GATT (Senate - September 30, 1994)

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Mr. DORGAN. Mr. President, there has been a fair amount of discussion in the last couple of days here in Congress and in the newspapers about the subject of GATT, General Agreement on Tariffs and Trade.

Frankly, not many people know very much about GATT, what it means. It sounds sort of dull, like a backwater in public policy. But GATT, the General Agreement on Tariffs and Trade, the potential ratification of the Uruguay round of these trade talks, will have enormous effect on the lives of every single American and every American family.

I wanted to say a few words about it today because I sense there is an impatience here in Congress and in the country on the subject of GATT. Some people are impatient because they think our trade negotiators have negotiated an agreement with many, many other countries and it a fundamental nuisance if we now decide we cannot move this swiftly and approve it quickly. It is just a nuisance if somebody wants to have a discussion or debate about it.

I would say, it is not at all a nuisance for us to be talking about the fundamental economic and trade policies. These are some of the most important and profound policy changes in the last quarter or half-century.

This country, as I have said on the floor on previous occasions, is in a sour mood. It does not take much to find that out. Turn on your radio and listen to the next talk show. Turn on the television. Go visit with some folks in a cafe and see what they think about life, about Washington, about their Government, about where the country is headed.

At least part of that, it seems to me, is what they see in the institution of Government. They see waste and they see problems and they see evidence of concern. That sours them. But there is another element to all this because I think the Government, the Congress, for example, has addressed a lot of things in very important ways. We affect senior citizens in a positive way, affect farmers in a positive way, affect wage earners in a positive way. So not all is bad and not all that has been done represents a step backward. We have made many steps forward. But it is so much easier to be critical than it is to look at the positive side of things--and I understand all that.

Yet at least part of the discontent deep in the gut of every American is some basic understanding that we are not quite doing as well as we used to do. It used to be almost a given when you woke up in the United States of America, you knew that we were the biggest, the best, the most, the first: No. 1. It was just the way it was. And you knew that is the way it was going to be in the future. And you knew life was better for you than it was for your parents. And life was going to be better for your kids than it was for you. That is the way it worked. That is the way things have been for several decades in this country.

But things have changed. The fact is, the average American family has less income now, adjusted for inflation, than that family did a decade ago. If you talk to parents you will find out they are not so sure their kids are going to do better or have it better. In fact, most people think their kids are going to confront more challenges and more trouble and lower incomes and less opportunity. That gnaws at people and leads people to be concerned about the future and to have less confidence in the future.

People know that if you look around you will see other people around the world now have jobs that we used to have. Whoever might be watching C-SPAN on television will understand, probably, that we invented television. The United States of America invented television. We invented it but we no longer produce many television sets. The production of television sets has largely all moved offshore. We invented the technology and someone else produces the television sets.

The American people know that. And they know that it is not just television sets. We have lost market share in many other things. We have, in the last decade developed an economy in which we listen to economists and we listen to the soothsayers on Wall Street and the business folks and others. And we have been led to believe that we should measure our economic health based on what we consume rather than what we produce. No country will long remain a world economic power unless it measures in a real way its opportunity and its strength based on what it produces, not what it consumes.

Turn on the radio as you drive down the beltway and listen to the next economic statistic. The next question is, what were retail sales this month? The whole series is geared on what we consume rather than what we produce. And that is the dilemma that we face in our country. GATT, the General Agreement on Tariffs and Trade, furthers this consumption mentality.

The notion of GATT is that we should reduce tariffs. Last evening I was listening to the news. The description of GATT was: It is a reduction of trade barriers. Who could be against that? I do not know of one thinking person in this country who would say: Gee, I am against the reduction of barriers. Phrase it that way and I say sign me up. Send me in. I am all for it.

But that is not exactly what is going on with GATT. Yes, it reduces tariffs. That was part of the negotiations, country to country. It does open up markets. I think it will do that.

It also establishes the rules of competition. Most certainly it will do that. It establishes the rules by which we in America who produce certain products will compete against others in other countries who produce those same products. And the rules of competition, it seems to me, are rules designed to facilitate the economic interests of the largest producers in the world, those economic interests who are very large. These producers are not American firms or Japanese firms or British firms or German firms any longer; these companies do not get up in the morning and say the Pledge of Allegiance to the Flag. These big producers are multinational corporations. They are international corporate citizens interested in one thing: Maximum advantage for their stockholders.

Those corporations, which I think largely drive these discussions, have an interest that is very, very simple. Their interest is to produce their products in an area of the globe where they can find the cheapest possible production and then to sell their products in the area of the world where they can find the best markets for sale. What does that mean? It means that when you are producing something, if you can possibly find a way to produce it paying 15 cents an hour labor and then sell it in a rich, aggressive market like America, you will maximize your profits.

So we set up competition in which producers can judge where in the world to produce. It is as if you get on an airplane and you fly around the world and peer down and say, `All right, where will I produce this product? Who has the capability? Who has the labor force? And what will it cost me?'

I have said on the floor previously that the cost comparisons are very interesting, which is why the competition for production established in these kinds of trade agreements is so fundamentally unfair to the American worker. We now pay about $16 an hour for average manufacturing wages in the country. That level comes from a very long struggle between producers and workers, and the collective bargaining process and our notion of what a living wage should be. That network of rules and notions has developed over a long period of time in this country.

Now, in many other countries there is no such network at all. In many other countries we are not talking about a real comparative economic advantage, as economic theory would describe it. We are talking about political comparative advantages, political in the sense a country can decide that it is not interested in upholding fair labor standards.

Some countries do not have standards for safety in the workplace, standards prevent 10-year-old children from working 10-hour days in sweatshops. These are political decisions, and some countries make them all the time in order to inhibit the growth of a well-paid labor force.

So the result is, we have many areas around the country where you have relatively low-skilled but very, very low-paid, workers. These workers are willing to work for multinational companies for what we would consider to be an insignificant amount of money.

I mentioned the other day a woman named Sadisha. Sadisha is a woman in Indonesia who makes shoes. She works 10 1/2 hours a day. She works 6 days a week, and she makes 14 cents an hour. The product of her work is a pair of shoes that will sell for $80 in the United States of America. She needs about 1 1/4 hour to make a single pair of shoes, so an $80 pair of shoes costs only 20 to 25 cents in labor.

Would a company who wants to produce shoes decide to produce them in Pittsburgh? Or would that company decide to produce them where they can pay 14 cents an hour? What is the economic decision for that company? It is clear. It is a decision that too many companies have made over the past few years. A manager thinks to himself, I have a choice: I can hire one American at the average manufacturing wage, or for the same money I can hire 20 people from the Philippines. Rather than that one American, I can hire 40 people from India. Rather than hiring one American at an average manufacturing wage, I can hire 80 people from China.

Those are the choices that producers have if you establish a competitive trade system in which you say, `We're not too much worried about standards; all we want to do is reduce the tariffs. And if we can reduce the tariffs, we'll pretend we just won the Olympics. We'll celebrate. We'll declare a day of feasting and rejoicing. And we'll call the agreement free trade.'

Of course it is not fair trade because we have then said to the American worker, `We want to set up competition for you and, gee, we think you're good, we think you're hardworking and enterprising, and we think you can win.' They say, `What is that competition?'

We say, `You now earn $15 an hour average manufacturing wage, and we're going to put you in the ring and you are going to compete with somebody making 14 cents an hour.'

They are going to scratch their heads and say, `You know, I'm not sure we can compete. I'm not sure we want to compete. Who thinks we can compete with 25-cents-an-hour wages, or 50-cents-an-hour wages, or $1-an-hour-wages when, after all that we have been through in this country to improve living standards and working conditions, to try to give people who work hard a living wage, we are now told that we have a new system of competition.' That is what is at work in these discussions about trade rules and GATT.

Yesterday, I was in a discussion about this issue. It took no more than 30 seconds to become the predictable discussion between people who talk right past each other. I raised some of these same issues, and the response by a friend of mine was, for those of you who want to build walls around America and keep out all imports--and I thought to myself, gee, that is not what I am talking about. I would never suggest that. I want American consumers to have a wide choice of goods produced in the world. So immediately we talk past each other in these debates.

Maybe we should construct trade rules differently. Competition should be fair competition, not between us and everybody in the world, or us and those who will be willing to work for 25 cents an hour. The competition would be fair between the industrialized countries where living standards and work standards are relatively similar.

And then let's use preferential trade conditions to try to bring some of the other countries up to our level, rather than being dragged down. That would be better than what happens now. Now the producers fly around the globe and say, `Where on Earth can I produce for the cheapest cost?' Of course, we learn that those very same places where you can produce for the least cost are going to allow you to hire workers who cannot begin to purchase the products they produce.

So you have no choice but to ship these goods to the United States. You need to develop markets and try to sell your product here. This works for a while, and then one day, inevitably, not enough people will be working here to be able to afford to buy the products that you produced elsewhere.

That is the fundamental problem of putting together a trade system that works.

It is not just an inconvenience, and it is not just a nuisance for us to decide to stop and try to promote a serious and abiding national discussion about these policies. These policies, after all, are about this country's economic future. It is not about free trade versus protectionism. That is far too simplistic.

The Senator from North Carolina raises these questions, and some others of my colleagues raise these questions. We are viewed with arched eyebrows as `folks who don't quite get it, folks who just can't quite see over the horizon, who just do not have the vision to understand exactly what is happening.'

I do not agree. I and a lot of the American people understand exactly what is happening. In fact, I think this problem fuels part of the engine of discontent in this country. Too many American families understand their incomes are lower than they were a decade ago. Too many American families understand that when they are looking for jobs for their kids, well educated or not, it is going to be harder to find the jobs. Those jobs have left.

That is what this debate needs to be about. We had an economist, who is a friend of mine and for whom I have great respect, come to a hearing some while ago. He said, `These kinds of trade agreements will mean, yes, lower income, but only for the unskilled workers in America.'

I said, `What do you define as unskilled workers in America?' Seventy percent of the American work force--70 percent of the American work force.

`Yes,' the economists say, `this will mean lower income for unskilled workers, only for unskilled workers.' What they are saying is, these kinds of agreements will mean lower income for 70 percent of the American work force. Is that a policy that we want for America's future?

Those who are opposed to these viewpoints will say, `Well, should we not compete?' Absolutely. No question about it. Is competition good? You bet it is. Can we do without competition? No, I do not think so, because without competition you do not have creativity, you do not have innovation, you do not have the kind of aggressive invention and production that goes on in a free society. So we need it.

The question has never been that. The question is fair competition. Do we want to compete against 25-cent-an-hour wages? Do we want to compete against $1-an-hour-wages? Or do we want to decide to compete when we have developed rules of competition that are fair? Those are the questions, it seems to me, that we must begin to answer.

There are times these days when I think everyone serving in this Chamber wonders how will we ever change the mood in this country; how will we ever try to respond to the increasing volume of negative cries and responses in this country.

One way we do that is to understand that all of us have individual responsibilities that start with us, not with Government, and they start with us at home, in our neighborhoods, and in our communities. We also need to meet the responsibility we all have to make sure that our Government does the right things for our future.

The right thing, it seems to me, that restores hope and confidence in this country, is to provide people with an understanding that tomorrow there will be opportunity. That is all our obligation is; that is all people want. People want to be able to see opportunity ahead.

As I close, I cannot help but point out one other thing. A few days ago we saw this exercise of a contract for the future on the steps of the Capitol--a contract. I looked at that contract; I thought somebody ought to be sued for contract fraud here. There are certain timeless truths that ought to go across every single debate and every single understanding we have: Pay your bills.

The contract they are talking about says, `Let's increase the deficit massively, not worry about it, promise and promise and promise, and not decide how we pay for it.'

Pay your bills. That is the first virtue, it seems to me. It is a truth that we all ought to understand, individually and especially in our Government.

Educate your kids. Give your kids an opportunity, invest in them, invest in human potential--that is the way to move this country ahead.

Keep your streets and neighborhoods safe. Deal with the problem of security and crime. If you cannot, kids cannot learn if they are not safe, families do not stay together. You cannot produce if you do not feel safe. The fact is, security and safety are critical.

And then provide an opportunity in which our workers compete fairly--fair trade--and that is what GATT is all about--fair trade.

That is why this need for a debate is so important.

I guess I am so concerned about GATT because we need to enable the American people to hope for the future. People hope in the future if they believe that the future holds opportunity. That is what this debate is about.

I am not one who believes the economic future of this country is inevitably a future towards fewer jobs and lower income. It is the future we decide it will be. We can compete anywhere on this globe. We have the ingenuity, the capability. We have the natural resources. If we have the national will and if we develop the national policies, we will do just fine.

But this debate is about the policies and the will. That is why I would say to those who think this is all a nuisance, and who believe we should not worry too much about GATT, you are wrong. This is the time, this is the place, and this is the purpose of this institution. We need to have a meaningful debate about this country's economic future.

Mr. President, I yield the floor.

Mr. President, I make a point of order that a quorum is not present.

The PRESIDING OFFICER (Mr. Rockefeller). A quorum has been questioned. The clerk will call the roll.

The legislative clerk proceeded to call the roll.

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Mr. MACK. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.

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