I thank the gentleman for yielding and taking the time on such an important and timely subject.  I rise in opposition to this so-called Central American Free Trade Agreement.

 

Introduction

I am told the clinical definition of insanity is "doing the same thing over and over again and expecting different results.”  The United States continues to enter into similar so-called "free trade” agreements with countries and regions of the world that give carte blanche to corporate America to outsource jobs to other parts of the world. 

Now given the experience so far, you would think that when you find yourself in a hole, you might stop digging. 

Not only does this ship American jobs overseas, but it creates a "race-to-the-bottom” mentality and further burdens our current trade deficit.  In 2004, the U.S. trade deficit soared to a record of $617 billion, a 25% increase over 2003’s record deficit and more than 5% of our nation’s GDP.

The Bush Administration and the corporations who profit when American jobs get shipped overseas argue that this trade deal will benefit U.S. businesses and workers while helping member countries prosper.  The fact is:  this couldn’t be further from the truth.  Tonight, I’d like to focus my remarks on exposing the real impact that the Central American Free Trade Agreement will have on our workers, Central American workers, and our burgeoning trade deficit.  Let’s first take a quick look at the North American Free Trade Agreement – NAFTA – and its impact on our workers, our neighbors’ workers, and the trade deficit.

Those who advocate Congress’ passage of the Central American Free Trade Agreement, CAFTA,  often point to NAFTA and it status as a "success story” in their arguments.  I think it is important to take a close look at NAFTA in order to understand both the economic and policy implications of this model as we consider the Central American Free Trade Agreement.

During the NAFTA debate, proponents of the trade measure promised that its adoption would lead to 170,000 new jobs in the United States; instead our country has lost 3 million manufacturing jobs since the adoption of NAFTA in 1994, 900,000 of which come as a direct result of NAFTA.  These jobs were good, high-wage, benefits-paying manufacturing jobs that have been replaced by service sector positions that typically pay 23 to 77 percent less, with few or no benefits.  While some proponents expect the Central American Free Trade Agreement to turn out differently than did NAFTA, the six Central American countries possess an even larger pool of cheap labor than Canada and Mexico. 

What’s more, since the implementation of NAFTA, the trade deficit with Mexico has surged from $9.1 billion in 1993 to $110.8 billion last year. 

 

Additionally, NAFTA did nothing to improve the lives of average Mexicans and this failure to improve the quality of life for these workers has generated mass opposition and widespread distrust on our southern border.  Amnesty International continues to report that extrajudicial torture and murders continue.   This is not democracy, this is not what Mexicans signed up for.

Meanwhile, here at home, this comparative advantage of subsistence wages and a complete lack of labor and environmental protections have led to the shift of low-wage, labor-intensive work from the U.S. to Mexico. 

Pursuing unrestricted free trade agreements with lesser-developed countries along the NAFTA model will continue to accelerate this "race to the bottom,” where jobs go to the countries with the weakest labor and environmental protections.  That’s bad for American workers and exploitative of foreign workers.

We hear this Administration talk about exporting democracy.  Well, this is probably the most powerful opportunity.  You don’t export democracy through the Defense Department – you do it through trade agreements.  Are we liberating Iraq so we can move American jobs there and exploit them for wages of 10 cents an hour, in miserable conditions, 12 hours a day, with no environmental standards.

As for the expected boon to the Mexican economy, we have seen none of these gains and instead we have seen NAFTA’s detrimental impact on the Mexican worker.  Average real wages in Mexican manufacturing are lower than they were ten years ago.  And as companies look to cut costs even further, we see factories being shipped from Mexico to China, India, and Indonesia, always in search of the lowest cost best exemplified by the most exploited worker.

 

Now on NAFTA’s coattails rides