[Congressional Record Volume 145, Number 48 (Thursday, March 25, 1999)]
[Senate]
[Pages S3577-S3579]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




       CHINA'S WTO ACCESSION AND THE VISIT OF PREMIER ZHU RONGJI


                          KEEP THE POWDER DRY

  Mr. BAUCUS. Mr. President, I rise today to bring your attention to a 
matter of pressing concern involving the upcoming visit of Chinese 
Premier Zhu Rongji and the prospects of China's accession to the World 
Trade Organization.


                        Context of Relationship

  Let me begin, however, with some context.
  On April 8 and 9, the Premier of China will visit our country. As we 
speak, the Administration is negotiating with China the terms of its 
possible accession to the WTO.
  Already this session, the Senate has seen one floor debate concerning 
our overall China policy. That debate was prompted by an amendment that 
would have required Congress to vote on the terms of China's accession 
prior to the Administration's completion of an agreement. Such a pre-
emptive vote raised several constitutional and precedential questions.
  Congress has not voted on any of the previous 110 GATT and WTO 
accessions because since 1948 WTO accessions have been executive 
agreements which generally require no U.S. concessions.
  I spoke loudly against that amendment for three specific reasons. 
First, a vote on WTO accession would more likely be a judgment on the 
immediate state of our overall relationship with China than on the 
trade policy details of the accession. Second, such a vote could result 
in the U.S. holding a set of unilateral trade concessions by China to 
the United States hostage to every other concern we have about China--
from human rights to security, environment, labor policies and much 
more. Third, we are already required to vote on China's permanent 
Normal Trading Relation status before the agreement becomes binding. 
Therefore, I was pleased that the Senate saw fit to defeat this 
resolution by a resounding vote of 69 to 30. Now we can move on to the 
matter of pressing concern.
  Mr. President, as the visit of the Chinese Premier nears, and as the 
Administration continues with its negotiations, I am sure that the 
Senate, the Administration, and the country as a whole will engage in 
an intense debate on China policy. Participants in this debate will 
have radically different views on the prospects of our relationship, 
and on the trade, security and human rights policies we should adopt in 
it.
  I rise today to encourage all participants in this debate to take a 
deep breath and to think carefully about this issue. For there is much 
at stake. And it is incumbent upon all of us to make sure that our 
actions are in the best interests of our country.


                    STATEMENT TO THE ADMINISTRATION

  First, let me address my remarks to the Administration, for they are 
engaged in an on-going dialogue with China over WTO accession.
  Simply put, we must not allow the pending visit of the Premier to 
cause us to want an agreement so badly that we will accept it on 
anything less than the best possible terms. It may sound trite, Mr. 
President, but this is serious stuff--we have to get it right. I do not 
want to see us simply agree to a commercially viable agreement, instead 
I want us to sign a commercially powerful agreement.

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  We've waited a long time to achieve liberalized trade with China. 
Many times in the past dozen years, we have tried unsuccessfully. But 
despite, our questions concerning enforcement never before have we been 
so close in terms of real progress and genuine commitment to agreeable 
terms that right now. And we must recognize that whatever happens, 
China will be a challenge for years to come.
  Take for example the matter of China refusing to import Pacific-
Northwest wheat. For the first time in over two decades, we are near a 
breakthrough concerning their zero tolerance policy. While talk is good 
and I encourage it continue, we still have not resolved the underlying 
problem. China is not importing our wheat. Thus the true measure of 
success will be weighed in terms of action and reaction--both China's 
commitment to dropping its ban and its importation of Pacific Northwest 
wheat.
  On a broader scale, Mr. President, I believe that any agreement with 
China must contain at a minimum, the following terms:
  First, it must apply to three critical trade sectors: agriculture, 
manufacturing, and financial services. We must ensure that China is 
willing to trade fairly across the board with U.S. companies in each of 
these sectors. The agreement should include significant tariff 
reductions, elimination of non-tariff barriers and other measures to 
liberalize trade in goods.
  It should include market access for agriculture, including the 
elimination of phony health barriers on Pacific Northwest wheat, 
citrus, meats and other products. And it should include liberalization 
of service sectors including distribution, telecommunications, finance, 
and audiovisual industries. Let me be very clear: China must agree to 
accept all WTO disciplines after a negotiated phase in. They should be 
afforded no special treatment.
  Second, the agreement must be commercially viable, verifiable, and 
enforceable. Good words and good intentions are not enough, Mr. 
President. This must be a commercially powerful agreement. The American 
people and American companies deserve to know that the words will be 
backed up by actions. In other trade negotiations, some have proposed 
an annual report card to monitor progress.
  Mr. President, I plan to review any accession agreement very 
carefully. If necessary, I will carry legislation to ensure that 
compliance with such an accession agreement is carefully monitored to 
ensure that it is met in letter and spirit. For example, I think the 
concept of a general safeguard which would allow unilateral sanctions 
if China failed to meet its commitments is the most important element. 
Use of this general safeguard should also be linked to an annual review 
of the agreement.
  Third, and finally, I believe that the agreement should be coupled 
with a showing of good-faith by China. Now, I don't want to prejudge 
the on-going negotiations. Rather I want to wait and see what the 
results of those negotiations are. But I don't think it is beyond 
reason to expect that a WTO accession agreement would include trade 
targets or up-front purchase agreements for U.S. products.
  But again, Mr. President, I am not in the room with the 
Administration as they negotiate this agreement, and I want to leave 
them some flexibility on this point. Let me reiterate that I mean 
``some'' flexibility and Mr. President, I can't emphasize this enough. 
Flexibility with Caution because we don't want an accession agreement 
with China at any price. We do want an agreement must be fair and in 
the best interests of the United States.
  In particular I urge the Administration to closely scrutinize any 
agreement to make sure it meets this test and be vigilant about the 
details. And if the offer falls short of the mark, I would suggest that 
the United States wait rather than push forward with this accession.


                     STATEMENT TO SENATE COLLEAGUES

  Mr. President, I also wish to speak to my Senate colleagues today. 
Issues related to China can stir our passions. As we move forward with 
negotiations on China's accession to WTO, I urge you to simply ``keep 
your powder dry.'' Let's wait and take a look at the outcome of the 
negotiations.
  We must not lose sight of the vital American interests that are at 
stake. From our perspective, WTO accession can create a more reciprocal 
trade relationship; promote the rule of law in China; and accelerate 
the long-term trend toward China's integration into the world economy 
and the Pacific region.
  And let me be absolutely clear. This is about more than wheat. The 
whole spectrum of the U.S. economy stands to benefit from a 
commercially powerful accession agreement with China. Agriculture, 
manufacturing, and financial services--industries affecting literally 
every state in the United States.
  But, Mr. President, the WTO accession holds more at stake than the 
interests of U.S. industries. This integration is, we should always 
remember, immensely important to our long-term security interests.
  To choose one example, twenty-five years ago China would likely have 
seen the Asian financial crisis as an opportunity to destabilize the 
governments of Southeast Asia, South Korea and perhaps even Japan. 
Today China sees the crisis as a threat to its own investment and 
export prospects, and has thus contributed to IMF recovery packages and 
maintained currency stability. Thus China's policy has paralleled and 
complemented our own; and as a result, the Asian financial crisis 
remains an economic and humanitarian issue rather than a political and 
security crisis.
  From China's perspective, WTO entry has the long-term benefits of 
strengthening guarantees of Chinese access to foreign markets and 
promoting competition and reform in the domestic economy; and the 
short-term benefit of creating a new source of domestic and foreign 
investor confidence at a time of immense economic difficulty.
  So I say to my Senate colleagues that we must review any agreement 
carefully. Just as I have said that we should not accept it out of 
hand, so I do not believe that we should reject it out of hand. I 
believe that issues related to nuclear security, human rights and 
Taiwan are all important issues.
  Mr. President, I believe that each of in the Senate need to take a 
close look at the agreement and weigh it in the context of all U.S. 
interests. Until we have done that, Mr. President, we should ``keep our 
powder dry.''


                           STATEMENT TO CHINA

  Mr. President, before I conclude, let me also send a message to 
China. I believe that the window of opportunity for China's accession 
to the WTO is closing rapidly. The next WTO round begins in November in 
Seattle. If we cannot reach agreement on WTO accession, it may be many 
years before this opportunity arises again.
  Let me say this clearly to the Chinese leadership: If you are willing 
to negotiate in good faith, if you are willing to agree to a 
commercially viable agreement and to eliminate phony barriers to the 
import of Pacific-Northwest wheat and other products, then I will be 
willing to support China's accession to the WTO. And I think that many 
of my colleagues feel the same way. But if you are not willing to take 
that step; if you are not willing to agree to free and fair trade, then 
I will oppose China's accession to the WTO and I will urge the 
Administration to join me in that opposition.


                               CONCLUSION

  In conclusion, Mr. President, China's pending accession must be 
considered carefully.
  This Administration must closely scrutinize any agreement to ensure 
that it meets the ``commercially powerful'' test. If the offer is 
genuine and sound, the Administration should work toward an agreement, 
if it falls short, then the United States should wait.
  We in the Senate should ``keep our powder dry.'' That is to let 
calmer heads prevail by not pre-judging the agreement.
  Instead we should play an active role in the negotiations and lend 
our input as we work toward a successful agreement.
  And finally, China must make every effort to demonstrate its desire 
to enter the global marketplace by bringing forth a commercially 
meaningful offer. The ball is in China's court.
  In sum, I would say that Premier Zhu's visit offers us an immensely 
important opportunity to define the course of our overall U.S.-China 
relationship. I welcome his visit and hope my colleagues and the 
Administration will do the same.

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