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