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Public Statements

John Kerry: CAFTA is a Giant Step Backward

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Date:
Location: Washington, DC


John Kerry: CAFTA is a Giant Step Backward

John Kerry spoke on the Senate floor this afternoon about his opposition to the Central American Free Trade Agreement (CAFTA). The remarks that follow are as prepared.

"I have supported free trade for the past two decades. That includes NAFTA, the Uruguay Round, China PNTR, and the many bi-lateral agreements negotiated by the Clinton and Bush Administrations. I continue to believe that open markets and robust trade will benefit America's workers, consumers, corporations and ultimately our security.

"At the same time, we cannot hide from the fact that the benefits of global economic integration bring some very real costs and some very real risks. For a number of years now I have been arguing that Washington must set out a strategy for trade and better prepare America to compete in the global economy.

"As we know, opening markets sets in motion an economic transition that creates winners and losers. And while we may want to mask that reality in the emotionless language of economics here on the Senate floor, let it be clear that that transition can put hardworking men and women in a very difficult transition as their jobs go overseas, leaving our communities economically crippled. We all know the numbers: since 2001 we have shed nearly 3 million manufacturing jobs and endured 42 consecutive months of economic decline in the manufacturing sector.

"We have long understood that if we want a broad for consensus for free trade in America, we must make these trade agreements work for more Americans. In the 1990's we initiated steps to find a better path forward.

"First, we looked at the trade agreements themselves and decided we must protect American workers from unfair competition. American workers should compete on the basis of pay, skill and effort - but it is unfair to ask American to compete against child labor and habitually depressed wages.

"In the Jordan agreement of 2001, we set a new standard. We gave basic labor protections the same standing as all the protections we rightly provide corporate America.

"We made a new bargain with the American worker: we will protect your economic interest - your job -from unconscionable competition like child labor, just as we protect a corporation's economic interest - its product - from dishonest competition like copyright theft.

"In CAFTA we go backward from that standard. Once again, our corporations get the protections they need with an elaborate system of rules, complaint, appeal, compensation and strict enforcement.

"But all our workers get is flowery language with no teeth behind it. We will hear that CAFTA has the strongest labor provision of any trade agreement. That's good spin - and not much else.

"It comes down to this: There is only one labor provision in CAFTA that is enforceable - a nation's commitment to 'enforce its own laws.'

"That sounds good, or at least it sounds like something, but in reality this provision does nothing to protect workers because there is no stipulation whatsoever as what those laws are. Moreover, if the provision does lead to an attempt at enforcement, the maximum so-called penalty is $15 million. I say 'so-called penalty' because the fine is then returned to the offending country ostensibly to fix the problem, but without any real enforcement mechanism. "The other labor provisions in CAFTA ask a nation 'to strive to' eliminate the 'worst forms of child labor,' sweatshop conditions and other problems. But if a nation fails that meager standard, we can only consult. In other words, we can talk about ending child labor in a CAFTA county, but we cannot act to stop child labor. Words alone aren't going to do much for the kids suffering in the sweatshops, and the Americans off the job.

"I ask my colleagues to consider a simple question: why the double-standard in favor of corporations? Why do Americans not have the same standing to end child labor or sweatshop conditions that corporations have to end copyright and patent theft? Why the double-standard that punishes workers?

"Mr. President, I and many of my colleagues have a long-standing commitment to the development and well being of Central America, and we're concerned that CAFTA is insufficient to provide for steady and balanced economic growth in the region. The Administration claims that supporting CAFTA is a security issue. I agree - this is a security issue - this is about the economic security of some of the more vulnerable economies in our hemisphere. We must ensure that a trade agreement with Central American countries grows their economies, protects their workers, helps them preserve their sensitive ecosystems, and most importantly, encourages balanced and widespread economic growth and opportunity for all people in the region.

"The most troubling aspect of CAFTA is that its shortcomings, particularly the Administration's indifference to workers, are part of a far greater problem.

"The fundamental issue we must address is the need for a national policy to make sure America is competitive - the leader in the global economy of today and tomorrow. And the reality is the Bush Administration has no comprehensive strategy to meet the needs of a fast changing playing field.

"What can we do? Certainly, when we negotiate trade deals with nations that have checkered labor records, we must give citizens the same standing to end child labor that corporations have to end copyright and patent theft. It is a pro-trade, free-trade policy that builds consensus and considers all Americans, yet the Administration refused to do this in CAFTA.

"After we have agreements in place, we must defend America's interests. The Administration must stop bowing down to our competitors. The Clinton Administration brought an average of 11 trade cases to the World Trade Organization per year. This Administration has brought 12 total cases in its first four years.

"The Administration also needs to take action against China's currency manipulation. This Senate has voted for that, but the Administration refuses.

"And I want my colleagues to know the truth about the Administration's recent dealings with China. According to our trade representative, 'counterfeiting and piracy in China are at epidemic levels' and cost U.S. companies $20-25 billion annually. And we're told the problem is getting worse, not better.

"But according to press reports, in May the United States presented the Chinese with a list of modest proposals to curtail intellectual property violations. The Chinese rejected our proposal outright. The Administration responded not by pressing the Chinese, but by telling U.S. companies to go file lawsuits in Chinese courts to defend their rights. This is absolutely ridiculous. It's time this Administration enforced our agreements and defended our own businesses and workers.

"Most of us also heard recently about the Chinese firm seeking to purchase UNOCAL, an American energy company. What many don't know is that the company borrowed money from the Chinese government to make the bid. That has upset a lot of people and generated a lot of press - as it should. But it should concern us even more that America does the same thing: Since the start of the Bush Administration, the federal government has borrowed billions of dollars to fund our national debt and cover reckless tax and fiscal policies - and billions of dollars have been borrowed from none other than the Chinese government.

"Mr. President, we should also be concerned about the missed opportunities related to Trade Adjustment Assistance. This Senate has supported Trade Adjustment Assistance and tried to expand coverage to service workers and communities. We did this because we understood that the movement to open markets means economic transition. Unfortunately, the Bush Administration doesn't seem to understand. They have ignored the will of the entire Finance Committee on this issue, who voted to include TAA for service workers in the CAFTA Agreement.

"In the Commerce Committee, Senator Ensign held an excellent hearing on America's competitiveness. Our Administration witness was the President's point-person on manufacturing, Al Frink. He told us that he believes there is a shortage of skilled workers in America that is hurting our economy. What the Undersecretary did not say, or maybe did not know, is that the Bush Administration has resisted Congressional efforts to fund worker retraining and vocational education.

"The Administration's indifference to competitiveness goes further. We have a tax policy that rewards American and multi-national companies for housing operations abroad instead of in the U.S. It's hard to imagine a more backwards tax policy. We should end it, but for this Administration it's not a priority - it's not even an afterthought.

"We also don't adequately fund the basic science and research that will produce the revolutionary technologies and products of tomorrow. Not surprisingly, fewer and fewer American kids are choosing to study science and engineering. And the Bush Administration has proposed cutting federal research and development spending for the first time in ten years.

"The story is much the same in our public schools. Bill Gates has called our high schools 'obsolete' because they fail to prepare our kids to compete. Alan Greenspan said much the same thing before the Finance Committee last week. And yet every year the Administration refuses to fund No Child Left Behind - seeming perfectly content to leave millions of kids behind.

"And while we sit here, the Administration foolishly negotiating trade deals that are indifferent to our workers and fail to defend our interests, refusing to adequately invest science, research and training, and ignoring problems that drain our business like health care, the competition is hard at work.

"While our short-sighted policies stunt our competitive advantage, China, India, all of Asia and Europe have developed long-term plans and strategies aimed at one thing: eliminating America's economic dominance. They have national programs aimed at educating workers, reducing capital costs and attracting businesses.

"In the Commerce Committee we heard how Japan and the EU are implementing large scale, long range R&D projects aimed at developing leading edge commercial technologies. For example, from 1995 through 2001, the emerging economies of China, South Korea, and Taiwan increased their investments in research and development by approximately 140 percent.

"It is urgent that we consider real measures to advance America's competitiveness and forge a new global consensus on trade. It begins with a set of rules that make sense to American workers - rules that work for them - even as we open new markets which we must do. We can do better and we need to.

"The bottom line is this: CAFTA is not a good deal for America. The Administration has turned a blind eye toward America's workers. I won't do that, and I hope my colleagues won't either.

"Instead, we should stand solidly for free trade - and more importantly demand a national policy to compete in the global economy on terms that are fair to all Americans. I believe America can stay at the top while making trade fair for Americans whether they spend their day working the boardroom or the factory floor. I believe we can make trade work of all Americans. CAFTA, unfortunately, does not work for working Americans, and I hope my colleagues will join me in standing up for America's future and voting against it."

http://kerry.senate.gov/v3/cfm/record.cfm?id=240185

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