[Congressional Record Volume 146, Number 20 (Tuesday, February 29, 2000)]
[Senate]
[Pages S930-S932]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BAUCUS (for himself, Mr. Murkowski, Mr. Bingaman, Mr. 
        Akaka, Mr. Wyden, and Mr. Dorgan):
  S. 2115. A bill to ensure adequate monitoring of the commitments made 
by the People's Republic of China in its accession to the World Trade 
Organization and to create new procedures to ensure compliance with 
those commitments; to the Committee on Finance.


             china-world trade organization compliance act

  Mr. BAUCUS. Mr. President, today, I am introducing the China WTO 
Compliance Act, along with Senators Murkowski, Bingaman, Akaka, Wyden, 
and Dorgan.

  This bill is designed to ensure continuous and rigorous monitoring of 
China's WTO commitments. It also provides new mechanisms in the 
Congress and in the Executive Branch to make sure that China complies 
with those commitments.
  Twenty years of negotiations with our Asian partners have 
demonstrated that trade agreements are often not self-executing. This 
is just as true with China today as it has been with Japan over these 
last two decades. The Congress and the Administration must both be 
resolutely committed to monitoring and enforcement. Only then do our 
trade agreements succeed and bring the desired results. Inattention by 
the United States leads to inaction

[[Page S931]]

by our trading partners. It leads to failure to achieve market opening 
objectives.
  This bill will make sure that future Congresses and future 
Administrations, whether they are Democratic or Republican, will keep 
trade agreement compliance permanently at the top of the agenda with 
China. We must ensure that inattention never sets in. We must also 
ensure that other elements in the bilateral relationship not be allowed 
to prevent the United States from gaining the maximum trade and 
economic benefit from China's WTO promises.
  Let me be clear that this bill is not designed to set conditions for 
the Congressional vote on granting China Permanent Normal Trade 
Relations status, PNTR. Rather, this bill addresses one of the major 
concerns that many in the Congress have. That is, China historical 
record in complying with bilateral trade agreements has been spotty. 
So, how can we be confident that compliance with this agreement will be 
any better? I hope that enactment of this bill will provide some 
reassurance to Senators and House members in this regard. I urge my 
Senate colleagues to join me in approving this legislation.
  Let me outline the main provisions of the China WTO Compliance Act.
  First, monitoring. The President must submit a detailed plan to 
Congress for monitoring Chinese compliance three months after China 
accedes to the WTO. The plan must be updated yearly and include 
detailed tasking responsibilities for each agency.
  The General Accounting Office will be required annually to survey the 
top 50 American firms in each of five different categories. Companies 
that export non-agricultural goods to China. That export agricultural 
goods to China. That provide services in China. That invest in China. 
And that import goods from China. The purpose of the survey is to 
determine if China is abiding by its WTO commitments. The survey will 
also provide information about any problems confronted by those firms.
  The International Trade Commission will report annually on United 
States-China bilateral export and import statistics. They will also, as 
best they can, seek to reconcile the different United States-source and 
China-source statistics.
  The second element in the bill deals with compliance. USTR must 
submit an annual report to Congress on China's compliance with its WTO 
commitments. After analyzing this report, a majority vote of either the 
Finance Committee or the Ways and Means Committee would require USTR to 
initiate a Section 301 investigation of Chinese practices that do not 
abide by China's WTO commitments. If USTR then determines that China is 
violating any of those commitments, USTR shall initiate dispute 
settlement action at the WTO, unless there exists another more 
effective action. USTR shall consult with the Congress and provide an 
explanation of its action.
  Going further, a majority vote of both the Finance Committee and the 
Ways and Means Committee will require USTR to initiate immediately a 
case under the dispute settlement mechanism of the WTO.
  The bill also amends Section 301. It authorizes USTR to draw a 
negative inference if a country being investigated does not cooperate 
in providing information. This has become a serious problem with some 
of our trading partners. A 301 investigation can bog down when a 
country with a non-transparent trading regime refuses to provide 
detailed information. This provision provides an incentive for 
cooperation.
  Third, the bill calls for a special WTO review of China. It is the 
Sense of the Congress that there should be a special multilateral 
process at the WTO for a thorough and comprehensive annual review of 
Chinese compliance. The bill directs USTR to propose that the Trade 
Policy Review Mechanism, the TPRM, at the WTO execute such a review of 
China's trade policies every year. It also directs USTR to take 
measures to improve the TPRM process.
  Finally, institution-building in China. Coming out of half a century 
of communism, China does not have the institutions necessary to carry 
out fully its WTO obligations. This bill requires the President to 
submit a plan to provide assistance to China to build those 
institutions necessary to fulfill the obligations China has made as 
part of its accession to the WTO. The bill expresses the sense of the 
Congress that the United States should provide such assistance through 
bilateral mechanisms, in particular, through appropriate non-
governmental organizations. It also provides for the possibility of 
some multilateral assistance under the auspices of the WTO.
  Finally, because a primary beneficiary of the results of successful 
institution-building in China would be American business, efforts shall 
be made to develop cost-sharing with the private sector.
  There has been a lot of talk about the need to ensure full Chinese 
compliance with its WTO commitments. This bill is an attempt to 
establish a system that will do just that. We need this legislation. 
And we need to pass PNTR as soon as possible.
  Let me conclude with a few remarks about Chinese compliance with the 
Agricultural Cooperation Agreement, which went into effect in December. 
Three weeks ago, I initiated a letter signed by 53 Senators to Chinese 
President Jiang Zemin. In the letter, we insisted that China proceed 
with full and immediate implementation of that agreement. I was pleased 
to announce on Monday the first purchase by China under this agreement. 
50,000 metric tons of Pacific Northwest wheat. This is an important 
step that should be followed by other agricultural purchases.
  Mr. AKAKA. Mr. President, I rise in support of the legislation 
introduced today by the distinguished Senators from Montana (Mr. 
Baucus) and Alaska (Mr. Murkowski) entitled the ``China-World Trade 
Organization Compliance Act.''
  Last November, the United States and China announced that a bilateral 
agreement had been reached on China's accession to the World Trade 
Organization (WTO). The agreement covers all agricultural products, 
industrial goods, and service areas. It promises to open up the Chinese 
market to American exports and American investment.
  Nevertheless, many Americans are hesitant at embracing this accord. 
Part of their concern is over the requirement that in order for the 
United States to benefit fully from this agreement. Congress will have 
to pass legislation granting permanent Normal Trade Relations (NTR) 
status to China. Previously known as Most-Favored-Nation (MFN) trading 
status, NTR has been subject to an annual renewal vote each year in the 
Congress. This yearly vote has allowed for a full airing of American 
concerns over relations with China--relations which remain contentious 
to this day because of the Chinese government's human rights behavior, 
proliferation activities, trade policy, and relations with its 
neighbors, most especially Taiwan.
  I cannot predict the result of the vote later this year on granting 
China permanent NTR.
  I do know that a Congressional vote against China will not 
necessarily prevent China from joining the WTO if it concludes 
successfully its accession agreements with other WTO members. China 
still has to resolve issues with the European Union and then have its 
accession approved by the WTO General Council/Ministerial Conference. 
But I think it is reasonable to assume that later this year China will 
join the WTO whether or not the United States grants permanent NTR.
  In light of this possibility, the legislation proposed today by my 
colleagues, and which I am pleased to cosponsor, is a reasonable and 
prudent step to take in order to ensure that the agreements which China 
commits to in joining the WTO are ones which China will fulfill.
  The history of Chinese compliance with international agreements has 
not been as good as it should be. In particular, China has not 
successfully implemented the commitments it made in March 1995 to 
protect American intellectual property rights. Intellectual piracy 
remains a major threat to the American music, cinema, and computer 
software industries. The Chinese government has demonstrated an 
impressive ability to arrest and intimidate massive numbers of Falun 
Gong followers but seems unable to locate factories mass producing 
thousands of counterfeit CDs, videos, and computer software. Clearly, 
where there is a will, there is a way for the Chinese government.

[[Page S932]]

  In addition, the Chinese government has proven itself very adept at 
protecting its domestic market from foreign goods and investment, 
devising formal and informal barriers to trade. The concept of 
transparency in Chinese trade law leaves much to be desired. An October 
1992 market access agreement between the United States and China has 
yet to be fully implemented with China eliminating some barriers while 
imposing new ones.
  The pattern of past Chinese behavior to international trading 
agreements suggest that we must be vigilant in ensuring compliance with 
the WTO accession agreement.
  The legislation we offer today is a significant step towards ensuring 
that China's promises are fulfilled. The bill establishes a process 
within the United States government for monitoring Chinese compliance 
with its WTO commitments. The monitoring would occur regardless of 
whether or not the United States grants permanent NTR to China, 
although surely it would have more effect if we do grant this to China.
  We have lacked a process, and an agency, within the United States 
government with the mandate, the expertise, institutional memory, and 
the resources to ensure that the promise of bilateral and multilateral 
trade agreements are fulfilled. This legislation is a major step in 
starting the debate on how to ensure that promises made are promises 
kept.
  As ranking member of the International Security, Proliferation And 
Federal Services Subcommittee of the Governmental Affairs Committee, I 
am keenly interested in the implications of the legislation for the 
organization of our government's trade agencies. There are several 
areas where I would like to work with the legislation's authors to 
refine their proposal. I believe that it might be appropriate to 
designate the United States Trade Representative's Office as the lead 
agency working with other agencies to monitor compliance. I intend to 
study further the best means for ensuring the effectiveness of this 
legislation.
  I believe it also important that public participation in commenting 
on China's compliance should not be limited to business groups but 
include environmental, labor, and human rights organizations. The 
climate affecting the world economy is not solely determined by the 
financial bottom line.
  This legislation is an important step towards a trade environment 
which benefits the many, not the few, and I am pleased to cosponsor it.
                                 ______