William Roth

Mr. ROTH

Mr. ROTH. Mr. President, I send to the desk the managers' amendment.

Mr. ROTH. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.

Mr. ROTH. Mr. President, I suggest the absence of a quorum.

Mr. ROTH. For these reasons, I oppose the amendment.

Mr. ROTH. I object.

Mr. ROTH. These comments I will now make are in connection with the Wellstone amendment No. 2487. Mr. President, I rise in opposition to the Wellstone amendment No. 2487. This amendment is very similar to one we tabled yesterday, and should be tabled today for similar reasons. This amendment denies benefits until the U.S. Secretaries of Labor and State determine that the beneficiary country is enforcing internationally recognized human rights. In and of itself, this is unnecessary and duplicative. The managers substitute already contains criteria that the President must take into account in determining a beneficiary country's eligibility that includes the internationally agreed upon core labor standards. I will address later in my statement the concern of the Senator from Minnesota as to the use of these criteria. But this amendment goes further. It would force beneficiary countries to guarantee that the head of the national labor agency of that country, the U.S. Secretary of Labor, and an international union bureaucrat have access to all the private business information and records of all business enterprises in that country. This undermines the sovereignty of these nations, and represents an intrusion on the privacy of their small businesses. The practical effect would be that no country would ever allow an international union head to peek into the business dealings of all of their citizens. These countries simply would not choose to enjoy the trade benefits offered in this bill--and rightly so. This amendment would also create an unprecedented private cause of action in U.S. courts if a U.S. citizen wants to seek compliance by those countries with the labor standards. This would invite unnecessary, wasteful litigation, and would create novel discovery activities by U.S. courts, to say the least. To sum up, the provisions of this amendment would simply eviscerate the goals of this bill and is nothing more than protectionism by another name. The labor standards in the managers' substitute and the flexibility given to the President provide an appropriate means for regular dialog with the beneficiary countries on labor issues. Let me be clear that the labor standards in the managers' substitute--and which are reflected in current law--are effective. As my colleague may know, CBI benefits are linked to a country's eligibility for the GSP program. If a country violates one of the requirements of the GSP program by, for example, failing to afford workers internationally recognized workers' rights, then that country will lose eligibility for both GSP and the CBI program. The labor standards under the GSP program are not meaningless. In fact, 11 countries have been suspended from GSP benefits since 1985 for labor standard violations. Six countries are currently suspended. What this should tell us is that the system works, both under GSP and under my legislation for the CBI countries. As evidence of the effectiveness of these criteria, I cite a June 1998 GAO report that concluded that the GSP and CBI programs have led to improvements of workers' rights in the beneficiary countries. This is not the only evidence, however. In fact, the best way to tell whether the management's amendment presents an effective approach to the protection of labor standards is by asking those most affected: namely, the workers. I have with me a list of the labor unions in the Caribbean and Central America who endorse my approach on this issue. These leaders understand that the manager's amendment provides an effective way to protect workers, while at the same time spurring investment and economic growth that creates jobs. I ask unanimous consent that this list be printed in the Record.

Mr. ROTH. Mr. President, I ask consent a vote occur on or in relation to the pending amendment--the Landrieu amendment to H.R. 434 in the voting sequence occurring at 3:30 p.m. today, with all the parameters provided for the first two amendments in order.

Mr. ROTH. Mr. President, I ask unanimous consent to set aside the Landrieu amendment.

Mr. ROTH. I could not hear the Senator.

Mr. ROTH. The Senator withdrew her amendment and I asked unanimous consent we dispense with the vote on the motion to table.

Mr. ROTH. Mr. President, I ask consent a vote occur on or in relation to the pending amendment No. 2487, of Senator Wellstone, and No. 2347, the Specter amendment, at 3:30, with 4 minutes prior to each vote for explanation. I further ask consent it be in order for me to make a motion to table at this point on both amendments with one show of seconds.

Mr. ROTH. Will the Senator yield?

Mr. ROTH. In the meantime, I ask unanimous consent to lay aside this amendment. As I said, Senator Grassley, the cosponsor of this legislation, desires the opportunity to speak.

Mr. ROTH. I give the Senator permission to make modifications, if that is necessary.

Mr. ROTH. I move to table the above-described amendments, and I ask for the yeas and nays.

Mr. ROTH. Mr. President, I rise in opposition to my colleague's amendment. I do so do for three reasons. First, there is no evidence that the current antidumping and countervailing duty laws have failed to deliver relief to injured industries. My colleague argues that the amendment is required to address the unfair trade practices facing the steel industry. I would have preferred not to have to revisit the many points that were made in the context of the debate over the steel quota legislation this past summer. This bill is about trade and investment with Africa, the Caribbean, and Central America. I prefer we keep our focus there. That said, since my colleague's amendment has raised those issues before us yet again, I think it is important to remind my colleagues about the points that were made at length in this past summer's debate. You may recall that, at the time, the steel industry and the steelworkers made the point that they faced a sudden surge of increased imports of steel and were sufficiently threatened that they sought to impose direct quotas on imports of various steel products. They argued that the existing import relief laws were inadequate to the task of addressing that surge. What the debate revealed was quite a different story. In fact, while imports into the United States did surge dramatically in the wake of the Asian financial crisis, they then dropped precipitously in response to the filing of a series of antidumping measures. Imports have continued that downward trend as a result of those unfair trade actions and the suspension agreements negotiated by the Commerce Department that effectively blocked any further imports of hot and cold rolled products from Russia and other countries engaged in below cost sales into the United States market. What lessons should we draw from that experience? One is that the existing laws work exactly as they are intended. They provide an effective and efficient means of obtaining relief from unfairly dumped or subsidized imports. Indeed, as the Wall Street Journal pointed out in an article published in the midst of the steel industry's filing of dumping actions this past year, the mere filing of an unfair trade action under existing laws has a dramatic impact on prices. The article quoted Curtiss Barnette, the chief executive of Bethlehem Steel as acknowledging that trade cases had become a ``part of the Bethlehem's ``normal business-planning process,'' and acknowledging that, even where dumping actions failed, ``You have won some interim relief and you have said you're going to protect your rights.'' Nicholas Tolerico, executive vice president of Thyssen, a Detroit- based steel processing and importing unit of a German steelmaker, made the point even more emphatically. He indicated that, among importers faced with the prospect of an antidumping action, ``the response is just to stop importing.'' The same holds true for foreign exporters faced with unfair trade complaints even when they eventually win cases. The article quoted the chairman of Ispat International, one of the largest steel manufacturers in the world to the effect that his company had cut exports to the United States from a wire-rod mill in Trinidad and Tobago by 40 percent simply due to the risk inherent in trade litigation even though Trinidad's steelmakers eventually won the case. Why is that the case? Some statistics might help here. The reason that both exporters and importers of steel halt trade the minute a trade case is filed is because of the record compiled by U.S. industry. The Department of Commerce grants relief to the petitioning industry in over 90 percent of the cases filed under the antidumping and countervailing duty laws. Due to the deference that the Court of International Trade is obliged to pay to the Commerce Department's decisions under current law, the Department's decisions are upheld over 90 percent of the time. In other words, if you are an exporter of steel facing an unfair trade action in the United States, there is a 9 in 10 chance that you will face some considerable penalty. Given that steel is a commodity product, and microeconomic theory would dictate that all such products would be priced to the margin, you, as the foreign exporter, are likely to find yourself priced out of the competitive U.S. market with even a slight dumping our countervailing duty added onto the price of your current shipments. Now, let's look at it from an importer's perspective. Let's say you are in the automobile industry in the United States, or one of the other steel consuming industries that employ more than 40 persons in the United States for every person employed in the steel industry here. In fact, let's say you are the plant manager for the Dodge Durango plant in Delaware and you are operating as efficiently as you possibly can to compete with your competition in the hotly contested market for sport utility vehicles. You operate on the basis of ``just in time'' delivery to ensure that you carry as little inventory as possible. You do that, in part, to reduce the associated costs and, in part, to take advantage of any change in prices for component parts that may help you compete in your market. That, however, can make you more vulnerable to price swings in the market for component parts. Then, suddenly, the steel industry files a series of dumping actions. Do you continue to import steel when you could be faced with a dramatic increase in price if the case succeeds? No. You stop importing from the targeted country or companies in order to reduce your risk. The net result is that the cases filed before the Commerce Department begin to raise prices as soon as they are filed simply because the market is responding to the fact that the Commerce Department, 9 cases out of 10, is going to impose a significant penalty at the end of the day. Now, would the result be the same if these cases were litigated before the Federal courts, as my colleague's amendment would require? I strongly doubt that. The cases are complex, the facts frequently are in dispute, and the outcome less assured because of the nature of the litigation process. Those who have spent time litigating in the Federal courts tell me that they do not quote odds on cases to their clients even on sure winners due solely to the risks of litigation. Those with experience litigating before Federal courts tell me that the likely result of a shift of jurisdiction from the administrative agencies to the courts would be a more intrusive review--without the deference the courts currently pay to Commerce Department decisions. The net result would be greater uncertainty as to the result in these cases, which, for the steel industry, would ultimately spell a less reliable outcome than they currently achieve before the administrative agencies. In short, the dumping and countervailing duty laws appear to be working as designed and the change suggested by my colleague would simply increase the uncertainty of the outcome from the steel industry's perspective. Second, there is no evidence that shifting the burden of investigating foreign unfair trade practices to the courts would in any way enhance the prospect for prompt relief. At hearings earlier this year before the Finance Committee, those who have litigated under the ``rocket docket'' at the Commerce Department and the International Trade Commission have complained about the fact that they do not get relief as promptly as they like. But, no one suggested that a shift of jurisdiction to the courts would some how improve the situation. Given the record of the courts in handling complex economic litigation in other areas, it is not clear to me that shifting the burden of the initial investigation to the courts, with any allowance at all for the normal process of discovery between private litigants, would provide a benefit to the petitioning industry in these cases. While both petitioners and respondents complain about their treatment before the administrative agencies, largely due to what they consider to be the arbitrary basis for their decisions, both sides to the litigation seem to agree that the cases themselves are completed as rapidly as possible. That not only helps provide relief to the petitioning industry on as timely a basis as practical, it also has the significant benefit of deciding the issue for the rest of the players in the marketplace. What that really does is reduce the uncertainty in the market that the filing of the case creates. So the plant manager at the Dodge Durango facility in Delaware can rely on decisions in making his own assessment of who to purchase steel from for the coming production run. Finally, let me say that my colleague's proposal may simply be ahead of its time. What it suggests is something akin to an antitrust remedy--in other words, litigation between private parties that reduces the Government's role in the process. I personally think that there would be real merit to examining that sort of proposal in the Finance Committee in the future. And I would welcome the opportunity to do so rather than forcing a vote on the proposal today. The reason I say that the proposal may be ahead of its time is that an antitrust remedy is relevant when the actions involved are solely those of private parties. That is not the case with most foreign unfair trade practices today. Even dumping is not solely a function of private pricing decisions by foreign producers. As long as governments continue to distort markets, whether through high import tariffs on U.S. steel exports or heavy subsidies to their own domestic producers, prices in the marketplace for products like steel will not equilibrate based solely on private actions. Thus, for example, dumping is often the result of a country maintaining a closed market in which its companies can maintain a relatively high profit margin, which effectively allows those producers to cross-subsidize their exports to the United States. A private right of action does not reach that conduct. That is conduct that the United States must address at its root--which is the government-induced distortion of the market, rather than the private pricing decisions of the foreign producers. What that means for the propose shift of the jurisdiction to the Federal courts proposed by my distinguished colleague's amendment is that it is premature. Neither he nor I would suggest that the steel industry's current conditions are shaped solely by private pricing decisions. In fact, the principal problem facing the steel industry is the global overcapacity created by government protection of their home markets and subsidization of their exports to our shores. I therefore, ask my colleague to withdraw his amendment in order that the Finance Committee could take a look at the proposal and explore the ramifications of the far-sighted suggestions in greater depth. Failing that, I must oppose the amendment and urge my colleagues to do so as well. Mr. MOYNIHAN addressed the Chair.

Mr. ROTH. I move to reconsider the vote.

Mr. ROTH. Mr. President, I want to take a few seconds to thank my colleagues on both sides of the aisle for a very strong bipartisan support for the bill. I also want to extend my thanks to the majority and minority leaders who worked so hard to find the compromise that enabled the legislation to move forward. Let me underscore and emphasize that we would not be where we are if it had not been for my good friend, Senator Moynihan. His patience, his historical perspective on trade, and the key role he has played through the years were instrumental in getting this legislation through. I want to say I think it gives a clear statement to our neighbors in the Caribbean, Central America, and Africa that we are willing to invest in a long-term economic relationship--a relationship of partners and a common endeavor of expanding trade, enhancing economic growth, and improving living standards. I also think, most importantly, it will send a very clear signal to our partners around the world that isolationism is dead, that liberal trade policies are still supported overwhelmingly. It signals, I believe, that the United States is prepared to engage constructively in the wider world around us and to provide the kind of leadership necessary to reach our common goals. I yield the floor.

Mr. ROTH. Mr. President, I oppose my colleague's amendment. I do so because this amendment will undermine the very objectives this legislation is trying to further. In essence, this amendment says that if a country has managed to do well in that desperately poor and politically unstable region, its access to our market will be cut dramatically. I can't imagine a more damaging or more ironic signal to send. Let me be a little more specific about my concerns. The purpose of this legislation is to use tariff preferences to spur investment in the sub-Saharan African countries. That investment will help create economic growth and create jobs in a region that has suffered so terribly for so long. My colleague's amendment, however, would tell the Africans to watch out if they start succeeding, because their access to our market will be taken. It is an ironic signal to send. While the signal that it will send to the Africans is unfortunate, the signal it will send to investors is particularly damaging. Let me explain. This legislation is designed to encourage increased investment in the sub-Saharan region. This amendment would undermine that objective by telling investors that they cannot count on the market access that this legislation provides over the long term. As an investor, nothing is more troubling than uncertainty. When investors cannot count on what the future will hold in terms of market access, then they will avoid the region. Given the political and economic uncertainties that already exist in that region--and given the disincentives that this creates for investors--adding more uncertainty through this amendment would be particularly cruel. This amendment also ignores the fact that trade among the African countries themselves is vital to their economic future and to the effectiveness of this legislation. The rules of origin in my legislation are specifically designed to encourage the Africans to enter into economic partnership amongst themselves. Such partnering is particularly important among these nations because they each have different resources and capabilities. We should, therefore, encourage each of these countries to take advantage of their comparative advantage. My colleague's amendment, however, would selectively exclude certain countries in that region. This, unfortunately, will undermine the process of economic integration and partnering among the African nations that is vital to sound economic development in that region. This amendment seems to suggest that the economic growth of the sub- Saharan region must rely exclusively on trade with the United States. While we would all like to think that that is enough to spur growth and investment in that region, we all know that it is not. For these reasons, I oppose this amendment. Ms. LANDRIEU addressed the Chair.

Mr. ROTH. Mr. President, I ask unanimous consent the previously agreed to Grassley-Conrad amendment No. 2359 be modified. Further, the modifications have been agreed to by both sides. I ask unanimous consent that the modification be adopted.

Mr. ROTH. We will be ready in a minute for another amendment.

Mr. ROTH. Mr. President, I suggest the absence of a quorum.

Mr. ROTH. I am going to ask unanimous consent to set aside this amendment. Senator Grassley desires the opportunity to comment. I think we will stack votes as we did yesterday. It would be in order for another amendment to be raised.

Mr. ROTH. Mr. President, I ask unanimous consent that the Senate insist on its amendments, request a conference with the House, and the Chair be authorized to appoint conferees on the part of the Senate.

Mr. ROTH

Mr. ROTH. Mr. President, I ask unanimous consent that the order for the quorum call be rescinded.