Editor’s note: Following are transcribed excerpts of Jim Chesnutt’s rebuttal to Jim Leonard, deputy assistant secretary of Commerce within the U.S. Department of Commerce, during the North Carolina Manufacturers Association’s 98th annual meeting in Greensboro, NC, Oct. 1, 2004.
Jim Leonard is here from our government and he’s here to help us.
One day about a year and a half ago, Jim Leonard happened to catch me after we had just told 800 people that they no longer had jobs. You betcha I was angry
The administration, I believe, has begun to recognize what this administration and prior administrations have done to the textile industries in North Carolina and South Carolina. The president did come to Charlotte and we were successful in having him to at least mention in his presentation some issues that relate to the textile industry. But Mr. Bush is still controlled by the multinational companies. The big companies control Washington and don’t you ever forget that, any of you. He is still controlled and is still a free trader and still says some thing that makes you wonder is in fact this administration going to do something to try to at least let us maintain 600,000 or 700,000 jobs in this country.
As it relates to this group, I have watched what goes on in Washington very closely the last few years and it absolutely frightens me so much of what we’ve created in Washington, DC, in the greatest country in the world — soon to be No. 2 behind China, because we’re letting it happen. What we’ve allowed to happen in Washington, DC, is sad. All of us need to be aware of everything that we can possibly to do have some kind of effect on who we send to Washington
It also concerns me what goes on in Washington. And we’re a state, I think you said, Jim, where 16 percent of the jobs are in manufacturing and 8 percent of those are for export. I’d really like to see how many of those relate to agriculture and some other things.
But here we are a manufacturing state, and this group, over the last 98 years has been in my mind the solid voice in Raleigh to take care of the manufacturing side of this business. And here we are today in a small room representing a few textile manufacturers and a few boat manufacturers.
And in fact we represent all of manufacturing in North Carolina. And my challenge to the utilities here ... is we need to do something to get the manufacturers involved, and we need to try to get that group to come together. Not only for issues at the national level but particularly on issues at the state level because we can have more harm done to us during a couple of weeks in Raleigh than we can get over in two years. Raleigh is almost as dangerous as Washington.
But you look at some good things that can happen. ... Our trade policy, for anybody who’s in any type of business, can allow anything that’s made to be made overseas. It can destroy you. ...
It’s not just manufacturing. It’s many, many jobs that are going out of here. And these big multinationals call it trade, but it ain’t trade when you stop making it here and you make it somewhere else. It’s no longer trade. It’s only moving where you make it somewhere else, at the expense of those who make it in this country.
Here we are with a trade deficit over $500 million this year, a budget deficit that is absolutely, totally out of control ... health care issues that are about to break every one of us who run a company ... immigration policy in this country that is absolutely, totally broken. If we don’t get a tort reform, we’re all in trouble. And, yes, Jim, I know that Grant (Aldonas) has heard that everywhere he’s been ... but we still must fix the trade policy
I want to react to a couple of things that Jim said and give you my perspective. He gives you the absolute true perspective because it’s from Washington. And that’s the way it is. What Grant said about threat and the textile safeguards and that the procedures for filing those safeguards, I would say that the conventional wisdom, based on what we’ve heard of every human being that I know in the textile and apparel industry today is that ... the procedures that are in place now are adequate and don’t need to be rewritten. And as a matter of fact, the USTR supports that those procedures do not have to be rewritten.
We’ve got three safeguards in place. And what Jim Leonard didn’t tell you is that yes they had it for 30 days ... the 30 days after they were accepted for the comment period, then their were 60 days ... how long did it take to get the procedures done? Almost a year? So we got a blood transfusion when the patient was damn near dead. It took a year for our government just to develop the lawyers to develop a procedure in order to file it. If we have to go through procedure development again to file threat safeguards, and quotas come off January 1, we will die so quick that the blood transfusion later simply doesn’t matter.
Jim’s right — quotas are going away. Ten years ago, when the GATT was signed, every country in the world in the WTO said, “oh, make the quotas go away.” You’ve got to be careful what you ask for, you might just get it. And these countries around the world asked for quota to go away. They’re going away. But when they asked for it, there was no China and no India, to the extent their is today. And China got a preferential deal to get in to the WTO.
But when we deal with China, we are dealing with a communist, corrupt nation and we must never forget it. If you listened to the (presidential) debate last night, you know why we are so frightened of China — because China holds the Korea card. Korea has got a damn bomb and they hold the card, and if we make China too angry, we don’t have a chance.
Driven by the multinationals and driven by the fact that China has 20 billion people coming into their labor force every year, they will do anything at all to keep those people occupied and working, because if they’re not working they’re going to have another revolution over there and a lot of people are going to be killed.
Yes, we were able to get the quotas removal on the Council on Trade and Goods Committee in Geneva today. Thanks to Bangladesh, Uganda and Maritius who were willing to step up to the table, their governments, to get it on the agenda ... it is being talked about. If in fact safeguards are not implemented against China, the people who do the numbers, about 30 million people around the world will be affected by what China does in terms of dominating world trade.
Go back home and do your homework and see how many of those countries are Muslim countries. Put, 5, 6 or 7 million Muslims out of work, what are they going to do? Get angrier and angrier and angrier. And they’re going to train for more terror and more terror.
Our government sent us down to Central America and said “develop an industry.” And we’ve busted our chops to develop an industry in Central America. 18 or 19 percent of the apparel content in this country comes from Central America. ... You let China get most of that 18 or 19 percent of the goods coming into our country and put those people out of work ...
I remember Jesse Helms saying years ago, “the pitter-patter of those feet coming across the border to the United States” — he never dreamed that so many people trying to get here. And before we know it, Central America will be exactly the way those countries were 15 years ago if we allow China to put them out of business.
The AGOA countries, the ANDEAN agreement put in place ... and, by the way let me say something about these agreements ... I asked Bob Zoellick last week about Singapore, Australia, Morocco, Central America ... we go into a bilateral and the USTR and the Commerce Department says “but we only gave away 2 percent of the American market.” Who keeps up with the 2 percent that is here and here and here and here? I don’t think anybody’s keeping up with that. We continue to give it away in bilaterals and sooner or later there’s not cake left. We just continue to give it away.
If we allow China to run roughshod over the world, and we want to create products ... the United States — big, bold and proud — cannot take the lead and go to the WTO, because we would be that big, wealthy nation that reneged on the agreement that we signed 10 years ago. So what we have to do is influence with our authority to try to get those other countries to convince those people in the WTO that what they’ve done is headed us toward a disaster — an absolute disaster around the world.
We must have the safeguards. If we don’t have the safeguards, and renewal of the three that we already have, based on threat ... because the threat is absolutely there, then we know by looking at history that when you decontrol an item from China, the first thing they do is drive the price down and the second thing they do is grow, grow, grow in that category and take unprecedented percentages of those items that are coming into this country. China agreed to this. In our company we don’t do business with people who are dishonest and don’t pay their bills and don’t live up to their agreement. China is corrupt.
They studied the Australian free trade agreement and guess what they found? $200 million square meter equivalent worth of sweaters that were said to be made in Australia that were made in China, came in with an Australia label ... and by the way this industry supported the Australia agreement. It’s a good framework for which to have an agreement. We will support anything that makes sense for Americans.
We’ve got to have safeguards, Jim, we’ve got to have them quick, and we’ve got to have them without a lot of government bulls---.
CAFTA. We need the CAFTA. We did not communicate well as an industry with Commerce and our U.S. trade representative when CAFTA was being negotiated and they did not listen to the industry while it was going on. We presented a short supply proposal and it would’ve taken care of the issues.
Jim says you have to give and take in negotiations. The Central Americans don’t have a very strong bargaining position. We didn’t have to give them anything. But our government gave. They need us so bad in Central America. And we’ve educated many of them in this country — many of them at Georgia and at University of Chicago. And I know them in almost every country. They’re great people. I have learned to really like Central America.
We’re doing business both in Guatemala and El Salvador and I like the Central Americans. But they need us bad. We didn’t need to give in to them. Give a little bit to Nicaragua, that’s OK. Nicaragua is kind of poor. But we could have given in to them in a different way. So what happened is our government negotiates a bilateral and they need to listen to the industry because, I assure you, we know more about it than anybody in Washington, DC. Anybody. But we need the CAFTA and we need it bad.
We’d take a quid pro quo today on a CAFTA like it is for safeguards. But you can’t deliver that one, can you? I have pledged to Bob Zoellick to try to do everything I can to help you get a CAFTA because this administration needs it and this hemisphere needs it — bad.
Haiti. Haiti’s got a lot of problems. They’re poor. They’ve been devastated by storms. And you’ve got a senator from Ohio who introduced a bill that’s a piece of trade legislation. ... And you remember when the Founding Fathers put this country together, trade is supposed to come out of where? Out of the House. But a senator introduced a bill that gave Haiti 383 square meter equivalents of fabric from anywhere in the world that can be made into garments in Haiti and sent to the United States duty free, quota free. An absolutely terrible bill.
Now, before the last hurricane, it was said to be DOA when it got to the House. But now another hurricane has come along and they’ve had 1,200 or 1,500 people killed and devastation in the country and they’re fighting over what food’s down there. And now we’re in danger of that damn bill going through Congress. And, Jim, you know it is horrible for this industry. I don’t think you want it. I don’t think the USTR wants it and I think that that senator wants it. As many jobs as Ohio has lost, he’s stupid enough to put that bill in. So, we’ve got to do something about the Haiti bill.
Vietnam. Vietnam happened because there are so many people probably who feels so bad about that war that we gave up and turned tail and ran. Vietnam came along and what we gave away was criminal. It was criminally insane. And then we went back and, based on the study that Jim told you about, and we took a little bit away. Not much. And they continue — I just read a couple of articles yesterday — that even the son of one of the government officials is involved in corruption. And it is just as corrupt and just as bad as China is.
The Vietnam agreement was an absolutely horrible, horrible bilateral and will continue to do extreme harm to this industry. But you have people like JC Penney who are going to bet on Vietnam and bet on India and when Penney and Target and Wal-Mart and KMart to some extent and Costco and all the others gather up their hundreds of millions of dollars worth of soft money and hard money and take it into Washington, DC, those are the reasons that you get laws passed and those are the reasons that they have influence into any kind of trade agreements. We’ve got to fix what we’re doing. It has to be fixed.
At the end of the day it’s a money game controlled by the multinationals. The Penney people said “we are going to give you better quality. Maybe your price will go down.” Watch what happens to the earnings of the retailers and watch what happens to the salaries of the CEOs at the big retail firms. Watch it. We are driven by greed in this country. And the greed, the tax laws that have been passed that take care of those on the higher end of the spectrum.
But we are destroying the bedrock of this country. (NC Commissioner of Labor) Cherie Berry talked about training people. The community college in my hometown is training everybody that comes through the door to go into health care. Who’s going to pay for it? You’ve got a health care plan. You’ve got to pay for it. Our hospital at Beaufort County wrote off $29 million last year for indigent care. Train all those people to have these jobs in health care, but at the end of the day, it’s those of us who create something and make something that have to pay for it, and we’re running it out of the country.
I wish I had the magic elixir to grow this group. 98 years is a long time and there’s nothing I believe is needed more than a manufacturers group in North Carolina and to grow it. You might say, “well, Jim why haven’t you brought us a lot of members? Well, I’ve been trying to save 1,050 jobs — and 700,000, in Washington, because there are many, many people in this group and others that have put an unbelievable amount of time into trying to make a difference.”
I do believe our administration is looking at us differently. I’m confident that Jim Leonard has helped get our issues on the table because I think Jim understands. And the only thing I’d like to encourage Jim to do as a civil servant is to represent these 700,000 people in the textile industry who have their jobs today and to go a little bit deeper and represent the remainder of the U.S. citizens who pay taxes in this country who make stuff.
Put us in a position to where we can have a fair chance. Because if we don’t the road we’re on now is only going to mean that our dollar is going to have to be devalued to the level that will make you want to throw up. And our interest rates are going so high that you won’t be able to get the numbers in your calculator. And it will be my children and my grandchildren who will pay the price. Because we are going to drive the standard of living down in this country.
Here’s a little piece of information for you. In Los Angeles, CA, 51 percent of the population is functionally illiterate. They can’t fill out an application for a job. They can’t read signs at the train and bus stations. The dropout rate is higher in Los Angeles than most any other country in high school. They’ re not educated. This is immigration policy. And the mayor of Los Angeles said “I will be the mayor of the first third world city in the United States if we allow it to continue to happen.”
I cheated a few minutes ago. I had my blackberry out, which is very not kind to do.
