[Congressional Record (Bound Edition), Volume 151 (2005), Part 6]
[House]
[Pages 8631-8637]
[From the U.S. Government Publishing Office, www.gpo.gov]




                 CAFTA, LIKE NAFTA, IS BAD TRADE POLICY

  The SPEAKER pro tempore (Mr. Inglis of South Carolina). Under the 
Speaker's announced policy of January 4, 2005, the gentleman from Maine 
(Mr. Michaud) is recognized for 60 minutes as the designee of the 
minority leader.
  Mr. MICHAUD. Mr. Speaker, first I want to thank my good friends, the 
gentleman from Ohio (Mr. Brown) and the gentleman from New Jersey (Mr. 
Pallone), for allowing me to conduct this Special Order regarding CAFTA 
this evening. They have been remarkable advocates of issues affecting 
working families, and they have my gratitude and admiration.
  Mr. Speaker, there are several Members who want to come down to speak 
on this important issue, so I will at this time yield to my good 
friend, good colleague and cofounder of the House Labor and Working 
Family Caucus, the gentlewoman from California (Ms. Linda T. Sanchez).
  Ms. LINDA T. SANCHEZ of California. Mr. Speaker, this evening I rise 
in opposition to the Central American Free Trade Agreement. I am glad 
to see that there are other Members fighting against this deeply flawed 
trade agreement.
  When a trade agreement is so terrible that the Costa Rican president 
says he thinks it will hurt hard-working people and that their 
parliament is reluctant to even approve it, you know that it is a bad 
deal. When a trade agreement is so terrible that the majority will not 
even bring it to the floor of the House for a vote until a year after 
signing, you know it is a bad deal. When a trade agreement is so 
terrible that the Labor Department cannot even comment, they could not 
even mount an effective counter-argument about CAFTA's awful labor 
provisions, well, then you know it is a bad deal.
  If Costa Rica cannot justify it, if the majority has no confidence in 
it, and if the U.S. Labor Department cannot even defend it, then it 
needs to be scrapped. There is not one single reason to support an 
agreement with this many problems in it.
  I would like to talk about a little comparison between CAFTA and 
NAFTA, because NAFTA was supposed to be this great free trade agreement 
with our partners to the south, Mexico; and, boy, did we really get the 
wool pulled over our eyes. With CAFTA, we have a chance to learn from 
the mistakes of NAFTA and not allow that to happen again.
  They told us that NAFTA would bring jobs, but we lost jobs. They 
promised that our trade would improve, but it has gotten worse with the 
steadily rising trade deficit. And they told us that it would elevate 
the middle class in Mexico. Well, guess what? I have been there, and it 
has not.
  When I visited Mexico, I went to a small town in the state of 
Michoacan, where 60 percent of the men have left the town because there 
is no work. These men used to be soybean farmers, but their farms have 
been wiped out since NAFTA. Were these not the people that NAFTA was 
supposed to help? Instead, they got nothing, and their way of life has 
been decimated forever. CAFTA will have the same effect.
  The gentleman from Arizona (Mr. Kolbe) has said that CAFTA will 
reduce illegal immigration. Well, guess what? He said the exact same 
thing about NAFTA. In fact, history has taught us the exact opposite. 
NAFTA enabled cheap U.S. imports, which pushed 1.3 million Mexican 
campesinos off the land. It is reasonable to think that some of them 
may long have since crossed the border into the U.S. seeking economic 
opportunity.
  Central America is even more dependent on agriculture than Mexico is, 
so the impact on illegal immigration could be even worse. We do not 
want another NAFTA debacle. We do not want an agreement that hurts 
hard-working people in the U.S. and other countries.
  The word needs to get out that CAFTA is a rotten deal for Central 
American and American workers. This agreement helps no one but big 
business, which makes sense, since this administration gives them a 
prime seat at the negotiating table. This is simply an expansion of 
NAFTA, which broke all the golden promises that it made to the American 
people.
  CAFTA should be more appropriately renamed The American Jobs For Sale 
Agreement, because that is what it does. I say to my colleagues, do not 
be fooled twice. For those of you who were not here then, like me, do 
not even allow yourself to be fooled once. I invite you to join the 
growing list of opposition to CAFTA.
  Mr. MICHAUD. Mr. Speaker, now I would like to yield to the good 
gentleman from Ohio (Mr. Kucinich), a gentleman who has fought for the 
environment and who has fought for working-family issues.

                              {time}  1900

  Mr. KUCINICH. Mr. Speaker, I thank the gentleman from Maine (Mr. 
Michaud) for yielding, and thank him for his dedication to the workers 
of the State of Maine and to workers all over this country. All of 
America appreciates the leadership that you have taken on this issue. I 
am proud to join you at this moment.
  I remember years ago hearing Ross Perot talk about the sucking sound 
that would be heard once NAFTA passed. We were warned that we would be 
losing millions of jobs. Well, all of these prophecies have come true. 
We now seem to have learned nothing, because we have a new trade 
agreement that is being delivered to this Congress that promises to do 
exactly the same thing that NAFTA has done to our country.
  And that is the so-called negotiated Dominican Republic-Central 
American Free Trade Agreement, or DR-CAFTA for short. This legislation, 
which I will refer to here as CAFTA, will be harmful to all of the 
people of the signed nations. CAFTA will benefit a few and hurt the 
many.
  Governments will have little or no control over the investment of 
foreign companies. As a matter of fact, the power of legislatures is 
effectively nullified once these trade agreements are passed. National 
development needs and the rights of citizens and local governments will 
come secondary to the rights of foreign investors.
  Moreover, investors will not have to comply with international labor 
organization standards, workers rights will be undermined, especially 
for women workers, for farmers, and Maquila workers. The labor rights 
abuses that are currently prevalent throughout the CAFTA countries will 
run rampant under this new legislation's weak labor provisions.
  Countries will enjoy greater tariff benefits for goods made by 
workers whose rights have been denied. Family farms in Central America 
and the United States will fall victim to

[[Page 8632]]

CAFTA, which will threaten locally-grown produce and undermine food 
security. Basic public goods and services, such as education, health 
care and water will become privatized as governments lose the 
flexibility to subsidize these services.
  Think about this. Privatization of education, privatization of health 
care. We have a private health care system, which is wrecking this 
country's ability to be able to meet the needs of its people. We are 
going to cause it to proliferate across Central America. The attempt to 
privatize water constitutes a challenge to human dignity. We are going 
to help facilitate the privatization of water with this legislation.
  Expensive brand name drugs will have expanded patents, and 
inexpensive generic medicines will have greater restrictions. Poor 
people will not have access to lifesaving pharmaceuticals, because what 
are these trade agreements about? They are about lifting of corporate 
rights and dashing the rights of the common people.
  The rules of trade, as first developed in NAFTA and now expanded in 
CAFTA, will increase the suffering of people in all signed countries. 
When CAFTA comes before Congress for a vote, I will urge my colleagues 
to oppose this unfair agreement. Trade between nations does not and 
should not have to lead to such negative consequences.
  Trade should lift up the human condition, not degrade it. Trade 
should celebrate workers rights, not destroy those rights. Trade should 
take into account environmental quality principles and appreciate the 
quality of our air and our water. We have new goals to set in this 
country with respect to trade agreements; workers rights, human rights, 
environmental quality principles must be included in all trade 
agreements. We have to challenge the prevailing consensus which 
delivered NAFTA to this Congress.
  We have to challenge the prevailing consensus which brought the World 
Trade Organization into being without any respect for the rights of 
national legislative bodies or for the people that we represent.
  So I want to thank the gentleman from Maine (Mr. Michaud) for leading 
the way on this issue. I am proud to join with you, and I look forward 
to continuing to work with you as we take a stand here on behalf of 
workers not just in this country, but all over the world.
  Mr. MICHAUD. Mr. Speaker, I would like to thank the gentleman from 
Ohio (Mr. Kucinich) for his leadership on this issue and look forward 
to working with him on this issue.
  Mr. Speaker, as a co-founder of the House Labor and Working Families 
Caucus, I am privileged to be here with my colleagues to discuss the 
devastating impact that Central America Free Trade Agreement will have 
on our economy here in the United States. This so-called free trade 
deal promises to cripple our industries, both in my home State of Maine 
and throughout the Nation. Before coming to Congress I worked over 29 
years at Great Northern Paper Company in East Millinocket. I have seen 
first-hand the devastation of the so-called free trade on Maine's 
economy, and I know what it means to working families.
  I could see in 1994, with NAFTA, which has been nothing but a 
disaster, costing people of the State of Maine over 24,000 
manufacturing jobs. In some parts of my Congressional district, 
unemployment has reached over 30 percent in different labor market 
areas over the last 2 years. Over 30 percent.
  And often when jobs go, so do people, taking the heart and soul of 
what once was prosperous communities with them. Today, the threat of 
job loss is not for blue collar workers alone. Even high-tech companies 
like IBM, Boeing, General Electric are taking their computer and 
engineering jobs to China, India, and the Far East, while leaving 
behind a long trail of pink slips.
  As a Member of Congress, I have had the opportunity to meet with 
several prominent free traders, like the trade Ambassador, Bob 
Zoellick. They like to talk about how free trade is good for everyone 
and creates jobs. But when I share the story of what happened and is 
happening in the State of Maine, of the many jobs lost and the lives 
that are devastated by those jobs lost, they admit to me, well, there 
will be winners and there will be losers, and that is just the price of 
doing business.
  This is not a game. These are real people who lose jobs every day. 
They are the ones who lose the jobs who can no longer afford to send 
their kids to college and who can no longer afford even basic health 
care for their families.
  Now, do not get me wrong. I am glad that there are a lot of Federal 
program benefits available to help dislocated workers. And I have 
devoted myself in advocating and fighting for Federal resources to help 
laid off workers. But, working people do not want a program and handout 
created by Congress to clean up the mess from these so-called free 
trade agreements. They just want their jobs. Each and every Mainer, 
each and every American worker, should be asking, can we afford to lose 
another job? Can we afford the Central American and Dominican Republic 
Free Trade Agreements?
  The job loss numbers show that we simply cannot afford that. From 
1998 to 2004 alone, 11,724 workers in Maine were certified for trade-
related adjustment assistance. Companies like C.F. Hathaway Company in 
Waterville, Gerber Childrenswear in Fort Kent, were among the hardest 
hit by NAFTA.
  The company that I worked for for over 29 years, Great Northern Paper 
Company, announced only 2 days after I was sworn in as a Member of 
Congress in 2003, they were filing bankruptcy. My coworkers, my family, 
my community was devastated. And the culprit was the so-called free 
trade agreements.
  These agreements have created nothing but stagnant economies and 
rising inequality. And CAFTA is based on the same NAFTA model. You will 
hear from me and other Members this evening about the specifics of its 
devastating effects tonight.
  This agreement will serve to push ahead the corporate globalization 
trend that has caused a race to the bottom in labor and environmental 
standards. American companies are often forced to compete with foreign 
corporations who are not held to the same labor or environmental 
standards. This creates an unfair balance.
  I have long advocated for fair trade, not just free trade. The fight 
ahead is to ensure that these trade agreements are fair for our 
workers, our businesses, our States. We must ensure that all trade 
agreements respect workers rights to the environment, health and human 
rights. And I know Members on both sides of the aisle are committed to 
stopping this flawed agreement that we currently will be voting on in 
the months ahead.
  Mr. Speaker, I yield to the gentleman from Massachusetts (Mr. Lynch) 
who is also a co-founder of the House Labor and Working Family Caucus.
  Mr. LYNCH. Mr. Speaker, I thank the gentleman from Maine (Mr. 
Michaud) for yielding. I thank the gentleman for his leadership on this 
very important issue.
  I am told that the clinical definition of insanity is the tenancy to 
do the same thing over and over again and expect different results. And 
this proposed Central American Free Trade Agreement is another example 
of the United States continuing to enter into these so-called free 
trade agreements with countries and regions of the world that give 
carte blanche to corporate America to send our American jobs to other 
parts of the globe.
  The one thing that I have been struck with, after coming here to 
Congress is, how many people in Washington, D.C. talk about job loss 
like they are talking about the weather, or a natural disaster like an 
earthquake. They talk about job loss like it is something that happens 
beyond the control of Congress, when, in fact, much of the job loss 
that we see in America today is the result of poor trade policy, and 
lopsided trade agreements in which we have negotiated away our jobs and 
failed to protect the American worker.
  Now, given the experience that we have had thus far, with our 
subsequent trade agreements with NAFTA and others, you would think that 
with our

[[Page 8633]]

experience of job loss that we have had there that when you find 
yourself in a hole that you might stop digging. But, that is not the 
case, because here we are facing another agreement that will definitely 
ship jobs overseas.
  Not only does CAFTA, the Central Free American Trade Agreement shift 
jobs overseas, but it creates and perpetuates a race to the bottom 
mentality, and further burdens our current trade deficit.
  In 2004, the U.S. trade deficit soared to a record $617 billion, a 25 
percent increase over 2003's record deficit, and more than 5 percent of 
our Nation's GDP.
  The Bush Administration and the corporations who profit when America 
sends their jobs overseas argue that this trade deal will benefit U.S. 
businesses and workers while helping member countries prosper. But, the 
fact is from our own experience with NAFTA, that that is very far from 
the truth.
  And tonight I would like to focus my remarks on exposing the real 
impact of the Central American Free Trade Agreement, and what it will 
do to American workers, and also to Central American workers as well, 
and our burgeoning trade deficit.
  Let us first take a quick look at the North American Free Trade 
Agreement, NAFTA, and its impact on our workers and our neighbor's 
workers and the trade deficit. Those who advocated Congress's passage 
of the Central American Free Trade Agreement often point to NAFTA as a 
success story in their arguments. I think it is important to take a 
good hard look, both from economic and policy implications of that 
model as we consider the Central American Free Trade Agreement.
  During the NAFTA debate, the proponents then argued that the measure 
would, if adopted, would lead to the creation of 170,000 new jobs in 
the United States. Instead, our country has lost 3 million 
manufacturing jobs since the adoption of NAFTA, in 1994.
  And 900,000 of those jobs lost can be directly tied to NAFTA. These 
jobs were good, high-paying jobs that included benefits. They were 
manufacturing jobs that have been replaced by service sector jobs that 
typically pay 25 to 75 percent less, and with few or no benefits. And 
while some proponents expect the Central American Free Trade Agreement 
to turn out differently than did NAFTA, it is important to remember 
that the six Central American countries possess an even larger pool of 
cheap labor than did Mexico, and what is more, since the implementation 
of NAFTA, the trade deficit with Mexico has surged from $9 billion to 
$110 billion last year.

                              {time}  1915

  So the deficit with Mexico, the trade imbalance with Mexico, has gone 
from $9 billion before NAFTA to $110 billion last year.
  Additionally, NAFTA did nothing to improve the lives of average 
Americans; and my colleague, the gentlewoman from California (Ms. Linda 
T. Sanchez), has talked about that briefly prior to my remarks. This 
failure to improve the quality of life for these workers has generated 
mass opposition and widespread distrust on our southern border.
  Amnesty International continues to report that extra judicial 
tortures and murders continue. This is not democracy that we are 
exporting to Mexico, and this is certainly not what the Mexican workers 
signed up for.
  Meanwhile, here at home this comparative advantage of subsistent 
wages and a complete lack of labor and environmental protections have 
led to the shift of low-wage, labor-intensive jobs from the U.S. to 
Mexico.
  Pursuing unrestricted free trade agreements with lesser developed 
countries along the NAFTA model will continue to accelerate this race 
to the bottom where jobs go to countries where the weakest labor 
standards and environmental protections exist. That is bad for American 
workers, and it is exploitive of foreign workers and foreign 
populations.
  We hear this administration talk about exporting democracy. You hear 
that often in the last weeks and months with regard to the situation in 
Iraq. Well, this is probably the most powerful opportunity we have to 
export democracy. You do not export democracy through the Defense 
Department or the Defense Secretary. You do it through trade 
agreements, through the Department of Commerce and favorable agreements 
with our friends and neighbors across the globe.
  Are we liberating Iraq so we can move American jobs over there and 
exploit them for wages of about 10 cents an hour? I certainly hope not. 
And I hope that is not what our men and women are fighting today in 
Iraq for. We do not express liberation in terms of working 10 to 12 
hours a day for 10 cents an hour, but that is what we are proposing for 
Central America.
  As for the expected boon to the Mexican economy, we have seen none of 
these gains, and instead we have seen NAFTA's detrimental impact on the 
Mexican workers. Average real wages in Mexican manufacturing are lower 
than they were 10 years ago, if you can believe that.
  As companies look to cut costs further, we see factories now being 
shifted from Mexico to China and India and Indonesia, always in search 
of the lowest cost best exemplified by the most exploited worker.
  Now on NAFTA's coattails rides CAFTA, the Central American Free Trade 
Agreement. The American people are expected to buy the same bill of 
goods at even higher costs. Proponents of CAFTA, the Central American 
Free Trade Agreement, insist that the economic gains from this trade 
agreement for American workers in business will be a windfall. But 
remember what we are trading for in this case.
  The combined purchasing power of all six Central American countries 
that are affected by this agreement have the identical purchasing power 
of New Haven, Connecticut. If you combine all of the purchasing power 
in these nations under the Central American agreement, their entire 
purchasing power is equal to the city of New Haven, Connecticut. That 
is what we are talking about here. This is what we are going for.
  What they do have is millions of low-wage workers, and that, I think, 
that is the real object of this agreement. The U.S. economy has $10 
trillion in gross domestic product in 2002. It is 170 times larger than 
the economies of those six nations at about $62 billion combined. And 
quite simply, the Central American Free Trade Agreement is not about 
robust markets for export of American goods. It is about access to 
cheap labor. It is about shipping American jobs overseas so they can 
sell stuff back to the people who have not been laid off yet.
  Like the gentleman from Maine (Mr. Michaud), who spoke earlier and 
who is leading this debate, I worked in my previous life as an iron 
worker for about 20 years. I worked at the General Motors facility that 
used to be in Framingham, Massachusetts. It closed shortly before GM 
made decisions to relocate plants to Mexico. I also worked at the 
General Dynamics shipyard in Quincy, Massachusetts, as a welder prior 
to that plant closing because of foreign competition and unfair trade 
practices. I also worked in the steel mills in Gary, Indiana, and East 
Chicago, Indiana, for U.S. Steel and Inland Steel. And I understand 
those plants are now victims of foreign outsourcing as well.
  So I know a little bit about the impact of off-shoring and imbalance 
in our trade agreements. I know what it means to communities and 
families when those jobs disappear.
  Over the last 20 years, our economy has hemorrhaged jobs in the 
manufacturing sector. Since 2001, 3.3 million jobs were lost. Yet these 
workers were told not to worry. They were told they would be retrained 
for another job; they needed more education in our new high-tech 
economy. How can they not worry when unemployment is at a 10-year high 
at 5.4 percent, with 80 million Americans out of a job? Personal 
bankruptcies in my State rose 17 percent between the years 2000 and 
2003.
  How can we tell these folks not to worry when the administration is 
signing even more trade agreements to ship away their jobs?
  The never-ending pursuit of the lowest-cost labor is spreading, and 
CAFTA

[[Page 8634]]

will only just cement this cycle. We need to break the cycle now.
  There is a pretty good book that is out there right now. It is called 
``The World is Flat'' by Tom Friedman. I suggest my colleagues read it. 
Mr. Friedman writes about the speed at which our jobs are disappearing 
and the volume of wealth being taken from regular, average, working-
class Americans.
  The biggest share of U.S. exports to the six CAFTA nations is not the 
traditional job-creation kind. These are products that are not consumed 
in the purchasing nations. What happens is that, for example, textiles 
here in the United States are shipped to Central America where they are 
fashioned and furnished into clothing which is then shipped back to the 
United States and which our people, those that still have jobs, are 
able to purchase. These are called exports, but in fact it is just a 
cycle of us exporting raw materials and getting back finished product 
which was once supplied by U.S.-based factories.
  The biggest difference here is that American workers are cut out of 
the picture. More than 30 percent of U.S. exports to the six CAFTA 
countries consist of these roundtrip exports that cause American jobs 
to be outsourced to these countries with lower labor standards.
  This trade agreement is bad not only for the American workers but for 
those in Central America as well.
  Yesterday, The Wall Street Journal reported that Costa Rica's 
resistance to the Central American Free Trade Agreement was based on 
the fact that the agreement itself would be harmful to poor and 
struggling workers in Costa Rica. Costa Rican President Abel Pacheco 
has said that he believes that the Central American Free Trade 
Agreement is bad overall for his country, and he has delayed a vote on 
that until February of next year.
  The reluctance of Costa Rica has surprised the White House and 
undermines one of its chief arguments for the pact itself, that CAFTA 
represents an urgently sought benefit for the impoverished region.
  Costa Rica's ambivalence and long delay before it votes on this trade 
agreement indicates its reluctance to endorse this supposed free trade 
agreement. Protests in Guatemala numbering in the thousands and tens of 
thousands have also been an indicator that many Central Americans do 
not see the Central American Free Trade Agreement as a benefit for 
their nation and for their livelihood.
  As you may know, May Day marches in Guatemala, Costa Rica, Honduras, 
and El Salvador have featured a myriad of anti-CAFTA signs and slogans. 
As President Pacheco rightly emphasizes, more trade does not 
necessarily mean less poverty.
  Proponents of the Central America Free Trade Agreement have 
conveniently ignored this fundamental fact: the effect of trade on 
incomes in Central America and how to alleviate the adverse 
consequences of trade liberalization on the poor.
  This Washington consensus that opening up markets will help alleviate 
poverty is just plain wrong. One reason is that the labor in developing 
countries is not nearly as mobile as trade theorists assume. In Central 
America, for trade to benefit unskilled workers, farm laborers, for 
example, they need to be able to move out of jobs that will face 
competition from efficient U.S. producers thanks to CAFTA, such as 
drilling, corn and into exporting industries that are likely to be 
selling products to the American market.
  Unfortunately, there is no job mobility in Central America, and these 
workers are stuck, and there will be no place for them to turn.
  Trade reform has also been linked to increased income disparity as 
skilled workers have captured more benefits from globalization than 
their unskilled counterparts. Simply said, CAFTA will make the rich 
richer in Central America and the poor poorer.
  Take Mexico as a perfect example. Since NAFTA was put in place, 
Mexico has lost 1.9 million jobs and most Mexicans' real wages have 
fallen. The United States with its unrivaled economic clout is in a 
unique position to empower workers around the world while promoting 
economic prosperity here at home.
  Unfortunately, the CAFTA agreement does the exact opposite. If we 
pass CAFTA, the Central American Free Trade Agreement, we are rewarding 
Central American countries for their poor labor rights records. We are 
harming farmers in Central America by opening up their tiny markets to 
our own cycle of exploitation.
  Recently released reports prepared by the Human Rights Watch and 
National Labor Committees provide overwhelming evidence that CAFTA does 
almost nothing to protect workers. These Labor Department reports have 
been suppressed because they demonstrate the Central American workers' 
rights restrictions.
  Thanks to my colleague, the gentleman from Michigan (Mr. Levin), the 
Department of Labor has just recently released these reports.
  In these reports, DOL found that the right to collective bargaining 
and nondiscrimination in the workplace were nonexistent. In Nicaragua, 
for example, employees can be fired for trying to organize a union, 
provided they are paid twice the normal severance amount. It is bad 
enough that these countries do not meet international labor standards, 
but what is worse is that CAFTA is silent on the need to improve any 
working conditions in Central American countries.
  Instead of trade policy that is beneficial to American businesses and 
workers as well as our trade partners, we have a flawed trade policy 
that hurts all parties. Free trade should not mean free labor. 
Likewise, free trade does not, as evidenced in CAFTA, mean fair trade.
  The Central American Free Trade Agreement outlines only one labor and 
environmental provision, and that is that countries enforce their own 
labor and environmental laws regardless of how weak those might be.
  The labor laws of the six CAFTA nations are a joke. They have been 
repeatedly criticized by the U.N.'s international labor organization 
and our own State Department. Violations of core labor laws cannot be 
taken to dispute resolution. And the commitment to enforce domestic 
labor laws, which are pathetic to begin with, is subject to remedies 
that are weaker than those available for commercial disputes.
  In a purely technical sense, this violates the negotiating principal 
of the Trade Promotion Authority Act that equivalent remedies exist for 
all parts of an agreement.
  Another negative effect of the Central American Free Trade Agreement 
for the Central American laborer will be felt in the agricultural 
sectors of these countries. Simply put, CAFTA will destroy the Central 
American small farms. And that is why we see these massive protests.
  The final negative impact of the Central American Free Trade 
Agreement I would like to discuss is what it will do to our trade 
deficit. The U.S. trade deficit which indicates that our imports exceed 
exports, has increased by $200 billion per year under this 
administration. In 2003, the trade deficit reached $497 billion, and 
U.S. foreign debt has increased dramatically from $1.6 trillion in 2000 
to $2.7 trillion at the end of 2003.
  Over the past 4 years, a 10-year budget surplus of $5.6 trillion left 
by President Clinton has become a 10-year deficit of $3 trillion. And 
now we are working on another plan here to export more American jobs to 
countries overseas.
  Secretary of State Condoleezza Rice said yesterday that the Central 
American Free Trade Agreement will help the U.S. compete more 
successfully in a dynamic global economy, but I cannot understand how.
  How will these nations be able to help the U.S. come out of its 
current trade deficit? CAFTA nations are not a robust market for 
exports. The average wage of a Nicaraguan worker is 50 cents an hour. 
How much in terms of U.S. exports can a Nicaraguan worker afford? They 
cannot afford Folgers coffee or Tide laundry detergent. They cannot 
afford cuts of U.S. prime beef at $13 a pound.

[[Page 8635]]

  As I noted before, the six Central American nations of Nicaragua, El 
Salvador, Honduras, Costa Rica, Guatemala, and the Dominican Republic 
have the combined purchasing power of New Haven, Connecticut.

                              {time}  1930

  They will not add much to the U.S. economy. They will only take 
American jobs away, and make no mistake, that is what this agreement is 
all about.
  If companies were serious about creating robust markets for ``Made in 
America'' goods, they would be working to improve the wages and working 
conditions of these workers. It is only when these laborers can earn 
enough to buy U.S. goods that this kind of trade agreement will be 
successful for all the parties and all the countries involved.
  If you consider that a typical Central American consumer earns only a 
small fraction of an average American worker's wages, it becomes clear 
that CAFTA's true goal is not to the increase U.S. exports. About half 
the workers in this region work for less than $2 a day, placing them 
below the global poverty level.
  All this agreement does is exploit lowest-wage labor to the detriment 
of the American worker. The Central American Free Trade Agreement does 
not benefit America. Let us be honest. CAFTA benefits companies that 
leave the U.S. or outsource their jobs to Central America, plain and 
simple. These companies will not only exploit cheap labor with minimal 
protections, but can import their products back to the U.S. under 
favorable terms.
  There are several simple steps we can take to mitigate the effects 
that existing trade agreements have on our workers and future trade 
agreements have on global labor movements.
  First, instead of subsidizing large corporations that outsource 
American jobs, with tax breaks for foreign production and government 
contracts for companies that ship jobs overseas, we should create 
financial incentives for companies to keep jobs here in the United 
States. It sounds simple. It could be revolutionary in this country.
  Secondly, we must act now to deal with our increasing national 
deficit. The U.S. trade deficit has jumped from $70 billion in 1993 to 
$618 billion in 2004. There should be no new trade agreements until we 
can negotiate fair terms for our own workers.
  Finally, in existing trade agreements, we need to demand and strictly 
enforce all provisions protecting labor, human rights and environmental 
standards. All future trade agreements should include these basic 
rights and all countries should be held accountable to internationally 
recognized standards.
  We need a trade policy that supports domestic manufacturers, while 
promoting labor standards which are similar to our own overseas. The 
Central American Free Trade Agreement fails to do either.
  In closing, I must say that there is a stark difference between our 
policy in the United States with respect to Iraq and the policy that is 
being suggested here in this Central American Free Trade Agreement. I 
was in Iraq several weeks ago, and there was much talk from the White 
House and from my colleagues in government about the need to spread 
democracy, to export democracy. I have heard of that a lot in the 
recent months and weeks, the talk of empowering people and raising 
their standards of living and liberating the people of Iraq.
  Then I see this Central American Free Trade Agreement and what it 
does. It endorses oppression. It exploits workers. It turns a blind eye 
to repressive regimes. It reinforces the complete lack of hope that 
these people have, and it does not lift a finger to help them.
  Once Iraq is stabilized, is this the way we will treat their workers? 
Is this why we pumped $200 billion into that country in the last few 
years? Is that what liberation means for the Iraqi worker? Is that what 
our sons and daughters are fighting for? Is that the policy that we are 
going to adopt for Iraq once they are able to stand up on their own 
feet and control their own country?
  We should have the courage and the honesty to tell our men and women 
in uniform that that is what they are fighting for if that is what we 
are proposing.
  Mr. MICHAUD. Mr. Speaker, I would like to thank the gentleman from 
Massachusetts for his comments tonight and I really appreciate his 
remarks.
  Now, Mr. Speaker, I would like to yield to the gentleman from Maine 
(Mr. Allen), a gentleman who I have known for some time, a gentleman 
who is deeply concerned about the trade agreements and what effect it 
has on our State, of the State of Maine, and I am very appreciative of 
the work that he has done for the people of the State of Maine, 
particularly coming into the 2nd District, which is my district, to see 
the effect of some of these unfair trade agreements and the job loses 
that we have.
  So I now yield to the gentleman from Maine (Mr. Allen).
  Mr. ALLEN. Mr. Speaker, I thank the gentleman from Maine (Mr. 
Michaud) for yielding to me, my friend and colleague.
  I stand here as a person who believes fundamentally that the task we 
have here in the Congress is to create a stronger and more competitive 
America, number 1; number 2, to encourage a broader prosperity among 
citizens among all walks of life in the country; and 3, to create a 
better future for ourselves and our children. It really comes down to 
being pretty much that simple.
  I also stand here as someone who, in the past, has voted for some 
trade agreements and voted against others, and I wanted to speak 
tonight on why I believe CAFTA is a bad deal for the American people 
and a very bad deal for Central America as well.
  Our history has shown that the free enterprise system, and free 
markets in particular, are essential in order to have an efficient 
allocation of resources and to encourage economic growth, but our 
history has also taught us that free markets do not, by themselves, 
assure that the benefits of a free economy will be distributed fairly 
among the population.
  In fact, in many places around the world, it is the case that wealth 
and power are concentrated, and in America, in the last four years, 
wealth and power have become concentrated at an alarming rate.
  We are doing anything in this country but encouraging broader 
prosperity. We, in fact, are doing tax cuts for the wealthiest people 
in the country and making it harder every day for the middle class to 
get by, to pay for their mortgage, to get a good education, to pay for 
their health care, and to otherwise create for themselves and their 
children the kind of life that we thought America promised to everyone.
  So, some of my criticisms of CAFTA relate to the policies of our 
Republican colleagues in the Congress and to the Bush administration 
because when we listen to people on both sides of the aisle, both sides 
of this issue, the proponents of CAFTA say the agreement will create 
jobs in the United States. The opponents say it will cost jobs. I 
believe that both are right. It will create some jobs in the United 
States, and we will lose many, many other jobs, in all probability many 
more.
  So, if both are true, the question is, what are we doing as a country 
to take care of those people who lose their jobs as a result of CAFTA? 
The answer from this administration is nothing. The answer from this 
Republican Congress is nothing, nothing at all.
  Because what we have done are tax cuts for the wealthiest people, 
major tax cuts in 2001, irresponsible tax cuts in 2003 that followed, 
and when we look around, look what the result is. Here it is.
  We have turned budget surpluses to deficits as far as the eye can 
see. The International Monetary Fund says that American budget deficits 
are threats to global economic stability. Our growth is sluggish, 
stocks are flat, wages are stagnant. When we look at General Motors, 
$1,500 of every automobile goes to health care, two-thirds of that to 
retirees who are not even making the vehicles. That is not true in 
Japan. It is not

[[Page 8636]]

true in Canada. This is the year when Ontario will go past Michigan in 
North America as the place where most automobiles are manufactured. The 
U.S. cannot compete in this kind of playing field because it is not 
level.
  So if we look at the Bush administration and the Republicans in 
Congress, what are they doing for people who get laid off as a result 
of CAFTA, as they surely will be? Well, the budget that was just passed 
by Congress cuts funds for job training, cuts funds for vocational 
education, cuts funds for adult education, community development, zeros 
out the section 7(a) loan program for the Small Business 
Administration.
  So if you lose a job because of our trade policy, and you want to 
start your own business, the administration's answer is forget it, we 
want to take away the ability of the Small Business Administration to 
help you.
  If we are going to keep America competitive in the 21st century, we 
have got to invest in emerging technologies to give us a competitive 
advantage. Green technologies that make automobiles, power plants and 
businesses more efficient and clean would be one key area.
  Our economic strength basically depends on our investment in people, 
both people who are trying to get an education for the first time, 
people who are trying to get an education or job training to recover 
from a job loss, in industries that are cutting edge technologies for 
the future. This is not what we are doing here. So we do not have the 
comprehensive national plan to deal with job loss. The administration 
and the Republican Congress have just watched jobs fleeing overseas, 
and the response has been, ho hum, well, that is just the way the 
market operates.
  Now, let us turn from that and look at the trade agreements 
themselves.
  In CAFTA, because these are poor countries, we have got to have 
strong labor provisions. The labor in Central American countries have 
much weaker labor laws than we do. So a trade deal must include 
provisions to prevent companies from taking advantage of that gap by 
exploiting the lack of labor protections for workers in Central 
America. CAFTA fails this test hands down.
  The agreement requires these countries to enforce their own laws 
rather than enforce internationally recognized worker rights. 
Yesterday, the gentleman from Michigan (Mr. Levin) released reports 
commissioned by the Department of Labor, which confirmed that laws in 
Central America do not adequately protect the right to organize in 
accordance with international labor standards.
  The lack of enforceable standards is bad for workers in CAFTA 
countries trying to lift themselves out of poverty makes it very 
difficult to create a middle class in those countries, and it is bad 
for American workers and businesses who want to expand international 
markets without resorting to the exploitation of workers overseas.
  CAFTA also fails the balance test on the environment. It is not 
balanced. It does not work. It creates incentives for American 
companies to move production to Central American countries where the 
environmental protections are weak and lack the proper enforceable 
mechanisms, and CAFTA does nothing to help.
  When you look at those areas, labor and environmental issues, they 
are examples of where this agreement, CAFTA, tilts too far toward 
unmanaged, free markets, but there is one area where CAFTA tilts too 
heavily against free markets and against competition and that area is 
pharmaceuticals, no surprise.
  The CAFTA agreement continues a dangerous trend of using trade policy 
to extend intellectual property protections that stifle generic drug 
competition and erect market barriers to affordable medicines. These 
provisions are bad for public health.
  Generic drug competition is proven to lower prices and expand access. 
Several years ago when generic AIDS medications were introduced, it 
drove the annual cost of treatment in developing countries from $10,000 
a year to $300 a year, and no one can argue that that was not an 
important development. But CAFTA would delay generic entry for 
prescription drugs by forcing trading partners of the CAFTA countries 
to accept 5- to 10-years extension of what is called data exclusivity 
during which generic makers are denied access to patent holders' 
clinical data that could expedite regulatory approval of generic 
versions of drugs.
  In other words, CAFTA gives a huge break to the brand name 
pharmaceutical industry at the expense of the generic pharmaceutical 
industry but, more importantly, the public health of people in Central 
America.
  A year ago, the Guatemalan legislature changed its law to promote the 
availability of generic drugs in the Guatemalan market, and using CAFTA 
as a weapon, the United States has forced the Guatemalan legislature to 
repeal that legislation. In other words, we have done something for the 
pharmaceutical industry by forcing Guatemala to change its laws and for 
no benefit to anyone else in America.
  So the bottom line is CAFTA does not work for the Central American 
workers. CAFTA does not work for American workers or American 
businesses. It needs to be voted down, and I want to thank the 
gentleman from Maine for holding this Special Order tonight.
  Mr. MICHAUD. Mr. Speaker, I thank the gentleman from Maine (Mr. 
Allen). I do want to thank him especially for his leadership when we 
deal with prescription drugs. He has definitely been a leader in that 
area. I want to thank him very much.
  Mr. Speaker, now I yield to the gentleman from New York (Mr. 
Crowley), a good friend.

                              {time}  1945

  Mr. CROWLEY. Mr. Speaker, I thank the gentleman from Maine (Mr. 
Michaud) for holding this Special Order, and I thank my other ``Maine 
man,'' the gentleman from Maine (Mr. Allen). I like to call them my 
``Maine men,'' but they have been outstanding in their efforts to 
highlight what is wrong with this free trade bill. I just really want 
to thank, in particular, as I just said, the gentleman from Maine (Mr. 
Michaud) for organizing this Special Order this evening.
  I have been a strong supporter of trade, and as many of my colleagues 
know, I have been an outspoken leader on the Democratic side of the 
aisle during the past two trade agreements which passed with the 
support of a Democratic majority, those two trade agreements being the 
Australia Free Trade Agreement and the Moroccan Free Trade Agreement. 
And I happily helped pass those agreements here on the floor of the 
House of Representatives.
  As I have spoken about free trade agreements in the past, I have 
always been clear that I look at each free trade agreement on its 
individual merits. Since the USTR began negotiations in January of 
2003, I have closely followed the negotiations leading up to the 
signing of CAFTA in August of last year. In my experience, this has not 
been the norm for this administration. Usually, after negotiations have 
concluded, they make a very strong push for passage within an average 
of 55 days. It is now May 4. While the target date for a vote on the 
floor is said to be before Memorial Day recess, I seriously doubt the 
Republican leadership will bring up this bill when they know they do 
not have the votes to pass it.
  Like many of my colleagues, both Democrats and Republicans in the 
House, I remain concerned about many of the provisions contained in 
this agreement. I hope now that we have Mr. Portman as our new UST 
representative, he will take into account the strong views my 
colleagues have on free and fair trade.
  This agreement weakens workers' rights and environmental standards in 
six countries, but it also does not take into account the rising trade 
imbalance that our country faces globally. Instead of pushing free 
trade agreements down the throat of Congress, the President should 
start to work on lowering the enormous deficits that he has created for 
our country.
  Our country needs to create the next sector of our economy so we can 
finally

[[Page 8637]]

stop the joblessness and work towards job creation. Our workers are not 
only being killed by high prices at the gas pump but also in our 
general living expenses. Wages continue to go down as the cost of 
living continues to skyrocket.
  In my colleague's own home State of Maine, paper mills have closed 
and shoe and apparel manufacturing is all but eliminated because of 
free trade. While it is good to say that the next generation of jobs 
will be of higher value and will raise the wages of employees of the 
future, I am sympathetic to a lot of my friends in rural America who 
say they just do not see it.
  My wife, Casey's, family is from Montana, and they do not see it 
either. They do not see it when the administration continues to fight 
country-of-origin labeling for meats. The administration allows 
Canadian soft wood lumber to flood our market and other anti-worker 
proposals of this administration. It is time for this administration to 
focus on how they can end the middle-class squeeze and bring prosperity 
back to our working class.
  While I have the floor, I would like to discuss an article that 
appeared in today's Congress Daily, which I read this morning. In the 
article, one source said that Democrats, specifically my fellow new 
Democrats, and I quote, ``are sewing the seeds of our own 
irrelevance.'' I take offense to that comment. We clearly see that we 
are relevant. We are very relevant. If we were not, do you think the 
Republican leadership would still be waiting to bring this agreement to 
the floor?
  This late push by the administration to try to win over pro-trade 
Democrats has lacked any real compromise. Unfortunately, I cannot be 
there for the CAFTA agreement in its current form, but my sincere hope 
is it can be renegotiated to meet the requirements of free, fair and 
balanced trade; fair to the people of the Dominican Republic and 
Central America that raises their wages and their standard of living; 
but, more importantly, fair to the people of the United States who feel 
that they are competing in a world economy where the odds are just 
simply stacked up against them.
  Once again, Mr. Speaker, I want to thank my colleague, the gentleman 
from Maine (Mr. Michaud), for holding this Special Order this evening.
  Mr. MICHAUD. Mr. Speaker, I want to thank the gentleman from New 
York, and I really appreciate his efforts in this manner and look 
forward to working with the gentleman to make sure we do have fair 
trade agreements.
  In closing, Mr. Speaker, it does not take a trade expert to see the 
economic mismatch between the United States and the nations that make 
up the Central America Free Trade Agreement: Honduras, Costa Rica, 
Nicaragua, Guatemala, and El Salvador. The way CAFTA proponents talk, 
you would think that Central America is made up of the biggest 
economies in the Western Hemisphere. CAFTA nations are not only among 
the world's poorest countries; they are among the smallest economies as 
well.
  Think about this, as the gentleman from Massachusetts (Mr. Lynch) 
mentioned earlier: the combined purchasing power of CAFTA nations is 
almost identical to the purchasing power of New Haven, Connecticut. The 
U.S. economy, with $10 trillion of GDP in 2002, is 170 times larger 
than the economies of the CAFTA nations, at about $62 billion combined. 
So where are the economic opportunities for American industry and 
American workers?
  These kinds of questions are clearly giving people pause. Congress 
typically votes on trade agreements within 55 days after President Bush 
has signed a trade agreement, but May 28 will mark the 1-year 
anniversary of when the President signed CAFTA. Why the long holdup? 
Clearly, there is dissension in the ranks and people are wondering why 
we need to make this deal. And for good reason. CAFTA is a 
dysfunctional cousin of NAFTA, continuing a legacy of failing trade 
policies.
  Look at NAFTA's record, with 1 million U.S. manufacturing jobs lost. 
NAFTA did nothing for the Mexican workers as promised. They continue to 
earn just over $1 a day while living in poverty, not exactly an 
exploding market for the U.S. products either. And yet the United 
States continues to push for more of the same, more trade agreements 
that ship U.S. jobs overseas, more trade agreements that neglect 
environmental standards, more trade agreements that keep foreign 
workers in poverty.
  For U.S. workers, the only difference between CAFTA and NAFTA is the 
first letter. It adds up all the same: more lost jobs. CAFTA is not 
about a robust market for the export of American goods; it is about 
outsourcing and accessing cheap labor markets. Trade pacts like NAFTA 
and CAFTA enable companies to exploit cheap labor in other countries, 
then import their products back to the United States under unfavorable 
terms.
  CAFTA will do nothing to stop the bleeding of manufacturing jobs in 
the United States and even less to create strong Central American 
consumer markets for American goods. Throughout the developing world, 
workers do not share the wealth they create. Nike workers in Vietnam 
cannot afford the shoes that they make. Disney workers in Costa Rica 
cannot buy the toys for their children, Motorola workers in Malaysia 
are unable to purchase cell phones.
  Mr. Speaker, we have a historic opportunity before us to empower 
workers in developing countries. We have a historic opportunity before 
us to bolster our economy. When the world's poorest people can buy 
American products rather than just make them, then we will know that 
our trade policies are finally working.
  Mr. Speaker, there are reasons why not only environmental and labor 
groups but also business organizations such as the United States 
Business and Industry Council, a leading group representing American 
businesses, have taken a firm stance against this trade agreement. It 
is because it is unfair.
  I believe in free trade, but it has to be fair trade. We can no 
longer continue to allow jobs in the United States to be exported 
overseas when we have a need here in this country. As I stated earlier, 
in my own region in the State of Maine, the labor market area has risen 
over the last 2 years to, at certain times, over 30 percent. Over 30 
percent of people unemployed because of that market.
  So, Mr. Speaker, I hope my colleagues will join me in opposing the 
CAFTA trade agreement. It is unfair, unneeded, and hopefully it will 
not pass.

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