[Congressional Record (Bound Edition), Volume 151 (2005), Part 10]
[House]
[Pages 13587-13594]
[From the U.S. Government Publishing Office, www.gpo.gov]




                                 CAFTA

  The SPEAKER pro tempore (Mr. Reichert). Under the Speaker's announced 
policy of January 4, 2005, the gentleman from Oregon (Mr. Brown) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. BROWN of Ohio. Mr. Speaker, I rise tonight to talk about the 
Central American Free Trade Agreement.
  Before doing that, I would just like to make a couple of comments 
about what was said by my friend from Florida, who was joined by other 
members of the Republican Party to talk about their privatization plan, 
their plan to privatize Social Security. I applaud them for coming up 
with a plan. President Bush has for the last 4 months gone around at 
town hall meetings, invitation only, where there is never any 
disagreement in these meetings, preaching Social Security change, never 
specifically saying what that change will be. The President, other than 
saying it is privatization, has not offered a specific Social Security 
plan. But what concerns me both about President Bush's comments and 
about the comments from my friends on the other side of the aisle is 
they really are engaging in what we used to call, when they privatized 
Medicare, ``Mediscare'' tactics. They are doing the same kind of Social 
Security scare tactics by saying people are paying taxes into Social 
Security but may never see this money that they have put in.
  And I cannot imagine a more secure system than Social Security. It is 
a system that has been around for 70 years. It has never missed a 
payment month after month after month for 70 years. It is reliable. It 
is predictable. It is always going to be there.
  And when people who are Members of Congress stand up and say that we 
cannot count on this money being there, the Supreme Court made a 
decision here and Congress could make a decision there that Social 
Security might not be available, it simply scares people. And I do not 
think there is any

[[Page 13588]]

room for that in our political system to scare people of any age, 
whether they are retirees or whether they are soon to be retirees or 
whether they are my age or younger than I and simply are not so sure 
about Social Security, to scare them and say that it will not be there, 
when it has been there every month for 70 years. It is reprehensible, 
frankly.
  In terms of solutions, the first thing we should do with the Social 
Security, as the gentleman from Illinois (Mr. Emanuel) said earlier 
tonight, is quit stealing from it. Quit using money from the Social 
Security fund and spending $1 billion a week on the Iraq war. Quit 
spending money from the Social Security fund and giving tax cuts to the 
wealthiest 1 percent of people in this country. That is how we start to 
change, to reform, to make even stronger the Social Security system.
  Mr. Speaker, I turn my attention to the Central American Free Trade 
Agreement. In a White House news conference in May, President Bush 
called on Congress to pass the Central American Free Trade Agreement 
this summer. Last year the gentleman from Texas (Mr. DeLay), majority 
leader, the most powerful Republican in the House, promised that we 
would vote on CAFTA during the year 2004. Then the gentleman from Texas 
(Mr. DeLay) promised a vote on CAFTA prior to Memorial Day. Now the 
gentleman from Texas (Mr. DeLay) is promising a vote again, and this 
time I think he means it, that we are going to vote on this by July 4.
  Mr. Speaker, many of us, the dozen of us, Republicans and Democrats 
alike, who have opposed the Central American Free Trade Agreement have 
one message about CAFTA: Defeat CAFTA and renegotiate a better Central 
American Free Trade Agreement, one that business and labor, 
manufacturers, small business, ranchers, farmers, environmentalists, 
religious people, religious figures, leaders in the six CAFTA, Central 
American, Latin American countries and the United States, one we can 
agree on. But as it is, religious leaders in each of our seven 
countries, the U.S. and the Dominican Republic and the five countries 
in Central America, labor union members, workers, small business 
people, farmers, ranchers in all seven countries think this CAFTA is 
wrong and we should renegotiate a better CAFTA.
  The President commented that workers can excel anytime, anywhere, if 
the rules are fair. I agree with President Bush that workers in our 
country can always compete if the rules are fair. That is why it is too 
bad this administration negotiated a Central American Free Trade 
Agreement that fails so miserably to do that.
  Today the President grossly generalized the opposition to CAFTA, 
lobbying the tired accusation of economic isolationism. Name-calling 
does not have a place in this debate. For the President to say we are 
backward looking, economic isolationists, protectionists, none of those 
terms means anything, and all of those terms lower the debate to the 
lowest common denominator.
  Just to clarify for the President, those he calls economic 
isolationists, the fact is a majority of Members of this Congress 
oppose the Central American Free Trade Agreement. At least 23 business 
organizations represented at a rally just yesterday in Washington 
oppose the Central American Free Trade Agreement. Farmers and ranchers 
and small business people and workers all over these seven countries 
oppose this agreement and call for a renegotiation of the Central 
American Free Trade Agreement.
  We want a trade agreement with CAFTA countries, but we want one that 
benefits the many, not the select few. CAFTA was a negotiated 
agreement, negotiated by the select few, including the drug industry, 
including the largest corporations in America, an agreement negotiated 
by the select few, for the select few, for the drug industry, for the 
largest corporations of America. That is what the White House is trying 
to force through this Congress, a failed trade agreement that was dead 
on arrival.
  Just look at its history. Thirteen months ago President Bush signed 
the Central American Free Trade Agreement. Every other free trade 
agreement President Bush has signed, one with Morocco, one with 
Australia, one with Chile, one with Singapore, four agreements, each of 
these four agreements that the President signed was voted within 60 
days by this Congress. The President signed it; within 2 months 
Congress voted on it and passed it.
  This trade agreement is very different. He signed it 13 months ago, 
and the gentleman from Texas (Mr. DeLay), majority leader, the most 
powerful Republican House Member, has not brought it before this body 
or the Senate simply because it does not have the votes, because it has 
languished in Congress for more than a year, because this wrong-headed 
trade agreement is a continuation of failed trade policy in this 
country and Republicans and Democrats alike understand it.
  Just look at what has happened with our trade policy in the last 
dozen years, Mr. Speaker. If we look at this chart, we will see that in 
1992, the year I happened to be elected to Congress, the United States 
had a $38 billion trade deficit. That means we imported $38 billion 
more worth of goods than we exported; $38 billion. That number grew and 
grew and grew until last year, in 2004, our trade deficit was $618 
billion.
  In a dozen years, our trade deficit went from $38 billion to $618 
billion. What does that mean? That is just a bunch of numbers. Well, it 
is not just a bunch of numbers. When we have a trade deficit grow like 
that, what it means is a lot of lost jobs. President Bush the first 
said that every $1 billion in trade deficit, every billion dollars, and 
we had $618 billion last year, over $500 billion the year before, over 
$400 billion the year before, and over $300 billion the year before 
that, that every $1 billion of trade deficit translates into, according 
to President Bush the first, 12,000 lost jobs. So if our trade deficit 
is $1 billion, it is a net loss of 12,000 jobs. If we multiply that 
times 618, we have a lot of jobs lost in this country as a result of 
our failed trade policy.
  Mr. Speaker, if we look at this next chart, we will see what those 
numbers mean. The States in red are States that have lost 20 percent of 
their manufacturing in the last 5 years: Ohio, 216,000, where I live; 
Michigan, 210,000 jobs lost; Illinois, 224,000; Pennsylvania, 200,000; 
Virginia and West Virginia, 95,000; North and South Carolina, 315,000; 
Alabama and Mississippi combined, 130,000.
  The States in blue have lost 15 to 20 percent of their manufacturing: 
Texas, 201,000; Florida, 72,000; Georgia, 107,000; Tennessee, 93,000; 
California, 353,000.
  Those are manufacturing jobs lost in the last 5 years in large part 
because of our trade policy. Yet President Bush wants us to pass 
another trade agreement called CAFTA, a dysfunctional cousin of NAFTA, 
an agreement that will cause the same downward spiral in our 
manufacturing situation in this country.
  It is the same old story. Every time there is a trade agreement, the 
President promises three things: He says it will mean more jobs for 
Americans; it will mean more manufacturing done in the U.S.; it will 
mean better wages for workers in developing countries. Yet with every 
trade agreement, their promises fall by the wayside. We lose jobs. The 
standard of living in the developing world continues to stagnate. Our 
own wages stagnate.
  Mr. Speaker, Benjamin Franklin once said that the definition of 
insanity is doing the same thing over and over and over and expecting a 
different result. Mr. Speaker, we are doing the same thing on our trade 
policy over and over and over again, and for some reason, although not 
a majority of Congress buys this, but for some reason the President and 
the largest corporations in the country and some Members of Congress, 
Republican leadership, believe that the outcome will be better, will be 
different this time, will actually produce much better results.
  Mr. Speaker, when we look at this job loss, again, these are just 
numbers, but think what 216,000 jobs lost in Ohio or in Akron or in 
Columbus or in Dayton or in Toledo or in Cleveland or in

[[Page 13589]]

Lorain or in Youngstown, when a factory closes down and moves to 
Mexico, which happened to a plant in Elyria just in the last couple of 
years in my district, when a plant closes down, 800 jobs were lost. The 
schools suffer because there are fewer tax dollars for the schools. 
Police and fire are often laid off because there are not enough tax 
dollars. But it is what it does to those families, those 800 families, 
who generally cannot find jobs. The bread winners in those families 
simply cannot find jobs that pay nearly at the rate of those 
manufacturing jobs. So these families suffer. The kids suffer. The 
school district is hurt. All kinds of people lose when these trade 
agreements pass this Congress and we see this kind of manufacturing job 
loss.
  The administration and Republican leadership have tried every trick 
in the book to pass this Central American Free Trade Agreement. This 
year the administration is linking CAFTA to helping democracy in the 
developing world. Defense Secretary Rumsfeld and Deputy Secretary of 
State Zoellick have said CAFTA will help us in the war on terror, but 
10 years of NAFTA has done nothing to improve border security between 
Mexico and the U.S.; so that argument does not sell.
  Then in May, Mr. Speaker, the U.S. Chamber of Commerce flew the six 
Presidents from Central America and the Dominican Republic around the 
Nation, hoping they might be able to sell CAFTA to the Nation's 
newspapers, to the public, to the Congress.

                              {time}  2030

  They flew to Albuquerque and Los Angeles, to New York and Miami, to 
Cincinnati in my home State. Again, they failed. In fact, the Costa 
Rican President announced, after the junket paid for by the Chamber of 
Commerce, that his country would not ratify CAFTA unless an independent 
commission could determine it would not hurt working families in his 
country.
  Now, Mr. Speaker, the administration, finding that nothing else works 
to convince enough Members of Congress to vote for CAFTA, now the 
administration has opened the bank. Desperate after failing to gain 
support for the agreement, CAFTA supporters now are attempting to buy 
votes with fantastic promises.
  I would hold this up, Mr. Speaker, This is called ``Trade Wars, 
Revenge of the Myth, Deals For Trade Votes Gone Bad.'' It refers to a 
study of 92 documented promises made during trade agreements and how 
many of those promises by the administration to Members of Congress 
were actually honored. Fewer than 20 percent; 16 of these 90-some 
promises were actually honored by the administration.
  Members are not going to fall for this kind of disingenuous, these 
kinds of disingenuous actions from the administration. Again, the 
President can open the bank, the President can promise bridges and 
highways, the President can promise campaign fund-raisers in districts, 
the President can make all kinds of promises, sugar deals and textile 
deals to Members of Congress; but this year, they are not buying it, 
Mr. Speaker.
  Instead of wasting time with toothless side deals, our U.S. trade 
ambassador should renegotiate a CAFTA that will pass Congress. 
Republicans and Democrats, business and labor groups, farmers, 
ranchers, faith-based groups, religious leaders, environmental, human 
rights organizations in all seven countries, the Latin American 
Consulate of Churches, for instance, have opposed CAFTA. All kinds of 
labor organizations and small businesses, manufacturers in this country 
have opposed CAFTA. They all say they want a trade agreement, but they 
want to renegotiate this CAFTA so that we will have one which actually 
works for American businesses, for American small businesses, for 
American workers, and for workers in these developing countries.
  This CAFTA will not enable Central American workers to buy cars made 
in Ohio or software developed in Seattle or prime beef in Nebraska. 
They make these promises. The CAFTA supporters have said, Mr. Speaker, 
they said that if the United States passes CAFTA, we will increase our 
exports to these six Latin American countries, they will buy our 
things. But if we look at this, Mr. Speaker, the United States average 
wage is $38,000; Guatemala is $4,000; Honduras, $2,600; and Nicaragua, 
$2,300. A Nicaraguan worker cannot buy a car made in Ohio, cannot buy 
produce from Mr. Farr's district in California. A Guatemalan worker 
cannot afford to buy software from Seattle. An El Salvadoran worker 
cannot buy prime beef from Nebraska or textiles or apparel from North 
Carolina. This is about CAFTA companies moving jobs to Honduras, 
exploiting cheap labor in Guatemala.
  Mr. Speaker, in closing, our goal should be to lift up workers in 
those countries so that they can buy American goods. When the world's 
poorest people, Mr. Speaker, can buy American products and not just 
make them, then we will know that our trade policies are working.
  Again, Mr. Speaker, we must renegotiate CAFTA.
  I am joined this evening by the gentleman from California (Mr. Farr), 
a friend of mine, a Member of Congress, who came the same year I did, 
in 1993, from Northern California; and I would like to yield some time 
to him.
  Mr. FARR. Mr. Speaker, I thank the gentleman for yielding, and it is 
a pleasure to be here on the floor with the gentleman. I wanted to be 
here for the discussion of CAFTA, and I wanted to say that as a former 
Peace Corps volunteer in South America, this issue of development of 
these countries is very, very important. I just think that we are 
putting the cart before the horse with this trade agreement.
  We are dealing with the Central American countries of Costa Rica, El 
Salvador, Guatemala, Honduras, and Nicaragua; and of those countries, 
Nicaragua and Honduras are two of the poorest countries in all of Latin 
America, Bolivia being the third poorest. These countries do not have, 
as the gentleman just pointed out, right now a level of living, a wage 
income to be able to afford imports of American products, which would 
probably have less of a tariff because of the agreement.
  What is missing in this is that in order to really help these 
countries, we need to invest in education, we need to invest in clean 
water systems, we need to invest in very basic things. Frankly, they 
are agrarian countries, meaning they grow agricultural products. Do we 
think they can compete with any of the agriculture products that we 
grow in the United States? Absolutely not. There is no way in the 
world, as we saw with the corn going into Mexico after NAFTA, that even 
the smallest of those farms can continue to compete.
  So I am very concerned and very opposed to CAFTA; and I think, as the 
gentleman pointed out, it needs to be renegotiated. These countries 
need investment in infrastructure. That is why the Peace Corps is 
involved in these countries. If you talk to the Peace Corps volunteers 
in these countries, I am sure that the discussions they have had with 
most of the people have nothing to do with CAFTA, because they are like 
most parents in the United States.
  If anybody is listening to this and watching this debate, they will 
know that as parents, what you are interested in is education for your 
kids. There are no schools. There is nothing in CAFTA that promises new 
schools or new teachers or new water systems. There is just a hope that 
perhaps, with additional investment in these countries, that foreign 
firms will come in and invest. Why would they invest in these 
countries? Why? Because there is cheap labor, cheap labor because 
people are not educated, because they do not have an infrastructure, 
tax structure that allows for the development of infrastructure.
  So I think that to just jump in and talk about taking the most 
powerful economic Nation in the world and essentially entering into an 
agreement which allows us to bully up on the poorest countries in our 
hemisphere is the wrong way to go. I appreciate the gentleman bringing 
these issues forward, because I think there is not enough discussion.

[[Page 13590]]

  Remember, part of CAFTA is also DR CAFTA, which is the Dominican 
Republic. And that has been bandied about; and of the six legislatures, 
El Salvador, Honduras and Guatemala, those three legislatures have 
ratified it. The others have not because they say that an agreement 
with the Dominican Republic, which is next to Haiti, the other poorest 
country in the region and in the Caribbean, that they do not have 
transparency about negotiation and the ratification process.
  So we have political infrastructure problems, we have accountability 
problems, and I think we are missing the point. If we really care about 
bringing up the level of living, frankly, the way you do that is you 
invest in the simple things. You invest in rural roads and in rural 
schools and in rural water systems and definitely health care systems.
  So I appreciate the gentleman bringing this forward. The other 
country here is Costa Rica, and they have an upper-middle-income 
country. It has one of the best tourism programs in all of Latin 
America. It did it without having to enter into a trade agreement with 
the United States. It did it with other kinds of U.S. aid. I would just 
point out that Nicaragua and Honduras have qualified as countries 
eligible for Millennium Fund accounts. It is a good program. It is a 
bottoms-up, sort of let the countries build what they think are 
important. The program is very good, and these countries qualify 
because they are the poorest countries there are.
  But when it comes down to finding out what the Millennium Account is 
doing, I think it is being driven essentially by the people interested 
in CAFTA, because they are building not water systems, not schools, not 
infrastructure for the rural areas, but building highways from port to 
port, thinking that CAFTA is going to come along and have this 
superability for the farmers to compete with the American farmers, for 
people to be on a level to buy consumer goods that are sent to them 
from the United States.
  Mr. BROWN of Ohio. Mr. Speaker, I want to point out the gentleman 
from California was a Peace Corps volunteer himself in Latin America 
and is a fluent Spanish speaker; and I think the perspective he brings 
shows that even though the wages are so much higher in these countries, 
it is not a question of we just want to shut them off and keep them 
away and not let them compete and all of that in the world economy. It 
is a question of development and bringing up their standard of living. 
These trade agreements in the past have not done that.
  Talk to us, if the gentleman will, about from your perspective what 
development means. The gentleman talked about water systems and all of 
that. Instead of a CAFTA that does not lift standards up, what kinds of 
things work the most and, in particular, the poorest of these countries 
in Nicaragua and Honduras and Guatemala whose income is about, in some 
cases, less than one-tenth of ours, one-fifteenth of ours, if the 
gentleman would.
  Mr. FARR. Mr. Speaker, perhaps people do not like to hear this, but a 
country that has been able to put their priorities in perspective has 
been Cuba, and the reason Cuba did it is they invested in the 
infrastructure to keep the rural people in the rural areas so that they 
could have rural economic development. The countries that we are 
talking about, people are fleeing the rural areas to move into the 
cities. That is why there are all these poor barrios that are 
constructed without water.
  I lived in a house that did not have water or sewer or lights. It is 
a pretty miserable situation because all you are doing is, in our case, 
we had kids haul water for us; they cannot go to school because they 
have to haul water. So you really begin to understand that if you are 
going to try to build up sort of an economic base, you have to stay 
with the basics; and the basics are, you have to have running water in 
the house. If you have to go and get it, that means that usually the 
children have to go get the water and bring it to the house.
  And if you do not have any electricity, that means you have to build 
a fire or buy very expensive petroleum, now kerosene, to start a fire. 
Most people go out and try to get charcoal and get wood. So you are 
gathering the basics to make the meal so people can eat. You have to go 
out, and you certainly cannot afford to go to the supermarket, so you 
go at it piece by piece. It takes the whole day just to put together 
food on the table.
  So if we want to really help these countries, let us make sure that 
there are some guarantees that this is going to happen. There is 
nothing in CAFTA that says that. This is about the rich getting richer.
  Mr. BROWN of Ohio. No labor standards.
  Mr. FARR. And the poor staying poor. Now, Latin America, I was in 
Honduras and Nicaragua, and I have to say from the government officials 
that you talk to, they are all excited about CAFTA. There are some that 
are worried about losing their identity, some politicians in Costa 
Rica, the most successful of these countries, that are very, very 
concerned that the CAFTA agreement is going to have this dominant 
United States, just sort of the big, huge 800-pound gorilla move into 
these countries and wipe out their local identity, wipe out their local 
culture and customs and essentially homogenize the whole thing with 
American fast-food chains and American businesses.
  So where I am concerned about this is that I think if we want to have 
a win-win, I mean, frankly, the Central American markets, these are 
small countries. These are poor countries. There is not a huge market 
down there. This is not going to put a big blip on America's foreign 
trade. This is not like trading with China or trading with Europe. 
These are some of the smallest countries in the entire; well, they are 
the smallest countries in the entire hemisphere. And the importance of 
these countries in a trade agreement for us as sellers is not that big. 
For us, as a country that is looking to stabilize the hemisphere, it is 
about infrastructure development. If you want to generate drug trade, 
keep a country poor. If you want to generate people that would be 
interested in terrorism because life is not getting better for them, so 
you go to extremes and start listening to that, keep them uneducated, 
keep them poor.
  So if we really want to fight for our priorities and emphasize our 
priorities in this country, we ought to be ensuring, first of all, that 
these countries have an infrastructure development that has 100 percent 
access to education, 100 percent access to health care, 100 percent 
access to a safe place to sleep. And then, when you begin developing an 
educated middle class, you can begin these more sophisticated trade 
agreements.
  Frankly, I do not see that the trade agreements, there is no 
responsibility for the outsiders in this agreement, for the countries 
outside, to do anything to improve the level of living. They are just 
going to assume that the free market enterprise is going to take care 
of us; it will trickle down.
  The gentleman from Ohio (Mr. Brown) and I know that it does not even 
work in the United States, the trickle down theory here. We had a tax 
cut for the most wealthy people in America with the idea that the 
wealthiest would take all of that tax cut and they would give it to the 
poor and they would start funding the necessary affordable housing, 
they would fund the educational stream in America, where the public 
sector does not meet it. They would fund, essentially, the charity of 
America. It has not happened. It does not work that way. And CAFTA is 
not going to solve the Central American problem, and it certainly is 
not going to solve America's trade balance, which is caused by 
primarily our trade with China, trade imbalance.
  Now, my farmers, it is interesting, in California we grow $3 billion 
of agriculture in my district. None of it is subsidized by the Federal 
Government. These associations, they have all come out and said, we 
support trade agreements, they support all of these trade agreements; 
but as individuals, that is not the market we are interested in. We do 
not expect; in fact, if anything, they are going to be growing these

[[Page 13591]]

products and trying to send them into us, because they are going to try 
to grow strawberries, which is a value-added project.
  We grow the most strawberries in the world in my district, we grow 
the lettuce, we grow the things that you find that are fresh fruits and 
vegetables, and those countries have climates that they can grow those. 
So what are they going to do? They are going to compete with our 
farmers, if they can at all; and frankly I do not think the worry is 
that they can compete much, at least not on a large scale.

                              {time}  2045

  So this issue of the kind of the social conscience of CAFTA is 
missing the point. We need to invest in America's best, which is our 
social responsibility as the leading economic engine, the leading power 
of the world, to make sure that the level of living for the rest of the 
world is being improved by our business ventures, not being taken 
advantage of.
  Mr. BROWN of Ohio. I think there were a couple of things that you 
said tonight that were very good. There is nothing in this agreement 
that will raise living standards when you look at the six countries 
here, and their incomes, especially Nicaragua, Honduras, Guatemala, and 
El Salvador, all make no more than about one-tenth of what Americans 
make.
  There is nothing in this agreement to bring worker standards up, to 
bring environmental or food safety standards up. In fact, this 
agreement protects prescription drugs and the prescription drug 
companies; the agreement does that, but does not protect workers 
standards.
  It protects Hollywood films, but does not protect the environment and 
food safety. And when you talk about the size of these economies not 
buying very much from the United States, the size of these five Central 
American countries, the economic output is about the equivalent of 
Columbus, Ohio or Memphis, Tennessee or Orlando, Florida. It is simply 
not a place that is going to buy from the United States.
  But what we should be doing is a trade agreement, a renegotiation of 
CAFTA, in a trade agreement that will lift worker standards up so that 
these incomes begin to rise, so that over time they can in fact buy 
American products, they can send their kids to school.
  You talk about children, particularly girls, not having any chance to 
go to school and get out of this situation. In this agreement, we found 
this in other places, this agreement just locks in that sort of 
exploitive sort of economic situation where people simply do not have 
the opportunity that they should have.
  Mr. FARR. It is very interesting. Before coming here I was in the 
State legislature and before that in local government, and before that 
in the Peace Corps. And what I learned in local government, and we are 
dealing with economic development all of the time, trying to encourage 
business development.
  But, you know, in that process, you extract a lot from business. 
Because it is essentially sort of that corporate responsibility to be a 
citizen of your community. In California, we tax them a lot. If you are 
going to build hotels, we tax the hotels for tourism occupancy tax. 
That stays with the city.
  We tax sales tax, high sales tax. And communities can raise it 
higher. We tax on gasoline. We have a huge tax. And people will say, 
yeah, California is a big high-tax State. But guess what? It is also 
the biggest economic engine, the fifth largest economy in the world. 
The most start-up businesses, the most everything.
  California is not suffering by the fact that it is proud to have 
businesses that share in their prosperity through the taxation process 
and through being good corporate neighborhoods. Silicon Valley is out 
raising their own money to support local transit, their own money, 
private money, to build housing for people on the street, for the 
homeless and for people who cannot afford the rental rates, to have 
subsidized housing, and leverage that with public money.
  That is the kind of agreement you ought to be making. It ought to be 
this quid pro quo. It is not just about trade. It is not just about 
going in and taking advantage of people, but, really, what is the 
social benefit that you get from allowing businesses to come into your 
community, or allowing businesses to come into your country. And I do 
not see that in this legislation. That is the problem. We are missing 
the leadership role that the United States has.
  And these things could be negotiated out. Yes. The agreements are all 
about trade agreements under the GATT agreements, which are commodity 
by commodity. So it is not so broken that those things do not already 
exist. So you can deal in bananas, and you can deal in sugar. You do 
not need CAFTA to do that.
  But you do need these side bar agreements. And here we have created 
the Millennium Fund. I compliment the President for creating it. But I 
think at the same time, the Millennium Fund has gone to these countries 
and said, What do you want? It is really ironic. I do not think they 
have talked to the poor people. I do not think they have talked to the 
people they need to talk to, even though it is supposed to be very good 
transparency, because they come back and say, We want big super-
highways.
  Well, that is not going to benefit the education of poor kids. We 
want bigger ports so bigger ships can come in here, because when we do 
have the ability to trade with America, we are going to be needing 
places for a lot of these American goods for land and for our goods to 
go out. We are forgetting the basics.
  We are losing the war on drugs in Colombia because we are fighting 
the war by eradicating crops. We are investing very little in 
alternative development and alternative crops. You cannot win on the 
war on poverty by just making businesses be more successful. I mean, 
the lesson in this country is that if you want to win the war on 
poverty, it has got to be a social collective responsibility to assure 
that there is investment in institutions that help the poor, and that 
the poor can help themselves through programs like Head Start, through 
programs like the welfare social services that we have.
  And, you know, I just think that the debate here about our 
hemisphere, we ought to be prouder of this hemisphere. We ought to be 
more involved in this hemisphere. We ought to be looking at the 
responsibility, and we have seen that with all of the immigration 
issues. We debate immigration all of the time. It is sort of like if we 
build a higher fence and make the border secure, 10 million 
undocumented people will sort of disappear. It is not going to 
disappear as long as you have a border between the United States and 
Mexico, the changes between the richest and poorest border in the 
world, and the heaviest trafficked border.
  We have not learned. The only way you are going to improve that is by 
investment in Mexico. We have NAFTA. NAFTA has not risen Mexico up to 
the level where people can stop coming across the border. So what makes 
you think that CAFTA is going to raise the level of El Salvador and 
Nicaragua so that they do not migrate up through Guatemala and up 
through Mexico, and are part of the illegal immigrants?
  This is what I am saying, that we cannot deal with this on a 
piecemeal fashion. We have got to have a bolder, wiser, more inclusive 
commitment to raising, as you said, raising the ships, raising, you 
know, the tides for all ships, not just winners and losers.
  Mr. BROWN of Ohio. You said something very perceptive about 
California, and whether it is the Silicon Valley or whether it is the 
Central Valley or whether it is Cleveland, Ohio, what our country has 
been successful in doing is workers in our country share in the wealth 
they create.
  If you work for someone and you help that employer make a decent 
living and make a good profit, you as an employee share in the wealth 
you create. That company also pays taxes in that community, so that the 
community has safe drinking water and the community has decent road 
structure and other kinds of infrastructure.
  But, as you know, whether you go to Nicaragua or whether you go to 
the Mexican border or any number of countries in the developing world, 
workers

[[Page 13592]]

do not share in the wealth they create. I have been to an auto plant in 
Mexico 3 miles from the United States. The workers work just as hard as 
workers in our country. It is a clean, productive plant, with the 
latest technology.
  The difference between a Ford plant in my district and the city I 
live in, and a Ford plant in Mexico, is the Ford plant in Mexico does 
not have a parking lot, because the workers are not sharing in the 
wealth they create.
  You can go around the world to Vietnam, and go to a Nike plant, and 
the workers cannot afford to buy the shoes they make. Or go to Costa 
Rica, the workers at a Disney plant, the workers cannot afford to buy 
the toys for their kids often.
  So the workers are not sharing the wealth they create, and the 
companies are generally taxed very little, if at all, so they are not 
putting any money into those communities.
  So if we would renegotiate CAFTA and put a program together like you 
talk about, with safe drinking water and infrastructure and schools so 
that boys and girls could go to school, and the workers were making 
enough that they could begin to buy some things, you would see their 
standard of living going up, and everybody would be better off, instead 
of just the largest corporations in the world.
  And the interesting thing about all of that is even though the 
leaders of those countries, as you have said, most of them except Costa 
Rica like the idea of CAFTA, the workers in those countries, the 
citizens of those countries simply do not.
  I would like to show you this here. Several months ago there was a 
demonstration in one of the Central American countries, I believe this 
is Guatemala. There have been 45 demonstrations against CAFTA in each 
of the six countries, and our country too, but 45 demonstrations where 
literally tens of thousands of citizens have shown up at the Parliament 
asking these countries not to ratify the agreement.
  This is a case where the police attacked workers who were protesting 
peacefully. Two workers were killed. In place after place, it is clear 
that, like you understand, of course, they understand better than we 
possibly could why this agreement does not work. They know it will not 
raise their standard of living. They know they will not share in the 
wealth they create in a factory for their employer.
  They know that these companies that come in will not pay taxes in 
their local communities so they can have safe drinking water and a 
better environment and better food safety standards and all that comes 
with an industry coming to town.
  I know when an industry comes to Ohio, it means a lot for the 
community. It is good jobs. They pay property taxes for the schools. 
They build good roads because of their tax dollars. All that comes when 
these factories come, they mean continued misery.
  Mr. FARR. Remember, when these companies come in, they are coming in 
according to the zoning that has been adopted by the local community. 
They are coming because the community wants them there, and they know 
that they are going to be sharing in the responsibility.
  I mean, I do not think we are trying to knock down responsible 
corporate entities, and companies that do a lot for their employees. 
But I think you cannot just do this on the fact that some of the 
companies do much better jobs than others.
  Some of my companies in the Salinas Valley provide for all of their 
farm workers health care insurance, 401(k) plans, scholarships for 
every one of the farm workers' children that go to college. And I 
represent more farm workers than any other ag district in the United 
States.
  And so I know that there are very responsible corporate entities that 
will do the responsible social thing. But you cannot just sort of, when 
you are dealing with a whole country like this, and dealing with major 
trade agreements, you cannot just sort of pick out that there will be 
some winners and losers.
  The country cannot afford to have any losers. The country and the 
people in these countries, the poorest countries in Latin America 
cannot afford not to have a total commitment. And CAFTA does very 
little to ensure that the infrastructure is going to be improved. It 
only hopes that the trickle-down effect will make it better, thinking 
that there will be more capital in the country by investment and by 
productivity. At the expense of what?
  Mr. BROWN of Ohio. History has taught us otherwise; that it does not.
  We have been joined by the gentlewoman from California (Ms. Waters) 
from Los Angeles who has been a real leader on all kinds of economic 
justice issues, especially trade issues.
  Ms. WATERS. Mr. Speaker, I want to thank the gentleman from Ohio (Mr. 
Brown) for the time, and I applaud him for his efforts to expose what 
is wrong with CAFTA, the U.S. Central American Free Trade Agreement.
  I must say he has put many hours into helping to organize us around 
this issue and to present the real facts about what CAFTA is and what 
it is not.
  CAFTA is yet another unfair trade deal that will hurt working 
families in both Central America and the United States. CAFTA is not 
only the latest unfair trade deal in a decade of failed trade policies. 
Over the last 12 years, the U.S. trade deficit has exploded from $39 
billion in 1992, to over $617 billion in 2004.
  As a matter of fact, I think the most interesting thing about what is 
happening in the Congress of the United States is this tremendous trade 
deficit under what is supposed to be a conservative President.
  And aside from the trade deficit, the United States deficit that we 
have here in America under this administration. I think people should 
take note of that. In my home State of California, over 353,000 
manufacturing jobs have been lost since 1998.
  Nationwide, almost 2.8 million manufacturing jobs have been lost 
since President Bush took office in 2001. CAFTA is modeled on NAFTA, 
the North American Free Trade Agreement. And let me say I did not 
support NAFTA, as I do not support CAFTA.
  The North American Free Trade Agreement had a devastating impact on 
many American workers. When NAFTA was passed in 1994, the United States 
had a $2 billion trade surplus with Mexico. In 2004, we had a $45 
billion trade deficit with Mexico.
  NAFTA caused almost 1 million American manufacturing jobs to be 
exported to Mexico. CAFTA will cause even more manufacturing jobs to be 
lost to American workers. I do not care whether it is a Democrat 
President or a Republican President, I do not support these unfair 
trade agreements that cause us to have such huge trade deficits and who 
displace American workers.
  Mr. Speaker, I want to thank the gentleman from Ohio (Mr. Brown) for 
the press conference he organized where he had several business people 
who came to Washington, to explain how small- and medium-sized 
businesses will be unable to compete with cheap labor in Central 
America.

                              {time}  2100

  What I loved about that press conference was the fact that we had 
these representatives from small and medium-sized businesses coming to 
Washington, D.C. to tell the truth about how they have not been 
represented here in Washington. Many people think when the Chamber of 
Commerce speaks, they are speaking for all businesses. They made sure 
that everybody knew that this was not true.
  They also made sure that everybody understands that the National 
Manufacturers Association was not speaking for everybody. These are 
small and medium-sized businesses that represent the heart and soul of 
America: Mr. Alan Tonelson with the U.S. Business and Industry Council, 
Mr. Jim Schollaert with the American Manufacturing Trade Action 
Coalition, Mr. Fred Tedesco with the PA-Ted Spring Company of 
Connecticut, Mr. Jock Nash with Milliken & Company of South Carolina 
and the National Textile Association, Mr. Mike Retzer with the W.W. 
Strohwig Tool & Die of Wisconsin, and Mr. Dave Frengel with Pen United 
Technologies of Pennsylvania and Manufacturers for Fair Trade.

[[Page 13593]]

  These business persons are the kind of business people that we talk 
about all the time. Members of Congress on both sides of the aisle talk 
about how we support small and middle-sized businesses, how they are 
the heart and soul of America. And how they really are responsible for 
creating more jobs than even the big conglomerates and the 
international corporate businesses. We talk about how we want to give 
support to them. Well, this is how we can support them. Enough of the 
rhetoric. Let us get down to business.
  If we want to support our small and medium-sized businesses in this 
country, we will not support CAFTA. We will not support what they have 
come to Washington to tell us undermines their ability to stay in 
business.
  I think we could not have had a more clear representation of what is 
wrong with CAFTA than to watch these American business persons talk 
about what is wrong with CAFTA. When American workers lose good jobs in 
manufacturing, they often have no choice but to take jobs with low 
wages and no benefits.
  The countries of Central America that are included in this agreement 
are some of the world's poorest countries. The average Nicaraguan 
worker earns only $2,300 per year, or $191 per month. Forty percent of 
Central American workers earn less than $2 per day. Central American 
governments do not enforce fair labor standards, and thousands of 
Central American workers work in sweatshops with dreadful working 
conditions.
  CAFTA will do nothing to improve wages and working conditions in 
these impoverished countries. Opposition to CAFTA is wide spread, not 
only in the United States but in Central America as well. CAFTA will 
increase agricultural imports into Central America by large corporate 
agri-businesses. These imports will put an estimated 1.2 million 
farmers out of work, displacing families and causing an increase in 
world poverty. When poor Central American farmers lose their jobs, they 
will be forced to move into overcrowded cities and seek work in 
sweatshops producing manufactured goods that are currently made in 
America.
  CAFTA will cause American workers to lose good manufacturing jobs and 
again seek jobs with lower wages and no benefits. At the same time, 
CAFTA will cause Central American workers to lose their farms and seek 
jobs in sweatshop with meager wages and no benefits.
  CAFTA is not a free trade agreement at all. It is an outsourcing 
agreement. I say it again: this is not free trade; this is about 
outsourcing American jobs to third world countries for cheap labor. 
That is what it is. Let us call it what it is.
  It allows profit-hungry corporations to ship American jobs to 
impoverished countries where workers can be forced to work long hours 
for little pay and no benefits. It is a bad deal for Central American 
workers, and it is an equally bad deal for workers here in the United 
States.
  So I would urge this President, Mr. Conservative President, Mr. 
President who claims to have concern about American businesses, Mr. 
President who should not be the President, presiding over a big trade 
deficit, a huge deficit in the United States, I would urge him to 
withdraw this CAFTA agreement and negotiate a trade agreement that will 
create good jobs and provide real benefits to the impoverished people 
of Central America as well as the working people of the United States.
  Mr. Speaker, it is awfully ironic that I am, who is considered a 
progressive and a liberal, even more conservative than the President of 
the United States when it comes to preserving American jobs and getting 
rid of a trade deficit that we do not deserve to have.
  Mr. BROWN of Ohio. The gentlewoman is exactly right when she talked 
about small businesses, those manufacturers that we all have in our 
districts. The gentlewoman from Toledo, Ohio (Ms. Kaptur) has joined 
us. We all have seen these companies of 50 and 100 workers, often 
nonunion, usually family owned, usually Republican business, mostly 
men, some women. We had 23 business groups represented yesterday in 
this news conference; but more importantly, these small manufacturers 
understand when a big company outsources their jobs, these small 
companies simply have to close. This may be 50 jobs in Lorraine, Ohio 
or Akron, Ohio. There may be no article in the newspaper that this 
plant has closed, and nobody knows much about it except these 50 
families whom it is just devastating to.
  I thank both of our friends from California for joining us.
  Mr. Speaker, I yield to the stalwart in fighting for economic justice 
and fair trade, not these free trade deals that do not work, my good 
friend, the gentlewoman from Lucas County, Ohio (Ms. Kaptur). We share 
the same county, Lorraine County, in our districts.
  Ms. KAPTUR. I want to thank the gentleman from Ohio (Mr. Brown), the 
author of a book on fair trade, and my colleagues, the gentlewoman from 
California (Ms. Waters) and the gentleman from California (Mr. Farr), 
for joining us this evening.
  I want to focus for a few minutes on the important issue of 
agriculture. And the new trade ambassador who happens to be from Ohio 
claims that our agricultural exports to Central America are going to 
increase by $1.5 billion, or almost double our exports, to the region 
as a result of CAFTA. But you know what, that is what they told us when 
we debated NAFTA. They said that we were going to increase agricultural 
exports.
  Let us look at the record. The record shows with Mexico we are dead 
even. It did not make any difference. And with Canada we have fallen 
over $4.3 billion into the hole. We were promised by the former trade 
ambassadors we would get more food-processing jobs, and that sounded 
like a good thing back in the early 1990s.
  They told us we would get 54,000 new food-processing jobs. Guess 
what? We did not get a single one. In fact, we lost 16,000 food-
processing jobs in this country. Even Brachs Candy is locking up their 
doors in Chicago and moving south. Same thing in my district, 
Spangler's Candy.
  NAFTA boosters said to us, oh, farm cash receipts are going to go up 
by 3 percent a year. Guess what? They have gone down by that amount. 
And net farm income during the NAFTA period has gone down by nearly 10 
percent from $52.7 billion to $47 billion. So NAFTA's legacy for 
farmers in America is declining prices, and they know it: shrinking 
revenues, shrinking markets, and rising debt burdens. And now the same 
people who gave us NAFTA want to give us CAFTA, the same group.
  And what did the gentleman from Ohio (Mr. Brown) say, if you keep 
making the same mistake over and over again, it is a sign of insanity.
  I agree with the gentleman 100 percent on that. In fact, the food 
consumption power of consumer markets in CAFTA countries is 
exaggerated. We already hold an $812 billion deficit in agricultural 
products with the CAFTA countries. Already we are in the hole. With 
NAFTA and Mexico, we were almost even. We were in debt a little bit 
with Canada, and it has gone completely south.
  We know CAFTA will mean more sugar imports into our country. We also 
know in one of the most important areas which hardly anybody has talked 
about, in ethanol production which is a brand-new market for our 
country. We have got about 54 ethanol plants in this country right now. 
A Corn Belt State like Ohio would benefit enormously from some of the 
new energy legislation we are working on in the Congress.
  But what CAFTA would do is, guess what, it would open up exports from 
Argentina and from Central American countries of ethanol-based 
products, including ethanol made from sugar into our market. So in the 
same ways we are becoming and have become totally addicted to imported 
petroleum, now we will get addicted to ethanol by imports through 
agreements like CAFTA, rather than finding a way to help our farmers 
bring those markets up in this country.
  Minnesota is really leading the way. I love the people of Minnesota, 
the

[[Page 13594]]

farmers of Minnesota. I just wish I could do for America what they have 
done for Minnesota in the area of ethanol production.
  So when we look at this CAFTA agreement, and I know time is limited 
this evening, I just wanted to come down here and say if we had a 
decent renewable fuel standard that would require an 8 billion gallon 
reserve, what we could do for real farm income, not subsidy income, but 
real farm income in the entire Corn Belt region, in the sugar beet 
region of this country, in the cane sugar region, all these areas of 
our country where we could really make a difference. Wow, what we could 
do here at home.
  I just think CAFTA is a bad deal. I think we should learn from the 
past. And agricultural America knows it is a bad deal. The only people 
who are supporting this are some of the brokering companies. Whether 
they get their product in China or whether they get it in Argentina or 
in the United States, these transnationals, they really do not care. 
They just want to trade on the backs of those who are actually doing 
the work.
  We should care about the American people. We should care about the 
farmers in our fields. We should care about those people who are 
working in our processing companies and keep that production here.
  Mr. FARR. The gentlewoman and I are both on the Subcommittee on 
Agriculture of the Committee on Appropriations, and I cannot think of 
two people that fight more for small farms and the ability of rural 
America to have a successful economic development.
  I am wondering if the gentlewoman is finding in Ohio, in the people 
the gentlewoman has run across, most of the agricultural trade 
associations are supporting CAFTA. As I run into the members of those 
associations, they are not so keen on it. They are very concerned. They 
think that these are agrarian countries, and so what is going to happen 
is the products that they grow and can get into the school lunch 
program, can get into the organic program, can get into essentially the 
multi-billion dollars that America spends on food for the military and 
food for food stamps and things like that, that these products will be 
produced not at the local farmers market and additional farmers 
markets; but these products will come from Central America, at the 
expense of small farmers in our country, particularly of speciality 
crops.
  Ms. KAPTUR. I think the gentleman has raised an excellent point. I 
think the Washington trade groups are totally out of touch with their 
members at the local level.
  I have had farmers say to me when we were debating the NAFTA 
agreement, why should we let bell peppers come in from countries that 
do not have environmental regulations like we do? Bell peppers coming 
in with DDT, when DDT was being banned in Ohio. They were not competing 
on a level playing field. They were on a different field. They would go 
down to these towns. You cannot even call them towns. Little dusty 
villages in Mexico where these bell peppers were grown. And the farmers 
would say, I have been going down there for 20, 30 years. They do not 
even have an asphalt road yet.
  So the whole system of life was different, and they were being asked 
to compete with a country that really did not allow its farmers to earn 
more by virtue of the hard work that they did. They respect the people 
of Mexico, but they knew the system was rigged against them. They said, 
just give us a level playing field.
  Mr. FARR. I think the difficult is, and we all agree on this, that 
you cannot just have these trade agreements which are private business 
contracts and expect the social responsibility of both sides of the 
agreement are going to raise those opportunities for people who are 
less educated, for people who are below living standards.
  It has got to be a totality. If we are going to trade ideas and 
products, we have also got to trade in education. We have got to trade 
in social responsibility and minimum standards, minimum wages, minimum 
protection for labor, minimum protection for environment. The whole 
quality of life has to improve.
  This is the most giant business deal that the United States will ever 
make. And it is tragic that in this giant business deal we are not 
dealing with all of these other issues that we came here to Congress to 
try and solve.
  Ms. KAPTUR. I thank the gentleman for his comments on that. I think 
the gentleman from California (Mr. Farr) is exactly right and he 
understands how one has to have integrated policies.
  I wanted to say as I am looking at the gentlewoman from California 
(Ms. Waters) who has fought so hard for people to build a real middle 
class in this country and to help other nations help their people 
create a middle class, what is really sad about these trade agreements 
is it pits the poor against the more poor. It draws our living 
standards down. But one farmer that I met in Mexico said to me, what is 
really upsetting is that we feel like crabs in a bucket.

                              {time}  2115

  Every time we try to get up a little bit, somebody else pulls us 
down, and they were fighting this rush to the bottom, which is the 
expression that the gentleman from Ohio (Mr. Brown) uses so well. One 
poor person pulling another person down, rather than having the 
standards that the gentleman from California (Mr. Farr) is talking 
about, where we all agree to a minimum standard. We bring people up, 
not pull them down.
  Ms. WATERS. I think you are so right, and I thank you so very much 
for the leadership you have provided on these issues. I thank you for 
opening up opportunities for women to go down to Mexico and take a look 
at what is going on there. It is because of you that a lot of people in 
this Congress have become interested in this issue, and I appreciate 
the work you have done.
  Ms. KAPTUR. Mr. Speaker, I thank the gentlewoman for saying that. 
Also, 60 percent of those people who are employed in these Central 
American countries are women. They are working in banana companies 
trying to pack these crates, 40, 50, 60 crates an hour. They are being 
forced to make men's trousers, 400 to 600 pairs an hour, and they have 
to work 2 weeks to afford 2 pairs of slacks down there, which costs 
$39.40, and yet, they are making 400 to 600 pairs of trousers an hour.
  What kind of a continent, what kind of a world are we creating when 
we pay so little heed to those who work so hard for so little and then 
we put our workers out, largely women workers in the textile industry 
in this country, where we farmed out those jobs in places like North 
Carolina, South Carolina, are hollowing out of this production? At 
least they were in the middle class. They had finally made it to the 
middle class. What are we doing in this country?
  Ms. WATERS. It could not have been better stated.
  Mr. BROWN of Ohio. Mr. Speaker, I thank all of my colleagues. Our 
time is about up. Thank you very much for your passionate remarks in 
closing.
  I thank the gentleman from California (Mr. Farr) and the gentlewoman 
from California (Ms. Waters), the gentlewoman from Ohio (Ms. Kaptur).
  This Congress will likely vote on this agreement soon. It is pretty 
clear that the most powerful people in all seven countries, the 
Dominican Republic, the Central American countries and the United 
States, support this agreement but overwhelming opposition among the 
public, small business owners and family farmers and ranchers and 
workers and people who care about the environment.
  If this Congress does its job, it is clear we will defeat this CAFTA 
and then renegotiate one that lifts up workers in all seven countries. 
I thank all of my colleagues for joining us this evening.

                          ____________________