Press Conference by Majority Leader Gephardt Opposing NAFTA

 
         NEWS CONFERENCE WITH REP. DICK GEPHARDT (D-MO)
                SUBJECT: OPPOSITION TO NAFTA
 
 REP. GEPHARDT: Good afternoon.  I'm very happy to appear before
 you today, and Ithank all of you for coming.  I've come today to
 discuss something which seems to be the subject of the week in
 Washington which has been a major subject of concern to me for
 about three years now.  In fact, for more than three years I've
 been out spoken on the North American Free Trade Agreement
 negotiations.
    I've traveled to Mexico on seven separate occasions; I've
 written numerous letters, both public and private, to both
 President Bush and to President Clinton and their administrations
 on this very important issue.
    From the start I have said that I would make my decision on
 one basis and one basis alone -- that the only decision that I
 could justify was one based on the substance of the agreement. My
 bottom line test was whether or not I was convinced that the
 final NAFTA would be a force for progress in all three countries.
 I have reached a decision, and I am here to state it and explain
 it.Despite the best efforts of President Clinton and his
 administration to remedy the flaws in the Bush-negotiated NAFTA,
 the agreement is not a sufficient force for progress.  So today I
 am announcing that I will vote against this NAFTA.  The issues
 are too important, and the stakes are too great to pass a
 deficient NAFTA, and no NAFTA is preferable to a deficient NAFTA.
 Once approved, we will not have the opportunity to easily revisit
 this issue.
    No member of Congress is unaware of the importance of the vote
 we will cast on this issue; it's a decision of great consequence.
 So I have tried to take greatcare in making it. Unfortunately,
 for a number of reasons this NAFTA falls short. Others will
 disagree; I respect their views.  At the same time, I hope they
 will respect mine. The basis of democracy is open, honest debate;
 in fact, our democracy is strengthened by our ability to weather
 debates such as the one that our country is going through now.
 As John Stuart Mill said, it is only by the coalition of the
 adverse opinions that the remainder of the truth has anychance of
 being supplied.
    I believe we should begin this debate with a premise: In
 economic affairs, our guiding national goal should be a high and
 rising standard of living and a long-term policy of ensuring
 better jobs at better wages.  Now, to many of you this may sound
 quite obvious; but too many of our policy debates don't accept
 this basic goal at the outset.  Without a strong economy, America
 can't lead, not only because of limited resources but because of
 limited resolve.  The American people are right to ask their
 representatives to put their interests first.  At the same time,
 America has a conscience. We're a community, and we'repart of a
 larger community.  Being self- interested doesn't mean being
 selfish. From Bosnia to Mexico to Somalia and other places around
 the world, America has and needs to continue to lead.  But our
 capacity to lead depends not just on ourmoral strength but also
 on our economic strength.  As David Potter, author of People of
 Plenty said, and I quote, We conceive of democracy as an absolute
 value, largely ideological in content and equally valid in any
 environment instead of recognizing that our own democratic system
 is one of the major by-products of our abundance workable
 primarily because of the measure of our abundance.
    In sum, the first thing we must do is agree as a society that
 our prime goal is a high standard of living.  For the past twelve
 years that goal has shared equal billing with others like free
 trade, private markets, social justice, lackof government
 interference, or unwillingness to offend allies. But we cannot
 achieve our best hopes in the wider world unless we first do our
 best for our people.
    Under this agreement we will not be doing the best for our
 people; we will reduce our abundance.  By not addressing key
 issues like water, our wages and our standard of living will seek
 its own level and, drawn down by the lower wages in Mexico, our
 standard of living will continue to stagnate or decline.
    We face great challenges in this global economy; indeed,
 Mexico is not the only competitor we face with highly productive,
 quality- oriented productive capacityand low wages. Thailand,
 China, other countries all pose enormous competitive threats to
 our standard of living.  But there's an important difference:
 We're not seeking to complete a free trade agreement with these
 countries.
    By promoting freer and more open trade with Mexico, with the
 changes they will make in their own laws, we're going to
 stimulate investment in their country, and that's why Mexico
 supports the agreement.  Mexico also has the tremendous advantage
 of a common border with our country that makes the integration
 that much more attractive and threatening.
    We want a healthier Mexican economy, but not at the expense of
 our own. And we need to recognize that we must get it right in
 this agreement, both for what it means to us on its own and
 because Chile and other countries are waiting in line for similar
 agreements. They'll expect that the NAFTA will be air- dropped
 into place for a quick ratification.  So this agreement has
 repercussions beyond its current scope.
    Numerous studies have been conducted on the effects of NAFTA
 in terms of jobs,and there are those today who support the
 agreement and will say every reasonable study shows net job
 gains.  And then there are those who oppose the agreement, and
 they'll say that every reasonable study shows net job losses.
    Now, all of us, certainly I am concerned, as everybody is,
 with job losses in the United States, whether they are net or
 gross.  A lost job is not just a debating point in a discussion.
 To the person who loses the job, the consequences are
 devastating.  But change will occur, whether we like it or
 not.We're losing good-paying jobs and, frankly, that's going to
 continue with or without NAFTA. The much greater threat is to our
 wages and our standard of living, and on this important point
 there can be no doubt that NAFTA as drafted will only increasethe
 downward pressure.  In short, the goal that I outlined earlier --
 a high andrising standard of living and a long-term policy of
 ensuring better jobs at better wages -- won't be achieved under
 this agreement. On the contrary, I thinkthe agreement will
 undermine this goal.
    And of all of the goals that we share with regard to Mexico,
 proponents and opponents alike, that it too be a strong nation
 with a rising standard of living will not be possible if our own
 economic strength is put at risk.  For the ability to share our
 wealth with others, our ability to promote progress around the
 globe, our ability to offer democratic opportunity to people of
 all nations depends and indeed is rooted in our economic
 strength.  This agreement undermines the roots of outwardly
 directed foreign and economic policies on behalf of the United
 States.
    In March of 1991 I wrote a lengthy letter to President Bush
 outlining the yardstick against which I would measure NAFTA.
 Since that time, while I have offered proposals to help measure
 the result, I have refused to make that standard either more or
 less difficult. Since that day, I consistently and persistently
 advocated the only kind of policies which I believe would allow
 us to integrate our three economies -- Mexico's, Canada's and the
 United States' --while increasing growth and opportunity in each.
    As I wrote President Bush, I want the Mexican economy to
 flourish and grow.
    Relying on low wages and unsafe working conditions as
 comparative advantages to lure away high-paying American jobs
 will not save the Mexican economy, but it will further weaken the
 American economy.  I said in order for Mexico to prosper, America
 must prosper. So for a free trade agreement to be of
 meaningfulbenefit to all nations, it must contain provisions that
 will stem any hemorrhageof American jobs across the border.
    I said for that reason I request that you not limit the talks
 to what used to be traditionally known as trade issues --
 tariffs, trade- related investment restrictions, dispute
 resolution and the like -- but rather that we address North
 American Free Trade systematically. I said to do so will require
 discussion issues like transition measures, wage disparity,
 environmental protection, and workers' rights.
    While I was doubtful that President Bush would negotiate an
 agreement that wouldwin my support -- and in an ironic way, he
 didn't let me down -- I voted for fast track authority because I
 thought NAFTA, done right, would be in our and Mexico's best
 interests.  Free trade is an important and ongoing project.  But
 theory and reality are often very different.  Many have argued
 for the agreementbased on economic theory as if theory had the
 force of defined and indisputable dogma.
    Unfortunately, most economists haven't taken the time to
 travel to Mexico and see what's actually happening on the ground.
 In Mexico I have met twice since the beginning of the
 negotiations with President Salinas, I have met numerous times
 with members of his cabinet, and I must tell you with all my
 heart that I applaud his commitment and his people's commitment
 to the Mexican people.
    When I had dinner with President Salinas, he talked about the
 results of his solidarity program that has brought electricity
 and water and dignity to many communities in his country, and I
 have seen the change brought about by his policies on the ground.
 But much, much more needs to be done in both countries.
    On both sides of the border I have seen families forced to
 live in squalor in homes with cardboard walls, dirt floors, and
 roofs made of scrap wood and metal.Poverty is always cruel, but
 for these workers it is especially tragic. They work in some of
 the most advanced manufacturing plants in the entire world, and
 while they use computerized machinery on the job, they don't have
 water they canbathe in, let alone drink, off the job.  They build
 some of the most sophisticated television sets in the world, some
 of the most sophisticated computers in the world, and yet their
 homes are at times built from the packing materials.  I've talked
 to workers who have moved from the interior of Mexico seeking a
 better life and then to find that they are forced to live on --
 and barely live -- on subsistence wages.  And I've talked to
 workers who have been fired for trying to form a union, and I've
 walked through plants and seen safetyviolations that jeopardize
 the health and welfare of everyone there. And I've seen the
 inside of barracks where hundreds of young Mexican workers are
 forced to live, through economic necessity, virtually on top of
 one another with no privacy, no dignity, and no real future.
    Understand: Mexico is a great country with strong, determined,
 admirable people who deeply deserve change and progress no less
 than our people.  A NAFTA done right could be a force for
 progress in all of these areas and in all of these countries.  It
 could increase growth and opportunity for workers. It could
 provide a basis for cleaning up environmental degradation and
 protect against future problems, and it could be the basis for a
 hemispheric-wide trading community that would enhance our ability
 to compete with any nation or any trading bloc in the world.  It
 would add tremendously to the synergy of trade bydeveloping new
 efficiencies of production.
    It is on these important issues that the Bush Administration
 fell flat on its face.  They did not understand, as President
 Clinton did, that addressing labor and environmental issues was
 essential to a successful NAFTA.  I commend President Clinton for
 the vision he has shown, as no president before him has, and the
 diligence with which he has pursued it since his October campaign
 speechon the North American Free Trade Agreement.
    What are the causes and effects of the challenge he set out
 for himself and for us?  Mexican wages are kept artificially low
 because of the actions and inactions of the Mexican government.
 Government rules and procedures set both minimum and maximum wage
 increases for the vast majority of hourly workers in
 manufacturing industries, and they have kept these wages low to
 help their economy grow.  They've sought to combat inflation and
 to attract investment fromcompanies seeking low-wage labor as a
 way to cut their costs.
    Mexican wages must rise because it is the right thing for the
 Mexican people.
    They must also rise because we want to make them better
 consumers of Mexican andUnited States products, and if their
 wages don't rise, the downward pressure on our wages will
 continue. Official data from the Mexican government tells the
 story best.  Since 1980, real hourly compensation has fallen by
 32 percent in Mexico, while manufacturing productivity has
 increased by more than 30 percent. Wages were going one way,
 productivity going the other.
    Economists tell us that wages should roughly track
 productivity increases, yet Mexican workers are producing more
 and being paid less. And what does this mean to the average
 Mexican family?  Well, the flip side of low earnings and low
 purchasing power.  A survey conducted earlier this August showed
 that a worker would have to work about an hour to earn a half a
 gallon of milk, two and a halfhours for a pound of beef, almost
 an hour for a dozen eggs, and almost two hoursfor baby formula.
 In other words, workers are finding that they work simply to eat.
 The chance of a better life is simply out of reach.
    After spending countless hours in reading and examining this
 agreement, studyingthis issue, I truly believe that this
 agreement falls short in terms of reachingthe goals that I've
 outlined, and there are a number of reasons for that.  Does this
 NAFTA do enough to ensure that, while companies may be attracted
 to Mexico's high-quality labor force or lower wage structure,
 we've done all that we can to eliminate artificially low wages in
 Mexico? The answer, unequivocally and undeniably, is no.
    In the area of labor, this NAFTA is actually worse than the
 status quo for tworeasons.  Under the NAFTA, the Mexican
 government refused to allow industrial relations -- the right to
 strike, the right to bargain collectively, the right to freely
 associate.  They refused to allow these rights to be coveredunder
 the dispute resolution procedures of the agreement. This is a
 glaring andcritical omission.  It is equivalent to having an
 environmental agreement that excludes air and water.  What the
 Mexican government has said is that they're unwilling to allow
 oversight of whether they're enforcing their most important labor
 laws.  We're not talking here about the United States imposing
 our laws onMexico; we simply want them to enforce their good
 laws, and their laws are actually quite good.  Their constitution
 provides basic labor law protections; it includes family and
 medical leave; it even includes striker replacement limitations.
 But you can have the best laws on the books, and if they aren't
 enforced, they aren't worth much. That's the case in Mexico.
    The largest union federation, which covers the vast majority
 of workers, acts asa quasi-governmental agency.  Each year they
 enter into what is known as El Pacto that sets maximum and
 minimum wages.  A conscious decision has been made in Mexico to
 keep wages artificially low to continue to attract investment.
    That hurts their people.  It also hurts our people by
 attracting our jobs to Mexico and putting downward pressure on
 our wages and preventing Mexican people from becoming better
 consumers of their own and our products.
    The second reason why NAFTA is worse than current law is that
 Mexico currentlyis a beneficiary of what we call the Generalized
 System of Preferences program -- the acronym is GSP. In short,
 what this means is that we grant duty-free access on hundreds of
 products to help stimulate growth in Mexico, and at the same time
 we impose a number of conditions on the concession.  One of the
 key conditions of GSP is that a beneficiary must afford their
 workers internationally recognized worker rights -- the right to
 strike, the right to organize, the right to freely associate.  At
 this point, the leverage of the GSPappears to have been lost
 because the administration has not decided to retain it.  I hope
 that in drafting the NAFTA they decide to keep the leverage of
 GSPon labor rights and commit to use it aggressively as a tool to
 force Mexico to live up to its own laws.
    So again, passing this NAFTA will ratify or even worsen the
 status quo. Now, economists argue that if you just open up trade,
 in the long hall everything will work.  Now, there's no evidence
 that trade has helped to really address theproblems in Mexico.
 Wishful thinking is no substitute for using the major opportunity
 for integration of our generation as a force for progress on the
 most important fundamental problems facing the United States and
 Mexico.
    Now, some say that the agreement will be truly effective. They
 believe that sunshine, open markets, and growth in the long term
 will raise Mexican wages andthe Mexican standard of living.
 That's the curious thing about this agreement; it seems to me
 that every time someone doesn't have an answer to a problem,
 theypoint to the long haul.  The long term, invoked in that way,
 is not a point in time; it's a debating point and a day that may
 never come. Where's the proof?
    What are the forces that will convert present losses in jobs
 and present lowering of wages into sweeping future progress?  Why
 should we believe that theprocess will raise Mexico's standards
 and not lower ours so that in the end our wage rates meet in the
 middle -- in the long term, of course?  The evidence is that in
 the last decade, where free trade has largely existed in the
 maquiladoraprogram, wages have fallen.  This is not the long term
 that anybody wants for any of the three countries.  Mexico at
 least made an effort on the environment during the negotiations.
 We saw a number of high profile enforcement activities.  They
 closed a refinery in Mexico City, they conducted an environmental
 enforcement effort on the border.
    But in the area of labor laws, Mexican officials didn't make a
 real effort at change.  Instead they showed us more that the
 status quo would continue. They arrested and confined Don Agapeda
 (sp?), a Mexican labor leader who was fightingfor higher wages in
 Matamoros. They helped break a strike at a Volkswagen plant.At no
 time did they show a genuine commitment to carry out their own
 labor laws on behalf of their workers.
    President Clinton did achieve important progress -- child
 labor and health and safety are to be covered under the dispute
 resolution mechanism.  The Mexicans agreed in the closing hours
 of the negotiations to allow minimum wages to be subject to the
 dispute resolution, and in addition they also appear to have
 agreed unilaterally, and therefore the concession is not subject
 to our review, to tie minimum wages to productivity.  This is a
 step in the right direction, and from the Mexican point of view,
 a big step.
    But in the manufacturing sector, where we face the greatest
 competitive pressure, few workers actually work at the minimum
 wage, and thus their actions will do little to reduce the
 pressure on our jobs and our standard of living.
    The real issue is wages in the export sector and average
 wages, not minimum wages.
    Now, as you well know, despite increasing our minimum wages,
 our average wages have fallen.  According to data from the Bureau
 of Labor, real average hourly earnings have dropped by about 60
 cents between 1980 and 1992.  That's despite an increase in our
 minimum wage of $1.15 an hour.
    So you have two problems in Mexico: On the one hand, you have
 workers who aren'table to exercise internationally recognized
 labor rights, and on the other hand you have a government setting
 both minimum and maximum wage increases for many workers, and the
 space in between has become an economic vise.
    The result in Mexico is that you've got workers whose hands
 are tied behind their backs except when they're working on the
 government's terms, and even if they were to be granted greater
 rights -- the right to organize, bargain collectively, freely
 associate -- they'd be limited through the wage setting
 mechanism.
    We want to help Mexico raise its standard of living because
 it's the smart and right thing to do.  We want to make Mexicans
 better consumers of our products.
    We want to reduce the downward pressure on our wages; we want
 to increase jobs, not lose them.  This agreement won't do that.
 This agreement fails to satisfy the most important challenge a
 NAFTA faced -- getting Mexican average wages upthrough the
 present system or creating a new open system or both.
    Let me also talk about an issue that's of increasing
 importance here in the United States -- immigration.  Some would
 have you believe that the agreement would help; but in fact,
 according to a number of responsible studies, illegal immigration
 is expected to increase in the short term.  Mexican farmers who
 havea low efficiency of production as compared to ours will find
 they can't live offthe land, and they'll move to industrial
 areas, principally the border region, where industrial growth is
 expected to increase in this area.  It won't be able to increase
 fast enough to accommodate all those who seek work, and the only
 choice then will be to cross the border as free trade can lead to
 free immigration.
    I've talked to Mexican workers about this issue, and, you
 know, they don't want to cross the border.  They want to be in
 Mexico, their country that they love.
    But economic conditions often force them to leave.  The best
 solution to the problem of immigration is, again, increasing the
 standard of living in Mexico; and, again, this agreement doesn't
 do enough.
    Now let me turn for a moment to the important issue of the
 environment. From now on, environmental issues will always have a
 place on any trade negotiating agenda, for we can and we must use
 the leverage of our marketplace and access toit as an incentive
 to clean up the land, air, and water of this earth.
    We do a disservice to our people and people everywhere if we
 fail to pursue sustainable development policies.  No nation,
 developed or lesser developed, should be encouraged to poison the
 future in order to pay for false progress or prosperity.  We need
 to understand that without pressure, environmental protection can
 be seriously damaged in the quest for economic growth.
    There is profit, unfortunately, in pollution unless we help to
 stop it.
    Environmental degradation on both sides of the border has had
 a tremendous impact on people's health.  In terms of border
 clean- up, the status quo may become better under the
 environmental portion of the NAFTA, but only marginally so, and
 the NAFTA will certainly not live up to the expectations.
    The financing mechanism that's been developed includes no
 assured source of funding.  It will be forced to compete in our
 budget against education, crime, and other demands on our budget.
 Creative financing has existed for years, as has bonding
 authority in border states.  The real issue is not whether you
 know how to deliver money; it's whether you can find the money in
 the first place andwhether you have the resources to pay it back
 in the long term.
    This agreement does little to address this problem, and
 there's no integrated border plan that requires that the clean-up
 occur.  But the need for border clean-up at its core is a result
 of lax enforcement of environmental laws in Mexico.  On the
 books, again, the laws are quite good; but they aren't adequately
 enforced.  The enforcement regime the negotiations agreed to,
 which also applies to, as I said before, certain labor issues,
 follows a labyrinthine route. While it includes a trade sanction
 at the end of the day, one must get the consent of another party
 to even proceed with the case, and the sanction is essentially
 intended as another collection mechanism for the fine.  Let's
 recognize that imposing a trade sanction means that the system
 has failed, that the country has a pattern of not enforcing its
 laws.
    But the more accessible a trade sanction, the more likely that
 enforcement will occur.  Under the scheme the negotiators decided
 upon, sanctions may never be available.  We've got to address the
 environmental issue for the sake of people's health on both sides
 of the border and the future of our environmental assets.
    But we've also got to address the lax environmental
 enforcement problem because of the economic impact it has on our
 people.  We need to understand that low environmental standards
 and lax enforcement can create a competitive advantage. It's been
 documented that U.S. companies have gone to Mexico to avoid
 environmental laws here, and that is unacceptable.  We must not
 allow countries to auction off their environmental assets to
 attract our jobs.
    As I've said on countless occasions, I will not support an
 agreement that isn't paid for.  There needs to be a guaranteed,
 concrete stream of funding for NAFTA.  The funding needs
 associated with NAFTA are substantial.
    First, the administration and the Congress must replace up to
 $3 billion in tariff revenues that will be lost just by the
 operation of the agreement. Underour budget rules, those funds
 will have to come from spending cuts or higher taxes in other
 places in the budget.
    Second, the administration needs to find a guaranteed funding
 source for border clean-up, an issue I've already discussed.
    A third component is paying for the training and retraining of
 our workers who lose their jobs.  Addressing this issue is vital.
 We need a triggerless training system that doesn't require
 workers to prove why they're dislocated butallows them simply to
 establish that they are dislocated.  A reasonable program should
 include training, income support, and placement service.
    Our workers are understandably skeptical that the money will
 be available for train and retraining, and they are right.
 Commitments have been made in the paston this subject, and then
 funding is always shamefully inadequate or not present.  In fact,
 Ronald Reagan zeroed out funds for trade adjustment assistance in
 one of his budget proposals.  Workers who lose their jobs are
 entitled to help, adjustment and job placement. While I know that
 this administration, unlike past administrations, is deeply
 committed to helping these workers, they have yet to find a
 secure funding source.
    There are other fiscal needs that need to be met -- new border
 crossings must bebuilt; additional customs inspectors and border
 patrol officers must be hired.
    I believe that ultimately the total cost of the NAFTA will be
 between $30 and $40 billion over the next ten years, of which $6
 billion or more must come from the federal budget over the next
 five years.  And if the states can't pay their fair share, the
 federal costs may be higher.
    It is very important on this question to step back and
 understand that there aresome very real transitional costs, and
 we no longer can afford just to sweep these issues under the rug,
 saying we'll find the answer somewhere else, sometime else.
    We should learn a lesson from the integration efforts of the
 European community.This year alone they'll spend almost $25
 billion on transition needs, most of itgoing to the lower wage
 countries of Spain, Portugal, and Greece.  Listen to this: Since
 1986, Europe has spent over $120 billion on integration of those
 three countries into the European community, and that is the cost
 of constructing a free market with countries whose standard of
 living is much closer than that of the United States and Mexico.
    Many months ago I proposed a cross border transaction fee as
 one approach of paying for the costs of disagreement.  To date I
 have not heard a better idea.
    As the New York Times said of this proposal last year, asking
 traders to pay some of the costs of the trade agreement is a
 tolerable price for congressional approval.  The logic and the
 politics to me are compelling.  It seeks in a roughsense to ask
 the beneficiaries of trade to pay for some of the costs of trade.
    For the truck driver I met on the border who waited 26 hours
 to cross the borderwith his truck on and running, the fee could
 be used to help build new roads andborder crossings. Certainly
 there are substantial opportunity costs involved in that 26-hour
 wait, as well as the pollution that was caused from his truck
 idling for the entire 26 hours.
    It would also build political support by not forcing NAFTA-
 related costs to compete directly with other programs in our
 budget -- education, crime prevention, health, and others.  At
 the end of the day, I must tell you this maybe one of the
 toughest problems to solve.  We must stop spending all of our
 timedeciding how we're going to spend public money and start
 giving proper attentionto how we're going to find and raise
 public money.
    Last year I spoke on the Bush NAFTA and said I did not believe
 that it was good enough.  At the same time I supported then-
 Governor Clinton's call for supplemental agreements because I
 wanted and still want to support a NAFTA. In supporting Governor
 Clinton's position, I reluctantly agreed that I would support the
 basic agreement if we could address the problems left unresolved
 -- the effects on the environment, jobs, and wages.
    There are a number of other problems, all of which are
 important, that have largely been ignored.  Any benefits of the
 NAFTA could be quickly reduced if Mexico decides to devalue their
 peso.  I've asked that this problem be addressedon many occasion
 between the two governments.  To date I am unaware that
 there'sany agreement in this area.  The political system in
 Mexico continues to need reform; we need to press for continued
 change in this important area, including fair elections in 1994.
    Now, during the upcoming debate, and I really believe the
 discussion of this issue has not yet begun -- hopefully from
 today forward we will really have a debate -- but during the
 debate, so- called facts will be used by both sides to argue
 their position, as they should. Federal News Service,  21
 September 1993.
      (Continuing Text..... 2 ).
    Let me take a minute to dispute two of the points that
 proponents are using now to argue for this NAFTA.  First the
 proponents say that the average Mexican buys $450 of United
 States goods.  I know you've already heard this argument.  Ithink
 this argument is simply not right.  The real number is closer to
 $60 or $80 or, at the most, $100 in terms of consumer purchases.
 Unless you believe that the average Mexican is buying robot
 welders for their home or large industrial equipment.
    And $21 billion that are claimed as exports are really
 products that we ship to maquiladoras for export plants for
 inclusion in products that come right back tothe United States
 for sale to U.S. consumers.
    Now, second, supposedly 700,000 jobs are created by the
 exports we're now shipping to Mexico.  Again I think the
 proponents are wrong. As Holly Shakin (sp?), a visiting professor
 at the University of California at Berkeley says, atleast 360,000
 of these 700,000 jobs produce parts which might be classified as
 industrial tourists -- they're shipped from the U.S. factories to
 Mexico, assembled into finished products, and then come right
 back to the United States.The real number of U.S. jobs related to
 U.S. exports is closer to about 330,000 at most, according to
 Professor Shakin.
    It's important to recognize that in the short time since
 President Salinas requested a free trade agreement, tens of
 thousands of jobs have been created inmaquiladoras -- plants who
 ship the bulk of their products to the United States market.
    I want it to be understood now and it should have been in the
 past and I hope itwill be in the future that my support for a
 NAFTA continues.  I want the political and economic reforms in
 Mexico to continue.  I want the Mexican economy and people to
 prosper.  I want to support an effort at creating a hemispheric
 trading bloc.  I look toward a better future, not an unacceptable
 past.
    But for the reasons I have outlined, I can't support this
 NAFTA. The agreementisn't sound, and our economy isn't ready for
 it.  In fact, the greatest failuresin the agreement could
 exacerbate our worst economic problems
 -- disappearing jobs and a declining standard of living.  Against
 the economic
  backdrop of the last twelve years, people are right -- they're
 right to be concerned about theirfuture.
    I'm happy to say that we have a president now who is helping
 to change that perception.  Regardless of what the president's
 opponents think of his deficit reduction plan, even they must
 acknowledge his courage and resolve in pushing itthrough.
 Interest rates continue to decline.  Each month homeowners,
 consumers,and businesses save billions through lower interest
 rates, money that will help restore our economic growth.
    Bill Clinton is also committed to a skill strategy that will
 ensure that our workers can compete against any workers anywhere
 in the world.  But restoring economic growth and upgrading skills
 will take time.  The NAFTA that is beforeus fails to provide the
 needed transition.  Members of Congress who come to oppose or
 vote to oppose this NAFTA are not protectionists, and we're not
 against Mexico.  We simply believe that passing a NAFTA that
 fails to ensure sensible Mexican wage increases and that provides
 no guaranteed funds for necessary structural adjustment during
 integration is worse than no NAFTA at all.  As Jorge, Casteneda
 (sp?) said in a recent Foreign Affairs article, without these
 provisions we are missing an excellent opportunity to attack the
 key obstacle to Mexico's development.
    I believe that there is a way both to promote growth in Mexico
 and to promote growth here.  We should take a chapter out of the
 European community's integration efforts.  Before prospective
 nations such as Spain, Portugal, and Greece were allowed to join
 the EC, they were asked to initiate reasonable political and
 economic reforms.  I believe we could follow a similar course.
 Weshould ask Mexico to enforce its own laws so that our companies
 aren't lured away by the possibility of profits or inadequate
 environmental codes or insufficient worker protections.  We
 should seek specific political and economicreforms in Mexico.  We
 should cooperatively clean up the border region and produce
 assured revenues to accomplish it.  We should require our
 companies to set an example in Mexico by adhering to a code of
 conduct much like the ChemicalManufacturers Association here has
 already adopted.
    How would it benefit Mexico?  We could unilaterally reduce
 tariffs on Mexican products by 10 percent a year as long as
 progress on these issues is achieved, and after that period we
 could enact a NAFTA that would promote economic growth and
 benefit ordinary people in all three countries.
    During this period we would continue the reforms that are
 necessary in our country.  We can allow the economic program of
 the president's time to work, thereby restoring growth and
 opportunity here.  We'd be able to put in place a comprehensive
 training program that would ensure our workers that if they are
 displaced, there's hope for a brighter future.
    Since day one I've been clear about what I believed a
 successful NAFTA must achieve to be a real force for progress. I
 respect deeply the decision of those who want to support this
 agreement that will soon be in front of us.  I hope that they
 will respect my decision and that of others who in their hearts
 and minds truly believe that had agreement is not the best that
 we can do.
    There are those who will argue the merits of this agreement
 based on economic theories.  I think we have to be more
 interested in economic reality. The reality is that the nature of
 Mexico's economic and political system is such that workers will
 be asked to bear the burden of an agreement that doesn't address
 the most important issues.  The reality is that the agreement
 could haveachieve more to be a force for real progress.  To those
 who say that opposing the present agreement will simply leave us
 with the status quo, I say that the process doesn't have to be
 over. Chairman Arafat and Prime Minister Rabin showedus clearly
 that people of will, persistence and vision can accomplish
 anything. To those that say that on balance at some time in the
 future under some conditions the problems unsolved in the
 agreement will be solved, I say why leave it to promises, good
 wishes, and chance?  Don't our people -- don't the Mexican people
 -- deserve better than that?
    President Clinton knows of my support for him and his
 administration.  I along with many others helped him achieve
 success on his economic plan, and I will be there by his side on
 health care education, welfare reform, Russian aid, and countless
 other issues. On this issue as it stands, however, I must part
 company.
    Now is the time for an open, honest, candid debate in our
 country.  I will participate actively in this debate.  I will
 engage those who argue this agreement is the best we could
 achieve.  We could and we can do better.  As Thomas Jefferson
 said, reason and free inquiry are the only effectual agents
 against error.  Let the debate -- let the discussion begin.
    I'd be happy to respond to any questions.  (Applause.) Q Do
 you still hold out the possibility that you might ultimately
 support a NAFTA -- (inaudible)?
    REP. GEPHARDT: Bob, I have worked, as I said in the speech,
 for over three yearsto try to get a NAFTA that I thought would be
 a positive force and real progress.  I said after the side
 agreements were -- I said after the treaty was finished by
 President Bush that it was not adequate.  I said it almost
 immediately and said I would not support it.  I worked hard with
 our administration and, while progress was made and hard work was
 done and I give them great credit for taking the agreement from
 where it was left by President Bush and taking it to where they
 did, I said, as I said in the speech today thatvery important
 issues, in my view, were still not addressed and that it was
 insufficient.
    Since that time I have talked to and worked with members of
 our administration to try to solve these remaining problems, and
 we have not been able to do that. We've talked and we've worked,
 and we just haven't been able to get there, and it's not easy.
 And, having completed that, or finished that, I wanted to make my
 statement.  I wanted to say to people my feelings about this
 issue.
    I want a NAFTA to go forward, whenever that can be; I want it
 to do these things.  My opinion of it is based on what the
 agreement does, nothing else. I feel very deeply about these
 issues.  I think the whole issue is very important for all of us.
 I think it needs to be done right.  I think it's got to be a
 pattern or a precedent for lots of other treaties with lots of
 other countries. We cannot afford to do this carelessly or wrong,
 and I will work as hard as I know how to work to see that that
 can happen sometime.
    Q (Off mike.) REP. GEPHARDT: I think there's been some
 horrible exaggeration of late of my influence on others.  I bring
 to this one vote.  I will be part of the debate, obviously.  I
 feel very strongly about this, and I will argue my position, and
 Imust tell you that I think the debate up until now has not been
 very good.
    There have been some out there that have been trying to get to
 the issues and trying to talk about the merits of this, but
 there's been an awful lot of personal attack, people lining up
 personalities, and saying how could anybody agree with these
 people.  I mean, just kind of ridiculous ways of arguing an
 issue.
    We really need for this trade debate -- we've never really had
 a trade debate, in my memory, in this country in modern times
 that has really engaged the American people, ordinary people.  I
 hope and believe this debate will do that. I believe that if you
 have a serious discussion that is on the merits -- not
 theconflict, not a sporting event, not an athletic event, but on
 the merits of whatthe issue is about, that whatever happens, we
 will improve the product, we will do better.
    None of us know the truth.  I don't know the truth.  Every
 time I go out there I'm asked by people, you know, "Are you proud
 of all your votes in the House of Representatives" -- I've been
 here 16, 17 years now, I say, you know there are some votes where
 I look back and I think I made a mistake.  I try as hard as I
 can; all of us do.  We're human beings.  We don't know the truth.
 In the Bible it's said we see through a glass darkly. And so
 debate, difference, discussion, real interchange of ideas, real
 conflict on issues, not personalities, will giveus the right
 answers and will help us as a country come to the right
 conclusions.  That's what I want to be involved in, and that's
 what I will do inthe days ahead.
    Let me say one other thing.  Your question -- and I'm not
 blaming you at all -- but it belies, perhaps, a misunderstanding
 of the way members make up their minds to vote.  The folks that
 come to the House, and I've seen this throughout my career, are
 very serious, well-motivated, well-intentioned people who are
 trying their dead level best to do the best thing for their
 constituents and thebest thing for the country.  In the final
 analysis, what they vote on is what in their heart and their mind
 they believe fulfills that promise.
    They may be influenced in some way by what I've said today or
 what I'll say in the next days in this debate.  They may be
 influenced by what someone else says on the floor.  The president
 is going to argue strongly his deep feelings on this, and I -- he
 should -- I want him to do that.  That will be good for the
 country.  Others who feel very deeply about this will express
 their feelings.
    Members will make up their mind not on the size of the whip
 task force on eitherside, not on who calls them at the end of the
 day, not on anything else but on the merits, and that's what they
 should make up their mind on.
    Q Mr. Gephardt, is there anything that the president can do to
 meet your objections in 1993-'94?  -- (inaudible) -- maybe in the
 year 2000, maybe not?
    REP. GEPHARDT: Well, probably I spent too long with you today
 and was too repetitious and spent too much time, but I've been
 pretty clear, I think, today about what I think this treaty needs
 to do in order to be a force -- a sufficient force for progress.
 And while I know once you finish negotiating, it's very hard to,
 you know, to open issues up and get things done, it can be done.
    I think it's -- I'm not optimistic that it can be done.  I
 think it's very hard to do, and I understand all of that, and I
 also respect deeply those who disagree with me, who say look, on
 the whole I think this is good enough and it's as good as we can
 do and that's it.  And maybe that is it, but you have to stand up
 finally for what you believe in, and that's what I've tried to
 do.
    I've studied this thing long and hard; I feel deeply about it.
 And I've said what I think it has to contain.  I don't know how I
 can be more clear than this.And there it is.
    Q One of the arguments that was used during the budget debate
 in the House by the leadership was that Bill Clinton's budget had
 to be passed because it was very important to him to, that he'd
 be irreparably -- (inaudible) -- if the budget -- (inaudible).
 If this NAFTA treaty -- (inaudible) -- how badly will Bill
 Clinton be -- (inaudible) -- how much of the spillover will occur
 on other issues like health care?
    REP. GEPHARDT: Well, my own opinion is that in this case with
 this issue it is critically important because we won't go back to
 it any time soon if it goes through -- critically important that
 it be done right.  I think that's in everybody's interest, and
 that's what I'm seeking, to try to see that happens.
    I frankly don't believe that issues are all intertwined.  I
 don't believe that if this issue goes up or down, that that has
 some major impact on some other issue.  I think members come to
 issues on their merits one at a time, and they look at the merits
 and they make a decision, again, based on what they think is best
 for their constituents in the country.
    Q What do you think is going to happen over -- if this is
 voted down -- (inaudible) -- over the next few months or years
 along the border -- (inaudible) -- manufacturing jobs --
 (inaudible)?
    REP. GEPHARDT: Well, again you know, I often say to audiences
 we've had free trade with Mexico.  It's called the maquiladora
 program.  It's been going on forabout 20 years, and the evidence
 from that is that wages have not gone up.  In fact, as I said in
 the speech, wages went down in the '80s by about 32 percent while
 productivity went up by a similar amount.
    So to those who argue that going forward with this opening up
 more trade will necessarily lead to higher wages in Mexico, the
 evidence just doesn't support that in my view.
    Now, if we don't go forward, what happens?  I think some have
 exaggerated the negative impacts of this.  I'm not saying it will
 be good; it would be better ifwe could all agree on a NAFTA and
 pass it. I agree with that.  But, again, I don't think it will be
 all of the negative effects that some have forecast.
    We will still have extensive trade with Mexico; we still have
 over 535,000 jobs in maquiladora plants today, and I don't think
 any of those will change. I think they'll still increase. Those
 plants still face zero tariff.  They have free trade today, and
 they will continue to have that.
    Obviously what we miss by not having a NAFTA is getting access
 to more of the Mexican market.  But the counter of that, which
 I've tried to explain today, is it doesn't do you a lot of good
 to get access to markets if the people there have no money to buy
 the products.  And it's on that essential issue that the NAFTA is
 deeply flawed.
    If you could see them -- and I'm not talking -- I understand
 you don't do this overnight.  It takes time.  But if there could
 have been in the treaty an opening up of labor rights so you
 could feel that over time the right to bargain, the right to
 strike, would yield higher wages, a free and open labor market,
 or if you felt there was a deep commitment with teeth by the
 government to tie average manufacturing wages or average wages
 with productivity, which they seem to be willing to do with the
 minimum wage, which is 60 cents an hour, then you could have some
 confidence, one or the other or both, that getting these markets
 open would really yield something both for them and for us.
    That's the flaw.  And so I'm just not willing to go forward
 until we can get something done on that, and even though it won't
 be terrific and as good as it could be, I think trade will
 continue.
    Q How will defeating the NAFTA make things different? I mean
 how come -- (inaudible)?
    REP. GEPHARDT: Well, I guess, again, I'd look at it this way:
 What do we gain byforcing an agreement through that doesn't
 address the basic problems and continues a status question with
 regard to labor and wages which is not good foranybody?  And we
 never get another crack at it, never -- it's never going to
 change.  They're not coming back.  If NAFTA is approved, we're
 not going to goback and start negotiating another NAFTA. So the
 ultimate question you have to face, all of us have to face, is do
 we think this NAFTA is a sufficient force for progress, or is no
 NAFTA better than a deficient NAFTA?  And all of us -- every one
 of you, all of us -- have to make that judgment for ourselves.
 We have to approach, face squarely, that question and make a
 judgment.
    Q In reaching your decision, how much consideration did you
 give to -- (inaudible)?
    REP. GEPHARDT: I started on this, as I said, three years ago,
 before President Clinton decided to run for president.  I started
 writing letters to President Bush at the time, telling him what I
 thought needed to be in this agreement.  AsI said, I've been to
 Mexico seven times; I've spent a lot of time on this issue,and I
 care about it deeply.  And I decided, as I was going through all
 of that, that there was only one valid way to decide this issue,
 and that was on its merits and on what I in my heart and mind
 thought was the right thing to do.
    Maybe there aren't a lot of issues where you get that deeply
 involved in it; maybe we should.  Sometimes you don't even have
 the time to do that, but I did on this one because I think it's a
 very important issue.
    I believe ultimately President Clinton is going to be a great
 success.  I think he already is.  You know, people around the
 country say to me, "Boy, you got a lot going on in Washington
 right now -- health care and budgets and NAFTA and cutting the
 budget and campaign reform and welfare reform and education
 reform and congressional reform.  Can you do all this"?  Or
 they'll say, "Why are you bringing all this stuff up? Why is the
 president bringing all this stuff up?" You know, we've been in
 neutral for twelve years.  We've been standing around kind of
 looking at the problems, not doing anything about them.  I'll
 tell you, I give this man great credit.  He has got us back on
 the beam.  We are talking about the fundamental problems that
 face this country, and he's done it in an honest and forthright
 manner, and he's pushing all of us to think, to discuss, to
 debate, and then make some decisions for the good of the country.
 And however all those come out, I got to tell you, at the end of
 the day, I think the American people are going to appreciate the
 fact that we finally have a president, a leader who leads, who
 puts it out there for better or for worse.
    He does the best he can, there it is, let's grapple about it,
 let's get on it, let's debate it, let's discuss it, let's do it
 honestly, let's do it from our heart, and then let's make a
 decision.  And I think when we're done with all of these issues,
 this is going to be a better country.
    Q (Inaudible) -- bit clearer of what you need -- (inaudible)
 -- in this debate. Will you join, Mr. Gephardt, in this anti-
 NAFTA -- (inaudible) -- organization?  Will you seek out
 undecided members of the House and will you give more speeches
 like the one you gave today? What will you do to be active inthis
 debate?
    REP. GEPHARDT: My answer is that I will be active in debating
 the merits of this issue.  I feel strongly about it; I have
 worked hard on it, and I will be involved in the discussion and
 the debate. That is the best thing I can do; it'swhat I must do;
 it's what I need to do; it's what I believe in.
    Q Will you be working with Dave Bonior to -- (inaudible)?
    REP. GEPHARDT: I think I answered your question.  I am going
 to be involved in the discussion of the issues and the debate of
 the issues on the merits. And perhaps, again, I think your
 questions may, and I'm not criticizing you in any way, belie your
 understanding of how members make these decisions. This is a
 discussion of issues on its merits.
    Q (Inaudible.) REP. GEPHARDT: My greatest hope is that,
 whether it's now or later, that at whatever time, we get a good
 NAFTA.  We need it.  The region needs it; Mexico and Canada need
 it; our people need it; the world needs it. Thank you very much.
    (Applause.)END