. Not being 
an alarmist and being a realist, let's look at Smoot-Hawley.
  First, it occurred some 8 months after the October 29 crash, in June 
of 1930. It did not cause the crash, Hitler, the Depression, or any of 
the other disasters of the thirties. On the contrary, it did not affect 
trade to any extent. The tariffs in question affected only one-third of 
our trade; two-thirds were unaffected--causing no impact whatsoever 
with respect to trade.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. HOLLINGS. 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. HOLLINGS. Mr. President, continuing with respect to the amount of 
trade affected, it was just at a third or a little less. Trade itself 
was somewhere around 1.5 percent. There was some argument about it 
being 3 percent of the GNP. Now it is 25 percent.
  I am trying to give a comparison so you get a feel of the exact 
impact upon the economy.
  The tariffs in question affected only $231 million worth of products 
in the second half of 1930--less than 1 percent of the world trade. So 
it did not have any real effect on world trade.
  In 1930 to 1932, duty-free imports into the United States dropped at 
virtually the same percentage as dutiable imports.
  So what you do is you look at the effect of Smoot-Hawley, and look 
how unaffected free trade really was mostly due to the worldwide 
depression. But namely, talking about cause and effect, we are both 
discussing the effect, but not the cause; because the cause was not 
Smoot-Hawley.
  When taken into account, Smoot-Hawley only affected a fraction of the 
trade. Only 33 percent of the $1.5 billion of U.S. imports was in the 
dutiable category. The entire impact of Smoot-Hawley has to be focused 
on the $1.5 billion number which was barely 1.5 percent of our GNP.
  I have a better authority than any, I think, with respect to Smoot-
Hawley. Paul Krugman, in ``The Age of Diminished Expectations,''--I 
finally found his quote--and I am quoting from page 64:

       Although protectionism is usually a bad thing, it is worth 
     pointing out that it isn't as bad as all that. Protectionism 
     does not cost our economy jobs any more than the trade 
     deficit does: U.S. employment is essentially determined by 
     supply, not demand. The claim that protectionism caused the 
     depression is nonsense; the claim that future protectionism 
     will lead to a repeat performance is equally nonsensical.

  Mr. President, there you are. Any time they get in trouble and they 
do not have the facts with them, then they go off and try to get you 
into a miasma of history and how we have had bad times, and now we have 
good times--the best of times--and how we

[[Page 27386]]

are going to create all of these jobs. The group that says it is going 
to create jobs is the same group mentioned in 1993 in Capital City's 
Media Women's Daily, where the article from November 16 states:

       That was the battle cry Monday by directors of the American 
     Textile Manufacturers Institute, who in a last-ditch effort 
     to solidify congressional support for NAFTA, pledged not to 
     move any jobs to Mexico in the pact as passed. The ATMI 
     Board, made up of firms representing every facet of the 
     textile industry, voted in favor of the resolution which said 
     their companies would not move jobs, plants, or facilities 
     from the United States to Mexico as a result of the North 
     American Free Trade Agreement.

  What are the facts? Dan River is about to build an integrated apparel 
fabrics manufacturing plant in Mexico. Tarrant Apparel purchased a 
denim mill in Puebla, Mexico; DuPont and Alpek are going to build a 
plant in Altimira, Mexico and form a joint venture with Teijin; 
Guilford and Cone Mills are to create a Mexican industrial park known 
as ``textile city''; Burlington Industries is going to build a new 
Mexican plant to produce wool products.
  I hear about the 127,000 jobs that the industry says it is going to 
create. I heard that NAFTA was going to create 200,000 jobs.
  I know categorically from the Department of Labor that we have lost 
420,000 textile jobs since NAFTA was introduced. We have lost exactly 
31,700 jobs in South Carolina alone. You only have to turn to the 
articles by Kurt Salmon Associates--and I quote from August of this 
year:

       More textile mills are funneling plants and investment into 
     Mexico to be closer to the cut-and-sew apparel factories that 
     have already migrated south of the border, according to a new 
     analysis. A flood of low-priced fabric and fiber imports from 
     Asia has pressured domestic manufacturers to respond by 
     seeking ways to cut their own costs.

  The Kurt Salmon Associates report continues:

       Since NAFTA's passage in 1994, Georgia has lost 28,000, 
     plus two textile--30,000 apparel and textile jobs.

  So we have lost 31,700 jobs. They have lost 30,000. That makes, as 
you go over through the other States and the other communities, some 
420,000 in just textile jobs alone.
  Rather than a balance of trade that they are talking about--a win-win 
situation, that the industry is for this, everybody is for it. We heard 
that cry before, too. It was going to create a positive balance of 
trade. We were at $5 billion at the time we passed NAFTA, a $5 billion-
plus balance of trade. Now we have a negative $17 billion balance of 
trade with Mexico.
  So the proof of the pudding is in the eating. As I said before, there 
is no education in the second kick of a mule. This NAFTA proposition 
that they are trying to spread to the CBI and the sub-Sahara at the 
same time, it reminds me of an insurance policy contest that they had 
for a company down in South Carolina years back. The winning slogan for 
the particular company was: The Capital Life will surely pay, if the 
small print on the back don't take it away.
  Here we extend this to the CBI and then to the sub-Sahara; or to the 
sub-Sahara and then to CBI--either way. I think it is really going to 
the CBI; and it is going to be kept there and then taken away from the 
sub-Sahara. They are not going to invest all the way over into Africa 
when they all just pell-mell are going down there hand over fist to 
come into the Caribbean production.
  I was just referring to Mr. Farley and Fruit of the Loom and how they 
have already eliminated 17,000 jobs in the Presiding Officer's State of 
Kentucky. They eliminated another 7,000 jobs in Louisiana. They have 
moved to the Cayman Islands. So they are foreign companies. It is 
getting to be where we have to sort of sober up and understand what the 
real facts are.
  Trade, reciprocity--that is exactly what he called it--reciprocal 
trade policy of Cordell Hull back in the 1930s. We had reciprocity. We 
had a modicum of it even in NAFTA, even though it didn't work. But we 
had the side agreements on the environment. We had the side agreements 
for labor. We had reciprocity. We go down the list, and we find out now 
we are going to do away with all of the particular tariffs with respect 
to the United States for the CBI, sub-Sahara.
  Let's see what the CBI--Dominican Republic has a 43-percent tariff; 
El Salvador--some of these include VAT, a value added tax--El Salvador, 
37.5 percent; Honduras, 35 percent--this is all on textiles--Guatemala, 
40 percent; Costa Rica, 39 percent; Haiti, 29 percent; Jamaica, 40 
percent; Nicaragua, 35 percent; Trinidad and Tobago, 40 percent--the 
United States is already giving it the store. We have already lowered 
ours to 10 percent. There is a 5-year phaseout. We have had a 10-year 
phaseout of the Multifiber Arrangement. Now we are going into the fifth 
or sixth year, so we only have another 5 years. And the real impacts, 
the heavy reductions on the good traded articles--we do trade some in 
textiles--is going right on out of the window. So, yes, you have some 
fabric boys calling us and saying: Wait a minute, Senator, we are for 
this bill. That is shortsighted. It is just like all the apparel jobs--
about gone.
  What is happening, as Kurt Salmon Associates says, they want to 
locate the fabric plants near where the sewing is and where the apparel 
is. It is just an economy of production, an increase in productivity. 
So they are moving down there more and more. So the fabric boys are 
calling on the phone. Give them another 5 years, I can tell you here 
and now; they will be gone.
  I know this: Any good businessman in textiles looking at this 
situation says, with 5 years--wait a minute--to put in this new 
machinery, this new spindle or otherwise--says: I can't get my money 
back in 5 years. It is going to take me 9 to 10 years to get my money 
back. I just don't buy it. I don't get productivity. And then the 
politicians will run around on the floor of the National Government 
hollering: They have to be more productive; they have to be more 
productive. And who has cut off the productivity? We have.
  What about tariffs in Africa? Central African Republic, 30 percent; 
Cameroon, 30 percent; Chad, 30 percent; Congo, 30 percent; Ethiopia, 80 
percent; Gabon, 30 percent; Ghana, 25 percent; Kenya, 80 percent; 
Mauritius, 88 percent; Nigeria, 55 percent; Tanzania, 40 percent; 
Zimbabwe, 200 percent. There they are.
  What is really going to happen, from practical experience, is 
transshipments. Let me say a word about the transshipment problem. I 
will never forget. It was 1984; this Senator got 500 additional customs 
agents into the Treasury-Post Office appropriations bill, and they 
didn't hire them. We kept on pleading, and by the end of the 1980s, we 
finally got President Bush, and he put on some extra ones. But we 
haven't gotten any extra ones since that time.
  We go to the customs agents, and they say yes, it is still at least 5 
billion in transshipments, but they say: Senator, you want us to stop 
T-shirts or drugs? And you look them in the face and say: Well, of 
course you have to stop the drugs. They say: That is all we have got.
  Now they are talking all over the Halls in both Chambers of a 1\1/2\ 
percent cut. And now we have just been educated by CBO that 1\1/2\ 
won't work, it will take at least 5.8 percent. And then if you don't, 
if you are going to exclude, say, defense and others, emergency ones, 
it is going to take an 11.8-percent across-the-board cut. So they are 
debating over on the House side right now is this so-called cut bill. 
But what they are debating is a cut in customs agents and a cut in 
enforcement.
  Our African friends, I know they changed their vote with respect to 
human rights in the United Nations some 4 years ago or 5 years ago. We 
had passed a resolution in the general assembly, and we will set up the 
hearings. We never have had the hearings.
  Our Chinese friends went down into Africa. They have made all kinds 
of friends there over the years. I will never forget over 25 years ago 
when I was in Zaire, it was the Chinese building the railroad from the 
hinterland out to the coast, down the Congo. They have had all kinds of 
contacts down there with Nelson Mandela and many others. They will get 
their plants and transshipments, and they will be coming through 
Africa. And our folks will

[[Page 27387]]

be working still at customs looking for drugs coming up from Colombia 
and South America and little inspecting will done concerning 
transshipments in the area of African trade.
  In reality, you are really fattening the competition in the Pacific 
rim all under the auspices and the gist of free trade. Let's say we are 
going to allow our textile boys to compete with the Pacific rim 
industries. That is why I put in that book.
  Do we have the book of all the fabric manufacturers? I don't want to 
put the entire book in, but we included just those entities that had 
invested already down in Mexico--referring, of course, to Davidson's 
Textile Blue Book. You can see here the fabric resource list. We will 
include all of these pages--not the book, but pages 345 through--well, 
just the fabric--well, we can include the yarns, too, natural fibers; 
they have yarn forward on 807, 809.
  That is too much to include in the Congressional Record. Just on the 
fabrics, not just the yarns forward, would be 11 pages.
  As I related on yesterday, all you need do is go from southern 
California into Tijuana, and you can see that you think you are going 
into Mexico, but it looks as if you are going into Seoul, Korea. There 
is nothing but Korean plants all over it. I have been there. I have 
traveled to other parts of Mexico. I think we ought to say a word, 
though, with respect to the wonderful economy we have. Do we have that 
article?
  I was talking earlier about the economy and the devastating effect 
this would have on the economic strength, the security, of the United 
States upon a three-legged stool: One leg of values as a nation is 
unquestioned; the second leg, that of military and the only superpower 
left; the third leg of the economics has been fractured. They used the 
17-percent figure, but the most recent figure I had of workforce and 
manufacturing had gone from 26 percent 10 years ago down to 13 percent. 
What happens is, since we are not saving here, I had the article where 
we are actually consuming more than our increase in productivity. If 
you can find that in here--I am not sure that is the same article I was 
looking at. It was three weeks ago in Newsweek where they pointed that 
out. Last week, Mort Zuckerman, in U.S. News and World Report, talked 
about the two levels of society and the split we have there.
  We see signs on the horizon now of trouble. We are not pessimists, 
and we are not necessarily optimists; we are realists. As I pointed out 
earlier, the deficit at the end of last month for the fiscal year 1999 
was $127 billion. It is not a surplus--not as they reported in a 
Washington Post story that was added earlier today to the Record--that 
said for the first time since the Eisenhower days we had back-to-back 
surpluses. That is absolutely false. It is a $127 billion deficit, 
according to Treasury figures. They could be interpolated by the CBO 
about funds carried forward. And it says there might be about $16 
billion.
  When my distinguished friend from New Mexico put this balanced budget 
law through in 1997, I said: If the budget is balanced under your act, 
I will jump off the Capitol dome. We knew it would not be. We know now 
it isn't. When you are still spending $100 billion more than you take 
in and you are increasing your deficit from last year, as we are going 
to do already this year, we just go pell-mell down the road. Your 
interest debt increases, your interest cost increases, and so your 
spending increases. And they want to give all kinds of tax cuts and 
spending.
  I know I am on pretty solid ground. So when the President said--I 
wish I had that article of yesterday from the Washington Post. It was 
on page 3 or 4. I want to give some credibility to what I am saying. It 
is difficult when you are the only one saying there is a deficit. The 
newspapers say surplus, the President says surplus, the majority leader 
says surplus, the minority leader says surplus, the Democrats say 
surplus, the Republicans say surplus; and you come along and say there 
is a deficit. You have to have support for what you are doing. So I put 
in this sheet of paper earlier with respect to the Treasury figures. I 
am glad to put it in again, if I can find a copy of it. I will ask the 
staff to get a copy of that sheet from the Treasury Department we were 
inserting into the Record so we can see exactly--I am not just saying 
it is a deficit, it is the Treasury Department saying it is a deficit. 
So we will find that.
  Right here in this morning's paper it says we are not spending more 
money than we are taking in. It is as usual. As Tennessee Ernie said, 
``another day older and deeper in debt.''
  Can we get Thursday's Washington Post, which is easily had, and the 
sheet of paper from the Treasury Department? I know they made a copy. 
Here it is. ``Hill Negotiators Agree to Delay Part of NIH Research 
Budget.'' The subheadline is ``The government has recorded its first 
back-to-back surpluses since 1956-57.''
  Mr. President, this says:

       Meanwhile, figures out yesterday showed that the federal 
     government ran a surplus of $122.7 billion in fiscal 1999 . . 
     . the first time the government has recorded back-to-back 
     surpluses since the Eisenhower administration in 1956-57.

  Absolutely false. There isn't any question about it.
  I will retain this floor. I know others like to talk about different 
subjects, but I have had a difficult time this morning trying to get a 
word in edgewise about this particular trade bill.
  If we find the Treasury sheet that was issued yesterday, it is a 
whole report--I didn't want to put the entire report in the Record, but 
if we can find that sheet, we will include it. It is page 20.
  I have my hand on another copy right here. This is page 20 of the 
Department of the Treasury report, table 6: ``Means of financing the 
deficit or disposition of surplus by the U.S. Government, September 
1999, and other periods.''
  Then you will see the account balances column, current fiscal year of 
total Federal securities. In other words, how much did we have to 
borrow? We have the figure here at the beginning of the year; it is 
$5,478,704,000,000. Then you look at the close of the fiscal year, and 
it is $5,606,486,000,000--a deficit, not a surplus, of $127.8 billion. 
That is as of yesterday. But if you read the headline in the paper, 
they have ``back-to-back surpluses,'' and we have another deficit in 
excess of over $100 billion.
  I ask unanimous consent to have this printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               [From the Washington Post, Oct. 28, 1999]

      Hill Negotiators Agree to Delay Part of NIH Research Budget

                            (By Eric Pianin)

       House and Senate negotiators yesterday agreed to delay a 
     big chunk of the research budget of the National Institutes 
     of Health, as they struggled to find new ways to hold down 
     costs and stay within tight spending limits.
       With concerns rising over their plan to cut programs across 
     the board, Republicans leaders are once again turning to 
     creative accounting tactics to make sure their spending bills 
     are lean enough to avoid tapping into Social Security payroll 
     taxes.
       The last of the 13 spending bills to be considered by 
     Congress, a giant $313 billion measure funding labor, health 
     and human service programs, would provide the NIH with $17.9 
     billion for fiscal 2000, a 15 percent increase that exceeds 
     the administration request by $2 billion.
       But the bill, which will be considered by the full Congress 
     today, would require the NIH to wait until the final days of 
     the fiscal year in September to use $7.5 billion of that 
     money. The tactic is aimed at limiting the actual amount of 
     money that the government will spend at NIH in the current 
     fiscal year; the plan would essentially roll over $2 billion 
     of spending to next year.
       The Clinton administration warned that the move would 
     seriously hamper research efforts and impose significant 
     administrative burdens on NIH, and congressional Democrats 
     complained that it was yet another step eroding GOP 
     credibility on budget matters.
       But Senate Appropriations Committee Chairman Ted Stevens 
     (R-Alaska) said Congress was justified in its use of 
     accounting ``devices'' to cope with emergencies and pressing 
     budget priorities that exceeded what Congress had previously 
     set aside to spend this year.
       The various devices are crucial to the GOP's campaign to 
     pass all 13 spending bills for the fiscal year that began 
     Oct. 1 without appearing to dip into surplus revenue 
     generated by Social Security taxes. GOP leaders

[[Page 27388]]

     last night put the finishing touches on an unwieldy package 
     that includes both the labor-health-education bill, the 
     District of Columbia spending bill and proposal for a roughly 
     1 percent across-the-board spending cut.
       Democrats maintain the ``mindless'' across-the-board cuts 
     would ``devastate'' some agencies, hurt programs for mothers 
     and children, and trigger large layoffs in the armed 
     services. But House Majority Whip Tom DeLay (R-Tex.) said 
     accusations the cuts would hurt defense were ``nothing but 
     hogwash.'' He said the criticism was coming from ``the same 
     officials who have sat by idly as the president has hollowed 
     out the armed forces.''
       President Clinton has vowed to veto the huge package, as he 
     has three other bills, and there is no way the two sides can 
     reach agreement before a midnight Friday deadline. With 
     neither side willing to provoke a government shutdown, the 
     administration and Congress will agree on a third, short-term 
     continuing resolution to keep all the agencies afloat while 
     they continue negotiations.
       While the Republicans and the White House are relatively 
     close in negotiating overall spending levels, there are 
     serious differences over how to spend money to reduce class 
     sizes, hire additional police officers and meet a financial 
     obligation to the United Nations, as well as disputes over 
     environmental provisions in the bills.
       Meanwhile, figures out yesterday showed that the federal 
     government ran a surplus of $122.7 billion in fiscal 1999 
     (which ended Sept. 30), the first time the government has 
     recorded back-to-back surpluses since the Eisenhower 
     administration in 1956-57.
       The 1999 surplus was almost double the 1998 surplus of 
     $69.2 billion, which was the first since 1969. While the 1999 
     surplus was the largest in the nation's history in strict 
     dollar terms, it was the biggest since 1951 when measured as 
     a percentage of the economy, a gauge that tends to factor out 
     the effects of inflation.
       All of the surplus came from the excess payroll taxes being 
     collected to provide for Social Security benefits in the next 
     century. Contrary to an earlier estimate by the Congressional 
     Budget Office, the non-Social Security side of the federal 
     government ran a deficit of $1 billion, money that was made 
     up from the Social Security surplus.
       The drafting of the labor-health-education spending measure 
     dominated the action behind the scenes on Capitol Hill 
     yesterday. The House has been unable to pass its own version, 
     so House and Senate negotiators worked out a final compromise 
     in conference.
       The $313 billion compromise exceeds last year's spending by 
     $11.3 billion and includes more money for education, Pell 
     Grants for college students, NIH, federal impact aid for 
     local communities, the Ryan White AIDS research program and 
     community services block grants than the administration had 
     requested.
       While the bill provides $1.2 billion for class size 
     reduction, the Republicans insist local school districts be 
     given the option for using the money for other purposes while 
     the White House would mandate the money for hiring additional 
     teachers.
       Republicans also were claiming $877 million in savings by 
     using a computer database of newly hired workers to track 
     down people who defaulted on student loans. The nonpartisan 
     CBC said the idea would only save $130 million, but 
     Republicans are using a more generous estimate used by 
     Clinton's White House budget office.
  Mr. HOLLINGS. Mr. President, having gotten the record made, the point 
is that it is not as easy as my distinguished colleagues from New York 
and Delaware, the leaders on this particular measure, have painted it. 
When you see that you are running deficits now of $127 billion, when 
you see that the trade deficit is widening, when you see that, 
according to an article, we were consuming faster than we were 
producing, then you can see trouble on the horizon.
  I refer to this morning's Financial Times, page 4: ``Widening Trade 
Gap Raises Fear For Dollar.''
  I ask unanimous consent that this article be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

               Widening Trade Gap Raises Fears For Dollar

                         (By Christopher Swann)

       Fears of a slide in the US dollar have haunted global 
     currency markets for several months now. The dollar was 
     granted a reprieve last week following better than expected 
     August trade figures. But many observers believe it is only a 
     matter of time before the dollar succumbs to mounting trade 
     imbalances.
       As the US current account deficit has increased, concerns 
     have intensified that international appetite for dollar 
     assets will soon be exhausted, leaving the US unable to fund 
     its trade shortfall with the rest of the globe and 
     precipitating a sharp drop in the currency. That could 
     imperil the US economy's run of rapid non-inflationary 
     growth.
       However, some economists point out that the high level of 
     long-term foreign direct investment should spend the dollar 
     from the threat posed by the current account deficit, 
     expected to reach $320bn in 1999.
       Optimists argue that the growing importance of foreign 
     direct investment, as US companies become the target of 
     foreign takeovers, means much of the capital now flowing into 
     the US may be relatively slow to leave.
       Foreign direct investment (FDI), into the US is booming, 
     with BP's take-over of Amoco, Daimler's take-over of Chrysler 
     and Vodafone's takeover of AirTouch the most high profile 
     examples.
       New inflows of FDI reached $60.5bn in 1998, a record sum 
     which covered about a third of the US current account 
     deficit. And this year, net FDI has already eclipsed last 
     year's figure, with $83.5bn pouring into the US in the second 
     quarter alone. In the fourth quarter of 1998 and the second 
     quarter of 1999, net FDI flows were stronger than shorter-
     term portfolio inflows and indeed exceeded the entire current 
     account deficit. The long-term nature of these flows reduces 
     the prospect of a sudden balance of payments crisis, says Ian 
     Morris, US economist for HSBC in New York.
       ``If a current account problem develops there is a 
     breathing space for the authorities to correct the imbalances 
     rather than have financial markets force it on them in an 
     abrupt and possibly catastrophic manner,'' he argues.
       The big question for the dollar is whether this surge in 
     foreign direct investment can be maintained.
       Paul Meggyesi, senior currency strategist at Deutsche Bank 
     in London, thinks it can. The deep-seated structural 
     advantages enjoyed by the US in areas such as technology and 
     labour market regulation, he argues, should ensure that FDI 
     continues at a healthy rate.
       ``This is particularly true in the technology field, with 
     the US accounting for 74 of the top 100 information 
     technology companies, compared to only 5 per cent in Europe. 
     It would not be surprising if European companies try to close 
     the gap by taking over or merging with US businesses,'' he 
     says.
       But the bare facts are alarming. The current account 
     deficit, expanding at about 50 per cent a year over the past 
     two years, is now at its highest level since at least the end 
     of the civil war as a proportion of GDP. And the family 
     silver can only be sold once. Few believe that the US economy 
     can rely indefinitely on the sale of assets to cover the 
     current account shortfall.
       Mr. Morris calculates that funding the expected $375bn 
     deficit in 1999 from FDI alone would mean selling the 
     equivalent of Intel, the third largest company in the 
     Standard and Poors 500 index.
       And if present trends continue until 2001, assets equal in 
     value to Microsoft, the largest company in the US, would have 
     to be sold to cover the deficit.
       In reality, over the medium term FDI is unlikely to be 
     anywhere near 100 percent of the current account shortfall, 
     leaving much to come from more fickle portfolio flows. 
     ``While the high proportion of long-term capital flows 
     provides some comfort for the dollar, it is likely to prove 
     inadequate,'' argues Avinash Persaud, head of global research 
     at State Street.
       When US shares offered an unrivalled 20 percent annual 
     returns it seemed the US would have no trouble attracting 
     sufficient portfolio inflows. With US share prices falling 
     and returns picking up in the economies of Japan, the euro-
     zone and the UK, competition for international capital is 
     becoming more intense.
       ``The safe haven portfolio flows which entered the US 
     during the global crisis at the end of 1998 now have other 
     alternative homes. It will prove much more difficult for the 
     US to finance its deficit in 1999 than it was in 1998,'' says 
     Mr. Persaud.
       Most agree that this will cause the dollar to grind lower, 
     removing one of the main ingredients in the US's high rate of 
     non-inflationary growth. Higher interest rates and weaker 
     stocks may well be the consequence.
       Some analysts believe that the dollar's 16 percent fall 
     against the yen since this year's peak in May merely marks 
     the start of a period of general weakness in the US currency.
       But the dollar has so far proved relatively resilient 
     against other currencies and may well keep the market on 
     tenterhooks for some time yet.

  Mr. HOLLINGS. Mr. President, there it says:

       A slide on the U.S. dollar has haunted global currency 
     markets for several months now.

  It says:

       The dollar was granted a reprieve last week following 
     better-than-expected August trade figures. But many observers 
     believe it is only a matter of time before the dollar 
     succumbs to mounting trade imbalances.

  It is going up over $300 billion.

       As the U.S. current account deficit has increased, concerns 
     have testified that international appetite for dollar assets 
     will soon

[[Page 27389]]

     be exhausted, leaving the U.S. unable to fund its trade 
     shortfall with the rest of the globe and precipitating a 
     sharp drop in the currency. That could imperil the U.S. 
     economy's run of rapid inflationary growth.

  It goes on to say how we have had foreign direct investment with, of 
course, the BP takeover of Amoco, Daimler-Mercedes takeover of 
Chrysler, and Vodafone's takeover of AirTouch.
  It says:

       The big question for the dollar is whether this surge in 
     foreign, direct investment can be maintained.
       But the bare facts are alarming. The current account 
     deficit, expanding at over 50 percent a year over the past 
     two years, is now at its highest level since at least the end 
     of the Civil War as a proportion of GDP. And the family 
     silver can only be sold once. Few believe that the U.S. 
     economy can rely indefinitely on the sale of assets to cover 
     the current account shortfall.

  Some analysts believe that the dollar's 16 percent fall against the 
yen since this year's peak in May merely marks the start of a period of 
general weakness in the U.S. currency.
  What are we doing about this? We are taking away the productivity. It 
is not an increase in jobs. It isn't any increase at all. They are 
running and spending it fast in the fabric plants. But forget about the 
people working by the sweat of their brow in the apparel industry--such 
as the mother trying to keep food on the table and get her children 
through college.
  We will pass all kinds of protections for high tech companies. We 
even repealed the State tort laws for something that can't happen until 
the first of next year. They want to do away with the immigration laws 
for high tech companies--the estate taxes, the capital gains tax, and 
everything else of that kind. They have all kinds of benefits. I even 
saw an article about creating a subsidy for boat manufacturers, so we 
can get more pleasure yachts.
  We have to increase the productivity. We are losing the industrial 
backbone of the United States of America.
  What we are hearing is that this Senator and others do not understand 
that the high-tech community is the engine of this wonderful 
globalization, the engine of this economic giant, the United States of 
America. Not so at all.
  There is a book called ``In Praise of Hard Industries'' by Eamonn 
Fingleton. We don't put the book, of course, in the Record.

       But surely the United States has scored some real successes 
     in high-tech manufacturing in the 1990s? Yes--but far fewer 
     than even most experts realize. Perhaps the strongest 
     remaining American high-tech manufacturer is Boeing. But even 
     Boeing is doing less well than it used to. Quite apart from 
     facing increasing competition from the European Airbus 
     consortium, Boeing has been under considerable pressure from 
     foreign governments to transfer jobs abroad, and it has duly 
     done so. As William Greider has pointed out in his book One 
     World, Ready or Not, 30 percent of the components used in 
     Boeing's 777 jet are made abroad. By comparison in the 1960s, 
     Boeing imported only 2 percent of its components. Thus, 
     Boeing, like other erstwhile world-beating American 
     manufacturers, is rapidly becoming a ``virtual corporation'' 
     ever more dependent on suppliers in Japan and elsewhere 
     abroad for its most advanced manufacturing needs.

  I divert for a minute to say that was the trouble we had in the gulf 
war. We had to get panel displays from Japan in order to get the 
weapons in order to fight that war. We weren't making them anymore. 
Every time I put a ``buy America'' provision into the defense bill--I 
serve on the Defense Appropriations Subcommittee--I get no, you are a 
fruitcake. That is what Mike Kelly calls those who are trying to 
protect trade.
  Now I hear this morning that I am going to start a depression and 
everything else of that kind. You can't talk sense on this particular 
subject. But the proof of the pudding is in the eating.
  Let me quote again.

       Meanwhile, despite all the talk of a renaissance in the 
     American semiconductor industry, there is acturally only one 
     truly strong American semiconductor manufacturer left: Intel. 
     Moreover. Intel's success says little if anything about its 
     manufacturing prowess. In fact, the company's twenty-four-
     fold growth in the fifteen years to 1997 has been driven not 
     by any fundamental efficiency edge in production engineering 
     but rather by the company's near-monopolistic franchise in 
     producing microprocessors for the dominant ``Wintel'' 
     standard in personal computers.
       In any case, Intel is just one company--and judged by the 
     all-important criterion of jobs, not a particularly large 
     one. At last count it employed sixty-seven thousand people 
     worldwide--little more than one-sixth of IBM's peak workforce 
     in the mid-1980s before its domination of the computer 
     industry collapsed under pressure from the rising Wintel 
     standard. Moreover, Intel is not as advanced as it appears. 
     In fact, its Wintel chips are based on an aging technology 
     known as CISC (complex instruction set computing). In the 
     last decade, CISC has been superseded by a technology called 
     RISC (reduced instruction set computing). RISC chips, which 
     are noted for their use in such high-performance computers as 
     Sun Microsystems' network servers, are made mainly in Japan.
       Intel apart, there are few other semiconductor 
     manufacturers left in the United States. This may seem 
     surprising in view of the fact that, according to such 
     prophets of America's purported industrial renaissance as 
     Jerry Jasinowski, the United States has now recovered strong 
     leadership in semiconductors. He has reported that American 
     semiconductor makers boosted their global market share from 
     40 percent in 1988 to 44 percent in 1993, and this supposedly 
     has put the United States back in the ``top spot'' in the 
     industry. After the big decline in America's share in the 
     first half of the 1980s, all this seems like convincing 
     evidence of a comeback. But the truth is that his 44 percent 
     figure is bogus. It is based on highly misleading statistical 
     procedures that categorize most chips outsourced by American 
     companies from factories in East Asia and elsewhere as 
     ``American''! The only justification for this bizarre 
     statistical treatment is that most such chips are made to 
     American designs and bear American brand names. But that 
     hardly means they are made in America. Even Dataquest, an 
     information-industry consulting firm that is the ultimate 
     source of data on world semiconductor production, compiles 
     its statistics on this basis.
       Given the prevalence of such misleading statistics, how do 
     we gauge the true state of American competitiveness? Again, 
     there is no substitute for international trade figures. These 
     indicate that the United States ran a deficit of more than $3 
     billion with Japan alone in semiconductors in 1997. Given 
     Japan's higher wage levels, therefore, it is clear that the 
     idea that the United States has recovered world leadership in 
     semiconductors is just another myth.

  Mr. President, I want to yield in a minute so other colleagues can 
address the Senate. But I will come back because what you have is a 
situation where that sandwich board they put up with all of these 
industries, they are all for the American worker. No; they are all for 
money, profit. That is all that those companies are for.
  Let me quote page 32.

       Since American labor is not represented in American 
     boardrooms, the real losers from technological globalism have 
     no say in the matter. Moreover, workers' interests count for 
     so little these days that American corporate executives 
     openly proclaim their commitment to utopian globalism without 
     the slightest fear of embarrassment. The pattern was 
     memorably exemplified a few years ago by a Colgate-Palmolive 
     executive who told the New York Times: ``The United States 
     does not have an automatic call on our resources. There is no 
     mindset that puts this country first.'' A similarly outspoken 
     disregard for the interests of American labor was apparent in 
     a remark by NCR's president, Gilbert Williamson, some years 
     ago when he said: ``I was asked the other day about the 
     United States' competitiveness, and I replied that I don't 
     think about it at all. We at NCR think of ourselves as a 
     globally competitive company that happens to be incorporated 
     in the United States.''

  That is the situation with Farley and Fruit of the Loom, exactly what 
was brought in issue fortuitously by Time magazine when they put in the 
article ``The Fruit of Its Labor--The Politics of Underwear.'' Fruit of 
the Loom eliminated 17,000 jobs in Kentucky, 7,000 in Louisiana, moved 
to the Cayman Islands and I should put them on one of those sandwich 
boards. Whoopee, they are for this bill so that they can make more 
money.
  Who is looking at the welfare of the American worker? Who is looking 
at the industrial strength of the United States? Who is looking at the 
economic progress and security of the United States of America?
  One could not be for this particular bill if one knew how it has been 
drawn up. It does not even compare with NAFTA. We cannot put an 
amendment up because the tree is filled. They put in what you might 
call fast track, no amendments, and then they give their friends the 
fruit of the tree. Senator Wellstone, the Democrat, comes in

[[Page 27390]]

with an agricultural amendment that is not to be allowed. But take the 
Senator from Missouri. When he comes with a particular amendment on 
agriculture, the leader comes down and finds that is relevant. We stop 
the whole process and pluck the amendment from the tree and put in your 
friend's amendment and they call that ``procedure'' in the world's most 
deliberative body. It is the most undemocratic procedure, 
unparliamentary kind of procedure that could possibly be contemplated. 
They ought to be embarrassed handling a measure this way.
  However, there is no embarrassment with this group. They know they 
can pass this bill easily because they can breeze through the committee 
and everybody on the floor saying mollify, unite. It used to be the 
ILGWU working the floor. I have been in it too long; I understand the 
competition.
  As a southern Governor, I don't blame the foreigners for saying we 
give this benefit and give that benefit. That is exactly what we did in 
South Carolina. The Senator from Delaware says they can get new jobs by 
learning new skills. We do that in South Carolina. We have brought in 
Hoffman-LaRouche and BMW. They told me the only reason they have come 
is because of the technical training system I instituted 30 years ago. 
I know about skills, training, getting new jobs and new industry. But 
we have had a net loss, in the last 4 years since NAFTA, of 12,000 jobs 
in South Carolina.
  In the campaign last year in the Governor's race, they were talking 
about new jobs. I said: Add and subtract. You are not announcing those 
that are leaving and going down to Mexico. We had United Technologies, 
the textile plants and others take off down to Mexico. We saw it 
starting then and it is mushrooming now.
  We are being derided on the floor talking about Smoot-Hawley and 
putting up the bankers' sandwich board and saying: This is for the good 
of America.
  We are going to have to discuss this a little bit longer.
  I yield the floor.
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from Iowa.
  Mr. GRASSLEY. Mr. President, this morning Senator Conrad offered an 
amendment which I cosponsor. I ask my colleagues to consider voting for 
this amendment that will make the Trade Adjustment Assistance Program 
available for farmers as well as industrial workers.
  This program, trade assistance, is being reauthorized in this 
legislation. This amendment would expand it just a little bit.
  President Clinton, about a month ago in an address spoke about one-
third of the jobs that have been created during his administration have 
come as a result of opening foreign trade and all the economic activity 
that takes place because of foreign trade.
  If we can have millions of jobs created during this administration 
because we have had a 50-year history of breaking down trade barriers 
between countries, we have to conclude that the liberalization of trade 
is good for American workers and good for our economy.
  Free trade has produced many winners in our economy. This has been 
true since 1947 when the United States and just 22 other countries 
created the regime for liberalized trade we have been under since 1947 
called the General Agreement on Tariffs and Trade.
  Since 1987, we have had eight series--sometimes they are called 
rounds--of multilateral trade negotiations to break down these 
barriers. These multilateral trade negotiations have liberalized trade 
in many sectors. Tens of thousands of tariffs have been scrapped. Many 
nontariff trade barriers have been eliminated. Others have been sharply 
reduced.
  The result of 50 years of trade liberalization has meant the creation 
of enormous wealth and prosperity and, as I have said, millions of new 
jobs, one-third of the new jobs created just in this decade. But 
whenever you have a free market economy, probably even when you have a 
regimented economy, as the socialist countries have had, there is 
always some adjustment in the economy. There are some winners and some 
losers; that is true in our economy, and it is true in the foreign 
trade part of our economy.
  For this reason, more than 35 years ago President Kennedy and the 
87th Congress thought it was only fair to transfer some of the net gain 
from free trade to injured workers or firms or industries or even 
entire communities. The first U.S. Trade Adjustment Assistance Program 
was designed by President Kennedy and authorized by the Trade Expansion 
Act of 1962 to help workers dislocated as a result of a Federal policy 
to reduce barriers to foreign trade.
  It is very important for the purposes of our amendment and also the 
spirit of the Trade Adjustment Assistance Act to hear what President 
Kennedy, its author, had to say about its intent and scope:

       I am recommending as an essential part of the new trade 
     program that companies, farmers, and workers who suffer 
     damage from increased foreign import competition be assisted 
     in their efforts to adjust to that competition. When 
     considerations of national policy make it desirable to avoid 
     higher tariffs, those injured by that competition should not 
     be required to bear the brunt of the impact. Rather, the 
     burden of economic adjustment should be borne in part by the 
     Federal Government.

  What President Kennedy said was so important, and I emphasize, once 
again, a small part of it:

       Trade adjustment assistance should be available for 
     companies, farmers, and workers.

  In spite of President Kennedy's belief that farmers should be able to 
get relief from trade adjustment assistance, just like others who 
suffer from trade-related job losses, the reality is, few, if any, 
individual family farmers are ever able to qualify for this program. 
Hence the amendment by Senator Conrad and myself that is offered today 
to address this inequity.
  Senator Conrad and I think it is only fair that not only farmers be 
included but fishermen be added to this group as well. They are 
workers, they help put food on our tables, and they have the same 
problems under the current program as farmers.
  Our program will create a limited new trade adjustment assistance for 
farmers program. It will provide cash assistance to farmers and 
fishermen when the price of a commodity falls sharply as a result of 
imports and causes a farm's net income to drop. The formula ensures 
farmers will recover a portion, but not all, of the income lost due to 
import competition.
  This is not an open-ended program. Assistance is capped at $10,000 
per farmer and a total of $100 million per year, and, of course, as 
must be under the Budget Act, this Trade Adjustment Assistance Program 
is paid for. In order to qualify for this limited Trade Adjustment 
Assistance Program, farmers will have to consult with the USDA's 
Extension Service to develop a plan for adjusting to the import 
competition.
  In about 5 weeks, the United States will launch a new round of global 
trade talks with 133 other WTO--World Trade Organization--member 
countries. That is an extension of the organization that started out 
with 22 countries in 1947 for this regime of liberalizing trade. In 5 
weeks, these talks start.
  Farmers have always been among the strongest supporters of free trade 
because so much of what they produce is sold in overseas markets. In 
fact, there is an absolute necessity of selling overseas because, even 
in normal production, we produce a third more than can be domestically 
consumed. Profitability and farming must come by selling the surplus 
overseas.
  The income our farm families earn in these foreign markets sustains 
our economy and contributes greatly to our national well-being. Farm 
support for free trade cannot and should not be taken for granted by 
the rest of the people in this country who benefit from free trade.
  We are in the worst farm crisis since the Depression of the thirties. 
Low commodity prices are not caused exclusively by import competition, 
and I do not mean to imply that. In fact, it is just the opposite. It 
is caused because a lot of our markets overseas have been

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hurt by the financial crisis that started 2 1/2 years ago in the Far 
East. But, of course, in our complex economy, even in our complex 
agricultural economy, trade might be a contributing factor to these 
historically low prices.
  Through trade adjustment assistance, we look after Americans who are 
harmed by import competition but not farmers. Through trade adjustment 
assistance, we have looked after communities harmed by import 
competition but not farm communities. Between 1979 and 1996, 12 trade 
adjustment assistance centers in the United States assisted about 6,130 
firms with petitions for trade adjustment assistance. During this same 
17-year period, these centers assisted only 200 food growers and 
processors, 200 firms in 17 years that were nonindustrial. But these 
firms were not individual family farms. I am concerned that if we lose 
farm support for free trade, it will be very hard, and perhaps 
impossible, to win congressional approval for new trade deals when 
these negotiations conclude among these 133 countries.
  Fairness, equity, common sense, and, most importantly, the original 
intent of President Kennedy's program, all tell us that farmers and 
fishermen should and must be a part of the Trade Adjustment Assistance 
Program.
  So as Senator Conrad did this morning, I strongly urge my colleagues 
to support this important amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Massachusetts.

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