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Dominican Republic-Central America-United States Free Trade Agreement Implementation Act

Location: Washington, DC



Mr. KERRY. Mr. President, it is interesting, listening to the Senator from Idaho, who, as he said, came to this decision from a different place than the Senator from North Dakota, and listening to the Senator from North Dakota; both of them have raised issues they tried to get the administration to respond to. I am very sympathetic with the sense they have that the administration just didn't respond to them and really was unwilling to try to accommodate what I think are very reasonable concepts.

In May of 2003 I sent a letter to Ambassador Zoellick, asking the administration to delay tabling CAFTA's labor chapter until Congress had an opportunity to consult. I wrote again in October 2003, raising similar concerns.

All we got was a very sort of abrupt and short letter that basically never engaged in the kind of discussion that could have benefited all of us so we would not have the kind of divide we have in the Senate and in the country today.

During the debate of TPA in 2002, I offered an amendment to allow communities to be able to preserve their health and safety laws which were being challenged under NAFTA. Even now, with a lawsuit pending against the State of California for attempting to protect their drinking water--imagine that. The State of California wants to protect its drinking water and the interests of its citizens. But nevertheless they included the very same provisions that have led to that kind of challenge in CAFTA.

In the summer of 2003, I suggested to the administration, in the context of the Chile and Singapore agreements, that the labor standards achieved in those agreements would not be adequate for CAFTA. The reason for that is in Chile, in Singapore, and in Australia--all three agreements which I supported last year--you have capacity for enforcement. You have specificity with respect to the laws on the books that can be enforced. And you have a record of that enforcement. All three of those ingredients--capacity, specificity of law, and record of enforcement--are absent in too many of the countries that are involved in this agreement.

We tried to get the Trade Representative to understand that there is an evenhanded way to open a fair agreement to trade but to address those kinds of concerns. Regrettably the labor standards in the Chile and Singapore agreements may be good for those countries, but they should not be applied to CAFTA because of the lack of those three critical ingredients.

Even in this last month, as CAFTA was considered in the Senate Finance Committee, I offered an amendment that specifically laid out what the administration could do to fix this agreement. That amendment lost on a tie vote--10 to 10 was the division in the Finance Committee, in no small part a division that was that close because the administration opposed it.

So I regret enormously that we are where we are with respect to this agreement at this point in time. I have been in the Senate now for 21 years, and I was one of those who was on the cutting edge and leading the effort in our party to try to make it clear that we ought to trade and that it is important to the United States. I still believe that. I voted for NAFTA, the Uruguay Round, China PNTR, and the many bilateral agreements negotiated by both the Clinton and Bush administrations.

Last year, while I was not here to vote, I supported the Chile, Singapore, and Australia agreements precisely for the reason that they had a strong ability and a strong record of enforcement, that they had very specific laws, and that they had the capacity to be able to enforce those laws.

There are some colleagues who have always opposed each and every one of these trade agreements; and there are some who have been for everything no matter what the balance is. For a number of years now I have been trying to suggest not as a matter of ideology, not as a matter of party label, because I don't think this should have a party label, but as a matter of common sense, I have been trying to suggest that the consensus we have built globally for trade, a consensus built around the notion that, yes, there are some winners and losers, but you do your best to mitigate the impact on losers, that you have sufficient trade adjustment assistance, that you do enough education and training, that you do enough with health care and COBRA payments so people can cover themselves with health care during a transition, that you ease the pain, so to speak.

At the same time, as you attempt to maximize the rising of all boats in the tide that we proverbially think about, the rising tide lifts all boats, the fact is, in many countries, it is not lifting all boats. The standard of living does not move at the rate it ought to. The standards for health, safety, labor organizations, or environment do not change in the way they ought to. All of these are quality-of-life issues and value issues, fundamental value issues that ought to be part of our agreements.

This is not just basic economics. Particularly when you look at the chart showing the deficits in trade that are growing, it is hard to make a new economic argument about it. The fact is there are larger issues at stake in a trade agreement.

For rigid ideological reasons, over the years, we have had tension in the Senate and a fight over whether you embrace some of these other considerations in a trade agreement. Part of the reason we have had such intense reactions to trade meetings around the world, with riots in Seattle and with other demonstrations around the globe, is because of the raging pace of globalization and the discomfort it brings to a whole bunch of people who feel powerless to be able to do something about it. If we, the people who have the power to do something about it, do not choose to do so, we leave people out in the cold and hurting even more.

The fact is, the consensus--which has been global, that has helped us to be able to build the trade structure--is fraying. It is fraying not just in the United States but it is fraying in other countries as well. The administration had a unique opportunity in this agreement to try to address some of those concerns. We all understand that opening markets sets in motion economic transition that everyone here knows creates winners and losers at the same time.

While you may want to mask some of that impact, the personal impact to people's lives with an unemotional language of economics in the Senate, the fact is if you go to Ohio, Wisconsin, Minnesota, Idaho, North Dakota, or other parts of the country, it is having a profound impact on communities. It is having a profound impact on the fabric of life in America and on our ability to be able to have a long-term strategy for success.

We all know the numbers. Since 2001 we have shed nearly 3 million manufacturing jobs. We have endured 42 consecutive months of economic decline in the manufacturing sector. Fifteen years ago, 20 years ago, 30 percent of America's economic pace was services and 70 percent was manufacturing. Today, it is 30 percent manufacturing and 70 percent services. Many of those services are not the kind of high value-added paying jobs Americans have come to expect.

We have long understood if we want a broad consensus for free trade in America, we have to make these trade agreements work for all Americans, not just for the winners, but for the people who temporarily are in the losing position.

In the 1990s we began to respond to that. First we looked at the trade agreements themselves and we decided we must protect American workers from unfair competition. American workers should compete on the basis of pay and skill and effort. But it is unfair, fundamentally unfair, to ask Americans to compete against child labor or against habitually depressed wages or habitually unfair working conditions.

In the Jordan agreement of 2001, President Clinton had come to understand that in the later part of the 1990s. His administration moved specifically to include these other values within the four corners of a trade agreement. We gave basic labor protections the same standing we give in the protections we provide to corporate America. In other words, we made a new bargain with the American worker in order to hold on to the consensus. The bargain was very

simple: We will protect your economic interests, your job from unconscionable competition such as child labor, just as we protect a corporation's economic interests, which are its product, from dishonest competition such as copyright theft. It seemed like a very fair bargain, a very fair form of protection.

In CAFTA, we go backwards from that standard. We go backwards from that standard for no explicable reason. Once again, our corporations get the protections they need with an elaborate system of rules, complaints, appeals, compensation, and strict enforcement. But all our workers get is some flowery language with no teeth behind it.

We are going to hear that CAFTA has the strongest labor provision of any trade agreement. That is what some folks have been trying to say. Look at this agreement, read the language, and you realize that is once again spin. It comes down to this: There is only one labor provision in CAFTA that is enforceable. It is a nation's commitment to ``enforce its own laws.'' Now, that sounds good, or it sounds like something, but in reality this provision does nothing to protect workers because, No. 1, there is no stipulation whatever as to what those laws are; No. 2, some of those laws are completely inadequate; No. 3, there is no enforcement capacity in some of those countries to enforce even the inadequate laws, if you can understand what they are. There could have been a stipulation as to what they are. There could have been an understanding in the four corners of this agreement as to what standard we would try to reach.

Moreover, if the provision does lead to an attempt at enforcement, guess what. The maximum so-called penalty is $15 million. There is a cap. There is no cap on the corporate penalty. But there is a maximum cap. Guess what. It is a so-called penalty because the fine is then returned to the offending country, ostensibly, to be used to fix the problem, but without any real enforcement mechanism to do so.

Senator Bingaman will say to the Senate that he has secured an agreement from Trade Administrator Portman that they will put $40 million a year into the enforcement efforts. Again, if you do not have adequate laws and you do not have adequate specificity and you are enforcing in a structure that has a cap on the payment and the payment goes to the country that offended, you are not enforcing the standards of workers.

There is another labor provision in CAFTA. It asks a nation to strive to eliminate ``the worst forms of child labor.'' We do not even define what the gradations of the forms of child labor are. Just the worst forms of child labor. There shouldn't be any form of child labor. But we are only going to seek to strive to get rid of the worst forms, sweatshop conditions and other problems.

But if a nation fails to do that, we can only consult. In other words, we can talk about ending child labor in a CAFTA country, but we cannot take any action to end child labor in a CAFTA country. That is wrong. That is contrary to the values of our country and to the fundamental values of American workers. Words alone are not going to do anything for kids who are suffering in work sweatshops. They will not do anything for the American workers who lose their jobs as a consequence of being undercut by that level of competition.

I ask my colleagues to answer a simple question: Why is there a double standard that we are going back to when we passed an agreement that set a higher standard, and there is no showing as to why that standard hasn't worked, shouldn't work, and shouldn't be part of this agreement? Why do Americans not have the same standing as a corporation? Why don't they have the same standing to end child labor or sweatshop conditions that corporations have to go out and protect copyright or patent theft? Why the double standard that punishes American workers?

I share with many of my colleagues a longstanding commitment to the development of the well-being of Central America, but I am concerned that CAFTA is insufficient to provide for steady and balanced economic growth in the region. The administration claims supporting CAFTA is a security issue. I agree, it is a security issue. It is about the economic security of some of the more vulnerable economies in our hemisphere. We have to ensure that a trade agreement with Central American countries grows their economies, protects their workers, helps them preserve their sensitive ecosystems, and, most importantly, encourages balanced and widespread economic growth and opportunity for all of the people in the region.

The most troubling aspect of CAFTA is that its shortcomings, particularly the administration's indifference to our own workers, are part of a larger problem. I will speak about that for a minute. What CAFTA underscores is the need for a national policy to make sure America is competitive, the leader in the global economy of today and of tomorrow. The reality is, there is no comprehensive strategy to meet the needs of a fast-changing playing field.

What am I talking about? Certainly when we negotiate trade deals with nations that have an insufficient or lackluster labor record, you have to give citizens the same standing to be able to end child labor that corporations have to end copyright and patent theft. It seem to me it is a pro-trade, free-trade policy that builds consensus and which considers all Americans. But it was refused in this agreement.

After you have the agreement in place, we need to defend America's interests. This is true of all of our agreements. The administration has to stop giving in to competitors. The Clinton administration brought an average of 11 trade cases to the World Trade Organization per year. This administration has brought a total of 12 cases in the first 4 1/2 years.

The administration also needs--and many colleagues have spoken about this--to take action against China's currency manipulation. We keep hearing about it. People talk about it. And they talk about it. And they talk about it. And they talk about it some more. The Senate has actually voted and gone on record that the administration needs to do something other than talk. But nothing has happened.

In the administration's recent dealings with China, according to our trade representative, counterfeiting and piracy in China are at epidemic levels. That piracy costs U.S. companies $20 to $25 billion annually. We are told the problem is getting worse, not better. According to press reports in May, the United States presented the Chinese with a list of modest proposals to curtail intellectual property violations. Modest proposals. We gave them a list. The Chinese rejected the proposal outright.

What did the administration do? They did not respond by pressing the Chinese. They did not respond by taking any particular action. Guess what they did. They told United States companies to go file lawsuits in Chinese courts to defend their rights. It is insulting and it is ridiculous. It is not just putting the agreements in place, it is also enforcing them that the American worker is asking for.

In addition to that, we have all heard about the Chinese firm recently seeking to purchase Unocal, an American energy company. What many people do not know is that Chinese company borrowed money from the Chinese Government in order to make the bid. It should not come as a surprise since it is 80 percent Government owned. That has upset a lot of people and generated a lot of press. But it ought to concern us even more that we are doing the same thing in the United States in the following way. Since the start of the Bush administration, the Federal Government has borrowed billions of dollars to fund our national debt and cover questionable and, some think, even reckless tax choices in fiscal policy. Billions of dollars have been borrowed from--guess where--none other than the Chinese Government.

Mr. President, I yield myself an additional 5 minutes off their time.

The PRESIDING OFFICER. Without objection, it is so ordered.

Mr. KERRY. Mr. President, we ought to be concerned about the missed opportunities that are related to trade adjustment assistance. The Senate has supported trade adjustment assistance. If people lose their jobs, they have the right to expect that we are going to try to help transition. We have done that because we have understood the movement to open markets means this economic transition.

Guess what. Once again, the administration has ignored the will of the entire Finance Committee on this issue, which voted to include TAA for service workers in the CAFTA agreement. In the Commerce Committee, Senator Ensign held an excellent hearing on America's competitiveness. Our witness was the administration's point person on manufacturing, Al Frink. He told us he believes there is a shortage of skilled workers in America. And that shortage of skilled workers is hurting our economy.

What the Under Secretary did not say, or maybe he did not know, is that the Bush administration has resisted congressional efforts to fund worker retraining and vocational education, which would, in fact, address the skilled worker shortage.

The administration's indifference to competitiveness goes deeper. We have a tax policy that rewards American and multinational companies for housing operations abroad instead of housing them here in the United States. It is hard to imagine a more backward tax policy. We should end it. But for this administration, it is not only not a priority, it is not even an afterthought.

We also do not adequately fund the basic science and research that will produce the revolutionary technologies and products of tomorrow. Not surprisingly, fewer and fewer American students are choosing to study science and engineering. The Bush administration has proposed cutting Federal research and development spending for the first time in 10 years. The story is much the same in our public schools. Bill Gates has called our high schools obsolete because they fail to prepare our kids to compete. Alan Greenspan said much the same thing before the Finance Committee last week. Yet every year the administration refuses to fully fund No Child Left Behind, seeming perfectly content to see those kids not study science and engineering, or perhaps not study at all. And all of this time, the administration negotiates trade deals that remain indifferent to American workers and fail to defend our legitimate interests at home, all the while refusing to adequately invest in science, research, training, and ignoring the problems that drain our businesses, such as health care.

The competition is hard at work at every single one of these. China and India will probably turn out 300,000 engineers each over the next year--way ahead of the United States. While our shortsighted policies stunt our competitive advantage, China, India, and all of Asia and Europe have developed long-term investment plans, long-term infrastructure investment plans, long-term trade, and long-term educational plans, all aimed at one thing: eliminating America's economic dominance. They have national programs aimed at educating workers, reducing capital costs, and attracting businesses. And we are falling dangerously behind.

I was visited just the other day by the new president of MIT. Every Senator here, I know, respects that institution. She was deeply concerned. She expressed this enormous concern about what is happening to the competitive advantage of our great science and technology institutes across the country and our commitment to science as a whole as a Government.

In the Commerce Committee, we heard how Japan and the European Union are implementing large-scale, long-range R&D projects aimed at developing leading-edge commercial technologies. For example, from 1995 through 2001, the emerging economies of China, South Korea, and Taiwan increased their investments in research and development by approximately 140 percent.

It is urgent we consider real measures to advance America's competitiveness and forge a new global consensus on trade in our country. That global consensus begins with a set of rules that makes sense to the American worker, rules that work for the American worker, even as we open new markets, which we must do.

We can do better than this trade agreement. We need to.

Mr. President, the bottom line is that CAFTA is not a good deal for America. It is a good deal for some companies. It is a good deal for some investors and shareholders. It is a good deal even for some of the countries that are a party to it. But it is not a good deal for the American worker. So I hope colleagues will help America stay at the top, while making trade fair for Americans. And I hope colleagues will join in saying no to this agreement in its current shape.

Thank you, Mr. President.

I yield the floor.


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