[Congressional Record Volume 142, Number 90 (Tuesday, June 18, 1996)]
[House]
[Pages H6425-H6426]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   THE RATIONALE FOR VOTING FOR DENIAL OF MFN TRADE STATUS FOR CHINA

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from California [Ms. Pelosi] is recognized for 5 minutes.
  Ms. PELOSI. Mr. Speaker, on June 3 President Clinton requested a 
special waiver to grant most-favored-nation trade status for China. 
Since the Tiananmen Square massacre in 1989, I have worked with my 
colleagues to provide alternatives to denial of most-favored-nation 
status, including conditional renewal or targeting revocation. However, 
this year I will be voting to deny MFN to China and to deny the 
President's special request, because of the increased violations of our 
bilateral trade agreements, because of the increased repression in 
China and Tibet, and because of China's proliferation of weapons, 
chemical, nuclear, and advanced missile technology, to unsafeguarded 
countries including Pakistan and Iran.
  Mr. Speaker, while I know there is not a large enough vote in the 
Congress to override a Presidential veto, and the President would veto 
a motion to deny MFN, I do believe that a vote to support the status 
quo in United States-China relations is difficult to defend for several 
reasons.
  In the area of trade, China does not play by the rules. Despite the 
fact that over one-third of China's exports come into the United States 
and are sold in the United States markets, Chinese high-tariff and 
nontariff barriers limit access to the Chinese market for United States 
goods and services and hold our exports to only 2 percent of our 
exports into China--a third of China's exports allowed into the United 
States,

[[Page H6426]]

only 2 percent of ours allowed into China.
  On a strictly trade-by-trade basis, China does not reciprocate the 
trade benefits we grant to them under MFN status. The result is a $34 
billion United States trade deficit with China in 1995. As we can see 
from this chart, only 10 years ago we were reasonably in balance with a 
$10 million trade deficit with China, and over the past 10 years the 
trade deficit has increased to just about $34 billion.
  Mr. Speaker, supporters of MFN will say that U.S. exports have 
tripled in the course of that time. They have, but Chinese exports to 
the United States have increased elevenfold, therefore resulting in 
this very extreme imbalance.
  The deficit is expected to exceed $41 billion in 1996, and does not 
include the economic loss of Chinese piracy of our intellectual 
property, which costs the United States economy over $2.5 billion each 
year. It does not include the loss to our economy on Chinese insistence 
on offsets, production and technology transfer, which hurt American 
workers and rob our economic future, and it does not include money 
gained by China in the illegal smuggling of AK-47s and other weapons 
into the United States by the Chinese military.
  Members will hear that trade with China is important for United 
States jobs. When President Clinton made his statement accompanying his 
request to renew MFN, he claimed new exports to China supported 170,000 
American jobs. These jobs are very important. However, they must be 
seen in the larger context. Other trade relationships of comparable 
size, of, say, a $56 billion trade relationship, produce many, many 
more jobs because our trade relationship is more in balance. More of 
our exports are allowed into other countries' markets.
  Other trade relationships of comparable size to the China-United 
States trade relationship support at least twice as many jobs. For 
example, the United States-United Kingdom trade relationship totaling 
$2 billion less than the United States-China relationship supports 
432,000 jobs. The trade is less but the number of jobs is well over 2 
times. The United States-South Korea relationship is $8 billion less 
than the United States-China trade relationship. It supports 381,000 
jobs, well over double the Chinese trade relationship. Why? Because of 
lack of market access for United States products into the Chinese 
marketplace.
  We must also be concerned about the harm to our economy of the 
technology transfer and production transfer which is accompanying 
United States investment in China and United States sales to China. The 
Chinese Government demands that companies wishing to obtain access to 
the Chinese market not only build factories there, so that the products 
are made in China, not in the United States, but that they also 
transfer state-of-the-art technology to do so. The Government then 
takes that technology, misappropriates it, the companies have little 
choice, because they want to access the market. We are helping the 
Chinese Government build our own competitors, using our state-of-the-
art technology. Time does not permit me to go further, but more will 
come.

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