Dennis Kucinich on Free Trade
Democratic Representative (OH-10)
A: What we’ve seen is that without solid trade policies, we’re undermined. Without a strength-through-peace doctrine of rejecting war as an instrument of policy, we’re going to keep borrowing money from China. We’re borrowing money from China to finance the war in Iraq. And in addition to that, the speculation on Wall Street has weakened our economy. We need a policy of constructive engagement with China.
A: Yes. Either buy America or bye-bye America. We have to recognize that, and a Kucinich administration will rebuild American industry. And while I’m listening to this debate, I’m the only one up here who voted against China trade. It is critical that we rebuild America’s industry, that we not get in an arms race with China.
A: Well, first of all, we have to understand why so many people came north of the border to seek work. I talked about the connection between NAFTA, trade and our immigration policies. When NAFTA was passed, there was an acceleration of immigration from Mexico because people were in search of jobs. They were told their wages were going to go up. Wages collapsed in Mexico. Now, there were many corporations north of the border who were ready to receive a supply of cheap labor. We understand that. So of course we need to provide people a path to legalization. But if we do not look at NAFTA while we’re looking at immigration, we’re going to keep having the same problems. A new trade agreement with Mexico that has those principles will help workers in Mexico, help workers in the US, create conditions where we finally gain control of our economic destiny again.
His chronology is correct; his economic theory is highly debatable. NAFTA went into effect Jan. 1, 1994. The Mexican peso collapsed late that year, leading to large job losses and reduced wages. Most economists, including the World Bank and the Congressional Budget Office, describe the peso collapse as coincidental.
However, Kucinich is not the only one to espouse a NAFTA-peso relationship. The liberal Economic Policy Institute argued the connection in a 1997 report titled “NAFTA and The Peso Collapse: Not Just a Coincidence.” They wrote, “The peso had to be devalued in order to implement the Mexican strategy for export-led growth that NAFTA was intended to promote.”
A: In my first week in office, I will notify Mexico and Canada that the US is withdrawing from NAFTA. We need a president who knows what the right thing is to do the first time, not in retrospect. And I think that we need to go forward to trade that’s based on workers’ rights, human rights and environmental quality principles. No one else on this stage could give a direct answer because they don’t intend to scrap NAFTA. We’re going to be stuck with it
A: No. We’re going to stop the tax increases that Bush gave to people in the top brackets. We’re going to end war as an instrument of policy. So we’re not going to borrow money from China to fight wars in Baghdad. We’re going to lower our trade deficit by ending NAFTA & the WTO and going back to trade based on worker’s rights. We’re going to change our economy so people will be able to get something for the taxes they pay but they’re not going to have to pay more.
GRAVEL: Outsourcing is not the problem. What is the problem is our trade agreements that benefit the management and the shareholders.
One of my first acts in office will be to cancel NAFTA and the WTO and go back to trade conditioned on workers’ rights, human rights and environmental quality principles. That’s what we must do. A Democratic administration started NAFTA. A Democratic administration will end it.
Now, why was that? Cheap labor. They also were looking to move it to places where if possible they could have prison labor, slave labor, child labor. They didn’t want environmental restrictions. So what happened is NAFTA and GATT opened up the door for that. And it really undermined workers in this country, it undermined workers in other countries.
My first week in office, I will move to cancel NAFTA and our relationship with the WTO and go back to bilateral trade that will be conditioned on workers’ rights, human rights, environmental quality principles.
KUCINICH: NAFTA and the WTO must be canceled. Let me tell you why. The WTO doesn’t permit any alterations. When we, as members of Congress, sought from the administration a Section 201 procedure to stop the dumping of steel into our markets so we could stop our American steel jobs from being crushed, the World Trade Organization ruled against the United States and said we had no right to do that. Now, the World Trade Organization, as long as we belong to it, will not let us protect the jobs. This is the reason why we have outsourcing going on right now. We can’t tax it. We can’t put tariffs on it. In order to protect jobs in this country and to be able to create a enforceable structure for trade, we need to get out of NAFTA, get out of the WTO.
Q: And you can do that by edict?
KUCINICH: The president has the power to withdraw from both NAFTA and the WTO upon a six-months notice. And I would exercise that authority to help save American jobs.
A: That presumes that people of this country do not have a social consciousness. I believe they do. That’s why we’ve lost hundreds of textile plants in this country. That’s why our steel, automotive, aerospace, shipping and textile industries are in such severe trouble. My first act in office will be to cancel NAFTA and the WTO.
A: No, and my first act in office will be to repeal the existing ones. NAFTA has spurred a $418 billion trade deficit, costing 525,000 jobs, most of them in manufacturing. The World Trade Organization forced our president to lift steel tariffs, which will cost us more good jobs and hurt consumers. The Free Trade Agreement of the Americas would encourage the privatization of municipal services, including water.
KUCINICH: 22,000 jobs lost in N.H. can be directly traced to NAFTA and the WTO, good paying jobs in this state that were lost. [Nationwide, we lost] 3 million American manufacturing jobs because of NAFTA and the WTO. As president, I intend to have a trade structure which supports manufacturing in this country-steel, automotive, aerospace, textiles, shipping. I intend to have a manufacturing policy which stops the hemorrhaging not only of manufacturing jobs, but high-tech jobs as well. As president, my first act in office will be to cancel NAFTA and the WTO and return to bilateral trade conditioned on workers’ rights, human rights and environmental quality principles. I wish that every candidate on this stage would join me in saying that you would agree to cancel NAFTA and the WTO, in light of what it’s cost New Hampshire.
DEAN: I did not vote for NAFTA or the WTO, because I have never served in Congress. But I did support China’s entry into the WTO in 1999 because I believed it was an issue for national security. I believe in constructive engagement. That doesn’t mean these agreements don’t need to be changed. We have stood up for multinational corporations in these agreements, but we have not stood up for workers’ rights, environmental rights and human rights. And until we do, trade doesn’t work.
GEPHARDT: Look, Howard, you were for NAFTA. You came to the signing ceremony. You were for the China agreement. It’s one thing to talk the talk, it’s another thing to walk the walk. We’ve got to get labor and environment in these treaties, when the treaties are before the Congress. That’s when it counts.
A: The US is not a beggar in international trade relations. The US is the world’s number one consumer market. The world wants to sell to American consumers. That ought to represent leverage. But the US gave up its leverage when it joined the WTO. Withdrawal from the WTO will enable the US to reclaim its leverage. With this leverage, we will ask of our trading partners to buy from us approximately an equivalent amount of what we buy from them-the principle of correspondence. We can also promote workplace, human and environmental rights from around the world by simply telling our trading partners that we are not interested in buying their products when they are made with child labor, or are made in factories which show no regard for environmental protection.
NAFTA makes it impossible to be able to protect workers’ rights. Now, those people say they’re going to put conditions on NAFTA. If you put conditions on NAFTA, that’s WTO illegal. Unless we cancel NAFTA and withdraw from the WTO, we aren’t going to [improve the economy]. I’m the one, first day in office, cancel NAFTA, cancel the WTO, return to bilateral trade with all those conditions we’ve just spoken about.
But unless we cancel NAFTA and withdraw from the WTO, we aren’t going to get there. So all of this is just talk. I’m the one, first day in office, cancel NAFTA, cancel the WTO, return to bilateral trade with all those conditions we’ve just spoken about.
KUCINICH: The real question is what kind of profits do the Kmarts and the Wal-Marts of the world make?
Q: Well, Kmart, not too much.
KUCINICH: But on the misery of those people in Third World countries who are working for pennies an hour and are finding themselves unable to support their own families.
I think it’s time, not just to move around the edges of this issue, it’s time to cancel NAFTA and the WTO and return to a trading system that’s conditioned on workers’ rights, human rights and the environment.
Otherwise, workers are undermined at the bargaining table, jobs are going south and out of the county and off of this continent. We’re losing control of our own destiny with a $500 billion trade deficit and with rising unemployment. And I think that a core problem here is our trade policy. It’s time to get rid of NAFTA and the WTO.
KUCINICH: I was not in favor of it. I voted against most favored nation status for China for a number of reasons. First of all, we have to keep in mind that there has to be some correspondence in trade. There has to be some relationship between what a country sells in America and what it buys from America.
There has to be some reciprocity. We have $100 billion trade deficit with China, and we have an overall trade deficit of $435 billion. [We should] challenge the underlying structure of our trade, or what does it mean? $435 billion deficit. We need to cancel NAFTA, cancel the WTO, which makes any changes in NAFTA “WTO-illegal.” We need to go back to bilateral trade that’s conditioned on workers’ rights, human rights and the environment.
Proponents support voting YES because:
Rep. RANGEL: It's absolutely ridiculous to believe that we can create jobs without trade. I had the opportunity to travel to Peru recently. I saw firsthand how important this agreement is to Peru and how this agreement will strengthen an important ally of ours in that region. Peru is resisting the efforts of Venezuela's authoritarian President Hugo Chavez to wage a war of words and ideas in Latin America against the US. Congress should acknowledge the support of the people of Peru and pass this legislation by a strong margin.
Opponents recommend voting NO because:
Rep. WU: I regret that I cannot vote for this bill tonight because it does not put human rights on an equal footing with environmental and labor protections.
Rep. KILDEE: All trade agreements suffer from the same fundamental flaw: They are not self-enforcing. Trade agreements depend upon vigorous enforcement, which requires official complaints be made when violations occur. I have no faith in President Bush to show any enthusiasm to enforce this agreement. Congress should not hand this administration yet another trade agreement because past agreements have been more efficient at exporting jobs than goods and services. I appeal to all Members of Congress to vote NO on this. But I appeal especially to my fellow Democrats not to turn their backs on those American workers who suffer from the export of their jobs. They want a paycheck, not an unemployment check.
Proponents support voting YES because:
Rep. RANGEL: In recent years, trade policy has been a dividing force. This legislation develops a new trade policy that more adequately addresses the growing perception that trade is not working for American workers. The Trade and Globalization Assistance Act would expand training and benefits for workers while also helping to encourage investment in communities that have lost jobs to increased trade--particularly in our manufacturing sector. The bill is a comprehensive policy expanding opportunities for American workers, industries, and communities to prepare for and overcome the challenges created by expanded trade.
Opponents recommend voting NO because:
Rep. McCRERY: We should be considering trade adjustment assistance in the context of trade opportunities generally for US workers. That is to say, I think we should be considering modifications to our assistance network in the context of the pending free trade agreements that are before the Congress. Unfortunately, we are not doing that. We are considering TAA in isolation. [We should instead] restructure TAA from a predominantly income support program into a job retraining program. Other problems include that H.R. 3920 would:
Title: Expressing the sense of Congress that the United States Trade Representative should oppose any changes that weaken existing antidumping and safeguard laws at the World Trade Organization (WTO) negotiations.
The mission of the Cato Institute Center for Trade Policy Studies is to increase public understanding of the benefits of free trade and the costs of protectionism.
The Cato Trade Center focuses not only on U.S. protectionism, but also on trade barriers around the world. Cato scholars examine how the negotiation of multilateral, regional, and bilateral trade agreements can reduce trade barriers and provide institutional support for open markets. Not all trade agreements, however, lead to genuine liberalization. In this regard, Trade Center studies scrutinize whether purportedly market-opening accords actually seek to dictate marketplace results, or increase bureaucratic interference in the economy as a condition of market access.
Studies by Cato Trade Center scholars show that the United States is most effective in encouraging open markets abroad when it leads by example. The relative openness and consequent strength of the U.S. economy already lend powerful support to the worldwide trend toward embracing open markets. Consistent adherence by the United States to free trade principles would give this trend even greater momentum. Thus, Cato scholars have found that unilateral liberalization supports rather than undermines productive trade negotiations.
Scholars at the Cato Trade Center aim at nothing less than changing the terms of the trade policy debate: away from the current mercantilist preoccupation with trade balances, and toward a recognition that open markets are their own reward.
The following ratings are based on the votes the organization considered most important; the numbers reflect the percentage of time the representative voted the organization's preferred position.
[Explanatory note from Wikipedia.com "Exchange Rate"]:
Between 1994 and 2005, the Chinese yuan renminbi was pegged to the US dollar at RMB 8.28 to $1. Countries may gain an advantage in international trade if they manipulate the value of their currency by artificially keeping its value low. It is argued that China has succeeded in doing this over a long period of time. However, a 2005 appreciation of the Yuan by 22% was followed by a 39% increase in Chinese imports to the US. In 2010, other nations, including Japan & Brazil, attempted to devalue their currency in the hopes of subsidizing cheap exports and bolstering their ailing economies. A low exchange rate lowers the price of a country's goods for consumers in other countries but raises the price of imported goods for consumers in the manipulating country.
Reciprocal Market Access Act of 2011: Prohibits the President from agreeing to the reduction or elimination of the existing rate of duty on any product in order to carry out a foreign trade agreement until the President certifies to Congress that the US has obtained the reduction or elimination of tariff and nontariff barriers and policies and practices of such foreign country with respect to US exports of any product that has the same physical characteristics and uses as the product for which the President seeks to modify its rate of duty.
The Progressive Caucus opposes awarding China permanent Most Favored Nation trading status at this time. We believe that it would be a serious setback for the protection and expansion of worker rights, human rights and religious rights. We also believe it will harm the US economy. We favor continuing to review on an annual basis China’s trading status, and we believe it is both legal and consistent with US WTO obligations to do so. The Progressive Caucus believes that trade relations with the US should be conditioned on the protection of worker rights, human rights and religious rights. If Congress gives China permanent MFN status, the US will lose the best leverage we have to influence China to enact those rights and protections. At the current time, the US buys about 40% of China’s exports, making it a consumer with a lot of potential clout. So long as the US annually continues to review China’s trade status, we have the ability to debate achievement of basic worker and human rights and to condition access to the US market on the achievement of gains in worker and human rights, if necessary. But once China is given permanent MFN, it permanently receives unconditional access to the US market and we lose that leverage. China will be free to attract multinational capital on the promise of super low wages, unsafe workplace conditions and prison labor and permanent access to the US market.
Furthermore, giving China permanent MFN will be harmful to the US economy, since the record trade deficit with China (and attendant problems such as loss of US jobs, and lower average wages in the US) will worsen. For 1999, the trade deficit is likely to be nearly $70 billion. Once China is awarded permanent MFN and WTO membership, the trade deficit will worsen.
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