[Congressional Record (Bound Edition), Volume 155 (2009), Part 6]
[Senate]
[Pages 7176-7178]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       U.S. TRADE REPRESENTATIVE

  Mr. BROWN. Madam President, this Chamber will confirm in the coming 
days a new U.S. Trade Representative. Mayor Kirk's confirmation 
represents an opportunity for American trade policy to break from the 
false choice between free trade and fair trade.
  As our economy struggles with massive job losses, a shrinking middle 
class that we have seen during the entire Bush years, and a housing 
crisis brought on by wrong-headed policy, the housing crisis that 
undermines the pursuit of the American dream, our trade policy must be 
part of our response to the new realities of the global economy.
  Mayor Kirk inherits a position traditionally focused on status quo 
trade

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policy, and expanding that policy with more of the same status quo 
trade policy that gives protection to large business, protection to big 
oil, protection to big drug companies--and even with new rights and new 
privileges--a status quo trade policy that suppresses the standard of 
living for American workers, and at the same time hurts workers in 
China and India and Mexico; a status quo trade policy that does nothing 
to curb the cost of climate change or the degradation of the 
environment; and a status quo trade policy that has yielded an $800 
billion--more than $2 billion a day--trade deficit.
  For 8 years the Bush trade policies were wrong. They are wrong now. 
They should not continue this way in the future. Our trade deficit has 
reached annually, thanks to Bush trade policies and thanks to lax trade 
enforcement, a wrong-headed, unregulated, free-trade policy, which has 
allowed toys with lead paint, contaminated toothpaste and other 
products, and weakened the health and safety rules for our trading 
partners and our own communities.
  We want more trade but not like this. Bush trade policies have 
devastated communities in my State, in towns such as Tiffin, 
Chillicothe, and Lorain, and done damage to your State in places such 
as Flint and Detroit and Hamtramck. Job loss does not just affect the 
worker or the worker's family, as tragic as that is for them, job loss, 
especially job loss in the thousands, devastates communities. It 
depletes the tax base. It means the layoff of police and fire personnel 
and schoolteachers. It hurts local business owners--the drug store, the 
grocery store, the neighborhood restaurant.
  Massive job losses prevent middle-class growth. The Senator from New 
York, who is in the Chamber, talked about how the middle class in the 
last 10 years has shrunk. The middle class has shrunk in pure numbers. 
It has shrunk in income, in buying power. The middle-class people in 
this country have seen their incomes go down in part because of the 
Bush trade policy and partly because of tax policy and in part because 
of the economic policy generally.
  Massive job losses prevent middle-class growth, as manufacturing jobs 
that once anchored a community are gone, but they demoralize a 
community. Ohio has seen the loss, during the Bush years, of more than 
200,000 manufacturing jobs; nationwide, 4.4 million manufacturing jobs, 
26 percent, more than one out of four manufacturing jobs in our country 
that simply disappeared.
  We know in Michigan and Ohio and across the industrial heartland of 
this country and in every State, American manufacturing can compete and 
compete with anyone in the world if it is a fair fight. But the deck is 
stacked against us when our Government does not enforce our own trade 
laws that level that playing field.
  Foreign competitors take an unfair advantage, and it is stopping 
American manufacturers from reaching their potential. We can no longer 
afford to sit on the sidelines. We must establish a manufacturing 
policy in this Nation that helps businesses stay here, that helps 
communities thrive, that rebuilds middle-class families in communities 
in my State.
  It starts with reforming our trade policy. I am pleased to hear Mayor 
Kirk's emphasis on trade enforcement. Too many of our major trading 
partners are breaking the rules through massive currency imbalances, 
tax and capital subsidies, and through unfair labor and environmental 
practices.
  In recent years, the Trade Representative has shown, to put it 
bluntly, a terrible record in response to public demand for strong 
trade enforcement. The Trade Representative that has occupied that 
office for close to a decade simply does not enforce our trade laws. 
All five of the public petitions for trade enforcement actions filed 
during the Bush administration, each concerning currency manipulation 
or labor exploitations by China, every one of those five public 
petitions was denied by the U.S. Trade Representative.
  In some cases those petitions were denied on the day they were 
submitted, as if the administration even bothered to read them. Wrong-
headed economic policy, job-killing trade agreements have also fueled 
increasing income disparity at home and abroad. I traveled some years 
ago, after NAFTA passed--a trade agreement that has hurt our Nation--I 
traveled at my own expense to McAllen, TX, across the border, with a 
couple of friends to Reynosa, Mexico. I met a husband and wife who 
worked for General Electric. They lived in a shack about 15 by 20 feet, 
dirt floor, no running water, no electricity. If it rained hard, the 
dirt floor turned to mud.
  If you walked through the neighborhood, you could see where people 
worked in that neighborhood because these shacks were made out of 
building materials from the companies they worked for or the companies 
that supply the companies for which they worked.
  These two workers worked for General Electric Mexico, 3 miles from 
the United States of America. If you go to one of those plants where 
those workers worked, those plants looked a lot like an American plant. 
These workers made about 90 cents an hour and lived, as I said, in 
squalid conditions, as hard as they were working, 6 days a week, 10 
hours a day.
  I visited an auto plant nearby, and this auto plant looked exactly 
like an auto plant in Michigan or Ohio, except perhaps it was more 
modern. If you walked into the auto plant, things were clean, the 
technology was up to date, the workers were productive, working hard.
  There was one difference between the auto plant in Reynosa, Mexico, 
and the auto plant in the United States; that is, the auto plant in 
Reynosa, Mexico, had no parking lot because the workers could not 
afford to buy the cars they made. That is what our trade policy has 
wrought.
  You can go to Malaysia and go to a Motorola plant. The workers cannot 
afford to buy the cell phones they make. You can come back to this 
hemisphere and go to Costa Rica to a Disney plant and the workers 
cannot afford to buy the toys for their children, the toys they make, 
or you can go back across the sea to China and the workers in plant 
after plant after plant cannot afford to buy the material, buy the 
products they make.
  Simply put, in this country, because of a strong union movement over 
the years, that is another debate and another question, how the 
Employee Free Choice Act will help in building the middle class in this 
country, workers who worked hard and were productive, shared in the 
wealth they created.
  As productivity went up, then workers' wages went up. As workers made 
more profits for their boss, as workers made money for their company, 
those workers shared in the wealth they created. It is the American 
free enterprise system. It is what Americans have stood for. It is why 
the middle class in this country, until recently, has been as strong as 
it has been.
  I am glad to see the Obama administration will approach trade 
differently, will consider what goes on in Reynosa and what goes on in 
Malaysia and Costa Rica and China. The Obama administration will take a 
different direction on trade.
  I am glad to see Mayor Kirk's emphasis on enforcement. That means 
correcting our imbalanced trade relationship with China. Enforcement 
also means using the tools of a trade agreement to correct labor 
abuses. I remember when the Jordan agreement overwhelmingly passed 
Congress. This agreement was held up--at the end of the Clinton 
administration--as a standard in labor provisions. But in 2001, the 
Bush administration backtracked, essentially turned the other way, as 
those labor standards and labor provisions were being ignored by the 
Jordanian Government. In fact, it even turned the other way when 
reports came out that there was human trafficking plaguing the citizens 
of Jordan.
  As human rights groups revealed overwhelming evidence of labor 
violations and human trafficking, the Bush administration simply did 
not enforce trade agreements. At the time, the USTR sent a letter to 
Jordan's trade minister saying the United States would not enforce the 
labor provisions.

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So why should the Jordanian Government do it when they knew they did 
not have to?
  Those days of turning away from our responsibilities are over. In 
November 2008 voters in my State, as they did in Michigan, as they did 
around the country, demanded real change, not symbolic differences in 
policy. The Panama Free Trade Agreement, negotiated under fast-track 
rules by President Bush, is more of the same failed model, trade model, 
and we are hearing stories now that it is time for this Senate and the 
House to vote on the Panama Free Trade Agreement. It is a little 
agreement. It is not too bad. It does not really do any damage.
  Well, it does do damage. It is the same failed trade model that we 
saw with NAFTA, the same failed trade policy, the same model as the 
Central American Free Trade Agreement, the same kind of trade policy 
and trade mechanism and trade model as we saw with PNTR with China.
  I hope the administration does not simply push up a Bush trade 
agreement, change its shape a little bit, put some new handprints on 
it, and make some changes at the margin. I hope the administration will 
reshape these trade agreements, reshape our trade policy. We need to 
stop the pattern where the only protectionism in trade agreements is 
protectionism for the drug companies, protectionism for the oil 
companies, and protectionism for the financial services companies, many 
that have created the economic turmoil we now face.
  I illustrated one time during a trade debate not too long ago that if 
we really were concerned about trade agreements, if we were really 
concerned about doing trade in the right way, of just simply 
eliminating the tariff reforms, trade agreements would be one page. It 
would simply say: Here is the schedule that eliminates trade tariffs.
  But what we have seen in our trade agreements in the last 10 years is 
trade agreements that look something like this: This is not exactly the 
real trade agreement, but they are usually hundreds and hundreds of 
pages. And NAFTA, the Central American Free Trade Agreement, do you 
know why they are not just one page or two or three pages of repealing 
tariff schedules? The reason is because it is all about protections. 
You have protections for drug companies, you have protections for oil 
companies, you have protections for banks, you have protections for 
insurance companies.
  That is what these trade agreements have all been about. They accuse 
us of protectionism. These trade agreements are bailouts for their 
wealthy friends, for their corporate buddies, for their big campaign 
contributors. These protections to my friends at the USTR's office 
during the Bush administration were all about protecting oil, 
protecting financial services, and we know what that has brought us.
  Panama, the proposed trade agreement with Panama, includes terms that 
shift extraordinary power to corporations. Panama has a reputation as a 
banking secrecy jurisdiction and a tax haven. Panama was among 35 
jurisdictions identified by the Organization for Economic Cooperation 
and Development 9 years ago as a tax haven.
  The GAO reported a number of corporations, U.S. corporations, created 
subsidiaries in Panama for tax purposes. Now, why would we want to pass 
a trade agreement with a nation that has encouraged U.S. companies to 
move their earnings to their country to avoid U.S. taxes?
  Why would we reward a country that makes a lot of money by enticing 
these corporations to come to their country: We will help you avoid 
your taxes? Why do we reward a country like that? Why do we want more 
of that, especially when we know and when we look at what has happened 
with corporate salaries. If we look at what has happened with the 
banks, and they know we do those kind of things, it simply does not 
make sense.
  In addition, investments derived from illegal activities--namely, 
drug dealing--have also been known to exist in Panama. Several sources 
indicate that Panama serves as a tax haven for as many as 400,000--
mostly, not all, United States--companies, and Panama has refused to 
sign a tax disclosure agreement with the United States. This is not 
just Panama saying, come visit us, come move some of your executives 
and, on paper, move some of your work to Panama. But then, to avoid 
taxes, we don't even make them disclose what those companies are and 
the taxes they have evaded. Such an agreement would deter tax cheats 
from evading taxes through Panama and would enable the IRS to verify 
that income subject to tax in the United States has been properly 
reported.
  Offshore tax evasion is an enormous problem. We have heard Senator 
Dorgan talk about what has happened in the Cayman Islands. It is an 
enormous problem that would be potentially aggravated by the free trade 
agreement itself and also by Panama's continuing refusal to enter into 
a disclosure agreement with the United States. Why would we complete a 
trade deal which includes these extraordinary protections for 
corporations with a country that has secrecy issues? The old model for 
trade agreements no longer works.
  As Mayor Kirk begins his work at USTR, as we confirm him in the next 
few days--and I hope we will--we can create an alternative framework 
that rewrites trade rules for globalization, trade rules that protect 
our national interests and strengthen our workers and communities.
  We are all accountable in this body for trade votes, how our votes 
affect American workers, how our trade policies affect Lima and 
Zanesville and Dayton and Middleton and Portsmouth and Hamilton. We are 
all accountable for trade votes. Most of us want trade. We want more 
trade, but we want it under a different set of rules. Fidelity to a 
broken trade system will not put our economy back on track and workers 
back to work. The small business owner or manufacturer in a machine 
shop or tool and dye company in Akron or a local machine shop in Dayton 
or workers and business owners around the country don't want more of 
the same. It is time to rethink trade policy. We want trade, more of 
it. But we want it under a different set of rules that works for 
workers, for communities, and for the country.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mrs. SHAHEEN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Whitehouse). Without objection, it is so 
ordered.

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