DOMINICAN REPUBLIC-CENTRAL AMERICA-UNITED STATES FREE TRADE AGREEMENT IMPLEMENTATION ACT
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Ms. STABENOW. Mr. President, I thank my friend and eloquent leader on this issue, the Senator from North Dakota.
Mr. President, I rise today, also, to share my great concern about this agreement and to oppose what I view as an unfair trade agreement. We can do much better than this. This country has been in an economic slump since 2001, and since then we have lost more than 2.7 million manufacturing jobs. Certainly, in my State, it has never been more clear as we see the headlines every day regarding job loss, jobs going to Mexico, China, and India--every day, headline after headline.
At the same time, we have grown record budget deficits and a record trade deficit. Workers are losing their health care and higher education is becoming even more expensive. What is the response? Well, the administration decides to push through a CAFTA trade agreement that will dig the job holes even deeper. This makes absolutely no sense to me.
This agreement will cost us jobs. It will increase our trade deficit. It will hurt our country's middle class, the backbone of our economy, our way of life. What makes us different from other countries is that rather than just having a few very wealthy people and a lot of poor people, we have a vibrant middle class, people who work hard, save, put their kids through college, and they know they can count on having--up until this point--a pension when they retire or they receive health care through their jobs. All of that is at risk right now for the people in Michigan and others around the country.
This fight that we are having, this debate, is critically important. I think there is not a more critical debate to have on whether we are going to continue to support American businesses and American jobs and the American middle class. That is really what is at stake. We should pass legislation that will be creating jobs. We should be passing legislation that will lower the trade deficit and will create more access to health care, lowering the cost of care and for college. There is a lot we should be doing.
Unfortunately, I have concluded that this trade pact really moves us backward. It will lead us to more offshoring of American jobs. It would be better titled ``NAFTA part II.''
However, so that I am not misunderstood, I do support trade. Obviously, the debate about trade or not to trade is not the right debate anymore. You could not put a wall up around this country if you wanted to. The Internet reaches anywhere. The question is, Are we going to be smart so that we can compete up rather than down, compete in a way that increases the middle class in other countries that will buy our products rather than losing our middle class and exporting our jobs? What is at stake here is really fundamental.
I have supported trade agreements in the past. In fact, I voted in favor of six trade agreements in the last 4 years. I will give you an example of one of them. I supported the United States-Australia trade agreement because our economies are similar. Our workers get paid roughly the same amount of money. Our companies can sell their products in Australia because it has a high minimum wage, sound environmental laws, and good labor standards. We can sell and trade back and forth.
Unfortunately, the CAFTA agreement does exactly the opposite. This packet will ship jobs overseas and provide fewer export markets for American companies, and it is because in these countries the minimum wage is very low. In Guatemala, the minimum wage is 25 cents an hour. I don't want our workers having to compete with 25 cents an hour. You cannot live on that. Mr. President, how can we expect to export to a market and compete with an economy where workers make 25 cents an hour, and there are no basic environmental laws and labor standards? I want to compete with a country where you can drink their water, where they can live on their wage, where we are competing up, not down.
I believe we should try to support agreements that actually lift up workers in other countries as well as our own, as I said, so they can purchase our products. That is not what this does. Tragically, the countries involved in the CAFTA agreement are poor countries. For example, the median GDP in Nicaragua is only $2,300 a year. And 40 percent of all workers covered under the agreement survive on less than $2 per day. It would make sense if we were putting in place an agreement that would raise those wages so they can buy our products. But I fear, from what I have seen in the past, that will not be the case. The entire purchasing power of all six of the CAFTA countries combined is less than the purchasing power of half of the city of Detroit.
We are not competing on an equal playing field in this CAFTA agreement. I ask, how many Nicaraguans are going to be able to buy a $20,000 automobile made in Michigan? We want them to buy cars made in Michigan, by the way, Mr. President. We all know those who don't understand history are forced to repeat it. I am afraid that is what is happening.
When we look at NAFTA, after Congress passed NAFTA, hundreds of thousands of American jobs were lost to Mexico. It is still happening. Last year, Electrolux, a plant in Greenville, MI, that makes refrigerators, announced they were going to move to Mexico, with 2,700 good-paying jobs gone. Why? So they can pay $1.50 an hour in Mexico, with no health benefits. This is having a devastating effect on a small town community in the middle of Michigan. That is not the only story. There are hundreds of those.
Right now, if we use NAFTA as a comparison, we see that over the past 11 years U.S. workers have lost nearly a million jobs due to the growing trade deficits with our NAFTA partners. During the same time period, real wages in Mexico went down. Now, it would be different if it were true that wages went up, as we often hear, because that would make sense economically. But instead, in Mexico, wages have fallen, while the number of people living in poverty in Mexico has actually grown. It makes no sense to follow that line out again with another trade agreement. Since NAFTA took effect in 1994, the U.S. trade deficit with Canada and Mexico has ballooned to 12 times its pre-NAFTA size, reaching $111 billion in 2004.
I believe we can expect more of the same from CAFTA, unfortunately. We can do better than this for American farmers, we can do better for American businesses, we can do better for American workers, and for American families. I hope we will reject this proposal and send them back to the drawing board. There are other models, other prototypes that have gotten it right. There are other agreements we have voted for on this floor that do a better job of creating and protecting our middle class and our jobs and businesses in America than this agreement. We can do better than this. We need to do better than this. I urge my colleagues to reject this agreement.
We are once again rushing into a trade agreement that doesn't help, and in fact, has the potential to hurt American workers and their families.
This country has been in an economic slump since 2001. Since that time, we have lost more than 2.7 million manufacturing jobs.
At the same time, we have grown record budget deficits and record trade deficits. Workers are losing their health care and higher education is becoming ever more expensive. And, in Michigan we suffer from the nation's highest state unemployment rate.
What is this administration's response? It has decided to push the CAFTA trade treaty that will dig the jobs hole even deeper. And, the administration has stripped out a trade adjustment assistance provision that would have helped workers displaced by CAFTA.
This trade pact moves this Nation backwards. It will lead to more offshoring of American jobs.
It will cost us jobs, increase our trade deficit and hurt our country's middle class. It will turn the haves into the have-mores and the have-nots into have-nothings.
We should be negotiating trade agreements that involve exporting products, not jobs and we should pass legislation that will help create jobs, lower our trade deficit, and help working families get access to health care and college.
However, so that I am not misunderstood I support free trade on a level playing field. I have voted in favor of six free-trade agreements over the past 4 years.
For example, I voted for the U.S. Australia Free Trade Agreement because when we trade with Australia we trade on a level playing field.
That agreement works because our economies are similar and our workers get paid roughly the same wage. Our companies can sell their products in Australia because it has a high minimum wage, sound environmental laws and good labor standards.
Unfortunately, the CAFTA agreement goes in exactly the opposite direction.
This agreement will ship jobs overseas and provide few export markets for American companies.
My State of Michigan certainly will not benefit because this agreement does not provide a meaningful export market for Michigan manufacturers.
That is because in order to have an export market you need to be selling to people who can afford your goods. But the typical wage in the CAFTA countries is very low.
Tragically, these countries are poor. For example, the median GDP in Nicaragua is only $2,300 per year.
And 40 percent of all workers covered under this agreement survive on less than $2 per day.
The entire purchasing power of all six of the CAFTA countries combined is half that of the city of Detroit alone.
In Guatemala, the minimum wage is approximately 25 cents an hour.
How can we expect to export to a market where workers make 25 cents an hour and lack basic environmental laws and labor standards?
We should try to lift up the impoverished workers in these countries so they can purchase American made products. But this agreement will not do that.
As we all know, those who do not understand history are forced to repeat it. Let's take a look at what has happened in recent history.
After Congress passed NAFTA, hundreds of thousands of American jobs were lost to Mexico. And it is still happening. Just last year, Electrolux closed a plant in Greenville, MI, and put 2,700 high paid workers on the street.
Despite the fact that the company was making a profit and its workers were productive, the management closed the plant in Greenville and will soon open a new one in Mexico.
If we use NAFTA as a comparison we see that over the past 11 years U.S. workers have lost nearly 1 million jobs due to growing trade deficits with our NAFTA partners.
During the same time, real wages in Mexico have fallen while the number of people living in poverty there has grown, according to the Carnegie Endowment for International Peace.
Since NAFTA took effect in 1994, the U.S. trade deficit with Canada and Mexico has ballooned to 12 times its pre-NAFTA size, reaching $111 billion in 2004. Imports from our NAFTA partners outpaced exports to them by more than $100 billion, displacing workers in industries as diverse as autos, aircraft, apparel and consumer electronics.
I believe we can expect more of the same under CAFTA.
American farmers have also felt the impacts of NAFTA. We quickly discovered that this trade deal was no deal because it accelerated the agricultural products trade deficit.
Consider that in the three years before NAFTA our trade surplus with Mexico and Canada increased by $203 million.
After NAFTA, our surplus fell by $1.5 billion.
The result is that some American crops, like tomatoes, have been pushed to the brink of extinction.
Also, in 1994, Congress passed the General Agreement on Tariffs and Trade more commonly known as GATT.
After we signed that agreement, we began to lose jobs to India, Indonesia and other East Asian countries.
Now, workers in India are doing thousands of jobs that Americans used to do.
They now staff call centers, provide technical support for our computer networks, and even process our tax forms and read our medical x-rays.
To make matters worse, we passed so called most favored trade status for China in 1998. And since then, hundreds of thousands of Americans jobs are now done in China.
Mr. President, you would think that after what has happened after previous trade agreements that we would know better than to pass another free trade agreement with countries that don't share our wage structure, labor standards, or environmental standards.
Before we pass another free-trade agreement, why don't we first enforce our existing trade agreements.
Currently, two of our major trading partners, China and Japan, are violating world trade rules by manipulating their currencies, which has the effect of making their products cheaper here and our products more expensive over there.
Additionally, China refuses to seriously combat the rampant counterfeiting of auto parts.
This hurts Michigan companies and costs American workers their jobs. This is unacceptable.
That is why I, along with Senators GRAHAM and BAYH, have introduced a bill that would create a trade prosecutor. This ambassador-level position within the office of the U.S. Trade Representative would be appointed by the President and confirmed by the Senate, with the authority to ensure compliance with trade agreements to protect our manufacturers against unfair trade practices.
In practical terms, this prosecutor will have the authority to investigate and recommend prosecuting cases before the World Trade Organization and under trade agreements to which the United States is a party.
Senator Grassley has assured me that this approach would be seriously debated while we continue to move forward on trade reauthorization and I look forward to working with him on this important piece of legislation.
In addition to enforcing our current trade laws, we should pass other legislation that would help protect our jobs.
First, we should close loopholes in the tax code that actually reward companies for shipping jobs overseas. Senator Dorgan has introduced such legislation to do so. Why aren't we passing that in the Senate?
Second, why don't we help our companies deal with the runaway cost of health care so they can be more competitive overseas and keep our jobs here?
Third, why aren't we more aggressively moving comprehensive pension reform to help our workers and companies through this very difficult economic time?
Fourth, while we are building infrastructure over in Iraq, why can't we do the same here at home? Our roads, bridges, transit systems, and sewer systems are in dire need of repair. Why aren't we setting aside the resources now to repair them? Doing so would create hundreds of thousands of new jobs.
Finally, why aren't we doing more to invest in new science and technology so our companies can better compete in the future? With very little federal funding, we are on the verge of producing a commercially viable hydrogen car and being the leader in the world on stem cell research.
So, Mr. President, I ask my colleagues, why aren't we using our time to pass job producing legislation? How can we ask our workers to compete against economies that don't allow for collective bargaining, that don't maintain reasonable environmental standards, and don't maintain workplace safety requirements on par with the U.S.?
It is not fair to their workers and it is certainly not fair to our workers.
Why don't we work with these countries to help lift up their workers? Let's work with them to raise wages, provide health care, protect their environment and then we can enter into a free-trade agreement.
This agreement represents a race to the bottom.
A race to the bottom makes the world a poorer place--not a richer one.
There are many things we can do to increase our trade with the world in a commonsense way. CAFTA is not one of them.