[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[Senate]
[Pages 8056-8057]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       OUTSOURCING AND CLOW VALVE

  Mr. HARKIN. Mr. President, after 2\1/2\ years of a largely jobless 
recovery, the current administration is on track to be the first in 
over six decades actually to lose jobs during its 4-year term. It is 
particularly alarming that this country has lost more than one in seven 
of its manufacturing jobs since this administration took office. More 
than one in seven.
  One reason is outsourcing. We have been seeing good, high-wage 
manufacturing jobs transferred overseas for a number of years. But 
outsourcing now has accelerated. It has spread to ``knowledge-based 
jobs''--programming, auditing, accounting, engineering, design, 
telemarketing, animation, editing, transcription, legal assistance, 
call centers and even core research.
  Some economists have argued over the years that free trade helps the 
United States to concentrate on creating high-wage, high-value-added 
jobs here in America. But now those jobs are being exported, too. The 
old rules of comparative advantage have been exploded.
  As we all know by now, the President's annual economic report, signed 
by Mr. Bush, explained why we should be celebrating the outsourcing and 
off-shoring of American jobs. Gregory Mankiw, chairman of the 
President's Council of Economic Advisors, summed up the report. He said 
that ``outsourcing is a growing phenomenon, but it's something that we 
should realize is . . . a plus for the economy.''
  Yes, you heard that right: Outsourcing is ``a plus for the economy.''
  Outsourcing of U.S. jobs, however, is just one side of the coin. The 
other side of the coin is U.S. jobs that are lost because this 
administration refuses to enforce our existing trade laws--for example, 
existing laws that protect against sudden surges of imports from abroad 
which harm particular businesses or sectors here in our country. This 
refusal threatens U.S. manufacturers and destroys American jobs.
  Let me offer one vivid example:
  Clow Valve Company has operated in the town of Oskaloosa, Iowa, since 
1878. It manufactures iron pipes, water hydrants and other foundry 
products. If there's a fire hydrant on your block--and there should be 
one under most city codes--chances are excellent that it was made by 
Clow Valve Company.
  The company was acquired by McWane, Inc., of Birmingham, Alabama in 
1985. McWane owns similar facilities in several other states, including 
Alabama, New York, Texas, Pennsylvania, Missouri and Tennessee, 
employing some 7,000 workers.

[[Page 8057]]

  Last year, McWane, Inc., faced a near tripling of Chinese imports of 
waterwork pipes compared to the previous year, with Chinese product 
being sold at prices that severely undercut American producers. 
Obviously, continued expansion of sales by Chinese companies at this 
rate could cause serious market disruption. It could threaten all 7,000 
jobs in these plants, including the 358 in the Clow facilities in 
Oskaloosa, IA.
  Nonetheless, President Bush has steadfastly refused to use his 
authority under Section 421 of the Trade Act of 1974 to restrain this 
surge of imports, even though such a step was unanimously recommended 
by the International Trade Commission (ITC) last December. I wrote to 
the administration on two occasions, once to the ITC and once to the 
President himself, urging that our trade officials utilize existing 
laws that were enacted for the very purpose of temporarily protecting 
American jobs from sudden surges of imported products.
  The President's refusal to enforce our trade laws has profound 
consequences. In Oskaloosa, it could mean the loss of some or all of 
the 358 good-quality, high-paying jobs at the Clow Valve Company. In 
turn, that would have a devastating impact all across Mahaska County. 
Bear in mind that Clow Valve is now the single largest employer located 
in the county. It is an employer with deep roots in the community. I 
imagine there might be some bewilderment among people there about the 
refusal of the Bush Administration to stand up and defend those jobs.
  Let me summarize the basic facts:
  We have a clear case of harmful trade practices on the part of the 
Chinese--flooding the U.S. market with cut-rate waterwork pipes.
  In December, the United States International Trade Commission ruled 
that a surge in imports of Chinese waterwork pipes had caused market 
disruption and material injury to domestic manufacturers such as Clow 
Valve Company.
  The Commission was unanimous in its conclusion that imports from 
China should be restrained pursuant to section 421 of the Trade Act of 
1974.
  The Commission was unanimous in its prediction that, without 
implementation of an effective relief program, the U.S. waterwork pipes 
industry may have to close plants and lay off workers.
  And yet, the White House refused to act. Which leads me to ask: Whose 
side are they on?
  Mr. President, it is clear to me that the jobless recovery here in 
the U.S. is not an accident. It is the result of a productivity surge 
that has benefited corporate profits, not workers' paychecks. It is the 
result of corporate America's enthusiastic embrace of outsourcing and 
off-shoring jobs, with the blessing and encouragement of the Bush 
administration. And it is the result of the refusal of this 
administration to enforce our trade laws--its refusal to stand up for 
American workers, including in the face of seriously harmful trading 
practices from abroad.
  We cannot build a sustainable recovery by exporting jobs, driving 
down U.S. wages to match foreign wages, and allowing nations like China 
to flood our market with cheap imports.
  No, a true recovery must include all Americans. It can only be built 
on a foundation of good jobs and good wages--here in America, not 
overseas. And it can only be sustained if the administration, at long 
last, is willing to enforce our trade laws and stand up for American 
workers.

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