[Congressional Record (Bound Edition), Volume 151 (2005), Part 19]
[Senate]
[Pages 25821-25824]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              TRADE ISSUES

  Mr. DORGAN. Mr. President, I was just asked by a news reporter about 
the President's trip to Asia. The President is now going to Japan, 
Korea, and China and will be talking, presumably, about a wide range of 
issues, including trade. My hope certainly is that he will talk about 
trade.
  Last month, we had a trade deficit of $66 billion--in 1 month--one-
third of it from China. When the President goes to China, he could 
visit a lot of American jobs because the jobs that used to be here in 
America exist now in China--jobs that made bicycles, Radio Flyer's 
Little Red Wagon, Tony Lama boots. The jobs that used to make a wide 
range of products now exist in China. An American President--any

[[Page 25822]]

American President--visiting China could visit a lot of American jobs. 
They are not the same kind of jobs that existed in America because in 
America, in most cases, those jobs were performed by employees who made 
a decent wage and who had benefits. No longer, in most cases. Those 
jobs in China are being performed by people who are being paid a small 
amount of money and no benefits.
  By the way, if they complain about the working conditions, they will 
be either fired or put in prison.
  As the President goes to China in the shadow of last month's 
devastating announcement of a $66 billion monthly trade deficit, one-
third of it coming from China, what should the President do? It seems 
to me the President, with respect to China, Japan, and Korea--all three 
of those countries--should begin to get tough and exhibit on the part 
of this country a backbone that says to countries with whom we do 
business, we expect and demand and deserve fair trade.
  Fair trade means it is mutually beneficial. It is not fair, and it is 
not mutually beneficial when last month--when the last month for which 
we had reporting--we bought one dollar's worth of goods from China, and 
for every dollar's worth of goods from China we sold them 10 cents' 
worth. A dollar and 10 cents--that is not fair trade. With a $66 
billion trade deficit, with nearly 20 percent of it coming from the 
country of China, we ought to expect something substantially different.
  The Commerce Department announced that the trade deficit that 
shattered all records was in the month of September. Our country had a 
trade deficit of $66 billion.
  This is what it looks like. Our country is choking in red ink. Behind 
this red are American jobs leaving for China. Companies know they can 
simply get rid of their American workers and save a lot of money by 
hiring people in Third World countries--in this case, China--and they 
can presumably boost their profits believing, apparently, that people 
are like wrenches and pliers. You just get rid of them when you are 
done with them and find something less expensive. Go and hire that less 
expensive commodity--in this case ``commoditizing'' labor.
  This is what our trade deficit looks like with China. We have a $220 
billion annual deficit with China. You can see what has happened. We 
are sinking into a deep abyss with respect to the trade deficit with 
China.
  One of the reasons for the trade deficit is piracy and 
counterfeiting. That is just one of the reasons.
  Let me describe something interesting. This happens to be the logo 
for the 2008 Chinese Olympics. It says: Beijing 2008. It is a great-
looking logo. It actually belongs to the Chinese. The Chinese know how 
valuable a logo like this is because in Greece they had the logo for 
the Greek Olympics, and I am told they raised something over $850 
million with this logo. So the Chinese know.
  First of all, this logo belongs to them. Secondly, it is very 
valuable. And some people on the streets of China decided they were 
going to counterfeit this logo. They decided, We are going to pirate 
this logo. They started selling mugs, coffee mugs, banners, all kinds 
of things with the official Chinese logo on it for the 2008 Olympics.
  Guess what. The Chinese Government can, in fact, control piracy and 
counterfeiting. They demonstrated it.
  The President, if he gets out of the car and walks down the street in 
Beijing, will not find someone selling counterfeit goods. They are 
gone. They are in prison. They are off the streets. The Chinese 
Government shut them down, just like that, in an instant.
  So when it is their money that is at stake, they understand how to 
stop piracy and counterfeiting. They do it.
  Two-thirds of all counterfeit and pirated goods coming into this 
country come from China. Does China lift a finger to stop it? Not a 
finger; don't care; doesn't matter to them. It mattered when it was 
goring their ox, when they were about ready to lose money. Then it 
mattered.
  So the question is, What do we do about this? I could put up a chart 
that shows Japan, a $60 billion to $70 billion a year--every single 
year--trade deficit.
  I could put up a chart that shows Korea and talk about my favorite 
subject with Korea: that little old Dodge pickup truck called the Dodge 
Dakota. I kind of like the name because it is named after my State--
Dakota. It is so wonderful they named a pickup truck after it.
  At a time when 700,000 vehicles come into this country over the high 
seas from Korea to be sold to the American consumers, we are able to 
sell, if we are lucky, about 3,800 to 3,900 vehicles in Korea. So 
700,000 this way, and 3,800 to 3,900 going to Korea.
  Why is that? The Koreans don't want American cars in Korea, and 99 
percent of the vehicles on the roads in Korea are Korean-made vehicles. 
That is what the Korean Government wants.
  The Dodge Dakota folks thought they would have a niche in Korea 
selling Dodge Dakota pickup trucks. For the first 3 or 4 months they 
started selling some. All of a sudden, the Korean Government shut them 
down just like that. With Japan, with Korea, and with China, the fact 
is, in all of these cases, governments take action to complete trade 
arrangements with us that are not mutually beneficial--trade 
arrangements that hurt us, ship our jobs overseas and help them.
  This trip by the President is very important. The question is, Will 
this country stand up for its own economic interests? There is no 
evidence in the past that it will.
  My colleague, Senator Graham, and I have offered several pieces of 
legislation on these very issues. But there is a giant yawn on the part 
of the U.S. Congress, not very interested; giant yawn at the White 
House, not very interested.
  Why is that? It is because most of these policies--I am talking about 
policies that affect the jobs of our citizens, policies that affect 
this country's economy, and whether we grow or not, whether people have 
a good job that pays well with benefits--are viewed through the lens of 
soft-headed foreign policy and not hard-nosed economic policy.
  That is the problem. You have to run all these things by the U.S. 
State Department to see if we could begin to be a little bit tough and 
take some action, maybe, with respect to some unfair trade practices of 
the Chinese. Oh, no. We are worried about offending the Chinese. Don't 
do it.
  They are engaged in managed trade and hard-nosed economic issues, and 
we are engaged in soft-headed foreign policy.
  Mr. GRAHAM. Will the Senator yield for a question?
  Mr. DORGAN. I would be happy to yield.
  Mr. GRAHAM. I don't know if anyone has done an analysis of our trade 
deficit. What percentage does the Senator believe is directly 
attributable to unfair trade practices on behalf of the Chinese? It is 
one thing to be outworked. If people work harder than you do and are 
smarter than you are, shame on you. But I believe, as the Senator does, 
that a lot of the market share that we are losing in the trade deficit 
explosion has to do with Chinese Government policy when it comes to 
trade behavior rather than just simply outworking the American worker.
  What is the Senator's view on that?
  Mr. DORGAN. I don't have a numeric answer to that. But I think it is 
self- evident that most of the trade deficit we have with China has to 
do not with fair competition but a manipulation of currency, a refusal 
to deal with piracy and counterfeiting, a refusal to open their 
markets. I think that is what it is about.
  To give you a point of reference, the U.S Trade Ambassador's Office, 
on April 29 of this year, issued its report. This is our official 
Government report. It concludes that Chinese piracy was at epidemic 
levels and that the Chinese had broken promises.
  Despite the fact the Chinese continued to break promises, piracy of 
our intellectual properties was at epidemic levels, and two-thirds of 
the pirated products coming into this country are coming from China, 
despite that, our Trade Ambassador says it is not ready

[[Page 25823]]

to file a WTO case against China. Why? Because, instead, we are going 
to put China on a watch list. Boy, that will teach them. You put 
somebody on a watch list, and that will strike fear in the hearts of 
almost anybody. A priority watch list.
  Here are the deficits with China. Going back to 1996, $39 billion. Go 
back another 7 years, and we had a balanced trade with China. But it is 
sinking deeper and deeper into this abyss. Now, all of a sudden we are 
going to put them on a priority watch list.
  On behalf of farmers in North Dakota, I can say I know that inside 
the administration, in the Trade Policy Review Group, they made a 
recommendation that we should take action against China with respect to 
unfair trade dealing with wheat. But the State Department said they 
thought it would be too much ``in your face.'' So they wouldn't do it. 
They ran it through the State Department. Would this offend somebody if 
we decided they ought to play fair?
  Yes. It might offend them. Let us not do that.
  I have said many times there is not anyone in this Chamber whose job 
is jeopardized by this unfair trade with these three Asian countries.
  I could also describe it with Canada, Mexico, and the European Union 
as well. But because the President is on a trip to Asia, I am talking 
about the problems we confront there. It is safe to say there is no one 
in this Chamber serving in the Senate who is going to lose his or her 
job due to a bad trade agreement, or due to us not having the backbone 
to demand of other countries that they play fair. Nobody here is going 
to lose their job. We will just sit around, thumb our suspenders, toot 
our horn, and put on our blue suits every morning. But nobody's job is 
in jeopardy. It is just a lot of other people's jobs that are in 
jeopardy.
  Do you remember that little Etch A Sketch? Everybody played with Etch 
A Sketch. There were two knobs on it. You had some sand in there, and 
you tried to draw a picture on your Etch A Sketch. Gone--gone to China. 
They are all gone.
  I could go through a list of 100 companies. In fact, I should bring 
over just the first 6 months of this year, the Department of Labor's 
report which is 33 pages, on both sides, single-spaced, of the names of 
companies that have sourced jobs off our shores. It is 33 pages, 
single-spaced, the names of companies--not people, companies.
  It is unbelievable what is happening. They are selling this country 
piece by piece. When today we import $2 billion more than we export, 
the financial transaction is we put in the hands of foreigners the 
currency or securities by which they own part of America. Each day they 
buy $2 billion more of this country. It doesn't seem to mean a whit to 
anybody.
  Last week was the announcement of the $66 billion monthly trade 
deficit. Did you hear any outcry from this Chamber? I came over and 
gave a little speech--but nothing. It is almost like everybody pulls 
their sombrero down and takes a big siesta and sleeps forever on this 
subject.
  Then what is going to happen someday--because I think every economist 
understands this cannot stand. You can't keep doing this. You add this 
$700 billion trade deficit to a $550 billion budget debt increase this 
year--yes, this year--that is $1.2 trillion that we sunk deeper in debt 
in this country. We cannot keep doing that. Every economist understands 
that. But nobody is saying much because we are all for the jingoistic 
``free trade.''
  Give folks some tambourines and robes, put them on the street corner, 
and let them bang around out there chanting ``free trade.'' But when 
the American people have had enough of it, they will say stop already. 
We fought for 100 years for good jobs with good benefits and the right 
to organize; now you will pole-vault over that and ship the jobs 
elsewhere and go visit them as you talk about trade? At some point when 
this collapses--and it will; this cannot continue--when it collapses of 
its weight, we are all going to stand around, thumbing our pockets and 
saying: We knew it could not last.
  Really? Read the Washington Post. By the way, if you do read the 
Washington Post, you will not read both sides of this debate because 
the Washington Post will run only one side. I have actually gone back 
for 6 years. We did a column appraisal of what the Washington Post runs 
with respect to trade. If you are for free trade, which is jingoistic 
nonsense about shipping America's jobs overseas and running our trade 
policy through the eye of the needle called foreign policy, if you are 
for that, God bless you, send some op-ed pieces our way, we would love 
to run them. If you are on the other side, if you believe in fair trade 
and that free trade and the monumental deficits are hurting this 
country and shipping jobs overseas, try to get an op-ed piece published 
in the Washington Post. Good luck. Take some medicine, it will take 
some while. It just will not happen. The whole town is like that on 
this issue.
  I understand, when we have that much invested in failure, you 
certainly want to defend it. But there will come a time, in my 
judgment, when everyone has to understand this is not representing the 
long-term economic interests of our country.
  Producing products for 30 cents an hour with kids working 7 days a 
week so you can ship them to a big box retailer in this country and 
sell them for pennies might be good, in the short term, for corporate 
profits, but it is not good for the long-term economic interests of 
this country. One day enough Members will wake up. It has not happened 
yet. It did not happen on the Central America Free Trade Agreement 
which we had in this Senate, another chapter in the book of failures. 
It did not happen. Enough said.
  First, let's agree that we will bind our hands and not allow any 
amendments. So agree not to be original and let's not think about this 
stuff. And second, when we have the vote, we will also agree to vote 
for a treaty--and it is a treaty but was called an agreement so it does 
not need 67 votes--we will agree to something that was negotiated 
behind closed doors somewhere else. And we will continue to open the 
new testament of trade dogma believing that somehow it will have a 
happy ending. It will not.
  President Bush is on his way to Asia. I want him to succeed. But I 
doubt whether he will raise these hard-nosed, tough trade issues in a 
significant way that tells these countries, ``Enough is enough.'' I 
want our country to stand up for its economic interests. Its economic 
interest is rooted, yes, in some expanded trade. No question about 
that. But it is rooted especially in the demand to require full trade.
  If I might make one additional observation, the same companies 
shipping companies overseas all in the name of profit because they do 
not say the Pledge of Allegiance in those boardrooms anymore, those 
same companies do not want to pay taxes in most cases. Here is an 
interesting statistic: In the Cayman Islands, there is a five-story 
white building. That five-story white building is home to 12,748 
corporations. They do not all live there. No, no, they get their mail 
there. It is a mail box. The mail box is for the purpose of being able 
to say they belong to the Grand Cayman Islands and they can avoid 
paying taxes in the United States.
  Isn't that interesting, and also disgusting, that 12,000 companies 
are claiming one white five-story building in the Cayman Islands as 
their home?
  Finally, as part of all of this, this Congress--yes, this Congress--
decided to give a special gift to those that have exported jobs. The 
gift was to say that in this year, if you have moved jobs overseas, if 
you have created foreign subsidiaries and you are doing business 
overseas, we will allow you to repatriate your foreign earnings on 
which you expected someday to pay a tax in the United States, we will 
allow you to repatriate those earnings, and you get a special income 
tax rate that no other American gets. It is a 5.25 rate. Does Mrs. 
Smith pay that? Mr. Jones? Mr. Johnson? The people of North Dakota pay 
that? The people of Tennessee? No, no, only one group. Just the group 
that moved their jobs overseas, made a lot of money overseas, who 
expect to have to pay income taxes on it. When they bring it back to 
this country, they are

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told, Bring it back, we will give you a sweetheart deal, 5.25 percent.
  That was called a JOBS Act. In fact, we now see the result. Companies 
are bringing somewhere around $300 billion back, and the very companies 
that are repatriating these earnings and paying 5.25 percent income 
taxes--a fraction of what the lowest income American is paying--they 
are cutting jobs and moving jobs overseas.
  My colleague who sat in this desk, the amendment that would have 
stripped that little sweetheart deal for these companies. I supported 
him, spoke for him, and he lost. Why? Because as in the rest of trade, 
there are sufficient numbers who will stand up in this Senate and say: 
Sign me up. Let me give a special deal to those companies that not only 
do business in that five-story white building in the Caymans but also 
give them an opportunity to pay 5.25 percent income tax when they 
repatriate the money to the United States.
  I hope one day all of those workers in America who had good jobs, who 
were proud of them, and who were taking care of their families someday 
march on this Capitol and ask the question: Where is my job? What did 
you do to my job? How much did you reward the people that took my job 
and moved it overseas? It would be an interesting question and one that 
ought to be answered by people in this Senate, by people in the White 
House, and people in the House as well.
  I yield the floor and suggest the absence of a quorum.
  Mr. NELSON of Florida. Mr. President, I ask to be recognized.
  Mr. LEVIN. Would the Senator from Florida ask that he be allowed to 
proceed as in morning business?
  Mr. NELSON of Florida. Mr. President, I ask unanimous consent I be 
allowed to proceed as in morning business.
  The PRESIDING OFFICER (Mr. DeMint). Without objection, it is so 
ordered.
  Mr. LEVIN. I thank the Senator.

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