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Weapons of Mass Destruction (WMD)

USIS Washington File

12 May 2000

Fact Sheet: Labor Aspects of Normal Trade Relations for China

(U.S. will monitor vigilantly and enforce aggressively) (1550)
Following is the text of the May 12 White House fact sheet:
(begin text)
Labor Aspects of PNTR:
Benefits for American Workers and Farmers
May 12, 2000
Permanent Normal Trade Relations For China Means More U.S.-Made
Exports To China. American Workers And Farmers Will Get The Full
Benefits Of China's Accession Only If Congress Grants PNTR.
If Congress enacts PNTR, there will be more exports to China of
products made in the United States by American workers and farmers. If
Congress does not grant PNTR, our competitors will enjoy the full
market access and enforcement rights in China that we will be denied.
The U.S.-China WTO Accession Agreement Gives American Workers And
Farmers Unprecedented Access To China's Market.
The one-way Agreement negotiated in November requires China to open
its market, while we are required only to maintain the market access
policies we already apply to China by granting PNTR. Denying China
PNTR will cost American exports and the jobs they support, as our
competitors in Europe, Asia, and elsewhere capture Chinese markets
that we fought to open. Under the strong, enforceable market opening
Agreement negotiated by the U.S.:
-- China will cut agricultural tariffs by more than half on U.S.
priority products. USDA estimates that China's WTO accession would
result in $2 billion annually in additional U.S. agricultural exports
by 2005.
-- China will sharply reduce industrial tariffs. Industrial tariffs on
U.S. products will fall from an average of 24.6% in 1997 to an average
of 9.4% by 2005.
-- China will allow new rights to import and distribute. At present,
China severely restricts trading rights (the right to import and
export) and the ability to own and operate distribution networks --
both essential to move goods and compete effectively in any market.
China will phase in trading rights and distribution services for
almost all products over 3 years. This will allow our businesses to
export to China from here at home, and to have their own distribution
networks in China rather than being forced to set up factories abroad
to sell products through Chinese middlemen.
The Agreement Gives American Workers And Farmers New Leverage To
Ensure Fair Trade And To Protect Against Import Surges and Unfair
Pricing.
No agreement on WTO accession has ever contained stronger measures to
strengthen guarantees of fair trade and to address practices that
distort trade and investment.
-- The Agreement gives the U.S. strong protections against unfair
trade practices, including dumping. The U.S. and China have agreed
that we will be able to maintain our current anti-dumping methodology
(treating China as a non-market economy) in future anti-dumping cases.
This provision will remain in force for 15 years after China's
accession to the WTO.
-- The Agreement's China-specific safeguard improves our ability to
respond to import surges. China has agreed to a 12-year China-specific
import safeguard mechanism that will provide stronger and more
targeted relief than that provided under our current Section 201 law.
This ensures that the U.S. can take effective action in case of
increased imports of a particular product from China that cause or
threaten to cause market disruption in the U.S. This permits us to act
based on a lower showing of injury than Section 201.
-- China has agreed to prohibitions on practices that can cost
Americans jobs and technology. China will no longer require U.S.
companies to transfer their technology in order to export to or invest
in China. This will better protect U.S. competitiveness and the
results of U.S. research and development. In addition, China will no
longer require U.S. manufacturers to export as a condition for
importing inputs, to use Chinese-made parts for products sold in
China, or to balance the value of their exports and imports so as to
prevent a net loss in foreign exchange. If existing contracts contain
such provisions, China has committed not to enforce those contract
requirements. This Agreement will make it significantly easier for
American companies to export to China from the U.S., rather than
having to set up in China to sell products there.
-- China's commitments will be enforceable through WTO dispute
settlement for the first time. In no previous trade agreement has
China agreed to subject its decisions to impartial review, and
ultimately imposition of sanctions if necessary. If China loses a
dispute, it will have to change the offending practice, provide
compensation, or be subject to denial of access to our market in an
amount proportional to the harm it causes.
-- The United States maintains the right to use the full range of
American trade laws. These include Special 301, Section 301, Section
201, and our antidumping laws, all of which continue to be effectively
used to advance U.S. interests in a WTO-consistent manner.
-- The U.S. will maintain its ability to protect its important
interests. Strong provisions in the WTO rules allow the U.S. -- even
when dealing with a country enjoying NTR status -- to continue to
block imports of goods made with prison labor, to maintain our export
control policies, to use our trade laws. And Congress can, at any
time, choose to revoke PNTR, if circumstances warrant and Congress is
willing to forego WTO benefits.
The United States Will Monitor Vigilantly And Enforce Aggressively.
We are already preparing for an increased monitoring and enforcement
effort through President Clinton's request for $22 million in new
enforcement and compliance resources for USTR, the Commerce
Department, USDA, and the State Department. The President is
requesting resources for the largest monitoring and enforcement effort
for any agreement ever, covering China's obligations in the WTO and
strong enforcement of our trade laws. For the Department of Commerce,
the new initiative would triple resources dedicated to China trade
compliance -- including administration of our unfair trade laws. The
additional resources sought for USTR would strengthen its ability to
pursue a two-track strategy of negotiating good, smart agreements, and
ensuring that the terms of those agreements are fulfilled. The new
Commerce/State Overseas Compliance Program would strengthen our
capacity to gather information 'on the ground' by providing for trade
experts to monitor compliance with international trade obligations and
support enforcement of U.S. trade laws. The President's budget also
calls for providing additional resources to the U.S. Department of
Agriculture to bolster its legal and technical expertise in areas
covered by trade agreements and U.S. trade law.
The President's Recently Proposed Manufacturing Initiatives Would
Further Increase Opportunities And Protections For American Workers.
On February 4, the President announced $386 million in new proposals
and program expansions that will help strengthen American
manufacturers, workers, and communities and help keep manufacturing a
strong and vital part of the U.S. economy in the 21st century. The
President's FY 2001 Budget request calls for expanding trade promotion
and financing, expanding and enhancing assistance for workers and
communities, developing and making available technologies that enable
smaller manufacturers to thrive, and upgrading the skills of the
manufacturing workforce.
The President's New Markets Initiative Will Spur New Capital
Investment In Businesses In Economically-Distressed Areas.
The President's New Markets Initiative is designed to spur private
investment and economic activity in distressed areas, both urban and
rural. Finding business financing and the right kind of technical
business advice is a critical need in many economically distressed
communities. These programs help entrepreneurs find the financing and
advice they need to start up, and once started, to grow. As part of
the New Markets Initiative, which will spur at least $22 billion in
new capital investment in businesses in economically-distressed areas,
the President has proposed to more than double the proposed New
Markets tax credit at a cost of about $5 billion over 10 years and
expand Empowerment Zone Tax Incentives at a cost of $4.4 billion.
Passage Of PNTR And China's WTO Accession Will Further Open China To
American Values And Practices.
U.S. companies are more committed than their Asian competitors to
progressive labor management practices and protecting the safety of
their workers.
We Will Continue to Press China To Respect Internationally Recognized
Labor Rights.
The United States continues to make clear our concerns about labor
rights violations in China. President Clinton and President Jiang
announced a dialogue on labor issues in June 1998 that addresses core
labor standards, labor law, and development of social safety net
issues. In 1998, China joined the United States and other members of
the International Labor Organization (ILO) in adopting a new
Declaration of Fundamental Rights and Principles at Work. This
Declaration included a follow-up compliance mechanism and covered
rights such as freedom of association, right of collective bargaining,
non-discrimination, and the abolition of forced labor. The Chinese
Minister of Labor and Social Security visited Washington in 1999 to
begin the bilateral labor dialogue. Secretary Herman made clear the
priority we place on implementation of internationally recognized
labor standards, and our firm opposition to and deep concern about the
detention, arrest, and imprisonment of persons for labor-related
activities that are protected by ILO standards. The U.S. has supported
ILO findings on China's law and practice in the area of freedom of
association.
(end text)
(Distributed by the Office of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)



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