[Congressional Record Volume 143, Number 81 (Wednesday, June 11, 1997)]
[Senate]
[Pages S5491-S5493]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          MFN STATUS FOR CHINA

  Mr. BAUCUS. Mr. President, over the Memorial Day recess, I made a 
week-long trip to East Asia. This included stops in Seoul, South Korea; 
Pyongyang, North Korea; Beijing, China; Hong Kong, as well as Misawa 
Air Force Base in Japan. I spent most of my time on the three issues of 
most immediate concern to us in northeast Asia this year. First, food 
and security problems on the Korean Peninsula; second, the negotiations 
over China's entry into the World Trade Organization; and third, Hong 
Kong's transition to Chinese sovereignty, now less than 3 weeks away.
  I also discussed longer term issues, including environmental 
protection, human rights, and United States-China security relations. 
These are complex subjects, with great implications for our national 
interest in all sorts of areas. With respect to the three immediate 
issues, I think our basic strategies are well conceived, and we have 
good people in the military and the Foreign Service working on them. I 
am in the process of drafting a trip report that will address them in 
much more detail.
  But we in Congress must first take up a different issue; that is, 
whether to support the President's decision to renew China's MFN 
status. So I will return to the floor in coming days to discuss the 
basic security, trade, environmental, and humanitarian issues we face 
in China and in East Asia generally. But today I will concentrate on 
MFN status--why it is legally right; why it is morally right, and why, 
given our compelling interest in issues like security in Korea, more 
fair and reciprocal trade with China, and a smooth transition for Hong 
Kong, it is right for our national interest.


                             Legally Right

  First, renewal of MFN status is right under our law. The Jackson-
Vanik law, which has governed renewal of MFN status for nonmarket 
economies since 1974, is the main law in place. It conditions MFN on 
two things: the existence of a bilateral commercial agreement, and 
freedom of emigration. Under the law, the President's choice is clear. 
We have a bilateral trade agreement signed with China in 1980, and 
China allows free emigration. Therefore, as a legal matter, the 
President was right to renew MFN and we should back him up.


                             Morally Right

  Second, renewing MFN status is morally right. At times, people in 
Washington are tempted to see a vote to revoke MFN as something which 
might promote human rights in China. This is a fine sentiment. People 
who advocate revoking MFN status to promote human rights are very well 
intentioned. But the effects of revoking MFN would be the opposite of 
what they intend.
  To revoke MFN status, very simply, is to raise tariffs from Uruguay 
round to Smoot-Hawley levels. To take one example, that means raising 
tariffs on toys and stuffed animals from zero to 70 percent overnight, 
again, automatically, from zero to 70 percent tariff overnight. That 
hits one of China's major exports to the United States, at about 6 
billion dollars' worth last year. And who makes them? On the whole, 
it's young Chinese working people trying to improve their lives.
  What would happen if we revoke MFN status? The result should be 
obvious. Millions of innocent Chinese workers in toy factories and in 
other walks of life would lose their jobs. The Chinese Government would 
certainly be hurt, but it would still be there the next day. But the 
lives of these workers would be ruined. So, far from improving human 
rights, revoking China's MFN status would cause immense human suffering 
in China.
  Of course, that would discredit our human rights efforts with the 
Chinese

[[Page S5492]]

public. No rational person can expect anyone in China to thank us for 
harming their economy and inflicting misery on them, their families, or 
their fellow citizens.
  By contrast, if human rights is our motivation, MFN is an 
irreplaceable part of an effective policy. As the Democracy Wall 
activist Wang Xizhe--until recently, a political prisoner--says:

       The goal of exerting effective, long-term influence over 
     China can only be achieved by maintaining the broadest 
     possible contacts with China, on the foundation of MFN, thus 
     causing China to enter further into the global family and to 
     accept globally practiced standards of behavior.

  A long-term policy may emotionally be hard to accept. There are real 
human rights problems in China: About 3,000 political prisoners remain 
in jail, strict limits on freedom of assembly exist, very severe 
policies in Tibet. We would like to solve them all in a day, but the 
fact is, that won't happen. Only by staying the course, staying 
involved through trade and human exchange, as well as diplomacy, can we 
hope to make a difference.


                    Right for the National Interest

  Finally, we are Americans first, and we are responsible to the 
American public on our policy decisions. And renewing MFN status is 
right for our own national interest.
  Security issues are an example. I can say from firsthand experience 
that we have a very complex, very dangerous situation at hand in the 
Korean Peninsula.
  North Korea is a politically isolated government, with very severe 
food and economic problems, and a large and well-armed military 
machine. We have a commitment to joint defense of South Korea, we 
Americans and the South Koreans, and we have 37,000 men and women 
permanently on the line just a few miles south of the DMZ. We owe it to 
them to pursue a very serious, responsible policy that can keep the 
peace and ensure a swift victory if, God forbid, there is any conflict. 
And Chinese cooperation is absolutely essential to that. Deliberately 
antagonizing the Chinese Government and armed forces by revoking MFN 
will not help at all.
  We are also responsible to our own people to make trade with China 
more fair, more reciprocal, and more beneficial to our country. We have 
an opportunity to do that this year by bringing China into the World 
Trade Organization on a commercially acceptable basis. Cutting off MFN 
status would put us on the opposite track: it would balance trade at 
close to zero, cutting off jobs and prosperity here as well as in 
China.
  As we look into the next century, we must work to slow global 
warming, ocean pollution, and the loss of biodiversity. To take just 
one statistic, in the next 20 years, world greenhouse emissions will 
grow from 6 to 9 trillion tons a year. Fully 1 trillion of the 
additional 3 trillion tons will come from China. That is, one-third of 
all greenhouse gas emissions in the next 20 years, if nothing is done, 
will come from China.
  We have a chance now to moderate that trend. And a political crisis 
caused by revoking MFN would make that mutually beneficial effort very 
difficult.


                    Views of Our Friends and Allies

  Our own common sense should tell us that China is a key player on all 
these issues. Wantonly picking a fight with the world's largest country 
by revoking MFN status, when only 6 countries in the world lack MFN 
status and 151 countries actually get tariff rates better than MFN, 
would be foolish.
  And our allies tell us the same thing. During my trip last month, I 
met top national security officials in the South Korean Government. I 
spoke with senior officers of the Japanese Self-Defense Forces. And I 
met with Chinese dissidents and democratic political leaders in Hong 
Kong.
  These are our friends, our strategic allies, people we work with 
every day, people who wish us well. Not a single one of them supported 
revoking MFN status. To the contrary, they all felt that a good 
relationship between the United States and China is crucial.
  The right course to take, therefore, is very clear. From Korea to 
human rights to global warming to Hong Kong and Taiwan and trade, we 
have very serious issues to discuss with the Chinese. And the annual 
MFN debate is an artificial, unnecessary crisis that makes results on 
all of them more difficult.
  So we should not debate this question into the misty and indefinite 
future. Instead, we should back up the President this year, renew 
China's MFN status, and when China faces up to its WTO 
responsibilities, then make MFN permanent.
  Mr. President, I ask unanimous consent that an acknowledgement on the 
East Asia trip be printed in the Record at this point.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

         Senator Max Baucus--Acknowledgments on East Asia Trip

       Mr. President, we in Congress oversee the work of 
     government. It's our responsibility to eliminate waste. Fix 
     what's broken. Find what's wrong. That's an essential part of 
     the job. But every once in a while, we ought to stop and 
     remind ourselves what's right. And today I'd like to take a 
     few minutes to do that.
       I recently returned from a week-long trip to South Korea, 
     North Korea, Beijing and Hong Kong, with a brief stop at 
     Misawa Air Force Base in Japan as well, on official business 
     for the Finance Committee.
       In the future I will make a more formal report to the 
     Committee on these visits. But setting the policy issues 
     aside for a moment, this trip reminded me once again that 
     both here in Washington and overseas we have talented, 
     patriotic people who are doing their very best for our 
     country. And today, I would like to take some time to thank 
     for helping to make my trip a success.
       In Washington:
       Chairman William Roth, and Jane Butterfield of the Finance 
     Committee staff;
       Lt. Col. John Wohlman, who served as my military escort 
     officer in Seoul, Pyongyang and Beijing;
       Assistant Secretary of Defense Dr. Franklin Kramer and Rear 
     Admiral William Wright, who gave me a very enlightening brief 
     on Korean security issues and our military dialogue with the 
     Chinese armed services, and Col. Martin Wisda of the POW/MIA 
     office;
       Charles Kartmann, Deputy Assistant Secretary of State, 
     Howard Lange, State Department China Desk Director and John 
     Long of the State Department's East Asia Bureau;
       Peter Scher of the U.S. Trade Representative on the state 
     of our agricultural trade talks with China; and
       Teri Patin and the staff of the State Department Office of 
     Congressional Travel.
       In Seoul:
       With the U.S. Embassy:
       Charge d'Affaires Richard Christiansen, an extremely 
     capable and knowledgeable public servant who is one of our 
     country's real experts on Korea; and
       Larry Robinson, Political Officer and my Control Officer. 
     Larry worked hard on very short notice to arrange my 
     schedule, and gave me some very good advice about China as 
     well; and
       David Schoonover, Agricultural Minister-Counsellor.
       With US Forces--Korea:
       Gen. John H. Tilleli, Commander of US Forces--Korea;
       Gen. George W. Norwood and the other USFK officers, who 
     helped brief me on the security issues we face in Korea; and
       The Korean-American Cowboy Association for inviting me to 
     the Memorial Day Rodeo to meet and talk with some of our 
     enlisted men and women.
       At Misawa Air Force Base in Japan:
       Gen. Bruce Wright, USAF; and
       Col. Mark Rogers, USAF.
       In Beijing:
       Ambassador Jim Sasser and the other participants in the 
     Country Team Briefing;
       Kelley Snyder, Second Secretary, Economic Section. Ms. 
     Snyder was principally responsible for arranging meetings 
     with Chinese political leaders, and officials from the 
     National Environmental Protection Agency, the Agriculture 
     Ministry, the People's Liberation Army, the Trade Ministry, 
     the Foreign Ministry and the Hong Kong and Macao Office of 
     the State Council.
       Bill Brant, Agricultural Minister, who handled the 
     Embassy's participation in the Mansfield Pacific Center 
     Conference on Food Security and Agricultural Trade, and 
     helped make it a resounding success;
       Jim Brown, the Embassy Interpreter.
       In Hong Kong:
       Consul General Richard Boucher;
       Scot Marciel, Economic Officer and my control officer. Scot 
     helped me arrange meetings and gain an understanding of the 
     spectrum of Hong Kong opinion on the transition;
       Dr. Douglas Spelman, Chief of the Economic and Political 
     Section;
       Robert Tynes of the Consular Section and his staff, who 
     handle a tremendously busy and important office very 
     efficiently; and
       Victor Chan of General Services.
       Our country has a lot at stake in all these places. We face 
     some difficult issues, and in the case of Korea some very 
     dangerous ones. But I must say that we have some very good 
     people on the job. I could not have had better advice on 
     setting an itinerary, more efficient logistical help in 
     scheduling it, and more informed briefings than I received 
     from them.

[[Page S5493]]

     They have my gratitude, and America is lucky to have them.

  Mr. BAUCUS. Thank you, Mr. President.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. DASCHLE. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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