19 March 1999
EXCERPTS: SENATOR BAUCUS ON CHINA ACCESSION TO THE WTO
(He argues against requiring vote by Congress) (1550) Washington -- A U.S. senator says that requiring Congress to vote on China's accession to the World Trade Organization (WTO) would set a bad precedent. Senator Max Baucus, a Montana Democrat, made the argument during March 18 debate over an amendment to a spending bill that would have required such a vote. The Senate rejected the amendment 69-30. Baucus argued that non-trade issues like human rights and espionage charges should be considered separately from WTO accession. And while acknowledging many problems the United States has with China, he also pointed out instances where China has performed responsibly, especially by not devaluing its currency during the global economic crisis. Baucus asserted that WTO membership will promote greater respect in China for the rule of law. WTO accession would require the United States to apply permanent normal trade relations (formerly called MFN) with China. The president now extends normal trade relations to China through an annual waiver of existing law. Arguing against the amendment, Baucus said that any vote in Congress to revise that law for making normal trade relations permanent would amount to a vote on WTO accession. Following are acronyms used in the excerpts: -- GATT: General Agreement on Tariffs and Trade, now part of the WTO. -- MFN: most-favored nation trade status, now called normal trade relations. Following are excerpts from Baucus's remarks in the Senate debate as published in the Congressional Record: (begin excerpts) Mr. BAUCUS. ... Certainly, Congress has the authority to pass the amendment suggested by the Senator from Arkansas. But that is not the question. The real question is, Should Congress adopt that amendment? In my judgment, it has the ring of simplicity which often sounds good, but when one thinks about it a little bit more deeply and what the consequences of that amendment would be, it, at the very least, causes people to pause and, in my judgment, causes Senators to not support the amendment .... I am reminded of a statement by H.L. Mencken, a famous Baltimore Sun journalist: "For every complicated problem, there is a simple solution, but it is usually wrong." That is this case. There is a complicated problem -- China and our trade relationship -- and the simple solution to some degree is, "Congress should vote on whether to admit China to the WTO or not." This would set new precedent, a groundbreaking and very alarming precedent. In each of the previous 110 cases where countries have acceded to the GATT, or to the WTO, there has not been a congressional vote. Congress has never voted on whether a country should accede to the GATT, currently to the WTO. That is an executive decision. There is a good reason why Congress has not voted in the past. Essentially, it is for the reasons suggested already by the Senator from Arkansas, because if we were to vote on whether China should accede to the WTO, that vote would essentially be a vote not on WTO, but it would be a vote on our "overall China policy." It would include countless other relationships that we have with China. The Senator from Arkansas already mentioned them. Human rights, for example. The Senator is very upset with China's human rights policy. He said that should be looked into. He implied looking into it in the context of this debate. I, too, am upset with China's human rights policy. I daresay every Member of the Senate is upset with China's human rights policy. But are those issues considered in trade negotiations? Are they considered by the World Trade Organization? The Senator from Arkansas might think that they should be, but they are not considered in trade negotiations and in whether or not China is or is not meeting commercially acceptable principles under which it would properly be admitted to the World Trade Organization. The Senator also mentioned the words "political environment." He said this issue has to be considered in the total political environment of our relationship with China. He mentioned espionage. That is a charged issue right now. I daresay that if the Congress were to vote in the next several months presumably on whether China should accede to the WTO, there would be an amendment on espionage, there would be an amendment on human rights, an amendment on labor relations, an amendment on the environment. I can think of countless subjects that would be included, by the design of certain Senators, in any decision by the Congress whether or not China should be admitted to the WTO. ... I think it is also important to remember we have a lot of problems with China, but China has done a lot of good things, too. What are they? Recently in the economic sphere, China, at great cost to itself, has not devalued its currency. China, in the last year, has been under tremendous pressure to devalue its currency so that it could sell more products overseas; it would help boost its economy. But China has not. Why has China not devalued its currency? In many respects because the Americans have encouraged them, have asked them not to devalue. Why? Because if they were to devalue their currency, then the other southeastern countries -- the baht in Thailand, the Indonesian currencies, North Korea -- there would be great pressure on them to devalue further, which means that our exports will be that much more expensive, their exports to the United States that much less expensive, and the trade deficit we are all so worried about will be even worse. China, at great cost to itself, has so far -- that might change -- not devalued the currency. China has also signed the Comprehensive Test Ban Treaty. They signed it. That is a major step. That is good. China has helped provide more stability between India and Pakistan, particularly when those countries were starting to test missiles. It has been a very great help to us. They also have begun to downsize their state-owned enterprises. That is not something we asked them to do, but at great cost to themselves, they are doing so, and that is a major effort. ... They are going through a lot of painful times. I am not going to stand here and apologize for China. We are very concerned about China. But instead, China is trying to be a player. Why is WTO good for America and why is it good for China? WTO is good for America only under commercially acceptable principles. I must underline that forcefully. It is good for America because it will help encourage a greater rule of law in China, because there are commitments that China would have to agree to. It would help America because we could take China to the WTO. The Senator from Arkansas has a concern whether we could "trust" China. I tell you, Mr. President, China will do more of what we wish if they are a member of WTO, at least on trade issues, because we can take China to the WTO. ... WTO is good for China, too. Why? Basically because it gives China status and more investment in China; it gives China the opportunity to be more of a player in the world economic scene. And that is all good. That is good for China; that is good for America. We are so interrelated today economically, politically, socially that when one part of the world's economy collapses or goes south, it has effects everywhere. It affects the Senator's farmers. They have a harder time selling soybeans. It affects farmers in my State. They have a harder time selling wheat. That is why, when the Asian currency crisis occurred, at least in my State, our agricultural exports fell $50 million compared to the preceding year. ... There are lots of different areas there that I wish to just briefly mention as to the test I think China should meet. I must say, Mr. President, I do not think this administration is going to send us a weak agreement. It would be foolish for them to agree to China's accession into the WTO under noncommercially acceptable terms. It would not make any sense. For one thing, it would be an outrage. Second, it would have an effect on MFN, a vote later. It would have an effect on fast-track proposals that may or may not come up. It just does not make sense. They will not do it. One final point is this. The Senator wants a vote. The Senator is going to have a vote. It is on MFN extension, because, by definition, if the United States agrees, because China has met commercially acceptable principles, that China should accede to the GATT, then by definition this Congress must vote on whether to give China permanent MFN status. There will be a vote. And obviously, if the U.S. Senate believes that the terms under which China is admitted are not acceptable, I daresay that this body will not agree to permanently extend MFN to China. So we ought to have a vote. The Senator wants a vote. By definition, there will be a vote. ... (end excerpts)
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