[Congressional Record (Bound Edition), Volume 147 (2001), Part 5]
[Senate]
[Pages 6004-6007]
[From the U.S. Government Publishing Office, www.gpo.gov]



                           THE TRADE DEFICIT

  Mr. DORGAN. Mr. President, last week we were all witnesses to 
headlines in the newspapers about a meeting held in Quebec City, 
Canada. The newspaper headlines talked about tear gas, chain link 
fences, police lines, demonstrators, 30,000 people marching down 
streets. It also discussed anarchists.
  What is this all about, 30,000 people demonstrating in the streets of 
a major city in our hemisphere? It is about international trade. The 
same sort of thing happened in Seattle a year and a half ago. The 
future WTO ministerial meeting will be held not in a major city but in 
a place called Qatar. Why? Because no city wanted to host it, as I 
understand it. They will have to even bring in cruise ships for hotel 
rooms. They feel if the ministers of trade from around the world can 
hold a meeting in an isolated place, no one will show up to protest 
their closed door meeting.
  Last week's demonstrations in Quebec City underscored again that 
world leaders are not going to hold trade talks without attention being 
paid to the issues concerns of the people and the problems related to 
global trade. It is not that global trade ought to be stopped. It is 
that global trade has marched relentlessly forward without the rules of 
trade keeping pace. There is a relentless accelerated march toward 
globalization. However our world leaders have not develop acceptable 
rules, so people demonstrate in the streets.
  I want to make two points this morning: One, trade is very positive 
for our country when it occurs in circumstances where it is fair. It 
makes sense for us to do that which we do best and trade with others 
who in their comparative advantage are doing what they do best. That 
makes sense on the world stage. Our country has been a leader in world 
trade, a leader in expanded trade, and it does make sense to expand our 
trade opportunities as long as doing so represents the values that this 
country considers important in the development of our economy and in 
the development of our international relationships.
  It is also the case that while all say that expanded trade is good 
for this country, it is also the case that we ought not allow the 
international corporations in this world to pole vault over all the 
issues that relate to labor, the environment and of production simply 
by saying: We are going to produce in Sri Lanka, Indonesia, Bangladesh, 
or China, and we will ship back into the United States. So what if they 
hire 12-year-olds and pay them 12 cents an hour, working them 12 hours 
a day. So what. They would like us to think that is a fair trade.
  It is not a fair trade. That is why people are marching in the 
streets. It is not fair trade when corporations are able to become 
international citizens and decide to circle the globe in their 
airplanes and evaluate where they can produce the cheapest, where they 
can employ kids, where they can dump pollution in the water and the 
air, where they can have factories without the barriers and problems of 
making them safe and produce there, create a cheap product and send it 
to a department store in Pittsburgh or Los Angeles, or Butte, MT.
  The question is, Is it fair trade when that happens? This country has 
fought for a century over these issues. All of those fights were 
agonizing. Many occurred in this Chamber. The fight about whether we 
ought to be able to employ children, so we have child labor laws saying 
we don't want you to send 12-year-olds into coal mines. We don't want 
12- and 14-year-olds put on a factory floor to work 12 hours a day. We 
have child labor laws.
  The question of safe workplace, demanding that those who employ 
people employ them in safe workplaces that are not going to pose risks 
to the life and safety of workers. We have fought, and made laws to 
protect our people.
  The issue of fair compensation, we have fought for a long while in 
this

[[Page 6005]]

country about that issue. We have collective bargaining and the ability 
of employees to form and join unions. We have minimum wages. We fought 
about that and continue to fight about that from time to time in this 
country, but we have settled part of it. Now, some say that doesn't 
matter; we can go elsewhere. We can produce elsewhere, where people 
can't join a labor union, they are illegal. We can produce where we can 
hire a 12-year-old child and pay 16 cents an hour, and we can make a 
pair of shoes that has an hour and a quarter direct labor, with 20 
cents labor costs in a pair of shoes, and ship that to New York City 
for a department store shelf because we are saying to the American 
consumer, this is better for you because it is cheaper for you.
  So people demonstrate in the streets because they say that is not 
fair trade. That is not what we mean by expanding the opportunities of 
trade.
  We have had some experience in this country recently with our trade 
issues and that is not a pleasant experience. This chart shows what has 
happened to this country's trade deficit. There has been a great deal 
of good news on the issue of deficits in this country. The fiscal 
policy and the budget deficits have diminished year after year, and we 
now have surpluses. Look what has happened to the trade deficits of 
this country.
  In 1993, we had merchandise trade deficits of $132 billion. It is now 
$449 billion and growing. This trade deficit is mushrooming. If there 
are people who think it doesn't matter, think again. This is like the 
runup of dot com companies in the stock market. Everybody thought 
NASDAQ would continue to increase forever. These values are perfectly 
understandable. We had people on Wall Street who made a lot of money 
that were justifying and explaining why the values made sense.
  They didn't make sense. This doesn't make sense. This ballooning, 
mushrooming trade deficit will cause serious problems to this country 
unless it is addressed. This country must repay these trade deficits. 
With a budget deficit, you can make the case that it is a deficit, you 
owe it to yourself. You cannot do that with trade deficits. This is a 
deficit we owe to others.
  Inevitably, they are repaid with a lower standard of living in this 
country. That is an action in economics that no one disputes. This is a 
very serious growing, abiding problem.
  With whom are our trade deficits? Our trade deficits are with Canada. 
We passed a U.S.-Canada trade agreement. We had a reasonably small 
trade deficit with Canada. We quickly doubled it, very quickly doubled 
our trade deficit with Canada. What an incompetent trade agreement. We 
ought to haul those negotiators to the well of the Senate to explain to 
us what they did in public and in secret to undercut this country's 
interests in the U.S.-Canada agreement. I could talk about some of 
those issues, but I don't have time today.
  China, the China trade deficit, the trade deficit we now have with 
China is an $83 billion merchandise trade deficit, and growing rapidly; 
the European Union, $55 billion trade deficit, and growing; Japan, $81 
billion trade deficit, and growing. And we have had a trade deficit 
with Japan of $50 billion a year plus now for a long time.
  Mexico, by the way, prior to the U.S.-Canada and Mexico trade 
agreement, something called NAFTA, North American Free Trade Agreement, 
we had a surplus trade balance with Mexico. We had a surplus. It is now 
nearly a $25 billion deficit. Talk about colossal incompetence. The 
trade agreements we have negotiated in recent years have undercut this 
country's interests in fair trade. In every set of circumstance, our 
country bows to trade agreements that undercut our workers and our 
producers all in the name of free trade.
  Quebec City hosted a big meeting last week. The President went to 
Quebec City and talked about the desire for expanded trade agreements. 
He said Congress must give him what is called trade promotion 
authority. That is just new language for fast track. What the President 
is saying is: I want fast-track trade authority.
  To the extent I have the capability of involving myself in this, I 
will say to the President: You are not going to get fast-track trade 
authority. We wouldn't give it to President Clinton, and we won't give 
it to you. Your first job is not to create new trade agreements when 
every agreement in recent years has undercut this country's interests 
and resulted in larger and larger trade deficits. Your first job is to 
fix the problems that have been created in the last decade and a half. 
Fix these problems, then come to us. Then we can talk about trade 
promotion authority.
  Do you want to hear some problems? We have a huge, growing trade 
deficit with Japan. Do you know what the tariff is on a T-bone steak we 
send to Tokyo, American beef sent to Japan? There is nearly a 40-
percent tariff on every single pound of American beef sent to Japan--40 
percent. That would be declared a huge problem if the United States 
imposed a 40-percent tariff, but we will allow our allies to do that, 
our trading partners. Why? Because we are poor negotiators and we do 
not have backbone and we do not have the nerve and we do not have the 
will to stand up for this country's economic interests. So T-bones to 
Tokyo are just a small example, just one small example.
  How about going from T-bones to apples? Try sending apples to Japan. 
Do you know what Japan will tell apple growers in this country? They 
say the apples that are shipped in Japan must be shipped from trees in 
the United States that are separated by at least 500 meters from the 
other trees in the orchard. Does it sound goofy to you? It does to me. 
How do they get by with it? They get by with it because we negotiate 
incompetent agreements, incompetent bilateral agreements with these 
countries.
  China? Well, China has a huge and growing trade surplus with us--or 
we a deficit with them. They ship us their trousers and their shirts 
and their shoes and their trinkets--they flood our country with their 
goods. But try to get American wheat into China these days. Ask what 
China is buying from the United States. See whether our trade agreement 
with China is fair.
  Let me just give one example. We just sent negotiators to negotiate 
with China. When they finished--I will just talk about automobiles for 
a moment. China has 1.1 billion people. When our negotiators finished, 
just a year and a half ago, negotiating a bilateral agreement with 
China, here is what they said: China, it is all right for you, after a 
rather lengthy phase-in, to impose a 25-percent tariff on any 
automobiles the United States sends into China. And, by the way, for 
our part, we will impose a 2.5-percent tariff on any automobiles China 
would send to the United States.
  We sent negotiators to sit down with the Chinese to negotiate a 
bilateral agreement and said what we will agree to, with a country with 
1.3 billion people that is going to need a lot of automobiles in the 
future, we will agree you can impose a 10-times higher tariff on 
automobiles that we would send to China versus the automobiles they 
might send to the United States.
  I would like to find the people who agreed to that on behalf of this 
country and ask them how do they justify their public service by such 
incompetence. It makes no sense to me that we engage with other 
countries on trade and are not hard-nosed and strong negotiators, 
saying we are all for trade so let's have reciprocal trade policies: We 
must say you treat us like we treat you, we treat you like you treat 
us. Let's treat each other fairly.
  But that is not the way our trade negotiators see it. Every single 
time they get involved in a negotiation, our farmer, ranchers, and 
small businesses lose. I talked about having our trade negotiators wear 
jerseys as they do in the Olympics. At least they could look down and 
see the initials on the jerseys and see for whom they are working.
  What is happening with trade with China, Canada, EU, Japan, and 
Mexico? There is now a merchandise trade deficit of over $450 billion a 
year, a deficit every single day of goods going into our country that 
exceeds goods going out, and this $450 billion in accumulated 
merchandise deficits is part of

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our account that has to be settled at some point, and it will weaken 
this country's economic strength when we do it.
  The question for this administration--and I have asked exactly the 
same question with the previous administrations--is: Are you going to 
stand up for this country's economic interests? President Bush went to 
Canada. He said at the outset that we have to recognize the issues of 
labor and the environment in trade agreements. Then later in the week 
he said: Trade agreements must be commercial--commercial interests, 
and, by the way, what I want is trade promotion authority--which, as I 
said, is a new term for fast track.
  For those who do not know what fast-track authority is, it means our 
negotiators shall go negotiate an agreement with another country, bring 
it back as a treaty to this Senate, and the provisions under fast track 
would be we can debate it but cannot amend it; no Senator has the right 
to offer any amendments at any time under any circumstances.
  It is fundamentally undemocratic. Had we had the opportunity to offer 
amendments to NAFTA, we would not be in this situation with Mexico and 
Canada, just as a example, with respect to our current trade agreement 
with our neighbors.
  The big study on Mexico and Canada was by Hufbauer and Schott study, 
which everybody used. The Chamber of Commerce and all our colleagues 
used it. They said if we do this trade agreement, we will have 350,000 
new jobs in this country. And they said here are the imports and 
exports between the United States and Mexico that we expect after this 
agreement.
  It turns out they said the principal imports from Mexico would be 
imports of largely unskilled labor. What are the three largest imports 
from Mexico? The three largest imports are automobiles, automobiles 
parts, and electronics, all of which come from skilled labor, all of 
which mean the Hufbauer and Schott study missed its mark. We didn't 
gain jobs, we lost jobs with that trade agreement and turned a surplus 
into a fairly large trade deficit.
  Who is going to be called to account for that? Nobody. Because that 
is exactly what the international companies wanted. They do not get up 
in the morning and say the Pledge of Allegiance. They are international 
entrepreneurs, and they are interested in producing anywhere in the 
world where they can find the fewest impediments to production and the 
cheapest place to produce. They don't want to have to worry about the 
child labor laws, pollution and the standards that countries impose in 
preventing companies from dumping into the air and water. They don't 
want to have to worry about worker safety. They don't want to have to 
worry about fair compensation. They had those fights and lost them in 
this country, and now they want to go elsewhere and say: We want to be 
able to ignore that.
  The people in the streets are saying: Wait a second, there needs to 
be some basic set of standards. What does it mean when someone ships 
carpets to this country and the carpets are made by kids, 10- and 12-
year-old kids, some of whom have had gunpowder put on their fingertips 
to have them burned off so they have permanent scarring, so 10- and 12-
year-old kids can make carpets and run needles through the carpets, and 
when they stick the top of their fingers, it doesn't hurt them because 
they have already been scarred by burning.
  That is part of the testimony before Congress about child labor. It 
is happening in this world. Is it fair trade for those carpets to come 
into our country and be on our store shelves? Would anybody be proud to 
buy from countries where the circumstances of production are 
represented by that kind of behavior? The answer is no.
  What I want to say today is very simple. The example in Quebec City 
last week is an example that is going to continue. I do not support the 
anarchists and others who show up for those events to cause trouble, 
but I understand why protesters come to those events, peaceful 
protesters--and most of the 30,000 people who showed up were peaceful. 
I believe we should expand trade. I believe expanded trade is important 
for this country. But I also believe this country ought to be a world 
leader, promoting and standing up for the values for which we fought 
for over a century to protect. Those are the values of dealing 
thoughtfully with the rules of production dealing with the hiring of 
children, with safe workplaces, dealing with the environment and 
controlling the emission of pollutants.
  If this is, indeed, a global economy and if it matters little where 
people are producing, then you have to have some assurance, if they are 
going to close a plant in Toledo or Fargo and move to Guangzhou, they 
are not going to be able to do that because in Guangzhou they can hire 
kids and pollute the water and air and not have a safe workplace and 
produce a cheaper product and represent to the people of the world: We 
have done it all for you. That is not doing anybody a favor. That is a 
retreat from the standards for which we fought for a century in this 
country.
  People will demonstrate in the streets on trade issues because they 
want the rules to keep pace with the relentless march of globalization. 
I want globalization to continue, but I want it done under rules that 
are fair. Coming from a small State in the northern part of this 
country, North Dakota, that borders a friendly nation, Canada, I know 
full well what happens when we are sold out and undercut by our trade 
negotiators. It happened to us with the trade negotiations with Canada. 
We sent a trade ambassador to Canada. They negotiated a trade 
agreement, and they essentially said to family farmers: Your interests 
are unimportant to us, so we will sell those interests out in order to 
get concessions for other industries. And we have family farmers going 
broke in my State because we have an avalanche of unfairly traded durum 
wheat coming into this country. We produce 80 percent of that in the 
State of North Dakota. Durum wheat is used to produce semolina flour 
which makes pasta, so most everyone has eaten semolina which comes from 
the fields of North Dakota in the form of our pasta. But durum growers 
were severely undercut. Their interests were severely undercut by our 
former trade ambassador who not only made a bad agreement but then made 
a private side deal that he didn't disclose to Congress, and he pulled 
it right out from under our producers. That is not fair.
  Neither is it fair that we will negotiate with a country such as 
Canada that has a monopoly state trading enterprise and that sells 
their wheat on what is called the Canadian Wheat Board, which would be 
illegal in this country. They say: We will have a trade arrangement 
under which we will sell in the U.S. market at practically secret 
prices and refuse to disclose it to anyone. It is fundamentally unfair 
trade.
  We sent people to Canada to say we want to evaluate the prices at 
which you sell to determine whether you are dumping in the American 
marketplace. They thumb their noses, saying: We don't intend to show 
you one piece of paper about what we are doing in United States.
  To allow that to happen is unfair. It is unfair to farmers, it is 
unfair to producers, and it is unfair to workers. On a broader level, 
it is unfair to corporations that are doing business in this country 
and producing for our marketplace.
  I hope it is not lost on this administration--I have said the same 
thing to previous administrations--that they should not hold trade 
agreements or trade negotiations, or trade conferences for that matter, 
in cities around the world without, in my judgment, opening the 
discussion for a lot of people who want to raise questions about what 
the fair rules are for international trade. Globalization will 
continue, and should. But it must be attended by rules of fair trade, 
and people ought to understand that and know that.
  Second, finally, when we negotiate trade agreements, we ought not to 
be afraid to stand up for this country's economic interests. It is 
about time to

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be a bit hard nosed, and have a backbone that serves to stand up for 
this country's interests.
  Mr. President, I yield the floor.
  I suggest the absence of a quorum.
  The ACTING PRESIDENT pro tempore. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. THOMAS. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The ACTING PRESIDENT pro tempore. Without objection, it is so 
ordered.

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