[Congressional Record (Bound Edition), Volume 146 (2000), Part 12]
[Senate]
[Pages 16979-16981]
[From the U.S. Government Publishing Office, www.gpo.gov]



 TO AUTHORIZE EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PEOPLE'S 
            REPUBLIC OF CHINA--MOTION TO PROCEED--Continued

  The PRESIDING OFFICER. The distinguished Senator from Iowa is 
recognized.
  Mr. GRASSLEY. Mr. President, we started earlier today the initial 
discussion of what I call the China trade bill, the Senate by law 
ratifying the agreement that has been worked out by this administration 
and the Government of China to level the playing field for trade 
between the United States and China.
  In a simple form, the bill before us will give access for U.S. 
exporters--meaning manufacturing, services and agriculture--to China on 
the same basis that China has had access to our markets for the last 15 
to 20 years.
  When you have an opportunity for our people to export to China, to 
sell to China, on the same basis that China has been able to do with 
the United States, it is a win-win situation. My Midwestern common 
sense tells me this is a good situation for America. So that debate has 
started today.
  We are on the question of the motion to proceed. I support this 
motion. I hope we get to a final vote on the bill, because I think it 
will pass by an overwhelming margin, not the very narrow margin that it 
passed in the House of Representatives. This will give us an enhanced 
opportunity to do business with 20 percent of the world's population.
  There are many reasons I support this bill, which is probably one of 
the most important matters to come before the Senate this session. But 
today, I would like to address just two reasons. The first is the issue 
of jobs, a very positive aspect to this legislation. The second is 
human rights, which some people view as a reason for being against this 
legislation. I suggest to you that even though the human rights 
situation in China is not good, trade gives us an opportunity to 
improve that human rights situation.
  In each case, I want to address concerns of real people in a 
commonsense way. Too often, when we talk about major policy changes, we 
do so in lofty terms, not connected to the people's concerns and their 
interests, and what is important to everyday working Americans.
  Today, I would like to talk about how real people will be affected by 
making it possible for the United States to take advantage of China's 
pending accession to the World Trade Organization.
  Lowering protectionist tariffs and tearing down trade barriers that 
discriminate against American products will create many thousands of 
new American jobs. A new era of free trade with China, under the WTO 
World Trade Organization disciplines, will help us continue to build 
the tremendous prosperity that we enjoy as a direct result--a very 
direct result--of the success of our postwar trading system; going back 
to 1947, as we have used the gradual freeing up of trade around the 
world to expand the world economic pie. Because of free trade, with a 
population that is now about double what it was back then, we now have 
more prosperity for more people. If we had not expanded the world 
economic pie, we would, in fact, have less for our increased world 
population. So think in terms of the economic enhancement of 
individuals and the political stability that comes from it.
  In my State of Iowa, we know our economic interdependence with the 
rest of the world is not a policy choice; it is a fact. Trade means 
jobs anywhere, but particularly in my State. In just 5 years, Iowa's 
merchandise export to China has soared 35 percent.
  In the Waterloo-Cedar Falls area--that is close to where I was born, 
and where I have lived my entire life--recent merchandise sales to 
China have surged 806 percent. Iowa's trade-related jobs mean that a 
young couple can afford their first home. They can afford tuition for 
school. They can afford to buy a car. They can afford to care for their 
families, the way working people want to care for their families.
  But unless we seize this moment, this opportunity will pass us by. 
When China enters the World Trade Organization, which it will do 
regardless of the outcome of this vote on the Senate floor--and if we 
do not remove all of our current conditions on trade with China, which 
this bill does--other countries will reap the rewards of a trade deal 
that we helped negotiate. American companies then would be forced to 
sit on the sidelines as companies from the European Union or Asia or 
Africa or elsewhere take our business and ultimately take our jobs 
because we have not assumed this opportunity of freer trade with China.
  If we pass up this opportunity, America will be at the end of the 
line of the 137 other WTO countries, that will be standing in front of 
us, trading with China.
  I want to give my colleagues two real-life examples from my State of 
Iowa.
  Tucker Manufacturing Company is a family-owned business in Cedar 
Rapids, Iowa, that has developed a unique window-washing system which 
it makes and sells around the world. Tucker has made a few small sample 
sales to China and has found a distributor that would like to make a 
large order. Tucker knows that in the past state-owned distribution 
companies in China have dictated commercial terms that have often 
harmed exporting companies like Tucker. They would like to see China 
become a World Trade Organization

[[Page 16980]]

member so that distribution rights are no longer strictly controlled by 
the state, meaning the country and Government of China, and so that any 
new transactions in China then are protected by the rule of law, which 
is what the World Trade Organization regime is all about--the rule of 
law, predictability in international trade, the resolving of disputes 
in international trade.
  A second example from Cedar Rapids, Iowa, is the Diamond V Mills 
Company, which I visited just last week. I had the opportunity to 
present it with the Commerce Department's E-Star Award for excellence 
in exports. They had already received the E award, now they have the E-
Star award that indicates they have been highly successful in 
international trade on an ongoing basis.
  Diamond V Mills has exported its yeast culture feed ingredients to 
China since 1996, but they did it by operating through a local 
distributor. The company wants to sell directly to its end user but has 
not been able to do so--until this agreement goes through--due to 
China's current restrictions on a foreign company's rights to 
distribute its products in China.
  Under the WTO accession agreement, China has committed to opening its 
markets to the private distribution networks that Diamond V Mills of 
Cedar Rapids needs. If Diamond V Mills can get access to new 
distribution networks in China, it will generate more sales, earn more 
revenue, provide more jobs in Iowa, create more opportunity and more 
prosperity for everybody.
  These are only two examples of how Iowa's manufacturing sector will 
benefit through expanded trade with China. There are many more. We have 
Iowa's farmers and agricultural producers seeing tremendous benefits 
from this proposal as well because China's World Trade Organization 
accession agreement will dramatically lower agricultural tariffs and 
eliminate many nontariff trade barriers. As a result, our farmers will 
sell more soybeans and more soy oil to China than ever before.
  After the United States, China is the second largest consumer of corn 
and corn products in the world. As the distinguished Presiding Officer 
knows, my State is No. 1 in the production of corn in the United 
States, as his State is No. 1 in the production of wheat.
  China's WTO commitments will create a great export opportunity for 
Iowa's corn growers and for corn growers across the United States.
  Iowa State University professor Dermot Hayes recently told my 
international trade subcommittee that if China fully implements its WTO 
accession commitments we could see hog prices rise by as much as $5 per 
head. That is a larger benefit than any of the Government support 
programs we have heard about lately.
  Unlike some of the proposals I have heard, we would not have to 
impair our obligations under the WTO's subsidies agreement, or the WTO 
agriculture agreement, to do it.
  Second, I want to discuss the issue of human rights and political 
freedoms in China because this is a legitimate issue, even though I 
disagree with the argument that killing this bill is going to help 
human rights in China. I wish to make it clear I don't find fault with 
those who bring it up as part of this debate because I think wherever 
we can try to say to China that they are going down the wrong road on 
human rights, they are hurting their country, not us.
  Like all Americans, Iowans care deeply about the struggle for 
liberty. Many have family members who have given their lives in 
freedom's cause, or they know someone who has. It hurts us to hear 
horrible accounts of repression. We are rightly repelled. We don't 
understand why it happens, and we want it to change because we think 
freedom is an innate right for the Chinese as well as for Americans. 
But the fact is, we can never turn China into a model of constitutional 
democracy if we isolate them economically. However, we can help bring 
about fundamental reform in China's economy and political structure 
through enforceable WTO rules that do not discriminate and are 
consistent and are not arbitrary.
  In addition, I have a firm conviction that regardless of how 
necessary a political and rule of law environment is for trade to take 
place and political leaders such as the President of the United States 
and other people negotiating with the Chinese, none of those efforts, 
as important as they are, can compare to the opportunities for 
advancing political freedom and human rights that will come when 
millions of American businesspeople interact with millions of Chinese 
businesspeople on a day-to-day basis. That is going to do more to 
improve human rights than anything else.
  When it comes to making decisions, the WTO applies the democratic 
principle of consensus rule. All of these principles--democratic 
decisionmaking, nondiscrimination, nonarbitrary regulation--are also 
the obvious, essential ingredients of political freedom. The process of 
economic reform, guided by China's WTO commitments, will mean that 
China will become more open. They will eventually become more free. We 
know, perhaps better than any nation on Earth, that economic and 
political freedoms share deep roots.
  That economic and political rights go hand in hand is at the heart of 
America's constitutional heritage. Many in China know that economic and 
political reform are closely linked as well. That is why many of 
China's military hardliners oppose China's entry into the World Trade 
Organization.
  Perhaps it is this inevitable linking between economic reform and 
political freedom that has inspired the Dalai Lama, no stranger to 
China's religious repression, to say:

       I have always stressed that China should not be isolated. 
     China must be brought into the mainstream of the world 
     community. . . .

  To those who doubt that economic reform has occurred in China, or 
that it is significant, I ask them to consider how much has changed in 
the last half century. You will remember that in 1952, China's 
Communist government mounted a wide-ranging crusade to undermine 
private entrepreneurs, businesspeople were commonly condemned as 
``counterrevolutionaries,'' and many were assessed large fines and 
forced out of business.
  In fact, by 1956, China required all private firms to be jointly 
owned and, in fact, run by the government. In practice, this meant that 
we had state control of all private enterprise in China. It wasn't 
until the early 1980s that private enterprise began to reemerge in 
China. More significantly, it wasn't until 1988 that the private 
economy even had a defined legal status in China.
  Today, 12 years later, China is a different country. Today, young 
Chinese engineers who studied and worked in California's Silicon Valley 
are going back to China, lured by entrepreneurial opportunities that 
didn't even exist a few years ago.
  The number of individuals employed by the private sector in China has 
soared by over 31 percent in the last 3 years. That is bad news for 
China's state-owned enterprises. That happens to also be bad news for 
China's People's Liberation Army, which depends on many state-run 
businesses for revenue and have opposed these reforms that are going on 
within China, including this agreement before the Senate.
  But this development is good news for the cause of freedom. As the 
number of individuals employed in the private sector rises, the state 
will have less and less direct control over how people think and how 
people react to political change.
  Massachusetts Institute of Technology professor Edward Steinfeld is 
one of our country's keenest scholars on what goes on in China. This is 
what he had to say about the meaning of China's World Trade 
Organization concessions on China's direction as a country:

       The concessions of 1999 represented a thorough reversal of 
     course. Instead of reform serving to sustain the core, the 
     core itself would be destroyed to save reform, along with the 
     growth, prosperity, and stability reform has brought to 
     China.
       In the new view, instead of using market forces to save 
     state socialism, state socialism itself would have to be 
     sacrificed to preserve the market economy.

  I agree with Professor Steinfeld. China's membership in the World 
Trade

[[Page 16981]]

Organization will require it to reform a very large portion of its 
economy, and not only to comply with WTO rules, but to be able to 
compete internationally.
  With a ``yes'' vote on the motion to proceed and a ``yes'' vote on 
approving permanent normal trading status for China, we can help change 
the world. China constitutes one-fifth of the world's population. We 
can be on the right side of history. We ought to be on the right side 
of history. I urge a vote for this motion to proceed and a vote of yes 
on final passage.
  I yield the floor.
  Mr. REID. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Brownback). Without objection, it is so 
ordered.
  The PRESIDING OFFICER. The Democratic leader.
  Mr. DASCHLE. Mr. President, I would like to use an amount of my 
leader time prior to the time we go to the energy and water bill to 
speak on an unrelated matter.
  The PRESIDING OFFICER. The Democratic leader is recognized.

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