[Congressional Record Volume 146, Number 60 (Tuesday, May 16, 2000)]
[House]
[Page H3148]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     THINK ONCE, THINK TWICE ABOUT U.S. TRADE RELATIONS WITH CHINA

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, I would say to our colleagues this evening, 
think once, think twice about U.S. trade with China, particularly in 
agriculture.
  Recently I read a fascinating report prepared by Dr. Charles 
McMillian, former editor of the Harvard Business Review. He is a man 
who understands numbers. And he says, think once, think twice. China 
has produced an annual glut of agricultural commodities for over a 
generation. In fact, the United States has registered a consistent and 
growing deficit in agriculture with China in two-thirds of all 
agricultural groupings.
  It is true with pork. We produced a lot of that in my corner of Ohio. 
It is true with corn. It is true with citrus, with vegetables, with 
fish. Just go down the categories.
  China, in fact, in the last decade, had an average annual surplus, 
that means they are sending more out than taking goods in, in global 
agricultural trade of $4 billion annually. Just last year, in 1999, the 
rate of that is increasing to where just in 1999 they had a $4 billion 
surplus of global agricultural trade over what they imported. So their 
advantage, essentially, is increasing.
  They are rapidly expanding the quantity, the quality, and the 
composition of products that are being exported to our country, 
everything from ketchup to rice and, for the first time, in 1999, 
cotton.
  Now, China recorded an overall advantage with the United States in 
1985, 1986, 1992, 1993, and 1999 in agriculture. In fact, we have 
maintained a chronic agricultural trade deficit with them in 17 of 26 
agricultural commodity groups, everything from seafood, to tobacco, 
sugar, cocoa, vegetables, fruits, nut, and various animal parts.
  What is even more troubling is that our exports to them have fallen 
every year since 1995 as China has strengthened our ability to export 
to them in spite of our bilateral agreements and tariff reductions has 
decreased.
  In fact, our agricultural exports to China in 1999 were a third less 
than a decade before, while U.S. imports of their agricultural 
commodities had literally doubled, gone up by nearly 100 percent.
  Now, if we think about this, China's agricultural production growth 
continues to outpace their own growth in domestic demand. Our own 
embassy in China, our agriculture attache in Beijing, points out that 
China is struggling to solve its fundamental problems of chronic 
overproduction.
  But it does have an inefficient distribution system. And with capital 
investment that might occur there as a result of going into WTO, they 
are going to be able to move that product more quickly around the 
world.
  Particularly key in all of this are China's partnerships with 
powerful global firms such as Cargill, Archer Daniels Midland, and 
ConAgra. And of course, those companies export. In fact, Cargill, for 
example, has been in China since 1973. Cargill really does not care if 
it sells and markets Chinese corn or U.S. corn.
  So the point is there are some agricultural interests globally that 
will win, but it will not be U.S. farmers because that Chinese corn and 
pork and tobacco and seafood, and go down all the categories, are going 
to depress prices even more here at home.
  So I would say to people in rural America, think once, think twice 
about all of this.
  It is not clear that, in this recent agreement that the 
administration signed with China, that any new grain commitments to 
purchase were actually made. There were some promises that maybe there 
would be some tariff reduction. But if we look at the tariff reduction 
that occurred during the decade of the 1990s, it did not result in any 
more sales.
  It is highly unlikely that China will eliminate its non-tariff 
barriers to agriculture trade. It would put too great a risk on its own 
sector advancing. Because China, since 1949, has had an agricultural 
policy that said, we will be food self-sufficient. Starvation propelled 
them into the most recent half century, and they fully well understand 
what it means not to be self-sufficient in food production at home.
  I think that, as much as we talk about tariffs here and about non-
tariff barriers, it is also important to point out that when China gets 
in trouble internationally, it does something very simple, it devalues 
its currency, as it did in 1994.
  So think once, think twice. China is going to put more downward 
pressure on U.S. food prices if permanent normal trade relations are 
approved with China.
  I urge my colleagues to vote ``no'' on that measure.

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