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Fritz
Hollings says "Baloney"
to call for fast track trade
By Ernest F. Hollings
U.S. Senator, South Carolina
Special to GwinnettForum.com
(Editor's note: this was especially written
for GwinenttForum. It's longer than we normally use, but who's going
to edit a U.S. senator? A similar version first appeared in the
New York Times. -- eeb.)
MAY 14, 2002 -- The United States is exporting jobs - - both manufacture
and high tech - - faster than we can create them. The economy weakens
and the nation's security is jeopardized.
Sen.
Fritz Hollings
D-S.C. |
The security of the United States rests as upon a three legged
stool. The first leg - - the nation's values ----is unquestioned.
The world around knows of America's stand and sacrifice for individual
freedom and democracy. The second leg - - military - - is unquestioned.
The third leg - - economic - - is fractured.
At the end of World War II we were the world's industrial power.
The devastated in Europe and the Pacific Rim were given aid, equipment
and the expertise to rebuild; and the cold war was won. Capitalism
defeated communism.
Fundamental to this victory was the United States' treatment of
foreign trade as foreign aid. We called it free trade. But as we
set the example of opening up and giving up the U.S. market, the
competition refused to follow suit. Rather, they followed the example
of our founding fathers.
Our country had barely won its freedom when Britain contended that
we trade with the mother country with what we produced best; Britain,
in turn, would trade with what it produced best.
Alexander Hamilton, in his famous Report on Manufactures, told
the British in a line, "Bug off." We were not going to
remain a colony shipping cotton, rice, indigo, timber, and food
stuffs, while importing finished goods from England; we would become
a nation state by developing our own manufacture.
The second bill to pass the U.S. Congress, on July 4, 1789, imposed
a tariff on various imported goods. President Lincoln followed suit
with protectionism for steel, President Roosevelt with protectionism
for agriculture, and President Eisenhower with protectionism for
oil. With the income tax, not adopted until 1913, we built the industrial
giant United States of America on protectionism.
But at the end of the cold war, we lost our way. America's business
management, sent to rebuild, soon learned the economy of offshore
manufacturing. Labor costs in manufacturing average 30 percent of
sales. A company that retains its executive offices in America but
moves its production to a low-wage area could save as much as 20
percent in sales volume. Thus, a corporation with $500 million in
sales could increase its pre tax profits $100 million each year.
Accordingly, manufacturing has been leaving the U.S. in droves.
Little South Carolina has lost 53,300 textile jobs since the free
trade agreement with Mexico.
Since the fall of the Berlin Wall, hundreds of millions of workers
have entered the world's workforce ready to produce at a minimum
standard of living. In contrast, America continues to increase its
standard of living with requirements for a minimum wage, Social
Security, Medicare, Medicaid, safe working place, safe machinery,
clean air, clean water, plant closing notice, parental leave, and
continued health coverage. A plant can move to Mexico for 90 cents
an hour, and none of these requirements. Two years ago, corporate
America's golden boy, Jack Welch of General Electric, told suppliers
they would no longer be suppliers of GE unless they moved to Mexico.
Today, more than half of what we consume as a nation is imported,
and we produce little to export. In April, I rode Acela, the fast
train from Washington to New York, which was made in Canada. The
security dogs that sniffed me at Penn Station were from Czechoslovakia.
High tech that was supposed to be the motor of domestic growth is
now imported.
We have a deficit in the balance of trade in semiconductors. Our
insurance policies are administered in Dublin; our light bills in
Bangalore, India.
Moving this production offshore, the National Association of Manufacturers,
the Business Roundtable, the Conference Board, the Chamber of Commerce,
and the National Federation of Independent Business all join in
a chant of 'free trade." The retailers who make a bigger profit
on the imported article cry "free trade." The newspapers,
making most of their money from retail advertising, editorialize
"free trade" handouts for the retailers.
We have just learned that corporate America is not only exporting
our jobs, but they now move their executive offices to Bermuda so
as to pay no taxes. They want the protection of living in America,
but refuse to protect the economy of America.
Now, the Bush Administration contends good trade agreements are
passing us by because we don't have fast track, which would allow
the President to negotiate trade agreements that Congress then must
consider with a straight up or down vote.
Baloney! During the '90s we entered into more than 200 international
agreements without fast track, including: the chemical weapons treaty;
the Caribbean Basin, Sub-Sahara Africa, Jordan, and Viet Nam trade
agreements; and China's entry into the World Trade Organization.
Under Article 1, Section 8 of the Constitution it is not the President,
but the Congress that shall "regulate commerce with foreign
nations." But the fix is on. The fast track bill is called
in the Senate only when the White House knows it has 60 votes to
invoke cloture. The bill is then called, cloture invoked, and debate
limited. No one listens because they know the vote is fixed. Fast
track is passed and free trade continues as foreign aid, and the
United States continues to go out of business.
Years ago, Akio Morita of Sony admonished third world nations that
they had to develop a strong manufacturing sector to become a nation
state. Turning to me he said, "Senator, that world power that
loses its manufacturing capacity will cease to be a world power."
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Number
2.10, May14, 2002
