United States-Australia Free Trade Agreement Implementation Act

No problem.

Will the majority leader yield for a question?

Mr. President, the majority leader is speaking of schedules, in this case the schedule of the Senate Judiciary Committee. I inquire of the majority leader about the schedule with respect to legislation he and I have spoken about at great length. The last occasion was about midnight on the floor of the Senate, after which I allowed the nomination of Dr. McClellan to proceed. As a result of that, the issue of allowing prescription drug reimportation in this country and legislation that is bipartisan in scope with over 30 Senators now cosponsoring it, I had intended and hoped we would have an opportunity to vote on that on the Senate floor. I have not had the opportunity to speak with the majority leader at length in recent days, but my hope would be we could go back and revisit what is put in the Congressional Record. And my hope is what was put in the Congressional Record will then allow us to have an opportunity on the floor of the Senate to advance the legislation that we previously discussed dealing with the reimportation of prescription drugs and allowing us to put downward pressure on prescription drug prices in this country.

I ask the majority leader whether he has had an opportunity to go through that and whether he could give me some advice as to when he would allow that to be debated on the floor of the Senate?

Mr. President, we meet here in the Senate again to talk about the issue of international trade, a very important issue for our own country.

I would like to follow up on my colleague's comments about the Constitution. The Constitution does, indeed, talk about trade. It talks about who is responsible for international trade in this country. It is article I, section 8 of the Constitution. It says:

The Congress shall have power to regulate commerce with

foreign nations.

Yet Congress has largely given away that opportunity and the responsibility with respect to trade.

What the Congress has done, strangely enough, is to put itself in a straitjacket by voting and passing legislation called ``fast track''-- which doesn't sound like English, perhaps, to most people--fast-track trade authority.

Fast track means that Members of Congress will promise that when a trade agreement is negotiated somewhere else in the world in secret, behind closed doors, by our trade ambassador, when it is finally brought back to the Senate for a vote up or down, the Congress will prevent itself from ever being able to offer amendments to change it if it thinks something in it is wrong. That is fast track. The Congress has decided to limit its own ability to fix problems. I didn't vote for fast track, but the majority of my colleagues did.

So we have a situation where we have a rather innocuous trade agreement today between the United States and Australia. There is not much in this agreement that is of great moment. There are a couple of bad things in it that should be taken out. We should have a vote on the provision dealing with pharmaceutical drugs. We ought to have an opportunity to amend this trade agreement in a way that deals with trading authorities, such as the

Australian Wheat Board and the authority in Australia that deals with the sale of cattle. These are state trading enterprises that would be illegal in this country. We are actually having to say, let's trade with someone else who has a monopoly in marketing operations in agriculture, and we will consider that fair. It is not fair at all. I will talk about that at some length.

In any event, the Congress, through its lack of wisdom, I must say, has decided to use what is called fast-track trade authority, which means this agreement is here now and no one may offer any amendments because Congress decided to put itself in a straitjacket. So we have a circumstance with no amendments.

Let me at least describe where we are with international trade. Most people do not want to talk about it.

This is a massive failure. This is a colossal failure of this country on international trade.

This chart shows the countries with which we have trade surpluses. They are not in red, they are in green. All these countries in red are countries with which we have trade deficits--some very large. You look at a map of the world and you will see that we have on only a very few occasions trade surpluses. One of them happens to be with Australia. That will soon be gone after we pass this trade agreement. That is the case with every trade agreement we have done. But Australia, Egypt, Belgium--there are just a few countries with whom we have a surplus. With the rest of the world, of course, we have a large, abiding, substantial trade deficit.

Last month, I put this on a chart and showed it on the floor of the Senate. The Washington Post says, ``U.S. Trade Deficit Set Another Record In April.'' That trade deficit was $48 billion in 1 month, almost $50 billion in 1 single month. Month after month after month we see this trade deficit.

Let me go through a bit and perhaps show some charts that might give us the opportunity to ask the question, Are we really doing well here?

This is all about jobs, as you know. It is about where the jobs are located. It is about outsourcing. It is about moving jobs from here to another country.

Let us look at what is happening to our trade balance. This is the merchandise trade deficit. You will see this is dangerous, in my judgment, and very alarming. You won't hear anybody come to talk much about it. This is sort of the unseen, the hidden part of our policy that will cause, in my judgment, substantial problems in the future. You can make a case that the budget deficit, the big budget deficit-- incidentally, it is the biggest in history--will be repaid. It is a deficit the American people will repay to themselves. You can make that point. But you cannot make that point with the trade deficit. This large trade deficit will inevitably be repaid by a lower standard of living in this country. It is getting worse and worse year after year after year. And every single year, when another trade agreement is brought to the Senate floor, we are told what a wonderful agreement it is and how much we are going to sell and what good times we are going to have as a result of this agreement. Yet in every single case our trade deficit grows, jobs leave this country, and you will see that we are mortgaging this country's future.

Let me talk about some specifics, if I might. This is our trading partner to the north, Canada, a country with which we have a wonderful relationship. They, of course, have a terrific relationship with us with respect to this trade balance.

When we passed something called the North American Free Trade Agreement, we had a relatively modest trade deficit with Canada-- somewhere in here. But now it has grown to be a very substantial trade deficit with Canada. I will talk a little about why in a few moments.

China is the granddaddy of trade deficits. You will see what is happening in China. We are seeing massive and record trade deficits, of $130 billion a year. It is getting worse, worse, worse, and it is going to hurt this country.

What about the European Union? We used to actually have a bit of a trade surplus with the European Union. That has gotten worse and worse. It is now nearly as large as the merchandise trade deficit we have with China.

Japan is another interesting one. Japan, while not quite as large as Europe and China, demonstrates the fundamental and relentless incompetence of policymakers in trade. Over and over again, year after year, every single year, we have this deficit with Japan, somewhere between $50 billion, $60 billion, $70 billion a year, every single year.

Now Mexico. We had this big old NAFTA, North American Free Trade Agreement we negotiated with Mexico and Canada. When we negotiated it, we had a trade surplus with Mexico and a modest deficit with Canada. We turned that into a big deficit with Mexico and a larger deficit with Canada. So much for whether this North American Free Trade Agreement worked.

We could not offer any amendments to any of these agreements because of this foolishness called fast track, which, incidentally, inhibits us today in the Senate on this trade agreement with Australia.

I will go through some of the examples. I could start by talking about Japan. I mentioned the circumstance with Japan. We have a large trade deficit with Japan, and it just keeps on going every single year, $45, $60, $70 billion, forever. Europe will not allow that, by the way, but we do. I am talking about Europe and its relationship with Japan. We are a country that, in most cases, converts what should be hard economic policy--that is, trade policy--into softheaded foreign policy and we do not want to take action anywhere to stand up for America's interests.

I will talk about Japan in the context of my State. We produce a lot of beef. We have a lot of ranchers who work hard. They get up in the morning and work on that ranch. They are hoping to make a decent living. They want to sell some beef to Japan. But guess what. Nearly 15 years after a beef agreement with Japan between our country and Japan, which was trumpeted on the pages of all the newspapers--the United States and Japanese trade negotiators reach agreement on beef--15 years later, there is a 50-percent tariff on every single pound of American beef that goes into Japan. That would be considered a failure under any circumstance here, but in our relationship with Japan, it is just fine--a 50-percent tariff on every pound of beef. Should we be able to send more T-bones to Tokyo? I think so, sure. The tariff actually went down to 38 percent, and because we got a little more beef in to Japan, it snapped back to 50 percent. It is symbolic of the trade problems we have.

Does anyone want to do anything? Do we hear anyone rushing off to try to solve that problem? No. No one talks about that problem.

Let me use the Chinese tariffs on cars for a moment. Two years ago we did a bilateral agreement with China--actually, almost 3 years ago, now--a bilateral trade agreement with China. Our country decided, through our negotiators with China--a country with which we have a large deficit and it is growing dangerously high--we decided in our bilateral trade in automobiles we would agree to the following: China, you can put a 25-percent tariff on any cars that we try to sell in China after a long phase-in and we will apply a 2.5-percent tariff to any cars that you might want to sell in our marketplace.

In other words, our negotiators signed up to a deal that said, we know you have a really big surplus with us, or we have a big deficit with you, but with respect to automobile trade, you go ahead and impose a tariff that is 10 times higher than the one we will impose on automobiles going back and forth between China and the United States.

Of course, right now, China is gearing up an auto industry for exports and our negotiators said it is fine for them to have a tariff that is 10 times higher than we would have. That is fundamentally incompetent. We do not know who negotiated that, of course. This is not a matter of Democrats or Republicans. It is just incompetence, gross incompetence.

I will talk a little about Korea and automobiles, and I have used this example many times. I don't have the latest year's data, but trust me, it is about the same. Over 600,000 Korean vehicles are coming into this country. Ships are on the high seas, packed with Korean cars, coming in so the American consumers can purchase them.

Good for our consumers. But when 618,000 Korean cars come into our country for our consumers to purchase, guess how many American cars are in the Korean marketplace for Koreans to purchase? There are 2,800 U.S. cars able to be sold in Korea and over 600,000 Korean cars in the United States.

With respect to Korea, I might point out that we actually were making some progress recently. It was with a vehicle called the Dodge Dakota. When it looked as if that was beginning to pick up, we were actually going to be able to sell some in Korea, they did not like that and took action quickly to begin to shut that down.

The question is, Why will this country, when all of this translates to jobs here or there, why will this country decide it is all right in our relationship with Korea to have them ship 600,000 cars this way and then keep American cars out of Korea? It does not make any sense to me. What that means is fewer jobs in the United States and more in Korea. That means people are laid off here and people are hired there.

I know the agreement we are debating involves Australia, and I will talk about Australia in a couple of minutes, but it is important to put this discussion in a frame of reference. We will hear today by those who support this trade agreement that this is a wonderful agreement, this is nirvana, and if we just step back and we can see into the future, this will be new jobs, new economic growth, new opportunity. Nonsense. Total nonsense.

In each and every circumstance, our trade negotiations have resulted in trade agreements that have undermined our jobs and undermined our economic growth.

Want to talk about specifics? I will put the charts back up. Europe, Japan, China, Korea, Canada, Mexico--show me one of these circumstances where the trade agreement has buttressed the producers in this country, the employers in this country, the workers in this country toward new opportunities. In the aggregate, with each of those circumstances, we have lost ground rather than gained ground.

I know when we talk about this, people, especially the more institutional thinkers on this subject, say, well, your discussion demonstrates you do not get it, you do not see over the horizon, you do not understand what is happening internationally. This is a global economy. Why not shape up and listen and you will finally begin to understand this. You are nothing but a xenophobic isolationist stooge. Join the rest of the protectionists and just sit down.

I am not a protectionist, unless that means you want to protect the economic interests of this country, and if so I plead guilty and demand to be called that. I want to protect the economic interests of this country. I believe it is in this country's best interest to expand opportunities to trade. I believe that strongly.

For the first 25 years after the Second World War, our trade policy was almost exclusively foreign policy because we were trying to help others get back on their feet. But in the second 25 years after the Second World War, trade policy continued to be foreign policy when, in fact, it should have been harder nosed economic policy.

I began to raise questions about trade as a result of a trade agreement with Canada some long time ago. I suppose it was around 14 years ago. I was serving in the House of Representatives and I was on the Ways and Means committee. They were going to vote on the United States-Canada Free-Trade Agreement. It, too, was done with fast track, where no one was able to offer an amendment. A little provision was stuck in that agreement that allowed the Canadian Wheat Board, a sanctioned monopoly in Canada and which sells Canadian wheat through the monopoly--and that would be illegal in this country--to continue to move massive quantities of Canadian grain, underselling our farmers with unfair prices and secret prices into our country, into our marketplace. I raised those issues but to no avail.

So we came to the final vote on the United States-Canada Free-Trade Agreement and the vote in the Ways and Means Committee of the House of Representatives was 34 to 1. I was the one who opposed it.

I was told by all my colleagues: We want this to be a unanimous vote. It is very important for our committee. You must join us to get a unanimous vote on this trade agreement. I said: But the agreement is bad. The agreement is wrong. The agreement is going to hurt farmers and ranchers in an awful way in this country. So I voted no.

About 3 years later, I drove to the Canadian border one day, the border between North Dakota and Canada. I rode with Earl Jensen, who was driving a 12-year-old orange truck. It was a little old 2-ton orange truck. We rumbled up to border with some durum wheat on the back of his truck, all the way to the Canadian border.

On this windy day, we saw 18-wheel trucks coming from Canada to the United States, all loaded with Canadian grain, all of them headed to our marketplace, all of them with secret pricing, all marketed by the Canadian Wheat Board--a monopoly--which would be illegal in this country. All the way to the border we saw those trucks, dozens and dozens of trucks. The Canadians were saturating our marketplace, injuring our farmers in dramatic ways.

Well, we got to the border in this little old orange 12-year-old truck. We had about, I guess, 100 bushels of durum wheat in the back. When we got to the border station, the Canadian folks said: What do you have in the back of this truck? We said: We have durum wheat from North Dakota.

Remember, all the way to the border, we had 18-wheel trucks full of durum wheat from Canada going into our marketplace at secret prices. We found later, incidentally, they were at prices that were dumped prices that were designed to undermine our farmers. But we were told at the border station entering Canada we could not get just a small amount of wheat from the United States into Canada. Why? Because you just cannot. It is the way this works. It is a trade agreement. One side gets to dump all their products into our marketplace, and a little orange truck gets stopped going into their's.

A woman from Bowman, ND, married a Canadian. She told me she came home to Bowman one day, and because she liked to make whole wheat bread, her dad from the farm loaded up some grain in a couple grocery sacks. She drove back to Canada after Thanksgiving. She got to the border. Again, all these 18-wheel trucks were hauling Canadian durum south. She got to the border, and they forced her to throw out these two bags of wheat from a North Dakota farm that she was going to take back into Canada to make whole wheat bread. It was because you could not take that into Canada.

There is not one person in this Congress, in my judgment, not one in the U.S. House, not one in U.S. Senate, who will stand up and say: Yes, that is fair. That is right. We support it. We stand by it. That is what we intended. Not one. Yet none will lift a finger to change it. And that is just one small example that got me involved in this question of fair trade. Why on Earth will this Congress not stand up for this country's economic interest?

When it comes to international trade issues with respect to the production of manufactured goods--I have mentioned before and let me do it again because I am not at all embarrassed by repetition, so let me do it again and again and again--the Huffy bicycles that are made in this country, which I have spoken about repeatedly, are a wonderful bicycle, but they are no longer American bicycles. Huffy bicycles, most people know, are bought at K-Mart and Wal-Mart and Sears. They are 20 percent of America's marketplace for bicycles. They were made in Ohio by workers who made $11 an hour. They were proud of their jobs. In fact, the Huffy bicycles had a decal on the front just below the handlebar with the American flag. But those workers in Ohio do not make $11 an hour. They were fired. Huffy bicycles are made in China for 33 cents an hour by people who work 7 days a week, in some cases 12 to 14 hours a day. And the people in Ohio, who were proud to make these bicycles, had to go home one day to say to their spouse: Honey, I've lost my job. It wasn't because I didn't do a good job. It wasn't because I didn't like my job. It was because I can't compete with 33- cents-an-hour labor.

I don't know, I guess this truly is a globalized economy. Globalization has galloped along, and we are not going to change it. Have the rules for globalization moved along quite so

quickly? I don't think so. What are the rules for globalization?

The next picture is of a little red wagon most of us have ridden in. The little red wagon is called the Radio Flyer. This little red wagon was an American fixture for 100 years. For 100 years, they made the little red wagon in our country. Not anymore. It is gone. You buy labor for pennies an hour somewhere and have them make the little red wagon, and then make sure you have them make it in a way that allows them to sell it back into the American marketplace.

Yes, you can still buy the little red wagon. You can still buy Huffy bicycles in the American marketplace. But they are not made here. They show up as a big red bar on that trade chart I showed you, and that big red bar means jobs, and it means jobs that left here and went there. It means a worker in Ohio who made the Huffy bicycle now does not have a job. Because they are bad workers? No. Because they will not work for 33 cents an hour. They cannot do that.

So there are all kinds of elements to this issue of international trade, something that, in my judgment, is going to impose a substantial burden on this country with the kind of Federal deficits and kind of trade deficits we are now waging. You cannot experience these deficits year after year after year and not be forced, at some point, to turn to them, face them, and deal with them.

We ought not, in my judgment, deal with them by saying that we want to retreat from trade. Our country, in my judgment, should lead the world in trade--but lead the world in saying to others: There is an admission price to the American marketplace. There is an admission price here. You cannot, as a country, decide you are going to hire kids, pay them pennies, put them in unsafe plants, fire them if they try to form a labor union, and then produce your product and ship it to Pittsburgh or Fargo or Los Angeles or Denver. You cannot do that because we won't let you do that.

I will give you an example in China. This is a story from the Washington Post that I was interested in. It is a tragic story, but it is a story that mirrors a story of a couple of young women who came to a hearing I held a few months ago from Honduras who worked in a factory. You can find them all over the country--the young kids who work in a carpet plant at age 11. They tell us they have their fingertips burnt deliberately so that when these young kids are making these carpets with needles and they stick their fingers, it won't hurt because the burning of the fingertips creates scarring, so it does not hurt the kids when they stick themselves. You can find this all over the world.

Let me describe this story. This happened to be in China. In this article, it says:

On the night she died, Li Chunmei must have been exhausted.

Co-workers said she had been on her feet for nearly 16

hours, running back and forth inside the Bainan Toy Factory,

carrying toy parts from machine to machine.

It was the busy season before Christmas. Orders peaked from

Japan and the U.S. for stuffed animals.

Long hours were mandatory, and at least two months had

passed since Li and the other workers had enjoyed even a

Sunday off.

Lying in her bed that night, staring at the bunk, the 19-

year-old claimed she felt worn out.

The factory food was so bad, she said she felt as if she

had not eaten at all.

``I want to quit,'' one of her roommates . . . remembered

her saying. ``I want to go home.''

Finally the lights went out. [She] started coughing up

blood. They found her in the bathroom a few hours later,

curled up on the floor, moaning softly in the dark, bleeding

from her nose and mouth. Someone called an ambulance, but she

died before it arrived.

The cause of Li's death remains unknown. But what happened

to her last November . . . in southeastern Guangdong province

is described by family, friends and co-workers as an example

of what China's more daring newspapers call guolaosi.

The phrase means ``over-work death,'' and applies to young

workers who suddenly collapse and die after working

exceedingly long hour days, day after day.

Stories of these deaths highlight labor conditions that are the norm for a new generation of workers in China. Tens of millions of migrants have flocked from the nation's impoverished countryside to its prospering coast.

Perhaps more evidence is in a story about child labor in El Salvador--a country that our trade ambassador has just signed a new trade deal with:

Jesus Franco has scars crisscrossing his legs from his ankles to his thighs, and many more on his small hands. For more than half of his young life--he is age 14--he has spent long days cutting sugar cane, and he has the machete scars to prove it. And so do his four brothers age 9 to 19.

The point of this is simple: The rules of trade, in my judgment, have to be rules that recognize what we have accomplished in this country. We had people die on the streets in this country, demonstrating for the right to organize as workers. We had people demonstrate and die in the streets over that principle. It was a hard-fought battle to demand that workplaces be safe for workers in this country but which got there. It was not easy to get kids out of coal mines and kids out of manufacturing plants with child labor laws, but we did it.

This country battled long and hard on the question of what is fair compensation, and we have a minimum wage. We fought all of those issues and established standards. Do we now believe the conditions of international trade shall be that anyone who produces anything anywhere should have admission to the American marketplace to sell that product in our marketplace? I don't think so. We ought to lead on the basis of what fair trade relationships really are.

There are so many more issues dealing with international trade, many of them that affect our farmers, affect ranchers, affect workers. They affect businesses, small businesses trying to make a living.

The Australia trade agreement is brought to us as an innocent, rather innocuous agreement. It is not the CAFTA agreement, the Central American Free Trade Agreement, which is completed but will not be brought to this Congress before the election. That, of course, is for political reasons. The Australia agreement, despite the fact that I will vote no--and perhaps a few of my colleagues will vote no--will pass today. It is not as controversial as the Central American Free Trade Agreement, which is going to have difficulty in the Senate. But CAFTA won't come before the Senate in the coming months, because the President and the trade ambassador decided they don't want to bring it here before the election. They don't want to have this debate.

I want to have this debate. I don't think that is a Republican or Democratic problem. I think both political parties have shortchanged the country over two decades on trade policy. But we ought to have the debate now because it is about jobs, growth, and opportunity in the future.

Let me talk for a moment about Australia. As I indicated earlier, the Australia trade agreement is with a country that is similar to ours in many respects, a much smaller economy but similar. I don't allege this is the kind of problem we had when we were trying to connect a trade agreement with the country of Mexico, where you were trying to connect two countries with dissimilar wages and dissimilar standards. That is not the case with Australia. Australia is a wonderful country with great people. I would love to visit Australia. I have not yet visited Australia and would love to do that at some point.

My complaint is that we reach a trade agreement that consigns farmers and ranchers to great jeopardy. Let me tell you why. The Australians, like the Canadians, sell their grain, their wheat, through an Australian wheat board. In fact, it is the second largest exporter in the world, with 16 percent of the global share. Every grain of that that is sold internationally is sold through the Australian wheat board which is a sanctioned state monopoly, a state trading enterprise that would be illegal in our country.

We have been told time and again by the trade ambassador that we are going to deal with that. In future trade agreements we will not allow state trading enterprises to exist in circumstances where they can undercut our prices and dump their products into our country.

I described the circumstance in Canada with the massive quantity of grain coming down to our country and my not being able to get into Canada with a little orange truck with a few bushels. We have for years attempted to get

information from the Canadian wheat board about the conditions under which they are selling into our marketplace at secret prices, and they have said: Go take a hike. We don't intend to tell you a thing. The prices are secret. We don't intend to disclose them. Get out of here. They told that to the GAO, which went up there at my request: We don't intend to tell you a thing.

What evidence we do have suggests that they, as most monopolists will do, abused their pricing power and decided at secret prices to undercut our marketplace, and they have dramatically injured our farmers. That is not only me speaking. That is from studies that have been done by the Center for Agriculture and Trade Research. They have calculated the dramatic amount of money lost by family farmers as a result of unfair trade.

Now we have an Australia trade agreement. The Australian wheat board continues to exist in this trade agreement. There is nothing in this agreement that says, as we hitch together and connect our two countries in a trade relationship, you must divest yourself or create a circumstance where you are not using a state trading authority unfairly. Nothing here prevents them from doing exactly what the Canadians do.

The Australians are also positioned to do great harm to our country on beef trade. There are almost no export benefits for our cattle and beef producers with this free-trade agreement. Given Australia's relatively small population, its very large cattle herd, and its position as the world's largest beef exporter, the potential of Australia becoming any kind of an importer of our beef is almost nil. Instead, the only significant benefit I can see and many can see as a result of this with respect to cross-beef trade will be the U.S. beef packing industry which will profit from increased imports brought in under this agreement.

The beef industry is highly concentrated in a way that is pretty dangerous. I mean dangerous to consumers because the more concentration you have, the more pricing power they have and the more they price profits away from ranchers and towards themselves. They price it in a way that is disadvantageous to consumers.

There are serious problems that could exist with respect to agriculture, and there is nothing anybody can do about that. I would love to offer an amendment that deals with these two issues, but you can't because of fast track.

Finally, there is a provision in this agreement that is particularly pernicious. This is a trade agreement with Australia that includes a provision on prescription drugs. This is from the New York Times:

Congress is poised to approve an international trade

agreement that could have the effect of thwarting a goal

pursued by many lawmakers of both parties: The import of

expensive prescription drugs to help millions of Americans

without health insurance.

The agreement, negotiated with Australia by the Bush

administration, would allow pharmaceutical companies to

prevent imports of drugs to the United States.

This is a trade agreement, and they stick in a provision about prescription drugs. They did the same in Singapore. My guess is, they will do it every chance they get. What is this? It is anticonsumer, pro-pharmaceutical industry. It is an attempt to thwart those in this country who want to find a way to put downward pressure on prescription drug prices. How might one do that? By allowing the market system to act.

We pay the highest prices for prescription drugs in the world, and yet we are not able to purchase the identical prescription drug, the same pill put in the same bottle, made by the same manufacturer, from a pharmacist who is 5 miles north of the United States-Canada border.

A man talked to me the other day in North Dakota. He said his wife had breast cancer and she has taken the drug Tamoxifen for her breast cancer for 5 years and has just finished. She is now off the drug. For 5 years they traveled to Canada to buy their 90-day supply of Tamoxifen and bring it back across the border because they will allow 90 days of importation for personal use of prescription drugs. A pharmacist can't do it, but an individual can if they live near the border. So for 5 years they traveled to Canada. Why? Because you can buy Tamoxifen in Canada for 10 percent or 20 percent of the price you will pay in the United States.

Why can't a pharmacist or a distributor go to Canada and buy that prescription drug? It is FDA approved, a drug that is put in the same bottle, made by the same company.

Another example is Lipitor. Lipitor is made in Ireland. It is one of the best-selling drugs in our country for the lowering of cholesterol. It is sent from Ireland to two places. It is made in Ireland in an FDA- approved plant. It is sent to Winnipeg and then Grand Forks, ND, and all over the world, of course. But the difference between the same bottles that are sent to Grand Forks, ND and Winnipeg is in Winnipeg you will pay $1.01 per tablet, and in Grand Forks you pay $1.81 per tablet. What is the difference? About 100 miles and a border and a provision that protects the pharmaceutical industry from reimportation. That is helped, with respect to Australia and other countries this administration intends to negotiate trade agreements with, by their sticking in this trade agreement a provision dealing with the reimportation of prescription drugs. It is anticonsumer, and it shows how little regard those who negotiated this have for the marketplace. Let's let the marketplace be the arbiter of consumer prices on prescription drugs. Let consumers have opportunities to access prescription drugs in other areas where there is a safe supply.

The Australia Free Trade Agreement is going to be passed by the Congress today--not with my vote, I might add, because I think it undercuts and potentially injures family farmers and ranchers and our senior citizens who need affordable prescription drugs.

I hope that even as we do this, as the Congress addresses this issue, those who care about the long-term economy, long-term economic health of this country, opportunities and growth of this country--I hope they will take a hard look at these trade relationships and about our aggregate trade deficits that are growing alarmingly. I am not asking that we today do anything that is particularly radical. I am saying we need to address these things. Can we, will we, should we address the trade deficit with Europe that is growing rapidly? Should we, can we address the trade deficit with China that is moving rapidly up, the highest in the world? Mexico? Canada? Korea? Can we address any of those? All of them relate to American jobs.

It is safe to say there is not one Member of the Senate who comes to work with a blue suit every day and takes a shower in the morning, not at night, because that's the nature of our job--it is safe to say there is not one Member of the Senate that ever lost his or her job because of a bad trade agreement. It is probably safe to say there is not one journalist in this country who consistently writes about trade issues and seldom talks about these trade balances. It is safe to say they have never lost their job because of a bad trade agreement. But we can talk about a lot of people who have. We have a chart that shows the number of people who have lost their jobs with respect to NAFTA. This is not my speculation; these are companies that actually applied to the Department of Labor as a result of laying off workers due to the North American Free Trade Agreement. There was a provision in NAFTA that if you lay off workers as a result of NAFTA, you can apply for trade adjustment assistance. Here are the top 100 companies certifying they laid off United States workers due to our trade agreement with Mexico and Canada--mostly Mexico in this case.

Levi Strauss is No. 2. They laid off 15,676 people. Levis are all- American. That is like bicycles and little red wagons, right? When you buy Levis these days, you are not buying American.

Fruit of the Loom shorts and T-shirts used to be made in America. I always said it is one thing to lose your shirt but now Fruit of the Loom is gone.

From these 100 companies alone, a couple hundred thousand people lost their jobs. They all had hopes, dreams, and aspirations. They love this country and try to do their best. They were told by any one of these companies, sorry, you are out of work, we are moving to Mexico.

Next time you buy a Fig Newton cookie, guess what. You are eating

Mexican food. Fig Newtons were made in America for a long, long, long time. But Fig Newtons, like Levis, like Fruit of the Loom, are now Mexican. When somebody says let's have Mexican food, go buy some Fig Newtons.

The point is this: We had people working in all these areas producing these products. I will go back to the chart that I used when I began about what has happened in the aggregate to our trade deficit year after year after year. It shows this very substantial failure. All of these big deficits represent jobs that moved, jobs that should have been here but are not, jobs that could have been created here but weren't, or jobs that were here and left.

Let me again say I don't believe the solution to this is putting up walls, deciding that we are isolationist, that this is not an international economy. I believe the answer to this is to finally use the term fairness in the context in which it ought to really mean fair trade for all countries. Trade agreements should be mutually beneficial. But these trade agreements, the ones I have described, consistently and relentlessly have been unfair to this country. We were big and strong enough in the 25 years after the Second World War to withstand that. We were the biggest, strongest, and best in the world, and we could take any country on in economic competition and beat them with one hand tied behind our back. After World War II, we were that good. As other countries grew and became stronger and better, they became tough international, economic competitors. Our trade policy never changed. It largely remained foreign policy.

Last year, the administration's Trade Policy Review Group recommended take action against China, for failing to live up to its obligations on China trade. But the administration didn't. Why? Because the administration concluded that this would upset the Chinese. That is foreign policy; it has nothing to do with hardnosed economic policy.

This country lives in a world in which we have incredibly tough competitors. It requires us, it seems to me--if we are going to maintain this standard of living, it requires us to care a little about the preservation of that standard of living, and that in turn depends on both the entrepreneurs and those who work, the producers and the workers.

We have not done nearly what we should do in this country to stand up for our economic interests on international trade. I believe trade can be good, but much of the trade we have been engaged in in recent years has resulted in the largest trade deficit in history and will inevitably detract from this country's opportunity to grow, prosper, and create new jobs in the future, unless and until this Congress and this administration stand up and understand we need to take action on behalf of our country to protect our economic interests. All I ask for is fair trade.

I will vote against the Australia Free Trade Agreement because it contains three bad trade provisions, because we cannot get these removed due to fast track, which itself is an unfairness perpetrated in the Congress.

My expectation is that, even without my vote, this free-trade agreement will pass. But I will be back to talk about trade issues in the future.

I yield the floor.

Mr. President, I rise to express my strong opposition to the so-called United States-Australia Free Trade Agreement. This is really not a free-trade agreement at all. This is a negotiated trade agreement, and our side, once again, lost the negotiation.

I believe the United States-Australia Free Trade Agreement is one more example of the United States trading away its economic strength for some other agenda. Somebody once said: The U.S. has never lost a war and never won a negotiation. That certainly is true of this agreement.

First, I believe the focus of our trade policy should be opening markets to U.S. exports where we have the most to gain. We need to level the playing field for our producers, and we need to open major markets around the world that remain closed to us. Unfortunately, that is not the trade policy or agenda being pursued by this administration.

Our current trade policy is completely off course. Our negotiators have failed to secure a good deal for agriculture in the WTO talks. Instead, they have opened trade talks with countries that offer few new export opportunities for the United States.

Commercial gain should drive our trade policy. But it has become clear that foreign policy considerations are the primary factor influencing our trade agenda. It is no secret here in Washington what this agreement is about. It is not about a trade advantage for the United States. It is not about improving the economic strength of America. This is a payoff. This is a payoff to Australia for backing our Iraq policy. That is what this is about.

Not surprisingly, the results of this flawed trade policy are abysmal. Our trade deficits are skyrocketing. Last year, the trade deficit hit an all-time record of $497 billion. And this year, what do we anticipate? Well, it is going to be much worse.

Mr. President and colleagues, we can look back and see what has happened under this trade agenda. In 1997, we had a trade deficit of $108 billion. That was only 7 years ago, and look what has happened. Every year it has jumped, and jumped dramatically. From 1998 to 1999, it went up almost $100 billion; from 1999 to 2000, almost $100 billion; from 2001 to 2002, up, up, and away again, approaching $100 billion for 2002 to 2003. Goodness knows where it will be this year.

These developments have serious consequences for our economy. This is not just numbers on a page. This is not just columns on a chart. This has real-world consequences for the U.S. economy.

Earlier this year, the Washington Post carried an article expressing the concerns of economists about our trade and budget deficits and the falling value of the dollar. It reported:

The twin trade and budget deficits are both approaching a

half trillion dollars, and with

U.S. consumer debt also at record levels, it is up to

foreigners to keep the U.S. economy afloat.

Let me repeat that: ``it is up to foreigners to keep the U.S. economy afloat.''

The U.S. economy now borrows $1.5 billion a day from foreign investors, said Sung Won Sohn, chief economist of Wells Fargo & Co., and that level could reach $3 billion a day in the near future.

Where are we getting the money from? The Senator from South Carolina had it right. We are approaching $600 billion from Japan, $150 billion from China. We are even borrowing money from the so-called Caribbean banking centers--$80 billion from the Caribbean banking centers. And we have yet our tin cup out, even in South Korea. Who would have guessed that the mighty and powerful United States would have to go hat in hand to South Korea and borrow $40 billion?

The Washington Post article went on to say:

Currency traders fretting over that dependency have been

selling dollars fast and buying euros furiously. The fear is

that foreigners will tire of financing America's appetites.

Foreign investors will dump U.S. assets, especially stocks

and bonds, sending financial markets plummeting. Interest

rates will shoot up to entice them back. Heavily indebted

Americans will not be able to keep up with rising interest

payments. Inflation, bankruptcies and economic malaise will

follow.

On agricultural trade, the story, regrettably, is much the same.

Things are getting worse, not better. Our surpluses have gotten steadily smaller since 1996. Always agricultural trade has been one of our leading areas of surplus, but that surplus is shrinking and shrinking steadily. Last year we had the smallest agricultural trade surplus since 1987. We are going full speed in reverse in every sector. This is an ominous warning to the American people of the direction of this flawed and failed trade policy.

The fact is, this administration is not leveling the playing field for our producers or opening major new markets for U.S. exports. Instead, it is opening our markets to a flood of agricultural imports unfairly traded that threaten American family farmers. To me, focusing on this free-trade agreement and more like it and neglecting a successful WTO agreement is a recipe for disaster for American agriculture. Mark my words, friends: We are going in the wrong direction.

Those with whom we compete are not playing according to some fair set of rules. They are subsidizing at a rate, in Europe alone, five times our rate here. They account for over 87 percent of the world's agricultural export subsidy in Europe, 30 times the rate here. And the results are clear. They are gaining market share year after year after year and now rival our own share of the world market.

America needs to wake up to the gathering threat. I regret to say, this agreement with Australia is a perfect example. On agriculture, the United States had almost nothing to gain and a lot to lose. The simple fact is that Australia is never going to be a large export market for U.S. commodities, but it poses a serious threat to certain commodities produced here at home such as beef and dairy. It is very clear. Any objective analyst can look and see what was the opportunity for America and what was the threat. The threat totally overwhelms the opportunity.

In addition, Australia has an export state trading enterprise known as the Australian Wheat Board. Grain growers in my State have had a bitter experience with these State trading enterprises. Ever since passage of the so-called Canadian Free Trade Agreement--again, that was no free-trade agreement; it was another negotiated trade agreement, and our side lost the negotiation there as well, especially when it came to agriculture--the United States has been flooded with a tidal wave of unfairly traded Canadian grain, undercutting our producers, undercutting our prices, putting our people at risk, costing my State nearly half a billion dollars.

Our neighbor to the north maintains a government-sponsored monopoly known as the Canadian Wheat Board. The Canadian Wheat Board is the only exporter of western Canadian grain. It is a monopoly. It uses this monopoly power to undercut prices to our producers, not just in my State of North Dakota but in Montana, in Idaho, in Minnesota, and all across the northern tier of the United States, undercutting through unfair trade practices the family farmers who are the heart of the heartland of America.

We have been fighting for 15 years to resolve problems created by the Canadian Wheat Board, and we have learned a bitter lesson. We have learned that once something is permitted in a trade agreement, it is virtually impossible to fix. That is why I was disappointed to learn that the Australia Free Trade Agreement does nothing--I hope my colleagues are listening--to curb the unfair trading activities of the Australian Wheat Board. This was a priority for many farmers. The U.S. wheat industry has decided to oppose this agreement because of this one defect alone.

Some will argue that we have a trade surplus with Australia, and, therefore, it is a good country with which to enter into a trade agreement. That argument sounds good, but history teaches us something quite different. I remember so well when we debated NAFTA. I want to make clear my own position on trade. I supported the agreement with China. I supported WTO. I opposed NAFTA. I opposed the Canadian Free Trade Agreement because in those cases, I believed our negotiators got taken to the cleaners. I will tell you, our negotiators got taken to the cleaners on this one as well.

The record, I believe, will be clear. Back in NAFTA, remember what we were told. We were told: We have a trade surplus with Mexico, and if we just approve this agreement, the surpluses will grow.

We can now go back and check the record. Did the $2 billion trade surplus that existed with Mexico before NAFTA increase? No. Did it stay the same? No. There is no trade surplus with Mexico anymore. Now we have a trade deficit, not a small trade deficit, not $2 billion, not $4 billion, not $8 billion, but $40 billion of trade deficit. And some come on this floor and call it a success. What would it take to call it a failure? I am amazed to hear people come out on this floor and call NAFTA a great success. We went from a $2 billion trade surplus to a $40 billion trade deficit, and they call that a success? What are they thinking of? We are full speed in reverse in this country in terms of our trade position in the world.

Trade agreements are no guarantee of trade surpluses, and opening our market to further import competition without creating new export opportunities is a serious mistake. That is exactly what this agreement that is before us today does when it comes to agriculture. There will be virtually no new agricultural exports to Australia as a result of this agreement. But when it comes to the American beef and dairy industries, there will be significant increases in imports that they will face--and on an unfair basis--because we know of all the hidden subsidies they have in Australia for those industries. We know how they play the game.

I have concluded that from the perspective of the farmers and ranchers I represent, this agreement is a bad deal.

Second, the mistake has been compounded by a massive loophole in implementing this bill with regard to beef safeguards. Ever since the Australia Free Trade Agreement was signed, the administration has said over and over that the agreement had an automatic guaranteed safeguard to protect our U.S. beef industry against unfairly traded imports. That is what they told us. That is what they told American ranchers and farmers, that it was automatic, that it was guaranteed. But check the fine print. See what they have done in the final hours. They have slipped you a Mickey. It is not guaranteed. It is not automatic. It is all subject to a waiver and a decision by one person who doesn't happen to be in the Congress of the United States.

We were told that the industry would not have to worry if imports of Australian beef surged or prices in this country plummeted. The safeguards were automatic and were guaranteed.

But now we find the safeguard is not automatic and not guaranteed. In fact, this safeguard has a loophole big enough to drive a cattle truck through. The implementing bill before us specifies that the USTR can waive the beef safeguards whenever it determines that extraordinary market conditions make it in the national interest to do so.

Here is what it says:

The United States Trade Representative is authorized to

waive the application of this subsection if the Trade

Representative determines that extraordinary market

conditions demonstrate that a waiver would be in the national

interest of the United States.

Who decides? The Trade Representative of the United States. That is not what the Constitution says. The Constitution doesn't say the Trade Representative decides these questions of international commerce. The Constitution of the United States says:

The Congress shall have power . . . to regulate commerce

with foreign nations. . . .

Not the Trade Representative or Ambassador, but the Congress. And the Congress has given away its responsibility in these free-trade agreements with the fast-track procedure. We have done that based on a promise that is being violated in this agreement for the first time in a trade agreement.

Listen well, my friends. Listen well. Understand what is about to happen on the floor of the Senate. For the first time, in an unprecedented way, the role of Congress is being further reduced. The legislation before us does not require the Trade Representative to even consider the effect on the beef industry of waiving the safeguards. If he or she determines that a lower price for hamburger is in the national interest, it can waive the safeguard, even if doing so clearly injures the U.S. beef industry, which the safeguards are supposed to protect. The legislation doesn't give Congress, the body charged in our Constitution with regulating tariffs, any meaningful say in this decision.

As I show on this chart, Article I, section 8 of the Constitution says Congress shall have the power. In this agreement, it is the Trade Representative who has the power. The statement of administrative action says, ``The United States Trade Representative will notify Congress of its decision to waive the safeguard at least 5 days before the waiver goes into effect.''

The Congress shall have the power to get a 5-day notice of what the Trade Representative has decided. That is not what the Constitution of the United States intended. It didn't intend for a Trade Representative to give 5 days' notice to the Congress of the United States before their decision is made, with no role for the Congress of the United States. That is not what the Constitution says.

This agreement does not in any way commit the USTR to even listen if the Congress expresses concerns or objections. I don't think that is right. I don't think that is how this agreement had been sold to the American people. I know that is not the way it was sold to the ranchers and farmers of North Dakota, South Dakota, Montana, Idaho, and every other State. They were told there was automatic guaranteed protection for them.

That is why, when the Finance Committee conducted its markup of the Australia agreement 2 weeks ago, I offered an amendment. My amendment insisted that Congress have a say before the Trade Representative decides unilaterally to waive this safeguard.

This is where it gets interesting, because my amendment was adopted on a vote of 11-10. Here is the vote: 11 votes for the Conrad amendment, 10 votes in opposition. The Conrad amendment is not in the agreement that is before us. Have you ever heard of that happening before? Have you ever heard of an amendment passing in a committee that has jurisdiction and it is excluded when it comes out here on the floor? It is as though those 11 Senators never voted.

The administration ignored the amendment passed in the Finance Committee and, as a result, the legislation before us contains the very same loophole that was rejected by a majority of the Senate Finance Committee. That is profoundly unfair to America's ranchers and cattlemen. It ignores the express will of the Senate Finance Committee, and it is yet another example of why I have concluded this legislation is a bad deal.

Before moving on to discuss why I find this process so troubling, let me address one other issue that has been raised with respect to my amendment. Some have argued that my beef safeguard amendment was unconstitutional. That argument is simply a red herring designed to avoid a discussion of the merits of the amendment. I have yet to hear anyone argue that Congress should not have any say before the U.S. Trade Representative unilaterally waives the safeguard that was promised to America's cattlemen. The Finance Committee has a long history of considering conceptual amendments rather than requiring legislative language. That is how the Finance Committee of the United States does its work. We offer conceptual amendments that are later translated into legal language. That is the way it works.

My amendment said fundamentally that Congress must act before the U.S. Trade Representative can waive the safeguards promised to the beef industry. I have consulted with the Congressional Research Service, because one of their staff members asserted there might be a constitutional problem with what I proposed. I now have a memo from the very same gentleman who raised the constitutional question saying there were at least two ways to take my conceptual amendment and make it constitutionally permissible. But that is not what happened. As I have said, CRS has concluded in a memo to me that the concept expressed in my amendment could have been implemented in at least two ways without raising any constitutional problems.

First, the Conrad amendment could have been implemented through the statement of administrative action. The statement of administrative action is a document submitted to the Congress that explains the agreement on how the administration intends to implement it. Since the statement of administrative action is an executive branch document, it explains how the executive branch will choose to operate. No separation of powers problems would exist.

Moreover, this is precisely how a commitment to Senator Baucus with respect to the beef safeguard was implemented. It was not included in the legislation. It was put in the statement of administrative action.

Alternatively, it would have been entirely consistent with my amendment to implement it through a congressional disapproval process. This process is very familiar to Senators. For years, the Congress voted annually on a resolution extending normal trade relations, or most-favored-nation status, as it was then called, treatment for China. There has never been any question that this waiver process was fully constitutional. Thus, had there been any interest in making my amendment work, it would have been easy to find a way to do it.

So I can only conclude that those who talk about the Constitution are simply avoiding the real issue. The real issue is whether the U.S. Trade Representative should be given the power unilaterally to revoke a safeguard that was sold to our beef producers as an absolutely automatic guaranteed protection against surges of unfairly traded Australian beef imports that would damage our U.S. beef industry.

On that issue, a majority of the committee clearly said no. They didn't just say no, they voted no. I have yet to hear anyone make a persuasive argument why the USTR should be able to unilaterally take away this safeguard. It is unfair to those who supported my amendment. The process was short-circuited to drop the Conrad amendment. In particular, it is unfair to our ranchers and cattlemen to take away that safeguard.

Let me address the process the Finance Committee followed in dropping my amendment, and why it is so troubling.

The chairman of the Senate Finance Committee is a fine man. He is, in fact, a good friend of mine. But with all respect to the chairman, the process that was followed to subvert the will of the majority of this committee was egregious. It sets a very dangerous precedent that threatens the underpinnings of the fast-track process.

As all Members of this body already know, the Constitution gives the Congress--not the President--the responsibility for regulating foreign trade. Yet in recognition that we cannot have 535 trade negotiators, the Congress has agreed to the fast-track process for considering trade agreements.

In agreeing to fast track, each Senator gives up the most fundamental rights of a Senator. We give up our right to amend, the most fundamental right of all Senators. And we give up our right to extended debate, a second

of the most fundamental rights of any Senator. In essence, we are giving up our right to protect our constituents.

In return, there is supposed to be a detailed consultation--a detailed consultation--with the Congress throughout the process of negotiating trade agreements and developing the implementing legislation.

In practice, the Finance Committee in the Senate is the focus of this consultation because the Finance Committee has jurisdiction over trade policy. In theory, the committee has extensive input during the process of negotiating trade agreements and developing the legislation to implement them. Theoretically, it does not then need to amend the implementing bill once it is formally introduced.

Understand, here we are on the floor of the Senate. There is a treaty. Normally, every Senator would have the right to offer amendments to it. We would have the right to extended debate. We have given up those rights under the fast-track process. We do not have the right to amend. This bill will be considered in less than 20 hours. There is not the right to extended discussion, to illuminate, to educate so that people fully understand what is happening. Those fundamental rights of any Senator have been given up in the fast-track process.

When it comes to developing the implementing bill, this consultation occurs through what is known as the mock markup process because it is not a real markup because we have given up those rights. Instead, we have what is called a mock markup. The mock markup is the Finance Committee's opportunity to amend the implementing bill before it is formally introduced, and then cannot be amended under fast-track rules.

This informal process has a long history. For past agreements, the process has lasted months and produced a host of changes. To give just one example, 14 amendments were adopted during the mock markup of the North American Free Trade Agreement. The amendments added during mock markups were addressed in a mock conference and then included in the final formal implementing bill. I recall this history to make several points because people need to understand what is happening.

Everything has changed. We have never dealt with a trade matter in the way we are dealing with it today. My colleagues need to understand the consequences of what is about to happen because they are enormously serious for every Senator, and they are enormously consequential for this country.

First, in the past, the committees have always insisted on sufficient time for all members of the committee to review the draft implementing bill and have their concerns addressed.

Second, it is not at all unusual for changes to be made, for amendments to be made during the mock markup process, including many that did not have the support of the administration.

Third, when the mock markup process produced changes, it did not spell doom for the agreement.

Fourth and finally, the chairman of the Finance Committee did not vote down the package simply because it included a provision with which the administration or the chairman disagreed.

But what happened during the mock markup of this bill, the Australia free trade agreement, threatens to make a mockery--a mockery--of the process of congressional consultation. In the Australia agreement, we got the bum's rush.

The agreement was completed on February 13, but we did not see implementing legislation until June 18. More than 4 months went by with no implementing bill to review. And then after 4 months of delay, we were told we would have 4 business days before the mock markup to respond to a provision on the beef safeguards that was totally unexpected.

When I indicated my intent to offer an amendment, the Trade Representative made clear that my input was unwelcome. He simply did not want to entertain a serious substantive concern that is important to the ranchers and cattlemen whom I represent. Yet addressing these concerns before an unamendable fast-track bill is precisely the purpose of the mock markup process. That is the whole point of going through this exercise, is to give Senators a chance in the committee of jurisdiction to make changes if they prevail in a vote.

I did prevail in a vote. My side won, but it is not in this agreement. That has never happened before. Mr. President, I say to Senators, they better think long and hard about what that means. They better think long and hard about what that means for the process. They better think long and hard about what that means for fast track because if this trade of giving up our right to amend and our right to extended debate is a hollow one without meaning, that there is supposed to be a congressional consultation, that there is supposed to be a parallel process that allows Senators to alter the package before it comes to this floor, if that is all hollow, if that is all a sham, if that is all a phony exercise, then Senators better think long and hard about giving up that power to amend and that right to extended debate because the rest of this process has become an absolute sham.

I offered my amendment. It prevailed on an 11-to-10 vote, but the normal process was not allowed to play out. Instead, the committee followed the unprecedented course of voting down the amended recommendation in its entirety. Then the administration submitted its original proposal all over again without the amendment. That is good; that is arrogant.

In essence, what the administration is saying is that voting down a recommendation is tantamount to approving it. They are ignoring the clearly expressed will of a majority of the members when it comes to the language on beef safeguards. It is like voting down a bill on the Senate floor after it has been amended and trying to claim that defeat is the same as adopting the bill that was originally brought to the floor. What a sham.

That strikes me as dangerous. It opens the process to abuse, and it reduces the committee's role in crafting trade policy. It may have been expedient in this instance, but I believe that we will come to regret this precedent and this day. It invites a future President to ignore any recommendations made by the committee on future trade-implementing legislation.

Remember what the Constitution says? The power is with the Congress on the question of regulating commerce with foreign nations.

This is not a dictatorship. This is not a circumstance where the power was vested by the Constitution of the United States in the President of the United States. The Constitution of the United States says:

The Congress shall have the power . . . to regulate

commerce with foreign nations. . . .

The Australia Free Trade Agreement promises few, if any, benefits to U.S. agriculture and has little or no positive effect on our overall economy or perilously large trade deficits. Instead, it puts certain sectors of American agriculture at extreme risk.

Before I move on, I remind my colleagues that the fast-track process is up for renewal next year. To the extent that it becomes clear to colleagues that the consultation promised in the fast-track process is a sham, a snare, and a dilution, it will become infinitely more difficult to extend fast track. Who is going to want to give up their right to amend, who is going to want to give up their right to extended debate, if there is no right to serious consultation by the committees of jurisdiction; if it is all just a game and there is no meaning to votes that are cast? That is what is about to happen. It is a sham.

Moreover, the safeguards that were supposed to protect ranchers and cattlemen from excessive and unfairly traded Australian imports turned out to be a false promise. They are not automatic or guaranteed as promised. Instead, they can be waived at any time without any input from Congress. That is unfair to our ranchers, our beef industry.

Finally, the process that the Finance Committee followed sets a terrible precedent. No Senator should welcome the precedent that the administration can simply ignore the votes of the committee of jurisdiction on a particular trade issue important to the people we represent, secure in the knowledge that a trade-implementing bill can be pushed through as part of a larger take-it-or-leave-it package.

For all of these reasons, I will strongly oppose the Australia Free Trade Agreement that is before us.

I conclude by saying to my colleagues if anybody does not think we are setting a precedent that has enormous consequences down the road, think again. I have been here long enough to see what happens when this is done. For the purpose of expedient action one year, that precedent can grow like a cancer. Right now, I believe what is being done is so egregious and so wrong that it sows the seeds for undermining the entire fast-track procedure.

When Senators awaken to what is being done, I think they will be very reluctant to give up their fundamental rights to amend legislation implementing a trade agreement. I think they will be very reluctant to give up their right to extended debate. Those are the most fundamental rights of any Senator.

There is a reason those rights were extended to Senators. It is so they can protect the rights of the minority, so they could slow down a process so people could think carefully about the effects and the implications of legislation before this body. That is the fundamental constitutional role of the Senate. It is being jeopardized by this fast-track process that has become not just a fast track, it has become a railroad job.

When votes do not matter, when consultation does not matter, when one person decides the commerce with foreign nations, this country and this body has gone off the track.

I yield the floor.

I now ask unanimous consent that the FSC bill be temporarily set aside and I now move to proceed to H.R. 4759, the Australia Free Trade Agreement. I further ask consent that there be 6 hours equally divided between the chairman and ranking member or their designees; provided further that all other provisions of the statute remain applicable to the bill.

Further, I ask unanimous consent that following the use or yielding back of the time the Senate proceed to a vote on the passage of H.R. 4759, and immediately following that vote the Senate resume consideration of the FSC bill and proceed to a vote in relation to the DeWine amendment as provided under the order.

Finally, I ask unanimous consent that there be 2 minutes equally divided for debate prior to the second vote.

Yes. That would be on the DeWine amendment?

Mr. President, for staff and Senators who are not on the floor, I call attention to the fact that we are starting the debate on the United States-Australia Free Trade Agreement. We have 3 hours on this side. I have not had many requests for time, and I know that two or three Members want to speak. I urge those Members to come over early to speak because if we can yield back time we do want to do so.

I was only going to speak about 7 or 8 minutes. The Senator from Oklahoma wanted to speak 5 minutes. Is there any problem if I give the Senator from Oklahoma 5 minutes right now and then I speak 7 or 8 minutes and then the Senator from North Dakota can have the floor?

I yield 5 minutes to the Senator from Oklahoma.

Mr. President, I yield 2 minutes to the Senate majority leader.

Mr. President, I am happy to bring to my colleagues the United States-Australia Free Trade Agreement Implementation Act. This is a bill that Congress must pass to actually implement what has been negotiated as the United States-Australia Free Trade Agreement. This is under the process that we call trade promotion authority. This is a process by which Congress, which has the constitutional power to regulate interstate and foreign commerce, has delegated negotiating authority to the President to negotiate certain trade agreements. But because we have that constitutional authority, we cannot give to the President of the United States the authority to change U.S. law as it might be negotiated.

So we are now dealing with legislation that changes U.S. law and makes the United States-Australia Free Trade Agreement not a treaty approved just by the Senate of the United States, as we know treaties are, by two-thirds vote, but this is basic law. It has passed the House of Representatives by a majority vote, hopefully it will pass the Senate by a majority vote, and it is to be signed by the President.

We are dealing with the constitutional authority of the Congress to regulate foreign and interstate commerce, but understanding that it is not reasonable to expect 535 Members of Congress to deal with foreign countries, we have asked the President to do that for us but under guidelines that we have set down and with Congress having the final authority. We are in the process of exercising that final authority.

As is true of almost any agreement, this one might not be perfect. However, I believe it will provide significant benefits to the United States, our economy, and particularly to the economy and the people of my home State of Iowa.

During committee consideration of the agreement, we heard from a number of different sectors of the economy which stand to benefit from the agreement. At the top of the list is the U.S. manufacturing sector and all the jobs that exist in that sector that will be stabilized and enhanced as a result of American manufacturing selling a lot more to Australia because certain duties that now are on those products will be gone.

Under the agreement, more than 99 percent of U.S. manufacturing exports to Australia will become duty free immediately after this agreement is signed by the President. This is the most significant reduction of manufacturing tariffs ever achieved in any U.S. free-trade agreement.

This is very good news for manufacturers such as the Al-jon company of Ottumwa, IA, employing 100 people. Today, about 10 to 15 percent of Al-jon's production is exported. They are confident that with a level playing field they can do even better. This bill helps level that field.

During testimony before my committee, John Kneen, chairman of the board of Al-jon, testified that while they have had some success selling in Australia, their exports are currently limited by two factors: First, Australia currently imposes a 5-percent tariff on their exports. And, second, the cost of shipping heavy equipment to Australia is very high. While we cannot do much about the cost of shipping, we surely can eliminate the 5-percent barrier with the enactment of this trade agreement.

It is not just the company of Al-jon that will benefit. Mr. Kneen testified that over 19,000 U.S. companies that currently export to Australia are likely to benefit from what he termed the ``instant competitive advantage'' provided by the elimination of these tariff barriers on U.S. manufacturing exports.

These companies include other Iowa manufacturers such as John Deere, which has four manufacturing plants in my State. John Deere anticipates increased exports to Australia on account of this free-trade agreement.

The U.S. agricultural sector stands to benefit from the agreement as well, as duties on all U.S. farm exports will be eliminated, reducing tariffs on U.S. agricultural exports by over $700 million. Processed food, soybeans, oilseed products, fresh and processed fruits and vegetables, all will benefit from these duty reductions. For U.S. farmers and our ranchers who compete with Australian agriculture, special safeguards and tariff rate quotas are included as part of the agreement to make sure that trade is not only free but fair.

The free-trade agreement negotiating process also opened the door to eliminate scientifically unfounded barriers to the importation of U.S. pork and U.S. pork for processing. These are all major Iowa products because we are No. 1 of the 50 States in the production of pork. While Australia made its scientific determination regarding pork outside of the free-trade agreement negotiations, the intensive consultation process that naturally flows from engaging in bilateral trade negotiations helped in the resolution of that very important matter. Dermot Hayes, an economist at Iowa State University, estimates that the elimination of these unfounded barriers could increase U.S. exports of pork to Australia by over $50 million annually.

The United States-Australia Committee on Sanitary and Phytosanitary Measures, and the Standing Technical Working Group on Animal and Plant Health Measures, which are established under the FTA, will help to ensure that all Australian standards on United States agricultural imports are based on sound science and are not used as a basis for protectionism.

Iowa's service providers will also benefit from new market-access openings in Australia for our service exports. These commitments, along with new, transparent trading rules, should provide a lot of important new market opportunities for Iowa's service exports.

And, for the first time, this agreement opens much of Australia's lucrative government procurement market to United States exporters. The government procurement provisions are especially important, as Australia is one of only a few developed countries that are not members of the World Trade Organization Agreement on Government Procurement.

In sum, the United States will benefit from the United States- Australia Free Trade Agreement. I urge my colleagues to vote for S. 2610, the United States-Australia Free Trade Agreement Implementation Act.

(At the request of Mr. Daschle, the following statement was ordered to be printed in the Record.)

Mr. President, I was hoping that the Senator from North Dakota would stay around. First, I support the Australia Free Trade Agreement because it is for the sole purpose that it is in the economic interest of the United States of America. I do it within our constitutional power to regulate interstate and foreign commerce. I do it in the tradition of the last 70 years, since the 1930s, of the United States doing everything it could to lead the rest of the world in the reduction of barriers to trade; to enhance not only the economy of the United States of America but the economy of the entire world.

Let no one have any doubt in their mind, this is in the economic interest of the United States and that is the only thing the United States ought to be considering as we consider this legislation.

The charge was made that the only reason we are doing this is because of the friendship of Australia and their support in our efforts in Iraq. If I can do something in the economic interest of the United States and at the same time enhance our relationships and show our respect for a friend in the world community of nations, I am not going to back away from doing that, because through almost 100 years of the involvement of the United States in military activity for the promotion of peace and liberty around the world Australia has been an ally on which we could count.

Australia is not going to agree to this agreement because they might like the United States of America. Australia is going to look at this and ask: Is it in their economic interest? Now, their administration has already said that it is because it is signed. I do not know whether Congress has acted down in Australia, but nobody is going to be concerned about the economic interests of America except Americans and the elected representatives of America. Nobody is going to be concerned about the economic interests of Australia except the people of Australia and their elected representatives.

It just happens that everything does not have to be black and white, that when we do things in public policy and in international trade and in our foreign relations sometimes things can be done to accomplish more than one thing, and it happens that we have an opportunity in this vote today not only to do something in the economic interests of the United States of America but also to enhance our relationship with a friend in the world.

From a member of a political party who is always badmouthing our President of the United States because he is engaged in world activities, military activities without seeking enough help from other nations and from the United Nations, I think it is talking out of both sides of your mouth when you condemn us for trying to do something for a nation that has been a friend of ours--in this case, Australia.

The other thing I noticed about the debate that just went on is the charts that have been put up all afternoon by people on the other side of the aisle bemoaning the unfavorable balance of trade we have. What do they want to do? Do they want to tell the consumers of America that you cannot buy from anywhere in the world you want? Why do we have the balance of trade we do? It is because the U.S. consumers are king and they can do anything they want to do and they are doing it. They are exercising their economic freedom. They are also exercising the opportunity of the marketplace to buy from what they think is the place to get the best quality for a certain price. That opportunity happens to be enhanced the greater the competition. The freer the trade around the world and the fairer the trade around the world, the more opportunities there are for our consumers to buy whatever they want to buy, of the quality they want, at what they consider a fair price.

I don't know that any Member of this Congress who has been complaining about the unfavorable balance of trade has introduced any legislation saying the consumers of America cannot buy this product or that product. Are they going to tell the consumers of North Dakota what they can buy or not buy? Are they going to certify to their people that their judgment as political leaders is better than the judgment of the consumer of America and the marketplace, including the consumer of North Dakota? I don't see them doing that.

The other thing is, why do we have an unfavorable balance of trade? One of the reasons is the people of America are not saving as much. But what do we get from the other side of the aisle when it comes to giving the taxpayers of America an opportunity to have more discretionary income? We hear complaints from the other side of the aisle that this side of the aisle is giving too many tax cuts because they happen to believe that 535 Members of Congress are smarter and better able to decide how to spend the money than the 130 million taxpayers of America. I don't believe that. But when taxes are high, there is less discretion for savings, and it impacts negatively upon our balance of trade.

The other thing I wonder about, with the other side of the aisle talking about the high trade deficit--one-third of that trade deficit comes from the importation of energy into America, mostly petroleum. We had an energy bill up last November, and that energy bill is defeated by a filibuster on the other side of the aisle. When we want to set an energy policy, so we import less energy, so we reduce our unfavorable balance of trade to some extent, they deliver 13 out of 49 Democrats to break a filibuster. When they want to kill the confirmation of judges who the President appoints, they can deliver 46 out of 49 Democrat votes to kill those judges. But when their own leader votes for a motion to bring about a national energy policy so we are not importing so much energy, so the balance of trade is not so unfavorable, what do we get from the other side? They don't even support their own leader when he says he needs it for his State.

So don't complain about the unfavorable balance of trade in America when you espouse policies that tend to make it worse, or question the wisdom of the consumers of America, to put your judgment above the judgment of 280 million people in America, that you know more than they do about what they ought to be doing with their money.

Now I want to address whether Congress is giving up constitutional power. I am addressing specifically the accusation that has been made by the Senator from North Dakota, Mr. Conrad, who just finished his remarks. First of all, I have yet to see the memo obtained by Senator Conrad from the Congressional Research Service which he says supports his claim that his amendment could be made constitutional. But in any event, with respect to his argument that one way to implement his amendment in a constitutional fashion would be in the statement of administrative action--and it is on that point that I want to comment-- this is precisely the type of revisionist history that I warned of earlier, yesterday, in our committee meeting.

I read from the amendment that he put before the committee:

The amendment enhances the consultation requirement in the

waiver provisions by adding a requirement in paragraphs

202(c)(4) and 202(d)(5) that the Finance and the Ways and

Means Committees must both affirmatively approve a proposed

waiver before the USTR can waive the application of a

safeguard.

This amendment calls for specific changes to two sections of the implementing legislation. How could language added, then, to the statement of administrative action possibly effectuate this amendment, which calls for changes to the implementing bill? The answer is, very clearly it couldn't. But even if it could, this argument ignores the fact that the statement of administrative action is a statement of administrative action, not a statement of congressional action. But the amendment calls for action by two committees of Congress, not for action by the administration.

I would like to remind my colleague from North Dakota of the principle of separation of powers. In fact, that principle underlies the Supreme Court Chadha case and is the reason why the amendment as drafted and as voted on by the Finance Committee is unconstitutional. So any argument that the statement of administrative action offered a way to implement the amendment in a constitutional way is without merit.

What about the argument that the amendment could have been implemented in a constitutional way if requirements for action by the full Congress and presentation to the President for his signature were added, according to the decision of Chadha? In effect, under this interpretation, the amendment would require additional legislation to be enacted before a beef safeguard measure could be waived. That is the only way you could remain consistent with our Constitution. And it requires a contorted reading of the language of the amendment that was actually introduced and was voted on by the committee that day.

But let us assume that a legislative procedure was intended by the amendment, as contorted as that may be. The problem is, such a procedure conflicts with the obligations assumed by the United States in annex 3(a) of the agreement. In sections (b)(4) and (c)(5) of annex 3(a), the United States commits to retain the discretion not to apply a beef safeguard measure.

If the President is required to wait for congressional action before granting a waiver, that deprives the administration of the discretion to grant a waiver. Even if the amendment were to be implemented consistent with the U.S. Constitution, it would at the same time be inconsistent with the terms of the agreement.

Again, we see this amendment for what it truly is. It was political maneuvering, pure and simple. It was intended to obstruct the process. It was intended to force the administration to explain its rejection of an unconstitutional amendment or, based on these new arguments about constitutionality, the administration would be forced to explain its rejection of an amendment that was inconsistent with the agreement.

In either case, the administration's rejection of the amendment would have been used by some to argue that the trade promotion authority process was flawed, that the administration ignored the will of the Finance Committee.

They would have also argued that the administration had not done enough to protect the U.S. beef industry from imports, an allegation that is completely without merit if you read the terms of this agreement.

Any way that you revise the reading of the amendment, its purpose was to delay formal consideration of the bill and give opponents a political issue to try to exploit.

Again, as chairman of the Finance Committee, I did not want to see that happen. I wanted to end the obstructionism, end the political gamesmanship, and end the consideration of an unconstitutional amendment.

The majority of the committee voiced their will, and the amended recommendation was not approved. The trade promotion authority process was on and the process moved forward, leading us to the consideration of this very important legislation today, much in the economic interests of our people.

Again, I call on my colleagues to recognize the value of the underlying agreement with Australia and to support the implementation bill when we vote on it in a short period of time.

I yield the floor.

I yield back time on this side.

Mr. President, I move to reconsider the vote.

Mr. President, with a sense of regret, I come to the Senate floor to speak in opposition to the legislation before us to implement the free-trade agreement negotiated by the administration with our good friend and ally, Australia.

One thing I have made clear throughout my career in Government is the fact that I believe in free trade. As Governor of Ohio, I supported NAFTA and the establishment of the WTO. As a Senator, I supported permanent normal trade relations for China, the Andean Trade Preference Expansion Act, and the so-called ``fast track'' trade negotiating authority. I also supported our FTAs with Jordan, Chile, and Singapore.

Until very recently, our economy has been bleeding jobs--23,000 manufacturing jobs lost in my State of Ohio between May of 2003 and May of 2004, which is over half of the total 41,000 jobs lost in all sectors.

While I still firmly believe in free trade, I cannot stand idly by while our trade laws are ignored by other countries and go unenforced by our own. I will no longer allow the illegal trade practices of other countries that put good, hard-working Americans in the unemployment lines to be disregarded, because that is exactly what is happening.

When it comes to trade, China is the elephant in the room that everyone is afraid to acknowledge because they fear it will rear its ugly head. It seems as if we want to waltz with the Chinese and, for some reason, we are afraid to step on their toes for fear they might get mad.

As I and many of my colleagues see it, the two most prevalent trade issues we face are the manipulation of China's currency and their resistance to reform and enforcement of their intellectual property rights laws as required by their WTO accession agreement.

My good friend and colleague from South Carolina, Senator Lindsay Graham, and I held a press conference last month to highlight a finding in a report by the United States-China Economic and Security Review Commission, a Commission we in Congress created to suggest changes to current U.S. policies with regard to China.

The report issued by the Commission was quite alarming, and I suggest that every Member of both this and the other body read the trade sections of that report.

The Commission reinforces what I have been hearing from Ohio businesses and what I have been saying for years: China is not trading fairly and is hurting Ohio workers and American workers. As we know, since the early 1990s--this is the early 1990s--China has pegged its currency at 8.28 yuan per dollar, which is believed to be anywhere between 15 and 40 percent lower than it should.

This action has the effect of making U.S. products more expensive than items produced domestically. It also makes the retail prices paid here in the United States for Chinese goods artificially low, generating less demand for our domestic products. If demand is lowered both here and overseas of U.S.-manufactured goods, companies will lose money and lay off workers. They already have.

The Commission's report states that if China were to end its currency manipulation, it is believed other East Asian countries, such as Japan, Taiwan, and South Korea that have also manipulated their currencies in order to remain competitive with China, would also follow suit and end their manipulation.

The Commission has arrived at a unique solution to China's currency manipulation. They do not believe China's currency should be floated, as are most developed countries' currencies, because China's banking system and financial markets are simply not prepared. Instead, they recommend that it be pegged to a ``market basket'' of several trade- weighted currencies to avoid fluctuation of any one country. That is exactly the kind of ``outside the box'' thinking Congress had in mind when we created the Commission as part of the fiscal year 2001 Defense authorization bill.

The Commission recommends that the administration take strong action to thwart China's exchange rate practices, something I have repeatedly urged the administration to do myself.

Last fall, I introduced the Currency Harmonization Initiative through Neutralizing Action, CHINA, of 2003. This legislation requires the Secretary of the Treasury to analyze and report to Congress within 60 days whether China is manipulating its currency to achieve an advantage in trade. The CHINA Act also expresses the sense of Congress that the administration should pursue all means available to remedy China's currency manipulation.

The other pressing trade issue is China's lack of enforcement of intellectual property rights laws. This issue at least is getting some traction in the Senate. Unfortunately, not enough of my colleagues are aware of how bad this situation is or of how long the situation has persisted.

In April 1991, China was named a priority foreign country by the USTR under section 301. After further investigation, the U.S. threatened to impose $1.5 billion in trade sanctions if an IPR agreement was not reached by January

1992. While that deadline was met, by 1994, the USTR again listed China as a priority foreign country because they failed to properly enforce their laws. New talks failed for almost a year before a new agreement regarding Chinese IPR laws was reached.

As part of their new commitment, China agreed to take immediate steps within 3 months, establish mechanisms for long-term, effective enforcement, and provide greater market access for U.S. products. In 1996, USTR again listed China as a priority foreign country for not fully complying with the latest agreement. Talks stalled until China was threatened with $2 billion in sanctions when they reportedly satisfied U.S. demands.

However, the problem remains as estimates show the piracy rate for IPR-related products in China to be around 90 percent. Chinese law enforcement officials often lack the resources or the will needed to vigorously enforce IPR laws. Under the terms of the Chinese accession to the WTO, they were to immediately bring their IPR laws into compliance with the WTO Agreement on Trade Related Aspect of Intellectual Property Rights.

This also has not happened as promised. U.S. firms are still losing billions of dollars per year in China alone, and all we have to show for it is a string of broken promises that started in 1991.

I remember being in China in 1995 with a trade mission and speaking to the Chinese Government about the importance of enforcing their intellectual property rights. They said: Yes, we are going to do it. Here we are, 2004, and they have not continued to do the job they are supposed to be doing.

Regardless of China's staggering piracy and counterfeiting operations, they are far from being the only problem area in the world. The U.S. Trade Representative lists 18 countries as ones with which we have ``significant concerns'' with respect to their IPR laws and enforcement. In my opinion, this is far too many countries flouting their international obligations.

In the Governmental Affairs Subcommittee which I chair, I held a hearing on April 20, 2004, that focused on intellectual property violations in the manufacturing sector of the economy, and another on December 9, 2003, which examined the ability of the Department of Commerce and the U.S. Trade Representative to negotiate, monitor, and enforce our complex trade laws in a rapidly shifting global trade environment.

Also, just last month, I participated in a hearing held by Chairman Lugar in the Foreign Relations Committee which focused on China's inability to enforce intellectual property rights when it comes to music, films, and software. To quote the testimony of Jack Valenti, the head of the Motion Picture Association of America:

Piracy problems are only becoming more severe. In 2002, the

piracy rate in China for American films, home videos, and

television programs was about 91 percent. In 2003, the

pirates captured at least 95 percent of that market. The

current level of piracy is worse than it has been at any time

since 1995 when it was 100 percent.

But these industries are only the beginning of those suffering from China's disregard for international standards.

Perhaps the greatest problem to overcome is to change the perception in many countries that intellectual property rights do not exist. For U.S. manufacturers, artists, filmmakers, and others, the protection of intellectual property is not an abstract concept because at stake are their livelihoods and those of the people who work with them and for them.

We must make it clear we will not tolerate these trade violations. If the United States were to, in some way, violate a trade pact, the whole world would be beating down our door demanding we change our ways and pay for damages. But when we ask that countries follow the trade pacts to which they already agreed, we are denounced as bullies. Well, I say, let's be bullies.

My concern is that we may not be able to be bullies because, as I learned in my hearings, we do not have the mechanism in place to enforce our trade laws. In other words, we do not know who we should bully around because we do not know who is breaking what agreement. Moreover, testimony indicated that our Government is not doing anything to help the companies that are having their intellectual property stolen.

The state of enforcement is nothing short of abysmal. Amazingly, USTR only employs a grand total of 225 people. It has become painfully obvious that this is an insufficient number of employees to negotiate, monitor, and enforce our trade deals.

Given the impact of changing global economic forces, it is important for our trade agencies to have the right people with the right skills and knowledge to effectively monitor and enforce our complex trade agreements.

It was clear from the testimony delivered at the hearing that our Department of Commerce, the Customs and Border Protection Agency at the Department of Homeland Security, the USTR, and the rest of the 17 or more Federal agencies responsible for monitoring and enforcement of our trade agreements cannot do so effectively.

This could accurately be described as a case of the left hand not knowing what the right hand is doing. In my days of service in government as a Senator, Governor, and mayor, I have never seen such a hodgepodge of agencies and departments struggle with a relatively simple mission to enforce our trade laws.

Following my April hearing, I visited the Web site given as an example of what the Federal Government was going to do to help manufacturers that had become victims of counterfeiting. On that Web site was a telephone number, which I called. However, the person on the other end of the line had no idea that anyone but those with problems relating to immigration would ever be calling that number.

So I called later and I told them who I was, George Voinovich, U.S. Senator, and that I wanted to know what resources were available to victims of counterfeiting, and eventually I was connected to the correct person. Small business owners should not have to deal with such nonsense when asking their Government for assistance.

I am pleased to say that those answering the line are now aware of this other function. But the way it works is, if I am an Ohioan who has an IPR problem, I call this number and then they give me the number of my local Customs office and ask me to call them to begin my complaint. That is ridiculous. It is absolutely no help whatsoever to smaller manufacturers in this country.

I have been pressuring this administration at the highest levels to address the many issues we have with China. In March of this year, along with Senators Lindsey Graham, Schumer, and Durbin, I sent a letter to President Bush requesting an emergency meeting with the President, Treasury Secretary Snow, and Ambassador Zoellick to discuss concrete action regarding continuing illegal undervaluation of China's currency. That was 5 months after I wrote to Ambassador Zoellick, Secretary Snow, and Commerce Secretary Evans urging them to initiate a 301 investigation into China's practice of currency manipulation.

The response we received from the administration? None. Nothing was known about the stance of this administration until April 28 of this year when Secretaries Snow, Chao, Evans, and Ambassador Zoellick held a press conference to announce they would reject a yet-to-be-filed 301 petition requesting an investigation into China's currency manipulation. Needless to say, I was extremely disappointed that the administration would announce such a position before even receiving the petition documents.

China continues to tolerate rampant piracy of copyrighted U.S. material, with rates of piracy running above 90 percent across all copyright industries for 2003.

This year, piracy is estimated to cost U.S. industries $2.6 billion. Technology has made it much easier to copy or steal the engineering, packaging, and so forth of a product than in the past.

I was talking with a shareholder in a golf club manufacturing outfit 6 months ago. He said that within 3 days after they put a golf club out on the market they were already counterfeiting it in China and sending it to the United States.

Another example, in my own State, Gorman-Rupp Company of Mansfield, which testified at my April hearing,

since 1933 has designed and manufactured pumps used for many applications, including water, wastewater, petroleum, government uses, and agriculture. A Chinese company has not only copied and exploited Gorman-Rupp product manuals and performance specifications, but the Gorman-Rupp logo is still displayed on the products in the Chinese company's literature. In other words, this is a case where they copied the machine, the pump, to a ``T,'' then they used the same promotional material that Gorman-Rupp uses for their material. They copied it line and verse and are using it to promote their pirated product.

Unfortunately, patents do not protect American manufacturers.

America's competitive edge is derived from innovation and the resulting steady influx of new products and services. Intellectual property rights protect and promote this innovative spirit. In too many cases with too many foreign countries, our intellectual property is the last edge we have because of a fundamentally unbalanced playing field.

Many of our competitors do not have to consider environmental standards, labor laws, employee safety, litigation costs--and this Congress has to do something about litigation costs in this country. It is a tornado cutting through the economy and we just sit here and do nothing--health care costs. Losing our intellectual property is the last edge we have.

The United States-China Economic and Security Review Commission believes the administration should file a WTO dispute on the matter of China's failure to protect IPR and to promulgate and enforce WTO- required laws. To quote the report:

Follow through and action have been limited. . . . The

Commission believes that immediate U.S. action is warranted.

I hope my colleagues read the report. The Commission believes that immediate U.S. action is warranted on this issue. There is a sense of urgency. We are just going to Tweedledee Tweedledum? We have done nothing since 1991 on IPR and it is now 2004 and we are still doing nothing?

As I said, I believe in a fair playing field in which competitive and comparative advantage wins the day. We cannot continue to let countries walk all over us. The one country that everyone seems to be afraid to call on the carpet for flagrant violations of their international agreements is China. I do agree with some of my colleagues that maybe the reason we are not doing it is because of foreign policy decisions, but we have to put a stop to China's illegal and unethical trade practices.

There are people who come into my office and literally shed tears, people who have been in business for years, and they are going out of business because of competition from China because of the fact they have taken their patents. So we need to do something. We have to do something now.

Despite these overwhelming problems facing our Nation's manufacturers, I must say I have yet to see any significant action on behalf of the administration to respond. Now I have talked to some people and they say, oh, yes, George, we are working on this; we are talking to people; we are negotiating and we are doing this.

Well, it is time to bring it to the surface. Let the American people know what they are doing instead of hiding out. Make it an issue. Let the Chinese know we are serious about this thing. Let them know the U.S. Congress is serious about it. Let them know the administration is serious about it. So we can get some action.

Last month I made it known that I would not support any new trade agreements until there was a movement on these two fronts, and that makes me feel very bad. I am a free trader. I believe in free trade. But we do not have fair trade. Maybe the only way this Senator from Ohio, who has a lot of people who are on the edge of losing their businesses, can maybe get someone's attention in the administration to get out and start talking about this the way they should be so the American people, and particularly the voters in Ohio and the manufacturers and the people losing their jobs, is to say to them I will not support any other trade agreement on the Senate floor until they do something about the currency manipulation in China and the enforcement of intellectual property rights.

I yield the floor.

Mr. President, the United States-Australia Free Trade Agreement negotiated by the administration is not perfect. The distinguished chairman and ranking member of the Finance Committee would agree with me on that point.

It is often said around here that we should not let the perfect be the enemy of the good. This agreement for which we vote on implementing legislation today passes the ``good'' test, but barely.

Throughout my career in public service, I have been an ardent supporter of free trade. Opening markets to the free flow of goods and services benefits America, benefits our trading partners. Trade liberalization creates jobs, expands economic growth, and provides consumers with access to lower cost goods and services. The North American Free Trade Agreement, despite criticism from some, has increased our cross-border trade between our northern and southern neighbors by incredible amounts of money, creating economic growth and prosperity on both sides of the border.

In my judgment, free trade should mean truly free trade. There are some portions of this agreement which take admirable steps in that direction. For example, over 99 percent of the manufactured goods traded between our two countries--manufactured goods--will be duty and quota free and textile and apparel tariffs will be phased out.

According to the International Trade Commission, U.S. consumers will receive a net welfare benefit increase of between $438 million and $639 million if the agreement is fully implemented.

Ideally, this free-trade agreement would reach 100-percent duty-free treatment and tariff elimination immediately but I recognize that may not be possible.

What I find truly offensive are protections for special interests such as dairy, beef, and sugar. Even these protections, however, pale in comparison with the language in this agreement that covers patented pharmaceutical products.

I am astonished by the decision of the U.S. Trade Representative, Mr. Zoellick, for whom I happen to have the greatest admiration and appreciation. I am astonished that he would include language which would impair our ability to pass and implement drug importation legislation.

The Singapore Free Trade Agreement, which went into effect on January 1, was the first free-trade agreement to include language that could impact drug importation. In a side letter of understanding between our respective Trade Representatives, both nations agreed the language would not prevent Singapore from engaging in the parallel importation of pharmaceuticals. Thus, the U.S. Trade Representative effectively made the provisions applicable only to the United States.

USTR claims this language is consistent with longstanding U.S. patent law. If that is indeed the case, and if Singapore is not obligated to abide by the language, then why is the language included in the agreement? I suspect it was included in order to protect powerful special interests and to provide a template on which to base intellectual property provisions in future free-trade agreements.

In fact, the Industry Sector Advisory Committee for Chemicals and Allied Products, which advised U.S. negotiators on this provision, stated that this language ``should not be viewed as setting any ceilings for the intellectual

property chapters for future free-trade agreements; rather, each individual free-trade agreement should be viewed as setting a new baseline for future free-trade agreements.''

This pharmaceutical language was slipped into the Singapore FTA below the radar screen, without recognition of its potential implications for drug importation. Since that time, similar drug provisions have cropped up again in both the Australia FTA before us and the recently completed Morocco FTA.

Let's be clear about this language. It is antithetical to the spirit of free trade and serves only to block American consumers from accessing lower cost goods and services.

Not only does the intellectual property language in the Australia FTA offend all free traders, it also contravenes clear congressional intent. Let's look at the facts. In 2000, Congress passed the Medicine Equity and Drug Safety Act, MEDS Act, to allow American consumers to import lower cost prescription drugs from 25 industrialized countries with regulatory systems similar to ours. Although language added to that law acted as a poison pill and effectively prevented importation from taking place, congressional intent was crystal clear: We want to allow Americans to import safe prescription drugs.

In the years after the MEDS Act passed, the cost of prescription drugs has continued to rise, the number of uninsured Americans has continued to grow, and Congress has continued to debate the issue of drug importation. This week, a study from Boston University found that drug spending, as a share of income, rose by 50 percent between 1998 and 2002.

In the last 3 years, several additional importation measures have passed both Houses of Congress with substantial bipartisan support. In States, cities, and counties across the country, governments are implementing programs that would allow their residents to import lower cost prescription drugs. Today, approximately two-thirds of Americans believe they should be able to import lower cost drugs.

Where does this leave us? Congress has repeatedly voted, with bipartisan majorities, to allow drug importation. States and local governments are doing the same. An overwhelming majority of Americans believe they have a right to import cheaper medicine. AARP, the leading advocacy group for senior citizens, recently joined the battle.

So a simple question comes to mind: What is our U.S. Trade Representative, who is charged with representing the interests of the American people, doing? Why deliberately include language in bilateral trade agreements that could thwart importation efforts? Why flagrantly disregard the intent of Americans and their elected representatives? It seems to me that the special interests have found friendly territory.

Now, supporters of this language will claim that nothing in this agreement prevents the Congress from passing legislation with respect to drug importation. They are absolutely correct. No trade agreement can prevent Congress from exercising its constitutional right to pass laws that govern our Nation. However, the language in this trade agreement does tie the hands of Congress, further complicating our efforts to pass a drug importation law.

The USTR general counsel, John Veroneau, testified along these lines last month. He told the House Ways and Means Committee that new legislation on drug importation ``could give rise to an inconsistency between U.S. law and a commitment under this trade agreement.'' Given that similar language is now in not one but three trade agreements, it will presumably present the same problem for each.

Let's be intellectually honest here. It is simply bad policy to enter into bilateral agreements knowing we want to modify domestic law and thereby place ourselves in violation of these various agreements. Imagine Americans' response if they knew that domestic health care policy was being crafted not by their elected officials in Congress but, instead, by free-trade negotiators.

Now that this language is in three agreements, a precedent has been established for future FTAs. Indeed, USTR officials have indicated they intend to pursue similar language in all future FTAs. This means that future drug importation legislation will leave us in violation of our obligations to an ever greater number of trading partners and allies, undoubtedly creating a greater challenge to enacting and implementing importation law.

When Americans wonder how this continues to happen, maybe they should take a glance at the list of intellectual property ``advisors'' who worked with the negotiators. These advisors include representatives from--guess who--drug companies--guess who--the pharmaceutical industry as a whole, and other lobbyists with a direct interest in blocking drug importation. How many public health and consumer advocacy groups were included on this committee? Zero.

There is a popular philosophy among coaches known as game slippage which offers that you can make your team practice all you want, but, invariably, come gametime, some of what was taught in practice will not be applied during the game. I fear the administration is suffering from game slippage. It appears that Congress's intent over the last several years to address drug importation has slipped from the collective conscience of the administration and the U.S. Trade Representative when negotiating gametime comes around.

Our trade negotiators must be less mindful of special interests and more responsive to the express intent of the Congress. We granted the President trade promotion authority in 2002 to demonstrate our Nation's reenergized commitment to negotiating strong free-trade agreements. TPA was designed to lead to free trade, not more protection. Yet we have protectionist measures in this FTA for the pharmaceutical, sugar, beef, and dairy industries that will likely result in higher prices and, in some cases, less supply.

This agreement is not the first in which the administration has made use of TPA to promote its legislative priorities. Last year, immigration provisions were included in the Singapore and Chile FTAs. If the administration is to continue to enjoy the privilege of TPA, trade agreements must no longer be vehicles that include items rightfully addressed by Congress under the Constitution.

The United States has been and should be the leading promoter of an open global marketplace. Steel tariffs, agricultural subsidies in the farm bill, and other forms of protection, however, have damaged America's free-trade credentials. If special interest carve-outs, as the one for the pharmaceutical industry in this FTA, continue to pollute our trade agreements, we will all be worse off. Our economy will suffer and our leadership role on trade will further decline.

I have spoken at length about the very serious drawbacks of the Australia FTA. I will reluctantly support this implementing legislation because it, nevertheless, will have a net positive impact on the American economy. I also will vote for it because of my profound respect for the Government and the people of Australia. They have bravely stood by us for many decades and have shown enormous courage in helping us to fight the global war on terror. We are privileged to call the Australian people friends, and my comments here today should in no way reflect poorly on the proud nation with which we will embark on a new trading relationship.

Mr. President, I will vote yes. But the administration must understand that continuing down a protectionist path harms American consumers and engenders ill will among our allies and trading partners. I support passage of this legislation, but should another FTA being negotiated now or in the future come before the Senate with similar protections for special interests, I will find it extremely difficult to do so again.

FSC/ETI Tax Bill

Mr. President, before I continue, I would like to mention just a word about the FSC/ETI tax bill that we apparently have an agreement to go to conference.

The June 19 editorial in the Washington Times, not known for liberal propaganda, stated:

The ideal solution would have been a quick, simple repeal

of FSC-ETI, which is bad economic policy in any case. . . .

Unfortunately, both the House and the Senate versions of the bill became magnets for special interests. A steady train of lobbyists tacked on $167 billion

in tax breaks over the next 10 years to the Senate bill, while the House bill expanded by $143 billion in similar additions. The Senate bill, for example, includes breaks for NASCAR racetracks and foreign dog-race gamblers, while the House version lavishes its attention upon tobacco growers, timber owners and alcohol distillers. The imminent House-Senate conference, predictably, promises to be a de facto food fight between congressmen, lobbyists and tax watchdogs. And so while the lobbyists duke it out, EU sanctions will continue to rise, and American manufacturers and the U.S. economy will deal with the consequences.

There are many other editorials about how incredible this bill has become and how we have lost any possible sense of what we are doing to our deficit and to the American people. If we pass this bill in its present form, I will do whatever I can to make sure every American knows what we have done here for the special interests in this town. Despite the passage of campaign finance reform, they rule in a way which is almost unprecedented at least in the 22 years I have been a Member of Congress.

I yield the floor.