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Mr. President, in just a short period of time here in the Senate Chamber we will be voting on fast-track legislation designed to create a very quick path through the Senate for the Trans-Pacific Partnership and for trade agreements to come thereafter.
So I rise now to share with my colleagues and to share with the American people my concerns about this course of action. It is President Kennedy who once said: ``The trade of a nation expresses, in a very concrete way, its aims and aspirations.'' What are our aims and aspirations in the context of this trade agreement and fast-track?
From my perspective, the thing that really matters is whether this trade agreement will create good-paying jobs or will destroy good-paying jobs. Will this trade agreement make the American economy work better for working Americans? I feel it fails the test. I am going to explain why.
Now, it is true that the trade agreement is complex. It is multidimensional. It has a dimension that deals with intellectual property, with the extension of copyrights and patents and protections for trade secrets. That is certainly a win for protecting an innovation economy and innovation by Americans and American companies.
It has an agricultural section. We have sought out an analysis of the agricultural section, but don't have one yet. But those in the know say there is a good chance that the tariffs that are struck down and the nontariff barriers that are struck down as barriers to U.S. products may on balance benefit the U.S. agricultural economy. I look forward to an analysis to really examine that in detail.
But the heart of the trade agreement is about manufacturing. We have multinational companies that are seeking to be able to make things at the lowest possible cost. That is the heart of this trade agreement, as with other trade agreements. That means being able to incorporate into an economic circle countries where the costs are very low to make things. That is certainly the case with this trade agreement.
This trade agreement includes a couple of countries that have no minimum wage and others that have a very low minimum wage. We are really talking about Vietnam, Malaysia, and Mexico. In Vietnam they have a regional minimum wage. So it varies from place to place. You hear different amounts, but roughly it is 60 to 75 cents per hour. In Malaysia it is $1.54. In Mexico it is 66 cents. Well, those are all incredibly low compared to the American minimum wage of $7.25.
Of course, many of our States have State minimum wages that are higher. But the minimum wage is only a part of the puzzle. When you include the cost of labor in the United States, you have to include such things as workers' compensation and set aside expenses for Social Security and disability insurance and the cost of maintaining safe working standards, which are rigorously enforced.
So when you compare all of that, you probably have a labor ratio that is on the order of about 20 to 1. That is a playing field tilted against the American worker at a 20-to-1 ratio for manufacturing. That is certainly not a level playing field. Our companies will say time and again: Here in America, we will thrive with anyone in the world on a level playing field. But when the costs are 20 to 1--that is, when the costs overseas in countries such as Vietnam, Malaysia, and Mexico are lower than in the United States on a 20-to-1 ratio--that is a playing field steeply tilted against the United States.
So it is no wonder that in previous agreements we have seen an increase in trade deficits and a big loss of jobs here in the United States of America. Let's take a look at three of those cases.
In 1993, we signed the North America Free Trade Agreement. That incorporated Mexico into our economic circle. So let's compare the trade deficit in 1992, a year before, with 2014. In the course of those years, the trade deficit increased from $5.3 billion to $53.8 billion. That is a massive, massive change. Now, by various estimates that translates into a job loss of between 480,000 to 680,000 jobs. So half a million Americans lost good-paying jobs as a result of NAFTA.
Let's take a look at China. China came into the World Trade Organization, or WTO, in the year 2000. So let's compare 1999 with 2014. The trade deficit went from $68.7 billion to $343 billion. That is an increase of one-quarter of a trillion dollars. That is not a collective amount. That is an annual amount. By various estimates that resulted in job losses of between 2.7 million and 3.2 million American jobs.
Or let's look at South Korea. Remember how folks said that this would facilitate so much access to consumers in South Korea, and it would not have a big impact on our trade deficit? The South Korea agreement was signed in 2011 or ratified. So comparing 2010 to 2014--just 4 years--the trade deficit ballooned. It ballooned from $10 billion to $25 billion. The resulting job losses are estimated to have been between 75,000 and 150,000 jobs. Now, when I say jobs, maybe that is abstract. So let's translate this to families. Between the low estimates and the high estimates, we are talking about 3.3 to 4 million American families losing their jobs--good-paying manufacturing jobs. You know, there is no better foundation for a family than a good-paying job.
So when we pull away that foundation by striking agreements that send our jobs overseas, that is utterly devastating to families across our Nation and certainly to families in my home State of Oregon and certainly to families in every single State. So you cannot be pro-family and also be for shipping our good-paying jobs overseas. There is no government program that substitutes for a good-paying job.
That is why I am so deeply disturbed about the outline of the agreement that we are undertaking. Each and every time that improvements to wages here in the U.S. come up, the makers will say: If you raise your wages, if you add family vacation or family leave or sick leave or medical leave or help with daycare for your children--you know what--we may just have to move our manufacturing overseas or we may have to move our supply chain overseas or we may have to produce less at the factory here and more at the factory overseas.
It does not stop there. The construction that is envisioned by our multinational manufacturers in pursuit of their low-cost production is not just to play off the United States against Malaysia or the United States against Mexico or the United States against Vietnam--although all of that will happen--it is also to play off each of those low-cost countries against each of them.
So they can say to China, which has a certain cost structure and is not yet envisioned to be part of the Trans-Pacific Partnership but does benefit from WTO access: China, your costs are going up. Oh, you are enforcing those environmental laws, and your costs are going up. Oh, you are adding health standards, labor standards, and your costs are going up. You are paying overtime, and your costs are going up. We are going to shift more of our manufacturing to Malaysia, and if you keep at it, we will shift all of it.
Or to Malaysia: You are just close by to Vietnam. Your costs go up, and we are going to ship more to Vietnam.
Or to Vietnam: You raise your standards, you raise your costs, you raise your pay, and you raise your standard of living. So we are going to move those jobs to Mexico.
This is tremendous leverage if you are an owner of a multinational, if you own stock in a multinational, if you are an investor in a multinational, because you can sell--you can produce your product at lower costs by playing off economy against economy--at the world market price and you make more money.
But if you are a worker in the United States who is being played against a worker in Vietnam, it is a bad deal. If you are a worker in Vietnam being played off against a worker in Malaysia, it is a bad deal.
That is not all that is wrong with this arrangement. Let's look at the various things that could have made fast-track stronger and that are not in fast-track. We have heard a lot of conversation and a lot of presentation that this is a gold-standard framework, that this is a new style of trade agreement. But the fact is that key provisions that could have made it a gold standard or a new strategy are not there.
Let's start with the fact that there is no minimum wage required in this agreement--not even a minimum wage of $1 an hour, which would have certainly affected Mexico or Vietnam--and no mechanism for where there is a minimum wage, to increase it gradually over time to help lift up workers in our poorest nations and to reduce the gap and level out the playing field between low-wage countries and high-wage countries such as the United States.
Second, the agreement does not address currency manipulation. Everyone in international trade understands that tariffs can be replaced by a pseudo-tariff through currency manipulation, through intervention in the currency market. In 2009, when I came to the Senate, our Congress estimated that the currency manipulation by China amounted to a 25-percent tariff on American products and a 25-percent subsidy to Chinese products. Why would we agree to an arrangement where currency manipulation can produce a tariff against our products and a subsidy to our competitors within that framework?
Third, we have had a problem with the loss of our sovereignty on health issues, environmental issues, and consumer issues by giving that sovereignty away and that decisionmaking away to an international panel. Just weeks ago, under the World Trade Organization structure--the WTO structure--we lost a case, and the outcome of that case was that here in America we are not allowed to label our meat ``Produced in America.''
That is a loss of our sovereignty. I want to live in an America where if our consumers, if our policymakers, if our legislators believe it is in the best interest of this Nation for our consumers to be able to know where their meat is raised, if our consumers want to exercise some patriotic decisionmaking and support American ranchers, they ought to be able to do so. We ought to be able to have that law and not give away our lawmaking authority to an international panel.
So this is an investor-state dispute settlement panel of three corporate lawyers, who can be advocates in one case and the judges in the next. It does not provide anything close to an appropriate mechanism to decide issues of health, safety, and the environment. We could have taken those off the table so that if we wanted to control a dangerous environmental toxin such as cancer-causing flame retardants in our carpets, we could do so without going afoul of trade agreements.
But there was no effort to protect our health and safety here in America in this trade agreement. If we really believed that we were going to have a new-order agreement, we would have an enforcement mechanism for labor standards and for environmental standards. We have heard folks talk on the floor that there are such new enforcement standards. So I am aggrieved to report to you that that is simply not the case.
Now, let's start with the fact that we could have required the passage of laws before countries are admitted into the trade agreement and required that they bring their environmental standards, their legal standards, and their labor standards up to snuff before admission and then show that they were actually implementing them and have a 2-year demonstration period to show that they were actually enforcing them.
Because that is the easiest point at which to bring nations accountable before they are members of the trade agreement, before they get the lower tariffs. That is the point you have incentive. That is the point you have leverage. But there was no effort to force countries, to require countries to meet those minimum standards before being admitted into this trade agreement.
We could have had some form of snapback provision that said: If you fail in bringing your laws into accordance on the environmental side or the labor side, if you fail to enforce your laws, then tariffs snap back. But there is no snapback provision in this agreement.
We could have expanded the dumping provisions in international law to give a way to take on situations where countries are producing at low cost because they are not abiding by the goals in the environmental or the labor area, but there is no such provision envisioned or required in fast-track or anticipated in the Trans-Pacific Partnership.
In the course of our trade agreements, there has been only one situation where we challenged labor laws, and it was with Guatemala. We challenged them 7 years ago, and to date that case has never been adjudicated. It is virtually impossible, after a country has failed to come up to standards, to go back and retroactively enforce those standards without some new mechanism, some new strategy. But there is no new mechanism or strategy that applies in this situation, nothing that would solve the Guatamala case and actually end with it being adjudicated.
To continue with the challenges to this fast-track, the failures of this fast-track, there is nothing in this that provides for Congress to be consulted when other nations dock; that is, tie on to the framework that will exist in the Trans-Pacific Partnership.
We had an amendment here on the floor that if China was to try to dock with the TPP and become a TPP fully privileged member, it would have to come back to the United States for consideration. That would give us a chance to look at China's currency manipulation or China's cheating on international intellectual property. That would give us a chance to examine a whole facet of things. But no requirement like that exists.
To add on to everything else, now, because of the way this process has proceeded, there is no guarantee that there will be trade adjustment assistance for families who lose their jobs when their jobs go overseas, no assistance in training.
I find it absurd that the same folks who say that there will be virtually no jobs lost proceed to say that the cost of compensating families by giving some minimal training to them when they lose their jobs will be vastly expensive and that America can't afford it. So on the one hand they say there will be no jobs lost. On the other hand they say that so many jobs will be lost that it will be too expensive for our Nation to afford. So they are OK with leaving American families not only stranded without jobs but stranded with no training to try to find new jobs in the economy.
If we go back to where I started with President Kennedy and his vision that the trade of a nation expresses in a concrete way its aims and aspirations, our aim should be to create good-paying jobs here in America. Our aspiration should be to create a trade agreement that works for working families. Unfortunately, this trade agreement is constructed around a different aspiration, one of maximizing the value of stock in the multinational manufacturing corporations, and that is done by shipping our jobs overseas. That is the wrong aim for this Nation. That is the wrong aim for our working families. We have seen the impact of Korea. We have seen the impact of China joining the WTO. We have seen the impact of Mexico and NAFTA. As a result, we have lost millions of good-paying jobs in our Nation and undermined the success of millions of American families.
There is a lot of conversation on the floor of the Senate about inequality in our Nation. Do you know what drives inequality? Well, I will tell you. It is this: When you create trade agreements that are great for investors but are terrible for workers, that drives inequality. That is why I encourage my colleagues to vote no when it comes to the fast-track legislation being voted on later today. It is wrong for America because it is wrong as far as solving inequality. It is wrong for America because it is wrong for working families to have their jobs shipped overseas. It is wrong because it does not fulfill the vision of working for working Americans.
Thank you, Mr. President.
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