[Congressional Record (Bound Edition), Volume 145 (1999), Part 4]
[Senate]
[Pages 4768-4770]
[From the U.S. Government Publishing Office, www.gpo.gov]




       CHINA'S WTO ACCESSION AND THE VISIT OF PREMIER ZHU RONGJI

  Mr. BAUCUS. Mr. President I rise to offer some thoughts on our 
relations with China, and in particular the prospects of China's WTO 
membership, as the visit of Premier Zhu Rongji to the United States 
next month approaches.


                        context of relationship

  Let me begin, however, with some context.
  During this decade, the Senate and the country as a whole has had an 
intense debate on China policy. Participants in this debate have taken 
radically different views on the prospects of our relationship, and on 
the trade, security and human rights policies we should adopt in it.
  But virtually all participants have held one basic assumption: that 
is, that economic growth in China will inevitably continue at a very 
rapid rate for many years to come, and that consequently, China is a 
``rising'' regional power which is likely to become a superpower 
economy and military power on a par with ourselves.
  For some time I have been skeptical of this assumption. In the past 
year, as

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the Asian financial crisis has affected China more and more deeply, 
another possibility has become quite clear: China's immediate future 
may be one of protracted economic difficulties and social instability 
rather than unbroken ascendance.
  Within the past year, China's growth appears to have dropped 
significantly. Foreign investment commitments have dropped. Signs of 
financial crisis have emerged in Guangdong Province. China's exports 
overall seem to have dropped due to the contraction of Asian economies.
  And unemployment in cities has risen sharply.
  This has coincided with growing strains in our relationship. A number 
of Chinese actions--notably arrests of a number of people associated 
with the Chinese Democracy Party, and a series of statements by Chinese 
officials about American research on theater missile defense--have 
raised a great deal of concern, and rightly so.
  These have been combined with inflammatory reports in the press on 
clandestine Chinese efforts to gain access to American military 
technology, including nuclear weapons design.


                             u.s. response

  How do we respond?
  First of all, we should not simply set these issues aside and we 
should not be intimidated. In our bilateral relationship, I do not, for 
example, agreed with those who say that spying--especially in areas as 
sensitive as nuclear technology--is a natural and tolerable activity by 
foreign governments and that the only fitting response is better 
security in the U.S. Spying is intolerable and a breech of national 
security of this magnitude deserves the most serious attention and 
swiftest of action.
  And I do not agree with Chinese contentions that policies to defend 
American troops abroad, our treaty allies and our homeland from missile 
attack are destabilizing and provocative.
  And with respect to Taiwan, our goal must always be prevention of 
conflict in the Strait, and the more China threatens Taiwan with 
missiles, the more Taiwan will need to provide for security against 
missiles.
  Likewise, we should continue to develop our relationship with our 
Asian allies and the Pacific region generally.
  Special priorities this year should be ratification of the newly 
developed defense guidelines in our alliance with Japan; passage of the 
legislation allowing joint military exercises with the Philippine 
Senate; conclusion of the negotiations toward a commercial agreement 
and normal trade relations with Vietnam; and broader efforts toward 
economic recovery in Asia.
  At the same time, however, we should avoid seeing the present strains 
in relations with China as signs of inevitable confrontation. They 
likely reflect growing fears of domestic unrest and loss of confidence 
in China's future strength, rather than an arrogance born of security 
and success.
  And while we should be firm, we must also avoid being wilfully 
provocative or unwilling to seek out common interests.


                    u.s. interests in wto accession

  That brings me to the largest single item of common interest on our 
agenda: China's potential accession to the WTO.
  Such an accession would have immense potential benefits for both 
America and China.
  From our perspective, it can create a more reciprocal trade 
relationship; promote the rule of law in China; and accelerate the 
long-term trend toward China's integration into the world economy and 
the Pacific region.
  This integration is, we should always remember, immensely important 
to our long-term security interests.
  To choose one example, twenty-five years ago China would likely have 
seen the Asian financial crisis as an opportunity to destabilize the 
governments of Southeast Asia, South Korea and perhaps even Japan. 
Today it sees the crisis as a threat to its own investment and export 
prospects and has thus contributed to IMF recovery packages and 
maintained currency stability.
  Thus China's policy has paralleled and complemented our own; and as a 
result, the Asian financial crisis remains an economic and humanitarian 
issue rather than a political and security crisis.
  From China's perspective, WTO entry has the long-term benefits of 
strengthening guarantees of Chinese access to foreign markets and 
promoting competition and reform in the domestic economy; and the 
short-term benefit of creating a new source of domestic and foreign 
investor confidence at a time of immense economic difficulty.


              commercially meaningful accession essential

  Neither of us, however, will win the full benefits of WTO accession 
unless the accession agreement is of commercially meaningful quality.
  Thus Congress should be vigilant about the details of such an 
agreement. Broadly speaking, this means:
  Significant tariff reductions and other measures to liberalize trade 
in goods;
  Market access for agriculture, including the elimination of phony 
health barriers of Pacific Northwest wheat, citrus, meats and other 
products.
  Liberalization of service sectors including distribution, 
telecommunications, finance, audiovisual and others;
  This requires a lot from China. It is not entirely clear that China 
will make a commercially meaningful offer to us. And if they do not, we 
should be willing to wait rather than push forward with this accession.


            accession must be judged on trade policy merits

  However, if they are ready to make such an offer, the United States 
should clearly be willing to say yes. That should include the permanent 
normal trade relations we offer virtually all WTO members.
  Congress would, of course, have to vote on permanent normal trade 
relations. Because Congress already holds all the cards with respect to 
the Normal Trade Relations vote, I am concerned about proposals to 
create a second vote, which would delay accession by requiring a prior 
vote on admission. This raises a number of troubling questions.
  First, I think we need to be prepared to move quickly if and when we 
get the desired commercially acceptable accession package--simply put, 
we must be prepared to strike when the iron is hot. Such an important 
step should not be hamstrung by requiring a separate vote by Congress.
  Second, the proposal raises constitutional and precedential 
questions. Congress has not voted on any of the previous 100 GATT and 
WTP accessions since 1948, since WTO accessions are executive 
agreements which generally require no U.S. concessions.
  But most important, a vote on WTO accession would more likely be a 
judgment on the immediate state of our overall relationship with China 
than on the trade policy details of the accession.
  China's accession to the WTO is about whether China is ready to trade 
openly and fairly with the United States. Whether China will accept 
rule of law and abide by that rule of law.
  In effect, we would likely hold a set of unilateral trade concessions 
by China to the United States hostage to every other concern we have 
about China--from human rights to security, environment, labor policies 
and much more. The likely result would be an immense loss to the United 
States. Therefore, I do not favor such a proposal and will oppose it on 
the floor.


                               conclusion

  In conclusion, Mr. President, China policy must not be considered 
simply in isolation.
  Premier Zhu's visit offers us an immensely important opportunity, 
both to right the overall course of our relationship and to conclude 
the specific talks over WTO membership for China on the right, 
commercially meaningful basis. I welcome this and hope our colleagues 
will do the same.
  But this relationship is only one piece--important, but only one 
piece--in our broader relationship with the Pacific region and our 
Asian allies.
  If we are to develop these other relationships carefully; if we are 
firm with China when necessary but also willing to seek out areas of 
common interest; if we react to difficult periods with

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confidence in our own strength and commitment to our own interests, we 
can expect a very good future.
  I am fully confident that this is what we will do because we have 
some very important opportunities here to be sure to secure that 
relationship.
  I thank the Chair and I yield the floor.

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