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USIS Washington File

11 February 2000

Text: National Security Advisor Berger Feb. 8 Remarks on China

(Urges permanent Normal Trade Relations status for China) (3560)
The United States Congress should grant permanent Normal Trade
Relations (NTR) status to China, according to Assistant to the
President for National Security Affairs Samuel Berger.
Berger made his call for permanent NTR status for China at a business
roundtable in Washington, D.C. February 8 as part of a wide-ranging
effort by the Clinton Administration to develop support in Congress
for the measure.
His remarks were released by the White House on February 11.
The United States and China completed negotiations on the terms for
China's accession to the World Trade Organization (WTO) in November of
last year. The Clinton Administration is seeking bipartisan support
for that agreement.
At the same time, both the Senate and the House of Representatives
must vote on whether to extend permanent Normal Trade Relations status
to China.
As a member of the WTO, China would be entitled to the same treatment
from the United States that America's other WTO trading partners
receive. Likewise, the United States would have the same access to
China's markets that other WTO members would have -- but only if the
United States grants China permanent NTR status. Thus, to get the
benefits of the trade agreement the United States negotiated with
China, it must extend to China permanent NTR status.
"Before America can realize the full market-opening benefits of
Chinese entry into the WTO, Congress must answer a simple question:
will it grant China permanent Normal Trade Relations, the same
arrangement we have given to 132 of the 134 countries in the WTO?"
Berger asked. "Or will Congress turn its back on the sweeping changes
China has agreed to make and risk losing ground on the issues we all
care about?"
"I don't believe there can be a serious question that this agreement
is in America's economic interest," Berger said.
Critics of giving China permanent NTR status, Berger said, don't
question the economic benefits of the trade deal negotiated between
Beijing and Washington.
Instead, Berger noted, critics in Congress "are more likely to say
that: China is a growing threat to Taiwan and its neighbors, and we
shouldn't strengthen it. China is a drag on labor rights and
environmental standards, and we shouldn't engage it. China is an
offender of human rights, and we shouldn't reward it. China is a
dangerous proliferator, and we shouldn't empower it."
"Most of the concerns they raise on these issues are legitimate," he
said.
However, Berger argued, the trade agreement is just as vital to U.S.
national security as it is to America's economic security.
"It is far more likely to move China in the right direction -- not the
wrong direction -- on all of our other concerns," Berger said.
The Clinton Administration and other supporters of the trade
agreement, Berger said, cannot avoid issues such as human rights "by
saying that we're only interested in talking about economics."
"If we are going to win this debate," Berger said, "we must be
persuasive that it promotes both growth and jobs in America and
progress toward change in China."
With this agreement, Berger stressed, "China has chosen to speed the
opening of its economy, despite the political risks that entails.
Opponents of this agreement need to answer the question: do they
really want us to reject that choice?"
The American national interest, Berger insisted "lies in encouraging
both stability and change in China by encouraging it to meet, not
stifle, the growing demands of its people for openness,
accountability, freedom, and reform."
Opponents of the agreement, Berger suggested, "will counter these
arguments by saying it doesn't matter what we agree to because China
will just break its promises. Of course, we cannot know for sure. But
we do have reasons to believe that it will comply, and mechanisms to
reinforce that."
China, Berger noted, "is pledging to open its economy and its markets
not just as a means of getting in the WTO, but because most of China's
leaders believe reform is in China's interest."
If Beijing violates its commitments, Berger said, "we're still in a
better position, because it will confront judgments backed by a
135-member body, rather than being able to chalk it up to supposed
U.S. bullying."
"We must get this agreement through the United States Congress,"
Berger told his audience. "We can't underestimate for a second how
hard that is going to be."
The trade agreement, he said, "is opposed by an eclectic coalition,
from labor to the religious right" and creates real splits in both the
Republican and Democratic parties.
"I'll promise you this," Berger said, "the President and every key
person in the Administration will undertake the most intensive effort
possible to succeed."
Failure to secure NTR for China, Berger stressed, would be bad for
America. "It would send a penetrating signal to the rest of the world,
particularly after the Senate's rejection last year of the
Comprehensive Test Band Treaty, that America truly has turned inward."
That, Berger warned, "would be devastating to our future."
Following is the text of Berger's remarks, as released by the White
House:
(begin text)
THE WHITE HOUSE
Office of the Press Secretary
February 11, 2000
As Prepared for Release
REMARKS BY SAMUEL R. BERGER ASSISTANT TO THE PRESIDENT
FOR NATIONAL SECURITY AFFAIRS
ON CHINA
The Business Roundtable St. Regis Hotel
Washington, DC
February 8, 2000
It seems hard to believe that it was seven years ago when I first met
with The Business Roundtable. Back then, one of the most popular books
in the nation was entitled "America: What Went Wrong?" Time Magazine
had a story that asked: "is the U.S. in an irreversible decline as the
world's premier power." Seven years later, America is in the midst of
the longest economic expansion in our nation's history. Our military
strength is unchallenged. Our alliances are strong. And our values are
ascendant. Today, if you ask the question: "America: What Went Right,"
a big part of the answer is that we have a private sector willing to
take risks and do what it takes to succeed in the global economy. I
want to thank you all for the role you have played in creating this
unprecedented moment of prosperity for our nation.
Tonight, I want to talk to you about a decision our country will make
this year that is critical not only for your companies and industries,
but for our nation and the world: China's entry into the World Trade
Organization. Last fall, our negotiators completed an historic
agreement with the Chinese. But before America can realize the full
market-opening benefits of Chinese entry into the WTO, Congress must
answer a simple question: will it grant China permanent Normal Trade
Relations, the same arrangement we have given to 132 of the 134
countries in the WTO? Or will Congress turn its back on the sweeping
changes China has agreed to make and risk losing ground on the issues
we all care about?
I don't believe there can be a serious question that this agreement is
in America's economic interest. For years, China has had open access
to our markets, while its markets have been closed to American
products and services. This agreement requires that China open its
market on everything from agriculture to manufacturing - while we
agree only to maintain the market access we already offer to China.
For the first time, U.S. companies will be able to competitively sell
and distribute in China products made by American workers here at
home. And it responds to unfair trade practices in China, including
the dangers of import surges.
All of you already know that, of course, and I'm not going to
regurgitate the considerable economic benefits of this agreement
tonight. Because the importance of this agreement goes far beyond it
manifest economic benefits. And so does the debate that surrounds it.
In our talks with Members of Congress, most do not challenge the
agreement on economic grounds. Critics are more likely to say that:
China is a growing threat to Taiwan and its neighbors, and we
shouldn't strengthen it. China is a drag on labor rights and
environmental standards, and we shouldn't engage it. China is an
offender of human rights, and we shouldn't reward it. China is a
dangerous proliferator, and we shouldn't empower it.
Most of the concerns they raise on these issues are legitimate. We in
the Administration share them. But this debate should not be defined
as economic rights versus human rights -- or economic security versus
national security. That is a trap, a false choice. This agreement is
just as vital "if not more vital" to our national security as it is to
our economic security. It is far more likely to move China in the
right direction -- not the wrong direction -- on all of our other
concerns. We can't duck these issues by saying that we're only
interested in talking about economics. If we are going to win this
debate, we must be persuasive that it promotes both growth and jobs in
America and progress toward change in China I want to talk tonight
about how this agreement will advance our overall national interests
by encouraging the right kind of change in China.
To understand how, we need to understand the dilemma China finds
itself in today. Over the last 20 years, China has made remarkable
progress in building a new economy, lifting more than 200 million
people out of absolute poverty. But it still faces daunting economic
problems. Its system is plagued by corruption. Private enterprise
still accounts for less than one-third of China's economy. China's
workforce is increasing by 12 million each year. Millions are
migrating from the countryside, where they see no future, to the
cities, where only some find work. And economic growth has slowed just
when it needs to be rising to create new jobs. China clearly cannot
maintain stability or ensure prosperity by maintaining the status quo.
Hence the dilemma: China's leaders realize that opening China's
antiquated markets to global competition risks unleashing forces
beyond its control -- unemployment, social unrest, increasing domestic
pressure for political change. Yet, if they don't move forward, China
cannot make the next critical leap in development, because without
competition from the outside, it will not build world-class industries
that can survive in the global economy.
What does this mean for us? As the President said when Premier Zhu
Rongji visited Washington last year, "if we've learned anything in the
last few years from Japan's long recession and Russia's current
economic troubles, it is that the weaknesses of great nations can pose
as big a challenge as their strengths." There is a possibility that a
strong China will one day emerge as a threat to peace and stability in
Asia, and to our security as well. But as we focus on the potential
challenges of a strong China, let us not forget the risks that could
be posed by a weak China, beset by internal conflicts, social
dislocation, criminal activity, and large-scale emigration -- a vast
zone of instability in Asia.
With this agreement, China has chosen to speed the opening of its
economy, despite the political risks that entails. Opponents of this
agreement need to answer the question: do they really want us to
reject that choice? The fact is, our interest lies in encouraging both
stability and change in China by encouraging it to meet, not stifle,
the growing demands of its people for openness, accountability,
freedom, and reform. And bringing China into the WTO will help in
three ways.
First, it will obligate China to deepen its market reforms. With lower
tariffs, and greater competition, its private sector will expand; its
state sector will shrink.
The introduction of competition results in natural pressure for
progress. A decade ago, China's best and brightest students sought
jobs in the government, in large state-owned firms or state-run
research institutions. More and more, the best and brightest either
are starting their own companies or working for foreign-invested
companies -- where they generally get higher pay, a better work
environment, and a chance to get ahead based on merit, not political
connections.
U.S. companies are the leaders in China in developing human resources
-- by emphasizing teamwork and respect for individual rights. In turn,
Chinese firms are increasingly learning -- and if they haven't, they
will -- that unless they change their working style and treat
employees with respect, they will lose the top talent. This process
will only accelerate as China joins the WTO, and we should do all we
can to encourage it, because it will lift the standards for Chinese
workers -- and their expectations.
Second, by speeding economic change, the agreement we reached has the
potential to encourage China to evolve into a more open society.
In the past, the Chinese state was every citizens' employer, landlord,
shopkeeper, and news provider all rolled into one. By advancing the
flow of information, the pace of privatization, and the forces of
competition, this agreement will accelerate a process that is removing
government from vast areas of people's lives. And by giving investors
and property owners protection against arbitrary government action, it
reinforces the idea that individuals have rights.
By opening China's telecommunications market to cutting-edge American
technology and international firms, the WTO agreement will help bring
the information revolution to cities and towns across China. A year
ago, China had two million Internet addresses. Today, it has nine
million. Soon, people in some of the most remote villages in interior
China will have access to CNN. And as they become more mobile, more
prosperous, and more aware of alternative ways of life, I believe they
will seek a stronger voice in shaping their destiny.
Of course, just two weeks ago, Beijing announced that it was cracking
down on the Internet. It's outrageous -- but it's also futile. In this
information age, cracking down on the Internet is like King Canute
trying to still the waters. Indeed, that the Chinese government is
pushing back against the increasing flow of information to the Chinese
people only proves that the changes China is undergoing are real and
threatening to the status quo. This is not an argument for slowing
down the effort to bring China into the world; it's an argument for
accelerating it.
In the end, as China opens to the information economy, it can succeed
only as it liberates the minds of its people and empowers the
individual. You know all too well: creativity is indivisible. In this
age, you cannot expect people to be innovative economically and
stifled politically. Bringing China into the WTO doesn't guarantee it
will choose political reform. But by accelerating the process of
economic change, it will force China to confront that choice sooner,
and make the imperative for the right choice far more powerful.
This agreement will advance our national interests in a third way: it
increases the chance that in the new century China will be on the
inside of the international system, playing by the rules, instead of
on the outside, denying them.
Under this agreement, some of China's most important decisions will be
subject, for the first time, to the review of an international body.
Why does that matter? Quite simply, it applies to China the basic
principle at the heart of the concept of the rule of law: that
governments cannot behave arbitrarily at home or abroad, that their
actions are subject to rules consistently applied. Remember, China is
choosing to embrace these obligations. As China becomes a stakeholder
in the WTO and other international regimes, it will be more likely to
accept the legitimacy of international norms, and define its future
within the global community, not outside of it.
Opponents of this agreement will counter these arguments by saying it
doesn't matter what we agree to because China will just break its
promises. Of course, we cannot know for sure. But we do have reasons
to believe that it will comply, and mechanisms to reinforce that.
First, China is pledging to open its economy and its markets not just
as a means of getting in the WTO, but because most of China's leaders
believe reform is in China's interest. Second, if China violates its
commitments, we're still in a better position, because it will
confront judgments backed by a 135-member body, rather than being able
to chalk it up to supposed U.S. bullying.
Some will argue that granting China permanent normal trade relations
status is granting a favor that China hasn't earned. But it's
important that the public understand what PNTR means: simply that we
will give China the same tariff schedule we apply to almost every
other nation in the world, and China will do likewise for us. It would
eliminate the annual vote on China's trade status, which we do not
apply to any other WTO member. Some argue we need the annual vote to
address the other concerns we have with China, on proliferation or
religious freedom. But Congress has the ability to address any part of
our trade relationship with any nation, including China. And the
annual China trade vote has lost any leverage it was once thought to
have. Congress has affirmed our trading relationship with China for 20
years in a row.
Finally, others will argue that we are sacrificing human rights on the
altar of trade. In fact, locking China out of the WTO would be a blow
to the very cause they and we support. It 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. And no one could possibly benefit from that
except the most rigid, anti-democratic elements in China itself.
That's one reason reformers like Martin Lee and dissidents like Ren
Wanding support this agreement.
Let me be clear: bringing China into the WTO is not, by itself, a
human rights policy for the United States. The reality in China today
is that Chinese authorities still tolerate no organized political
dissent or opposition. Because the Communist Party's ideology has been
discredited in China, and because it lacks the legitimacy that can
only come from democratic choice, it seeks to maintain its grip by
suppressing other voices. Change will come only through a combination
of internal pressures for change and external validation of its human
rights struggle. And we must maintain our leadership in the latter,
even as the WTO agreement contributes to the former.
That's why we sanctioned China as a "country of particular concern"
under the International Religious Freedom Act last year. It is why we
are once again sponsoring a resolution in the UN Human Rights
Commission condemning China's human rights record. We will continue 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.
We must not and we are not relying on the hidden hand of the market to
do all our heavy lifting on the issues we care about in China, and
neither should the private sector. That's why it is important for our
businesses in China to be agents of change by being good corporate
citizens.
But to make the most of that opportunity, first we must get this
agreement through the United States Congress. And we can't
underestimate for a second how hard that is going to be. This fight
involves two issues -- China and trade -- that individually and
together have become the third rail of American politics today. The
agreement is opposed by an eclectic coalition, from labor to the
religious right. It creates real splits in both parties.
I'll promise you this: the President and every key person in the
Administration will undertake the most intensive effort possible to
succeed. We've already begun. I hope you will also recognize the
stakes involved. For if we fail to obtain PNTR, we will lose the full
benefits of the agreement. In a global economy, with global markets,
your companies will be shut off from one-fifth of the world -- while
your European, Japanese, and other competitors will be the
beneficiaries of the very good deal we negotiated.
But failure would be bad for our country in other ways. It would send
a penetrating signal to the rest of the world, particularly after the
Senate's rejection last year of the Comprehensive Test Band Treaty,
that America truly has turned inward. That would be devastating to our
future.
At the moment of America's greatest strength and influence, we must be
leading the world, and embracing change, not turning from it. Since
President Nixon went to China in 1972, the United States has worked
for the emergence of a China that contributes to peace in Asia. A
China with an economy that is open to American products, farmers, and
businesses. A China whose people have access to ideas and information,
that upholds the rule of law at home and adheres to global rules on
everything from non-proliferation to human rights to trade. This
agreement is an unprecedented opportunity to advance all of those
goals. I look forward to working with you in the months to come to
turn those worthy and historic goals into a reality. Thank you.
(end transcript)
(Distributed by the Office of International Information Programs, U.S.
Department of State)



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