Sherrod Brown’s Remarks at the Center for American Progress Time for a New Trade and Competitiveness Agenda

Text as Prepared for Delivery

Thank you to Winnie Stachelberg and the Center for American Progress team.

 

I want to talk today about an issue that is in a legislative class all by itself.

 

It enjoys an exceptional, privileged place in the legislative process.

 

The usual committee hearings are truncated. Mark-ups are dispensed with. Debate on the floor is limited.

 

It’s even exempted from the usual partisan shots that Republicans take at Anything Obama.

 

Obama is exceeding his authority. Obama is conducting government business in secret. Obama is failing to disclose information with Congress.

 

For all the concern that Republicans express about supposed overreach by the President, there is one issue over which they’re willing to cede almost complete control to the Obama Administration.

 

That issue? How we negotiate and approve free trade deals. 

 

Fast Track is unlike any other legislative process in Washington.

 

In 2002, the 107th Congress, which too often specialized in obfuscation, changed the name from Fast Track to Trade Promotion Authority. But they didn’t change the process.

 

Article I Section 8 of the Constitution entrusts to Congress the authority to regulate commerce with foreign nations.

 

Fast Track, however, delegates this authority to the executive to set the contents of trade agreements.

 

Then those agreements come back to Congress, already signed, and protected with extraordinary rules and procedures.

 

Look closely at this process. It allows the executive branch to write legislation. It avoids any real transparency rules. It bypasses normal committee review; and it guarantees “privileged” floor votes without amendments.

 

Not even a vote to end debate. No holds. No filibusters. No 60-vote requirements.

 

We don’t do this to raise the minimum wage. We don’t do this to protect our environment. We don’t do this to strengthen labor law. We don’t do this to make college more affordable for our young people.

 

This route is reserved for trade agreements that are permanent and that affect the values we hold dear in a democracy.

 

It is no surprise that the American public is anxious about our place in an increasingly multi-polar, complicated, dynamic global economy.

 

Americans support trade and they want more of it. Workers in Ohio want to export more too. But they want trade that works for them.

 

The American people know that after NAFTA, CAFTA, and permanent China trade relations were passed, plants closed and we lost five million good-paying manufacturing jobs.

 

Workers are still waiting for trade that works.

 

As a progressive, I want trade that strengthens the middle class here at home and lifts workers from poverty in America and around the world.

 

I want trade agreements that strengthen labor, environmental, food and drug safety, and human rights standards at home and abroad.

 

But I don’t want to rush into more foreign trade agreements; not until we invest in a Global Competiveness Agenda here at home that includes: the best trained workers; the most developed and sophisticated infrastructure; the most robust manufacturing base; and the strongest defense against currency manipulation.

 

But, just this week, we learned that our trade deficit with China grew 34 percent over last month’s figures.

 

We see foreign competitors manipulating their currency and investing far more that we do in infrastructure – racing past us on R&D and innovation.

 

Let’s go back a quarter century, when our country was facing a similar challenge, complete with: anxieties about a recession; worries about our growing trade deficit; fears about foreign competitors was posing new economic challenges; and suspicions about an East Asian country.

 

Today, we have an unsustainable trade deficit. We’re seeing long-term underemployment. Workers and companies are facing new challenges from competitors, principally Asia and East Asian, this time China, that play by their own set of rules.

 

The Omnibus Trade and Competitiveness Act of 1988, which included Fast Track, was a call to action that realigned our competitiveness policy to meet the challenges ahead.

 

This legislation helped fuel our competitiveness in the 1990s by: promoting manufacturing and new technologies; providing real resources to retrain workers; and protecting U.S. trademarked and copyrighted materials from being stolen.

 

That Act included many of the trade enforcement tools we still use today. 

 

It also helped cultivate a climate where fears of a zero-sum trade war with Japan gave way to new economic opportunities here at home.

 

Japanese investment in Ohio, in fact, includes some 423 facilities that employ more than 65,000 workers – nearly 14,000 at Honda alone.

 

Now is the time for us to bring that strategy up to date for the 21st century.

 

Look what happens when a plant closes – American families can no longer afford their homes, their children have to drop-out of community college, and the local coffee and sandwich shop closes.

 

Our trade policy is not working.

 

In 1977, manufacturing was 21.6 percent of our GDP and financial services represented 16.6 percent.

 

In 2010, that nearly flipped. Manufacturing was at 11.7 percent and financial services were at 21.1 percent.

 

But the U.S. economy cannot win on services alone.

 

Our financial system is more stable than four years ago and the S&P is at all-time high, we know that but, as CAP has been explaining for months, and as this new report illustrates, we’re not facing an austerity crisis. It is a jobs crisis. 

 

But you can also see extreme income inequality happening globally.

 

The worthy goal of creating demand for U.S. goods – in Vietnam and other TPP countries – isn’t served by trading one low-wage export zone for an even lower one.

 

We’re seeing more trade for U.S. and more trade for workers in the developing world, but the rules matter.

 

They matters to Ohio paper manufacturers in Southwest Ohio and steelworkers in Northern Ohio.

 

Just as they matter to the Poultry worker in China, who crawled out of an ammonia-fueled fire with only one unlocked exit. Just as they matter to the Shoe factory worker in Cambodia who survived a ceiling collapse. Just as they matter to the garment worker in Bangladesh.

 

Our trade policy also needs to adapt to the challenges global companies are facing when trying to enter new markets.

 

Some of our toughest trade challenges were not even on our radar when I was elected to the Senate in 2006, or even when President Obama was sworn into office in 2009.

 

Today, as President Obama meets with President Xi, some of our strongest, most iconic companies are grappling with the emergence of state-owned enterprises.

 

When Congress passed China PNTR in 1999, the Chinese promised to curtail state-owned enterprises and the majority in Congress believed them.

 

Yet in 2012, China had 73 of the Fortune 500 companies and the majority of these firms are state-owned.  It is estimated that more than 10 percent of the world’s largest publicly-listed firms are state-owned.

 

Of course, there are many other state-owned enterprises that are not publicly-listed.

 

And that’s just China.

 

Publicly-listed state-owned enterprises come from 37 different countries and their joint sales amounted to $3.6 trillion in 2011. 

 

That’s why trade rules matter.

 

Congress must embark on a pro-growth, jobs-focused competitiveness agenda that reforms Fast Track and builds on the strengths of American innovation and knowledge –an agenda that expands the opportunities created by the global economy to more American families.

 

A robust competitiveness agenda is in contrast to the dated playbook utilized by many in Congress – and supported, like birds flying off a telephone wire, by editorial boards.

 

The old game plan goes something like this; in exchange for massive trade deals, we reauthorize TAA – Trade Adjustment Assistance, what our friends in the labor movement, call “funeral expenses.”

 

TAA alone is simply not enough.

 

Here are a few actions we can take to create a pro-growth and competitiveness agenda.

 

First, to invest in our nation we must rebuild America and invest in our infrastructure.

 

For generations, our airports and seaports, highways and roads, were the envy of the world.  Now, the World Economic Forum ranks our nation’s infrastructure as the 25th best in the world.

 

Companies in Ohio like Siemens, Honda, and Airbus—locate in the United States—and particularly in Ohio—because of our reputation for having world-class infrastructure.

 

Yet, increasingly, the CEOs and logistics managers of these companies are seeing traffic jams and air traffic control delays cost their businesses thousands of dollars per hour.

 

If we want businesses to re-shore, or, in the case of Siemens and Airbus, to set up shop here, then we have to lay the groundwork for them to do so.

 

Reinvesting in our infrastructure is one way to do that. The cost of capital has never been lower. 

 

We can utilize private funds and innovative funding solutions – like the infrastructure bank and pension funds—to move capital off the sidelines and into long overdue construction projects.

 

Infrastructure spending is a near-term job creator. 

Infrastructure spending creates jobs now. 

 

But it has multiplier effects that ripple through the economy, including among working-class people whose opportunities in this economy and this society aren’t so great now. They’re having a hard time finding work now. 

 

These are good-paying jobs that cannot be outsourced.

 

Second, we must invest in workforce training.

 

American workers are the main source of our competitiveness as a nation. 

 

Yet, we do a disservice when we fail to equip our workers with the tools to succeed in a global marketplace – a marketplace that places a premium on problem-solving, adaptability, and creativity.

 

But the skills mismatch is real. The National Association of Manufacturers (NAM) has recently estimated some 600,000 open jobs.

 

There are solutions, starting with reauthorizing the Workforce Investment Act, and realigning our training programs to focus on industry sector partnerships.

 

We can go further and authorize a National Network for Manufacturing Innovation (NNMI), a public-private partnership to invest in deploying new technologies to the supply chain, with community colleges helping to lead the way.

 

Until we address this problem, our competitiveness will be blunted, and the jobs derived from new innovation will be created elsewhere.

 

Next, it is critical that we enforce trade laws and combat currency manipulation.

 

Trade enforcement means jobs and investment.

 

More than 20 countries have been intervening directly in foreign exchange markets – which results in cumulative reserves exceeding $20 trillion.

 

In 2009, G20 leaders met in Pittsburgh and made a commitment to balance trade. We had a global consensus that trade imbalances contributed to the financial crisis, and a plan to address it.

 

But, once again, nothing happened.

 

That’s why this week, Republican Senator Jeff Sessions of Alabama and I along with a number of our colleagues – including Senators Chuck Schumer, Susan Collins, Debbie Stabenow, Lindsay Graham, and Bob Casey – re-introduced a modest, bipartisan measure that the Senate passed in October 2011.

 

Our jobs legislation would combat those countries that are misaligning their currency.

 

This new measure would also trigger tougher consequences for those who engage in such unfair trade practices.

 

For example, the bill would allow industries to file petitions with the Commerce Department to offset imports that benefit from currency manipulation. It would also forbid federal procurement from countries that are repeated violators.

 

We also need to help smaller companies use the trade laws to fight back.

 

The President’s Interagency Trade Enforcement Committee is a great start, and Congress should authorize it.

 

We should build on the Pittsburgh consensus and put every global company on notice. America wants more trade, but under different rules and more balanced trade. 

 

Finally, we need to make reforms to Fast Track.

 

We’ve seen too much of these trade negotiations take place under a shroud of secrecy.

 

 

Instead of just dusting off the last Fast Track, in the gargantuan battle in 2002 when it passed, we need to: strengthen Congress’ role in the negotiating process; eliminate secrecy; and make the process more open to the public.

 

I do believe the President should have authority from Congress to negotiate better trade agreements.

 

Again, I support trade and I want more of it. Trade done right creates prosperity for a middle class here and abroad.

 

But if we don’t fix the process, prepare workers by investing in infrastructure, training, and combating unfair trade, I will oppose fast track.

 

We deserve a progressive partnership that ensures workers have the tools to out-compete the rest of the world.

 

A smart trade policy guarantees that our workers are prepared to take advantage of new markets. The debate over Fast Track is an opportunity to focus on competitiveness.

 

Every other country practices trade according to their own national interest. So should we by investing in the best trained workers, most sophisticated infrastructure, and a robust manufacturing base. Our future depends on it.

 

Thank you.

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