[Congressional Record (Bound Edition), Volume 146 (2000), Part 1]
[Senate]
[Pages 8-10]
[From the U.S. Government Publishing Office, www.gpo.gov]



                                SEATTLE

  Mr. HOLLINGS. Mr. President, the World Trade Conference in Seattle 
was

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violence run amok. But it was a good reminder of the trauma that 
brought about our nation's high standard of living. Labor rights were 
obtained only after the murder of workers at Hay Market Square in 
Chicago. Environmental protection was obtained only after poisoned 
deaths at Love Canal. Safety laws were obtained only after poisoned 
food, poisoned drugs, and babies burned in their cribs. It took the 
trauma of class actions to make America aware of tobacco's injury, and 
it took President Teddy Roosevelt to hem in the robber barons with 
antitrust laws. The excesses of the free market--of free trade--can 
only be controlled by government. The peaceful demonstrators in Seattle 
were demonstrating against government's failure to control.
  The threat of ``free trade'' was America's first lesson. The 
fledgling colony had just won its freedom when the mother country 
counselled ``free trade''. It was Riccardo's famous doctrine of 
``comparative advantage''. Britain would trade with us what it produced 
best--the United States would trade back what it produced best. 
Alexander Hamilton, in his famous booklet ``Reports on Manufacturers,'' 
told the Brits to ``bug off.'' ``We are not going to remain your 
colony, exporting our timber, iron, and agriculture--and importing the 
finished products from England.'' The second bill (the first was for 
the U.S. Seal) to pass the national Congress on July 4, 1789 was 
``protectionist''--a tariff bill of 50 percent over sixty-some 
articles. Later, when it was suggested that we import the steel for the 
transcontinental railroad, Abraham Lincoln said, ``No'', and a high 
tariff was imposed on steel. In the Depression, Roosevelt saved the 
family farm with subsidies and protective quotas. And it was President 
Eisenhower who placed quotas on oil. World War II was won in the main 
by the United States' industrial and agricultural might--might built 
with protectionism.
  After World War II the United States had the world's only industry. 
The task was to build a free market--to defeat communism with 
capitalism. The government--not the free market--instituted the 
Marshall Plan; sent money, equipment and expertise abroad for Europe 
and the Pacific Rim to rebuild. Today, our problem is that the Marshall 
Plan worked. The vanquished of World War II have become victors in 
production, in market share, in the global competition. Today, Japan 
produces more than the United States--and has the largest balance of 
trade; the United States the largest deficit in trade. We have tried 
and tried to open markets by setting the example, pleading ``free 
trade,'' giving away market share, giving away our technology, giving 
away our production. But nations, like the United States in the early 
days, are determined to build their industrial strength, and today 
controlled capitalism governs trade. Technology is obtained; market 
share is seized; production is transferred with controlled capitalism. 
Trade is not free, not controlled.
  The fall of the Wall has presented us with a new threat. Four billion 
workers have been liberated from communism and oppression. They are 
ready to work regardless of pay, safety or the environment. It's a 
given in manufacture that labor costs represent 30 percent of volume 
and you can save as much as 20 percent of volume by moving your 
production to a low wage country. Technology now can be transferred on 
a computer chip to any place in the world--and finance it by satellite. 
A corporation with $500 million in sales can retain its executive 
office and sales force in-country, but move its production to a low 
wage country and make $100 million before taxes. Or it can continue to 
work its own employees and go bankrupt. The rush is for production 
offshore--downsize onshore--and keep crying ``free trade.''
  These corporations and our competitors have been spoiled. At all the 
trade conferences they have come to expect the Special Trade 
Representative to arrive bearing gifts. They know the United States 
doesn't enforce its trade laws. They know the President and the 
Congress are controlled by corporate money. They have come to expect 
the United States to come crying ``fair trade'', but giving away the 
store. President Clinton's invitation to Seattle was like an invite to 
a birthday party. But rather than bearing gifts, the demonstrators 
caused the President to call for labor rights and environmental 
protection. The competition was so spoiled they took the United States' 
position at Seattle as an invasion of their sovereignty.
  The security of the United States is like a three legged stool. The 
one leg of the Nation's values is admired the world around. The second 
leg of military power is unquestioned. But the third leg of economic 
strength has been fractured. For 50 years we have been losing 
production, technology and market share. Today, this threatens a loss 
of the middle class, the weakening of our democracy--the loss of our 
security as a nation. When Henry Ford started the assembly line he 
wanted to be sure that his workers could make enough to buy the car 
they were producing, thus began the strong middle class in America. The 
labor movement brought health care and other benefits so that the 
worker could buy a home, pay for health care, send their kids to 
college and afford a vacation trip. The WTO puts this social contract 
in jeopardy. It's one-size-fits-all capitalism only dumbs down 
America's standard of living.
  For years the United States has had and continues to have the most 
productive industrial worker in the world. But we have less and less of 
them each year. The cold war policy of free trade sacrificed our 
electronics, textiles, shoes, steel, hand tools, shipbuilding, etc. 
Jack Welch of General Electric has just instituted an affirmative 
action plan to export GE's jobs to Mexico. Now, with NAFTA, the rest of 
our manufacturing is headed South. Worse, the internet doesn't provide 
enough jobs to build a nation--and it doesn't export. Microsoft, rated 
the No. 1 industry in America, has only 22,000 jobs in the United 
States compared to General Motors with 250,000. As Akio Morita 
cautioned years ago, ``That world power that loses its manufacturing 
capacity will cease to be a world power.'' The United States becomes 
weaker each day.
  The time has come to break with the failed trade policies of the past 
and instead pursue a policy that zealously promotes the national 
interest while at the same time remains true to our core values of 
promoting both economic growth and social justice. This will only be 
accomplished by recognizing that the WTO system is a relic of a bygone 
era. The WTO system was an instrument of the cold war. It served as an 
adjunct in the much larger strategic struggle between East and West. It 
required the U.S. to sustain concessions necessary to maintain the 
cohesion of the Western alliance. For all the talk about opening 
markets, WTO and its predecessor, the GATT, have proven to be abysmal 
failures. In 1979, Ambassador Robert Strauss proclaimed that the Tokyo 
round will open new markets for U.S. companies, yet from the Tokyo 
round to the Uruguay round, the U.S. racked up over a trillion dollars 
worth of trade deficits. In 1994, President Clinton proclaimed that the 
Uruguay round would crack open markets. Since that time the U.S. 
continued with record trade deficits and last year recorded its first 
$300 billion deficit. In each successive round, the U.S. agreed to 
asymmetrical market opening commitments. Each time we concluded a 
round, the trade deficit widened. Perhaps the WTO system's biggest 
failure is its claim that it is raising living standards. The argument 
made in Seattle was that market forces alone would raise living 
standards--an argument we rejected in our own country at the turn of 
the century.
  The reality is that unfettered free trade has unleashed a race to the 
bottom as nations in the developing world engage in a vicious 
competition to attract foreign investment. For example, in his book 
``One World Ready or Not, Bill Greider vividly describes this race to 
the bottom, ``The toy industry--much like textiles and garments, shoes, 
electronics assembly and other low-wage sectors--existed (and thrived) 
by exploiting a crude ladder of desperate competition among the poorest

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nations. Its factories regularly hopped to new locations where wages 
were even lower, where the governments would be even more tolerant of 
abusive practices.''
  We must rebuild. Get real! No more of this ``setting the example.'' 
No more crying, ``free trade,'' ``fair trade,'' ``level the playing 
field.'' No more of this harassing others to be like us. Our job is to 
compete; to protect labor, protect our environment, protect our 
production--to protect the United States' standard of living. The free 
market won't do this. Only government will. Protection is the 
fundamental of government. We have the Army to protect us from without, 
the FBI to protect us from within. We have Social Security to protect 
us from the ravages of old age, Medicare and Medicaid to protect us 
from ill health. We have EPA to protect the environment, FDA to protect 
our food and drugs, the FCC to protect communications, the FAA to 
protect air travel, the Consumer Protection Agency to provide safe 
products, and the Federal Trade Commission to protect us from the 
restraint of trade. Don't be misled by the cry of ``globalization.'' 
This is the chant of our corporate fifth column. Silicon Valley is not 
the answer. This is the crowd that government gave the Internet; that 
government trained at Illinois and Stanford; that government subsidized 
with sematech; and now the billionaires all want to eliminate the 
estate tax, eliminate capital gains, eliminate state tort laws, 
eliminate the immigration laws, eliminate taxes on the Internet, 
eliminate the antitrust laws--just eliminate the government. Let's stop 
running against government. We are the government. Our task is to make 
government work. Our responsibility, is to keep America strong.
  We must organize to do battle. The first order of business is to 
eliminate the Special Trade Representative who looks to desert and 
represent some country against us. Next, merge and downsize the 28 
departments and agencies that now deal with trade into a Department of 
Trade and Commerce. Then organize Congress' handling of trade issues. 
Our competition presents a solid front. Any trade measure to protect 
America's jobs is immediately opposed by Japan's 100 consultants and 
law firms, by America's big banks, the Trilateral Commission, the 
Business Roundtable, the National Manufacturers Association, the United 
States Chamber of Commerce, the National Federation of Independent 
Business, the consultants and campuses financed by corporate America, 
the retailers, the newspaper editorialists financed by the retailers, 
the business lobbyists, and most of the 60,000 lawyers in Washington. 
Trade bills today are passed in Congress by multinational corporations 
joining with the foreigners and, thereupon, the President garners the 
votes with local pork. The common good is ignored.
  Once organized, we must repeal the tax laws that subsidize the export 
of American jobs. Then abolish the International Trade Commission that 
habitually cancels the findings of injury by the International Trade 
Administration. Remove the Executive veto of trade findings so that an 
industry fighting for relief can count on it when upheld by the courts. 
In short, enforce our trade laws now on the books. This will stabilize 
domestic production. This will restore trust in government.
  The symbol of the Seattle ministerial was not the black hooded 
hoodlums intent on causing mayhem. Instead, they were Boeing machinists 
who led the large labor marches that snaked through the streets of 
Seattle. Boeing, an export powerhouse, was supposed to stand out as a 
shining example of the open trading system. But Boeing is experiencing 
the loss of jobs to government-financed Airbus; to China where the 
price of admission into the Chinese market is an agreement to shift 
production from the United States to factories in mainland China. The 
machinists did not join the mayhem. They trust the government to act in 
their interest--to act in the United States' interest. For this to 
happen, as Lincoln said, ``The dogmas of the quiet past, are inadequate 
to the stormy present. The occasion is piled high with difficulty, and 
we must rise with the occasion. As our case is new, so we must think 
anew and act anew. We must disenthrall ourselves, and then we shall 
save our country.''
  The PRESIDING OFFICER. The Senator from Minnesota.

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