Tariffs and Trade

Article I, Section 8, of the Constitution states that Congress shall have the power "To regulate Commerce with foreign Nations," and "to promote the progress of science and useful arts, by securing" copyright and patent protection for authors and inventors.

Congress may not abdicate or transfer to others these Constitutional powers.  We oppose, therefore, the unconstitutional transfer of authority over U.S. trade policy from Congress to agencies, domestic or foreign, which improperly exercise policy-setting functions with respect to U.S. trade policy, and the unconstitutional transfer of authority over copyright and patent policy from Congress to agencies, domestic and foreign.

We favor the abolition of the Office of Special Trade Representative, and insist on the withdrawal of the United States from the North American Free Trade Agreement (NAFTA), the General Agreement on Tariffs and Trade (GATT), the World Trade Organization (WTO), and all other agreements wherein bureaucracies, institutions or individuals, other than the Congress of the United States, improperly assume responsibility for establishing policies which directly affect the economic well-being of every American citizen.  We also favor more vigorous efforts to protect the copyright and patent rights of their owners in both domestic and foreign markets.

As indicated in Article I, Section 8:  duties, imposts, and excises are legitimate revenue-raising measures on which the United States government may properly rely.  As Abraham Lincoln pointed out, the legitimate costs of the federal government can be borne either by taxes on American citizens and businesses or by tariffs on foreign companies and products.  The latter is preferable to the former.

Similarly, we oppose all international trade agreements which have the effect of diminishing America's economic self-sufficiency and of exporting jobs, the loss of which will impoverish American families, undermine American communities, and diminish America's capacity for economic self-reliance.

We see our country and its workers as more than bargaining chips for multinational corporations and international banks in their ill-conceived and evil New World Order.

The defense of the American nation and the preservation of its economic integrity are essential to the defense of the liberty and prosperity of every American citizen.

We will insist on strict federal criminal penalties for any officer of the United States government, or spouse thereof, who subsequently hires himself or herself out to represent any foreign government or other entity, public or private, with respect to influencing either public opinion or public policy on matters affecting U.S. trade with any such governments or other entities.

The indebtedness of the American government has contributed dangerously to making our economy more vulnerable to foreign takeover and manipulation. Particularly in the area of national security, foreign interests have thus been abetted in gaining access to America's high-tech secrets under the guise of commercial enterprise.  We propose that technology transfers which compromise national security be made illegal, and urge that all violators be prosecuted.

We reject the concept of Most Favored Nation status, especially insofar as it has been used to curry favor with regimes whose domestic and international policies are abhorrent to decent people everywhere, and are in fundamental conflict with the vital interests of the United States of America.

The United States government should establish the firm policy that U.S. or multinational businesses investing abroad do so at their own risk.  There is no obligation by our Government to protect those businesses with the lives of our service personnel, or the taxes of our citizens.

Close Loopholes In International Tax Law That Encourage Outsourcing. Today's tax law provides big breaks for companies that send American jobs overseas.  Current "deferral" policies allow American companies to avoid paying American taxes on the income earned by their foreign subsidiaries and encourage them to keep their profits parked overseas, not reinvested in America. As president, John Kerry will end deferral that encourages outsourcing and will shut down other loopholes to make the tax code work for the American worker, not provide tax breaks for companies that ship jobs overseas.

KEYES:  — certain kinds of tariffs are quite allowable, in order to achieve greater balance of trade.

We need to creatively use the tools that are available to us.  Saying we should rely on these multilateral organizations, where the deck is stacked against us, which can circumvent what ought to be the proper judgment of our own legislators whom we elect, responsible to us, and we should rely on their judgment to be fair to us, when we've seen what they do to the United States in other respects?

I think we have to keep sovereign control of our own economic destiny.  And "globalism" should not imply that we are going to dilute the sovereignty of the United States when it comes to defending our manufacturing base, and when it comes, by the way, to winning a better deal for our farmers.  The notion that they have been getting something wonderful out of this "free trade" nonsense is absurd.

Oh, sure.  The other countries — Japan, and so forth — they've crack the door a little bit, but guess what?  They haven't stuck their heads out, yet.  And our farmers aren't yet getting access to the rich markets that they ought to have fair access to as a result of these agreements, and it's time we started to ask why, and stopped kowtowing to these multilateral mechanisms our fundamental interests for workers and farmers alike.

You know, many experts say that a president really doesn't have much control over jobs.  For example, if someone invents a machine that does the work of five people, that's progress.  That's not the president's fault.

So I ask you, is it fair to blame the administration entirely for this loss of jobs?

KERRY:  I don't blame them entirely for it.  I blame the president for the things the president could do that has an impact on it.

Outsourcing is going to happen.  I've acknowledged that in union halls across the country.  I've had shop stewards stand up and say, Will you promise me you're going to stop all this outsourcing?  And I've looked them in the eye and I've said, No, I can't do that.

What I can promise you is that I will make the playing field as fair as possible, that I will, for instance, make certain that with respect to the tax system that you as a worker in America are not subsidizing the loss of your job.

Today, if you're an American business, you actually get a benefit for going overseas.  You get to defer your taxes.

So if you're looking at a competitive world, you say to yourself, Hey, I do better overseas than I do here in America.

That's not smart.  I don't want American workers subsidizing the loss of their own job.  And when I'm president, we're going to shut that loophole in a nanosecond and we're going to use that money to lower corporate tax rates in America for all corporations, 5 percent.  And we're going to have a manufacturing jobs credit and a job hiring credit so we actually help people be able to hire here.

The second thing that we can do is provide a fair trade playing field.  This president didn't stand up for Boeing when Airbus was violating international rules and subsidies.  He discovered Boeing during the course of this campaign after I'd been talking about it for months.

The fact is that the president had an opportunity to stand up and take on China for currency manipulation.  There are companies that wanted to petition the administration.  They were told:  Don't even bother; we're not going to listen to it.

fact is that there have been markets shut to us that we haven't stood up and fought for.  I'm going to fight for a fair trade playing field for the American worker.  And I will fight for the American worker just as hard as I fight for my own job.  That's what the American worker wants.  And if we do that, we can have an impact.

Plus, we need fiscal discipline.  Restore fiscal discipline, we'll do a lot better.

KEYES: Well, I think one of the problems is, you look at that situation, and there are two problems:  the first is, obviously, you can't deal with a catastrophic situation with a general response, but you can, through a greater emphasis — not just on preventative care, but on the responsibility people have — to follow the prescription that will keep them as healthy as possible, you can free up the resources needed to help people in those catastrophic situations.

But I would say that in that situation, the real root of the problem isn't medical at all; it's these badly negotiated trade agreements that have resulted in the destruction of the manufacturing base and job base of our workers here in Illinois.

I have consistently voiced, even against the leadership in my party, the belief that we need freedom trade and fair trade.  Free trade is a myth — and those people who say it's a good thing are actually selling out the American people in favor of a handful of special interests who are outsourcing our jobs, allowing these despotisms in China and elsewhere to export goods into the United States when they refuse to pay the price in terms of what's needed to respect union rights and freedom of association and the decent conditions of work.

We pay that price in America.  And yet, when these cheap goods come over here, we allow that slave good to compete with our free good without making any distinction whatsoever between the false price of the slave-produced good and the real price that reflects human dignity and human rights.

So, I think we ought to look at this dynamically.  We are paying a cost in terms of what should be going on in the retail sector because we have depressed the real earnings of Americans since this whole business began, by 12% or more, since we started with this whole "free trade" regime — which is a misnomer.

I think, as well, the scheme that Senator Obama is talking about, it irritates me a little bit, because here we are:  our workers have already paid a price in terms of lost jobs, lost opportunities, reduced quality of life, then we want to ask taxpayers to foot the bill for some incentives to keep companies in America, when the government created the problem in the first place by negotiating bad trade agreements that give them an incentive to outsource the jobs overseas.

Let's go to the root of the problem.  Let's deal with the fact that, if we weren't negotiating these agreements in multilateral fora that strip the United States of most of its clout that is the result of the hard work of our people, we would be getting better results — not just for our workers, but also for our farmers, where we haven't been able to get access to the richest markets for their farm products.  And instead, we have the Japanese and others saying, "Oh, we've opened the door a crack," and I'm thinking, "But you haven't put your head out yet, and in point of fact, you're exploiting down to the ground the hard work of the American people, as they have put together the strongest engine of economic development in the world."  Everybody's taking advantage of it, and we're letting them take advantage of us.

Edwards spoke to the rally for about 15 minutes.  His speech was mostly a rehash of his acceptance address at the Democratic National Convention in Boston — critical of President Bush for the war in Iraq, job losses and spiraling health care costs.

He drew his biggest response when he criticized Bush administration officials for suggesting that outsourcing American jobs is good for the economy.

The audience responded with boos, but they suddenly turned to cheers at Edwards' next words.

"Here's what would be good for the American economy — to outsource George W. Bush."

First, we can create good-paying jobs in this country again.  We're going to get rid of tax cuts for companies who are outsourcing your jobs and, instead, we're going to give tax breaks to American companies that are keeping jobs right here in America.

The American Conservative: You often mention corporations.  What is the theory behind this or what are the alternatives to corporate economic power?  I presume you are not talking about state ownership or socialism, or perhaps you are...

Ralph Nader: Well, that is what representative government is for, to counteract the excesses of the monied interestss Thomas Jefferson said.  Because big business realizes that the main countervailing force against their excesses and abuses is government, their goal has been to take over the government, and they do this with money and politics.  They do it by putting their top officials at the Pentagon, Treasury, and Federal Reserve, and they do it by providing job opportunities to retiring members of Congress.  They have law firms that draft legislation and think-tanks that provide ready-made speeches.  They also do it by threatening to leave the country.  The quickest way to bring a member of Congress to his or her knees is by shifting industries abroad.

Concentrated corporate power violates many principles of capitalism.  For example, under capitalism, owners control their property.  Under multinational corporations, the shareholders don't control their corporation.  Under capitalism, if you can't make the market respond, you sink.  Under big business, you don't go bankrupt; you go to Washington for a bailout.  Under capitalism, there is supposed to be freedom of contract.  When was the last time you negotiated a contract with banks or auto dealers?  They are all fine-print contracts.  The law of contracts has been wiped out for 99 percent of contracts that ordinary consumers sign on to.  Capitalism is supposed to be based on law and order.  Corporations get away with corporate crime, fraud, and abuse.  And finally, capitalism is premised on a level playing field; the most meritorious is supposed to win.  Tell that to a small inventor or a small business up against McDonald's or a software programmer up against Microsoft.

Giant multinational corporations have no allegiance to any country or community other than to control them or abandon them.  So what we have now is the merger of big business and big government to further subsidize costs or eliminate risks or guarantee profits by our government.

"Meet the 'China Price' or else."  Remember that phrase — "meet the China Price," because you'll be reading much more about what it means to this country, its working families and its communities.

U.S. chartered corporations are telling their suppliers that if they do not meet the "China Price," they can either lose business, cut their employees' wages and benefits further, or close down and open up their production facilities in China.

Consider the irony.  Here are U.S. corporations — pampered for years with lower taxes, de-regulation, and taxpayer subsidies of various kinds — aggressively turning their backs on America and American workers in favor of production facilities inside a communist dictatorship.  A self-described conservative, President George W.  Bush is not only silent but is presiding over policies that favor such flight to China and other low-wage, authoritarian regimes.

By bringing these regimes into the World Trade Organization (backed by Clinton and Bush) and by Congress providing China with most-favored nation status, Uncle Sam's hands are quite tied.  There is no more tying trade to human rights standards by the United States.

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Generally, the accelerating impact of the "China Price" will hold wages down in this country or hollow out communities reliant on manufacturers and suppliers that have pulled up stakes and gone to China.  The number of lost jobs will grow faster in the next decade.

Our government and both Parties (with few exceptions) are leaving our workers defenseless.  You cannot have Free Trade with a dictatorship that controls labor and other prices.  So we the people better start focusing fast on this exodus.

Though it may not be evident, quite a few industries — and the profits they generate — can be traced back to taxpayer-financed programs whose fruits have been given away to (mostly) larger businesses.

Taxpayer dollars have often funded discoveries made by NASA, the Department of Defense, and the National Institutes of Health and other federal agencies.  In many instances the rights to those discoveries were later given away to companies that brag about them as though they were the fruits of their own investments.  Taxpayer dollars have played a major role in the growth of the aviation and aerospace, biotechnology, pharmaceutical, and telecommunications industries — to name only a few.

Though corporate America insists it must file yearly income taxes just like everyone else, it is responsible for a sharply decreasing portion of federal tax dollars — despite record profits.  Despite record profits, corporate tax contributions to the federal budget have been steadily declining for fifty years and now stand at a mere 7.4% of the federal government income because of the loopholes they driven into our tax laws.  The average citizen pays more than four to five times that in federal income tax revenues (with the single exception of payroll taxes).

Clearly corporations that believe they are self-reliant are often, in fact, dependent on taxpayer funds to maintain their financial viability.

WASHINGTON, March 25 — Responding to widespread anxiety about the movement of American jobs overseas, Senator John Kerry plans to propose on Friday a sweeping revision of international corporate taxes intended to prompt companies to invest more money in the United States.

"Time after time, this administration has put ideology first and jobs last. Today, I'm announcing a new economic plan for America that will put jobs first."

With voters saying that the economy is still the most important issue in the election, Mr. Kerry's speech is designed to begin a new economic policy offensive.  It represents an approach that sounds some of the same notes as his frequent denunciation of "Benedict Arnold C.E.O.'s" during the Democratic primaries, yet is more sympathetic to business.

Kerry campaign officials said they hoped his proposal would appeal to people concerned about the loss of jobs to low-wage countries like China and India.  But by advocating a crackdown on international companies but not an increase in the overall level of corporate taxes, the campaign is trying to avoid angering the business community.

"This is pure tax reform," said Gene Sperling, a top economic adviser to Mr. Kerry who also served as a senior policy adviser to President Bill Clinton.  "He is eliminating tax incentives to move jobs overseas and using those funds to create incentives for new jobs and investment in the United States."

The first would be eliminating the ability of American multinational companies to defer taxes on their foreign profits as long as those profits stay outside the United States.  That would raise about $12 billion a year in extra tax revenue, which Mr. Kerry would use to reduce the overall corporate tax rate to 33.25 percent from 35 percent.

"If a company is torn between creating jobs here or overseas, we now have a tax code that has American taxpayers paying to ship jobs overseas," Mr. Kerry plans to say in Friday's speech.  "That makes no sense.  And if I am president, it will end."

Campaign officials acknowledged that the new plan would not stop the broader trend of outsourcing jobs to low-wage countries.  But they said it would at least remove what they called a bias in the tax system that encourages such practices.

Democratic front-runner Howard Dean said during a debate last month that America needs a president "who doesn't think that big corporations who get tax cuts ought to be able to move their headquarters to Bermuda and their jobs offshore."

Sen.  John Kerry, D-Mass., introduced a bill in November requiring service representatives to disclose their physical location each time a customer calls to make a purchase, inquire about a transaction or ask for technical support.