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When you look at the facts, none of these three arguments that are used against this piece of legislation has any merit. First, let's look at the claim that free trade destroys jobs. The 50-year history of the multilateral trade negotiations, first under the General Agreement of Tariffs and Trade, and now under the World Trade Organization, called WTO for short, shows the enormous positive effect on the world economy of liberalizing trade by reducing tariffs and getting rid of nontariff trade barriers.
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We have had eight series, or rounds as they are called, of multilateral trade negotiations since GATT first started in 1947. We are about to launch a new round, the ninth one, at the WTO Ministerial Conference in Seattle in about 5 weeks.
During the first round, the Geneva Round it was called, in 1947, we negotiated 45,000 tariff concessions affecting one-fifth of world trade.
In the sixth round, which was called the Kennedy Round, we slashed custom duties on average of 35 percent.
During the last round, the Uruguay Round, starting in the middle 1980s, ending in 1993, we reduced or eliminated many nontariff trade barriers.
The results of this trade liberalization have been nothing short of astounding--creating jobs, expanding the world economic pie, creating better economies in various countries around the world, enhancing political opportunities and, most importantly, political stability. The expansion of free trade that has followed this 50-year period of trade liberalization has spurred one of the greatest bursts of wealth creation the world has ever seen.
In 1947, when we started postwar trade liberalization, the total value of world exports was about $50 billion. Today, the total value of world exports is $7 trillion, more than 3 1/2 times the total budget of the United States.
Free trade has enriched every American family. According to the President's own 1998 economic report, the added economic benefit to each American through expanded trade is $1,000 per year or $4,000 per year for a family of four, as we measure families in America. This is equivalent to an annual $4,000 per family tax cut. Where can one get a $4,000 tax cut these days? Even the tax cuts now being debated in the Congress do not come anywhere close to this amount of money to enhance family income and disposable income.
The facts that show the benefits of free trade seem to be so compelling that in explaining them, I don't know where to begin.
Let me mention a recent example that comes from NAFTA. According to a September 1998 report published by the nonpartisan Congressional Research Service, approximately 191,000 jobs were certified, between January 1, 1949, and August 12, 1998, as potentially suffering NAFTA-related loss--affecting 191,000 workers. That is on the negative side. We have always said that free trade will cause some job
dislocation. That is why we have programs such as trade adjustment assistance--to ease the transition that is sometimes necessary when we have open markets.
On the positive side, there has been much more gain. Let's go back to that Congressional Research Service study I cited. The number, 191,000 workers affected negatively by NAFTA over 4 years, represents less than the number of jobs created in any single month in 1997. In contrast, then, on the positive side, more than 1 million new jobs were created from new exports to Mexico and Canada after NAFTA was enacted into law--more than 1 million new jobs.
Next let's look at the claim that is made by opponents of this legislation or free trade generally that it causes investment to shift overseas. That claim, too, has little or no merit. Section 512 of the NAFTA Implementation Act required the President to provide a comprehensive assessment of the operation and effects of NAFTA to Congress. The President's report shows that the amount of new United States investment in Mexico is very low. Again, the specific facts are compelling. In 1997, direct United States investment in Mexico was $5.9 billion compared to United States domestic investment in plant and equipment of $864.9 billion. In other words, United States investment in Mexico was less than 1 percent of all United States domestic investment in plant and equipment in 1997. So much for that giant sucking sound we were supposed to have heard continuously from south of our border.
Free trade has been so good for our economy. If all these predictions about economic disaster haven't come true when we have liberalized trade in the past, it is clear we shouldn't fear tearing down barriers around the world, as we have for the last 50 years with the good results we have for the 50 years, without the expectation that those beneficial impacts would continue. We should, then, embrace such an opportunity.
Let me get specifically to the Africa trade bill. The fear that the Africa trade bill will cause a huge influx of illegal textile transshipments from Asia, as has been stated on the floor of the Senate, just is not true. I cite the International Trade Commission study, our own Government. It looked at the transshipment issue. Here is what our International Trade Commission found:
Assuming we will get illegal transshipments in a worst case scenario, the ITC study shows that U.S. apparel shipments would drop by one-tenth of 1 percent and result in the loss of less than 700 jobs. Again, to put this number in perspective, the U.S. economy has created about 200,000 jobs each month this year.
Remember, the ITC study guesstimate of 700 jobs is based on a worst case scenario. It is highly unlikely, then, that sub-Saharan Africa will see this level of export g rowth in the near term. They don't have the infrastructure. They don't have the trained workforce. They don't have good transportation. And the Africa bill has strong anti-transshipment provisions.
One might say, then, why the big deal about the Africa trade bill? Because trade is better than foreign aid and because, when you want to build up the economies of the developing nations, you start someplace. This is how we can best help them to help themselves.
Participating countries will have to commit to full cooperation with the United States to address and take any necessary action to prevent transshipment. The spirit of this legislation is that there not be transshipment. In addition, the U.S. Customs Service has effective procedures to thwart illegal transshipments, as Customs jump teams have proven to be successful in doing in both Hong Kong and Macao.
And there are many other provisions aimed at preventing transshipments. So free trade works. Free trade creates jobs and prosperity in the United States, adding $4,000 every year in economic benefits to each American family at home. Free trade keeps the peace by building interdependence among nations, and by bringing political stability to nations that heretofore have relied upon dictators and relied upon a government-controlled economy. Finally, free trade will help Africa break the shackles of poverty by bringing economic freedom to the most economically unfree and also the poorest regions in the world. So I urge my colleagues to join me in supporting this important piece of legislation.
Mr. President, I ask unanimous consent that the pending amendment, No. 2335, be temporarily laid aside in order for Senator REID of Nevada to offer an amendment. I further ask unanimous consent that at the conclusion of that amendment, amendment No. 2335 become the pending business.
The PRESIDING OFFICER (Mr. GREGG). Without objection, it is so ordered.
AMENDMENT NO. 2336
Mr. REID. Mr. President, I send an amendment to the desk and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The legislative assistant clerk read as follows:
The Senator from Nevada [Mr. REID] proposes an amendment numbered 2336.
Mr. REID. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place, insert the following new section:
SEC. . ADJUSTMENT OF COMPOSITE THEORETICAL PERFORMANCE LEVELS OF HIGH PERFORMANCE COMPUTERS.
Section 1211(d) of the National Defense Authorization Act for Fiscal Year 1998 (50 U.S.C. App. 2404 note) is amended--
(1) in the second sentence, by striking ``180'' and inserting ``30''; and
(2) by adding at the end, the following new sentence: ``The 30-day reporting requirement shall apply to any changes to the composite theoretical performance level for purposes of subsection (a) proposed by the President on or after June 1, 1999.''.
Mr. REID. Mr. President, I was born and raised on the southern tip of the State of Nevada, in a little mining town called Searchlight. When I grew up, there wasn't a single telephone anyplace in the town. No one had a telephone. In the home I was raised in, there was no hot water. We had no indoor toilets; they were outdoor toilets. It was primitive--well, I would not say primitive, but we weren't very modern there. That is the way it was with a lot of people in rural Nevada at that time.
Today, it is hard for me to comprehend what has taken place in the advancement of science. I can go home at night and see if I have received any e-mail on my computer. It is easy to do. I open my computer a nd it says, ``You've got mail.'' I open that up and find out who has contacted me by e-mail, and it is like magic. I press a button and I can reply to that person as quickly as I can type that message out. That message is sent quicker, of course, than the speed of light. It is gone. It is amazing. I can check to find out the weather on my computer. I can communicate and buy a CD, or anything else I want, on my computer. I can't imagine how that can happen, but it happens.
I rise today in total awe of what is happening in science and technology in America. The amendment I have offered is an amendment that is critical to maintaining our Nation's lead in the high-tech sector. Specifically, this amendment is crucial to the computer i ndustry, the industry that allows me to communicate, for example, with all five of my children. It is easy to do. It is easier to do than seeing if they are home by virtue of a telephone. It is easier to do because it is very convenient. They can send me a message when I want a message sent. I can send them a message when I have the time. I can have a good time with my children over the Internet. I sent one of my boys, who is the athlete of the family, an e-mail last weekend saying that I think the Redskins are going to do well if they get a new coach. He was an athlete at the University of Virginia. It is the first time I can remember that the University of Virginia soccer team has not been ranked in the top 10; they are in the top 20. I suggested to my son that it might not be a bad idea to get a new coach for the soccer team at Virginia.
This is done so quickly. He will communicate back to me when he has the time. I am in total awe of what is going on in the high-tech sector.
This amendment relates to an issue I have been interested in for quite a long time and, in particular, have done a lot of work on this session with some of my colleagues. What I am concerned about is bipartisanship. For once in this legislative session, we are doing something that is bipartisan. I have to say it appears the underlying bill is generally bipartisan, even though some disagree with it.
I want to talk about the U.S. computer i ndustry. According to an article in Computers Today, one of the many computer t rade journals, dated July of last year, American computer t echnology has led the world since the first commercial electronic computer w as employed at the University of Pennsylvania in 1946. The advancements that have been made are unbelievable. I can remember, before I came back to Washington, going to the Clark County Courthouse and being shown around by the person who was in charge of the computers for the county. It was a whole floor of that large building. Of course, it had to be really cold because computers needed constant cool
temperatures. Well, today, what was done on the whole floor of that Clark County Courthouse can be done on a computer t he size of a briefcase.
The industry is constantly changing with new companies and new products emerging every day. A statistic I find fascinating is that more than 75 percent of the revenues of computer c ompanies comes from products that didn't exist 2 years ago. That statistic shows they will continue to grow and change rapidly.
Through research and development that is largely due to another issue I have strongly favored, the research and development tax credit--and I think it should be permanent--the computer i ndustry has been able to remain competitive for these many years. The challenge we now face is a challenge that, frankly, we haven't lived up to in the past as a Congress, and that is to allow our export c ontrol policies to change with the times and not to overly restrict our Nation's computer c ompanies.
In the free enterprise system, entrepreneurs have never been so in charge of what is going on than in the computer i ndustry. They have led this Nation forward economically. We have to give them the freedom that they can continue, in this free enterprise system, to sell the product. We need to stop trying to control technology by politics. We have to start controlling technology by allowing the businesses to go forward. The technology we are regulating, computers with performance levels of 2,000 to 7,000 millions of theoretical operations per second, or MTOPS, is readily available from many foreign companies. Companies from countries such as China and other tier III countries are moving into this field rapidly.
Not too long ago, I secured funding through Congress for a supercomputer at the University of Nevada at Las Vegas. We were so proud of that computer. It required its own room. It is now about as powerful as my laptop computer. The supercomputer is no longer the same supercomputer it was then, in 1988 or 1989, when it came to UNLV. That is exactly, though, the kind of computers we are still regulating politically.
Computers that are now considered supercomputers operate more than 1 million MTOPS, or about 500 times the current level of regulation. Last month, Apple began producing a computer t hat exceeds the current threshold and, as a result, Apple is unable to sell its new G4 computer s ystems in over 50 countries.
The bottom line is that by placing artificially low limits on the level of technology that can be exported, we may be denying market realities and could very quickly cripple America's global competitiveness for this vital industry. If Congress doesn't act quickly, we will substantially disadvantage American companies in an extremely competitive global market.
On July 23, 1999, at my urging, and the urging of some of my colleagues, the President proposed changes to the U.S. export c ontrols o n high-performance computers. Since that announcement, the President's proposal has been floating around Congress for a mandated review period of 180 days, or 6 months. When the President made his proposal, the new levels would have been sufficient; however, we are still regulating under the old levels, and therefore hindering companies such as Apple from competing in tier III countries with other foreign companies.
The amendment I am offering simply reduces the congressional review period from 180 days to 30 days to complement the administration's easing export r estrictions by amending the National Defense Authorization Act of 1998.
I would like to share an example of how outdated today's restrictions are. I was at a meeting recently where Michael Dell, President of Dell Computers, stood up and pulled from his hip holster a little pager. Under current export c ontrols, this little pager, normally smaller than a computer m ouse, can't be exported to tier III countries because it is considered a supercomputer. That is wrong.
I am going to withdraw my amendment. I am going to do it because I have had conversations with the chairman of the Banking Committee. I fortuitously was able to have lunch with the ranking member of the Banking Committee, and I met also with Senator ENZI, who has worked very hard on this issue, and also Senator JOHNSON, who has worked very hard on this issue. They indicated they are very impressed with the need to change this time period. They want to do it under the Export A dministration Act. I, frankly, have been convinced by them that their intentions are well considered. They have thought this out over a long period of time. I want to work with them and the majority leader and the minority leader to do whatever we can to, this year, move the Export A dministration Act. It is vitally important that we do that.
We need to allow the entrepreneurs in America who have made this economy the vibrant, untiring economy that it is the freedom to sell their products because if we don't allow them to have that freedom to sell their
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I am going to withdraw my amendment with the notice that I am going to work very hard with my friend, the chairman of the Banking Committee and the members of the Banking Committee to do whatever we can to move this very important piece of legislation. It is more than just my amendment. What the Banking Committee wants to move is more important than my amendment. I am concerned about the material that I have in this amendment. I think this is very important.
I look forward to working with the chairman of the Banking Committee and the other members of the Banking Committee to see what we can do to move the Export A dministration Act in this Congress. With all the turmoil we have had in recent months with the partisanship, I believe we need to move this legislation in a bipartisan fashion. It can be done. We need to show the business community of America that we can move forward.
It is vitally important to everyone. The people who buy these products don't look to see who manufactures them, whether they are Democrats or Republicans. The people who work putting these computers together, no one knows whether they are Democrats or Republicans. But everyone knows when we have a good economy that we, the Congress, should get some consideration in a positive fashion for that. If something goes wrong, we deserve the blame. I think with things going so well we have to do everything we can to make sure the economy continues to move forward.
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