Trade Agreements
Floor Speech
TRADE AGREEMENTS -- (Senate - April 25, 2007)
Mr. BROWN. Mr. President, last week our colleague, Senator BYRON DORGAN, chairman of the Commerce Committee's Subcommittee on Interstate Commerce, Trade, and Tourism, held the first in a series of hearings on our U.S. trade policy. I was proud to join Chairman Dorgan as we asked the pivotal question on the minds of workers and small business owners across the country: Is free trade working? Is it working for American communities? Is it working for our families? Is it working for our workers?
For the majority of Americans and people worldwide, the answer is a resounding no. For a privileged few, yes, this model of trade has increased the bottom lines. But the economic values embodied by this free-trade model are skewed toward a very select few in our Nation. Not only is our trade policy not working, it is worsening the problem of income equality across the Nation.
From 1946 to 1973, economic opportunities for poor and working families in this country grew. As you can see, that income, people's income--they are divided into five groups--the lowest income, 20 percent, the middle groups, and then the wealthiest 20 percent.
Between 1947 and 1973 in this country, the 20 percent lowest income workers actually saw their income rise the fastest. From 1947 to 1973, that was a time of strong economic growth. It was a time of actual trade surpluses during those years. It was a time of fairly stable energy prices--all of that.
The lesson here: Families that worked hard, that played by the rules, had a real chance of getting ahead.
Then the next, from 1973 to 2000, that economic opportunity began to flatten out for those families. We saw, in those years, from 1973 to 2000--1973 was the year we went from a trade surplus to a trade deficit. That was only one of the reasons. The lowest income workers saw their income grow by the least. People whose income was in the top 20 percent saw their income grow the fastest.
If we had a third chart here, income since 2000, since 2000, income has gone up only for the wealthiest 20 percent in this country.
When Secretary Paulson came to the Banking Committee and spoke to us, he bragged about 3 1/2 percent economic growth for this country--a good thing. The problem is, profits are up, productivity is up, but workers are not sharing in the wealth they create. Profits are up, executive salaries are up, and almost everybody else's income in this country has been pretty stagnant.
Our economic house is not in order. It is not in order nationally, and it is not anywhere where it needs to be in my State of Ohio. When I first ran for Congress in 1992, our trade deficit was $38 billion. Our trade deficit figures for 2006 topped $800 billion. That is from $38 billion to $200 billion from 1992 to 2006. Our trade deficit with China went from low double figures in 1992 to well over $200 billion--an increase of almost 20 times in those 15 years or so. In fact, since 1982, we have accumulated trade deficits of $4.3 trillion. The aggregate trade deficit from 1982 to the present day is $4.3 trillion. That is money which eventually will have to be paid. Put another way, we have produced 4.3 trillion fewer manufactured goods, in most cases, than we have purchased. Put another way, to understand what $4.3 trillion of wealth transferred out of our country means, if you had $4.3 trillion and you spent $1,000 every second of every minute of every hour of every day, to spend that $4.3 trillion trade debt, it would take you 131 years.
We have lost more than 3 million manufacturing jobs across the country. Those are jobs which pay an average of 31 percent more than service sector jobs. Service sector jobs, the ones that NAFTA and the World Trade Organization proponents said would replace manufacturing jobs, they also are tradable and they are also moving offshore at a swift pace.
The trade policies we have set in Washington and negotiated across the globe have a direct impact on places such as Toledo and Hamilton, OH, Cleveland and Steubenville, and Lime, OH, as well as in Mexico and Korea and Bangladesh.
We must shrink income equality, grow our business community, and create good-paying jobs. We must establish trade policy that builds our economic security, not undermines it. Job loss does not just affect the worker or even just the worker's family. Job loss, especially job loss in the thousands, obviously devastates communities, layoffs of police and fire and teachers and all of that. It hurts local business owners, the drugstore, the grocery store, the neighborhood restaurant.
This model of trade is also not winning us more friends abroad. Last month, tens of thousands of workers in Korea took to the streets protesting a pending free-trade agreement with the United States, similar to the tens of thousands of protesters against the Central American Free Trade Agreement in our country and in the six countries in Central America.
Much has been written and said about the waning enthusiasm for the free trade area of the Americas, throughout Latin America, most notably because of what NAFTA has done to Mexico's rural population, with a million and a half small farmers' livelihoods devastated. It almost toppled the favored Presidential candidate in Mexico last year, as the challenger talked about NAFTA's negative impact on Mexico and who came within a hair of winning. In Brazil, in Bolivia, in Ecuador, and elsewhere, leaders are responding to the demand for a very different, more equitable trading system, not one modeled after the North American Free Trade Agreement.
A few years ago, I traveled to McAllen, TX, where I crossed the border with a couple of friends into Reynosa, Mexico. I met a husband and wife who worked for General Electric Mexico, 3 miles from the United States, and lived in a shack about 15 feet by 15 feet, no running water, no electricity, dirt floors. When it rained hard, the floors turned to mud. Behind their little shack was a ditch maybe 4 feet wide, human and industrial waste flowing through that ditch. The American Medical Association said it is the most toxic place in the Western Hemisphere.
As you walked through their neighborhood, you could tell where the people living in each of those shacks worked because their homes were constructed from the packing material, the boxes and the wooden crates and the pieces of cardboard and all, the packing material from the company for which they worked.
You could go nearby to an auto plant, nearby to these homes in this neighborhood, 3, 4 miles from the United States of America. The auto plant looked just like an auto plant in Lordstown, OH, or just like the auto plant in Avon Lake or just like the auto plant at Twinsburg, OH. The auto plant was modern, the technology was up to date, the floors were clean, the workers were productive, and the workers were working hard. The only difference between the Mexican auto plant and the American auto plant is the Mexican auto plant did not have a parking lot because the workers are not paid enough to buy the cars they make.
You could go halfway around the world to a Motorola plant in Malaysia, and the workers are not paid enough to buy the cell phones they make, or come back to our hemisphere, to Costa Rica, to a Disney plant, and the workers are not making enough at the Disney plant to buy the toys for their children. You can go back halfway around the world to a Nike plant in China, and the workers are not making enough to buy the shoes they make in their jobs.
Only when workers share in the wealth they create will we know our trade policy is working. American workers are more and more productive every year, an explosion in productivity in this country, yet workers' wages are flat, as we see, especially the bottom 60 or 80 percent, and especially since 2000, where our trade policy is having a depressing impact on wages.
Two years ago, thousands of workers in Central America took to the streets protesting that failed trade policy. CAFTA still has not been implemented in Coast Rica because it is so controversial. In fact, this week in Costa Rica, there will be a public referendum on the Central American Free Trade Agreement.
This shift in thinking about free trade, both in the Senate and the House, in this country among the public and abroad, presents all of us today with an opportunity, the challenge we face, which grows in urgency as to how we trade and take part in our global economy without continuing to destroy, to undermine the middle class. The current system is not sustainable.
Those of us who support free trade--not fair trade but support free trade--we want trade, we want plenty of it, but under new rules. We want legitimate fair trade. It is considered protectionist by some to fight for labor and environmental standards, but they consider it free trade to protect drug company patents and Hollywood DVDs. If we can protect intellectual property rights with enforceable provisions in trade agreements, as we should, we absolutely can do the same for labor standards and environmental protections and food safety standards.
I am pleased to say this Congress is already hard at work in building a better trade policy. Senator Dorgan and I have introduced antisweatshop legislation. We need more fair trade to build the middle class and lift up American workers. There will be more of those proposals in the future. It is not a matter of if we trade but how we trade and who benefits from that trade. Thank you, Mr. President.
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