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It is worth quoting Dr. Willard Cochrane, former chief economist at the Department of
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It does not make sense to pursue a strategy of pushing exports when the global demand is weak. To sell more of our farm commodities in that situation requires us to price them below the going market price, and thereby pull sales away from our competitors. This would, of course, invite retaliation in which those competitors (like Brazil and Argentina) came back at us by cutting their prices still further. This is not the way to profit from the export market--it is the formula for an expensive price war.
For the U.S., this is a terrible solution. The world prices for products like soybeans and corn are already below the costs of production for most U.S. producers. To expand your sales by selling more at still lower price is no way to get well financially and to stay in business. This practice can only transfer the costs to the U.S. taxpayer, as we are continually forced to provide emergency payments to farmers because of extremely low prices.
The global demand for American farm products cannot be manipulated at the beck and call of American policy makers. Foreign importers are not going to increase their purchase of American food products because U.S. policymakers want them to do so. Imports of American farm products will increase again only as those importing countries pull out of their economic slump and consumer incomes begin to rise.
Fantisizing about solving the price and income problems of American farmers through instantaneous global demand expansion is life fantasizing over winning the Power-ball Lottery. The chances of success are about the same. Farmers generally, and family farmers in particular, would be better served by forgetting about fixing the broken export market for farm commodities, and concentrating their energies on enacting legislation designed to strengthen rural communities, reduce the pollution of America's farmland and rivers, and increase competition among suppliers of non-farm produced inputs on the production side, and among handlers and processors on the marketing side.
I am also opposed to the fast-track legislation drafted by Chairman THOMAS because it will help accelerate the destruction of the environment both here at home and around the world. Further, it will do nothing to ensure basic labor rights for workers around the world. Proponents of fast-track would have us believe that incorporating labor rights and environmental protections that are enforceable in the exact same manner as the commercial provisions in trade agreements is an inappropriate mixture of economic issues with so-called ``social'' issues. That is, at best, a shallow and disingenuous analysis.
Representative SANDER LEVIN, one of the leading Democratic supporters of previous trade agreements, put it best when he said labor and environmental issues ``are fundamentally economic issues that are directly relevant to the structure of international competition. In the domestic context, we don't hesitate to say that `right to work' laws or emissions standard, to
pick two examples, are issues that affect economic competition. Indeed, it was the economic relevance of the right of workers to associate, organize and bargain that made it so central in early, decades-long struggles in our nation. Accordingly, it is illogical and inconsistent to suggest these issues are irrelevant with respect to international commerce and competition. Certainly, labor or environmental issues can have `social' aspects that may involve humanitarian or human rights considerations, or considerations about conservation of natural resources. But it is unrealistic to suggest that as the issues operate among nations, they are not in substantial measure economic in their nature. Indeed, the intensity of the controversy over them, especially between nations, is in good part because they are economic, and not just `social.' ''
The Economic Strategy Institute (ESI), a pro-trade think-tank that includes former officials of the Reagan administration has also concluded that these are economic issues and that labor standards are appropriate. ESI economist Peter Morici wrote in his book Labor Standards and the Global System that, ``An international regime that permitted importing countries to embargo or impose tariffs on goods made with exploited labor would increase wages, speed development and increase growth in countries where labor is exploited if these measures caused governments or producers to take corrective actions. ..... Better enforcement of [core worker] rights would likely promote trade that increases incomes and growth, both in industrialized and developing countries.'' He went on to write, ``Permitting workers to bargain collectively reduces distortions in the economy and results in a more efficient allocation of resources, more exports, and higher GDP. In contrast, denying workers the right to bargain collectively perpetuates distortions in the labor market, and results in an inferior allocation of resources.''
That being the case, why do fast-track proponents who oppose guaranteed workers rights favor a lower GDP for developing countries, a distorted labor market, and an inferior allocation of resources? Free traders pride themselves on promoting economic efficiency. Yet, economic efficiency depends on workers having rights. The Thomas bill, H.R. 3005, does not even guarantee that trade agreements will recognize the five core International Labor Organization standards: the right to freely associate, the right to bargain collectively, and bans on child labor, compulsory labor, and discrimination.
Environmental protection receives similarly shabby treatment under H.R. 3005. The bill includes no provisions that prevent countries from lowering their environmental standards to produce an economic advantage. The bill does not require the negotiation of trade agreements that improve environmental standards. Environmental protections negotiated via multilateral environmental agreements (MEA) are put at-risk. Citizens have few, if any, rights to protest when governments fail to enforce environmental laws, or labor laws for that matter. Even the language in H.R. 3005 that supposedly promotes environmental consideration is meaningless since it is non-binding on the administration's trade negotiators.
I have visited the U.S.-Mexico border since the enactment of NAFTA . It is a virtual wasteland. Environmental protection is not a natural result of so-called free trade agreements.
Environmental protection must be a mandatory objective, enforceable through the same dispute resolution process as commercial provision in trade agreements. H.R. 3005 falls far short of that standard.
Finally, as if destroying American jobs, rural communities, and the environment weren't enough, the misguided U.S. trade policies that would be perpetuated by the fast-track bill before us today represent a frontal assault on U.S. sovereignty.
H.R. 3005 proposes to expand NAFTA's notorious chapter 11 provision, for the first time, allows a private company to sue a sovereign foreign government in the event a country takes an action that is ``tantamount to expropriation.'' Unfortunately, the definition of ``tantamount to expropriation'' turned out to be extraordinarily broad. In other words, if federal, state, or local elected officials take action, such as through passing a law or regulation, that a company believes unfairly limits their ability to make a profit, that company can sue to get the law or regulation overturned or to get monetary compensation for ``lost profits'' resulting from the action.
We have over seven years of experience with the radical investment deregulation included in chapter 11 of NAFTA . During the NAFTA debate, critics of the treaty, like myself, were told that fears about the forced overturning of consumer safety, health, or environmental laws or regulations were unfounded. Unfortunately, events have proven those fears to have been quite prophetic. A string of chapter 11 cases has forced the repeal of public health and environmental laws in Canada and Mexico, and, at least two cases have been filed against the United States. There may be more, but because of the secrecy surrounding these proceedings, it is hard to know.
In Methanex v. U.S., a Canadian corporation is suing to overturn a California law enacted to protect its clean water supply, and thus the health of its citizens. In Loewen v. U.S., another Canadian company is essentially arguing that the U.S. tort system--whereby juries are able to send strong messages via large damage awards to businesses who abuse, defraud, or endanger their customers--is illegal. In other cases, Canada has been forced to overturn a ban on a suspected toxin, the United Parcel Service has sued challenging the existence of the Canadian postal service, and a Canadian steel company has sued over ``Buy American'' laws for highway construction projects in the United States.
The investor protections included in NAFTA , and those envisioned by H.R. 3005, are much broader than previous investment provisions in international agreements. These investor rights are exercised in secretive tribunals that issue binding decisions without regard to consumer health and safety or the environment. And, these investor protections are increasingly being used by businesses as a first resort to influence the sovereign lawmaking and regulatory processes of individual countries rather than as a last resort for egregious conduct by governments. The end-result forces taxpayers to fork over their hard-earned dollars to compensate corporations for our sovereign right as citizens to protect our health and safety.
I believe that federal, state, and local governments should be able to act to protect the public interest without being unnecessarily restrained by trade agreements. Unfortunately, H.R. 3005 says otherwise.
Mr. Speaker, the American people are far ahead of their elected officials in understanding the need to halt and reverse the race to the bottom in labor, human rights, and environmental standards around the world.
A recent study by the School of Public Affairs at the University of Maryland found 93
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Our current trade policies allow multinational corporations to receive all the benefits of expanded trade with no corresponding obligations to workers, public health, or the environment. We must reject the claims of proponents of H.R. 3005 that the choice is between unfettered ``free'' trade or no trade at all.
Let's be clear. Fast-track, and the agreements that would be negotiated with it, are not about ``free'' trade. No one will be arguing for the complete removal of tariffs, quotas, or other barriers to trade. No one will be arguing for the uninhibited movement of citizens. And, no one will propose doing away with patents, copyrights or other intellectual property protections which, while they have an economic rationale, are protectionist and violate the dictates of ``free'' trade. Rather, the debate today is about who will write the rules for trade and who those rules will benefit. I believe Congress must not abdicate our constitutional duty to write the rules, and to do so in a way that benefits average working families, public health and safety, the environment, and the U.S. economy.
I urge my colleagues to oppose H.R. 3005.
Mr. RANGEL. Mr. Speaker, I yield 1 minute to the distinguished gentleman from Washington (Mr. MCDERMOTT), a member of the Committee on Ways and Means and an active member on trade.
Mr. McDERMOTT. Mr. Speaker, the last round of negotiations came down with 5,000 pages of rules and regulations. We have today out here in 1 hour set up the process by which we are going to do this all over again.
The majority would have us believe that it is not even worth taking the time to look at any alternative. They say, well, you can have a motion to recommit. We can have 5 minutes to talk about the process by which we arrive at 5,000 pages of trade legislation.
If Members think that is fair, if Members think that is what people sent the 435 of us here to do, they ought to vote for this. But if Members think we need a little more time, and we have been here for almost 11 months, and we come down here at the last minute and we have less than an hour for 5,000 pages.
It does not work. They are going to have to come back again.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the gentleman from California (Mr. DREIER), the chairman of the Committee on Rules, which shares jurisdiction over trade packages, including this one.
(Mr. DREIER asked and was given permission to revise and extend his remarks.)
Mr. DREIER. Mr. Speaker, on this, the 60th birthday of our friend, the chairman of the Committee on Ways and Means, it is important to note that we are on the verge of casting the single most important vote of the 107th Congress. Why? Because it deals with the two very important issues of our economy and the U.S. role in the world, our leadership role.
We know that the attack that was launched on the United States first hit the World Trade Center, where people from 80 nations around the world were killed, and it was the worst attack on our civilian population ever. They knew exactly what they were doing. They were trying to undermine the leadership role we are playing.
The fact is, the world is moving dramatically towards free trade. The President of Brazil said in a speech just a couple of months ago in Portuguese, ``Exportamos o moremos,'' export or die. He understands that very well.
We as a Congress need to give this authority to the President so that he can pry open new markets for U.S. workers, producers, farmers, and businesses.
Mr. RANGEL. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I hope the worst thing that happens today on the birthday of the gentleman from California (Mr. Thomas) is defeat of this bill and that the rest of the day goes well for him.
But the best thing that could happen for the country is that we defeat the bill and try to do it the right way.
Mr. Speaker, I yield the balance of my time to the gentleman from Missouri (Mr. GEPHARDT), the minority leader.
(Mr. GEPHARDT asked and was given permission to revise and extend his remarks.)
Mr. GEPHARDT. Mr. Speaker, first I want to recognize the gentleman from New York (Mr. RANGEL), the gentleman from Michigan (Mr. BONIOR), the gentleman from California (Mr. MATSUI), and the gentleman from Michigan (Mr. Levin) for a tremendous job in putting together the motion to recommit that we will be talking about in a few moments. They are truly hard workers, and they truly care about a good trade policy for our country. I thank them for the hard work that they did to put this together.
Mr. Speaker, I rise today to ask Members to vote yes on the motion to recommit; and if it does not prevail, I ask Members to vote no on the underlying bill that has been presented here by the Committee on Ways and Means.
Let me first say that I would have hoped that we could have been on the floor today with worker relief. We are 11 -plus weeks since September 11 . We have thousands of workers who have lost their jobs.
While we seem to find time for insurance company relief and airline company relief, and now a big trade bill, and lots of appropriation bills, all of which are important and all of which have great support, we cannot seem to find time to take care of the most important thing in front of us.
I said last week, I guess it is because we are not unemployed. If one is unemployed, unemployment is the biggest problem. They cannot get health insurance today. They cannot support their families. I talk to unemployed workers every day. Their problems are right now, this week, today. I would hope that we would get relief for them soon. They need it. We have to do it. They deserve it. Rather than taking up every other manner of bill, I hope we would take that up.
But let me direct my remarks to the bill from the Committee on Ways and Means and why I think it is ill-advised and why the kind of bill that will be presented on the motion to recommit I think is the right way to go.
Let me say that over 20 years now, we have made great progress, in my view, on trade policy in America. Trade policy today is not what it was 20 years ago. There is a good reason for that. In trade negotiations, 20 years ago the only thing that was ever really considered were tariffs. It was a matter of trying to get down high protective tariffs all over the world so that trade would take place between countries.
Today, we have moved way down the road and the issues are not just tariffs, the issues are really about compatibility: how do we get intellectual property laws in countries to be properly enforced; how do we get capital laws to be enforced.
What we have brought to the table and tried to get on the table is the question of whether or not labor laws, human rights laws, environmental laws, health and safety laws, should be just as much a part of trade negotiations as intellectual property laws and capital laws.
Now, we have made a lot of progress. We had a treaty with Jordan that was recently brought to the Congress that dealt with those matters, to the satisfaction of the Government of Jordan and to the satisfaction of the United States.
We now go to another WTO Round. There are lots of other free trade treaties that we want to negotiate, that we should negotiate; but it is vital and important that the full range of issues that should be in those negotiations are on the table in the core text of the treaties.
I was at Microsoft last week, and one of the executives at Microsoft said to me, our intellectual property is still being pirated in China. We are not being paid for our Windows software in China. They can buy it on the street corner, pirated copies. You need to do more, he said, to enforce the intellectual property agreements that are in the treaties with the WTO and now China.
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