Congressional Record

By:  Joe Biden, Jr.
Date: July 31, 2003
Location: Washington, DC

Mr. BIDEN. Mr. President, international trade has always been an important part of the American economy. For the past half century and more, the United States has been a leader in expanding international trade, opening markets around the world to our products. I believe that on balance the evidence shows us that trade has supported economic growth here in the United States, and that trade has supported good jobs and good wages for American workers.

On paper, the simple, textbook logic of trade is clear—more open markets around the world mean more customers for our workers and companies, who can compete with anyone in the world. And open markets mean more choices and lower prices for American consumers—it makes their paychecks go further.

Trade complements and reinforces the great strength of the American economy—its ability to seize opportunities.
To lead the world in research, to be the first to develop new products and processes, we depend on our ability to move investments and manpower where they can do most good. Trade is the international face of that process, that has always been the key to the success of the American economy. But in the real world, where people live, things are not that simple.

Economists like to tell us how well markets work—other things being equal. But those "other things" are not always equal. Because trade, by reinforcing the basic process of economic growth and change, reinforces the shift of investment and jobs. So trade contributes to severe disruptions, as factories shut down, people lose jobs, communities decline. It may well be true that the overall result is a more efficient, more productive, even wealthier nation.

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But underneath those gains are the costs of economic change, costs that are just as real and just as much a result of trade as the benefits. The costs of coping with economic change are dumped on workers and their families, on the communities they live in. The benefits of trade often go to businesses and workers in other industries, in other parts of the country.

If the benefits of trade really do outweigh their costs, we should have the resources as a Nation to help those on the losing end, the ones who are paying the price so that our economy can become more productive. Recently, two important shifts have occurred in our trade negotiations. First, we are dealing with countries that more often than not lack the political rights and the legal structure to protect their workers and their environment.

Many of these countries don't have our strong tradition of organized labor, fighting and winning protections for wages and working conditions. Many of these countries don't have the organizations or the laws to protect their environment. We didn't, either, as we began to grow into the world's strongest economy over a century ago.

It took us time and a lot of struggle to learn those lessons.

There are still plenty of countries out there who have not learned them yet, countries that do not provide those protections that can raise living standards, standards that they cannot yet afford. Low-wage competition with our workers, with our higher living standards, can force American companies to cut costs wherever they can—and in the end, that often means cutting labor. That means families without breadwinners, communities without jobs.
Second, on top of the fact that we are now doing trade deals with a lot of countries that don't match up with us in terms of economic development, our trade deals now include a different, deeper level of integration.

We have gone beyond lower tariffs, and into areas that implicate a lot more of our own domestic laws—on issues like agricultural policy, intellectual property, even environmental and health regulations. This deeper integration in the international economy touches close to bone in a country like ours.

We want to be sure that we remain in control of those important political issues. This does not mean that we should stop trying to bring the benefits of markets and trade to American workers and consumers. But it does mean that we have to be increasingly careful with every new step we take in trade policy. The easy work is behind us.

Each step from here on has to be taken with a much closer look at the balance between risks and rewards. But these trade deals before us today do not show that kind of care. Chile and Singapore are good allies of ours, and I support more cooperation and exchange among our economies. They are not, in their living standards and level of development, all that different from us. They are not themselves the issue here, at least not for me.

But the trade agreements the Bush administration has negotiated with them are a step back from progress we have made, as recently as just a couple of years ago, in the Jordan Free Trade Agreement. For example, the Jordan agreement subjects any violation of labor protections to "appropriate and commensurate" action. And there is no cap on the penalty that could be imposed as a result of a dispute.

But the Chile agreement and the Singapore agreement provide recourse against a country only for a sustained failure to enforce its own labor and environmental laws. In the worst case, a country could chose to lower its labor and environmental protections, making it easier to avoid a dispute or a penalty, because it would make its own standards easier and cheaper to enforce. At the margin, that would put greater pressure on American firms to cut costs—and jobs.

In addition, in these two agreements there is a cap of $15 million a year on penalties for failure to live up to labor and environmental protections. And those fines are simply paid by the offending country to itself, supposedly to strengthen its commitment to the very standards that they have failed to live up to. I have some experience with crime and punishment, Mr. President, and I can't believe that is going to deter much bad behavior. If $15 million is the maximum fine, it is an incentive to commit more than $15 million worth of violations. You can do the math.

Again, Mr. President, it is not that these two nations raise a serious threat to American living standards. Trade with Chile and Singapore combined amounts to a fraction of 1 percent of our economy. Nor do I harbor any concerns that these countries will fail to live up to their end of the deal. The issue before us now is whether these deals—the first agreements accomplished under fast track negotiating authority—set an acceptable pattern for future, more extensive trade agreements, such as the planned Central American Free Trade Agreement or the Free Trade for the Americas.

These trade agreements fail to treat labor and environmental issues as seriously as commercial disputes, as our trade law now requires. This is the first test of what this administration has done with its fast track trade negotiating authority. Now is the time to hold them to the letter and the spirit of the legislation under which we in Congress granted that authority to this administration. Yet another problem with these agreements lies in the changes in immigration law—done without the participation of the Judiciary Committee.

Fast track for the specifics of trade deals is one thing; but trade deals should not undertake, outside of the legislative process, significant changes in immigration or any other policy. Thousands of new visas can be issued under these agreements—without any requirement to show specific skill shortages here in the U.S. Those immigration provisions usurp congressional legislative powers, and undercut jobs for Americans.

I expressed concerns about the future of trade negotiations when I did not support granting the President fast track negotiating authority last year. We need the strongest protection for our workers here at home, the strongest protection for environmental standards abroad. And we need to make sure that gains from more open trade are gains that all Americans share. In the last decade, up until just a few years ago, we had a growing economy, with strong job creation and wage growth. During that period, we accomplished a number of very significant trade negotiations, including NAFTA, and China's entry into the WTO, both of which I supported. Today, things are very different.

Since January of 2001 we are down 3.1 million private sector jobs, and still counting.

A growing national economy, with strong investment in new sectors, strong employment, and growing incomes, helps to protect American families from job shifts that come from technological changes. So do strong protections for workers to organize and earn fair wages. And so do pensions that are safe, health care that is accessible and affordable. And specific protections for workers directly affected by trade. If those things are in place, the benefits of trade can outweigh the costs. But right now, we can take none of those things for granted.

Under this administration, there is a concerted effort to erode pension protections, the 40-hour work week, and other core worker protections. Our economy is struggling through the worst drought in job creation since the Great Depression. To maintain our living standards, and to maintain political support for increased trade, our trade policy must first be based on strong growth and job creation at home. This administration has not demonstrated to me that they have a plan for economic growth and job creation, or a commitment to protect workers rights.

Without that plan, without that commitment, and because of the flaws in the agreements themselves, I cannot vote for them.

For me, Mr. President, the calculation is simple. If this administration can create one new job, if it can dig us out of the hole we are in—over 3 million jobs lost—trade deals might make more sense.

I challenge this administration to create just one new job—just one more job than we had in January of
2001—before it brings another trade agreement for our approval.