United States-Peru Trade Promotion Agreement Implementation Act

Floor Speech

UNITED STATES-PERU TRADE PROMOTION AGREEMENT IMPLEMENTATION ACT -- (Senate - December 03, 2007)

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Mr. SANDERS. Madam President, I rise this evening in strong opposition to the Peru Free Trade Agreement. It seems to me that most Americans understand that our current trade policies are failing. They see this every day when they go shopping and they buy products that are made in China--made all over the world--but that it is increasingly difficult to find a product manufactured in the United States of America. They understand our trade policies are failing when they note our trade deficit is huge and growing larger every single year. It seems to me that before we go forward again in pursuit of a failing trade agenda, we might want to sit back, take a moratorium, understand why our trade policies are failing, and then put together trade agreements that work for the working people and the middle class of this country, rather than just the CEOs of large multinational corporations. That is what I think we should be doing; not rushing helter skelter along the direction of failed trade policies.

One of the major reasons that the middle class in the United States is shrinking, poverty is increasing, and the gap between the rich and the poor is growing wider is, in fact, due to our disastrous, unfettered free trade policies. In my opinion, the last thing we should be doing now is passing another job-destroying, NAFTA-style free trade agreement.

Before we vote on this piece of legislation, I think it is terribly important that we as a Senate take a hard look at the current state of our economy. Now, if our economy is doing well for the middle class, if our trade policies are creating good-paying jobs, if our trade policies are moving toward eliminating poverty, if our trade policies are making us a more egalitarian society, let's go forward; but, in fact, if our trade policies are moving in exactly the wrong direction for the middle class, I think we should take a deep breath and not go forward in that direction.

Let's take a look at in fact what is happening in our economy today since President Bush has been in office.

Nearly 5 million Americans have slipped out of the middle class and into poverty. In fact, today, the United States has the highest rate of poverty of any major country on Earth. Madam President, 8.6 million Americans have lost their health insurance, and some 47 million Americans now have health insurance. Median household income for working-age families has gone down by nearly $2,500 since President Bush has been in office. Over 3 million good-paying manufacturing jobs have been lost. Three million American workers have lost their pensions. Wages and salaries are now at their lowest share of GDP since 1929. The United States has the largest gap between the rich and the poor of any major developed country on Earth. Incredibly, in 2005, the top 1 percent earned more income than the bottom 50 percent. According to Forbes Magazine, the collective net worth of the wealthiest 400 Americans increased by $120 billion last year to $1.25 trillion.

Now, is our current trade policy responsible for all of these economic trends? The answer, obviously, is no. Our current trade policies are not the sole cause for the decline of the middle class and the increase in poverty. But has unfettered free trade significantly contributed to the shrinking of the middle class and the increase in income inequality? The answer is absolutely, it has.

So the point I am making this evening is if you like the way the economy is going, with a shrinking middle class and an increase in poverty and a growing gap between the very rich and everybody else, I guess we should go forward on these trade policies. But if you don't like the direction of the economy of the United States--and the overwhelming majority of people in this country do not like where the economy is going--I think we need a new direction in our trade policies.

According to the Institute for International Economics, 39 percent of the increase in income inequality in our country is due to our unfettered free trade policy. According to the Center for Economic and Policy Research, unfettered free trade has caused the wages of American workers without a college degree to be slashed by over 12 percent. When we talk about economics, we often look at the problem from a general sense, but if we focus on what is happening, especially to those people who are high school graduates, what we are seeing is a severe decline in wages for that subset of the American population. Those people are struggling very hard to keep their heads above water economically.

We now have a record-breaking $765 billion trade deficit, including a $232 billion trade deficit with China, and a $64 billion trade deficit with Mexico. Today, we now have the fewest manufacturing jobs than at any time since Dwight David Eisenhower was President of our country.

If the United States is to remain a major industrial power, producing real products and creating good-paying jobs, we must develop a new set of trade policies which work for the middle class of this country and not just for the CEOs of large corporations. As the Presiding Officer well knows, coming from the great State of Michigan, it was not so many years ago that General Motors was the largest employer in the United States. By and large, those people who worked for General Motors had good wages, good benefits, and a strong union to represent them. Today, the largest employer in the United States is Wal-Mart--low wages, vehemently antiunion, and minimum benefits. That is the transformation of the American economy, and that is a metaphor for why the middle class in America today is shrinking.

Unfortunately, the Peru Free Trade Agreement is another failed trade policy among many other failed trade policies. In fact, in large part, this Free Trade Agreement, the Peru agreement, was modeled after the North American Free Trade Agreement--NAFTA. So I guess the bottom line here is, if you like NAFTA, you will like the Peru Free Trade Agreement. Most people in this country do not like NAFTA.

Has NAFTA been a success? Well, we have some information. We have some figures. Let's take a look. Supporters of unfettered free trade told us over and over again that NAFTA would increase jobs in the United States. I was a Member of the House of Representatives during that debate. I remember it like it was yesterday: NAFTA is going to create all kinds of new jobs. Unfortunately, according to the Economic Policy Institute, NAFTA has led to the elimination of over 1 million American jobs. Well, NAFTA cost us 1 million American jobs. Do we want to go down that road with other trade agreements that will also lead to the loss of jobs and the lowering of wages? I think not.

Supporters of unfettered free trade told us during that debate that NAFTA would significantly reduce the flow of illegal immigration into this country because the standard of living in Mexico would increase.

Well, that issue need not be discussed for too long because nobody believes that has happened. Sadly, as we all know, as a result of NAFTA, severe poverty in Mexico has increased; 1.3 million small farmers in Mexico have lost their farms. They have been displaced and real wages for the majority of Mexicans have gone down. All of this--the loss of farms, the decline in wages, and the increase in extreme poverty in Mexico--is directly opposite of what they told us NAFTA would do, and it has led to a 60-percent annual increase in illegal immigration from Mexico during the first 6 years of NAFTA alone.

So they told us NAFTA would create more jobs in America. Wrong. We lost jobs. They told us NAFTA would increase the standard of living of people in Mexico and stop illegal immigration. Wrong. Extreme poverty in Mexico has gone up; over a million people lost their farms, and illegal immigration to the U.S. has increased. Wrong, wrong, wrong. Yet people say we were wrong, wrong, wrong, and I guess we should continue to go down that same path. That doesn't make a lot of sense to me.

One of the interesting aspects of unfettered free trade in the United States, and all over the world, is that it results in very large increases in income inequality. That is true in the United States, and it is also true in Mexico, where the gap between the rich and poor in that country has skyrocketed.

You would be interested to know that one man in Mexico--we all have to admit that at least one guy in Mexico has significantly benefited from NAFTA, and that is the telecommunications mogul, Carlos Slim. He has done very well by NAFTA. He recently surpassed Bill Gates as the wealthiest person in the world, and he--from Mexico--is worth over $60 billion. He is the richest guy in the world and is from a poor country. Amazingly, Mr. Slim is worth more than the bottom 45 percent of the people of Mexico. One man has more wealth than the bottom 45 percent of the people in Mexico. Frankly, that is obscene.

That is obscene, but that is one of the manifestations of unfettered free trade. In that case, it is in a very extreme way. In fact, while NAFTA helped make Mr. Slim the wealthiest person in the world, about half of the Mexican population lives on less than $5 a day. How about that. One guy is worth $60 billion, and half of the population there lives on $5 a day. That is a manifestation of unfettered free trade. The Slim family fortune is equivalent to 8 percent of Mexico's gross domestic product. So, in Mexico, you have one man who is worth $60 billion, while extreme poverty in that country has increased and small farmers have been driven off the land.

That has been the result of NAFTA in Mexico. I am afraid that, if we continue to move down that road, this will be the same in terms of the Peru Free Trade Agreement.

In addition, before we vote on this unfettered free trade agreement, I think we need to closely examine our unfettered free trade policy with China because China is the 600-pound gorilla in the whole issue. Supporters of unfettered free trade told us that PNTR with China would lead to the creation of hundreds of thousands of American jobs. That is what they said. Well, unfortunately, they were wrong again. Instead, as a result of PNTR with China, nearly 2 million decent-paying American jobs have been displaced.

As we speak, there are millions of men, women, and kids in this country who are going out Christmas shopping. This is the time of year people do that. When people go to stores--whether they are large department stores or small stores--and they buy stuff, they find that almost everything that they are buying--whether it is footwear, telephones, clothing, computers, you name the product--is manufactured in China. They are not manufactured in the United States of America.

I recently held a series of town meetings, and I asked people in my State--and we are a small State. Unlike Michigan, we are not a major manufacturing center. Yet in the last 6 years, in Vermont, we have lost 25 percent of our manufacturing jobs. What kind of a country are we going to be if we are not producing the products people consume? Do you think we can be a great economy simply by flipping hamburgers? I don't think so.

I will tell you, there are people who worry about the military future of our country, our national security, when we are not even producing the products that our military needs. Since PNTR with China, our trade deficit with that country has nearly tripled to $232 billion, and that is a huge and growing trade deficit.

Today, over 80 percent of the toys sold in the United States are made in China. About 90 percent, for example, of the vitamin C--I take vitamin C--is made in China; 80 percent of all shoes we purchase in the United States are made in China; 90 percent of U.S. furniture production has moved to China; 85 percent of bicycles sold in the United States are made in China; half of all the apple juice imported to the United States comes from China; the United States imports more advanced technologies from China than any other country. We are not just talking about stuffed teddy bears or sneakers, we are now talking about highly advanced technology that is developing in China.

I have a simple question: Why is it that, in Vermont, Michigan, and all over this country corporations are shutting down and moving abroad? Wouldn't it be a nice idea that if these guys wanted Americans to buy their products--which they do--how about manufacturing some of them in the United States of America?

As I mentioned, I did a series of town meetings and I talked to the people in my State. I said: When was the last major manufacturing plant built in the State of Vermont? People can't quite remember, but it was a very fine plant built by a company called Husky. They are good jobs and it is a good plant. That was a long time ago. Nobody can remember any new plants being built in Vermont. By the way, I think that is true for most locations in America. Yet I was in China 5 years ago and I saw a lot of American companies building new plants in China--not in the United States of America. I think this is an issue we have to get a handle on.

The irony is that a few years ago when I was in the House, in honor of 9/11, we had a ceremony to commemorate and memorialize the people murdered that day, and they distributed American flags to us. Those flags were made in China. Since September 11, 2001, over 100 million American flags sold in this country were made in China. We are not even making American flags in the United States of America.

Before we pass yet another unfettered free trade

agreement--this time with Peru--we have to fundamentally fix the broken trade policies we have with China and Mexico. That is not just Senator BERNIE SANDERS talking; this is the view of the overwhelming majority of Republicans, Democrats, and Independents.

Let me refer you to a recent Wall Street Journal-NBC News poll. In that poll--maybe 2 months ago--it indicated that 59 percent of Republicans and 54 percent of Democrats believed that unfettered free trade has been bad for the U.S. economy. Probably the only room full of people we could find in America who think that unfettered free trade is a good idea is this room right here. I think Republicans understand it is not working, Democrats and Independents understand it is not working, and maybe the Senate should start listening to the American people who are experiencing the tragedy of unfettered free trade.

We have been told this particular trade agreement with Peru is different than the other trade agreements. We have been told this agreement has strong labor and environmental standards. If that is true, then why is it that not one major group representing the interests of labor, the environment, consumers, family farmers, religious organizations or Latino civil rights organizations supports this agreement? To the best of my knowledge, not one does.

In fact, the Peru Free Trade Agreement is being opposed by the Teamsters, the International Association of Machinists, the International Brotherhood of Electrical Workers, UNITE-HERE, the League of United Latin American Citizens, Oxfam, Public Citizen, and numerous religious organizations in our country.

In Peru, this unfettered free trade agreement is opposed by both of Peru's labor federations, and a prominent archbishop, among others. Even more troubling is the fact that the U.S. Chamber of Commerce, which strongly supports this trade agreement and all trade agreements, has said they have been ``encouraged by assurances that the labor provisions cannot be read to require compliance with ILO conventions.''

In other words, the labor standards in this agreement may not be worth the paper they are written on--or at least that is the view of the U.S. Chamber of Commerce.

According to a recent report by Columbia law professor Mark Barenberg, the so-called labor standards included in this legislation are ``even worse than existing law'' and ``in no respect do the agreement's labor provisions mark a significant improvement.''

Perhaps most important is this fact: The minimum wage in Peru is about 91 cents an hour. So what we are saying to workers in this country is that there is your competition. You are going to be competing against people who make 91 cents an hour. I think that is wrong. I do not think that America should be forced to compete against people in Peru, or any other country on Earth, where people earn such little money.

In industry after industry, corporate America is shipping our manufacturing plants, our good-paying jobs, overseas, where desperate people are forced to work for pennies an hour.

That bottom line is what unfettered free trade is about. The largest corporations in this country have pushed unfettered free trade for years. They have succeeded and they have gotten what they want. They want to pay people in China 50 cents an hour; in Peru, a dollar an hour, rather than paying American workers a living wage here, respecting the environment here and free independent trade unions here.

Our corporate friends have won this debate, and the result of that is that the middle class is shrinking, poverty is increasing, and the wealthiest people in this country have never had it so good.

At a time when the poorest people in this country are seeing unprecedented desperation, when the gap between the people on top and everybody else is growing wider and wider and most of the new jobs projected for the future are low-wage jobs with minimal benefits, that is the future.

The great economic struggle of our time is whether the middle class of our Nation can be saved. That is what it is about. What the American dream was about--and this was true in my household--is my parents started with very little and they worked hard, with the hope that their kids would do better than they did. That is the American dream, and it has taken place here for such a long time.

Right now, if we don't begin to deal with our current economic policies, including disastrous trade policies, there is a strong likelihood that our children--the young generation of today--will, for the first time in the modern history of this country, have the dubious distinction of having a lower standard of living than their parents.

That is a reality that we have to prevent. I don't want to see us participating in the race to the bottom. I don't want to see our kids being poorer than their parents. There are a number of factors for that happening. Anyone who does not think that unfettered free trade is one of the reasons for the decline of the middle class I think is dead wrong.

The word has got to go out loudly and clearly to companies such as Wal-Mart, General Electric, General Motors, IBM, Microsoft, Boeing, and hundreds of other corporations that they cannot keep sending America's future to low-wage countries.

Trade is a good thing, and let me reiterate that point. I believe trade is a good thing, but it must be based on principles that are fair to American workers. The U.S. Congress can no longer allow corporate America to sell out the middle class of our country and move our economy abroad.

A number of years ago, I think speaking for virtually all of corporate America, Jeff Immelt, who is the CEO of General Electric, one of the largest corporations in America, said:

When I am talking to GE managers, I talk China, China, China, China, China. You need to be there. I'm a nut on China. Outsourcing to China is going to grow to 5 billion.

That is what corporate America is saying. That is what unfettered free trade is all about, and it is time we told Mr. Immelt and the other CEOs of large corporations that if they want to sell their products in this country, they are going to have to start producing their products in this country.

It is not acceptable that Thomas Donohue, the CEO of the U.S. Chamber of Commerce, ``urges'' American companies to send jobs abroad. They actually think this is good.

It is not acceptable that Bill Gates, who has many wonderful qualities, tells us that Communist, authoritarian China has created a ``brand new form of capitalism, and as a consumer it is the best thing that ever happened.'' With all due respect to Mr. Gates, I disagree.

We must tell these corporate leaders to stop outsourcing our jobs overseas and stop outsourcing the future of our country. We must demand they start investing in the United States of America and create good-paying jobs here. We must rebuild our manufacturing base. Then we can talk about passing trade agreements that work for the middle class of this country while at the same time lifting standards throughout the world.

I want a race that takes all people up, not a race to the bottom. And that, among many other reasons, is why we should reject the Peru free-trade agreement.

I yield the floor and suggest the absence of a quorum.

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