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Weapons of Mass Destruction (WMD)

USIS Washington File

11 May 2000

Excerpts: Lawmakers Split on China Permanent Normal Trade Relations

(Republican urges yes vote, Democrat says he will vote no) (1910)
Lawmakers in the U.S. House of Representatives continue to line up on
opposite sides of the issue of granting China permanent Normal Trade
Relations (NTR) status.
While Representative John Linder (Republican of Georgia) urged fellow
lawmakers to vote to grant permanent NTR status to China in a May 10
speech in the House of Representatives, Representative David Phelps
(Democrat of Illinois) said he would vote no on that issue in an
extension of remarks the same day.
The United States can not succeed in bringing democracy to China
"through economic isolationism," Linder said.
"Wang Dan, a student leader at Tiananmen Square, said 'the West should
not try to isolate the Communist regime. Economic change does
influence political change.' Let us support PNTR and allow free trade
to open doors to the people of China," Linder said.
Representative Phelps said he supports China's accession to the World
Trade Organization (WTO), but not permanent NTR status for China.
Phelps rejected the argument that trade would bring about a more open
and democratic regime in China.
The Illinois Democrat also disputed the Clinton Administration's
argument that China represents a vast untapped market for American
agricultural exporters.
Phelps, who represents a district with significant agricultural
interests, said China's local producers already produce more than
their markets need and that China maintains a three-to-one ratio of
food exports to imports.
The Chinese government, he added, will probably pursue a policy of
enhancing internal distribution systems for food over bringing in
imports. The end result, Phelps said, is that China would not be a
large and growing market for U.S. farmers.
China "has a long history of failing to live up to its agreements, and
Chinese officials have recently indicated they do not intend to abide
by certain components of the WTO agreement either," Phelps said.
"I am not comfortable relinquishing bilateral enforcement tools like
Section 301 and anti-dumping provisions in favor of a WTO (World Trade
Organization) dispute resolution process which is notoriously slow,"
the Illinois Democrat added.
Following are excerpts from the Congressional Record:
(begin excerpts)
OPENING DOORS TO THE PEOPLE OF CHINA
(House of Representatives -- May 10, 2000)
Mr. LINDER. Mr. Speaker, we have an opportunity to encourage change in
China. PNTR for China will provide the Chinese people with access to
western influence and ideas by forcing China to open their society to
bring about positive economic and social changes.
George W. Bush recently commented on Ronald Reagan's `forward strategy
for freedom.' The Reagan adage, as espoused by the Texas governor, is
that `the case for trade is not just monetary, but moral. Economic
freedom creates habits of liberty. And habits of liberty guarantee
expectations of democracy. There are no guarantees, but there are good
examples from Chile to Taiwan. Trade freely with China and time is on
our side.'
I also agree with Prime Minister Margaret Thatcher, who predicts that
democracy will move steadily up the scale from the village to the
province and, ultimately, to the highest national level.
We cannot achieve these goals through economic isolationism. Wang Dan,
a student leader at Tiananmen Square, said `the west should not try to
isolate the Communist regime. Economic change does influence political
change.' Let us support PNTR and allow free trade to open doors to the
people of China.
REGARDING PERMANENT NORMAL TRADE RELATIONS WITH CHINA
HON. DAVID D. PHELPS
(Extension of Remarks -- May 10, 2000)
HON. DAVID D. PHELPS
in the House of Representatives
WEDNESDAY, MAY 10, 2000
Mr. PHELPS. Mr. Speaker, today after months of information-gathering,
discussion, and deliberation, I am announcing my position on the issue
of granting Permanent Normal Trade Relations (PNTR) status to China. I
would like to express my sincere appreciation to the hundreds of
constituents, colleagues, community leaders, and representatives of
groups with a stake in this debate, for sharing their views and
answering my questions as they patiently engaged in this process with
me. Seldom in my legislative career have I taken an issue more
seriously than this one. While I realize that my decision will not
please everybody, I hope there is no doubt that every voice and every
argument presented to me was given the utmost consideration.
I believe it to be in the best interests of the 19th District of
Illinois, and the nation as a whole, that I oppose extension of
Permanent Normal Trade Relations to China. I do support China's
accession to the World Trade Organization. However, I am convinced
that the United States must maintain annual grants of NTR until we
have ascertained that China is living up to WTO rules and our own
expectations regarding human rights, labor rights, religious tolerance
and environmental protection.
China has a long history of failing to live up to its agreements, and
Chinese officials have recently indicated they do not intend to abide
by certain components of the WTO agreement either. While I hope this
will not be the case, I am not comfortable relinquishing bilateral
enforcement tools like Section 301 and anti-dumping provisions in
favor of a WTO dispute resolution process which is notoriously slow.
We must not place ourselves in a situation where American jobs are
sacrificed while we wait two or three years for a WTO ruling, only to
have no recourse if the ruling is adverse.
Many argue that only through engagement and open trade will we see
programs in China on matters of labor rights, human rights, religious
persecution, and environmental degradation. If this is indeed the
case, then we need not worry, for China will be engaged with the
global marketplace through its WTO membership regardless of the
outcome of our PNTR vote. Unfortunately, there is reason to doubt this
contention. The United States has been trading with China since 1980,
and since 1994 we have followed a policy of `delinking' human rights
from trade policy, based upon the theory that free trade equals
greater freedom in society. Yet every year since delinkage conditions
in China have worsened, and according to a 1999 State Department
report, human rights there have deteriorated markedly.
I represent an agricultural district, and I have seen first-hand the
devastation that recent price drops have wrought. I am sympathetic to
the need for expanded export markets and other opportunities to
improve the farm economy, and if I believed that the China agreement
was the answer to agriculture's problems, I may have taken a different
position. Unfortunately, several factors lead me to the opposite
conclusion. First, as I have mentioned, China has not been a model
trading partner in the past, and I remain skeptical that they will
follow through with promises regarding agriculture and other products.
Second, China is a nation committed to preserving its national
independence and improving rural stability, and its agricultural
production consistently outpaces demand. China maintains nearly a
three-to-one ratio of agricultural exports to imports, and I worry
that China's objective is to improve its domestic distribution system,
rather than bring in more agriculture products when they already have
surpluses. If this is the case, our agreement with China will bring
minimal benefits to struggling farmers in Illinois.
The argument has been made that increased trade with China will
obviate the need for federal assistance like the $8.7 billion in
emergency farm aid that Congress provided last year. However, even
under the rosiest scenario, the total value of U.S. exports of wheat,
rice, corn, cotton, soybeans and soybean products to China would
increase by $1.6 billion dollars in 2005 when the agreement is fully
implemented, and the average annual value of U.S. exports from 2000
through 2009 would increase by $1.5 billion dollars. The
administration estimates that net farm income would be higher by $1.7
billion in 2005, and higher by an annual average of $1.1 billion per
year through 2009, although higher feed costs and reduced government
payments would offset part of the increase.
These potential increases, even if fully realized, fall billions short
of the assistance that has been required in recent years to help
farmers weather hard times, suggesting to me that China's export
market is not the panacea it has been portrayed to be. I recall that
during the NAFTA debate, proponents of the agreement made similar
arguments about the importance of new export markets for American
agriculture. Yet since NAFTA's passage, our farmers have experienced
the worst farm crisis in decades.
Furthermore, any decreases in federal aid to farmers would likely be
negated by the increased funding needed for dislocated worker programs
like Trade Adjustment Assistance. Since 1994, in my district alone,
over 2200 workers have qualified for TAA. If PNTR is granted, many
American companies will undoubtedly find it more cost-effective to
shift production to China. This will mean even more displaced workers
(and more federal aid) in a district like mine, where manufacturing
jobs often provide the highest wages and best benefits in the area.
Even ardent backers of PNTR admit that while on the whole they believe
the agreement will benefit the American economy, some sectors will
suffer and some areas will lose jobs.
Finally, although the United States and China have reached agreement
on many issues, the Government Accounting Office warns that some
remain incomplete. Several negotiating objectives have yet to be
reached, and of those that have, some remain to be finalized. In
addition, China has not yet reached agreement with the European Union.
I am reluctant to vote to forever relinquish congressional powers of
review when we have not been presented with a complete agreement, and
when even the nature of the remaining issues has been classified as a
national security matter.
Many of my concerns can be answered by taking a cautious approach to
this issue, welcoming China into the WTO without granting PNTR and
sacrificing our bilateral enforcement mechanisms. With all due respect
to those who have sought to convince me otherwise, I firmly believe
that this approach is viable. I am convinced that our 1979 Agreement
with China ensures for American farmers and manufacturers the
identical tariff and other benefits that China must give all other WTO
nations once it enters that body. Therefore, we need not fear that our
goods will be at a competitive disadvantage to similar products from
other member nations. Meanwhile, we will maintain our ability to
respond to non-compliance or bad behavior on China's part with our own
enforcement tools which have proven effective in the past. Our already
large trade deficit with China is expected to widen under this
agreement, and we must be able to act quickly and effectively to
protect the interests of American producers, businesses, workers and
consumers.
I remain committed to working towards a free and open trading
relationship with China, one that promotes growth and change in that
nation without shortchanging American interests. However, I do not
believe that we have reached an agreement that will accomplish these
goals. The very definition of PNTR is that it is permanent. Given the
many doubts and concerns I have not been able to reconcile, I am
simply not prepared to support the irrevocable sacrifice of America's
leverage and oversight on such a critical issue.
(end excerpts)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)



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