[Congressional Record Volume 140, Number 71 (Thursday, June 9, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: June 9, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                  SECRET GSP DEAL FOR CHINA A BAD IDEA

                                 ______


                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                         Thursday, June 9, 1994

  Mr. SANDERS. Mr. Speaker, I rise today to express my outrage over the 
administration's proposal to change the criteria for designating a 
country as a GSP beneficiary. This change would directly benefit the 
Chinese. The Clinton administration is quietly greasing the skids to 
unilaterally extend duty-free tariff treatment to billions of dollars 
of Chinese imports.
  Apparently it is not enough to give China most-favored-nation [MFN] 
treatment for its current $30 billion in exports to the United States. 
Now the USTR is trying to sneak into the GATT Uruguay round 
implementing legislation a marked change in current law. This change 
would allow the President to unilaterally give China duty-free access 
to our market through the generalized system of preferences [GSP] 
Program, upon peremptory notice to the pertinent congressional 
committees, at any point in time.
  Currently, section 502(b)(1) of title V of the Trade Act of 1974, as 
amended, requires the following:

       The President shall not designate any country a GSP 
     beneficiary country under this section--
       (l) if such country is a Communist country, unless (A) the 
     products of such country receive nondiscriminatory [MFN] 
     treatment, (B) such country is a contracting party to the 
     General Agreement on Tariffs and Trade and a member of the 
     International Monetary Fund, and (C) such country is not 
     dominated or controlled by international communism.

  The administration's proposal reads: Amend section 502(b) to strike 
clause (1) and substitute the following:

       The President shall not designate any country a beneficiary 
     development country under this chapter--
       (  ) if the Column 2 rate of duty [non-MFN] in the 
     Harmonized Tariff Schedule is applied to the products of such 
     country.

  Let us be clear about what could happen here. China is clearly 
prohibited now from receiving GSP benefits under current law because it 
is not a signatory to the GATT. Even if Congress does not overturn the 
President's recently announced decision to seek extension of MFN for 
China, I doubt the USTR would be prepared to claim, under existing law, 
that China is no longer dominated or controlled by international 
communism.
  But if the USTR gets its current GSP proposal approved in the Ways 
and Means informal markup of the GATT bill in the next few weeks, then 
the door will be wide open for the President to extend GSP benefits to 
China at any time, provided that China's MFN status is renewed.
  I think, GSP benefits for China should be out of the question for 
several reasons:
  First, GSP is a trade program whereby the United States extends to 
developing countries trade preferences that are decidedly more generous 
than nondiscriminatory [MFN] treatment. It is the difference between 
zero tariffs and the prevailing tariff rate for most of the countries 
with which we trade.
  Second, extending GSP benefits to China will add billions of dollars 
to our Federal deficit because of the significant loss of tariff 
revenue presently imposed on Chinese imports.
  Third, the United States is currently running a $21 billion trade 
deficit with China. Extension of GSP to China will only worsen our 
second biggest trade imbalance.
  Fourth, taking this action fresh on the heels of extending MFN 
treatment to China would make a complete mockery of our Nation's 
longstanding commitment to fundamental human rights, including worker 
rights, in the eyes of the Communist Chinese leaders.
  I urge my colleagues to take two immediate actions to prevent China 
from becoming eligible for GSP benefits:
  First, tell our colleagues on the Ways and Means Committee, 
especially those who serve on the Trade Subcommittee, of your 
opposition to China becoming eligible for GSP benefits. Urge them to 
reject the USTR's misguided proposed changes and to retain current law 
which prohibits the extension of GSP benefits to China.
  Second, cosign the letter that I am sending to President Clinton to 
express our strong opposition to any extension of GSP benefits to China 
and urging them to withdraw his pending legislative proposal.

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