United States-Korea Free Trade Agreement Implementation Act--Continued

Floor Speech

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Mr. SANDERS. Mr. President, I always enjoy the Senator's remarks. However, I cannot quite agree with the thrust of his statement.

In my view, the current trade policies in this country are a disaster. The evidence is very clear that they have cost us many millions of jobs and to continue that same unfettered free-trade philosophy, in terms of trade agreements with Korea, Panama and Colombia, makes absolutely no sense at all. When we have a policy that is failing, we change it; we don't continue it.

Let us be very clear. I think most Americans understand that our economy today is in disastrous shape. Our middle class is disappearing. Recent statistics have told us poverty levels are at an alltime high, and the gap between the very rich and everybody else is growing wider.

In my view, one of the reasons--not the only reason--for the collapse of the middle class has to do with the loss of millions of good manufacturing jobs, attributable to these disastrous trade policies. If we are serious as a nation in wanting to rebuild the middle class, lower our poverty rate, what we have to do is move forward in a new direction in trade, based on fair trade principles, and end this unfettered free trade, which has been such a disaster for American workers.

Over the last decade, we as a nation have lost 50,000 manufacturing plants in our country. I will repeat that because that is such a staggering number that it needs to be said over and over. Fifty thousand manufacturing plants in this country have shut down over the last 10 years alone. We have lost, during that same period, 5.5 million factory jobs. Many of those jobs were good-paying jobs. They were jobs that provided people with good wages and good benefits. Those jobs are gone and, in many cases, have been replaced by Walmart and McDonald's-type jobs, with low wages and minimal benefits.

To give us a sense about how significant the decline of manufacturing in this country is, the reality is, in 1970, 25 percent of all jobs in the United States were manufacturing jobs. Today, that number is just 9 percent. In July of 2000, there were 17.3 million manufacturing workers in this country. Today, there are only 11 million manufacturing workers. In my small State of Vermont--which is not as big as Ohio or Michigan and has never been one of the great manufacturing centers in the country, but even in a small State such as Vermont, what we have seen is a huge decline in good-paying manufacturing jobs, which have certainly impacted our middle class.

Mr. President, 10 years ago, we had approximately 45,000 manufacturing jobs in Vermont. Last year, we had 31,000 manufacturing jobs in Vermont. We have lost about one-third of our manufacturing jobs. I should tell everyone that 7,800 of those jobs were lost as a result of the trade agreement with China and another 1,300 were lost as a result of NAFTA.

The key issue is whether we continue our disastrous trade policy, which includes NAFTA, permanent normal trade relations with China, and CAFTA. Do we add on to trade policies that have failed? For the love of me, I cannot understand why anybody would want to do that.

The facts are very clear: Our current trade policies have failed, have been a disaster for working families. According to a recent study conducted by well-respected economists at the Economic Policy Institute, permanent normal trade relations with China led to the loss of 2.8 million American jobs--2.8 million American jobs. I remember because I was in the House when that debate took place. I heard the same thing then as I hear now--Members of Congress getting up and talking about all the new jobs that were going to be created. It wasn't true then and it is not true now.

How could we defend a trade policy based on the same principles as PNTR with China when that policy cost us 2.8 million jobs in the last year alone?

Then we have NAFTA. Many of us remember the rhetoric around NAFTA. My goodness, we were going to open the entire Mexican economy for products made in the United States of America. We were going to be selling it in Mexico. Does anybody in America believe that policy has worked--that NAFTA has worked? The facts are very clear. Again, according to the EPI, they found that NAFTA has led to the loss of 680,000 jobs. So the simple reality is--and one doesn't have to be a Ph.D. in economics to figure this out--that if a company has the option of hiring somebody in a low-wage country at 50 cents or 70 cents an hour and they don't have to deal with unions or with environmental standards, why would they not go to those countries? The answer is they would go. The answer is they have gone.

That is what these trade policies are about--not selling American-produced products abroad but creating a

situation where companies can shut down in America, move factories abroad, and bring those products back into this country tariff free.

We have quote after quote after quote from Members of Congress who got up on the floor during the NAFTA debate, during the China debate, and told us about all the jobs that would be created. I keep hearing that rhetoric, when, in fact, nothing said in the past has proven to be true.

Let me quote my good friends--and they are not good friends--from the U.S. Chamber of Commerce. They tell us this, and this is the discussion about Korea, Panama, and Colombia:

This is foremost a debate about jobs. At a time when millions of Americans are out of work, these agreements will create real business opportunities that can generate hundreds of thousands of new jobs.

But wait a second. Is this the same Chamber of Commerce that, on July 1, 2004, according to the Associated Press, said this--this is the headline: ``Chamber of Commerce leader advocates offshoring of jobs.''

Here is what the article stated about the Chamber of Commerce, a strong advocate for these trade policies:

U.S. Chamber of Commerce President and CEO Thomas Donahue urged American companies to send jobs overseas as a way to boost American competitiveness. ..... Donahue said that exporting high-paid tech jobs to low-cost countries such as India, China and Russia saves companies money. .....

Let's see, the Chamber of Commerce is leading the effort for these trade agreements, but they tell us the outsourcing of jobs is a good thing. Maybe we want to think twice before we accept the advice of the Chamber of Commerce.

The U.S. Department of Commerce has reported--and this is very interesting, not only as information unto itself but about the politics of this whole trade agreement. We have the Chamber of Commerce and we have every major multinational corporation in the country telling us how good this unfettered free trade policy is. But now we have the U.S. Department of Commerce reporting that over the last decade, U.S. multinational corporations slashed 2.9 million American jobs.

Let's digest that. Large corporations and multinationals come in here and say the trade agreements are great and will create American jobs. At the same time, over the last decade, they have slashed 2.9 million American jobs.

Here is the other side of the story. The truth is, these same multinational corporations that are telling Members of Congress to vote for these trade agreements--the truth is, they are creating jobs. The only problem is, the jobs they are creating are not in the United States of America; they are in China and other low-wage countries.

Over this last same period, the last decade, while they laid off 2.9 million American workers, these same multinational corporations created 2.4 million new jobs abroad. So they laid off 2.9 million American workers and created 2.4 million jobs in China and other low-wage countries.

That, in a nutshell, is what these trade agreements are about--enabling corporations to shut down in America, move to low-wage countries, and bring their products back into our country. The results are very clear. We don't need a great study done by the Department of Commerce or the Economic Policy Institute; all we have to do is walk into any department store in America. When we buy a product, we know where that product is manufactured. It is not manufactured in Vermont, it is not manufactured in California, and it is often manufactured in China, Mexico or other developing countries.

That has been the whole goal of these trade agreements--shut down plants in America, move them abroad, hire low-wage workers there, and bring the products back into this country. The idea that we would be extending this concept to Korea, Panama, and Colombia makes no sense to me at all.

Since the year 2000, 2.8 million American jobs have been eliminated or displaced as a result of the increased trade deficit with China. After all the talk on the floor of the Senate and the floor of the House, at the editorial boards of major newspapers and by leading politicians about how the China Free Trade Agreement would create jobs in America, it is very interesting to hear what these corporations had to say a few years after the trade agreement was passed. In other words, before it is passed, they will tell us about how we are going to create all these jobs in America. The day after it is passed, their line changes. The China Free Trade Agreement was passed in the year 2000. A couple years later, Jeffrey Immelt, the CEO of General Electric, was quoted on this subject at an investor meeting, just one year after China was admitted to the World Trade Organization.

This is after the Chinese-American free-trade agreement. This is what Mr. Immelt said:

When I am talking to GE managers, I talk China, China, China, China, China.

That is him, not me--five Chinas.

You need to be there. You need to change the way people talk about it and how they get there. I am a nut on China. Outsourcing from China is going to grow to $5 billion. We are building a tech center in China. Every discussion today has to center on China. The cost basis is extremely attractive. You can take an 18 cubic foot refrigerator, make it in China, land it in the United States, and land it for less than we can make an 18 cubic foot refrigerator today, ourselves.

This is the head of General Electric, who, by the way, I guess is President Obama's great adviser on creating jobs in America. So that was 2 years after the China agreement was signed.

And on and on it goes. It is not just Mr. Immelt, it is major corporation after major corporation. Before the agreement, it is jobs were doing great in America. After the agreement, it is all of the advantages of outsourcing.

Let me tell you how bad the situation is. By the way, I think most Americans know that not only is it a disaster for our economy that we are not producing the products we consume, but it is really an embarrassment. I will cite an example. Last year, during the holiday season, I walked into the Smithsonian's very beautiful American History Museum. It is a great museum, and I urge everybody who comes to Washington to visit. I walked into the gift shop of the Smithsonian museum, owned by the people of America, paid for by the people of America, and do you know what their gift shop had? Most of the products in the gift shop were not made in America. It turns out they were made in China or made in other low-wage countries around the world. I went to a section where they had little busts of Presidents of the United States--George Washington, Thomas Jefferson, Barack Obama--and when you turned them over, do you know where these busts of Presidents of the United States were made? Yes, you guessed it--in China.

We have since been having some discussions with the Smithsonian. They are in the process of changing their policies. And we are working with other people as well. But that is how bad the situation is, that busts of American Presidents, sold in a museum owned by the people of the United States of America, talking about the history and culture of America, are made in China. That is just one example of how pathetic this whole situation is. And on and on it goes.

By the way, when we talk about trade, we often focus on blue-collar jobs and manufacturing jobs, but it is also increasingly information technology jobs and white-collar jobs. Just think for a moment that during the past 4 years the cumulative trade deficit with China in advanced technology--not talking about sneakers but advanced technology products--totaled more than $300 billion. Last year, our trade deficit with China on advanced technology products was a staggering $92 billion--in 1 year alone.

I just bought one of these very nice iPhones. It is very nice. Do you know where that product is made? It is made in China. And the iPad is made in China, and the iPod and the Blackberry and IBM computers and Dell computers and the Microsoft X-Box and big-screen TVs. None of these American inventions we pride ourselves on inventing, none of the technologies we pride ourselves on developing--and Steve Jobs recently passed away, a great businessperson--none of these are made here. Where are they made? More often than not, they are made in China.

Let me quote from a December 15, 2010, article in the Wall Street Journal:

One widely touted solution for current U.S. economic woes is for America to come up with more of the high-tech gadgets the rest of the world craves. Yet two academic researchers estimate that Apple's iPhone--one of the best selling U.S. technology products--actually added $1.9 billion to the U.S. trade deficit with China last year.

So we develop these products, but we can't manufacture them here because these companies prefer the low wages in China. And on and on it goes--not just blue-collar jobs but white collar jobs as well.

Today, we are not talking about China and we are not talking about Mexico. We are talking about Korea and Panama, and we are talking about Colombia, but it is the same old story. The chamber of commerce is back again suggesting the creation of all of these jobs, until the day after the agreement is signed, and then they will be talking about how they can throw American workers out on the street.

It is interesting that poll after poll shows that, to say the least, the American people do not have an enormous amount of respect for the U.S. Congress and they see Congress as living in a very different world than working-class people are living in.

I don't know of any example where that schizophrenia is greater than in terms of trade. I don't know what it is like in Rhode Island, but I will tell you what it is like in Vermont when you ask people what they think about these trade agreements with China. When you ask constituents if they think they are creating jobs in America, they reply: What, are you nuts? Of course they are not. And the polls tell us that. In a September 2010 NBC News/Wall Street Journal poll, 69 percent of Americans said they believe ``free trade between the United States and other countries cost the U.S. jobs.'' I think every group in America except the Congress seems to get that point. But then again, the Congress is surrounded by lobbyists and campaign contributors who come from big-money interests, and they like these unfettered free-trade agreements.

Let me say a word or two about Korea. The Economic Policy Institute has estimated that the Korea free-trade agreement will lead to the loss of 159,000 American jobs and will increase the trade deficit by nearly $14 billion over a 7-year period. Why would we want to go forward in a trade agreement that will cost us jobs?

President Obama has estimated that the Korea Free Trade Agreement will ``support at least 70,000 American jobs.'' But the headline of a December 7, 2010, article in the New York Times says it all: ``Few New Jobs Expected Soon From Free-Trade Agreement with South Korea.'' According to this article, the Korea Free Trade Agreement ``is likely to result in little if any net job creation in the short run, according to the government's own analysis''--our government's own analysis. That analysis was done by the U.S. International Trade Commission, which projects our overall trade deficit will increase, not decrease, if the Korea Free Trade Agreement is implemented. This is our own International Trade Commission. So what are we doing? What are we doing?

Let me touch on one aspect of the Korea Free Trade Agreement that deserves a lot of focus, and I fear very much it is not getting it; that is, the Korea Free Trade Agreement will force American workers not just to compete against low-wage workers in South Korea but also to compete against the virtual slave labor conditions that exist in North Korea, a country which is certainly one of the most undemocratic countries in the world. To add insult to injury, not only are our workers going to be competing against slave labor in North Korea, some of the proceeds from this free-trade agreement are going to the dictatorship of Kim Jong Il, certainly one of the more vicious dictators in the entire world.

What that is about is that a number of companies in South Korea, including Hyundai and many others, own companies that are doing business in a large industrial area in North Korea. This agreement will allow products made in North Korea to go to South Korea and then come back into the United States.

I know there has been a little confusion on this, but there shouldn't be. Let me quote from a January 2011 report from the Congressional Research Service, and I hope everybody who plans on voting for this free-trade agreement with Korea hears this:

There is nothing to prevent South Korean firms from performing intermediate manufacturing operations in North Korea, and then performing final manufacturing processes in South Korea.

For example, as much as 65 percent of the value of a South Korean car coming into the United States could actually be made in North Korea if this trade agreement goes into effect.

Today, we have almost 47,000 North Korean workers currently employed by more than 120 South Korean firms, including Hyundai, at the Kaesong Industrial Complex in North Korea. What an agreement. What an agreement. Slave labor in North Korea manufacturing products that go to South Korea and then come into the United States of America. Meanwhile, the dictatorship of North Korea gets a significant piece of the action on top of the pennies an hour the North Korean workers get.

In 2007, Han Duck-soo, who was then the Prime Minister of South Korea and is now the current South Korean Ambassador to the United States, said:

The planned ratification of the South Korea-U.S. Free Trade Agreement will pave the way for the export of products built in Kaesong [North Korea] to the U.S. market.

Isn't that wonderful. Isn't that wonderful. Bad enough for workers in our country to have to compete against people in China and in Vietnam--people making 20 cents, 30 cents, or 40 cents an hour--but now we are asked to compete against slave labor in Korea. And that is the treaty people will be voting for today.

Mr. President, I think a lot of folks have mentioned, in terms of Colombia, the assault on trade unionists there. Since 1986, some 2,800 trade unionists have been assassinated. Less than 6 percent of these murders have been prosecuted by the Colombian Government. Last year alone--last year alone, in a small country--more than 50 trade unionists were assassinated in Colombia. That is up 9 percent from 2009. I ask, if in Colombia 50 CEOs of companies were killed last year, were murdered last year, do you think people here would be voting for a free-trade agreement with Colombia or would they say: Why would we want an agreement with a country that is so unlawful, that is so brutal, where so many CEOs are being killed? But it is not CEOs, it is just trade union leaders, so I guess it is OK to have an agreement there.

I would also say that President Obama had a different view on Colombia when he was a candidate for President in 2008. In October of 2008, candidate Barack Obama said:

The history in Colombia right now is that labor leaders have been targeted for assassination on a fairly consistent basis and there have not been prosecutions.

Candidate Obama in 2008 was right in opposing this trade agreement. Unfortunately, as President, he is wrong to support it right now.

Let me say a word about the Panama Free Trade Agreement.

Panama is a very small country. Its entire annual economic output is only $26.7 billion a year or about two-tenths of 1 percent of the American economy. So I think no one is going to legitimately stand here and say that trading with such a small country is going to significantly increase American jobs. Then why would we be considering a trade agreement with Panama? What is going on there? Well, it turns out Panama is a world leader when it comes to allowing wealthy Americans and large corporations to evade U.S. taxes by stashing their cash in offshore tax havens. And the Panama Free Trade Agreement would make this bad situation much worse.

I am a member of the Budget Committee, as is the Presiding Officer, and we have heard testimony time and time again that our country is losing up to $100 billion every year as corporations stash their money in postal addresses in the Cayman Islands, in Bermuda, and in Panama. This trade agreement makes that situation even worse.

According to Citizens for Tax Justice:

A tax haven ..... has one of three characteristics: It has no income tax or a very low-rate income tax; it has bank secrecy laws; and it has a history of noncooperation with other countries on exchanging information about tax matters. Panama has all three of those. ..... They're probably the worst.

That is according to Citizens for Tax Justice.

The trade agreement with Panama would effectively bar the United States from cracking down on illegal and abusive offshore tax havens in Panama. In fact, combating tax haven abuse in Panama would be a violation of this free-trade agreement, exposing the United States to fines from international authorities.

At a time when we have a 14-trillion-plus national debt and at a time when we are frantically figuring out ways to try to lower our deficit, some of us believe it is a good idea to do away with all of these tax havens by which the wealthy and large corporations stash their money abroad and avoid paying U.S. taxes. The Panama trade agreement would make that goal even more difficult.

I want to say another word on an issue that I think is important as we look into the future. The proposed Korea Free Trade Agreement threatens both the 340B drug program, which requires drug companies to provide discounts on covered outpatient drugs purchased by federally funded health providers, such as community health centers and other safety net providers, and the ability of Medicare Part B to hold down the prices of outpatient drugs. The Korea Free Trade Agreement would potentially allow Korean drug manufacturers to challenge the pricing under these programs on the grounds that the prices are not market driven--in other words, forcing prices up in this country. That is something that was pushed, by the way, by our trade representative, not theirs. In essence, the pharmaceutical industry's lobbyists, with complete indifference to the plight of millions of the most frail and vulnerable Americans, have succeeded in inserting provisions into the Korea Trade Agreement that would allow Korean companies to maximize their profits by challenging the cost control measures under the 340B and Medicare Part B programs.

But, unfortunately, this is just the tip of the iceberg. Right now, the pharmaceutical lobby--and they are a very powerful lobby--and the U.S. Trade Representative are negotiating a new trade agreement, the so-called Trans-Pacific Partnership, that I fear very much will make a bad situation in terms of drug access for the developing world, for poor people all over the world, much worse than it already is. Their aim, yet again, is to maximize drug company profits at the expense of the most vulnerable populations by tying the hands of health authorities here and in other developed and developing countries abroad who seek to provide access to low-cost generic pharmaceutical drugs for their citizens.

In negotiating the Trans-Pacific Partnership, our government is actively pushing intellectual profit laws for medicines that are more restrictive than we impose even here in the United States, with the effect of making it far more difficult to get generic drugs on the market in those countries. One of them, Vietnam, is a good example. Vietnam obviously is a very poor country. Vietnam has received more than $320 million from the President's Emergency Plan for AIDS Relief, PEPFAR, created under President George W. Bush and continued under President Obama since 2004. The function of this program is to make sure the poorest people in the world who have diseases such as AIDS are able to get the drugs they need at a price they can afford to pay, and that means making generic treatments available.

The PEPFAR program has actually had significant success. As somebody who is not a great fan of President George W. Bush, this is an area where he actually did something quite positive, and that program is credited with saving millions of lives in 15 developing nations over the last 7 years. In the face of one of the most severe humanitarian crises in modern history, the United States put billions of dollars into doing something about it, and we are doing that today.

So why, in the face of this success by one arm of our government, would another arm work to pull the rug out from underneath it? Yet that is what the U.S. Trade Representative's Office is doing now.

In other words, on the one hand what we are trying to do is the right thing, the humanitarian thing, to make sure that poor and sick people around the world are able to get the medicines they desperately need to stay alive at a price they can afford to pay; and, on the other hand, another part of the U.S. Government is saying, wait a second. We have got to protect the interests of the drug companies and make sure they can make as much money as possible so they can charge and force poor countries to pay outrageously high prices for drugs even if that means many people die because they can't afford those drugs. So this is a contradiction. This is what our new trade policies are about.

I will be back on the floor at some point in the not too distant future to be talking about this very important issue, but let me conclude by saying this country is in the midst of the worst economic crisis since the 1930s; the middle class is disappearing; poverty is increasing; millions of Americans have seen a decline in their standard of living; the gap between the very rich and everybody else is growing wider. That is the reality of the American economy today.

One of the reasons for the collapse of the middle class is the loss of millions and millions of good-paying manufacturing jobs, and one of the key reasons--not the only reason but one of the key reasons--we are losing millions of manufacturing jobs is disastrous trade policies designed to allow American corporations to shut down here, move to low-wage countries, hire people there for pennies an hour, and bring their products back. That is a policy I suppose you could say has worked if you are the CEO of a large corporation. You make a lot more money paying people 50 cents an hour than $20 an hour. You make a lot more money working in a country where there are no environmental standards rather than in a country where you have to have some standards protecting air and water.

That is what our trade policy has been, and it seems to me to be enormously foolish for us to continue this failed policy of NAFTA, of CAFTA, of permanent normal trade relations with China, and extend them to Korea, Panama, and Colombia. I urge my colleagues to stand up to the big money interests which want us to pass these trade agreements, stand up for American workers, and say: No. Trade is a good thing, but it has to be based on principles that protect ordinary Americans, working people, not just the CEOs of large corporations.

Mr. President, I yield the floor.

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