REPS. BECERRA AND SHAYS FACE OFF ON CAFTA
FROM LOU DOBBS
DOBBS: The debate over CAFTA at the center of our "Face-Off" tonight.
Joining me now, Congressman Xavier Becerra of California. He says the trade agreement will lead to the loss of American jobs as more companies move production to Central America, joining us tonight from Los Angeles.
Congressman, good to have you with us.
Congressman Christopher Shays from Connecticut, he says there are some jobs Americans simply won`t do, says it is better to ship those jobs to Central America and Mexico, rather than to Asia.
Congressman Shays joins us tonight from Riviera Beach, Florida.
Congressmen, good to have you with us.
(CROSSTALK)
REP. CHRISTOPHER SHAYS (R), CONNECTICUT: Good to be with you, Lou.
DOBBS: Thank you.
Let me address the first question to you, Congressman Shays.
We`ve had a 10-year experience with NAFTA. What is so terrific about the experience that would suggest that CAFTA is the right thing to do?
SHAYS: Well, what we`ve seen is, we`ve seen trade double in the last 10 years with Mexico and Canada, and we`ve also seen jobs created in all three countries.
And it`s interesting to me that your promotion at the beginning was so negative, Lou. There are two aspects to this. There are jobs and there`s democracy. The United States is always criticized when we do bad things. And here, we`re helping to create more jobs in an area close to our country where we have a lot of immigration problems, and let`s give a pat on the back to caring about what happens in Central America.
DOBBS: I think that`s a wonderful point.
Congressman Becerra, is it persuasive to you?
REP. XAVIER BECERRA (D), CALIFORNIA: I think Chris is right that we need to recognize the importance of Central America. But this deal won`t do it.
It is just a prescription for expanded job outsourcing, not just out of America, but out of the Americas to Asia. And it doesn`t really do the trick of trying to make sure that we keep jobs here and help keep Central Americans keep jobs in Central America.
DOBBS: One of the obvious issues, as you raise it, Congressman Shays, is aid and trade sort of melding together, the politics and commerce becoming one. In Mexico, we have seen a government put in place that has not been able to push through any reforms of any kind, in point of fact, still considerable corruption throughout that country, lower wages as a result over the course of the past 10 years. Manufacturing wages in Mexico have declined. Is that really what we want to export here?
SHAYS: Oh, we`re not exporting that.
And I think it is almost silly to imply that. You are making an assumption that it would have been different without NAFTA. I think it would have been worse without NAFTA. But what`s important to realize
(CROSSTALK)
DOBBS: Well, that`s a fair point.
SHAYS: No, but what`s important to recognize in this negotiation is that there`s significantly improved anti-corruption laws, much more transparency.
And remember, with the Caribbean Basin Initiative, already, a lot of the Central American countries can already export their products to us at very low tariffs.
DOBBS: And, Congressman Becerra, the fact of the matter is, the issue of jobs here is critical, is it not?
BECERRA: Absolutely. And trade agreements aren`t bad by themselves. We need to have trade with countries.
What we don`t want is to write into law through our trade agreements that we can allow workers to be exploited, companies to abuse so that they have these advantages over the U.S. and its companies and workers that are not based on natural consequences. So if we can make sure we have a trade agreement with Central America where it`s natural advantages -- it grows coffee and bananas better than we can, but we can`t let it have an advantage because it pays its workers 50 cents on the hour, when we pay our manufacturing workers $15, $20, $30 an hour.
What you don`t want is to create advantages that aren`t real, because getting rid of tariffs and quotas as artificial trade barriers are good. But if you`re allowing other artificial barriers to exist, you are not doing anyone any good. You are just helping export jobs to countries that are low-wage and it is a race to the bottom about who will pay the least amount to be able have the most -- least expensive product.
DOBBS: Christopher -- Congressman Shays, your response to that?
SHAYS: Well, first, it`s not a race to the bottom.
You could make that argument against any trade agreement with any country because we pay higher wages. The issue is, when will countries overseas pay more? And they will start to pay more when they start to have jobs. And then you will start to see their salaries go up. We have special agreements as it relates to the environment here and with labor practices.
But I do agree with you. We`ve been disappointed with what we have seen happened in Mexico. We haven`t seen some of the reforms that we would like to see. And it remains to be seen if we`ll see those reforms in Central America. I do want to point out that we export $11 billion to Central America. We import $12 billion. So we don`t have an insufficient or insignificant economic relationship.
BECERRA: Lou, there`s a problem here.
Mexico did see expanded exports into the U.S. It saw tremendous increase in the amount of U.S. investment in Mexico. All of that over the last 10 years has resulted in wages for Mexican workers actually decreasing and the minimum wage actually decreasing. So while we saw wealth created, it didn`t trickle down to the workers, and we never saw the Mexican middle class created, which could then buy the American products that we sell. And as a result, you don`t want to make the same mistake with Central America. Central America, this trade agreement, simply says the following with regard to labor laws. And we know there are abusive labor laws in some of these countries. Enforce your own laws. What kind of deal is that? Do what you`re supposed to be doing to begin with. That`s no trade agreement. There`s nothing, no bargain there. We got nothing from them.
DOBBS: Congressman Shays, I would like you to respond to that. And, at the same time, free trade is starting to take on a very simple, straightforward, synonymous connotation worldwide. Free trade equals cheap labor.
SHAYS: Well, it is to you.
DOBBS: Well, you can be as insulting as you want, Congressman. Go ahead. But what I`m saying to you is very simple.
(CROSSTALK)
SHAYS: No, I`m not being
(CROSSTALK)
DOBBS: That`s fine. But please address this question, if you would, Congressman.
Free trade equals cheap labor. That seems to be driving so much of what we`re looking at here.
SHAYS: That`s what you think. I don`t agree with that. I think free trade equals to a country like the United States that has massive economic power, tremendous economy and the hope and expectation that any country that wants to grow and prosper has to have technology that we offer. And so, yes, I`m not going to judge NAFTA entirely on the last 10 years. None of the terrible things have happened that people have suggested about NAFTA. None of the extraordinarily good things have happened that we suggested. It`s somewhere in between. And that`s the reality of it.
DOBBS: Is it really in between? Congressman Becerra, I would like you to address this. Is it in between when we`ve seen our trade deficit with Mexico and Canada explode? We`ve got a half trillion trade deficit, three trillion dollars in trade debt. And we continue to hear the discussion we have to have free trade at any cost. The cost -- we now see the bill. Three trillion dollars, half a trillion a year. And we continue to lose jobs. We still have to carry tremendous debt. We are a debtor nation. It looks now in propriety if we continue these policies, are we not?
BECERRA: And, Lou, that`s because we are forging trade agreements with these international trade partner that simply say to them, open up your market so we can send companies or other countries that can be as exploitive as your own companies have been of the labor there, thereby producing cheaper goods that we can bring back to the U.S.
What we should do in these trade agreements is say, look. You can`t get these kind of advantages that is aren`t natural or hard work made. And if we were to do that in the trade agreements, if we were to have protections for labor, the way we have for intellectual property. in the CAFTA trade agreement we say if you violate our intellectual property, if you try to pirate one of our videos or pirate one of our CDs, we can prosecute and impose sanctions. We don`t say that with regard to the most precious capital we have, which is human capital. You can exploit human capital, but don`t you dare take advantage of our videos and CDs. If we were to treat labor the same we treat CDs and videos, what we find is that these countries would have to share the wealth which could have given a Mexico a chance to have a middle class that could then purchase the products from the U.S., which would have meant we wouldn`t have had this massive imbalance of trade occur with Mexico. Because while they can send to us because it was cheaply produced, they couldn`t buy from us because they didn`t have a middle class to purchase our product.
DOBBS: Congressman Shays, you have the last word tonight.
SHAYS: Our production in the United States has gone up significantly. We`ve seen industry produce in the last -- since NAFTA, it has gone up 44 percent. When you talk about losing jobs, I think we`ve lost some jobs and gained some jobs.
DOBBS: Congressman Shays and Congressman Becerra, we thank you both for being here. We appreciate your time and your thoughts.
