[Congressional Record Volume 150, Number 88 (Wednesday, June 23, 2004)]
[Senate]
[Pages S7242-S7243]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                EXEMPTIONS TO BILATERAL TRADE AGREEMENTS

  Mr. KYL. Mr. President, I am going to talk about an amendment which I 
would have offered to the Defense authorization bill, but in the 
interest of time and to ensure that we can move the bill forward and 
complete work on that bill this evening, I am not going to do so.
  But I would like to discuss the general subject of the amendment, and 
begin by complimenting the chairman of the Armed Services Committee, 
the Senator from Virginia, on recognizing the very important necessity 
of changing our law to help work very closely with two of our greatest 
allies, the United Kingdom and Australia.
  We transfer a lot of technology back and forth between these two 
important allies. It is important that we have the capability of doing 
that. One of the amendments I believe will be adopted as part of this 
Defense authorization bill is a proposal of the distinguished chairman 
that would provide an exemption from U.S. law which requires that a 
bilateral agreement covering a specified set of issues be negotiated in 
order for a country to obtain an export control waiver. The bilateral 
agreements between the United States and the United Kingdom and 
Australia don't quite meet the standard set by U.S. law, so Congress 
needs to grant an exemption for this. The chairman's amendment is very 
important in creating this possibility. I strongly associate myself 
with that amendment.
  Just a note or two about this relationship between the United Kingdom 
and Australia and the United States which illustrates why it is so 
important for us to have this kind of cooperation. I think everybody 
knows the United Kingdom is our strongest ally in the war on terror. In 
addition to the over 8,000 personnel they have provided for the 
military operation, they support food aid. They have contributed a 
tremendous amount of money for reconstruction. Everyone is aware of 
their contribution. Perhaps less well known is the contribution that 
the Australian defense force has made. They contributed about 2,000 of 
their personnel, including a squadron of FA-18s and special forces 
elements, two navy frigates. They have a full variety of operations 
that I won't get into here. They have also been cooperative with us in 
a lot of other areas such as missile defense programs, and so on.
  It is for this reason that the chairman offered his proposal, which I 
am sure will become part of the Defense bill, that will make it easier 
for us to transfer equipment that is important to defense between the 
United States and Great Britain and Australia.
  The amendment I was going to offer simply added or would have added 
another element to that. We won't do it in this bill. Perhaps in 
conference with the House or at some other point, we could do that.
  It is an amendment that would make sure that in the transfer of 
important munitions between the United States and a country such as 
Great Britain, they would never get into the wrong hands. That is to 
say, they wouldn't be exported to a country that might potentially use 
them against the United States. The reason it is a problem is that some 
countries in Europe, for example, are talking about lifting the arms 
embargo that currently exists between those countries, the United 
States, and China.
  We do not send China our most sophisticated military equipment. There 
is a good reason for that. China has announced plans that it is 
developing military equipment that could directly compete with the 
United States in military conflict. So, obviously, we don't want to 
have a law on the books that would make it easy for a country such as 
China to acquire military equipment that we share freely with our 
allies, such as Australia and the United Kingdom, but which we would 
not want to go to a country such as China.
  That is the reason for my concern about this retransfer issue. The 
news reports have indicated, for example, that the United Kingdom might 
agree to support the lifting of the European Union's arms embargo 
against China. That would be an important event. What my amendment 
would have done is simply said if the European Union were to lift its 
arms embargo against China, then no U.S. military equipment could be 
transferred to entities in the European Union unless the President 
certified to Congress that there are binding assurances from those 
entities that our military equipment would

[[Page S7243]]

not be transferred to China. That is a pretty reasonable proposition.

  The State Department strongly opposes the European Union's lifting of 
the arms embargo. Secretary of State Colin Powell said the following on 
March 1:

       Regarding arms sales to China, I expressed concern that the 
     European Union might lift its arms embargo. We and the 
     European Union imposed prohibitions for the same reasons, 
     most especially China's serious human rights abuses, and we 
     believe that those reasons remain valid today.

  It is this government's policy that the arms embargo remain in 
effect. We are talking about military arms now, not trade. We have a 
huge amount of trade with China. We are not talking about that. We are 
talking about limiting certain kinds of militarily useful equipment.
  At a February hearing of the U.S.-China Economic Security Review 
Commission, the Deputy Assistant Secretary in the State Department for 
East Asian and Pacific Affairs, Randy Shriver, also expressed U.S. 
opposition to the European Union's lifting of the embargo for three key 
reasons: the human rights reason, China's lax export control policies, 
and China's military buildup against Taiwan. Similar concerns have been 
put forth by Department of Defense officials.
  While we don't like to talk about it, there has been a change in the 
direction of the buildup of the Chinese military. They have changed 
their doctrine to a doctrine which explicitly is designed to be able to 
defeat U.S. military assets. They are proliferating dangerous weapons 
and technologies to some of our potential adversaries--North Korea, as 
one example.
  The intelligence community produces a semiannual report on 
proliferation. The most recent report stated the following with respect 
to China:

       We cannot rule out . . . some continued contacts [related 
     to assistance to unsafeguarded nuclear facilities] subsequent 
     to the pledge between Chinese entities and entities 
     associated with Pakistan's nuclear weapons program.
       . . . Chinese entities continued to work with Pakistan and 
     Iran on ballistic missile-related projects during the first 
     half of 2003 . . . Chinese-entity ballistic missile 
     assistance helped Iran move toward its goal of becoming self-
     sufficient in the production of ballistic missiles. In 
     addition, firms in China provided dual-use missile-related 
     items, raw materials, and/or assistance to several other 
     countries of proliferation concern--such as Iran, Libya, and 
     North Korea.
       During the first half of 2003, China remained a primary 
     supplier of advanced and conventional weapons to both 
     Pakistan and Iran. Islamabad also continued to negotiate with 
     Beijing for China to build up to four frigates for Pakistan's 
     navy and develop FC-1 fighter aircraft.

  China also continues to threaten democratic Taiwan and to prepare 
militarily for a conflict against not only Taiwan, but also against the 
United States, were U.S. military forces to come to the assistance of 
Taiwan directly.

  According to one recent Washington Post article, the Chinese 
Government warned Taiwan's President Chen Shui-bian to pull back what 
he called ``a dangerous lurch toward independence or face 
destruction.''
  The Defense Department's annual report to Congress on the military 
power of the People's Republic of China warned

     . . . the focus of China's short and medium term conventional 
     modernization efforts has been to prepare for military 
     contingencies in the Taiwan Strait, to include scenarios 
     involving U.S. intervention.

  According to a previous report, the U.S.-China Security Review 
Commission, now the U.S.-China Economic and Security Review Commission, 
China's military was directed to have viable options to retake Taiwan 
by 2005 to 2007. Let me repeat: China's military was told to be 
prepared for conflict with Taiwan by next year.
  The DOD report further comments on the impact of the EU lifting its 
arms embargo stating:

       Efforts under way to lift the European Union embargo on 
     China will provide additional opportunities to acquire 
     specific technologies from Western suppliers.

  That is precisely the problem I think we have to come to grips with 
at some point. I am extraordinarily supportive of efforts to show 
political support for and, in fact, enhanced military cooperation with 
our allies, as the Warner amendment certainly does. But I also think we 
have to look at the export control policies which might, were the 
European Union to lift the arms embargo, allow material weapons 
implications to reach a country such as China. We obviously cooperate 
with China on matters of trade, for example. And it plays an important 
role in the international community. But it is a country with 20 
nuclear-tipped missiles capable of reaching the United States, and the 
Pentagon projects that number will reach 30 by next year.
  It is a country that has an announced policy that would be very 
dangerous if implemented with respect to Taiwan. So if the EU lifts its 
arms embargo, European countries will have the capacity to willingly 
pass military technology, and U.S. military technology, if we don't 
have the proper transfer or retransfer protections in place to a 
country that presents a potential military threat to the United States.
  My amendment would have prevented that from happening by simply 
saying that no U.S. military equipment could be provided to countries 
in the European Union unless there is a Presidential certification that 
there are binding assurances from such country that those goods won't 
be transferred to China.
  I don't think that is too much to ask. I think at some point we are 
going to have to include that within our law. The chairman of the 
committee has been very gracious in talking to me about working toward 
that end. As I said, I think in view of the great importance of moving 
this bill forward, completing action on it so we can provide the 
authority for the Defense Department and the other forces necessary for 
the next year, I am not going to offer my amendment. I certainly hope 
at an appropriate time we will be able to include the concept of what I 
am talking about in this Defense authorization bill.
  I compliment the chairman for the work he has done, and I express my 
hope we can conclude this bill soon. We have been on it now for almost 
a month, or half a month with respect to legislative days. I think it 
is time to come to an agreement on how to end debate and get it done. 
After all, we are in a war. We have to protect the American people and 
provide for the men and women we have put into harm's way for that 
purpose.
  Mr. WARNER. Mr. President, I thank our distinguished colleague from 
Arizona. He has been part of the team that has worked almost every day 
for agreements on the floor, and in consultation on how to deal with 
the various challenges we have had. He has been one of many who has 
made it possible. I think we are making steady progress here. I thank 
the Senator for the reference to the ITAR amendment, which I put in. I 
consulted with him, Senator Biden, and a great many Senators who worked 
with me in making this amendment possible, which is currently a part of 
the managers' package and, I anticipate, will become part of the final 
bill. It is long overdue, as the Senator points out. But this amendment 
is sort of a keystone. I thank the Senator for adding that very 
important piece of legislative history to what I hope will be a 
statutory provision that reflects the goals we both had in mind.
  At this time, I yield the floor.
  The PRESIDING OFFICER. The Senator from Alaska is recognized.
  Mr. STEVENS. Mr. President, I don't know the situation regarding this 
bill.
  The PRESIDING OFFICER. The Senate is in morning business.
  Mr. WARNER. The bill is still actively being considered. There is a 
possibility we can achieve completion of the bill tonight. I remain of 
that view.
  Mr. STEVENS. Mr. President, are we in morning business?
  The PRESIDING OFFICER. Yes, we are in morning business.

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