[Congressional Record (Bound Edition), Volume 151 (2005), Part 21]
[Senate]
[Pages 27961-27963]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      BAHRAIN FREE TRADE AGREEMENT

  Mr. DORGAN. Mr. President, my understanding is that the Senate is 
taking up the free-trade agreement with Bahrain. Of all the priorities 
that exist in our country dealing with the subject of trade, somewhere 
close to last would be a trade agreement with Bahrain. Nothing against 
the country of Bahrain. I am sure it is a wonderful place. I have not 
actually visited there. But I believe the total trade between our 
country and Bahrain is somewhere in the neighborhood of $700 million, 
less than $1 billion on both sides of the ledger.
  There are all kinds of trade problems our trade officials ought to be 
working on. But a free-trade agreement with Bahrain would not rank 
right near the top. Let me tell you what would rank near the top.
  We are deep in debt with respect to international trade. This country 
is in desperate trouble with respect to trade. We are now experiencing 
a trade deficit of over $700 billion a year. That means every single 
day, 7 days a week, we buy more from abroad than we sell in exports, $2 
billion a day every day 7 days a week. How long can a country sustain 
that?
  We have lost 3 million jobs in this country in the past 4 years--3 
million jobs--going to China, to Vietnam, Bangladesh, Indonesia, and 
more.
  So what is all of this about? It is about a new strategy, a strategy 
developed in the past two to three decades, but accelerated now more 
recently. It is a strategy that says we are a global economy, and 
because it is a global economy, enterprises, corporations, and others 
should take a look around this world and find out where these 1 to 1.5 
billion people are who will work for pennies an hour, employ them, shut 
down your U.S. manufacturing plant, hire the employees in China or 
Bangladesh, for example, and it will all work out because they will 
work for 30 cents an hour, and they will build bicycles and wagons and 
produce textiles and other things. And then you can ship it to a big 
box retailer in this country, and someone can walk through the front 
door of that big box retailer and buy a cheap product.
  I noticed last year at Christmastime there was a woman from Texas who 
decided she was going to buy her children some presents, and she wanted 
to make a point of buying American made products. So she started 
shopping, and she discovered she could not purchase one present for her 
children that was made in the United States.
  What does it mean? It means our country is changing and our country 
is, in my judgment, being hollowed out. Jobs are being lost, the middle 
class is shrinking because we have been told now American workers must 
compete with others around the world who are willing to work for 30, 
40, 50 cents an hour, work without health insurance, without a 
retirement, and work under the threat, in many cases, if they would 
like to organize as workers, of being sent to prison.
  I can actually give names of people now sitting in prison in China 
whose transgression was deciding to try to organize workers because the 
conditions in those plants were awful. So there are people who tried to 
organize workers, were arrested, and now are sitting in prison. Those 
are the conditions under which we are now trading.
  One-third of our trade deficit, incidentally, is with the country of 
China. Last month, we sold China $3 billion worth of American goods--$3 
billion. And we purchased from China $23 billion in goods.
  China has almost 1.4 billion people, and we are told this is going to 
be a huge market for American production. The creation of a middle 
class in China is going to be terrific for our country because we will 
be able to produce and sell into the Chinese marketplace.
  It is not working out that way, of course. What is happening is China 
sells us $23 billion worth of goods produced in China, and we sell them 
only $3 billion worth of goods produced in America, $20 billion-a-month 
trade deficit with China. On an annual rate, that is a $240 billion 
deficit with China in a year. That is unbelievable. And this Congress 
is perfectly content to dose through it all; in fact, probably a very 
satisfactory sleep for most because they still are willing to stand on 
street corners and chant about this so-called free trade that is not 
free at all.
  Some will say, and I think perhaps most who have studied economics 
will say, that this is unsustainable. This country is headed toward 
some whitewater rapids with these kinds of trade deficits. We are not 
only losing American jobs because American workers are being told they 
cost too much money, and we are going to produce elsewhere, but we are 
also up to our neck in debt.
  Incidentally, the trade deficits are financed by selling part of our 
country.

[[Page 27962]]

Every single day we sell another $2 billion worth of our country to 
foreigners. That is the way the trade debt is financed.
  In most recent months, one of General Motors' top executives called 
in about 300 of the top executives of the companies they buy parts from 
and said this to them: You are the companies from which we buy 
automobile parts. We want you to begin producing those parts in China. 
You need to move those parts to China. Get your production done in 
China. We are about driving down the costs.
  Then we see Delphi, which was formerly part of General Motors and 
then spun off as the largest automotive parts producer, going through 
bankruptcy, and Delphi says to the public: The problem is we have 
people making $20 to $30 an hour. That is up to $40,000, $50,000, 
$60,000 a year. What we want to do is get to a point where we have 
people making $8 to $10 an hour. In fact, what we want to do is move 
most of our production offshore to China and elsewhere so we can pay 30 
cents an hour. And then the jobs that are retained, we want to pay $8 
to $10 an hour.
  I ask this question of, yes, General Motors, IBM, and all of these 
companies engaged in this activity, and virtually all of them are: Who 
will be your future customers if your job is to lay off American 
workers so you can produce elsewhere where it is cheap in order to sell 
back into this established marketplace? Who is going to buy your laptop 
computers and your automobiles?
  If we were going to do something representing a priority today for me 
on trade, I would deal with China first. But there are all kinds of 
bilateral trade problems with a number of major trading partners. Let 
me give you some examples.
  I have mentioned many times that in the past year we will have 
shipped in well over 600,000 automobiles from Korea into this country. 
In return, we were able to send about 3,900 American vehicles to be 
sold in Korea. Sound fair? Sound reasonable? Sound like a thoughtful 
deal for America? The answer is clearly no.
  What this means is shifting American jobs elsewhere, produce the cars 
in Korea, ship them to the United States, and if you start selling any 
U.S. vehicles in Korea, shut it down. That is what has happened. 
Incidentally, the Dodge Dakota pickup truck became a little bit popular 
for a couple of months in Korea. They saw that and shut it down just 
like that. They do not want American vehicles sold in Korea. They just 
want to sell their cars here.
  China has 20 million cars on the road. It is estimated that by the 
year 2020 they will have 120 million cars on the road. They are gong to 
add 100 million cars because they want to start driving in China, even 
in the rural areas of China. General Motors says a Chinese company has 
stolen the production blueprints for one of its small cars. They have 
actually filed a legal action against the Chinese company for stealing 
what they call the production blueprints for a vehicle.
  So a company in China called Chery, which is only one letter away 
from Chevy, is going to be producing a car called the QQ. The QQ is a 
car that will be produced in China with what General Motors alleges are 
the production blueprints that were stolen from General Motors.
  Recent Wall Street Journal reports say that the Chinese are gearing 
up for a very substantial automobile industry, and they want to export 
around the world.
  I ask unanimous consent for an additional 5 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. They want to export those vehicles around the world so 
very soon. Unless something changes, China will be exporting 
automobiles as Korea is doing. Does anyone think China wants to take 
American vehicles into China? No, no. What they want to do is accept 
the American marketplace as a sponge for all that they produce.
  I have spoken at great length on the Senate floor about the people 
who have lost their jobs in this country when their plants closed down. 
I talked about Pennsylvania House Furniture. In fact, I talked to the 
Governor of Pennsylvania about this. Pennsylvania House Furniture, the 
description of that for almost a century was using the finest 
Pennsylvania wood and producing high-end furniture, and when people 
bought Pennsylvania House furniture, they knew they were getting a real 
piece of furniture.
  Well, La-Z-Boy bought that furniture company. After a couple of 
years, La-Z-Boy decided, we want to produce that furniture in China. 
The Governor of Pennsylvania and others tried to put together a 
financing package to keep the jobs in Pennsylvania, to do everything to 
see if they can keep in this country the Pennsylvania House Furniture 
Company that had been around a century.
  The answer was no. La-Z-Boy said: Those jobs are going to China. Now 
what they do is ship the wood from Pennsylvania to China and pay the 
Chinese workers pennies on the hour to put the wood together in 
furniture and then send the furniture back to our country to be sold. 
Yes, it is Pennsylvania House furniture but not made in Pennsylvania. 
So those workers lost their jobs. Is it because they were not good 
workers? No, they were craftsmen. In fact, the very last piece of 
furniture they made in Pennsylvania they turned upside down and those 
craftsmen who made that furniture all signed their name on it, the last 
piece of furniture that company made in America by American workers. 
La-Z-Boy, which owned Pennsylvania House Furniture, decided, as so many 
others have, that those jobs had to go to China because they can pay 
pennies on the hour, they can work kids if you want to, they can dump 
the pollution into the sky and into the water, and they will not have 
anybody worrying about whether they are going to form a union because 
it will not be allowed. That is not fair trade. That is not something 
we should continue to allow in this country, stand by and thumb the 
suspenders and whistle a little bit while Americans lose those jobs and 
those jobs go to China and then come back to a big-box retailer to be 
sold at discount prices. Who ultimately is going to buy those products?
  My point is this does not work. Instead of dealing with a range of 
issues, yes, with China, Korea, Canada, Mexico, Europe, with whom we 
have very large trade deficits and growing trade deficits, I might add, 
instead of dealing with that, talking about it, responding to that, 
trying to deal with this country's challenges in trade, we are on the 
Senate floor talking about the free trade agreement with Bahrain.
  Where is the energy to do something real? Once again, it is a small 
moment to do a free trade agreement with Bahrain. It is a very small 
country in the middle of the Middle East. Our total trade with them, on 
both sides, is $700 million a year. We cannot get trade officials in 
this country, this administration or this Congress, to look truth right 
in the eye on these kinds of problems, the huge deficits, year after 
year, that are shipping jobs overseas. There is another corollary to 
this as well. The same companies that decide that they should not hire 
Americans, they should shut down the American plant and, by the way, do 
so with an encouragement by this Congress because this Congress gives 
them a tax break--and we voted I think four times on my amendment to 
shut down the tax break that subsidizes jobs going overseas, but, no, 
this Congress still wants to provide a tax subsidy to those companies 
that shut down their American plant and move jobs overseas. But this 
new environment in which companies do not say the Pledge of Allegiance 
any more but they are an international corporation, they want to 
produce where they can produce for pennies, they want to sell into this 
marketplace where they can get high-end consumers to buy it, and then 
at the same time, by the way, they want to run the income, if they can, 
through a mailbox in the Bahamas or the Caymans.
  I want to mention that there is one building that is a five-story 
building in the Cayman Islands located on Church Street. I have brought 
a photo of it to

[[Page 27963]]

the Senate floor previously, and I should do that again at some point. 
That building is the official residence and address for 12,748 
corporations.
  Now, one might ask, how is it 12,748 corporations can share a 
residence or an address in a 5-story white building in the Cayman 
Islands? Simple. It is nothing more than an address.
  What is the purpose of having an address in a 5-story white building 
in the Cayman Islands? So that one does not have to pay taxes to this 
country. Money can be moved through a tax haven and avoid paying U.S. 
taxes. So one is a U.S. company, they are chartered probably in 
Delaware, have all the advantages of being an American, but now the new 
economics tell them they should produce in China, sell in this 
marketplace and set up an address in a 5-story white building mailbox 
in the Cayman Islands, so that they can have all the opportunities that 
come with being an American, except the responsibilities to hire 
American workers or to pay American taxes. That is what is happening.
  People say, well, that is just an anticorporate rant. It is not. I 
think there are some wonderful corporations in this country, some 
terrific corporations with inventive people, creative people, who have 
advanced this country, have produced wonderful, breathtaking products, 
but I think there is a culture in this country, with respect to trade 
and corporate responsibility, that has gone off the track. In this 
Congress, we cannot get anybody to talk about trade, except perhaps to 
come and stand around to talk about the Bahrain trade agreement on a 
Tuesday. Would it not be wonderful if we were talking about this full-
blown crisis of $2 billion a day to date, $2 billion that we purchase 
from abroad more than we sell to abroad, and therefore today someone 
off the shores of this country owns $2 billion worth of this country. 
We are selling this country piece by piece.
  A budget deficit in this country is financed in the traditional way, 
but a trade deficit is financed in a very different way. When we 
purchase those foreign goods, the trade deficit puts American currency 
in the hands of foreigners. They then use that currency to purchase 
real estate, stocks, bonds, to purchase part of this country. Every 
single day we are selling part of this country with an incompetent 
trade strategy, a jingoistic trade strategy that chants about free 
trade that has long ago been discredited. We ought to be describing 
circumstances of requiring fair trade. As a country, we ought be a 
leader in deciding, yes, let us expand trade in open markets, but it 
must be fair, and if it is not fair then this country is obligated to 
take the lead to insist on and demand fairness.
  Our job ought to finally be to pull others up, not to push us down. 
What has happened more recently is we are pushing American workers 
down, pushing incomes down, the standard of living down in this country 
and seeing jobs exported, opportunity exported, and exporting part of 
our future. That is not satisfactory to me. I regret we are here 
talking about this free trade agreement when in fact we should be 
talking about the center, the bull's-eye of the target dealing with 
trade that is causing this hemorrhage of red ink and the loss of 
American jobs day after day after day.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. DAYTON. Mr. President, I ask unanimous consent I may speak for up 
to 10 minutes.
  The PRESIDING OFFICER. The Senator has that privilege.
  The Senator from Minnesota is recognized.

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