White House Fact Sheet on PNTR for China
White House Fact Sheet
Permanent Normal Trade Relations for China:
An Historic Moment for U.S.-China Relations
September 19, 2000
The Senate's Passage Of Permanent Normal Trade Relations For China
Marks An Historic Moment In U.S.-China Relations. Passage of PNTR by
both the House and the Senate marks an historic moment in our pursuit
of open markets and stronger U.S.-China relations, and continues to
pave the way toward economic freedom for the Chinese people.
China's Entry To The WTO Will Slash Barriers To The Sale Of American
Goods And Services In The World's Most Populous Country. China's entry
into the WTO will dramatically cut import barriers currently imposed
on American products and services. This agreement locks in and expands
our access to a market of over one billion people. China's economy is
already among the world's largest and over the past 20 years has
expanded at a phenomenal annual rate of nearly 10 percent. During this
period, U.S. exports to China have grown from negligible levels to
over $14 billion each year. For agriculture alone, USDA estimates that
China's WTO accession would result in $2 billion annually in
additional U.S. agricultural exports by 2005.
China Made Unilateral Concessions; We Will Simply Maintain The Market
Access Policies We Already Apply To China. China made significant,
one-way market-opening concessions across virtually every economic
sector, including increasing access to its markets for agriculture,
services, technology, telecommunications, and manufactured goods.
China also agreed to eliminate "unseen" barriers, such as exclusive
rights to import and distribute goods.
-- Agriculture tariffs will be cut by more than half on priority
products. On U.S. priority agricultural products, tariffs will drop
from an average of 31% to 14% by January 2004, with even sharper drops
for beef, poultry, pork, cheese, and other commodities. China will
significantly expand export opportunities for bulk commodities such as
wheat, corn, and rice, and it will eliminate trade-distorting export
subsidies. Our producers may also export and distribute directly
inside China for nearly every agricultural product without going
through state-trading enterprises or middlemen. Sales in the Chinese
market will be a boon to American farmers, who have recently faced
tough times.
-- Industrial tariffs will be slashed. Industrial tariffs on U.S.
products will fall from an average of 24.6% in 1997 to an average of
9.4% by 2005. Considering that manufactured goods comprise a large
proportion of American exports, the drop in Chinese tariffs is good
news for our high-tech manufacturers and basic industries.
-- Right 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. Under the agreement,
China will phase in trading rights and distribution services over
three years, and also open up sectors related to distribution
services, such as repair and maintenance, warehousing, trucking, and
air courier services. Trading rights and distribution services 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 in China to sell products through Chinese partners.
This is a top priority of U.S. manufacturers and agricultural
exporters.
-- New markets for information technology. China will participate in
the Information Technology Agreement and will eliminate tariffs on
products such as computers, semiconductors, and related products by
2005. Our IT firms lead the world and stand to earn handsomely in this
huge, expanding, and information-hungry market.
-- Broad new access for American services like
telecom/insurance/banking. The agreement also opens China's market for
services. For the first time, China will open its telecommunications
sector and significantly expand investment and other activities for
financial services firms. And it will greatly increase the
opportunities open to professional services such as law firms,
management consulting, accountants, and environmental services. China
also agrees to ensure the existing level of market access already in
effect at the time of China's accession for U.S. services companies
currently operating in China, protecting against new restrictions.
China's Accession to the WTO Will Strengthen Our Ability To Ensure
Fair Trade And To Protect U.S. Agricultural And Manufacturing Base
From Import Surges, Unfair Pricing, And Abusive Investment Practices
Such As Offsets Or Forced Technology Transfer. Prior to the
negotiation of the U.S.-China accession deal, Democrats and
Republicans in Congress raised legitimate concerns about the
importance of safeguards against unfair competition. As a result, 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. This agreement addresses those concerns
through:
-- A China-specific safeguard. For the first 12 years -- in addition
to the existing global safeguard provisions -- China has also agreed
to a country-specific safeguard that is 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 United States. This applies to all
industries, permits us to act based on a lower showing of injury, and
permits us to act specifically against imports from China.
-- Strong anti-dumping protections. The agreement includes a provision
recognizing that the U.S. may employ special methods, designed for
non-market economies, to counteract dumping for 15 years after China's
accession.
-- Requiring China to eliminate barriers to U.S. companies that can
cost American jobs and technology. For the first time, Americans will
have a means, accepted under the WTO rules, 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 stated above, 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.
-- Provisions in WTO rules that 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 to withdraw benefits including NTR in a
national security emergency.
China's Accession Will Help Promote Reform In China And Create A Safer
World. China's accession to the WTO will encourage Chinese leaders to
move in the direction of meeting the demands of the Chinese people for
openness, accountability, and reform. The agreement:
-- Deepens market reforms. Obligates China to deepen its market
reforms, empowering leaders who want their country to move further and
faster toward economic freedom. This agreement will expose China to
global competition and thereby bring China under even more pressure to
privatize its state-owned industries and expand the role of the market
in the Chinese economy. Chinese as well as foreign businessmen will
gain the right to import and export on their own, and to sell their
products without going through government middlemen.
-- Accelerates removal of government from lives of China's people.
Accelerates a process that is removing the government from vast areas
of China's economic life. China's people will have greater scope to
live their lives as they see fit. In opening China's
telecommunications market, including to Internet and satellite
services, the agreement will over time 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.
-- Strengthens rule of law in China. Obliges the Chinese government to
publish laws and regulations and subjects pertinent decisions to
review of an international body. That will begin to 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.
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