[Congressional Record Volume 146, Number 61 (Wednesday, May 17, 2000)]
[House]
[Pages H3300-H3302]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NORMAL TRADE RELATIONS WITH CHINA
The SPEAKER pro tempore (Mr. Shimkus). Under the Speaker's announced
policy of January 6, 1999, the gentleman from Iowa (Mr. Ganske) is
recognized for 60 minutes.
Mr. GANSKE. Mr. Speaker, I am going to talk tonight about the vote
that the House is going to make next week on extending permanent normal
trade relations to China.
Capitol Hill is abuzz about this vote which we are going to make next
week. It seems that everyone and their uncle has been lobbying on this
issue.
Goldie Hawn, the actress, has been wandering the halls of Congress.
She is against; while Jesse Ventura was in the East Room of the White
House. He is for.
In my opinion, Mr. Speaker, this vote will be the most important
trade vote in a long, long time, and undoubtedly, the most important
agriculture vote this year.
President Clinton said last week, ``If the Congress votes against it,
meaning permanent normal trade relations, they will be kicking
themselves in the rear 10 years from now because America will be paying
the price.''
The President suggested that lawmakers who oppose the measure are
focusing on politics rather than its merits. The President said,
``Virtually 100 percent of the people at the other end of Pennsylvania
Avenue,'' meaning Capitol Hill, ``know it is the right decision.''
Well, Mr. Speaker, our country has benefitted greatly from the
growing international marketplace and American efforts to reduce
tariffs and trade barriers.
For example, between 1993 and 1998, my own State of Iowa had its
exports increased nearly 75 percent. Export sales from the capital city
of Iowa, Des Moine, alone totaled nearly half a billion dollars in
1998. And this growth was a two-way street.
My State has attracted more than $5 billion in foreign investment.
International trade supports thousands of jobs in my home State and
thousands, if not millions, of jobs across the country.
My State's economic growth depends on international trade. But Iowa
is not unique. Iowa is right in the middle of the country. There are
other States on both coasts where there is shipping and exports, where
exports are even more important.
Now, my State has agriculture as an agricultural industry, but we
also have a strong financial services industry and a strong
manufacturing industry. I think my State is typical of States all
across the country.
China very much wants to get into the World Trade Organization, the
WTO. Last fall the United States completed a trade agreement by which
we would welcome China into the WTO. Under that new trade agreement,
China makes significant concessions that are important to American
farmers and businesses.
Under this new agreement, China agreed to reduce its tariffs on
American goods in order to get U.S. support for accession into the
World Trade Organization. Chinese tariffs will drop from an average of
24.6 percent in 1997 to an average of 9.4 percent in the year 2005.
That is a 62 percent drop in tariff rates on most of our products that
we are trying to get into China.
In addition, China agreed to phase out most import quotas by the year
2005, making these new tariff rates applicable to most products
regardless of quantity. China also agreed to allow American businesses
to sell directly to the Chinese public.
This agreement cuts out the interference of Chinese middlemen or
Chinese trading enterprises that are often corrupt. This new agreement
means American companies will be allowed to provide maintenance and
service for their products.
China conceded on agricultural trade matters things that are very
important to our Nation's agriculture. China agreed to lower the
average tariff on American agricultural products from nearly 40 percent
to 17 percent. In addition, China will lower its tariffs on pork, beef,
and cheese to 14.5 percent.
China also agreed to accept the U.S. Department of Agriculture's
certification that American meat and poultry are safe. What this means
is that China will now open its markets to U.S. pork, beef, and poultry
access, which has been denied because of China's unscientific claim
that our products were not safe.
This is important for many, many States, not just my own, many
States, I might add, where there are some other considerations for
legislators to think about in terms of voting against permanent normal
trade relations.
China consumed more than 77 billion pounds of pork in 1998. And as
its population of more than one billion people increases, so will its
need for pork, U.S. pork.
China also agreed to eliminate oil seed quotas and gradually increase
the quota for corn to 7.2 million metric tons each year. By comparison,
in the last 10 years' total, China imported a mere 6 million tons of
American corn. China also pledged not to provide export subsidies for
its agricultural products.
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All of these are very significant concessions on the part of the
Chinese. In sum, the Chinese are opening up their market. They are
easing their quota restrictions. They are reducing their tariffs. And
they are agreeing not to subsidize their own products. These
agricultural provisions hold the promise of significant growth for our
country's farmers.
Another treaty component important to our country is insurance and
financial services. We just passed a bipartisan bill on financial
services reform so that our financial services industry in this country
can compete in a global market. This new treaty with China will help us
get our financial services industry into China. My State, for example,
is a leader in insurance, not just agriculture. Currently, foreign
insurance companies are allowed to operate in only two cities in China.
The bilateral agreement will remove all geographic limitations for
insurance companies within 3 years. Within 5 years, American insurers
will be able to offer group, health and pension insurance which
represents the majority of premiums paid. American firms will be
allowed 50 percent ownership for life insurance and will be allowed to
choose
[[Page H3301]]
their own joint venture partners. Non-life insurance companies will be
allowed to establish local branches, hold 51 percent ownership upon
accession and form wholly owned subsidiaries within 2 years.
In another area, China will lower tariffs on American automobiles to
25 percent. The current Chinese tariff on American-made automobiles
ranges from 80 to 100 percent. And American financing programs for
those cars will be available.
Another area is tariffs on information technology like computers and
Internet-related equipment. Those will be eliminated by the year 2005
under the new agreement. And banks and financial institutions will have
unprecedented access to the Chinese population.
All of these Chinese concessions are significant. They amount to a
very good deal for us, a deal that will move American goods and values
into China. Under this good deal, the United States is not making any
concessions. All the concessions come from the Chinese. Nor will we be
dropping our guard against further Chinese espionage. We will not be
abandoning Taiwan, and we will not be pretending that the Communist
Chinese have improved their human rights record. Altogether, a vote for
this new trade treaty and for normalizing trade with China should be,
as they say, ``a no-brainer.'' And it should not be a partisan issue,
either. A majority of Republicans in Congress support approval of this
agreement. In addition to President Clinton and Vice President Gore,
many Democratic governors, such as Iowa's Governor Tom Vilsack support
the agreement, too. Governor Vilsack wrote me, saying, ``There is more
potential for opening up new markets in China than just about anywhere
else in the world and a major step in that process was taken by
reaching an agreement on the U.S.-China bilateral World Trade
Organization accession. The next step is to establish permanent trade
with China.''
Governor Vilsack finishes by saying, ``I support permanent normal
trade relations for China.''
So, Mr. Speaker, what is all of this controversy about? By all
accounts, this is going to be a nail-biter of a vote. Every day,
practically, the vote tally is reported in the Congressional Quarterly
or in the newspapers. It is big news when, for instance, the gentleman
from New York (Mr. Rangel) yesterday came out and said that he would
vote for permanent normal trade relations. Every Member's vote is going
to count significantly next week. So what is it all about? If the
treaty is so good, if the Chinese basically made all the concessions,
if under current trade with China we cannot get our goods into China
because they have high tariffs on our goods but under the new treaty
they lower those tariffs so that we can send our American-made goods
and services over to China, what should be the controversy? One would
think that this would pass with 300-plus votes.
Well, in my opinion the controversy is not so much about the treaty.
It is more about symbolism. For some in the labor movement, blocking
permanent normal trade relations is symbolic of labor's clout, even
though in my opinion their position actually hurts manufacturing jobs,
such as those at the John Deere plant in Ankeny, Iowa, just north of
Des Moines where cotton pickers are made. With this new treaty, that
John Deere plant would have the opportunity to sell more cotton pickers
in China. That would mean more United Autoworker jobs in Ankeny, Iowa.
Now, along with many, I abhor China's human rights violations. But I
do not agree with those who believe that denying normal trade relations
will improve the human rights situation in China. Mr. Speaker, we have
had this debate for years annually. It has become pro forma. Even last
year when I voted against most-favored-nation status for China, when we
were dealing with the Chinese having stolen American nuclear secrets,
the biggest vote count we could get to overturn that or to send a
message was about 175 votes. But one of the other main reasons that I
have voted in the past against most-favored-nation trade status for
China is that under the current trading agreement with China, we
basically get taken to the cleaners. That is why we have such a huge
trade deficit with China. They can make goods over there and they can
send it into the U.S. when we have very low import tariffs on their
goods but then they slap high tariffs on our goods and commodities
going over there. The current situation is just not fair. That has
created a trade imbalance. That is why this new trade agreement is such
a good thing.
As I said, I previously voted against the annual extension of normal
trade relations with China. I did so because past extensions gave China
open access to our markets, as I have said. This has been a one-way
street right into the American market. I also voted ``no'' because of
concern about Chinese forced abortions and other human rights
violations, Chinese espionage, and Chinese arm sales to Iran and Iraq.
I would point out that these same issues will remain concerns even if
the United States chooses not to gain access to China's markets.
However, I have come to the conclusion that the best chance we have to
address those human rights violations is by actively engaging the
Chinese people politically and economically. We cannot defend fair
labor practices in China by staying at home, by defaulting on our
obligation to stand up for the rights of workers and democratic values.
What better way to improve labor conditions for the Chinese people than
to introduce rule of law into their business relations. No kickbacks.
No bribes. In addition, Chinese workers employed by American companies
clearly enjoy better working conditions, higher pay and an improved
quality of life. Now we have the opportunity to extend these
opportunities to more Chinese workers, allowing them to absorb and
practice our values. What better way to spark change in a closed
Communist society than by introducing western technology and ideology.
The elimination of tariffs on information technology will help open
China to the global information highway. That highway of American
enterprise and values will run right into China, right through that
great wall, and it will challenge its political and social repression.
We do not need to dispatch an army to carry forth our values and
market system. Our farmers, our workers and our businesspeople have the
tools to do that job.
But do not just take my word for it. Listen to one of China's most
prominent dissidents, Bao Tong, who has endured tapped phones, police
surveillance and restrictions on everyday freedoms. Despite that
treatment by the Communists, Bao Tong has this message for Congress:
Pass permanent normal trade relations with China. Pull China into
international agreements like WTO. Bao believes this will force China
to adhere to international standards on human rights. Bao says, ``It
doesn't make sense to use trade as a lever. It just doesn't work.''
That goes back to my comments about the annual pro forma debate that we
have had on this issue. Or listen to Dai Qing, perhaps China's most
prominent environmentalist and independent political thinker who has
served time in prison because she opposed the 1989 crackdown on student
protesters in Tiananmen Square. She said, ``All the fights for a better
environment, labor rights and human rights, these fights we will fight
in China tomorrow, but first we must break the monopoly of the state.
To do that, we need a freer market and the competition mandated by the
World Trade Organization.'' She also said, ``One of the main economic
and political problems in China today is our monopoly system, and a
monopoly on power and business monopolies. The World Trade
Organization's rules would naturally encourage competition and that's
bad for both monopolies.''
Mr. Speaker, what happens if next week we say no to this opportunity?
Well, China will still join the World Trade Organization, but China
will be trading with our competitors, not us, the European Union,
Australia, other Southeast Asia countries. In addition, if we reject
permanent normal trade relations, the Chinese leadership will feel the
United States, the world's only superpower, with its economic, military
and democratic arsenal, they will feel that we want to isolate the
mainland. Remember, China has a long history of xenophobia. We do not
need to play to that xenophobic tradition. That perception that the
Chinese could have of our motives could do us and the world a lot of
harm.
[[Page H3302]]
I want to return to the symbolism of this vote. While the symbolism
of a defeat for permanent normal trade relations might benefit certain
groups in the short run, in the long run I think it will hurt us all.
Paul Krugman in the Washington Post asked us to consider the symbolism
that rejecting permanent normal trade relations would send to other
governments. The United States, the home of the free market, the home
of the free society, would appear to be saying, ``Sorry, markets and
democracy work for us but we aren't letting any more countries into the
club.''
Mr. Speaker, a national poll last week by the Wall Street Journal/NBC
News showed that Americans favor approving the trade agreement with
China by a margin of 44 percent to 37 percent. So it is clear, the
public is still learning about this very important issue.
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That is why I sent a letter on permanent normal trade relations to
every household in my district explaining what is at stake and why I
support that agreement.
Mr. Speaker, I will vote next week for permanent normal trade
relations with China on its merits. It is a good agreement for my
state. It is a very good treaty for our country. It is much more fair
to us than our current trade relationship. This new agreement will
actually grow jobs in the United States, not lose them.
Passing permanent normal trade relations with China will send a
strong symbolic message abroad, about America's commitment to democracy
and market-based economics. I can think of no more important vote that
any of us will make in a long time about the future of our economy and
our position in a global market.
I urge all my colleagues on both sides of the aisle, do the right
thing; vote for permanent normal trade relations with China, and we
will continue to shine the spotlight on China's human rights violations
and continue to put heat on them to act in a more responsible way.
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