January 24, 2000
TEXT OF A LETTER FROM THE PRESIDENT TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES AND THE PRESIDENT OF THE SENATE
THE WHITE HOUSE
Office of the Press Secretary
________________________________________________________________
For Immediate Release January
24, 2000
TEXT OF A LETTER FROM THE PRESIDENT
TO THE SPEAKER OF THE HOUSE OF REPRESENTATIVES
AND THE PRESIDENT OF THE SENATE
January 24, 1999
Dear Mr. Speaker:
On November 15th of last year, my Administration signed an historic
trade agreement with the People?s Republic of China. Bringing China
into the World Trade Organization (WTO) on the strong terms we
negotiated will advance critical economic and national security goals.
It will open a growing market to American workers, farmers, and
businesses. And more than any other step we can take right now, it
will draw China into a system of international rules and thereby
encourage the Chinese to choose reform at home and integration with
the world. For these reasons, I will make it a top priority in the
new year to seek congressional support for permanent Normal Trade
Relations (NTR) with China.
A Good Deal for America
This agreement is good for America. It is important to understand the
one-way nature of the concessions in this agreement. China has agreed
to grant the United States significant new access to its market, while
we have agreed simply to maintain the market access policies we
already apply to China by granting it permanent NTR. China?s
commitments are enforceable in the WTO and include specially
negotiated rules. In the event of a violation, the U.S. will have the
right to trade retaliation against China.
China?s comprehensive market-opening concessions will benefit U.S.
workers, farmers and businesses. On U.S. priority agricultural
products, tariffs will drop from an average of 31% to 14% in January
2004. China will expand access for bulk agricultural products, permit
private trade in these products, and eliminate export subsidies.
Industrial tariffs on U.S. products will fall from an average of 25%
in 1997 to an average of 9.4% by 2005. In information technology,
tariffs on products such as computers, semiconductors,
and all Internet related equipment will decrease from an average of
13% to zero by 2005. The agreement also opens China?s market for
services, including distribution, insurance, telecommunications,
banking, professional and environmental services. Considering that
our farmers and workers are the most productive in the world, this
agreement promises vast opportunities for American exports.
Prior to the final negotiations, Democrats and Republicans in Congress
raised legitimate concerns about the importance of safeguards against
unfair competition. This agreement effectively addresses those
concerns. No agreement on WTO accession has ever contained stronger
measures against unfair trade, notably a ?product-specific? safeguard
that allows us to take measures focused directly on China in case of
an import surge that threatens a particular industry. This protection
remains in effect a full 12 years after China enters the WTO and is
stronger and more targeted relief than that provided under our current
Section 201 law.
The agreement also protects against dumping. China agreed that for 15
years after its accession to the WTO, the United States may employ
special methods, designed for non-market economies, to counteract
dumping.
Moreover, Americans will, for the first time, have a means, accepted
under the WTO, to combat such measures as forced technology transfer,
mandated offsets, local content requirements and other practices
intended to drain jobs and technology away from the U.S. As a result,
we will be able to export to China from home, rather than seeing
companies forced to set up factories in China in order to sell
products there.
The agreement also increases our leverage with the Chinese in the
event of a future trade dispute. As a member of the WTO, China must
agree to submit disputes to that body for adjudication and would be
much less likely to thwart the will of the WTO?s 135 members than
that of the United States acting alone.
Under WTO rules, we may ? even when dealing with a country enjoying
permanent NTR status -- continue to block imports of goods made with
prison labor, maintain our export control policies, use our trade
laws, and withdraw benefits including NTR itself in a national
security emergency.
Promoting Reform in China and Creating a Safer World
Of course, this trade agreement alone cannot bring all the change in
China we seek, including greater respect for human rights. We must
and will continue to speak out on
behalf of people in China who are persecuted for their political and
religious beliefs; to press China to respect global norms on
non-proliferation; to encourage a peaceful
resolution of issues with Taiwan; to urge China to be part of the
solution to the problem of global climate change. And we will hold
China to the obligations it is accepting by joining the WTO.
We will continue to protect our interests with firmness and candor.
But we must do so without isolating China from the global forces
empowering its people to build a better future. For that would leave
the Chinese people with less access to information, less contact with
the democratic world, and more resistance from their government to
outside influence and ideas. No one could possibly benefit from that
except for the most rigid, anti-democratic elements in China itself.
Let?s not give them a victory by locking China out of the WTO. The
question is not whether or not this trade agreement will cure serious
and disturbing issues of economic and political freedom in China; the
issue is whether it will push things in the right direction. I
believe it will.
WTO membership will strengthen the forces of reform inside China and
thereby improve the odds that China will continue and even accelerate
its gradual progress toward joining the rules-based community of
nations. In the last 20 years, the Chinese have made giant strides in
building a new economy, lifting more than 200 million people out of
absolute poverty and creating the basis for more profound reform of
Chinese society. But tens of millions of peasants continue to migrate
from the countryside, where they see no future, to the city, where not
all find work. China?s economic growth has slowed just when it needs
to be rising to create jobs for the unemployed. That is one reason
the WTO agreement is a win-win for both nations. China faces critical
social and economic challenges in the next few years; WTO membership
will spur the economy and, over time, will help establish the
conditions to sustain and deepen economic reform in China.
In the past, the Chinese state was employer, landlord, shopkeeper and
news-provider all rolled into one. This agreement obligates China to
deepen its market reforms, empowering leaders who want their country
to move further and faster toward economic freedom. It will expose
China to global economic competition and thereby bring China under
ever more pressure to privatize its state-owned industry and
accelerate a process that is removing the government from vast areas
of China?s economic life. The agreement will also give Chinese as
well as foreign businesses freedom to import and export on their own
and sell products without going through government middlemen. And in
opening China?s telecommunications market, including to Internet and
satellite services, the agreement will expose the Chinese people to
information, ideas and debate from around the world. As China?s
people become more mobile, prosperous, and aware of alternative ways
of life, they will seek greater say in the decisions that affect their
lives.
The agreement obliges the Chinese government to publish laws and
regulations and subjects pertinent decisions to review of an
international body. That will strengthen the rule of law in China and
increase the likelihood that it will play by global rules as well. It
will advance our larger interest in bringing China into international
agreements and institutions that can make it a more constructive
player in the world, with a stake in preserving peace and stability,
instead of reverting to the status of a brooding giant at the edge of
the community of nations.
Many courageous proponents of change in China agree. Martin Lee, the
leader of Hong Kong?s Democratic Party, says that ?the participation
of China in the WTO would?serve to bolster those in China who
understand that the country must embrace the rule of law.? Chinese
dissident Ren Wanding said upon the agreement?s completion: ?Before,
the sky was black; now it is light. This can be a new beginning.?
As I have argued to China?s leaders many times, China will be less
likely to succeed if its people cannot exchange information freely; if
it does not build the legal and political foundation to compete for
global capital; if its political system does not gain the legitimacy
that comes from democratic choice. This agreement will encourage the
Chinese to move in the right direction.
The Importance of Permanent Normal Trade Relations
In order to accede to the WTO, China must still complete a number of
bilateral negotiations, notably with the EU and others, and also
conclude multilateral negotiations in the WTO Working Party. These
negotiations are proceeding.
The United States must grant China permanent NTR or risk losing the
full benefits of the agreement we negotiated, including special import
protections, and rights to enforce China?s commitments through WTO
dispute settlement. If Congress were to refuse to grant permanent
NTR, our Asian and European competitors will reap these benefits but
American farmers and businesses may well be left behind.
In sum, it lies not only in our economic interest to grant China
permanent NTR status. We must do it to encourage China along the path
of domestic reform, human rights, the rule of law and international
cooperation. In the months ahead, I look forward to working with
Congress to pass this historic legislation.
Sincerely,
William J. Clinton
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