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Senator Hawley Gives Floor Speech on Reforming the Global Economy, Preventing China’s Domination

May 20, 2020

Editor’s note: Senator Hawley made this powerful speech on how it is in the US national interest to ditch the WTO and to prevent China’s domination. 

Today U.S. Senator Josh Hawley (R-Mo.) took to the Senate floor to make the case for reforming the global economy and preventing China’s domination.

[Sen. Josh Hawley | May 20, 2020 | Senator Josh Hawley]

Remarks as prepared are below.


We have come to the middle hour of our struggle against the epidemic, against a disease unleashed on the world by the failures and lies of the government in Beijing.

This epidemic has brought devastation in its wake. Lost lives, lost jobs, fear, isolation.

And it is shaking old institutions and challenging old ways. The international order as we have known it for thirty years is breaking. Now imperialist China seeks to remake the world in its own image, and to bend the global economy to its own will.

And we face a moment of truth. Will we acquiesce? Are we in this nation willing to witness the slow destruction of the free world? Are we willing to watch our own way of life, our own liberties and livelihoods, grow dependent on the policy of Beijing?

Already we hear a chorus of voices telling us that America must accept a narrower future. We must live with slower economic growth. We must expect lower wages. We must accommodate ourselves to the rise of China.

Well, I, for one, am not willing to settle for less. I am not willing to see blue collar workers go without work for months or years on end as their jobs are sent overseas. I am not willing to watch wages flatline and fall. I am not willing to see families struggle for food and middle-class neighborhoods collapse.

And Mr. President, neither is America.

The nation that sent a man to the moon and liberated the world from German and Soviet oppression in the space of fifty years will not be content with a small future. We will not gladly take second place to the imperialists in Beijing.

And so now, as in times past, this nation must again take control of our own destiny and lead the free world to a better day.

The free nations again confront a common threat. The Chinese Communist Party is a menace to all free peoples.

It seeks nothing less than domination. It wants nothing less than world power. This is China’s policy: to control Asia and to rule the Pacific. From there, the Chinese government wants to spread its influence to Africa, to Europe, to South America—a master of home and abroad.

And they are well on their way. For decades now, China has bent, and abused, and broken the rules of the international economic system to its own benefit. They have stolen our intellectual property and forced our companies to transfer sensitive trade secrets and technology. They have manipulated their currency and cheated time and again on their trade commitments. They have been complicit in the trafficking of persons and relied upon the forced labor of religious minorities.

And America has suffered. Since Beijing won Most Favored Nation status and joined the World Trade Organization in 2001, we have lost over three million jobs to China. During the past two decades, as we fought war after war in the Middle East, the Chinese government systematically built its military on the backs of our middle class.

We were promised things would be different. We were told that giving China access to our markets and allowing them power in the WTO would reform their behavior, make them more liberal. We were told it would be good for America and for the world.

Well, the only nation it was good for was China. And we cannot afford inaction any longer.

The threat of China to the free world grows by the day. If the coronavirus pandemic doesn’t make that clear, nothing will.

But what should be equally clear is that the United States must now reform the global economy itself to rebuild our strength and prevent China’s bid for domination.

The economy has become the principal arena for the great power contest of this century. Economic policy is now security policy.

China knows this. It has integrated its economic and security strategies for the last two decades, systematically weaponizing the institutions and procedures of the global economy for its own benefit. The United States has been slow to respond.

Now we must recognize that the economic system designed by Western policy makers at the end of the Cold War does not serve our purposes in this new era, and it does not meet our needs for this new day.

And we should admit that multiple of its founding premises were in error.

The economic system of the last thirty years—it’s nothing sacred. It’s not inevitable. It was a choice. And we have it in our power to choose differently now and for the better.

***

It didn’t start out this way. Decades ago, in the aftermath of the Second World War, the United States and its allies created a series of economic partnerships and institutions that aimed to strengthen the free world and check Soviet expansion.

These agreements encouraged partnership and trade among free nations, as sovereign equals. And trade and commerce increased, barriers came down. But nations remained in control of their own economies and their own destinies. Important sectors were protected, capital flows controlled. And workers had a place to rise.

But when the Soviet Union fell, ambitious policy makers in this country and other western nations saw the opportunity to create something new, something in the spirit of Woodrow Wilson, a dream to remake the world. These western leaders wanted a truly global economy to include all nations, likeminded or not, to be governed by multilateral institutions rather than nation-states, to operate by a single set of rules, to promote the flow of goods and capital across borders.

They wanted a single liberal market to support a single, liberal international order that would bring peace in our time.

That peace never arrived. Instead, these new Wilsonians embroiled the United States in conflict after conflict, war after war, for decades. And the new global market they championed flatlined the wages of American workers and shipped American industry overseas, all while multinational corporations reaped the gains.

One of the Wilsonians’ new institutions particularly typified these trends. I’m talking about the World Trade Organization.

It was established in 1995 as a successor to the Cold-War era General Agreement on Tariffs and Trade. The idea was for the WTO to help harmonize trading rules the world over—and have the teeth to enforce them. The WTO would have its own court, a dispute resolution body, that would interpret trade agreements and settle the differences between nations over trade. The effect was to take trade disputes out of the hands of elected national leaders and commit them to the control of international lawyers, in Geneva.

And it worked—in the sense that the WTO’s court increasingly set trade policy for the world. The old system, the GATT, had allowed for national policy needs to come first—our workers and our industries. But the WTO reversed these priorities. Now global concerns reigned supreme, which meant the priorities of multinational corporations and global capital.

And not surprisingly, the WTO lawyers have not been kind to America. The WTO’s dispute resolution process has systemically disfavored the United States, a complaint that presidents of both parties have lodged for years. The United States has lost ninety percent of the cases brought against it, hurting industries across our nation, from steel workers in the Rust Belt to cotton farmers in states like my own.

Meanwhile the WTO dispute resolution body has systematically expanded its jurisdiction, going beyond the text of the actual trade agreements and citing itself as authority.

And that’s not all. The WTO permitted China to claim special status as a “developing country” from the moment it joined the group, even though China was already the sixth-richest nation in the world by GDP in 2000. And China jealously guards this sweetheart deal even today, allowing it to defer its obligations, to skirt the rules that we follow, and to continue to amass power at our expense.

I could go on. The WTO places strict limits on the support we can provide our farmers and ranchers, even as other nations refuse to comply with WTO rulings in favor of our producers.

It’s clear that the WTO is deeply flawed. The institution’s design makes it nearly impossible to reform, as we saw during the failed Doha Round. And it remains completely unequipped to deal with forced technology transfer and intellectual property theft like we’ve seen from China for decades.

The American people get the idea. No trade regime can last when it no longer serves the people of the countries who are part of it. Our interests and those of the WTO diverged long ago.

The WTO is a symbol of an economic order whose Wilsonian ambitions have cost this country dearly, enabling and empowering the rise of an imperial China. And now American leadership is required—it is essential—to chart a new course.

This nation has never been content to linger in the rear while others lead the way. And we will not begin now. We will lead. We will act.

And I call on this body to do its part by taking a vote to withdraw from the WTO. The agreement by which we joined the organization expressly affords us this right. It commits to the Congress, both houses, the right to debate the WTO’s workings and to vote to continue in that body or withdraw.

This is a right, a responsibility, really, that the Senate has never exercised since 1995, not once. We are past due. We should take up our responsibility and debate this issue, critical to the future of our country. And we should vote to leave.

To begin a new era, we must end the old. So let us vote and let it be a new beginning.

And let the work begin in earnest to forge a new way forward.

Thinking of that future, Mr. President, I offer two principles to guide our policy. First, as a member of the world economy, we must never privilege the preferences of other nations or multilateral institutions over the needs of our own people and workers.

And as the leader of the free world, we must empower other countries to resist Chinese imperialism at every turn, whether on their own or together as a coalition.

To put these principles into action, we must leave the WTO and construct a new trade system that helps the United States grow strong.

This new system should retain and deepen the principle of reciprocity. It should encourage cooperation and market access, but without compromising nations’ economic sovereignty and their internal control of their own economies. We in America cannot compromise our sovereign right to protect the American people and their livelihoods.

So we must replace an empire of lawyers with a confederation of truly mutual trade.

And mutual trade will require a new approach to dispute resolution, one that will offer nations flexibility and choice. Allow countries to litigate trade disputes like a private contract, through third-party arbitration chosen by the parties on a case-by-case basis, with ground rules agreed upon by both sides and subject to revision as circumstances change. Or allow countries to set up enforcement procedures within the trade agreement, as we have recently done in our Phase I negotiations with China.

On either approach, choices over trade will be made and policies set as they should be, by elected leaders accountable to the people, not a court sitting in Geneva.

But reform should not stop at trade.

We must also think seriously about what occurs upstream from trade. And that is global capital.

There is a reason why Wall Street loves the status quo. There is a reason why they will object to leaving the WTO and resist major reforms to our global economic system. That’s because they are on a gravy train of foreign capital flows that keep their checkbooks fat.

But this foreign money pouring into our country has a distorting effect. We get asset bubbles that can spur recession, and our exporters have trouble selling abroad. Our farmers and producers know this problem all too well.

So now we must work for new agreements to better manage capital markets and stop currency manipulators. By moderating these flows of foreign money, we can help give a much-needed boost to our producers at home, and finally reverse our massive trade deficit with China and with the world.

Finally, Mr. President, actions at home are only part of the solution. Trade and currency policy are not made in a vacuum. The world is changing, and if we are to halt China’s bid for hegemony over the coming decades, we will need to work with our allies and partners to do it.

So it is in America’s interests to see that other free nations grow strong and that we are able to work together to deter Chinese economic coercion.

We benefit if countries that share our opposition to Chinese imperialism—countries like India and Japan, Vietnam, Australia and Taiwan—are economically independent of China, and standing shoulder to shoulder with us. So we should actively pursue new networks of mutual trade with key Asian and European partners, like the economic prosperity network recently mentioned by Secretary Pompeo.

And we should offer partner nations new incentives and support to purchase our products, made here in America by American workers. A new system of export financing and loan guarantees would serve as a powerful counterweight to China’s expanding Belt and Road Initiative. And it would boost demand for our products, raising wages and creating good jobs along the way.

Here again, our aim must be to build networks of strong partners able to stand tall against Chinese aggression while strengthening our workers and encouraging our industries.

***

Mr. President, a new departure is upon us whether we like it or not. The old order is giving way. But the future need not be limited, not for this country. This moment is full of promise, if we have the courage to lead.

We can build a future that looks beyond pandemic to prosperity—a prosperity shared by all Americans, from our rural towns to the urban core.

We can build a future that looks past a failed consensus to meet our national security needs in this new century.

We can build a future that transcends the narrow thinking of the Washington beltway and that gives confidence to American workers and the communities they call home.

With a global economy that better suits our interests, that better protects our people, we can find the strength and purpose to counter the gravest danger to the American nation in a century, and to unleash again the promise of our unique and marvelous way of life.

To my colleagues in the Senate: It is time to lead.

Thank you. 

Read the original article here.


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  • Ben Leet
    Bernie Sanders has been delivering this message for over a decade, but he does not blame the commies in China, he blames the corporatists who have bought our government and funded Senator Hawley’s campaign. Multinational corporations based in the U.S. expanded into low-wage nations willingly, joyfully, and profitably, these business people gave up their allegiance to the U.S. long ago, this is Robert Reich’s old critique. Ralph Nader has been excoriating the ‘investor trade dispute settlement’ since 2000. Lori Wallach in 2004 wrote her book Whose Trade Organization?, and John Maynard Keynes in 1946 spelled out the trouble caused by persistent mercantilistic nations running trade surpluses. All these warnings were routinely ignored and belittled by mostly Republican politicians, but also Robert Rubin and Henry Paulson and probably back to Reagan era secretaries of the treasury, Jim Baker and Donald Regan. What most disturbs me about Sen. Hawley (and others who sound like Sen Joseph McCarthy reborn) is his focus on China, when it should include all other trade partner nations and the corporate executives and especially Mexico. Inequality in Mexico is almost criminal and it is perpetuated by a business elite that is very violent and anti-democratic. Political murder is common in Mexico. The senator’s rhetoric sounds pollyannaish and lacks self-criticism. This is nothing new. This anti-democratic anti-worker anti-labor-union theme is the stock and trade of the Republican Party, with a lot of aid from Democrats. The issue should be ecumenical, there is plenty of blame to go around.