[Congressional Record Volume 146, Number 65 (Tuesday, May 23, 2000)]
[House]
[Pages H3637-H3642]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PERMANENT MOST FAVORED NATION STATUS FOR CHINA
The SPEAKER pro tempore (Mr. Sweeney). Under the Speaker's announced
policy of January 6, 1999, the gentleman from Ohio (Mr. Kucinich) is
recognized for 55 minutes.
Mr. KUCINICH. Mr. Speaker, tonight I am going to be speaking about
the permanent most favored nation status for China. And in the time
that follows, I hope to demonstrate to the Members of Congress why this
legislation ought to be defeated tomorrow and why this Congress needs
to return to the roots of our country, the historic roots which have
been the result of people really caring about human rights, caring
about the rights of all people.
When this country was founded, it was founded by people who felt
that, as the Declaration of Independence indicates, it was necessary
for people to dissolve the political bands which have connected them
with another, and to assume among the powers of earth the separate and
equal station to which the laws of nature and of nature's God entitle
them. A decent respect to the opinions of mankind require that we
should declare the causes which impel them to the separation.
And in that Declaration, which is our heritage, it goes on to say we
hold these truths to be self-evident that all men are created equal,
that they are endowed by their creator with certain inalienable rights
that among these are life, liberty and the pursuit of happiness, that
to secure these rights, governments are instituted among men deriving
their just powers from the consent of the governed.
Mr. Speaker, this Congress exists as part of a continuum of
representatives who have come here throughout the ages, and so many of
us raised our right hand to say the words of our desire to protect and
defend the Constitution of the United States as my good friend, the
gentleman from Colorado (Mr. Tancredo), spoke so well a few hours ago,
our purpose as Members of Congress, our first and foremost to defend
the interests of the United States of America.
Now, certainly as Members of Congress, we can make the decision to
see whether it is the interest of the American people to engage in
trade with nations of the world, and we have done that. Indeed, this
House of Representatives has taken the position time after time that we
should use trade as a means of exchange among the nations, but at no
time has this House ever stood back and renounced its obligation to
uphold the highest of principles upon which this country is based.
I do not think there is a Member of this House who came to Washington
without being animated by those lively sentiments of faith in America,
of hope in our country, of a belief in the American dream, of wanting
to share that with everyone. And so when we cast a vote on trade
issues, we may do so with the highest expectations, but we must do so
with the proper dose of reality. That is why, Mr. Speaker, I think it
is important that when we are looking at all the promises and claims
that are being made about the benefits of permanent most favored nation
trading status for China, that we look at the recent history of the
implementation of a major trade agreement which some Members of this
Congress had the opportunity to vote on, a major trade agreement which
was promoted by the current administration, a major trade agreement
known as the North American Free Trade Agreement, NAFTA, that took
effect with such great fanfare on January 1, 1994.
{time} 2215
In this report by Charles McMillion, he said it was ``the first ever
experiment in rapid and sweeping deregulation of investment and trade
policies between a low-wage developing country and highly industrial
countries.''
That seems at this moment as an echo of what we are hearing in this
debate today over China, that it is still another experiment in rapid
and sweeping deregulation of investment and
[[Page H3638]]
trade policies between a low-wage developing country and a highly
industrialized country, the United States of America.
Over 6 years later, we have the returns from all the promises that
were made from NAFTA. We remember those promises. As Mr. McMillion
states in his report, ``NAFTA advocates insisted that the agreement
would create good U.S. jobs by providing the U.S. a total trade
surplus,'' and hear that word, they promised ``a surplus in goods with
Mexico of $50 billion accumulated over NAFTA's first 6 years.'' But in
the first 6 years, the U.S. has accumulated a trade deficit in goods
with Mexico of about $93 billion. That deficit translates into a loss
of American jobs. So the promises of a $50 billion surplus suddenly are
turned into a $93 billion deficit.
McMillion goes on to say that NAFTA advocates expected the agreement
to provide U.S. advantage over the rest of the world in Mexico trade,
assuring a U.S. trade surplus far into the future. During the first 6
years of NAFTA, the U.S. suffered total current account losses to
Mexico of $118 billion. The rest of the world enjoyed a surplus, a
surplus from Mexico, of $190 billion.
In his study, he points out that Mexico exported 621,000 cars, just
to the U.S., in the 12 months to June 1999, while the U.S. base
producers were able to export only 477,000 cars to the entire world.
The U.S. net export deficit with Mexico for cars, light trucks and
parts reached $16.6 billion in 1998 and could exceed $20 billion in
1999. The deficit with Mexico for computers and computer components
reached $2.2 billion in 1998, and may reach $4 billion in 1999.
Now, Mr. Speaker, I represent Cleveland, Ohio, in the Congress of the
United States. My community is a city of auto workers, of steelworkers,
of people who work in industries connected to aerospace, of small
machine shops. It is a city which has a growing medical industry. It is
a city which is trying to move towards high-tech. It is a city that I
am proud to represent in the Congress of the United States, a city
which is an investment banking and also insurance growth community.
But the jobs that made Cleveland, Ohio, great, indeed the jobs that
made this Nation a great Nation, were the jobs in steel, in automotive
and in aerospace, jobs which helped to protect this country through two
world wars, jobs which are part of our strategic industrial base, jobs
which now we are finding through a single trade agreement, the North
American Free Trade Agreement, jobs which began to slip away, not only
from Cleveland, but good paying jobs slipping away all over the
country.
The U.S. net export losses to Mexico trade suggest a displacement of
378,000 higher wage U.S. goods producing jobs shifted to service
producing jobs where weekly wages are 38 percent lower, according to
the McMillion report.
The calculations of NAFTA's strongest supporters show that even
before NAFTA, wages associated with U.S. exports to Mexico paid less
than jobs displaced by U.S. exports from Mexico. NAFTA's investor
guarantees, threats of relocation and the size and growth of the
Mexican labor force had an even greater effect in depressing U.S. wages
and profits.
Now, I use this as a prologue to the discussion about China, because
trade with China dwarfs trade with Mexico. At this very moment, the
United States annual deficit for trade with Mexico is $70 billion.
Since 1992, our trade deficit with China is over $350 billion. Those
are American jobs, and they are not just shoes, they are not just
handbags, they are high-tech jobs, which I am going to get into in a
moment.
What about permanent MFN status with China? Contrary to what certain
special interests are saying to Capitol Hill, it is neither necessary
nor desirable to grant China permanent MFN trading status. Instead,
Congress can and should continue to review China's trading status on an
annual basis. Permanent MFN is not necessary. We know the WTO does not
require that the U.S. grant China permanent MFN. In fact, the
international trade agreement only requires that China receive MFN, but
it does not specify that the award be on a permanent basis.
We could continue to review China's trading status on an annual basis
and satisfy the WTO. So long as the U.S. does not allow the status to
lapse, we would be in compliance without international trade
obligations. There is no legal reason requiring Congress to give China
permanent MFN status. That is just not my legal opinion, it is that of
the Secretary of Commerce, William Daley. At a news conference on
December 16, 1999, Secretary of Commerce Daley admitted to a reporter
for a Washington trade journal that permanent MFN is not legally
necessary. However, the administration emphatically wants permanent
status.
Let me say why permanent status is not desirable. Permanent MFN for
China will cost the U.S. the best leverage we have to influence China
to enact worker rights, human rights and religious rights and
protections. At the current time, the U.S. buys about 40 percent of
China's exports, making it a consumer with a lot of clout. It is hardly
that we are in a position of being a helpless nation here. We still can
and should set the agenda. So long as the U.S. annually continues to
review China's trade status, we have the potential ability to use
access to the U.S. market as leverage for gains in worker and human
rights. But once China is given permanent MFN, we lose that leverage,
and China will be free to attract multinational capital on the promise
of super low wages, medieval workplace conditions and prison labor.
Indeed, and unfortunately, that is what some of our global
corporations are looking for. Recent history shows that the current
Chinese regime is completely incapable of reform on its own. Consider
the case of the 1992 memorandum of understanding between the United
States and China on prison labor when China agreed to take measures to
halt the export of products made with forced labor. According to a
recent State Department report, and this is a quote, ``In all cases,''
and that is of forced labor identified by U.S. customs, ``the Chinese
Ministry of Justice refused the request, ignored it, or simply denied
the allegations without further elaboration.''
If America gives up its annual review of China's trade status,
Congress will be unable to do anything about worker rights there.
Furthermore, giving China permanent MFN will be harmful to the U.S.
economy, since the record trade deficit with China and attendant
problems such as loss of U.S. jobs and lower average wages in the
United States will worsen. For 1999, the trade deficit is likely to be
nearly $70 billion. Once China is awarded permanent MFN and WTO
membership, the trade deficit will worsen.
In its September 30 report, the International Trade Commission
concluded that China's accession to the WTO would cause an increase in
the U.S. trade deficit with China. As a matter of fact, the news today
is that this deal may actually hurt the trade deficit, and we all know
that, that it will make America's already huge trade deficit with China
worse, rather than better. This report from the Associated Press
economics writer, Martin Crutsinger, says opponents have gleefully
seized on the report by the U.S. International Trade Commission to do
their own analysis, projecting the China deal will result in a loss of
872,000 American jobs over the next decade.
That is 872,000 American jobs projected to be lost over the next
decade. Will those be jobs in Cleveland, Ohio? Will those be jobs in
New York? Will they be jobs in New Jersey? Will they be jobs in
Pennsylvania, in Michigan, throughout Ohio, in Wisconsin? Will they be
jobs in California? Will they be jobs in Texas? They will be jobs from
all over this country.
A little bit later on, Mr. Speaker, I am going to address
categorically where our high-tech industries are at risk in this China
trade deal. I will address categorically where labor rights violations
are taking place, and I will address categorically where human rights
and religious persecution, human rights violations and religious
persecution is taking place.
Concluding for the moment, there is no legal requirement to award
China permanent MFN. Permanent MFN would be a drag on the U.S. economy
and cost us the best leverage we have to promote justice in China and
throughout the world. So let us avoid a travesty. The President and the
Speaker of the House and everyone should chime in and ask Congress to
continue
[[Page H3639]]
its annual review of China's trade status, and even at this late moment
I say, we can come together and approve unanimously of an annual
review, but China should not be given permanent MFN status.
At this point I would like to recognize my good friend the gentleman
from California (Mr. Sherman), Mr. Speaker, if I may yield for a
moment, from Sherman Oaks, California, who so ably represents not only
that district, but the State of California in this Congress. I am
honored to have the gentleman here this evening, and I am so grateful
to have the opportunity to share this forum with the gentleman.
Mr. SHERMAN. Mr. Speaker, I thank the distinguished gentleman from
Ohio.
Mr. Speaker, I am for trade. I am for engagement with China. I am for
American involvement in international organizations that took the lead
in keeping us involved in the IMF. But I am against isolationism, I am
against protectionism, and I am against this deal.
I want to focus in the minutes that I have on three new developments
that occurred today, that I hope Members listening at home or back in
their offices will focus on. But, before I do, I want to make a couple
of comments building on what my distinguished colleague had to say.
The gentleman pointed out that this whole WTO thing could take place
without granting permanent most-favored-nation status to China. In
doing so I think the gentleman focused on what this deal is really
about. It is not about us getting access to their markets, it is about
them having permanent access to our markets.
Corporate America does not see China as a great place to sell things;
they see it as a great place to make things to sell here. The best
example of that is the fact that India is virtually as large as China,
and I have gone the last 3 months without a single business
organization saying, ``Oh, my God, there are a billion consumers in
India,'' because China offers not a billion consumers, but the largest
pool of near slave labor available to those who want to manufacture
there and exploit the market here.
{time} 2230
They are not willing to make the major corporate investments in
factories unless they are sure that they will have permanent access to
the American market. Those factories ought to be built here. We should
not be facilitating the construction of them in China.
Mr. Speaker, this deal is good for profits; it is bad for working
American families. It is good for the central committee of the
Communist Party of China, which runs that country and has a monopoly of
power and endorses that agreement; it is good for the Central Committee
of the Communist party; it is bad for those who seek freedom in China.
This deal is good for the People's Liberation Army of China, without
whose consent China could not have made this deal. But while it is good
for the PLA, it is bad for American security interests.
There are three new developments. The first was brought up by the
distinguished gentleman from Ohio, and that is the report issued by the
U.S. International Trade Commission. This is the official government
entity designed to evaluate trade agreements. The study was requested
by U.S. Trade Representative Charlene Barshefsky, the chief
administration point person on negotiating this deal. She asked for the
study. The study came in and said, this does not just make our trade
deficit with China permanent, it makes it bigger. Upon the release of
the study, Ms. Barshefsky instead says that the study was premature.
Well, that is obvious. A study that helps Congress reject this
agreement is premature unless it is released after we vote.
Mr. Speaker, this study came in right at the right time. It was
commissioned by a trade representative who thought it would show that
this deal was good for American working families. It proves the
opposite. As the gentleman from Ohio clearly demonstrates, it costs us
872,000 jobs, but that is an underestimation, because all of the
analysis of the U.S. Trade Commission was done on the basis that China
would at least adhere to the written document. They have not adhered to
their other documents, and in a control and command economy like China,
they do not have to.
Mr. Speaker, here in the United States, we publish laws, and
businesses are free to do what they want as long as they do not violate
those published laws; and if our published laws violate the WTO
agreements, we get taken to WTO court. In China, a telephone call in
the middle of the night from a commissar is all that it takes to get a
business to do something else, and you cannot take a late-night phone
call to WTO court. You cannot even prove it ever existed. All that
happens is that that Chinese businessperson decides not to buy American
goods.
So the first and major development of the day is that the official
government agency that our trade representative, the chief architect of
this deal, asked to evaluate the deal says this deal is bad for
American working families. It is going to cost 872,000 jobs, and I
believe far more.
The second major development was the submission to the Committee on
Rules of this House of the Berman-Weldon amendment. The Committee on
Rules is meeting now. I have been told to expect that they will not
allow that amendment to come before this House.
Why is that amendment so important? The amendment simply states that
if China, after this agreement in joining trade relations with the
United States, easy access to our markets, that if China invades or
blockades Taiwan, that it loses access to our markets, they lose the
PNTR. China will not accept this; hence, it is unlikely that the
administration will accept it, and hence, it is unlikely that the
Committee on Rules will accept it. I would like to be pleasantly
surprised in an hour or two, although I do not think it will happen.
What does this mean to the Chinese? It is sometimes said that China
is inscrutable to the United States, that it is hard for us to know
what their system is doing. Trust me, we are at least as inscrutable to
them. But how will they interpret the proceedings this week in this
House?
An amendment was offered to say that if they invade Taiwan or
blockade Taiwan, they lose their trade privileges. That amendment, if
it is rejected, sends the exact opposite signal. Who is to blame the
Chinese hard-liners if they regard our decision this week to pass PNTR
and not condition it on whether Taiwan is blockaded or invaded, how are
they to interpret that? They are educated in a Marxist approach which
says that corporations are all powerful. They look at this House where
they might see just a little support for that proposition, and they may
very well conclude that their new corporate allies will defend them and
defend open access to America's markets even if they blockade Taiwan.
They could reach that conclusion even if some of us here who know this
House better might reach the same conclusion.
What conclusion will they reach when their trade grows, not to $100
billion or $120 billion? They will reach the conclusion that American
corporations are even more dependent and more powerfully willing to
defend access to the American markets, and that that access will
continue even if they invade or blockade. If they reach that
conclusion, it is not their fault for misinterpreting us. It is our
fault for being ambiguous, because this House this week can stand up
and say that no access to American markets will be available if Taiwan
is invaded or blockaded, or we can do the opposite by remaining silent.
So assuming this bill comes to this floor under a rule that does not
allow consideration of the Berman-Weldon amendment, we should expect
that China will interpret this as a green light and blockading Taiwan,
bringing Taiwan to its knees is relatively, unfortunately, easy.
During World War II, Hitler sent a fleet of submarines to try to
strangle another island nation, Great Britain. He was almost
successful. But what does China have to do to blockade Taiwan? All it
needs is a press release. Imagine a press release from Beijing
announcing that the next oil tanker arriving in a Taiwanese port will
be struck by a Chinese missile. One press release, one missile. They
may even destroy one ship. Would you want to be the captain of the
second freighter or
[[Page H3640]]
oil tanker on its way to Taiwan? The blockade is so easy for China to
do, the only reason they do not do it is fear of American reaction, and
if they can be confident of access to the American market. Well, I
think we could call this bill the Taiwan blockade authorization act,
because that is how it will be interpreted in Beijing.
Mr. Speaker, we cannot put this genie back in the bottle. The issue
has come before this House, and if we deliberately cover our eyes to
the possibility that trade relations would continue while Taiwan was
blockaded, that is the green light the hard-liners are waiting for.
Mr. Speaker, we should be explicit in this bill. Confusion and mis-
com-munication has started wars in the past, even among trading
partners. Look at World War I, for example. So there is nothing but
danger for our national security interests bypassing a bill that
implies without ever stating it that China will have access to our
markets even if it begins hostilities.
So this is an issue before this House; we cannot ignore it.
I see that the gentleman from Ohio has a number of other points to
make, and I yield back to him.
Mr. KUCINICH. Mr. Speaker, I thank the gentleman for his learned
presentation. Certainly, the Berman amendment would add a considerable
element to this debate so as to indicate our interest in seeing the
aggressive nature of Chinese military policy tamed. I might add that
our colleague, the gentleman from Virginia (Mr. Wolf), sent a
communication today which shows that China has recently received cruise
missiles from Russia, a deployment of 24 SSN 22 antiship cruise
missiles on a Chinese Sovremenny class destroyer as the most
significant recent weapons development by the People's Liberation Army
naval forces, according to the Navy officials, and this is in a
Washington Times dispatch. These weapons, according to the headline,
give Beijing a boost in firepower.
I believe in what President Kennedy said years ago when he said, ``We
should not negotiate out of fear, but let us never fear to negotiate.''
So we need to negotiate with China. We need to engage with China, but
perhaps what is in line here is a very long engagement.
Mr. SHERMAN. Mr. Speaker, perhaps we should have a long engagement
before we have a permanent marriage.
Mr. KUCINICH. Precisely the point, I say to the gentleman. Proponents
of permanent MFN for China like to say that once the U.S. gives
permanent MFN to China, exports are going to continue to grow. Since
industries exporting to China employ Americans, permanent MFN must be
good for America, that is what we are told. But I really wonder if it
is that simple.
For example, if the gentleman were told, or if we were told that the
Yankees, I will say Yankees because they are in our American League, if
the Yankees scored 6 runs in a ball game, could we conclude that the
Yankees won?
Mr. SHERMAN. Not with today's juiced baseball, you could not.
Mr. KUCINICH. Right. Everyone knows we have to know how many runs the
Yankees' opponents scored to know if the Yankees' 6 runs were enough to
win. If one is a Cleveland Indians fan one would, for sure.
Mr. Speaker, whether it is baseball or trade flows, people need to
see both sides of the ledger. So what is the economic score? The U.S.
imports from China, much more than the exports to China, according to
data collected by the U.S. Department of Commerce, the U.S. has a trade
deficit of upwards of $70 billion for 1999 alone. So while it is true
that U.S. exports to China have increased, it is also true that imports
from China have increased much more.
Mr. SHERMAN. Mr. Speaker, if the gentleman will yield, I will point
out that we have given China most favored nation status on an annual
basis several years in a row. Their 1999 imports from the United States
are $1 billion less than 1998. So while their exports to the United
States grows and grows and grows exponentially every year, our exports
to them actually shrunk.
Mr. KUCINICH. Mr. Speaker, reclaiming my time, the gentleman has a
good point, and we know that there is more to the U.S.-China
relationship than meets the eye. We have to look at the kind of goods
the U.S. imports from China.
Now, contrary to the myth, the United States does not just import
shoes, but high-tech products from the industries of tomorrow. In
almost every major category of traded goods, from agricultural
commodities to advanced technology products, the U.S. has a deficit
with China.
We wonder, what does all of this mean? Well, China's surpluses in
everything from corn to disk drives means that there is not a market in
China for any American-made products. Lower tariffs and nontariff trade
barriers do not change the fact that China already grows and
manufactures more than their population consumes. So we cannot expect
current trends to reverse. Exports to China will increase; imports from
China will increase much more. I think that when we consider why we
have this big push here for permanent trade status, let us look at it.
Mr. Speaker, the large U.S. corporations are the ones behind the
push. They want it so that they can invest in new factories in China,
use China as their export platform, low wages, no worker rights, no
human rights, no religious freedoms, no freedom of speech, no labor
voice. They want to sell their products back to the U.S. with
confidence that Congress will not levy tariffs or erect trade barriers
in the future. I mean, let us face it. Our ability to influence labor
rights and human rights depends on having an annual review, I say to
the gentleman.
{time} 2245
Mr. SHERMAN. Absolutely. We do not know how much worse things could
get in China. Yes, they are pressing bishops and Catholic and
Protestant workers in China now, but they have not publicly executed
any of them because they are subject to annual review.
If they have permanent trade relations with the United States, then 3
or 10 or 20 executions, whether it be of those practicing Christianity
or those practicing Buddhism in Tibet, would subject China not to the
possibility of losing its trade relationship but only to a harshly
written letter from the United States, a report outlining just how
terrible these violations were.
When we look at China today and see how bad it is, we should not just
look at how bad it is or how much better it might get but how much
worse it might get.
Mr. KUCINICH. Reclaiming my time, the gentleman is absolutely
correct. Even with annual review, now think about this because we have
talked about these things many times, even with annual review, as our
friend, the gentlewoman from Ohio (Ms. Kaptur) has pointed out, the
right to freedom of belief is explicitly denied to 60 million members
of the Communist party of China. The Falun Gong, thousands of their
practitioners have been arrested.
I heard the gentleman from Virginia (Mr. Wolf) on the floor today
saying that eight Catholic bishops were arrested. Now here we are on
the very day we are talking about a medal for the Pope, who I greatly
admire, celebrating his force for spiritual good in this world, China
is arresting Catholic bishops.
Now, is it going to get better if we have no review, I would ask the
gentleman? What does the gentleman think?
Mr. SHERMAN. Well, right now China has been emboldened in a way that
I did not think would occur this particular month. Clamping down on the
religious group that the gentleman pronounces so well, clamping down on
both Catholics and Protestants, a thousand nuns and monks expelled from
their monasteries in Tibet, all in the weeks before we are supposed to
vote. Imagine if this is the last vote. How many more Christian
practitioners, how much more will they clamp down?
Keep in mind the proponents of this deal postulate the idea that with
increased trade there will be a challenge to the monopoly power of the
Communist party of China. Now I do not think that challenge will occur,
but if it does they will clamp down and do whatever it takes to
maintain that monopoly power, and no matter how many executions occur,
the worst the Americans can do to them is a really tough letter and a
really long report, but they will not lose a single penny. That is not
a situation that is conducive to human rights in China.
Mr. KUCINICH. I agree with the gentleman. At the same time, we have
to
[[Page H3641]]
look at the Chinese to know that the Chinese people are our brothers
and sisters. They are not cut off from the grace of God. They are our
brothers and sisters. And because they are our brothers and sisters,
because they are people in China who are suffering under inhumane
working conditions, slave labor conditions, working for 3 cents an hour
making handbags, or a little bit more than that making electronic
equipment, we have a responsibility to stand up for human rights to
review the conduct of their government. Now the development of a new
economic model in any government has to be challenging, we recognize
that, but U.S. corporations have great power. What is happening when
they go to China, it is as if they are averting their eyes. They do not
want to see what is happening, and yet when we see Motorola, figures
available from 1996, now it is billions more since then, Motorola
investing $1.2 billion in China; Atlantic Richfield, $625 million; Coca
Cola, a half a billion dollars; Amoco, $350 million; Ford Motor, $250
million; United Technologies, $250 million; Pepsi Cola, $200 million;
Lucent Technologies, $150 million; General Electric, $165 million.
Now granted, make multiples of that and we will know the investment
today.
My first question is what is wrong with investing in America? My
father fought in World War II, had his leg shot out at a place called
Bougainville, spent all of his life with a limp and a silver plate in
his leg like so many people in that generation who fought for this
country, who fought for that flag, they did not fight for it so their
grandchildren would not be able to get a decent job. They did not fight
for it so American corporations would forget the red, white and blue
and begin to worship the great green god of the dollar bill as if that
is the only value we need to be worried about.
People fought to defend this country because we believe in basic
human dignity, because we believe in human rights, because we believe
in basic freedom, because we believe in human liberty. That is
something that we have believed in through more than 200 years of our
existence as a Nation. That is something that men and women have died
for, and we are going to give it away just with the signature and the
stroke of a pen.
That cannot happen. We cannot stand here and watch while China is
being used with all of its anti-democratic tendencies as an export
platform back to the United States, wiping out millions, eventually, of
American jobs, good-paying jobs. And then where do American workers
stand when they fight for their rights?
Mr. SHERMAN. If the gentleman will yield, I think he makes an
excellent point.
Mr. KUCINICH. Certainly.
Mr. SHERMAN. The gentleman mentioned Motorola, which is bombarding
the country now with an advertisement in which they hold up a cellular
telephone and say that China has 1.2 billion people who might use
cellular telephones, implying that American workers from coast to coast
will be making cellular telephones and shipping them to China.
I think the gentleman would agree that it is more likely that what
Motorola sees there is 1.2 billion potential slave workers. They do not
need them all. They do not need slave workers, but 1.2 billion people
anxious to work for 10 or 15 cents an hour who can make the cellular
phones and ship them here.
Which does the gentleman think is more likely, that Motorola plans to
make something here, paying union wages or high American wages, $10,
$15, $20 an hour, and then sell the product to people who make 15 cents
an hour? Or does the gentleman think there might be more profits in
making something for 15 cents an hour and selling it to those Americans
who still have good jobs?
Mr. KUCINICH. As usual, the gentleman is right on the mark. We know
that these major corporations are looking at China as a labor pool of
1.3 billion.
Here are some quotes that we pulled out from some of our major
corporations. Coca Cola Systems in China spends about $600 million each
year in sourcing all of its raw materials and packages within China.
Delphi Automotive Systems aims to eventually close the gap between the
Chinese automotive component industry and the world. Dow Chemical seeks
to create in China the large scale production required to be a major
supplier to customers in China and beyond. In Eastman Kodak's view, in
a market such as China with the value of businesses expected to grow
rapidly, local manufacturing is simply a better business model. Eastman
Kodak's China manufacturing operations reflect Beijing's determination
to create professional enterprises which could displace imports and
boost tax revenues.
GE Shanghai Silicone's factory will replace imports from the United
States, and on and on and on.
Now in the 10 minutes which we have left, I would like to continue
this colloquy and as the gentleman was talking about the cellular
telephones, I looked at the index to this report by Charles McMillion.
It is a report which talks about China's rapid leap into advanced
technologies. It is really the rapid leap of U.S.-based multinational
corporations into the advanced technologies. They talk about in the
advanced technology products, the U.S. now imports 64 percent more than
it exports.
Now everyone knows about the difficulties we have had in steel,
automotive and aerospace. As a matter of fact, when I first came to
Congress, representatives from Boeing were among the first in my office
already laying the groundwork for permanent trade status for China; and
they were admitting to me openly that the price of entry into the
market in China was for Boeing to give China its prototypes for the
most advanced aircraft manufacturing. So much for the tens of thousands
of American jobs on the line at Boeing and now McDonnell Douglas.
The gentleman made a comment about cellular phones. In this report,
which talks about advanced technology trade losses, they mentioned
cellular phones. In 1999, America imported $98,517,366 worth of
cellular telephones from China.
The gentleman from California (Mr. Sherman) is an astute gentleman.
How much does the gentleman think the United States exported to China?
We bought close to $100 million in cell phones from China. How much did
China buy from the U.S. in cell phones, I would ask the gentleman?
Mr. SHERMAN. I do not think we export cell phones to China. I think
we only export jobs to China.
Mr. KUCINICH. So the gentleman's answer would be none?
Mr. SHERMAN. Zero.
Mr. KUCINICH. The gentleman is correct. Is that your final answer,
though?
Mr. SHERMAN. That is my final answer. If I can make a comment or two
here.
Mr. KUCINICH. Please do.
Mr. SHERMAN. Up until recently it was low-tech factories going to
China to make low-tech products, the handbags the gentleman talked
about. That was because one could not invest a lot of money in China if
they were not sure that the products could come back to the United
States because that was why they were building the factory.
Mr. KUCINICH. Correct.
Mr. SHERMAN. Now that we give guaranteed permanent entry to the U.S.
market, multibillion dollar factories, the kind that make the high-tech
products that we are still as of today competitive in, those can go to
China as well and pay 15 and 20 cents an hour. So it used to be that I
was only worried about the capital flight, that a billion dollar low-
tech factory would be built in China when that same money might be
available here to build a different kind of factory that could employ
American workers and perhaps even making a different product.
Especially our Republican colleagues are always talking about how we
need more capital, how we have to encourage savings. Well, we could
pass the biggest tax bill designed to increase savings and if it leads
to another $30 billion in savings, all of which are corporations
borrowing and investing in China, then we are exporting capital for the
purpose of exporting jobs, and we can imagine what effect that has on
wages. We have enough jobs in America, but we need a situation where
there is the labor shortage that causes those jobs to be paying a
living wage.
Mr. KUCINICH. The gentleman is right. When the gentleman considers
[[Page H3642]]
where we are going in the future with this 64 percent difference in
imports and exports with China, earlier I mentioned the score, let us
look at some scores here. Camcorder, $176 million from China; $58,000
to China. Laser printers, $101 million from China; zero that we sent to
China.
Mr. SHERMAN. So it is not just toys and tennis shoes.
Mr. KUCINICH. Oh, no.
Mr. SHERMAN. This is the kind of stuff that Americans could make
competitively. I have laser printers made in the United States on my
desk now. This is not like little toys that sell for a buck or two.
Mr. KUCINICH. Exactly. Here is another one. Laser printers with
control and printer mechanisms, $88 million from China; zero from the
United States. More scores here. Radio transceivers, $62 million from
China; zero from the United States. Going on, fax machines, $35 million
from China; zero purchased in the United States. And it goes on and on
and on in this report where all of these jobs where China is being used
as this export platform for all of this high-tech but the real thing
that will get, I think, every American, listen to this.
{time} 2300
Turbo jet aircraft engines, $3.7 million from China, zero from the
United States. Turbo prop aircraft engines, $1.5 million from China in
1999, zero from the United States. Radar designed for boat or ship
installation, $1.5 million from China, $8,000 from the United States.
Reception apparatus for radio, $1.3 million from China, zero from the
United States.
Then we get into the military. Listen to this. Parts of military
airplanes and helicopters, we are buying this from China, almost a half
a million dollars, zero sold from the United States. Parts of aircraft
gas turbines, almost $1 million from China, zero from the United
States. Binoculars, almost $1 million, zero from the United States.
Rifles that eject missiles by release of air and gas, over $1 million,
zero from the United States.
Concluding on this part, and something that would really frost most
Americans, we are buying from China bombs, grenades, torpedoes, and
similar munitions of war.
Where are we going with this China trade? It is time for America to
pull back here and to reassess where we are going, how our national
security is at risk, how our stand for human rights and workers' rights
is at risk, and how, if we are to stand for anything as Americans, we
ought to stand for the interest of the United States first and
foremost.
Mr. SHERMAN. Mr. Speaker, if I can interject, I want to commend to
our colleagues, and I thank them for watching us instead of those
Friends reruns on television, a dear colleague that I have addressed
dealing with the Berman-Weldon amendment, summarizing why it is
essential that this amendment be included in anything that passed this
House; otherwise, we would be giving the green light to China to
blockade Taiwan.
A second dear colleague I would like to mention, this was delivered,
I believe, to every Democrat in the House, it is a letter that arrived
just hours ago from the President of the United States, and I want to,
time permitting, respond to a few comments in it, respectfully, because
they are from the President.
The one comment I would like to respond to is the argument that this
is going to lead to higher wages in China. The letter states, ``More
Chinese workers will find jobs with foreign companies where they will
get better paying conditions, and Chinese companies will be forced to
compete. In China, you are dealing with upwards of 700 million workers.
How many more jobs would our investments in China have to create before
we had an effect on the price of laborer the compensation of labor in
China?''
My fear is that it is not when the President says that more Chinese
workers will find jobs in American-owned factories in China, that means
fewer American workers will find jobs with American factories in the
United States.
Mr. KUCINICH. Mr. Speaker, here is the point that comes off of what
the gentleman from California is making in this few minutes that we
have remaining. We are all for the people of China being able to have
workers' rights and have a decent living. It is pretty hard, though,
when we have labor activists that, the minute that they start to
organize, they go to jail.
I have a list here, a pretty long list, of individuals who, the
minute they try to start speaking about trying to get better wages out
of these U.S.- multinational corporations based in China, they end up
in jail.
So I think that, again, Mr. Speaker, I want to thank the gentleman
from California (Mr. Sherman) for his participation in this last hour.
I think that what we have been able to establish is that this Congress
tomorrow ought to be voting to defeat permanent trading status for
China. We should have an annual review. Let us keep China engaged, but
let us not turn away the only real lever that we have, and that is our
ability to set the rules through annual review.
Mr. Speaker, I yield to the gentleman from California (Mr. Sherman)
if he would like a final word.
Mr. SHERMAN. Mr. Speaker, one other thing our colleagues should do
when they first wake up tomorrow morning is ask their staff, is the
Berman-Weldon amendment made in order by the rule? If not, then if we
go forward tomorrow, we are giving the green light for a blockade of
Taiwan.
The least we could do to avoid miscommunication with China is to tell
them that, if their friends in America are powerful enough to give them
permanent most-favored-nation status, at least that status will
disappear should they begin military action against Taiwan.
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