[Congressional Record (Bound Edition), Volume 146 (2000), Part 12]
[Senate]
[Pages 17508-17549]
[From the U.S. Government Publishing Office, www.gpo.gov]



 TO AUTHORIZE EXTENSION OF NONDISCRIMINATORY TREATMENT TO THE PEOPLE'S 
                           REPUBLIC OF CHINA

  The PRESIDING OFFICER. Under the previous order, the Senate will 
resume consideration of H.R. 4444, which the clerk will report.
  The bill clerk read as follows:

       A bill (H.R. 4444) to authorize extension of 
     nondiscriminatory treatment (normal trade relations 
     treatment) to the People's Republic of China, and to 
     establish a framework for relations between the United States 
     and the People's Republic of China.

  Pending:

       Wellstone amendment No. 4118, to require that the President 
     certify to Congress that the People's Republic of China has 
     taken certain actions with respect to ensuring human rights 
     protection.
       Wellstone amendment No. 4119, to require that the President 
     certify to Congress that the People's Republic of China is in 
     compliance with certain Memoranda of Understanding regarding 
     prohibition on import and export of prison labor products.
       Wellstone amendment No. 4120, to require that the President 
     certify to Congress that the People's Republic of China has 
     responded to inquiries regarding certain people who have been 
     detained or imprisoned and has made substantial progress in 
     releasing from prison people incarcerated for organizing 
     independent trade unions.
       Wellstone amendment No. 4121, to strengthen the rights of 
     workers to associate, organize and strike.
       Smith (of New Hampshire) amendment No. 4129, to require 
     that the Congressional-Executive Commission monitor the 
     cooperation of the People's Republic of China with respect to 
     POW/MIA issues, improvement in the areas of forced abortions, 
     slave labor, and organ harvesting.

  The PRESIDING OFFICER. The distinguished Senator from West Virginia 
is recognized.
  Mr. BYRD. Mr. President, I thank the Chair.
  I believe there is a 1-hour time agreement on this amendment, in 
accordance with the usual form.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. BYRD. That allows me 30 minutes. I may not require all of that 
time today, Mr. President. I do have a second amendment on which there 
was an agreement, I believe last week, Thursday or Friday, which would 
limit the time to 3 hours to be equally divided in accordance with the 
usual form.
  The PRESIDING OFFICER. The Senator is correct.
  Mr. BYRD. I thank the Chair.
  Mr. President, I wonder if I might offer that amendment today but 
take no time on it but just to be sure that it is offered and before 
the Senate? I would prefer that the final action be taken on that 
amendment following action on this first amendment on which I will be 
talking today. Final action at such time as the two leaders may agree.
  The PRESIDING OFFICER. Does the Senator propound that as a unanimous 
consent request?
  Mr. BYRD. Mr. President, I ask unanimous consent that I may offer, 
before I yield the floor, that I may offer a second amendment on which 
there is already a time agreement of 3 hours in accordance with the 
usual form. I have no desire to debate that amendment today or to have 
a vote on it, but I simply want to get it into the mix, and at such 
time as the Senate would vote on the first amendment concerning which I 
would refer to as the subsidy amendment, then once time has run on that 
and we have a vote, I would be happy if we could take up the second 
amendment and have the debate on it and vote on it. If this causes any 
problem with respect to the Thompson amendment, I would be agreeable to 
reducing the time on my second amendment.
  The PRESIDING OFFICER. Is there an objection to the Senator's 
request? The Chair hears none and it is so ordered.
  Mr. BYRD. I thank the Chair.
  Mr. President, the Senate will soon consider the subsidy disclosure 
amendment that I offered last Friday. And I say soon. I do not mean to 
imply that it will be today but it could be. I simply state that within 
the next day or so there will be a vote on that amendment. I urge my 
colleagues to vote in support of my amendment.


                           Amendment No. 4117

 (Purpose: To require disclosure by the People's Republic of China of 
  certain information relating to future compliance with World Trade 
                   Organization subsidy obligations)

  Mr. President, I am informed that the amendment has not been called 
up. I ask that the amendment be called up and stated by the clerk.

[[Page 17509]]

  The PRESIDING OFFICER. The clerk will report the amendment. The bill 
clerk read as follows:

       On page 53, between lines 3 and 4, insert the following:

     SEC. 402. PRC COMPLIANCE WITH WTO SUBSIDY OBLIGATIONS.

       (a) Findings.--Congress makes the following findings:
       (1) A significant portion of the economy of the People's 
     Republic of China consists of state-owned enterprises.
       (2) Chinese state-owned enterprises receive significant 
     subsidies from the Government of the People's Republic of 
     China.
       (3) These Chinese state-owned enterprises account for a 
     significant portion of exports from the People's Republic of 
     China.
       (4) United States manufacturers and farmers should not be 
     expected to compete with these subsidized state-owned 
     enterprises.
       (b) Commitment To Disclose Certain Information.--The United 
     States Trade Representative--
       (1) acting through the Working Party on the Accession of 
     China to the World Trade Organization, shall obtain a 
     commitment by the People's Republic of China to disclose 
     information--
       (A) identifying current state-owned enterprises engaged in 
     export activities;
       (B) describing state support for those enterprises; and
       (C) setting forth a time table for compliance by the 
     People's Republic of China with the subsidy obligations of 
     the World Trade Organization; and
       (2) shall vote against accession by the People's Republic 
     of China to the World Trade Organization without such a 
     commitment.
       (c) State-Owned Enterprise.--The term ``state-owned 
     enterprise'' means a person who is affiliated with, or wholly 
     owned or controlled by, the Government of the People's 
     Republic of China and whose means of production, products, 
     and revenues are owned or controlled by a central or 
     provincial government authority. A person shall be considered 
     to be state-owned if--
       (1) the person's assets are primarily owned by a central or 
     provincial government authority;
       (2) in whole or in part, the person's profits are required 
     to be submitted to a central or provincial government 
     authority;
       (3) the person's production, purchases of inputs, and sales 
     of output, in whole or in part, are subject to state, 
     sectoral, or regional plans; or
       (4) a license issued by a government authority classifies 
     the person as state-owned.

  Mr. BYRD. Parliamentary inquiry: The time utilized by the clerk in 
reading the amendment is not to be charged against my time, is it?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. BYRD. I thank the Chair.
  Mr. President, I yield myself such time as I may require.
  Voting in support of this amendment sends a message that the U.S. 
Senate seeks transparency to China's likely accession to the World 
Trade Organization (WTO). It sends a message that the Senate is 
prepared to ``stand up'' for U.S. industries, such as iron and steel, 
coal mining, and petroleum, as well as U.S. agriculture producers, such 
as the apple industry, and the beef industry. A vote in support of this 
amendment places members on record that they demand China's compliance 
with the promises that China has made under the bilateral trade 
agreement that it signed with the United States.
  This amendment is simple and straightforward. There is no hidden 
poison pill! There is no trick procedure! There is no so-called catch 
twenty-two to this amendment! It does not impede the possible benefits 
of China's accession to the WTO that many of my colleagues are hoping 
for.
  My amendment would require the United States Trade Representative 
(USTR) to obtain a commitment by the People's Republic of China to 
disclose information relating to China's plans to comply with the World 
Trade Organization (WTO) subsidy obligations. The amendment requires 
the USTR to obtain a commitment by China to disclose essential subsidy 
information unique to China's communist market. Specifically, the 
amendment would require China to identify, up front, current state-
owned enterprises engaged in export activities; describe state support 
for those enterprises; set forth a time table for compliance by China 
with the subsidy obligations of the WTO, and the amendment provides the 
USTR with authority to vote against China's WTO accession without such 
a commitment.
  This amendment only seeks to disclose information that confirms 
China's promised compliance with the WTO subsidy rules! It simply seeks 
that China disclose essential subsidy information forthright, openly, 
in the bright light of sunshine on a cloudless day. If China is serious 
about the promises that it has made to the United States on subsidies, 
this information should easily be provided. This amendment also helps 
with the many questions that have surrounded the transparency of the 
WTO rules, in general.
  Let us not place U.S. industries in the position of being unfairly 
injured by Chinese imports illegally subsidized. Without his 
information, U.S. industries will be required to pay the huge fees 
associated with filing antidumping and countervailing duty cases in 
order to pursue data on illegal subsidy behavior in China.
  We know that a significant portion of the economy of the People's 
Republic of China consists of state-owned enterprises! We know that 
Chinese enterprises receive significant subsidies from the Chinese 
government! We know that Chinese state-owned enterprises account for a 
significant portion of exports from the Chinese government!
  This is a matter of fact. So I say to my friends here in the Senate, 
do not fool yourselves! State-owned enterprises continue to be the most 
significant source of employment in most areas in China, and some 
reports suggest that these subsidized enterprises accounted for as much 
as 65 percent of the jobs in many areas of China in 1995--the most 
recent data that the Library of Congress could provide on this matter. 
That's right. State-owned enterprises likely account for 65 percent of 
the jobs in most areas of China. What kind of funds and other 
assistance do state-owned enterprises in China receive from their 
government? We should know. Help me find out by voting in support of 
this amendment!
  We should know. We ought to know. I ask that other Senators help us 
to know by helping us to find out this information. They can do that by 
voting in support of this amendment.
  I understand that China has stepped up to the plate and signed a 
bilateral agreement with the United States that proclaims that China 
will cease the use of subsidies prohibited under the WTO Agreement on 
Subsidies and Countervailing Measures (SCM Agreement), including those 
subsidies contingent upon export performance and subsidies contingent 
upon the use of domestic over imported goods, which are strictly 
prohibited under the SCM. But, guess what? On July 21, 2000--just a few 
weeks ago--the President of the Export-Import Bank of China, Yan Zilin, 
was quoted in the China Daily as saying that China's state-backed 
financing played a strong role in boosting China's exports in the first 
half of this year! China is subsidizing its products to ensure that 
they can be exported into foreign markets--including our market. U.S. 
companies cannot compete with such subsidies. Are Senators aware that 
China's machinery and electronic exports grew by 42.1 percent in the 
first half of 2000 reaching $47.1 billion and accounting for 41.1 
percent of total exports?
  Moreover, since having signed the bilateral agreement with the U.S., 
China has expressed a view that it should be included in the grouping 
of the poorest countries in the WTO--thus exempting China from the 
disciplines of the WTO subsidy codes altogether. We need to send the 
Chinese a strong message about the use of subsidies. We need to put in 
place some disclosure procedures that improve transparency about the 
use of such subsidies to Chinese industries.
  My colleagues who are dead set against any amendments to this bill 
are bound to reflect back to the U.S.-China bilateral agreement and 
argue that the USTR has already secured an agreement from China to 
eliminate all WTO illegal subsidies, and that the WTO requires certain 
compliance procedures already.
  However, the Chinese government oversees the top-to-bottom operations 
of many industries such as iron and steel, coal mining, petroleum 
extraction and refining, as well as the electric power utilities, 
banking, and transportation sectors. The staunchest

[[Page 17510]]

supporters of passing PNTR to China acknowledge that the trade rules 
that the Chinese have agreed to will likely in the short term cause 
widespread employment. If the past is an accurate indicator, the 
Chinese government will be very tempted to simply ignore the rules that 
they agreed to and to use their domestic state-owned enterprises as a 
jobs program.
  Former Secretary of Commerce William Daley stated that ``I do not 
pretend to think that this implementation of this agreement by the 
Chinese will be easy for them (the Chinese), and I would assume that we 
will have to, in the next administration, have to be very aggressive in 
their enforcement of the commitments that have been made.''
  Let me remind you that, without doubt, subsidies with all of our 
trading partners have been very difficult issues to resolve, and not 
all subsidies are actionable. In fact, with years of trade relations 
and negotiations, the U.S. has yet to reach a subsidy understanding 
with the European Union on agriculture or on some industrial sectors 
such as aeronautics.
  There is no harm in the extra measure of protection that is provided 
by my subsidy disclosure amendment. It provides transparency and will 
help many U.S. industries make improved, more educated decisions. So I 
urge members to support U.S. steelworkers, apple growers, electronic 
producers and vote for this amendment.
  How much time remains, Mr. President?
  The PRESIDING OFFICER. The Senator has 15 minutes remaining.
  Mr. BYRD. I yield the floor and I reserve the balance of the time on 
my amendment.
  The PRESIDING OFFICER. The distinguished Senator from Delaware is 
recognized.
  Mr. ROTH. Mr. President, I rise in opposition to the amendment of my 
good friend from West Virginia. I do so because of my concern about the 
impact that amendments could have on this legislation, but also because 
of substantive concerns I have about his proposal.
  Before I address the merits of his amendment, I wanted to take a few 
minutes to respond to the comments he made last week regarding the 
manner in which this legislation is being considered.
  He very colorfully described this legislation as a ``greased pig'' 
and protested that the Senate had not had adequate time to consider its 
merits.
  I am sorry that he feels this way, because with all the time I've 
spent on this legislation and with all the time I've waited for PNTR to 
be brought to the floor, I can say that this is no greased pig.
  This legislation has been given a full and adequate hearing. The 
Finance Committee, which I chair, held three hearings on PNTR this year 
alone. At these hearings we heard from a full range of witnesses, pro 
and con, who discussed the significance of this agreement, not just 
from the perspective of trade, but also from the perspectives of 
foreign policy, human rights, religious freedom, labor rights, and 
others.
  We have also benefited from the careful reviews by the Congressional 
Research Service, the International Trade Commission and the General 
Accounting Office, which has a team of analysts who have been following 
the China negotiations closely for several years now.
  My committee also held an open markup, where the committee approved 
PNTR all but unanimously, by a vote of 19 to 1. My committee also 
considered the House-passed legislation in executive session, where my 
colleagues agreed with me and the distinguished ranking member, Senator 
Moynihan, that we should support the legislation as passed.
  Those actions, together with the hearings on PNTR that have been 
conducted by the Foreign Relations Committee, the Commerce Committee, 
and others hardly constitute rushed consideration of this important 
legislation.
  Let us not forget that this legislation has been on the floor for 
consideration by the full Senate for 6 days, and will likely be here 
for another week. During this time we have been in regular order, and 
have welcomed all amendments. I would be hard pressed to think of 
another piece of recent legislation that has received more time and 
scrutiny that this has.
  All of us who support PNTR understand well that amending this bill 
will threaten its passage. Our opponents, I think, understand this even 
better.
  In the end, it is an exercise of our prerogatives to vote against 
amendments, given the threat they pose to the legislation. It is 
entirely appropriate for us to do so.
  After all, there is nothing that can be added or subtracted from the 
legislation that will enhance our access to the Chinese market. There 
is also nothing that can be added or subtracted that will strengthen 
the unequivocal support contained in this legislation for human rights, 
labor rights, and the rule of law.
  With that said, let me take a few minutes to discuss my colleague's 
amendment regarding subsidies. Although I unequivocally share Senator 
Byrd's views regarding the importance of compliance and regarding the 
significance of China's subsidies commitments, I must still oppose his 
proposal. I do so, not just because of my already stated concern about 
amendments, but also because of the substance of this amendment, which, 
in my view, is both redundant and flawed.
  I would point my good friend to section 1106 of the Trade Act of 
1988. The provision already conditions the President's extension of 
PNTR to China on a finding that China's state-owned enterprises are not 
disruptive to our trading interests. While I know that my colleague's 
amendment is crafted somewhat differently, the fundamental purpose of 
his amendment is already contained in section 1106. As such, it is 
redundant, and not necessary.
  Moreover, this amendment overlooks the fact that we already have a 
specific time table for China to come into compliance with its 
commitments in this area--and that is the date of accession.
  The amendment directs that China identify every entity receiving 
state support, yet the key feature of WTO disciplines is that they 
apply to the subsidy programs themselves. The Chinese have already 
agreed to end all prohibited subsidies, which is far more important 
that asking for a detailed company-by-company accounting of who gets 
what prior to China's entry into the WTO. Such an accounting, 
ironically, would delay accession, undermining the goal of achieving 
the subsidy disciplines in the first place.
  All this is not to say that I, as chairman of the Finance Committee, 
believe that China's integration into the WTO system will be without 
complications. Setbacks and conflicts are inevitable. Anyone who thinks 
otherwise misunderstands the magnitude of the task that lays ahead for 
the Chinese.
  That is why H.R. 4444 already directs USTR to provide a detailed 
annual report on China's compliance with its WTO commitments. That is 
also why the legislation authorizes the funds necessary to allow USTR, 
the Department of Commerce and other agencies to have the personnel 
necessary to monitor China's compliance and to take whatever actions 
necessary to enforce our rights.
  The WTO process also takes full account of the imperative of 
monitoring China's compliance. That is why the WTO will establish a 
transitional review mechanism, through which WTO members will conduct 
regular reviews of all aspects of China's compliance. These reviews 
will be conducted as a matter of course and will avoid the need to 
resort to dispute settlement each time a conflict arises.
  The Chinese have already agreed to such a review, though the 
specifics are still being worked out. That is why H.R. 4444 contains an 
unequivocal statement of Congress's support for such a review. I will 
take this opportunity to restate to both the administration and to the 
Chinese that it is imperative that the PRC be subjected to as rigorous 
a review as possible. This is essential not just for the United States, 
but also for the viability of the WTO.
  In the end, I say to my good friend from West Virginia that we share 
a common objective, to end and I emphasize end--China's prohibited 
subsidies.

[[Page 17511]]

At best, however, this amendment simply delays that goal.
  None of the benefits of China's compliance will become available to 
us unless we pass PNTR. As I have said many times, any amendment added 
to this bill will likely kill this legislation, and kill the benefits 
of China's WTO commitments for our farmers and our workers. That is why 
I must oppose the amendment of my good friend.
  Mr. BYRD. Mr. President, what is the number attached to the pending 
amendment?
  The PRESIDING OFFICER. The number attached to the amendment is 
amendment No. 4117. The distinguished Senator is recognized.


                           Amendment No. 4131

  (Purpose: To improve the certainty of the implementation of import 
  relief in cases of affirmative determinations by the International 
    Trade Commission with respect to market disruption to domestic 
          producers of like or directly competitive products)

  Mr. BYRD. Mr. President, earlier I received the permission of the 
Senate to offer a second amendment, not to have it debated but to have 
it in line for debate. I send that amendment to the desk.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from West Virginia [Mr. Byrd] proposes an 
     amendment numbered 4131.
       Beginning on page 16, strike line 11 and all that follows 
     through line 2 on page 17 and insert the following:
       ``(k) Standard for Presidential Action.--
       ``(1) Findings.--Congress finds that--
       ``(A) market disruption causes serious harm to the United 
     States industrial and agricultural sectors which has grave 
     economic consequences;
       ``(B) product-specific safeguard provisions are a critical 
     component of the United States-China Bilateral Agreement to 
     remedy market disruptions; and
       ``(C) where market disruption occurs it is essential for 
     the Commission and the President to comply with the timeframe 
     stipulated under this Act.
       ``(2) Timeframe for action.--Not later than 15 days after 
     receipt of a recommendation from the Trade Representative 
     under subsection (h) regarding the appropriate action to take 
     to prevent or remedy a market disruption, the President shall 
     provide import relief for the affected industry pursuant to 
     subsection (a), unless the President determines and certifies 
     to the Committee on Ways and Means of the House of 
     Representatives and the Committee on Finance of the Senate 
     that provision of such relief is not in the national economic 
     interest of the United States or, in extraordinary cases, 
     that taking action pursuant to subsection (a) would cause 
     serious harm to the national security of the United States.
       ``(3) Basis for presidential certification.--The President 
     may determine and certify under paragraph (2) that providing 
     import relief is not in the national economic interest of the 
     United States only if the President finds that taking such 
     action would have an adverse impact on the United States 
     economy clearly greater than the benefits of such action.
       ``(4) Automatic relief.--
       ``(A) In general.--If, within 70 days after receipt of the 
     Commission's report described in subsection (g), the 
     President and the United States Trade Representative have not 
     taken action with respect to denying or granting the relief 
     recommended by the Commission, the relief shall automatically 
     take effect.
       ``(B) Period relief in effect.--The relief provided for 
     under subparagraph (A) shall remain in effect without regard 
     to any other provision of this section.

  Mr. BYRD. Mr. President, I thank the clerk. I thank the Chair. As I 
understand it, the number on the amendment which was pending is No. 
4117?
  The PRESIDING OFFICER. The Senator is correct.
  Mr. BYRD. May I inquire of the Chair, what will be the designation of 
the new amendment?
  The PRESIDING OFFICER. Senate amendment No. 4131.
  Mr. BYRD. I thank the Chair.
  Mr. President, I ask unanimous consent that amendment No. 4117 be set 
aside temporarily and that amendment No. 4131 may be the pending 
amendment, with the understanding that it will be temporarily set aside 
also for the rest of the day.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. BYRD. I thank the Chair.
  As I understand it, there are 3 hours on the now-pending amendment, 
to be equally divided in accordance with the usual form.
  How much time is there remaining on No. 4117?
  The PRESIDING OFFICER. There are 12 minutes 41 seconds.
  Mr. BYRD. For my side?
  The PRESIDING OFFICER. That is correct.
  Mr. BYRD. How much is there for the other side?
  The PRESIDING OFFICER. There are 19 minutes 3 seconds.
  Mr. BYRD. I thank the Chair.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  Mr. BYRD. Mr. President, I suggest the absence of a quorum without 
the time being charged against anybody.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Kyl). Without objection, it is so ordered.
  Under the previous order, the hour of 1 p.m. having arrived, the 
Senator from Tennessee, Mr. Thompson, is recognized to offer an 
amendment.


                           Amendment No. 4132

(Purpose: To provide for the application of certain measures to covered 
 countries in response to the contribution to the design, production, 
development, or acquisition of nuclear, chemical, or biological weapons 
                    or ballistic or cruise missiles)

  Mr. THOMPSON. Mr. President, I send an amendment to the desk and ask 
for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report.
  The assistant legislative clerk read as follows:

       The Senator from Tennessee [Mr. Thompson] proposes an 
     amendment numbered 4132.

  Mr. THOMPSON. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The text of the amendment is printed in today's Record under 
``Amendments Submitted.'')
  Mr. THOMPSON. Mr. President, it has been said that the vote on 
permanent normal trade relations with China is one of the most 
significant pieces of legislation this body will have voted on in a 
long time. That very well may be true.
  For a number of reasons, I think most of the Members of this body are 
firmly committed to the concept of free trade. It has done the United 
States very well. We all know we are in the midst of a technological 
revolution that is increasing our productivity in this country and is 
giving us advantages we have never known before in the international 
marketplace. But it is not a zero sum game either; it has been 
beneficial for the whole world.
  I sign on to the concept that free trade leads to free markets and 
that free markets can lead to freer societies. The new trade 
arrangement we will be entering into with the People's Republic of 
China is also unique in many respects. As we know, they have 1.2 
billion-plus people in China. It is a tremendous market upon which 
everyone now is focused. While our trade with China only constitutes 
about 2 percent of our international trade at this point, there are 
those who believe that can be increased substantially.
  Usually we are trading with people who share our ideals and who share 
our values. This is not always true as far as the People's Republic of 
China is concerned. We have just been reminded again by our own State 
Department that the religious persecution that has been going on in 
China for some time actually is not only not showing any improvement; 
it seems to be deteriorating. Yet there are many here who argue--most 
of the people in this Chamber, I assume--that PNTR represents something 
so attractive to this country that we must adopt it, that it is a good 
deal.
  That argument is powerfully set forth, even though the PRC has not

[[Page 17512]]

kept agreements in times past. Even its foremost advocates would have 
to acknowledge that its record on compliance with agreements in times 
past has been spotty at best. When it comes to intellectual property, 
for example, it has been a haven of piracy. They have been major 
exporters of pirated goods from this country.
  One must also wonder whether or not the Chinese can really comply 
with the commitments they have made in light of the economic conditions 
in their country. They are experiencing slower growth rates. They are 
experiencing greater unemployment. We are seeing indications of rioting 
in various parts of China because of unemployment and because of some 
of the things we have seen happen in Russia and other countries. When 
they begin to privatize a little bit, some of the governmental 
officials seem to wind up with the goods and the property, and the 
average people see that and don't like it. It causes instability and in 
some cases rioting. That is prevalent in China right now. If they lower 
the barriers in ways they are talking about, it will only increase that 
instability. Obviously, it will have to be done gradually and over a 
very long period of time.
  That is why it is wise for us not to overhype the benefits we may get 
out of this action. We do about 2 percent of our trade with China now. 
Most people think the maximum probably is going to be up to 2.5 percent 
of our trade. So it is important to our country, but it is not of 
monumental importance, in my opinion, especially in the short run, in 
light of all these immediate difficulties they are going to have in 
implementing what they say they are going to implement.
  We should be realistic, too, especially in light of the fact that we 
are going to be giving up many of the unilateral actions we could take 
under present circumstances. When we go into a WTO context, we will be 
having to depend upon that body, that organization, and the 
international community, as it were, in order to seek compliance. Many 
writers have pointed out this is going to be very difficult because 
China is not a transparent society. How do we prove unfair trade 
practices or violations of WTO if there are no records that are 
decipherable with which to prove it?
  So there are many difficulties with the implementation of this 
agreement which might result in greater riches to this country and 
doing something about the $68, $69 million trade imbalance we have with 
China right now.
  So it is a gamble. It is a gamble on our part that by gradually 
lowering these barriers to trade, by gradually opening up society, this 
trade will lead to a gradual opening up of society with the Internet 
and what not, additional travel and additional exchange programs and 
additional trade; that we will wake up one day and China will be a 
democratic society. And in the meantime, we will maintain their 
friendship so that the world will not be a more dangerous place but a 
less dangerous place.
  That is the gamble we are making because clearly if this is carried 
out the way that people on both sides hope it will be, China will 
become even more powerful economically with all those great numbers of 
people, and therefore they will become much more powerful militarily. 
You only have to read a little bit of what is coming out of China these 
days by their intelligentsia concerning military plans and their view 
of the United States and the fact that many in their country see 
conflict as inevitable, and that they are laying the firm economic 
groundwork so that they can have a growing and more powerful military 
in the future. That should be of great concern to us. We are limited as 
to what we can do about that.
  So we take this gamble, before that comes into fruition--if that is 
their path--that they can open up that society somewhat and lead to a 
more open society, a democratic society. On the other hand, the Chinese 
are taking a gamble in that they can open up economic trade somewhat, 
and they can adopt a more capitalistic society and still maintain 
dictatorial control from the top, and that it will not get away from 
them. Our people say that once that starts happening, once we get in 
there, there will be no stopping it; democracy is right down the road.
  The Chinese don't see it that way. They are gambling. I think it is a 
gamble worth taking. I think it is a gamble worth taking because of our 
leadership and free markets and free economies and democratic society 
in this country. I think we should go down that road and we should take 
that chance. And I am not sure we have much of an option in that 
regard. But while we take that chance, we should be very mindful of the 
dangers that are presented to this country down the road from China and 
others. And we should be especially mindful of one particular category 
of Chinese conduct right now of all the categories that concern us, 
including human rights, religious freedom, and all the rest.
  The one particular category that poses a mortal threat to the welfare 
of this Nation has to do with the proliferation of weapons of mass 
destruction. The fact is that while we are willing to take this chance 
and we go down the road to trade with China, they are engaging in 
activities that pose a mortal danger to the welfare of this country. 
That is the subject of the amendment that I have just offered.
  The China nonproliferation amendment seeks to do something about 
this. I have sought to have a separate vote on this amendment because I 
don't consider it to be a trade-related amendment. I have sought, for 
about a month now, to have a debate in the context of our relationship 
with China but not to have it as an amendment to PNTR. I have been 
thwarted in that effort. I only have two choices--either relenting 
altogether or doing what I said I would do; that is, filing it as an 
amendment to PNTR. Well, that choice is obvious. I have made that 
choice today because of the importance that I attach to it.
  Mr. President, the world is a more dangerous place today because of a 
growing number of so-called rogue nations such as North Korea, Iran, 
and Libya, who have obtained and are in the process of obtaining 
additional weapons of mass destruction and the missile means by which 
to deliver them. Now, Congress has been informed of this on numerous 
occasions. It doesn't get a lot of attention but the information has 
been consistent. Two years ago, the bipartisan Rumsfeld Commission 
concluded that rogue states such as North Korea and Iran could develop 
an intercontinental ballistic missile within 5 years of deciding to do 
so. It is pretty clear that they have decided to do so.
  Shortly thereafter, North Korea surprised our intelligence agencies 
by successfully launching a three-stage rocket over Japan, essentially 
confirming what the Rumsfeld Commission had told us. Last September, 
the National Intelligence Estimate, released a report that ``During the 
next 15 years, the United States most likely will face ICBM threats 
from Russia, China, and North Korea, probably from Iran, and possibly 
from Iraq.'' It went ahead to point out that as soon as economic 
sanctions were lifted against Iraq, they will probably be back in 
business. Saddam will be reinstituting his ability to wreak havoc in 
various parts of the world along with the rest. We have received other 
intelligence reports. Much of it is classified, so I invite my 
colleagues to avail themselves of these reports, which are even more 
troubling than what has been made public.
  Earlier this year, Robert Walpole, National Intelligence Officer for 
Strategic and Nuclear Programs, testified that the threats to our 
Nation's security are real and increasing. Mr. President, it is clear 
that these rogue nations may have ICBMs much sooner than previously 
thought, and that they will be more sophisticated and dangerous. And we 
have taken note in this Congress--finally, last year--by passing the 
National Missile Defense Act. That is the primary reason that we need a 
national missile defense system in this country. We belatedly 
recognized that because of this threat I speak of from the rogue 
nations.
  But that is only half of the story. Equally alarming is the fact that 
Congress has also been repeatedly informed

[[Page 17513]]

that these rogue nations are being supplied by major nations with whom 
the United States is entering into increased cooperative arrangements. 
Last month, the Director of the CIA provided to Congress the 
intelligence community's biannual report on the proliferation of 
weapons of mass destruction. We get these reports sent to Congress 
twice a year.
  Basically, they have always been in recent history, the same. This 
report identified China, Russia, and North Korea as key players in 
nuclear, biological, and chemical weapons technology. According to this 
report, the Chinese activity has actually increased in support of 
Pakistan's activities. And China has also ``provided missile-related 
items, raw materials, and/or assistance to several countries of 
proliferation concern--such as Iran, North Korea, Libya.'' China, of 
course, has a long history of proliferating chemical weapons 
technologies to Iran--nuclear, chemical, and biological.
  The DCI's report also describes Russia's efforts to proliferate 
ballistic missile-related goods and technical know-how to countries 
such as Iran, India, and Libya. Russia is also identified as a key 
supplier of nuclear technology to Iran and to India. They also have 
provided a considerable biological and chemical expertise and 
technology to Iran.
  North Korea, of course, was identified as a key supplier. This is an 
interesting country because they have a nation full of people who are 
apparently starving to death. Yet they not only have managed to become 
a threat themselves, they have become the clearinghouse for that part 
of the world. They have become a vendor of weapons of mass destruction. 
They get help from the big powers, and then with regard to the other 
smaller powers in that part of the world they begin to assist them. The 
report identified North Korea as a supplier of ballistic missile 
equipment, missile components, and material expertise to countries in 
the Middle East, south Asia, and North Africa, just as North Korea is 
doing.
  This latest CIA report is consistent with past reports. We have seen 
it throughout the 1990s. China is supplying Pakistan with everything 
from soup to nuts for their mass destruction capabilities, and 
assistance to North Korea's weapons of mass destruction and missile 
programs. Just this summer, it was reported that China was helping 
Pakistan build a second missile factory, transferring missile equipment 
to Libya, assisted Iran with its missile program, and diverted a U.S. 
supercomputer for use to its own nuclear programs. All of this occurred 
in violation of a variety of international treaties, agreements, and 
U.S. laws.
  The bottom line is that these activities by China, Russia, and North 
Korea pose a serious threat to the United States. That threat is 
growing. This is at a time when we are granting permanent normal trade 
relations to China. This is at a time when we are sending over $1 
billion a year to Russia and providing other assistance to North Korea.
  It is inconceivable to me that while we discuss trade issues and a 
new relationship with China, we will not address what China is doing to 
endanger our country. It is just that simple. That is what this 
amendment does.
  I know people in this body want to pass PNTR. They do not want any 
complications. They want to get it done, wrapped up; the President 
wants his legacy, and we want to please our friends in the business 
community; and we all know trade is a good thing, and so forth. But it 
is inconceivable to me that we can address these trade-related issues 
and embrace our new trading partner--China--in a new regime without 
also addressing and doing something about the fact that they are making 
this world, and particularly the United States, a more dangerous place 
to live. The Federal Government's first responsibility is national 
security.
  In July of 1999, the bipartisan Commission to Assess the Organization 
of the Federal Government to Combat the Proliferation of Weapons of 
Mass Destruction--commonly known as the Deutch Commission--concluded 
that ``the U.S. Government is not effectively organized to combat 
proliferation,'' despite the fact that ``Weapons of mass destruction 
pose a grave threat to United States citizens and military forces, to 
our allies, and to our vital interests in many regions of the world.''
  It couldn't be any plainer than that, from one of our bipartisan 
commissions of experts that look at this and try to come to us and warn 
of what is happening.
  Therefore, Senator Torricelli and I have introduced the China 
Nonproliferation Act. Now we have introduced it as an amendment to 
PNTR. This amendment provides for an annual report to Congress and to 
the American people as to the proliferation activities of these three 
nations because they are the ones on which the CIA is required to 
report now anyway because they have already been identified as key 
suppliers--the three nations I have mentioned: China, Russia, and North 
Korea.
  It authorizes the President, if he makes the determination based on 
the credible evidence he has before him, to impose some non-trade-
related sanctions on these Chinese companies that are selling these 
weapons of mass destruction. It authorizes the President to take 
various actions. There is a list of them.
  One of the things it authorizes him to do is to cut these companies 
out of our capital markets in this Nation. China raises billions of 
dollars in our capital markets on the New York Stock Exchange to go 
back and spend on its own military. Most people do not know that, I 
assume. I am not here suggesting we stop that, unless the President 
determines that they or their companies are engaging in activities, 
which are controlled by them, that are dangerous to this Nation.
  Is this not the minimum we can do in this legislation? There is other 
legislation on the books, certainly. But this legislation, by a more 
extensive report, requires the President to come to Congress, 
basically--it does not force the President to take any action, but if 
he doesn't take action against these companies that are found to be 
proliferating, he has to tell Congress why.
  In this legislation, if 20 percent in Congress decide they don't 
accept the President's conclusion, they can introduce a resolution of 
disapproval and get a vote on certain sanctions against these 
proliferating entities. The President, of course, can veto that. It 
would be tremendously difficult for Congress to force anything through. 
But it would be a very good debate, and in egregious circumstances that 
we have seen in times past, I think Congress actually could get some 
responses through.
  The legislation also provides for increased transparency. When the 
President determines that these companies are proliferating and selling 
weapons of mass destruction, the legislation provides that the 
President has to inform Wall Street, and the Securities and Exchange 
Commission has to come up with rules and regulations that will inform 
investors they are investing with a company that our country and our 
President has determined to be a seller of mass destruction. They can 
still do that, if they want to. But they ought to know about it. It is 
amazing that this law is not already on the books.
  Lastly, it provides for a Presidential waiver based on national 
security if the President decides, for his good reasons, that is 
appropriate. The bottom line is that with all of this concern, talk, 
and hullabaloo about what this legislation does and doesn't do, until 
the President makes a determination that these companies are engaging 
in activities that are a threat to this Nation, if our President does 
that, do we not want to take action?
  We made changes to this legislation. The critics came out of the 
woodwork. No one wants anything that will complicate our trade bill 
with China these days, it seems. I am afraid some of the pro-trade 
people have their blinders on. I agree with them on how important free 
trade is and how important this bill is, and so forth. But we have an 
additional obligation which I tried to suggest to my friends. We have 
an additional obligation not just to put money

[[Page 17514]]

in our pockets in trade today but to look down the road for our kids 
and grandkids to see if our trading partners are doing something that 
will endanger their welfare.
  We have listened to our critics. We have made changes. We have tried 
to make sure our response was reasonable and measured.
  Instead of singling out China, we added the other two countries.
  Instead of having mandatory sanctions tying the President's hands, we 
gave the President additional flexibility where he must find that there 
is cause for a determination to be made against these companies.
  The bill now contains a blanket provision that protects the 
agricultural community from adverse impact.
  The bill's penalties only apply to key supplier countries and not to 
U.S. companies and will not affect U.S. workers.
  We made changes in the congressional review procedure so one person 
couldn't tie up the whole body. It has to be one-fifth of the Members 
of either House to sign a joint resolution of disapproval. It is a 
measured response to a very serious problem.
  Our critics have been numerous, persistent, and vociferous. They 
claim that the world will come to an end basically if, while we are 
passing PNTR, we irritate the Chinese by informing them there will be 
consequences to their irresponsible behavior. I don't think the world 
will come to an end if we do that. I think the world will be a more 
dangerous place if we don't do that.
  Let's take a look at some of the things that have been said: Existing 
laws are sufficient, that we already have the authority on the book. If 
that is true, why do we see an increasing problem? All we need to do is 
look at the latest report from the Director of the Central 
Intelligence. Behavior has worsened in the past year. On the eve of 
considering PNTR, the behavior has worsened. What will it be after we 
approve PNTR?
  On the eve of the Senate's consideration of PNTR for China, and after 
the House had already voted, it was revealed that China was assisting 
Libyan experts with that country's missile program, illegally diverting 
U.S. supercomputers for the use of the PRC's nuclear weapons program, 
and helping to build a second M-11 missile plant in Pakistan. And Iran 
test fired a Shahab-3 missile capable of striking Israel, capable of 
striking American troops, capable of striking Saudi Arabia or American 
bases located within the border of our NATO ally, Turkey. This missile 
was developed and built with significant assistance from the People's 
Republic of China, and the classified reports of Chinese proliferation 
are even more disturbing.
  If everything is so hunky-dory, why is this happening? Why does this 
continue to happen? I don't think the critics are that concerned that 
we are duplicating existing law or it might be useless. I think they 
are concerned that it might be useful and that it will substantially 
get the attention of the Chinese. That is exactly what I intend to do.
  Some say: We don't want to upset them while we are entering into this 
new trade relationship. I say that is exactly the time when we should 
upset them, if, in fact, they are making this a more dangerous world 
and posing a threat to the United States of America.
  Some say: Let us continue with our diplomacy; we can talk to them and 
we can work things out. Where is the evidence of this? All I see is 
evidence of three delegations of senior administration officials going 
to Beijing, hat in hand, asking them to stop the proliferation 
activities, and each was sent back to Washington emptyhanded and told 
pointblank, according to the newspaper accounts and according to the 
quotation of those who were on the delegation, that as long as we 
persisted in a national missile defense system and as long as we 
persisted in supporting Taiwan, they were going to persist in their 
proliferation activities.
  Basically, we can like it or lump it. Last Friday, I was interested 
to see three different delegations, including our Secretary of Defense, 
our Secretary of State--not minor; first in the administration--
perceive this problem. They just don't want to do anything to 
acknowledge the shortcomings of this administration in having dealt 
with this problem or failing to deal with it.
  Last Friday, the President got a face-to-face meeting with Jiang 
Zemin. I was interested in the subject of proliferation, and their 
activities with Pakistan, totally throwing that place out of balance. 
It is a tinderbox waiting to explode. Most accounts have Pakistan far 
and away leading India now in terms of their abilities. That is a 
dangerous situation.
  According to the New York Times International on Saturday, September 
9, ``President Clinton yesterday urged Jiang Zemin to put a stop to 
China's missile exports to Pakistan.'' Well, better late than never. 
``But in what had already been a week of diplomatic frustration for Mr. 
Clinton, Mr. Jiang offered little more than good wishes for the 
President's retirement in 4 months and thanks for supporting China's 
bid to join the World Trade Organization.''
  The article went on to say: ``Mr. Clinton's aides had played down the 
prospects of any major progress on Chinese missile exports, Tibet or 
Taiwan, during Mr. Clinton's last months in office. But they had hoped 
that the expected Senate approval this month of permanent normal trade 
relations with China--which the United States promised as part of its 
accord with China that ushers it into the World Trade Organization--
would be rewarded.'' We were hoping that by doing all this the Chinese 
would reward us for this. ``They hoped to claim political progress on 
issues that have bedeviled Washington's relations with Beijing since 
the two first met in 1993.
  ``In a measure of the two leaders' continuing communications problems 
after seven years of interchanges, a senior administration official 
said yesterday the meeting was designed to get these two men on the 
same wavelength. . . .
  ``The conversation on China's missile exports to Pakistan came after 
Mr. Clinton, earlier this summer, sent a delegation to China to try to 
cut off the supply. The administration worries that any new missile 
technology would heighten Pakistan's ability to strike India.
  ``But Mr. Jiang, by all accounts, has paid little attention to the 
issue.''
  I can't be bothered with you, son. We will continue our activities 
while we expect you to approve PNTR--no questions asked and no 
amendments added.
  We, in the United States, ought to be embarrassed and ashamed at that 
turn of events.
  Some say the unilateral sanctions can never be effected. I prefer 
bilateral sanctions, but we have apparently lost the ability to do much 
bilaterally these days. We can't even get a resolution through the 
United Nations condemning China for its obvious human rights 
violations. Our bill recognizes the value of this multilateral 
approach. It would be preferable. But over the years we have seen, 
though, that sometimes we need to act ourselves.
  The major threat to these missiles and weapons of mass destruction is 
not Belgium, or any of our allies; it is the United States of America. 
We can't wait until we get everybody together on the same page which, 
as I said, is more and more difficult to act. In times past, we have 
seen that U.S. economic pressure in the late 1980s and early 1990s led 
China's accession to the Nuclear Non-Proliferation Treaty in 1992. In 
1991, the Bush administration applied sanctions against the PRC for 
missile technology transfers to Pakistan. And on and on. Even the 
Clinton administration took measures that led to the imposition of 
sanctions on the PRC for M-11 missiles on one occasion, M-11 missile 
equipment to Pakistan in violation of the Missile Technology Control 
Regime.
  Anyway, they backed down and Mr. Berger acknowledged that sometimes 
these unilateral actions can be beneficial. Some say the dialog will 
assist, and perhaps it will, but only in conjunction with firm action.
  The leaders of PRC are not irrational people. They only can go as far 
as they can. We have, obviously, allowed them to do what they are 
doing. When we take actions detrimental to them, they

[[Page 17515]]

will respond to that, as they have in times past.
  We need this amendment more than we did even a few days ago. The 
President recently decided not to move forward on a national missile 
defense. As I said earlier, national missile defense, of course, is in 
primary response to these threats of rogue nations. According to our 
estimates, they will have the ability to be a threat to us in 2005. By 
the President's actions, now we will be unguarded for at least a year, 
and maybe 2 or 3.
  Doesn't it make sense to take this opportunity to at least have the 
threat of some sanctions for their activities during that period of 
time? Of course, China and Russia are vociferously opposing a national 
missile defense. I find that ironic: The same countries supplying these 
rogue nations with technology and missile equipment to build missiles 
of mass destruction are the ones that are doing the complaining.
  I talked about the provision concerning transparency and giving the 
President, if he finds that it is justified, the authority to do 
something about their access to our capital markets. To date, over a 
dozen Chinese firms have raised billions of dollars in the U.S. capital 
markets.
  The Deutch Commission again stated:

       The Commission is concerned that known proliferators may be 
     raising funds in the United States capital markets.

  The Cox Commission review of the U.S. national security concerns with 
China also conclude:

       [I]ncreasingly, the PRC is using U.S. capital markets as a 
     source of central government funding for military and 
     commercial development and as a means of cloaking technology 
     acquisition by its front companies.

  As we stand idly by.
  In conclusion, I understand there are many who are saying: Thompson, 
we think you are trying to do a good thing here. Yes, we really do need 
to address this. Yes, we let it go unattended for too long. But, as an 
amendment to PNTR, if you add it to PNTR it will have to go back to the 
House and, goodness, we don't know what will happen over there if it 
goes back to the House.
  The idea is that, I guess, what, 40 people would change their votes? 
With the Democratic Party thinking that they are very close to taking 
over the House of Representatives, and with the labor organizations 
having lined up support for Vice President Gore for President, the 
thinking is going to be that the labor unions are going to press 40 
Members to change their votes so going into the election they will have 
a vote on each side of this issue? I think that is absurd on its face. 
If we agree to this amendment, the House will ratify it within 24 
hours.
  Besides, doesn't that beg the question? Should our primary question 
be whether or not the House would ratify what we do? Since when does 
the Senate vote on an item simply because they are afraid of what the 
House of Representatives might or might not do?
  House Members included provisions in their bill regarding prison 
labor, import surges, religious freedom, increases in funding for Radio 
Free Asia. All of that was in their bill. And we are saying we can't 
add nuclear proliferation to that list of items? Are we going to tell 
the world that nuclear proliferation is not as much a concern as is 
funding for Radio Free Asia?
  I think we should ask what we would be signaling to the world if, at 
a time when we say we need a national missile defense system, we act as 
though we are not concerned about nuclear proliferation at all. What 
signals are we sending to our allies, such as those in Taiwan? If we 
don't have the wherewithal to defend ourselves, how can they ever 
depend upon us to have the fortitude to defend them, if it really comes 
down to it?
  What does it say about ourselves in dealing with a country that 
threatens Los Angeles? Since the last MFN vote--even besides and in 
addition to the increasing religious clampdown that we are seeing over 
there--they have sent missiles across the Taiwan Strait and they have 
unashamedly stolen nuclear secrets. They continue their proliferation 
activities. They tell our delegations, and even our President, that 
they are not going to be responsive at all to our concerns. They are 
not going to deny at all what they are doing. They are just going to 
tell us they are going to keep on doing it.
  And sending major delegations to Belgrade and praising Milosevic and 
saying the United States of America is making the world a more 
dangerous place because of what we did in Yugoslavia? All of that has 
happened since the last time we approved PNTR.
  What have we done in return? The President goes over and chastises 
our allies in Taiwan. He adopts the four ``noes'' the Chinese wanted 
him to. We grant concessions on WTO; We grant concessions on export 
control; We give China and Russia a veto on our national missile 
defense system; and we turn a blind eye to the proliferation activities 
they continue.
  We must ask ourselves, Is this the road to peace? Is this the road to 
peace? The strategic ambiguity may have worked for a little while in an 
isolated place, but it is getting to a place now where the Chinese do 
not know where we are coming from, where we will draw the line, or if 
we will not draw the line. I don't know, and I daresay the American 
citizens don't know. But there have been a couple of other wars that 
some historians say, because of this ambiguous kind of posture, became 
more likely. It has been more likely to get us into wars than to keep 
us out of wars. Leaving the impression that we will not act when, in 
fact, we might is just the kind of thing that is going to cause us to 
get into trouble.
  I finish by saying I support PNTR. There is no reason why we cannot 
trade, even with those who are engaging in some of the activities I 
have described. But we cannot do so while turning a blind eye to all of 
these reports of all of this dangerous activity, all of this continued 
activity by these countries. Because if we ever signal to the world 
that we are more concerned with the trade dollar than we are with our 
own national security, we will not remain a superpower for very long. 
Therefore I urge adoption of this amendment.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, I rise to oppose the amendment of my 
distinguished colleagues from Tennessee and New Jersey. While my 
friends have in good faith tried to address a critical issue--the 
serious national security threat posed by the proliferation of weapons 
of mass destruction and their means of delivery--I believe the approach 
they take in this legislation is flawed.
  I say this as a former chairman of the Senate Governmental Affairs 
Committee--the committee with jurisdiction over nuclear export policy. 
Indeed, it was during my tenure in that position that the Nuclear Non-
Proliferation Treaty came up for extension. I spent a good deal of my 
time in 1995 working to build congressional support for the NPT's 
permanent and unconditional extension.
  Without the backing of Congress, the U.S. would not have been able to 
exercise the strong leadership essential to overcoming opposition from 
an assortment of countries. Fortunately, on May 11, 1995, the more than 
170 countries party to the NPT agreed to extend the treaty without 
condition or qualification.
  That was a proud day for me and a truly historic day in our ongoing 
efforts to make ours a safer and more peaceful world. The amendment 
before us today reflects similar admirable intentions.
  However, there is a gap in this legislation between intention and 
result. In particular, this legislation relies on sanctions that are 
too widely drawn and too loosely conceived to prove effective in 
countering proliferation.
  In addition, this amendment will harm our workers and businesses, our 
key alliances, and the multilateral non-proliferation regime that is 
essential to stemming proliferation in a global economy.
  Finally, I believe this legislation will significantly compromise our 
ability to address the two most important foreign policy challenges 
this country

[[Page 17516]]

faces--China's rise and Russia's potential slide into instability.
  I will discuss each of these problems in turn, beginning with 
sanctions.
  This amendment uses as its principal tool unilateral sanctions. 
Indeed, this amendment represents the single largest expansion in our 
reliance on unilateral sanctions since the end of the cold war.
  And if there is one thing Congress should recognize after so many 
attempts at using such methods to force other countries to change their 
behavior, it is that, as Brent Scowcroft put it:

       . . . the record of U.S. unilateral sanctions is one of 
     unblemished failure.

  In a global economy, shutting off Chinese and Russian access to 
American goods and capital markets will not change Chinese or Russian 
behavior. Indeed, as Frank Carlucci noted in a letter he recently sent 
me, such actions

       . . . would likely isolate the United States, not China, 
     giving our European and Asian competitors an open field in 
     providing goods, services and financing to the most populous 
     nation in the world.

  The fact is that telling China or Russia to buy machinery, aircraft 
and agricultural products from our competitors in Europe, Canada and 
Japan, instead of from the United States, does not provide us any 
leverage. That is because American workers and companies will be 
punished rather than Chinese or Russian proliferators.
  Moreover, for the first time, U.S. securities markets will be used as 
a sanctioning tool. This is a particularly troubling aspect of this 
amendment because our capital markets have played such an enormously 
important role in fueling America's record-breaking economic expansion, 
and the strength of our capital markets is based on a degree of 
predictability and political certainty that this amendment would 
undermine.
  That is one of the reasons why Alan Greenspan opposes this 
legislation.
  But there are other reasons he took this position. Let me quote what 
he said in testifying before the Senate Banking Committee a couple of 
months ago. I will do so at some length because I think his views--
especially when expressed in such strong and unusually unambiguous 
terms--are worth heeding:

       In addition to questioning the value of this amendment, 
     there's a very serious question as to whether it will produce 
     indeed what is suggested it will produce.
       First let me just say that the remarkable evolution of the 
     American financial system, especially in recent years, had 
     undoubtedly been a major factor in the extraordinary economy 
     we've experienced, and it's the openness and the lack of 
     political pressures within the system which has made it such 
     an effective component of our economy and indeed has drawn 
     foreigners generally to the American markets for financing as 
     being the most efficient place where they can, in many cases, 
     raise funds.
       But it is a mistake to believe that the rest of the world 
     is without similar resources. Indeed, there's huge dollar 
     markets all over the world to lend dollars.
       Because of the arbitrage that exists on a very 
     sophisticated level throughout the world, the interest rates 
     and the availability of funds are not materially different 
     abroad than here. We do have certain advantages, certain 
     techniques, which probably give us a competitive advantage, 
     but they are relatively minor.
       But most importantly, to the extent that we block 
     foreigners from investing or raising funds in the United 
     States, we probably undercut the viability of our own system.
       But far more important is I'm not even sure how such a law 
     could be effectively implemented because there is a huge 
     amount of transfer of funds around the world.
       For example, if we were to block China or anybody else from 
     borrowing in the United States, they could very readily 
     borrow in London and be financed by American investors. Or, 
     if not in London, if London were financed by American 
     investors, London could be financed, for example, by Paris 
     investors, and we finance the Paris investors.
       In other words, there are all sorts of mechanisms that are 
     involved here. So the presumption that somehow we block the 
     capability of China or anybody else borrowing in essentially 
     identical terms abroad as here in my judgment is a mistake.
       So a most fundamental concern about this particular 
     amendment is it doesn't have any capacity of which I'm aware 
     to work. And by being put in effect, the only thing that 
     strikes me is a reasonable expectation that it would harm us 
     more than it would harm others.

  The sanctions in this amendment are not only unilateral and uniquely 
encompass our securities markets; they are also indiscriminate in their 
application. Sanctions in the amendment would apply to ``persons'' 
defined as ``any individual, or partnership, business association, 
society, trust, organization, or any other group created or organized 
under the laws of a country; and any government entity.''
  The problem with mandatory sanctions is that they force a rigid 
response, one as likely to exacerbate a problem as solve it. At a 
minimum, they do not permit the discretion necessary to determine 
whether or not the sanctions provide the best approach to achieving the 
non-proliferation goals we all share.
  Let us not forget that the mandatory sanctions of the Glenn amendment 
did not deter India or Pakistan from testing nuclear weapons. Those 
sanctions, however, did have an impact. Unfortunately, the impact was a 
negative one, causing harm to our farmers grievous enough for Congress 
to provide relief by passing the Brownback amendment.
  Now even though the President is theoretically able to waive 
sanctions, Congress gains the power to overturn the President's 
decision through a procedure similar to and as cumbersome, disruptive 
and counterproductive to American interests as, the one we currently 
use in annually renewing normal trade relations with China.
  For example, the amendment provides fast-track procedures for 
automatic consideration of joint resolutions, automatic referral of 
joint resolutions to the Senate Foreign Relations Committee and the 
House International Relations Committee, automatic discharge from 
committee, and privileged status on the floor of both the House and 
Senate for the resolutions.
  In other words, this amendment provides for procedures virtually 
identical to those specified in the Jackson-Vanik amendment, which has 
forced Congress to engage in it annual--and notably sterile--debates on 
China's trade status.
  PNTR would end this counterproductive process, unless of course this 
amendment were to pass. If it did, annual votes would resume on 
sanctions, and not only on China, but also on Russia, North Korea, and 
undoubtedly other countries as well.
  In fact, the amendment defines a ``covered country'' to include any 
country that was previously listed in the Director of Central 
Intelligence's Section 721 report and identified as a ``source or 
supply of dual-use and other technology,'' unless that country has not 
been identified by the DCI for 5 consecutive years.
  In 1997, the section 721 report listed some of our closest allies, 
such as Germany, the United Kingdom, Italy, and France, as targets of 
acquisition for WMD programs.
  The amendment thus could force us to sanction some of our closest 
allies, including those who work most closely with us in the fight 
against proliferation of weapons of mass destruction.
  I cannot believe that sanctioning allies who have actively worked 
with the United States to enforce international nonproliferation 
agreements will help us in furthering mutual nonproliferation efforts. 
Surely such actions will make future multilateral cooperation--which is 
absolutely essential to solving proliferation problems--far more 
difficult.
  In fact, that point was made by the Ambassadors of Sweden and France 
and the Charge of the European Commission in a joint letter they sent 
me. Here is a part of what they said:

       We would like to emphasize the member states of the EU are 
     strictly adhering to and enforcing the provisions of the 
     multilateral export control regimes (Nuclear Suppliers' 
     Group, Missile Technology Control Regime, Australia Group, 
     Wassenar Arrangement) and are parties to all the relevant 
     Non-Proliferation and Disarmament Treaties, including the 
     Chemical Weapons Convention. The EU works closely with the US 
     in stemming the proliferation of weapons of mass destruction. 
     We have worked jointly to strengthen the non-proliferation 
     regimes and to address specific cases.
       Against this background, we are concerned that [the 
     Thompson amendment] could potentially be used to threaten EU 
     entities with US sanctions. These EU entities are

[[Page 17517]]

     fully subject to EU member states' controls in compliance 
     with all non-proliferation and export control regimes. We are 
     also highly concerned by attempts to broaden the scope of 
     export controls beyond those agreed at the multilateral 
     level.
       Let us reiterate that the EU and its Member States fully 
     share the United States' determination to effectively combat 
     the proliferation of weapons of mass destruction, as we 
     express it in the Joint Statement on Non-Proliferation, which 
     was issued at the May 1998 US-EU Summit . . . However, we 
     urge you to clearly target these pieces of legislation and 
     thus to avoid the surely unintended consequence of 
     undermining US-EU cooperation on non-proliferation matters.
       We would also like to remind you that any legislation of 
     this type undermines the credibility of multilateral efforts 
     in the field of non-proliferation.

  This last point the Europeans make--about how this legislation may 
undermine multilateral nonproliferation efforts is one shared by 
American proliferation experts such as Frank Carlucci. As he said in 
his letter to me:

       The important and serious issue of Chinese arms transfers 
     requires a concerted and effective multilateral--

  I emphasize the word ``multilat- eral''--

     response, not the imposition of unilateral sanctions which 
     would have no effect on the sources of the transfers. The 
     United States must provide leadership to the international 
     community on this issue, not isolate itself from our allies 
     by pursuing a course of action that no other nation will 
     follow.

  Just as troubling as the sanctions themselves are the evidentiary 
standards used to trigger the sanctions. The measure of proof for 
violation of U.S. nonproliferation and export control policies, and 
thus the threshold for invoking sanctions contemplated by this 
amendment, is one of ``credible information.'' When this term has been 
used in the past, it has been defined as ``information which produces a 
firm suspicion, but by itself, may not be sufficient to persuade a 
reasonable person with confidence'' that the sanctionable activity took 
place.
  Surely, critical national security actions should be based on a 
higher standard, especially when they are being applied to our closest 
allies.
  There is one other aspect of this amendment that concerns me. Indeed, 
it is the one I find most troubling of all. This amendment will 
severely constrain the next administration in developing the sort of 
coherent, consistent, and comprehensive policies toward China and 
Russia that the United States has so sorely lacked for 8 years.
  As important as curbing Chinese and Russian proliferation activities 
is, we must deal with the whole broad range of challenges these two 
countries present to U.S. interests.
  In the case of China, for example, we have an interest in peacefully 
resolving the cross-straits issue as well as the potentially incendiary 
problems afflicting the Korean Peninsula, South Asia, and the South 
China Sea. We have an interest in encouraging China's transition to 
capitalism and the attendant political reform I believe that transition 
will help foster. And we have an interest in continuing to press China 
to provide its citizens basic human rights and religious freedoms.
  In the case of Russia, we have an interest in fostering the evolution 
of true democracy, capitalism, and the rule of law; in curbing 
corruption and in resolving the deadly conflict in Chechnya and the 
continuing instability in the Balkans.
  Given these and other critical foreign policy challenges posed by 
China's rise and Russia's potential slide into instability, we will not 
hold our policies hostage to individual issues, as important as those 
issues may be.
  Stemming proliferation by China, Russia, and other countries will 
only be possible if we get our overall policies toward those countries 
right. Let me read something from a report on China put out recently by 
the Carnegie Non-Proliferation Project which I think is instructive. 
Here is what it says:

       Encouraging Chinese acceptance of global non-proliferation 
     norms has been a long-term process, concurrent with the 
     larger effort to normalize relations with China . . . During 
     the years of isolation from the West, China's posture 
     rhetorically favored nuclear weapons proliferation, 
     particularly in the Third World, as a rallying point for 
     anti-imperialism. Through the 1970s, China's policy was not 
     to oppose nuclear proliferation, which it still saw as 
     limiting U.S. and Soviet power. After China began to open to 
     the West in the 1970s, its rhetorical position gradually 
     shifted to one of opposing nuclear proliferation, explicitly 
     so after 1983.
       China's nuclear and arms trade practices did not, however, 
     conform to international non-proliferation regime standards, 
     and major efforts over two decades were required to persuade 
     China to bring its nuclear trade practices into closer 
     alignment with the policies of the other nuclear supplier 
     states. [Yet] there is still a gap that needs to be closed . 
     . .
       China is still on a learning curve, and endemic problems of 
     a political, cultural and organizational nature exist in 
     China's decision-making apparatus . . . Thus, continued 
     vigilance and diplomatic interchange with China will 
     certainly be necessary on nuclear matters.
       The missile, chemical and biological areas will also 
     require diligent attention. Up to 1994, China made progress 
     on MTCR requirements. But it is still not clear that its 
     professed restraint applies, as the MTCR requires, to missile 
     components and technology--nor, indeed, that the restraint 
     applies to more than complete `ground-to-ground' missiles. 
     Compliance in this area, which is not defined by treaty, is 
     harder to nail down with standards that China can accept 
     politically--and also entails more scope for ambiguities. The 
     chemical area is defined by treaty, provides for 
     declarations, and lists restricted items, but it covers a 
     very large industrial domain.

  In short, Mr. President, stemming proliferation by China--or by 
Russia, for that matter--is a complicated matter that cuts across our 
broader bilateral relationship.
  To achieve the goals we all share of ending proliferation, sustained 
examination, discussion and debate by the Congress and the next 
Administration is essential. And negotiation and diplomatic interchange 
with the Chinese and the Russians must not be constrained by unilateral 
sanctions, as frustrating as those negotiations have been and will 
continue to be.
  Proliferation is a matter of vital national interest. In voting 
against this amendment, I will vote against its flaws but not its 
intent. In fact, I applaud my friend from Tennessee for raising this 
issue, and I hope he will continue his work in this critical area next 
year, when we will have the time to examine the issue thoroughly, and I 
hope come to agreement on a measure that will gain the support of an 
overwhelming majority of this Chamber.
  Only then can we send the Chinese and other proliferators the right 
message about the urgency with which we view stemming the proliferation 
of weapons of mass destruction and missile technology.
  Mr. President, I ask unanimous consent that at 10 a.m. on Tuesday, 
September 12, the Senate proceed to a vote on amendment No. 4117, with 
time tomorrow morning before 10 o'clock equally divided in the usual 
form for closing remarks.
  The PRESIDING OFFICER (Mr. Bunning). Without objection, it is so 
ordered.
  The Senator from Pennsylvania is recognized.
  Mr. SPECTER. Mr. President, I compliment my distinguished colleague 
from Tennessee for offering this amendment. I do support it. I think it 
is a significant step forward. As I listened to the Senator from 
Tennessee speak, I was persuaded, however, that the consequence or the 
conclusion of his eloquence was that the entire bill for permanent 
normal trade relations with China should be defeated.
  I thought the Senator from Tennessee made a very strong case that it 
is necessary for the United States to be wary of where the People's 
Republic of China is heading. It is my hope--and I know it is the hope 
of the Senator from Tennessee--that we will have good relations with 
China and that we will have a peaceful world.
  As the Senator from Tennessee enumerated the problems with nuclear 
proliferation and the potential difficulties from the People's Republic 
of China, it underscored in my own mind the grave concerns about making 
a concession at this stage to permanent normal trade relations with 
China instead of advancing that economic benefit to China on a year-by-
year basis so that the United States would retain some leverage as to 
the conduct of China. It is important to have the kind

[[Page 17518]]

of an annual report about which the Senator from Tennessee talks. I 
think it is a good idea to have it as to Russia and North Korea as well 
as to China.
  The reality is, as documented substantially by the Senator from 
Tennessee, there are real potential problems on the horizon.
  At the outset, I wish to make it clear that I support the concept of 
free trade. I believe history is on the side of free trade. I voted in 
favor of the North America Free Trade Agreement, in the face of 
considerable opposition from my constituency in Pennsylvania. 
Similarly, I voted for the African Growth and Opportunity/United 
States-Caribbean Basin Trade Enhancement Act. Although not without some 
qualms, I have supported most-favored-nation status for China. That was 
a hot concern on this floor and in the House of Representatives for 
some time because of China's violations of human rights. It was my 
judgment that we should have given China most-favored-nation status to 
try to build their country in the hope that it would move toward 
democracy and that it would move toward a greater recognition of human 
rights. In one fell swoop, to grant permanent normal trade relations 
with China seems to me to be a mistake.
  I spoke on this subject at some length back on May 17 of this year. I 
know there are others who wish to speak. I will not repeat what I said 
at that time but would incorporate my comments at that time by 
reference.
  On the issue of proliferation, there is very substantial evidence 
that the People's Republic of China is harming the interests of world 
peace. When they sold the M-11 missiles to Pakistan, they put Pakistan 
in a position to move forward on a potential nuclear confrontation with 
India, putting that area of the world at risk. When the People's 
Republic of China has assisted North Korea's missile program in 
providing special accelerometers, again, there is a country, a rogue 
country where the People's Republic of China threatens the interests of 
world peace. And when they have provided assistance to Libya's long-
range missile program by assisting in the building of a hypersonic wind 
tunnel, there again, they assist a rogue nation which really has the 
potential of threatening world peace.
  There has been a very elaborate chart prepared by the distinguished 
Senator from North Carolina, Mr. Helms, which is on every desk in the 
room. I know Senator Helms came to the floor a few moments ago and will 
doubtless speak about it. It particularizes the problem we face on 
nuclear proliferation by the Chinese, which raises the question: Why 
give away our bargaining power? The People's Republic of China is 
vitally interested in normal trade relations with the United States. 
Why not grant it to them this year but reserve judgment next year as to 
what happens?
  The record of the People's Republic of China on human rights is 
dreadful. The massacres at Tiananmen Square constitute only one issue 
in a long line of flagrant violations of human rights. These are 
detailed in a statement which is a part of the Record of my speech from 
May 17. I shall not detail them again, except to refer to the case of 
the Dickinson College librarian, Mr. Yongyi Song, a constituent of mine 
from Pennsylvania.
  Mr. Song went to China in August of 1999 to study the Cultural 
Revolution. While in China, he was unceremoniously arrested without 
cause, without any justification, and kept in jail for months. When I 
found out about the case and consulted with Mr. Song's family and with 
Dickinson College, I sponsored a resolution, cosponsored by many of my 
colleagues, and I spoke on the floor of the Senate. I said if the 
People's Republic of China wanted to be accorded a seat with the 
nations of the world on matters such as trade, or on matters generally, 
they would have to have a decent legal system and they would have to 
not arrest people without any cause. Shortly thereafter, I sought a 
meeting with the Chinese Ambassador to the United States. The morning 
of our meeting, I heard a rumor that Yongyi Song was going to be 
released, and in late January, he was in fact released.
  I had a very interesting discussion with the PRC Ambassador to the 
United States. He admonished me about meddling in internal PRC affairs. 
I had a few responses about the PRC record on human rights, especially 
as they related to the detention of my constituent for many months 
without any justification. Then I said that I personally was concerned 
about having good relations between the United States and the People's 
Republic of China, a nation of 1.2 billion people. The PRC Ambassador 
quickly corrected me, saying it is not 1.2 billion people, it is 1.250 
billion people.
  There is no doubt about the PRC's recognition of the PRC's power. 
They are emerging as the second major superpower in the world. That is 
fine so long as they comply with the norms of a civilized world. That 
requires nonproliferation, and that requires respect for human rights.
  We have two other matters that have come to the fore recently--both 
issues where the Senator from Tennessee and I have been involved 
collaboratively. One is on the issue of the efforts by the People's 
Republic of China to influence U.S. elections, and the second is the 
effort of the People's Republic of China on espionage. China has 
portrayed a very aggressive posture, in my judgment. China has moved 
ahead with many people who have made contributions in the political 
arena in flat violation of U.S. law, and there are cases--now 
documented--of the aggressive efforts of the People's Republic of China 
on espionage.
  The Judiciary subcommittee that I chair on the Department of Justice 
oversight has prepared a very lengthy report on Dr. Peter Hoong-Yee 
Lee. Dr. Peter Lee on October 7 and 8, 1997, confessed to the FBI that 
he had provided classified nuclear weapons design and testing 
information to scientists of the People's Republic of China on two 
occasions in 1985 and had given classified anti-submarine-warfare 
information to the Chinese in May of 1997.
  Now it is true that espionage is not limited to the People's Republic 
of China. But when they recruit a scientist in the United States and 
acquire information about our classified nuclear weapons design and 
information on our anti-submarine-warfare procedures, that is a matter 
of considerable importance.
  There is another major case which is very much in the forefront today 
and has been for some considerable period of time, and that is the case 
involving Dr. Wen Ho Lee, where this morning's media accounts disclose 
that later today, within a few hours, the Department of Justice has 
agreed to a plea negotiation for 1 count of a 59-count indictment 
concerning taking classified material and not maintaining the 
appropriate classification. This is a case that was under investigation 
by the Department of Justice Oversight Subcommittee, which I chair, and 
we had looked into it from October of last year until December 14 when 
the FBI asked that we cease our oversight inquiries because Dr. Wen Ho 
Lee was being indicted. We complied with that request so there would be 
no question at all about any interference in the prosecution of Dr. Wen 
Ho Lee. Now that the matter is finished, we will move ahead very 
promptly on that oversight investigation.
  But the case against Dr. Wen Ho Lee is an extraordinary one which 
raised very serious questions about whether Dr. Wen Ho Lee provided the 
People's Republic of China highly classified information.
  The investigation as to Dr. Lee proceeded from 1982, was accelerated 
in 1993 and 1994, 1995, 1996, and 1997. Then there was a request by the 
FBI, which was a personal request from FBI Director Louis Freeh, 
transmitted by Assistant Director John Lewis, who went personally to 
Attorney General Reno. Attorney General Reno assigned the matter to a 
man named Daniel Seikaly who had never had any experience with an 
application for a warrant under the Foreign Intelligence Surveillance 
Act. In a context that was reasonably clear that the warrant should 
have been granted, Attorney General Reno rejected that application.

[[Page 17519]]

  Then, inexplicably, from August of 1998 until December of 1999, the 
FBI did not act to further investigate Dr. Wen Ho Lee. Then, when the 
Cox Commission was about to publish a report in January of 1999, 
suddenly the Department of Justice and the FBI sprang into action, but 
did not take any steps to terminate Dr. Lee until March, and no steps 
to get a search warrant until April.
  Now there is no doubt that Dr. Wen Ho Lee is entitled to the 
presumption of innocence as to passing any matters to the People's 
Republic of China, which was the essence of the FBI investigation. 
Equally, there is no doubt that the Department of Justice has been 
convicted of extraordinary incompetence in the way this case has been 
handled, and the questions as to whether the People's Republic of China 
gathered key information remain unanswered and perhaps will be 
illuminated by oversight by our Judiciary Subcommittee. But it is hard 
to understand how the Department of Justice could maintain last week 
that Dr. Wen Ho Lee had information at his disposal that would ``change 
the global strategic balance'' or could ``result in the military defeat 
of America's conventional forces,'' posing the ``gravest possible 
security risk to the supreme national interests'' of the United States.
  So when the matter is concluded--as we have every reason to suspect 
it will be--with the plea bargain, the Department of Justice is going 
to have a great many questions to answer in terms of why they permitted 
Dr. Wen Ho Lee to have access to classified information for such a 
protracted period of time when they had very substantial probable 
cause, as shown in the application for the warrant under the Foreign 
Intelligence Surveillance Act, that there were connections with the 
People's Republic of China, which might have access to very important 
nuclear secrets.
  I mention that case because here is another illustration like the Dr. 
Peter Lee case where there were questions in the Dr. Peter Lee case, 
and he confessed and was convicted of passing secrets to the People's 
Republic of China. But in the long investigation on Dr. Wen Ho Lee, the 
Department of Justice is going to have some very important questions to 
answer about why Dr. Wen Ho Lee was enabled to have access to this 
classified information for such a long period of time, and why they 
kept him in detention with arguments which they have made. They argued 
even that on his release he should not have contact with his wife on 
their assertion that she might pass this highly classified information 
on, and fought it even to the Court of Appeals. Now, suddenly, in a day 
of reversal of position, which by the accounts will result in Dr. Wen 
Ho Lee's release later today, is really very extraordinary.
  The incompetence of the Department of Justice is obvious. The 
Department of Justice owes an explanation perhaps to Dr. Wen Ho Lee and 
to the people of the United States for their bungling of that case. But 
the point of the matter is, and it is sufficient really for Dr. Peter 
Lee's case, that you have an aggressive People's Republic of China 
which is after U.S. military secrets.
  Then there is the issue of the efforts by the People's Republic of 
China to influence our elections. That, too, has been documented in 
great length. I shall not speak about it at any length this afternoon 
except to comment about the conviction of Maria Hsia linking the 
People's Republic of China and the plea bargain with John Huang, 
Charlie Trie, Johnny Chung, and many, many others where there is 
documentation that the People's Republic of China had transferred funds 
to people in the United States to make campaign contributions, which 
were flatly illegal under U.S. laws, in the interests of the People's 
Republic of China in influencing our elections.
  While it is not unusual for one country to engage in espionage 
against another country, I believe it is quite unusual for a country to 
seek to influence U.S. elections. Those are matters which weigh in the 
balance.
  In essence, what we have before us at the moment is the amendment of 
the distinguished Senator from Tennessee who seeks to have a report 
from the President on the question of nuclear proliferation involving 
the People's Republic of China, and with all due respect, it is subject 
to being avoided by waivers which the President can exercise. But at 
least it is a step in the right direction.
  But when we take a hard look at what China has been doing in 
international affairs with Taiwan, with their threats and blackmail, 
having missile tests off the coast of Taiwan, what they have done with 
human rights, what they have done with proliferation, and what they 
have done in so many of the activities, there is very strong reason to 
conclude that the United States should not grant permanent normal trade 
relations to the People's Republic of China.
  Let's trade with them on a year-by-year basis. It is an insufficient 
answer to say that if we don't trade with the People's Republic of 
China, other nations will. The United States ought to assert U.S. 
leadership in trying to lead our allies not to trade with China to the 
benefit of China, if China is to maintain its current course of 
proliferation, of violating human rights, of espionage activities, and 
trying to influence the internal elections of a country such as the 
United States.
  At a minimum, in conclusion--the two most popular words of any 
speech--I urge my colleagues to support the amendment of the Senator 
from Tennessee. I urge my colleagues to accept the strong persuasion of 
the Senator from Tennessee to vote no on the entire bill.
  I thank the Chair. I yield the floor.
  The PRESIDING OFFICER. The Senator from Maryland.
  Mr. SARBANES. Mr. President, I understand that the distinguished 
Senator from North Carolina earlier indicated that he wished to speak 
at about 2:30. I ask unanimous consent that after the Senator from 
North Carolina finishes, I be recognized to make a statement.
  The PRESIDING OFFICER. Is there objection? Without objection, it is 
so ordered.
  Mr. SARBANES. I thank the Chair.
  The PRESIDING OFFICER. The Senator from North Carolina.
  Mr. HELMS. Mr. President, I thank the Chair for recognizing me. I ask 
unanimous consent that it be in order for me to deliver my remarks at 
my desk from my seat.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. HELMS. I thank the Chair.
  Mr. President, for the past two months there has been a deluge of 
claims regarding the Thompson-Torricelli amendment. While Mr. Thompson, 
the able Senator from Tennessee, has leaned over backward to 
accommodate all concerns raised in good faith, there is clearly no 
satisfying that particular crowd of ``beltway lobbyists'' who will stop 
at nothing to secure corporate profits. It is just as simple as that.
  Virtually every argument the pro-Communist China industrial lobby 
makes regarding this amendment misses one crucial point: Chinese 
proliferation of weapons of mass annihilation poses a grave threat to 
U.S. national security.
  If there cannot be agreement on this basic premise, then there is no 
common ground to be found on the Thompson-Torricelli amendment.
  But I, for one, find China's trade in those commodities abhorrent and 
intolerable.
  It is especially unconscionable for China to continue supplying the 
Islamic radicals in Iran with chemical weapons precursors and missile 
technology. Lest we forget, Iran's interests are antithetical to the 
United States. For the past twenty years the fanatics in Teheran have 
poured money, weaponry, and technology into terrorist groups worldwide. 
The mullahs have orchestrated dozens of bombings and the cold-blooded 
murder of hundreds of U.S. servicemen and citizens, including the 
bombing of Khobar Towers, in Saudi Arabia--killing 19 U.S. troops and 
wounding 240 others--and the Hizbollah bombing of the U.S. Marine 
barracks in Lebanon, which killed 241 Americans.
  So all this clap trap about reformists in Iran is hogwash--pure and 
simple.

[[Page 17520]]

As the saying once went: ``Read my lips''--read mine--Iran is ruled by 
an Islamic fundamentalist regime that calls the United States the 
``Great Satan'' and continues to spew anti-Semitic, anti-Israeli venom 
between each and every flight test of its new ``Shahab'' medium-range 
missiles, supplied, by the way, by Russia and China.
  Iran is the last country on Earth that the United States should want 
to possess deadly chemical nerve agents, nuclear weapons, or medium-
range ballistic missiles.
  Why on Earth would the United States not do everything possible to 
stop China's supply of nerve agent precursors and specialized glass-
lined production equipment to Iran?
  Why on Earth would the Senate look the other way as China continues 
to build a research reactor and other nuclear facilities in Iran, and 
to supply missile testing equipment, guiding systems, technology, and 
specialized material to Iran's missile program? Why, Mr. President, 
why? Surely Iran is the last country on Earth that the United States 
would ever want to gain possession of advanced cruise missiles capable 
of sinking warships from the United States of America.
  According to the Secretary of State, Madeleine Albright, China's C-
802 missile is ``roughly the equivalent of the French EXOCET missile 
that Iraq used in 1987 to attack the frigate U.S.S. Stark in the Gulf, 
killing 37 Americans.''
  Why, Mr. President, would the United States not do everything in its 
power, including the imposition of sanctions, to prevent China from 
supplying hundreds of these missiles to the Iranian military?
  Iran is by no means the only dangerous country to which Communist 
China continues to ship deadly weaponry. There is that little regime in 
Libya which today is on trial in The Hague for the cowardly terrorist 
bombing of a plane over Lockerbie, Scotland. Do you remember that, Mr. 
President? That cruel, beastly attack killed 270 people; 189 of whom 
were Americans.
  Libya is getting from the Chinese all sorts of missile testing 
equipment and training. Just bear in mind, for example, this is a 
regime that once drew a ``line of death'' across the Gulf of Sidra and 
launched war planes to attack the U.S. Navy. Under no circumstances 
would the United States want Libya to possess a ballistic missile 
capable of dropping chemical or biological weapons on the U.S. troops 
stationed in Italy. But that is precisely the capability that the PRC--
the People's Republic of China--is supplying to Libya to date.
  Then there is North Korea. We must not leave out North Korea, that 
Communist dictatorship that engaged in a massive surprise attack 
against the United States and South Korea in 1950 which ultimately 
killed more than 35,000 Americans. North Korea is acting today as if it 
is going to make amends, and we will see about that. I think it is 
about time. The point remains that North Korea still maintains a 
million-man army with thousands of tanks and artillery pieces deployed 
within a few miles of Seoul. North Korea is a country which recently 
launched that ballistic missile over Japan--do you remember that?--a 
missile capable of reaching the United States of America with a small 
chemical or biological warhead.
  North Korean boats periodically engage in shooting matches with South 
Korean ships. North Korea has deployed assassination squads on 
minisubmarines to infiltrate its neighbors to the south, and they 
continue to harbor vicious terrorists wanted in Japan for a variety of 
murders, and they are working overtime on the development of nuclear, 
chemical, and biological weapons. This is not a country that the United 
States wants to possess long-range ICBMs--but Communists insist on 
supplying Pyongyang with missile technology and specialized steel.
  I haven't even touched on the subject of Chinese missile and nuclear 
assistance to Pakistan or its supply relationship with the dictatorship 
in Syria or the help it was giving to Saddam Hussein's horrible 
programs.
  The world today is a very dangerous place, populated with tyrants and 
despots hostile to the United States. These are countries which have 
killed Americans by the hundreds. At every turn in the road we discover 
that Communist China is supplying all of these countries with 
technology which ultimately can be used in the future to kill Americans 
again.
  No matter how many times the United States raises the matter of 
China's military exports, the Communist leadership in Beijing refuses 
to cease and desist. They change the subject. Indeed, the history of 
U.S.-Chinese relations on nonproliferation matters is one littered with 
broken promises. It is a tale of deceit and trickery by Communist 
China.
  I call attention to this chart, which the distinguished Senator from 
Pennsylvania referred to earlier, which shows China has made at least 
14 major nonproliferation commitments since 1984, 7 relating to the 
proliferation of nuclear technology. The People's Republic of China has 
made five--count them, five--separate pledges regarding the transfer of 
missile technology and two pledges on chemical and biological 
transfers. During the past 20 years, the PRC has violated every one of 
those promises.
  Immediately following Communist China's 1984 pledge not to help other 
countries develop nuclear weapons, what do you think happened? Yes, 
that is right, China signs a little ``secret'' protocol with Iran to 
supply nuclear materials. Beginning in the early 1980s, China helped 
Pakistan get the bomb, sharing weapons design information. In 1996, 
China was caught having to shift a large number of specialized ring 
magnets for weapons-grade enrichment of uranium to Pakistan.
  In 1998, at the very time China was telling Congress that China had 
quit assisting Pakistan--in order to secure congressional support for 
commercial nuclear cooperation--the Clinton administration knew for a 
fact about ongoing PRC contacts with Pakistan's nuclear weapons 
program. It is abundantly clear, 2 years later, that China has never 
adhered even once to its nuclear nonproliferation pledges. In fact, 
according to the latest unclassified intelligence assessment of a month 
ago:

       Chinese entities have provided extensive support in the 
     past to Pakistan's nuclear programs. In May 1996, Beijing 
     promised to stop assistance to unsafeguarded nuclear 
     facilities, but we cannot preclude ongoing contacts.

  That is a nice way of saying it is still going on. It is the same old 
song: second verse same as the first, in the case of missile transfers. 
Again, China has repeatedly broken its pledges.
  A claim in 1989 that it had no ``plans'' to sell medium-range 
missiles to the Middle East was almost immediately contravened by 
several transactions. A subsequent pledge, in early 1991, to refrain 
from medium-range sales to the Middle East--also rubbish.
  So we come to 1992, when China made yet another promise--written down 
this time--that it would not transfer any category I or category II 
missile items to Syria, Pakistan, or Iran. A lot of good people just 
said, OK, that is great; peace, peace, peace is right around the 
corner. The Chinese pledge specifically covered M-9 and M-11 missiles, 
and extended to existing contracts.
  But this, of course, did not stop China from selling M-1 or M-11 
missiles to Pakistan or from selling missile technology to Iran and 
Syria--no siree. So what happened? The Clinton administration extracted 
a further pledge, don't you know, in 1994--from whom? That's right, 
China--that it really did intend to abide by the MTCR. China said: Oh, 
yes, yes, sir; we are going to abide by it.
  But that Chinese commitment to observe the MTCR guidelines--which, by 
the way, explicitly, clearly prohibit the transfer of missile 
production equipment--was observed no better than the earlier pledges. 
Not only did M-11 sales continue but Communist China was discovered 
supplying a production facility for such missiles to Pakistan. 
According to various press accounts, China recently completed work on 
this facility for Pakistan.
  Oh, boy, you can trust these Chinese, can't you? ``I think we ought 
to sign

[[Page 17521]]

this thing and go ahead and trust them and be done with it.'' If you 
believe that, you will believe anything because there are a lot of 
facts regarding the current exports of China's military that I have 
uncovered.
  The point is, and I say this reluctantly because these are my 
friends, too--or they have been--as much as various business lobbyists 
may wish to portray the Communist leadership in Beijing as being 
trustworthy and responsible, the truth is that the Chinese regime is 
neither trustworthy nor responsible. It has never been responsible. It 
has given terrorist regimes deadly chemical capabilities and nuclear 
technology to vaporize entire cities and missiles capable of raining 
terror on innocent people from above. Nor has Beijing proven 
trustworthy. They have broken pledge after pledge and pledge.
  I have to say this for the Clinton-Gore administration. It was not 
the first to allow itself to be duped by the PRC in order to pursue 
this commercial objective. But the current administration has coupled 
its willingness to subordinate nonproliferation concerns to trade with 
an alarming disregard for the law, in my judgment.
  I deeply regret the appalling legal hijinks of the administration in 
trying to avoid sanctioning Communist China for its military trade. 
Maybe somebody else will remember, as I do, that New York Times quote 
that President Clinton was declared to have made, that U.S. sanctions 
laws put--as the President put it:

       . . . enormous pressure on whoever is in the Executive 
     Branch to fudge an evaluation of the facts of what is really 
     going on.

  The fact that the President would say such a thing, I have to admit, 
doesn't come as too much of a surprise. The Senate Foreign Relations 
Committee--of which I happen to be chairman--has in particular been on 
the receiving end of this sort of business of ``fudging the facts'' for 
the past 8 years. Time and time again it has happened. I am sick of it. 
While no administration has ever voluntarily imposed sanctions that it 
believed would be counterproductive, the Clinton-Gore administration's 
callous disregard of U.S. law is bouncing around at a new low.
  Because the administration has no stomach for nonproliferation 
sanctions, and because the Chinese obviously know it, the United States 
nonproliferation dialog with China has become nothing more than an 
opportunity for Beijing to uncover how the U.S. intelligence community 
knows things about China's weapons trade. At this point, I think it 
must be patently obvious to Communist China that this administration 
does not have--what? The right stuff, I guess is the right way to put 
it--the right stuff to impose missile sanctions and make them stick.
  The exponential growth in China's deadly exports, clearly shown on 
this chart, is occurring in the face of weakening U.S. resolve.
  In the name of my children and grandchildren, your children and 
grandchildren, Mr. President and all other Senators, that is such a 
dangerous, dangerous combination.
  As I see it, the obvious benefit of the Thompson-Torricelli amendment 
now pending is twofold. First and foremost, the amendment underscores 
the Senate's concern about Red China's ongoing trade in the deadliest 
types of weapons technology with terrorist nations. Under no 
circumstance should the Senate let this moment pass without deploring--
without deploring it loudly--China's behavior and raising the stakes 
for China's continued assistance to the likes of North Korea and Iran 
and Libya. It is impossible to overstate how critical this is at a time 
when the commercial interests of the United States clearly predominate 
over national security concerns, and that is exactly what is happening.
  Second, it also raises the ante on an executive branch which has come 
to think of mandatory sanctions as optional things. You don't have to 
do them. I recognize that it is clearly impossible to compel this 
administration to adhere to the supreme law of the land. But surely the 
Senate can make flagrant disregard for the law a little more 
uncomfortable for some in the administration by requiring expanded 
reporting on China's proliferation behavior based on a reasonable 
evidentiary standard.
  Mr. President, for all of these reasons I strongly support the 
Thompson-Torricelli amendment. I not only hope, I pray that other 
Senators will join in sending a strong message to Beijing that its 
dangerous exports must stop forthwith.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Collins). The Senator from Maryland.
  Mr. SARBANES. Madam President, I rise in opposition to H.R. 4444, 
which would provide for the extension of Permanent Normal Trade 
Relations, PNTR, to the People's Republic of China.
  The proponents of this measure would have us believe that the 
decision to support PNTR is completely one-sided, with all the benefits 
going to the United States and none to the Chinese. If that analysis 
were correct, one would have to believe that the Chinese are either 
naive or simply being charitable to the United States. I don't think 
either of those propositions is true.
  In my view, it would not only be counter to the trade interests of 
the United States to grant PNTR to China, but it would undermine other 
important bilateral U.S. interests with that country, including 
national security, foreign policy, human rights, religious freedom, 
labor rights, and environmental protection. We should be seeking 
permanent normal relations with China which would link all of our 
diverse interests with China into an integrated policy, but I do not 
support Permanent Normal Trade Relations with China in the absence of 
achieving permanent normal relations. In other words, we should not 
separate out the trade relationship alone without addressing these 
other important matters that are at issue between us.
  Let me address then why I do not think it is in the U.S. national 
interest to grant Permanent Normal Trade Relations to China at this 
time.
  The decision to grant PNTR to China is linked to China becoming a 
member of the WTO, the World Trade Organization. Under the rules of the 
WTO, member countries are obliged to grant unqualified most-favored-
nation treatment to each other. In the view of the supporters of PNTR, 
the United States must grant Permanent Normal Trade Relations to China 
so the United States will be able to utilize the dispute resolution 
mechanism of the WTO to enforce compliance by China with trade 
agreements. In fact, the WTO agreement has been characterized as being 
completely one-sided in favor of the United States. A summary of the 
arguments in favor of the agreement prepared by the Administration 
stated:

       This is not a trade agreement in the traditional sense. 
     This is a one-way deal. We would simply maintain the market 
     access policies that we already apply to China.

  I believe this assertion overlooks some very important 
considerations. Until now, the United States has been free to link 
trade to any of our other concerns with China--national security, 
foreign policy, human rights, religious freedom, labor rights, 
environmental protection. With the exception of national security, 
granting PNTR to China would effectively end the ability of the United 
States to link trade with any of our other concerns with China because 
it would violate WTO rules. Even national security, for which the WTO 
has an exemption, would be subject to challenge and review within the 
WTO. Further, within the trade area itself, the United States would not 
be able to use U.S. trade laws to enforce compliance by China with its 
trade commitments.
  If one stops and thinks about this for a moment, it seems clear that 
China is achieving a fundamental strategic objective which, from its 
point of view, is enormously in its self-interest. The proponents of 
granting PNTR to China want the decision to be viewed through the 
narrow prism of trade relations because on that basis they believe the 
agreement is defensible. Even on those terms, I believe extending PNTR 
to China is an unwise decision, but it completely ignores the broader 
and

[[Page 17522]]

more fundamental interests the United States is abandoning by granting 
PNTR to China.
  I will review the U.S. trade relationship with China and why, even 
from the narrow perspective of trade, granting PNTR to China is not in 
the U.S. national interest. I will then review the broader interests 
the United States has at stake in this decision, some of which are 
underscored by the amendment that is now pending.
  Let me turn first to the bilateral trade relationship. Our bilateral 
trade relationship with China is our most one-sided significant 
bilateral trade relationship. We have been running a steadily 
increasing trade deficit with China for nearly two decades. In 1985, we 
had a trade deficit of $9 million. Since then, it has set a new record 
every year, rising from $1.6 billion in 1986 to $10.4 billion in 1990, 
to $29.4 billion in 1994, and $56.8 billion in 1998. In 1999, the 
Commerce Department reported that the U.S. trade deficit with China 
reached a record $69 billion. This chart shows very clearly this 
incredible deterioration in the trade relationship as it takes a 
downward plunge in terms of our trade balance.
  The trade balance has continued to deteriorate in 2000. The Commerce 
Department reports that the U.S. trade deficit with China for the first 
6 months of this year is over 23 percent higher than over the first 6 
months of last year. In fact, it is very close to becoming the largest 
single bilateral trade deficit of the United States. At the moment, it 
is surpassed only by Japan.
  This chart traces back to 1975. These are U.S. exports to China which 
have risen a bit, but not very much, and these are U.S. imports from 
China which, of course, are ascending at a very steep pace, and the 
difference gives us, of course, the trade balance which was shown in 
the previous chart. On this very small amount of trade, $95 billion--
there is $13 billion in exports from the United States to China and $82 
billion in imports from China--we now are on our way, I think, to where 
we will shortly have our largest trade deficit with China.
  It is important to appreciate this point because it underscores how 
important our trade relationship is with China and, in my judgment, 
therefore, underscores the necessity of not putting this trade 
relationship to one side, which would prevent us from trying to solve 
the other problems in our relationship.
  What is not fully appreciated, however, is that relative to the size 
of the overall volume of trade with China, the U.S. trade relationship 
with China is far more one-sided than with any other country in the 
world. For example, in 1999 we had a trade deficit with Japan of $74 
billion. That was based on a total volume of trade with Japan of $189 
billion. In contrast, the $69 billion U.S. trade deficit with China was 
based on a total volume of trade of $95 billion. With Japan, we have 
twice as much trade and almost the same deficit, a little more than we 
have with China. With China, the trade relationship is virtually a one-
way street, and we need to understand and appreciate that.
  This pattern is repeated to an even greater extreme with other large 
U.S. trading partners--Canada, the European Union, and Mexico. This 
chart shows U.S. exports as a percent of bilateral trade with China, 
with Japan, with Canada, with the E.U., and with Mexico. As one can 
see, even with Japan, exports make 30 percent of the total volume of 
trade--a little above 30 percent. With Canada and Europe and Mexico, it 
is in the mid-40 percent. With China, it is at 14 percent. The trade 
relationship with China is virtually a one-way street. It is Chinese 
exports coming to this country; it is not American exports going to 
China.
  Even if one compares it with the Asian countries, we find the same 
situation. U.S. exports to China as a percent of bilateral trade is, 
again, at about 14 percent. As you can see with Taiwan, Korea, and 
Singapore, it ranges anywhere from under 40 percent to almost 50 
percent.
  One may say: Well, maybe China has this kind of trade relationship 
with everybody. So let's briefly examine its trade relationship with 
Japan and the European Union as compared with the United States.
  China's total trade volume in 1999 with the United States, $95 
billion; with the European Union, $73 billion; with Japan, $69 billion. 
Yet the surpluses that China ran with us were by far the largest 
relative to the overall amount of trade with these countries. So you 
can see that once again the trade relationship with the United States 
is extremely one sided.
  (Mr. THOMPSON assumed the chair.)
  Some argue that most exports from China to the United States are not 
made in the United States and, therefore, do not compete with U.S. 
products. Some advance that argument. As a result, it is argued that 
some increase in Chinese exports to the United States comes at the 
expense of exporters in third countries, such as Mexico, South Korea, 
and Taiwan, and not at the expense of U.S. manufacturers.
  It is worth noting that although these other countries run trade 
surpluses with the U.S., the U.S. balance of trade with these countries 
is not nearly as one sided as with China. In fact, I think it is 
reasonable to suppose that if we were taking goods from these other 
countries instead of China, those countries would be more willing to 
take our goods because that is the nature of the relationship that we 
have with Mexico, or South Korea, or Taiwan. It is much closer towards 
balance, although not in full balance. But with China, it is a terribly 
one-sided relationship.
  Furthermore, the Congressional Research Service, in its analysis, has 
said the nature of Chinese exports into the United States is shifting 
and moving towards high-technology sectors--office and data processing 
machines, electrical machinery and appliances, and telecommunications 
and sound equipment. So the character of imports from China is shifting 
to increasingly sophisticated categories of products which compete very 
directly with goods made in the United States.
  Proponents of Permanent Normal Trade Relations with China assert that 
the WTO agreement with China will open China's market to U.S. exports 
and, thereby, reduce the one-sided nature of the U.S. trade 
relationship. Well now, this is a plausible-sounding argument. They say 
this will create an opening in the relationship and, therefore, these 
balances that you are pointing to will begin to change and there will 
be an improvement.
  The U.S. International Trade Commission was asked to conduct a study 
on the economic effects on the United States with China's accession to 
the WTO; in other words, to project out what the consequences would be.
  The ITC study assessed the impact the tariff cuts provided in the 
China WTO agreement would have on the U.S. balance of trade with China. 
They concluded that there would be an increase in the U.S. trade 
deficit with China. Let me repeat that. The ITC study, which was 
conducted at the request of the U.S. Trade Representative, found that 
the China WTO agreement would actually increase the U.S. bilateral 
trade deficit with China.
  So it is obviously important to understand that while these 
extraordinary claims have been made for the supposed benefits of the 
China WTO agreement for the United States, the reality is that it would 
not address the extraordinarily unbalanced trade relationship of the 
U.S. with China.
  A closer examination of the specifics of the China WTO accession 
agreement with the United States may help explain these results of the 
ITC study. Under the China WTO agreement, average tariff rates will 
fall from 16.9 percent to 10.2 percent--a drop of 6.7 percentage 
points. However, average applied tariff rates already fell from 42.8 
percent in 1992 to the 16.9 percent in 1998 under the previous trade 
agreements that we have negotiated.
  During that period when these tariffs came down, the U.S. trade 
deficit with China increased from $20 billion to $61 billion. Of 
course, that simply underscores a very common sense point, if you stop 
and think about it. One must recognize that, while tariffs may be cut, 
the remaining tariffs may still be sufficiently high to block out 
imports.

[[Page 17523]]

In other words, we are constantly being told these tariffs are coming 
down. Even assuming that is the case, as long as they remain at a 
sufficient level to block out imports, they, in effect, are 
accomplishing their results.
  For example, under this agreement, tariffs on automobiles are 
scheduled to fall from 100 percent to 25 percent. This is obviously a 
substantial reduction, but it still leaves in place a 25-percent 
tariff--a very significant tariff that may be highly effective as a 
deterrent to auto imports.
  Under the agreement, nontariff barriers, such as quotas, licensing, 
and tendering procedures, will be liberalized for some 360 product 
categories; however, the product categories for which this is taking 
place account for only 8.5 percent of our exports to China. Their total 
value in 1998 was only $1.2 billion.
  Furthermore, China is still in the process of negotiating its 
multilateral accession protocol with the 44-member WTO working party. 
According to a GAO report on the status of the negotiations, 
differences remain between China and the working party in three areas: 
China's trade-distorting industrial policies, including subsidies and 
price controls; foreign currency reserve-related restraints on trade, 
including foreign exchange controls; and a miscellaneous category of 
other issues, including Government procurement, civil aircraft, and 
taxes.
  In fact, currency manipulation, subsidies, and licensing by China 
have been significant factors in its trade relationship with the United 
States and have, of course, an impact on this trade deficit.
  There is a final point I want to make with regard to the U.S. trade 
relationship with China before I turn to the broader considerations and 
the impact of PNTR.
  Observers have pointed out that China is much more open to foreign 
investment than other Asian countries were--Japan and Korea, for 
example--and that this may set the basis for an improvement in the 
trade relationship. In fact, China has actively sought foreign direct 
investment as sources of Western capital and technology. It is a key 
item in their development strategy.
  But China's receptiveness to foreign investment does not necessarily 
mean an openness to imports.
  In fact, trade barriers in sectors such as automobiles have been part 
of China's strategy to encourage foreign investment. Since the Chinese 
market could not be accessed easily through exports because of the 
various restrictions, Western automakers who want a portion of the 
Chinese market were being forced to invest in China. Once inside the 
market, many Western companies took a different view of Chinese trade 
barriers because they now also are protected from competition from 
outside China.
  The unstated premise of those supporting PNTR on this issue is that 
openness to foreign investment will eventually lead to openness to 
foreign trade. However, it is not at all clear that changes undertaken 
to encourage foreign investment will inevitably lead to lower trade 
barriers and more imports. In fact, the Chinese insistence upon 
domestic production and transfer of technology suggests that the 
opposite may be the case.
  An article in the Wall Street Journal of May 25, the day after the 
House voted on PNTR, focused on the investment aspects of the China WTO 
agreement and stated:

       Even before the first vote was cast yesterday in Congress's 
     decision to permanently normalize U.S. trade with China, 
     Corporate America was making plans to revolutionize the way 
     it does business on the mainland. And while the debate in 
     Washington focused mainly on the probable lift for U.S. 
     exports to China, many U.S. multinationals have something 
     different in mind. ``This deal is about investment, not 
     exports,'' says Joseph Quinlan, an economist with Morgan 
     Stanley Dean Witter & Co. U.S. foreign investment is about to 
     overtake U.S. exports as the primary means by which U.S. 
     companies deliver goods to China.''

  If we look at the increase in investment over the recent decade, it 
is highly instructive. It has risen at an incredibly steep rate. U.S. 
investment in China has gone from just over $300 million in 1991 to 
$4.5 billion in 1999. Whereas the United States ranked behind Japan, 
behind Europe, behind Taiwan as a source of exports to China, it ranked 
ahead of all of them as a source of foreign direct investment. Rather 
than expanding exports and reducing the U.S. trade deficit with China, 
the extension of Permanent Normal Trade Relations and WTO membership 
for China may simply be a way for China to secure expanded foreign 
direct investment from the United States. This may serve China's 
development strategy and please U.S. companies seeking to invest in 
China. However, it is not clear that it will be the great benefit to 
U.S. exports and jobs that those who support PNTR claim.
  Indeed, in my view, a principal motivation for China's support for 
PNTR and WTO membership is to separate its trade and investment 
relationship with the United States from its other relationships with 
the United States and to separate it from the enforcement of U.S. trade 
laws, thereby securing an unimpeded flow of investment from the United 
States. Once they can lock this into place, they can put trade and 
investment off the radar screen, as we look at other outstanding issues 
between our two countries.
  A major argument made by proponents of PNTR for China is that if the 
United States does not grant it, the United States will not be able to 
utilize the WTO dispute resolution mechanism to enforce compliance by 
China with trade agreements.
  What they fail to mention is that if the United States grants PNTR to 
China, we will no longer be able to utilize directly U.S. trade laws, 
such as 301 of the Trade Act of 1974, and other provisions in our law 
to enforce compliance by China with trade agreements. The question is, 
then, what may better serve U.S. national interests, enforcement 
through the WTO dispute resolution mechanism or enforcement through 
U.S. trade laws? In my view, on balance, at this time the United States 
will be better off relying on U.S. trade laws.
  Let me give a few reasons. It is often noted that China has a weak 
rule of law, even assuming the central government wants to comply with 
the trade agreement, which in itself may be a very large assumption. 
This means there is no reliable domestic mechanism to keep various 
ministries, state-owned businesses, and provincial governments from 
ignoring the legal requirements of trade agreements.
  The WTO is a rules-based institution, and it is poorly equipped to 
enforce its rules in China. Given the lack of a clear paper trail, in 
many cases it could be impossible even to establish the existence of 
the trade barriers at issue, much less win a dispute settlement panel 
ruling.
  The reality is that enforcement of compliance by China with trade 
agreements would be a problem whether or not PNTR applies. Although the 
U.S. experience with bilateral trade agreements with China has been 
frustrating, at least the utilization of U.S. trade laws to enforce 
them remains under the control of the United States. Aggressive and 
persistent use of bilateral trade pressure has resulted at least in 
some compliance by the Chinese with these agreements. It is not at all 
clear that the highly legalistic WTO dispute resolution mechanism, 
under which adjudication of trade disputes would be given over to an 
international body, will produce better results. The difficulties in 
U.S. experience when it attempted to bring a WTO case against Japan 
over photographic film suggests the limitations of the WTO in 
addressing problems when the nature of the underlying government 
practice is uncertain. It is not difficult to imagine similar disputes 
with China in which the existence of the questionable policy is in 
dispute.
  In the remaining portion of my remarks, I will return to the point I 
raised at the beginning; that is, that in my view it is critical for 
the United States to pursue a policy toward China which integrates its 
trade and economic policy concerns with the range of other concerns, 
including national security, foreign policy, human rights, religious 
freedom, labor rights, and environmental protection.

[[Page 17524]]

  In other words, our objective should be to try to get permanent 
normal relations across the board in an integrated fashion and not to 
hand off, right in the beginning, the trade relation dimension which is 
obviously of such importance to the PRC given the one-sided character 
of our trade relationship.
  This is an enormously important economic benefit to China and, 
surely, in the course of considering the trade relationship, we should 
be seeking to use it as leverage to obtain an improvement in the 
relationships in the other areas that I want to discuss.
  Of all of its relationships with the United States, China derives by 
far the most benefit from its trade relationship, which is heavily 
skewed in its favor. Approval by the Congress of PNTR would make it 
difficult, if not impossible, to use the leverage of this heavily 
skewed trade relationship to influence our relationships in other 
critical areas. It is my view, as I have asserted, that we need to use 
it to improve the trade relationship itself. But over and above that, 
we need to look at influencing other critical areas.
  This, of course, is a critical strategic objective of China, which is 
why it is so eager for approval of PNTR. The China WTO agreement makes 
no provision for addressing labor rights, human rights, and 
environmental protection. We know--I think with reasonable assurance--
that if China joins the WTO, it will be a vigorous opponent of U.S. 
efforts to have labor rights, human rights, and environmental 
protection become a part of the WTO agreements.
  People say: Let's move ahead on WTO, and then we will include these 
things in the WTO agreements. I can, with almost complete assurance, 
say to you that if this moves forward, China will be one of those 
within the WTO opposing such inclusion.
  Let me review some of these other important policy concerns for China 
to underscore the importance of pursuing an integrated policy approach.
  First of all, human rights, labor rights and religious freedom. The 
State Department's 1999 Country Reports on Human Rights Practices 
summarizes in a single page the depth of the problems posed by China, 
and I would like to read that into the Record. This is our own State 
Department's human rights report about China. It is the last published 
report:

       The government's poor human rights record deteriorated 
     markedly throughout the year, as the government intensified 
     efforts to suppress dissent, particularly organized dissent. 
     A crackdown against a fledgling opposition party, which began 
     in the fall of 1998, broadened and intensified during the 
     year. By year's end, almost all of the key leaders of the 
     China Democracy Party (CDP) were serving long prison terms or 
     were in custody without formal charges, and only a handful of 
     dissidents nationwide dared to remain active publically.
       Tens of thousands of members of the Falun Gong spiritual 
     movement were detained after the movement was banned in July; 
     several leaders of the movement were sentenced to long prison 
     terms in late December and hundreds of others were sentenced 
     administratively to reeducation through labor in the fall. 
     Late in the year, according to some reports, the government 
     started confining some Falun Gong adherents to psychiatric 
     hospitals.
       The government continued to commit widespread and well-
     documented human rights abuses, in violation of 
     internationally accepted norms. These abuses stemmed from the 
     authorities' extremely limited tolerance of public dissent 
     aimed at the government, fear of unrest, and the limited 
     scope of inadequate implementation of laws protecting basic 
     freedoms. The Constitution and laws provide for fundamental 
     human rights; however, these protections often are ignored in 
     practice. Abuses included instances of extrajudicial 
     killings, torture and mistreatment of prisoners, forced 
     confessions, arbitrary arrest and detention, lengthy 
     incommunicado detention, and denial of due process. Prison 
     conditions at most facilities remained harsh. In many cases, 
     particularly in sensitive political cases, the judicial 
     system denies criminal defendants basic legal safeguards and 
     due process because authorities attach higher priority to 
     maintaining public order and suppressing political opposition 
     than to enforcing legal norms.
       The government infringed on citizens' privacy rights. The 
     government tightened restriction on freedom of speech and of 
     the press, and increased controls on the Internet; self-
     censorship by journalists also increased. The government 
     severely restricted freedom of assembly, and continued to 
     restrict freedom of association. The government continued to 
     restrict freedom of religion, and intensified controls of 
     some unregistered churches. The government continued to 
     restrict freedom of movement. The government does not permit 
     independent domestic non-governmental organizations (NGOs) to 
     monitor publicly human rights conditions.
       Violence against women, including coercive family planning 
     practices--which sometimes include forced abortion and forced 
     sterilization; prostitution; discrimination against women; 
     trafficking in women and children; abuse of children; and 
     discrimination against the disabled and minorities are all 
     problems. The government continued to restrict tightly worker 
     rights, and forced labor in prison facilities remains a 
     serious problem. Child labor persists. Particularly serious 
     human rights abuses persisted in some minority areas, 
     especially in Tibet and Xinjiang, where restrictions on 
     religion and other fundamental freedoms intensified.

  That is the U.S. State Department talking in its 1999 human rights 
report. Listen to what the United States Commission on International 
Religious Freedom, a commission established by this Congress just a 
couple of years ago, said with respect to the People's Republic of 
China. It said the following:

       The government of China and the Communist Party of China 
     (CPC) discriminate, harass, incarcerate, and torture people 
     on the basis of their religion and beliefs. Chinese law 
     criminalizes collective religious activity by members of 
     religious groups that are not registered with the state. It 
     registers only those groups that submit to membership in one 
     of the government-controlled associations affiliated with the 
     five officially recognized religions. Members of registered 
     religious groups can only engage in a limited range of what 
     the state deems ``normal'' religious activities.
       The religious and belief communities that resist 
     registration or that have been denied permission to register, 
     including Catholics loyal to the Pope and Protestants who 
     worship in ``house churches,'' have no legal standing in 
     China. Adherents are often harassed, detained and fined. 
     Meetings are broken up, unauthorized buildings are destroyed, 
     and leaders are arrested and frequently imprisoned.
       Over the past several years, Chinese officials have been 
     employing increasingly strict laws and regulations as 
     instruments to harass religious groups and maintain control 
     over religious activities. Officials responsible for 
     enforcing the strict laws continue to be guided by CPC policy 
     directives on religion. Furthermore, the Chinese legal system 
     does not protect human rights from state interference, nor 
     does it provide effective remedies for those who claim that 
     their rights have been violated.

  The Commission then went on to say this. Listen carefully to this 
recommendation. This is the recommendation the Commission which the 
Congress established on international religious freedom made with 
respect to extending PNTR to China, which is the issue before this 
body:

       Given the sharp deterioration in freedom of religion in 
     China during the last year, the Commission believes that an 
     unconditional grant of PNTR at this moment may be taken as a 
     signal of American indifference to religious freedom. The 
     government of China attaches great symbolic importance to 
     steps such as the grant of PNTR, and presents them to the 
     Chinese people as proof of international acceptance and 
     approval. A grant of PNTR at this juncture could be seen by 
     Chinese people struggling for religious freedom as an 
     abandonment of their cause at a moment of great difficulty. 
     The Commission therefore believes that Congress should not 
     approve PNTR for China until China makes substantial 
     improvements in respect for religious freedom.

  Turning briefly to the environment, I simply want to observe that a 
coalition of environmental groups, including the Sierra Club and 
Friends of the Earth, have argued strongly that the U.S.-China WTO 
agreement ignores critical environmental concerns regarding China and 
that PNTR should not be granted to China. They outline the incredibly 
severe pollution situation which now exists in China. Five of the 
world's 10 most polluted cities are in China. An estimated 2 million 
people die each year in China from air and water pollution.
  Let me turn for a moment to the national security and foreign policy 
field. The United States has, of course, fundamental national security 
and foreign policy concerns with regard to China which remain 
unresolved.
  It is, of course, well known that China has undertaken a very 
substantial buildup of its military over the past decade designed to 
undergird China's ability to confront Taiwan. In

[[Page 17525]]

fact, we have seen instances of such confrontation. This includes, 
among other things, a missile buildup across the Taiwan Strait that has 
greatly increased tensions between China and Taiwan. This military 
buildup also raises significant foreign policy and national security 
concerns for the United States in regard to Japan, South Korea, India, 
and indeed the rest of Asia.
  China has been the subject of longstanding concern about transfers of 
technology that contribute to the proliferation of weapons of mass 
destruction or of missiles that could deliver them. Of course, this is 
the subject area that is the direct focus of the amendment pending 
before this body.
  The Director of Central Intelligence, the DCI, submitted a report to 
Congress in June of 1997 stating that during July-December 1996 ``China 
was the most significant supplier of weapons of mass destruction 
technology to foreign countries.'' The DCI's latest report, which was 
delivered in August 2000, named China, Russia, and North Korea as key 
suppliers of such technology.
  In July of 1998, the Commission to Assess the Ballistic Missile 
Threat to the United States concluded:

       China poses a threat as a significant proliferator of 
     ballistic missiles, weapons of mass destruction, and enabling 
     technology. It has carried out extensive transfers to Iran's 
     solid fuel ballistic missile program and has supplied 
     Pakistan with a design for nuclear weapons and additional 
     nuclear weapons assistance. It has even transferred complete 
     ballistic missile systems to Saudi Arabia and Pakistan. 
     China's behavior thus far makes it appear unlikely it will 
     soon effectively reduce its country's sizable transfers of 
     critical technologies, experts, or expertise, to the emerging 
     missile powers.

  As recently as this July, U.S. intelligence agencies disclosed that 
China has continued to aid Pakistan's efforts to build long-range 
missiles that could carry nuclear weapons.
  In addition, China has been a strong opponent of a number of major 
U.S. foreign policy and military undertakings. In June, Li Peng, 
chairman of the Chinese National People's Congress, visited Yugoslavia 
to express China's support for President Slobodan Milosevic and to 
condemn NATO and U.S. intervention in Kosovo.
  In conclusion, I oppose this proposed extension of PNTR to China.
  From the narrow perspective of trade policy, the United States would 
have to give up its ability to utilize U.S. trade laws to enforce 
compliance by China with its trade commitments. Aggressive and 
persistent use of U.S. trade laws to enforce compliance are more likely 
to produce results with China than the legalistic dispute resolution 
mechanism of the WTO.
  More broadly and more fundamentally, extending PNTR would separate 
U.S. trade policy interests with China from the range of our other 
critical interests, including national security, foreign policy, human 
rights, religious freedom, labor rights, and environmental protection.
  The United States would be severing its relationship of greatest 
leverage with China, the trade relationship which is so heavily skewed 
in China's favor, far exceeding China's relationship with any of its 
other major trading partners. But we, in effect, would be taking that 
relationship and severing it from all of these other important issues.
  This may be in China's interest. But I do not perceive it to be in 
the interest of the United States. And, in fact, it is my view that it 
will become more difficult to achieve permanent normal relations with 
China--that is, across the breadth of these important issues at stake 
between us--more difficult if, in fact, we have put to one side and 
severed any connection with the trade relationship.
  My view is that we should be seeking to achieve a permanent normal 
relationship with China in all of these areas, including the trade 
relationship. But given the significance of the trade relationship, to 
sever that, as the measure before us would do, it seems to me will 
undercut or make more difficult our ability to achieve normal 
relationships in these other critical areas which I have enumerated.
  I can understand China's strategic interest here. I think those who 
have come out on the floor and said this agreement is all in our favor, 
there is nothing in it for China, as I said at the outset, to think 
that the Chinese would agree to such an arrangement is to think they 
are either naive or being very charitable. I certainly don't think they 
are naive, and I certainly don't think they are going to be very 
charitable. I think that is a very important strategic objective they 
are out to accomplish. I think it is a very significant matter for 
them. As I say, it is clear to me that it serves China's interests, but 
I do not see it at this time as serving the interests of the United 
States.
  Mr. President, I yield the floor.
  The PRESIDING OFFICER (Mr. Thompson). The Senator from Maine.
  Ms. COLLINS. Mr. President, I ask unanimous consent that following 
the conclusion of my remarks Senator Enzi be recognized, and following 
the conclusion of Senator Enzi's remarks, Senator Kyl be recognized.
  The PRESIDING OFFICER. Is there objection?
  Mr. BAUCUS. Mr. President, reserving the right to object, I note that 
would be three Republicans in a row. I don't see Senator Kyl on the 
floor. I am wondering if that could be modified so I could speak 
following Senator Enzi.
  Ms. COLLINS. Mr. President, it is my understanding that Senator Enzi 
is speaking in favor of PNTR. I just agreed to have Senator Sarbanes 
precede my speaking on PNTR despite the fact that it was a far more 
lengthy statement, although a very well-reasoned one, and Senator Kyl 
has been waiting for several hours to speak.
  I renew my unanimous-consent request.
  Mr. BAUCUS. Further reserving the right to object, this is one of the 
strange situations where nobody is in charge and it is very 
disorganized. I came to the floor and I have been prepared to speak on 
this issue since the Senate came in session today. I was told there was 
no set order for speakers, and I talked to the staff on the committee 
that has jurisdiction over this bill. I am here and I don't see Senator 
Kyl.
  I again ask my good friend from Maine if she would revise her 
unanimous consent request so I could speak after Senator Enzi.
  Ms. COLLINS. Mr. President, I inquire of the Senator from Montana how 
much time he desires.
  Mr. BAUCUS. About 15 minutes.
  Ms. COLLINS. Mr. President, to try to move things forward, I modify 
my unanimous-consent request. Following the conclusion of my remarks, 
the Senator from Wyoming, Mr. Enzi, would be recognized; and the 
Senator from Montana, Mr. Baucus, would be recognized; to be followed 
by Mr. Kyl, the Senator from Arizona.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BAUCUS. I thank the Senator from Maine for her generosity.
  Ms. COLLINS. Mr. President, I come to the floor this afternoon to 
join the Presiding Officer and several of my colleagues in discussing 
an issue of critical importance to our national security. That issue is 
the continued proliferation of weapons of mass destruction and whether 
we are willing to take action, at this time, to stem this dangerous 
trend. I rise today in enthusiastic support of the amendment offered by 
the Presiding Officer, the Senator from Tennessee, Mr. Thompson, who 
has worked so hard to present a reasoned and reasonable response to 
this threat to world peace. Senator Thompson's amendment imposes 
sanctions on key suppliers of weapons of mass destruction.
  Let me start by stating that while this is not a new problem, it does 
represent a growing threat. The United States has long been concerned 
about transfers of technology by the People's Republic of China that 
contribute to the proliferation of weapons of mass destruction. In the 
past few years, however, some of our worst fears have been realized. 
Let's just look at China's record: In June of 1997, the Director of 
Central Intelligence submitted a report to Congress stating that from 
July through December of 1996, ``China was

[[Page 17526]]

the most significant supplier of weapons of mass destruction and 
technology to foreign countries.''
  In July of 1998, the Rumsfeld Commission reported: ``China poses a 
threat to the United States as a significant proliferator of ballistic 
missiles, weapons of mass destruction, and enabling technologies.''
  In January 1998, the bipartisan Cox report stated bluntly: ``China 
stole and used classified design information on the neutron bomb, and 
concluded that China stole design information on our most advanced 
nuclear weapons, including every nuclear warhead the United States 
currently has deployed.''
  In July of 1999, yet another year goes by, but the same problem 
persists. The Deutch Commission concluded that ``weapons of mass 
destruction pose a grave threat to U.S. citizens and our military 
forces, to our allies, and to our vital interests in many regions of 
the world.''
  Once again, in January of this year, the Director of Central 
Intelligence named China, Russia, and North Korea as ``key suppliers'' 
of such technology. And just last month, the CIA's latest report again 
lists China as the key supplier of weapons of mass destruction and 
missile technologies to rogue states.
  We need no further proof. The record is crystal clear. The time has 
come to act. We should not continue to turn a blind eye to this grave 
threat to our national security and to world peace. The fact is, we 
know China is selling missile and chemical technology to Pakistan. We 
know China has also assisted Syria, Iran, North Korea, and Libya by 
transferring critical technology. In fact, the CIA's January 2000 
report states that China is perhaps the most significant supplier of 
weapons of mass destruction and missile technology in the world. Let me 
repeat that: China is the worst proliferator of weapons of mass 
destruction and related technologies in the world.
  We all know there is no easy panacea to this problem, no single 
answer. Senator Thompson's amendment provides reasonable and effective 
responses to proliferation of weapons of mass destruction, missile 
technologies, and advanced conventional weapons. This legislation is a 
step in the right direction to ensure that the United States no longer 
tolerates China's role in continuing to be the world's No. 1 
proliferator of weapons of mass destruction.
  This legislation has been revised to address legitimate concerns 
raised by the business community, our farmers, and the Administration. 
The amendment has been broadened to apply not only to China, but to 
other countries identified by the Director of Central Intelligence as 
other key suppliers of weapons--that list currently includes Russia and 
North Korea. This legislation ensures that appropriate action will 
finally be taken against these proliferators, that we will no longer 
ignore these serious transgressions, that we will no longer turn a 
blind eye to what is happening.
  This amendment is well crafted. It provides for discretionary, not 
mandatory, sanctions against countries that supply proliferating 
technologies. Frankly, I think a case could be made for mandatory 
sanctions. But the author of this amendment has bent over backwards to 
make sure it is a reasonable, well-crafted response.
  Another change was in the evidentiary standard. It has been raised 
for imposing mandatory sanctions for companies identified as 
proliferators to give the President more discretion.
  My hope is we will pass this amendment by a strong vote tomorrow, 
that we will send a strong signal to China and to other countries 
engaged in proliferation of weapons of mass destruction, that we will 
tell them there will be consequences, there will be penalties in 
response to spreading weapons of mass destruction.
  Now is the time for us to act. Let us enact these reasonable, well-
crafted changes to our foreign and national security policies.
  I thank the Presiding Officer for his leadership on this very 
important issue, and I also thank him for taking the chair so I could 
deliver my statement.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. ENZI. Mr. President, I have been listening to this debate since 
it began 3 hours ago. I am afraid colleagues and their staff and people 
watching this debate might be under the impression we are debating 
whether to limit Chinese imports. That isn't going to happen. That 
isn't part of this bill at all. This isn't about limiting what China is 
sending here, although maybe it would be a good idea. This is talking 
about the limitations placed on our trade in their country.
  It has also been mentioned a number of times that the Chinese do not 
keep agreements. It is a great chart. We have a copy of it on every 
desk. It has been mentioned that they are stealing our secrets. I do 
not think that is a secret to anybody but the Justice Department. This 
bill is not about stopping them from stealing our secrets. This bill is 
about sending our goods to China. I will go into that in a little bit 
more depth.
  I do rise in strong opposition to the amendment offered by the 
Senator from Tennessee. It is not the goal of the amendment--reducing 
proliferation--that I oppose; I do not want proliferation. I want the 
Chinese under control. We all want to see the elimination of the 
proliferation of weapons of mass destruction and the means to deliver 
them. But I think the amendment takes a flawed approach toward solving 
the problems. Contrary to what the sponsors of this amendment indicate, 
this is a trade and economic sanctions bill. The amendment remains a 
counterproductive unilateral sanctions amendment that would impose 
trade and economic sanctions.
  I appreciate the author changing it so that it is not mandatory. 
Under the only version I had seen before this amendment was submitted, 
it was to be a mandatory 5-year penalty, regardless of what was done 
and regardless of the size of the offense. So some flexibility is 
appreciated. The countless revisions made to the legislation further 
underscore why it would greatly benefit from committee input and 
consideration. This is sweeping legislation, and it has had no 
committee hearings and no committee consideration--at least I am not 
aware of a single vote or a single amendment proposed to this bill in a 
committee meeting. It is a little different from when we do major 
legislation.
  Sponsors of the amendment are clearly frustrated at a perceived lack 
of enforcing sanctions contained in the nonproliferation laws that are 
now on the books. It is reasonable to conclude that the President 
should have imposed some very targeted sanctions as a result of certain 
missile-related transfers to Pakistan. However, I do not advocate, nor 
does this justify, making sweeping changes to our nonproliferation 
policy, which is what this bill will do. It singles out countries. It 
used to single out just one. It has been expanded a little bit. It 
still singles out specific countries--and they do need more scrutiny. 
We said these people steal, perhaps do not abide by agreements.
  I am reminded of a quote by my grandpa. When he was talking about 
people he didn't trust, he said:

       I don't trust them as far as I can spit. And my chin is 
     always wet.

  You don't have to trust them to work with them, but you have to watch 
them.
  I remind my colleagues, this bill will not have an effect on this 
President, but it will certainly have a tremendous impact on the 
President's ability to conduct foreign policy. It is not in our 
security interests to tie the hands of the President.
  I have had a little experience with an industry in my State on this 
sanctions stuff. We have been working for years to be able to send soda 
ash to India. Soda ash--we call it trona in Wyoming--is used in making 
soda, but you also use it in glass manufacture and hundreds of other 
products. It is something needed in every single country. Southern 
Wyoming happens to have the largest single natural deposit of it in the 
world. We export that to most places around the world. Some places

[[Page 17527]]

make it synthetically, and they put high tariffs on it or completely 
ban it from their country to give their country a better trade 
situation.
  We had already gotten trona into India. We had everything moving, in 
place, to get it into India. And they had to touch off one of those 
nuclear bombs. They had to prove they had nuclear proliferation. Do you 
know what we did? We imposed immediate sanctions on them. Now we need 
to tell the countries what the problem is and what we are going to do, 
and I agree with that. But here is the effect it had on India.
  They said: Oh, Wyoming, you know that product we did not want anyway? 
You are not going to let us have it, and we are glad. Now we are back 
to square one, trying to get trona into their country. It did not 
affect their economy, it did not stop their proliferation, it has not 
had any effect on them, but it has had a huge effect on us.
  Trade is out of balance with China, but it is not proliferation that 
is doing it; it is people in the United States buying products from 
China. This bill and the proliferation amendment do not stop that. 
There are reductions in tariffs they will have to follow if they become 
a part of the World Trade Organization. They have already signed some 
agreements that say they will do that. That is our hope so we will be 
able to get a more competitive situation. Of course, we are also hoping 
to open up some new markets over there, and there are some other things 
that Wyoming and the United States will benefit from selling over 
there. We have to be careful not to spite ourselves while we teach 
China a lesson they will not hear.
  Many in this body think the President currently has more than 
adequate authority to respond to proliferation undertaken by China or 
any other country. Some of the statutory examples are the Arms Control 
and Disarmament Act, the Export-Import Bank Act, the Arms Export 
Control Act, the Iran-Iraq Arms Nonproliferation Act of 1992, the 
Nuclear Proliferation Prevention Act of 1994, and the Export 
Administration Act, which at the present time is implemented by 
Executive order under the authority of the International Emergency 
Economic Powers Act, IEEPA.
  If there is something that needs to be strengthened, that last item 
is the one where it needs to be done. A lot of the things we talk about 
to be able to control what China is able to use are embodied in that 
act. Right now, we encourage people to violate that law. We do not have 
sufficient penalties in that law. As I mentioned, it is operating under 
Executive order, and that takes away a lot of the capability of the 
United States to control what China has from us. It is important that 
that be done. But there are people in this body who evidently think we 
have enough of that because the ability to bring up the Export 
Administration Act has been thwarted.
  This amendment we are debating, the nonproliferation amendment--great 
title--also authorizes a new and, in my view, a very harmful tool for 
conducting foreign policy; that is, restricting the access of capital 
markets in the United States. Just sending the signal to the rest of 
the world that we are willing use our capital markets for the conduct 
of foreign policy would have a chilling effect on the competitiveness 
of our markets.
  Alan Greenspan, Chairman of the Federal Reserve Board, testified 
before the Senate Banking Committee on July 20. There he issued a 
pronouncement of his concern about any proposal which could restrict or 
deny access to our capital markets. Besides the harm this would 
certainly cause to our own markets, Chairman Greenspan questioned 
whether this provision would be an effective tool. After all, the 
United States is not the only source of capital in the world.
  I will read just a portion of Chairman Greenspan's response to a 
question about using our capital markets as a foreign policy tool, 
specifically as provided for in this amendment. He said:

       But most importantly, to the extent that we block 
     foreigners from investing or raising funds in the United 
     States, we probably undercut the viability of our own system.
       But far more important is I'm not even sure how such a law 
     could be effectively implemented because there is a huge 
     amount of transfer of funds around the world. For example, if 
     we were to block China or anybody else from borrowing in the 
     United States, they could very readily borrow in London and 
     be financed by American investors. Or, if not in London, if 
     London were financed by American investors, London could be 
     financed by Paris investors, and we finance the Paris 
     investors.

  So you can move it down the road as many steps as are needed in order 
to make the same transfer of dollars.

       In other words, there are all sorts of mechanisms that are 
     involved here. So the presumption that somehow we block the 
     capability of China or anybody else borrowing in essentially 
     identical terms abroad as here in my judgment is a mistake.

  Claims have been made by sponsors of the China Nonproliferation Act 
suggesting that all of the major concerns about the bill have been 
addressed. Let's take a little closer look at these claims.
  The first claim is the bill has been broadened to include countries 
in addition to China, so as not to single out China.
  However, while the bill expands the list of potential sanctioned 
countries, the bill title and focus remains the same: the China 
Nonproliferation Act. This clearly infers that the singular political 
target of the bill is China. Regardless, expanding the bill to include 
more potentially sanctioned countries does not correct the flawed 
unilateral approach of the legislation. Since the bill would use the 
past five Director of Central Intelligence proliferation report country 
lists, those countries which could be subject to unilateral sanctions 
include--these are ones that could be included under these sanctions 
because we are going back 5 years and using the Director of Central 
Intelligence proliferation reports. You will find Germany, the United 
Kingdom, which includes Great Britain, Italy, France, and other more 
likely suspects. These countries were listed in the 1997 DCI 
proliferation report. This means this amendment could sanction some of 
our allies for 5 consecutive years.
  The second claim by the sponsor of the China Nonproliferation Act is 
that the sanctions against supplier countries has been made 
discretionary, as opposed to the mandatory sanctions contained in the 
original bill. This is correct, but there is more than meets the eye. 
The sponsors of the bill leave out a crucial fact. If the President 
determines proliferation has occurred, he is required to apply all five 
of the sanctions provided for in section 4 of the bill. This is the 
mandatory, all-or-nothing aspect of the bill.
  The third claim is that the revised bill raises the evidentiary 
standard from credible information to a Presidential determination, 
giving the President complete discretion in making a sanction 
determination. Once again, the sponsors leave out crucial facts. Unlike 
other nonproliferation laws, the revised bill does not give the 
President any discretion over the types of sanctions that should be 
imposed on proliferating entities or the length of time those sanctions 
should remain. It requires the sanctions to be in place for a minimum 
of 1 year regardless of the circumstances. It also does not give 
discretion to the President regarding the SEC disclosure required in 
the bill if an entity is included in the President's proliferation 
report. Remember, no conclusive proof is necessary for an entity to be 
included in the report.
  It is also important to point out the dichotomy between the threshold 
level for the President's report--credible information--and that for 
triggering the mandatory sanctions--Presidential determination. This 
puts the President in the impossible position of labeling a certain 
activity, whether it occurred or not, as a concern sufficient to 
justify inclusion in the report to Congress but insufficient to justify 
action against the proliferator.
  The bill's authors' next claim is that it would not affect Wyoming 
farmers and ranchers, but they fail to recognize that regardless of who 
is sanctioned by the bill, it would still punish American agricultural 
producers. That is because foreign countries sanctioned as a result of 
the bill may retaliate by not buying U.S. farm and industrial products.

[[Page 17528]]

Most of the agricultural groups recognize this and, as a result, remain 
opposed to this legislation.
  The last claim of the sponsors is that the latest charges of the bill 
make it ``consistent with current law and similar to the Iran 
Nonproliferation Act of 2000.'' The reality is this bill does not track 
the Iran Nonproliferation Act of 2000 at all, except for the credible 
information standard for the President's proliferation report to 
Congress. This amendment would only add another layer onto the 11 or 
more statutes available for the President to presently use against 
proliferators.
  I will mention just a few of the differences. I could have some of 
them wrong because the bill we have may not be the same as the one we 
were able to look at yesterday.
  I have mentioned a few of the differences in the amendment. As I 
mentioned before, there are mandated five different types of sanctions 
if the President determines proliferation occurred. In contrast, the 
INA allows for optional sanctions. The amendment before us requires 
sanctions for at least 1 year, whereas the INA does not require a 
specified period of time for sanctions to remain intact. If this is to 
track the Iran Nonproliferation Act, then I question the need for it, 
too.
  This amendment provides for an expedited legislative procedure for 
Congress to use if it disagrees with the President's determination, 
whereas the INA does not. These facts clearly demonstrate that the 
China Nonproliferation Act contains significant and substantive 
differences from the recently passed Iran Nonproliferation Act of 2000.
  I would be remiss not to mention the significant impact this 
amendment would have on the operation of our export control system. It 
would add an additional layer to the current patchwork of dual-use 
export control law. Instead, the focus should be on a complete reform 
and reauthorization of the Export Administration Act to address 
proliferation of the dual-use items.
  Last year, the Banking Committee, as I mentioned, unanimously 
reported S. 1712, the Export Administration Act. This bill, the EAA, 
recognizes that the current system is broken and needs a complete 
modernization and overhaul to be fixed. The committee's EAA would 
create a country tiering system to take into account the risks of 
diversion and misuse of sensitive items if exported to any given 
country.
  Among the other nonproliferation enhancements, it would require the 
denial of licensed exports to entities that do not cooperate with U.S. 
postshipment verifications, with the possibility of license denial to 
the affiliate or parent company. It keeps us from shipping items that 
would help them. It also allows controls to be imposed based upon the 
end use or end user on the export of any item that contributes to the 
proliferation of weapons of mass destruction or the means to deliver 
them.
  In conclusion, I remind my colleagues that the amendment we are 
considering is a unilateral sanctions bill. It could easily replace the 
current China NTR votes with annual proliferation votes on China and on 
other countries, including our allies.
  These are serious issues at stake, so it is not to the benefit of 
this body or to the people of the United States to hastily consider 
this legislation without the benefit of committee consideration. I 
share the concerns about proliferation, but this counterproductive 
amendment takes the wrong approach and would have harmful consequences 
on the U.S. national security and economy. I encourage my colleagues to 
take a careful look at it, to defeat the amendment, and to pass NTR.
  I yield the floor.
  The PRESIDING OFFICER (Ms. Collins). Under the previous order, the 
Senator from Montana is recognized.
  Mr. BAUCUS. Mr. President, I rise in opposition to the Thompson-
Torricelli Amendment.
  I am very concerned, along with all of my colleagues, about missile 
proliferation and the development of weapons of mass destruction. 
However, this particular amendment does not enhance our ability to 
prevent dangerous proliferation. Just the reverse. The amendment will 
make it even harder for the United States to contain proliferation. It 
will seriously damage important American economic interests. And, if 
added to H.R. 4444, it will kill PNTR.
  Let me outline some of the principal problems I see in this proposal.
  First, we already have a broad body of law covering proliferation of 
missiles, weapons of mass destruction, and the inputs to those weapons. 
Those laws provide sufficient authority to the President to take 
action. Some may argue that there are cases where the President has not 
acted in a timely fashion or in the appropriate way. But he does have 
the proper authority and needs no more.
  Second, the proposal effectively ties the hands of the next President 
and all future Presidents. The proposal reduces a President's 
flexibility in using the threat of sanctions as leverage to force a 
change in behavior by a proliferating state. In recent months, we have 
seen, for the first time in 50 years, that reconciliation between South 
Korea and North Korea seems possible. We have been able to resume 
discussions with the North on missiles. What a tragedy it would be if 
we were required to impose sanctions against North Korea just at the 
moment when significant progress is possible in that potential 
tinderbox!
  Third, the scope of this proposal is so broad that sanctions would 
hurt innocent people and innocent entities. It could restrict purely 
commercial transactions. Stop scientific and academic exchanges that 
are important to our nation. And reduce military-to-military 
discussions that provide our own military forces with the information 
and insight necessary for them to do their job.
  Fourth, these sanctions are unilateral. We have seen, repeatedly over 
the last two decades, that unilateral sanctions don't work. 
Multilateral sanctions do work. Enactment of this legislation would 
antagonize some of our closest allies, with the result that they may 
not cooperate with us in the future on multilateral non-proliferation 
regimes. It may feel good to take a unilateral sanction, but any 
effective program to stop proliferation must involve all of our allies.
  Unilateral sanctions also hurt American farmers, workers, and 
businesses. While we are taking these unilateral measures and reducing 
the ability of Americans to pursue commercial activities with China, 
our Japanese and European competitors will be very happy to take our 
place in that growing market. Little harm to China. Great economic harm 
to America. A real boon for Japan and Europe. And once markets are 
lost, getting them back at some later time will be very, very hard.
  The impact of this proposal on our agricultural sector could be very 
serious. It would prevent the use of various commodity credit programs 
for sales to China. Our European, Canadian, and Australian competitors 
would happily step in. Also, our farmers would be the likely first 
target of Chinese counter-retaliation. For these reasons, almost every 
major agricultural organization involved in trade opposes this 
legislation.
  Finally, possible sanctions in this amendment include being barred 
from access to U.S. capital markets. Alan Greenspan, Chairman of the 
Federal Reserve Bank, testified on July 20 at the Senate Banking 
Committee. He said:

       Most importantly, to the extent we block foreigners from 
     investing or raising funds in the United States, we probably 
     undercut the viability of our own system.  . . . The only 
     thing that strikes me as a reasonable expectation is it can 
     harm us more than it would harm others.

   This would be the first time America's capital markets have been 
used as a unilateral foreign policy sanction. This idea is plain nutty. 
Why would we want to damage the capital markets that have contributed 
so much to our current prosperity?
  As we vote on granting China permanent Normal Trade Relations status, 
this amendment would effectively nullify much of the progress we have 
made in our economic negotiations with China.

[[Page 17529]]

  We need to integrate China into the international community. Chinese 
participation in the World Trade Organization and our granting them 
PNTR is a critically important first step. We also need to work closely 
with our allies to bring China into the Missile Technology Control 
Regime and to ensure Chinese compliance with it and other weapons 
control agreements. We need to work with our allies to address Chinese 
human rights abuses forcefully at the United Nations Commission on 
Human rights and elsewhere. We need to work with the international 
community to help ensure peace and stability across the Taiwan Strait.
  I support strong action against proliferation of missiles or weapons 
of mass destruction by China or any other country. But the Thompson-
Torricelli amendment moves us backwards in these efforts.
  In addition to these very important substantive reasons to vote 
against this amendment, there is another reason--the very survival of 
the underlying PNTR legislation. This amendment, like all amendments, 
is a killer. An amendment to H.R. 4444 means a conference will be 
required. At this stage of the Congressional session in this 
Presidential election year, there can be no conference. There will be 
no conference. A positive vote on this amendment is a vote to kill 
PNTR. Every Senator must understand this and decide whether you want to 
kill PNTR, with all the negative ramifications for our economy and our 
ability to influence China in the future.
  If this, or any, amendment passes, it will be a sign that the Senate 
has voted to kill PNTR. I will not be complicit in that effort. 
Therefore, if there is a successful amendment, I will vote against 
invoking cloture, and I will encourage all my colleagues to join me.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Madam President, I ask unanimous consent that I be 
allowed to speak briefly in response to one point my colleague made 
before Senator Kyl begins.
  The PRESIDING OFFICER. Is there objection?
  Mr. THOMAS. Reserving the right to object, it was my understanding 
there was agreement that Senator Kyl would be the next speaker.
  The PRESIDING OFFICER. The Senator is correct. The Senator is seeking 
to modify that.
  Mr. THOMAS. How much time?
  Mr. THOMPSON. I will take about 5 minutes.
  Mr. THOMAS. I will not object.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator from Tennessee.
  Mr. THOMPSON. Madam President, we have had a good discussion of the 
issues today, but recently the Senator from Montana has taken to the 
road of describing one of the ideas in the amendment as ``nutty.'' It 
doesn't really bother me if the Senator from Montana calls an idea of 
mine nutty. I assume that Senator Torricelli from New Jersey doesn't 
mind, either. But he is wondering where this nutty idea comes from. I 
will address that.
  The Deutch Commission stated that:

       The commission is concerned that known proliferators may be 
     raising funds in the U.S. capital markets.

  They concluded:

       It is clear that the United States is not making optimal 
     use of its economic leverage in combating proliferators. 
     Access to capital markets is among a wide range of economic 
     levers that could be used as carrots or sticks as part of an 
     overall strategy to combat proliferation. Given the 
     increasing tendency to turn to economic sanctions rather than 
     military action in response to proliferation activities, it 
     is essential that we begin to treat this economic warfare 
     with the same level of sophistication and planning we devote 
     to military options.

  That is the source of that idea. The Deutch Commission, of course, is 
comprised of several distinguished U.S. citizens who gave up 
substantial portions of their time to serve on this Commission: Mr. 
John Deutch; Senator Arlen Specter; Anthony Beilenson of California, 
served 20 years in the House; Stephen A. Cambone, director of research 
at the Institute of National Strategic Studies of the National Defense 
University; M.D.B. Carlisle, who was chief of staff to Senator Cochran; 
Henry Cooper, who is chairman of Applied Research Associates, Inc., a 
private consultant; Mr. James Exon, Nebraska, former Senator of the 
United States; Robert Gallucci, currently dean of the School of Foreign 
Service at Georgetown; David McCurdy of Oklahoma, former Member of the 
House of Representatives; Janne Nolan, professor of national security 
studies at Georgetown and director of the Ethics and National Security 
Project at the Century Foundation; Daniel Poneman, attorney at law, 
Hogan & Hartson; William Schneider, who is a former member of the 
recent Commission to Assess the Ballistic Missile Threat to the United 
States and was Under Secretary of State for Security Assistance, 
Science and Technology from 1982 to 1986; Henry Sokolski, executive 
director of the Nonproliferation Policy Education Center, a Washington-
based nonprofit organization.
  These are the people who came up with this nutty idea. I am proud to 
associate myself with them.
  The PRESIDING OFFICER. The Senator from Arizona is recognized.
  Mr. KYL. I thank the Chair.
  Madam President, I will be supporting the Thompson amendment and will 
explain why in a moment. But before the Senator from Montana leaves the 
floor, let me say that I am astonished that the Senator from Montana 
and others in his position have so little confidence in the underlying 
provision here that their view is that any amendment--the words of the 
Senator from Montana, ``any amendment''--would have to be opposed 
because it would jeopardize the passage of PNTR for China. I find that 
to be astounding.
  This passed the House of Representatives by an overwhelming vote, by 
over 40 votes. It is supported very strongly by the Clinton-Gore 
administration. It is supported by the leadership, the minority and 
majority in both Houses. I am certain it will pass the Senate when it 
comes to a vote.
  Given that, it seems to me quite strange, indeed, that any amendment 
that the Senate puts on this legislation will doom it to failure. Even 
amendments that arise from circumstances which occur after the House 
acted, I ask? For example, the representatives of the People's Republic 
of China, in their twice weekly briefings, have recently begun to 
insist on a condition to China's support for Taiwan's entry into the 
WTO. Taiwan, they say, must be admitted as a province of China rather 
than a separate customs territory, which is the way it has been 
negotiated among all of the countries involved. The wording is to the 
effect ``separate customs territory, China, Taipai'' I believe is the 
way it reads. Then there is the separate customs territory, Matsu, and 
I think two others.
  Why is this important? It is a fact that has arisen after the House 
of Representatives acted. I am certain that everybody who voted for 
PNTR for China in the House of Representatives and everyone who 
supports it in the Senate, and I know the Clinton-Gore administration, 
all support the entry of Taiwan into the WTO as a separate customs 
territory. We do not support--President Clinton has sent me a letter 
confirming that he does not support--China's effort to redefine the 
circumstances under which Taiwan will enter into the WTO as the 
definition that China wants to make the political point that it 
believes Taiwan is strictly a province of China.
  So this is a new fact. Now, are we to ignore this? Here China is 
asking us to grant them entry into WTO, and we are willing to do that. 
And China is saying: By the way, you are only going to get Taiwan's 
entry into WTO as we will define it, not as you all have already 
negotiated it.
  The President of the United States and his Trade Representative, Ms. 
Barshefsky, have said no to the representatives of China, that is not 
correct. We will not go along with Taiwan's entry in that way. The 
Chinese continue to insist upon it.
  Are we, the Senate, to ignore that development? Are we nothing but 
ciphers here to simply rubber stamp whatever the House of 
Representatives does? I don't think so. We have a constitutional 
responsibility, and to absolutely

[[Page 17530]]

ignore it--in fact, to reject that responsibility, as Members of this 
body are apparently willing to do all in the name of getting this 
passed exactly as the House of Representatives did it, is to abdicate 
our responsibility. I think that is wrong.
  As my colleagues know, the bill we are debating would grant permanent 
trade status to China. It is eventually going to pass and become law. 
Trade with China is an important issue, primarily due to the expansive 
nature of that country's economy and the desire of U.S. firms to 
participate in that economy. Trade alone doesn't define our 
relationship with China, as the present Presiding Officer made clear 
earlier, and as Senator Thompson made crystal clear in presenting his 
amendment. There are other troubling aspects to this, such as China's 
transfer of technology used to make ballistic missiles and weapons of 
mass destruction that I don't think can be ignored.
  I am very pleased, therefore, that Senator Thompson has brought this 
amendment to the floor and that we are now debating it. I, too, would 
have preferred that it come up in a different context so that we could 
not have the argument raised against it--not on the merits, but for 
political reasons you don't dare support the Thompson amendment; 
otherwise, the bill will have to go back to the House of 
Representatives, and who knows what will happen. It might not pass. We 
would not be subjected to that argument if he could have raised the 
amendment as a freestanding bill. The supporters of PNTR would not 
permit him to bring it up as a freestanding bill. They knew they would 
have a better chance to defeat this if he had to propose it as an 
amendment to PNTR. But then they complain he is presenting it as an 
amendment to PNTR.
  That is not an appropriate substantive position, it seems to me. It 
is clever from a parliamentary point of view, but I don't think it 
allows Senator Thompson to present the issue in the most dispassionate, 
objective, and appropriate way. We are now being relegated to the 
position that if this amendment passes, then PNTR is in jeopardy. 
Nobody wants that argument to be raised against them.
  Let me make arguments which I think are on the merits. The Thompson 
amendment is meant to combat China's irresponsible trade in the 
sensitive technologies that I mentioned. In response to concerns 
expressed by the administration, the amendment has been revised to also 
cover the proliferation behavior of other countries, such as Russia, 
North Korea, and any other country that engages in this irresponsible 
behavior.
  As a cosponsor, as I said, even though my comments will focus on 
cases of Chinese proliferation, as Senator Thompson has done, I also 
note that the administration's track record in responding to Russia and 
North Korea and their proliferation is, frankly, similar to the 
response with respect to China. I will comment about the proliferation. 
Senator Thompson made this point earlier, and I will raise a couple of 
new points.
  It is very clear that over the past decade China has been the world's 
worst proliferator of the technology used to develop and produce 
nuclear, chemical, and ballistic missiles, narrowly edging Russia and 
North Korea for this dubious distinction. Beijing has sold ballistic 
missile technology to Iran, North Korea, Syria, Libya, and Pakistan, at 
least. It has sold nuclear technology to Iran and Pakistan. It has 
aided Iran's chemical weapons program and sold that nation advanced 
cruise missiles. China's assistance has been vital to the weapons of 
mass destruction program in these countries. It is not a trivial 
matter. Because of that assistance, the American people, our forces, 
and our friends abroad face a much greater threat.
  That is what this boils down to. We want trade with China, but we 
also want to ensure that China doesn't endanger the American people and 
our allies and forces deployed abroad by their proliferation of these 
weapons of mass destruction. Sadly, the efforts of the Clinton 
administration to end Beijing's proliferation have not succeeded. Since 
taking office in 1993, the administration has engaged in numerous 
discussions with Chinese officials concerning their failure to live up 
to international nonproliferation norms. But it has failed to impose 
sanctions on Chinese organizations and Government entities, as required 
by several U.S. laws. Time and time again, the Clinton administration 
has either refused to follow the laws requiring sanctions, or has done 
so in a way deliberately calculated to undermine the intent of the 
sanctions.
  To understand the need for the Thompson amendment, it is instructive 
to examine a few of the cases of Chinese proliferation and the 
administration's response.
  First, the transfer of the M-11 missiles to Pakistan. Since taking 
office, the Clinton administration has been faced with the issue of 
China's transfer of M-11 missiles and production technology to 
Pakistan. The M-11 is a modern, solid-fuel surface-to-surface missile 
that is more accurate, mobile, and easier to fire than the Scuds that 
were used in Iraq during the gulf war. For the past 7 years, the 
administration has ignored mounting evidence in this case and has 
either failed to impose sanctions altogether or has taken steps to 
limit their effect. One month prior to President Clinton's 
inauguration, the Los Angeles Times reported that China had delivered 
about two dozen M-11s to Pakistan, breaking its pledge to the United 
States to abide by the Missile Technology Control Regime, the MTCR.
  The MTCR is a voluntary arrangement under which the 32 member nations 
agree to restrict exports of ballistic missiles capable of carrying a 
payload of at least 500 kilograms to a range of 300 kilometers, as well 
as key missile components and technology to nonmembers of the regime. 
While the MTCR does not have an enforcement provision, U.S. law 
requires sanctions to be imposed on nations that transfer technology 
regulated by this agreement. There are two categories. Category I of 
the MTCR covers transfers of complete missile systems, such as missile 
stages and some production equipment. Category II regulates transfers 
of specific missile components and dual-use goods used to produce 
missiles.
  In August of 1993, the Clinton administration imposed sanctions on 
Pakistan's Ministry of Defense and 11 Chinese defense and aerospace 
entities for violations of category II of the MTCR. Shortly after the 
imposition of the sanctions, the Washington Times quoted State 
Department and intelligence sources as saying that despite ``. . . 
overwhelming intelligence evidence that China in November of 1992 
shipped Pakistan key components of its M-11 missile''--an MTCR category 
I violation--Secretary of State Warren Christopher decided China had 
only committed a category II violation and imposed the mildest form of 
sanctions possible. Under Secretary of State Lynn Davis defended the 
decision, saying the U.S. did not have conclusive evidence Pakistan had 
received complete M-11s.
  In October 1994, the Clinton administration waived these sanctions in 
return for another Chinese promise not to export ``ground-to-ground 
missiles'' covered by the MTCR, and for China's reaffirmation to the 
``guidelines and parameters'' of the MTCR.
  Since the waiver, despite a steady stream of press reports, 
congressional testimony, and unclassified reports by the intelligence 
community that have described China's continued missile assistance to 
Pakistan, the Clinton administration has not imposed sanctions as 
required by law.
  For example, in 1995, the Washington Post reported that satellite 
reconnaissance photos, intercepted communications, and human 
intelligence reports indicated Pakistan had indeed acquired M-11s. The 
M-11s were reportedly stored at Pakistan's Sargodha Air Force Base 
where the Pakistani military has constructed storage facilities for the 
missiles and mobile launchers, as well as related maintenance 
facilities and housing for the launch crews. Soldiers have reportedly 
been sighted practicing launches with advice from visiting Chinese 
experts.

[[Page 17531]]

  The Washington Post also reported in June of 1996 that all U.S. 
intelligence agencies believe with ``high confidence'' that Pakistan 
has obtained M-11 missiles and that Islamabad had probably finished 
developing nuclear warheads for them. An August 1996 article in that 
newspaper further disclosed that a national intelligence estimate, 
which represents the consensus judgments of U.S. intelligence agencies, 
concluded Pakistan was capable of an M-11 launch within 48 hours. It 
also confirmed Pakistan was constructing a factory to produce M-11s 
from Chinese-supplied blueprints and equipment.
  In addition, an unclassified National Intelligence Estimate titled 
Foreign Missile Developments and the Ballistic Missile Threat to the 
United States Through 2015 published in September 1999, states, 
``Pakistan has Chinese-supplied M-11 short-range ballistic missiles.'' 
And lest anyone believe Chinese missile assistance to Pakistan has 
ceased, on July 2nd of this year, the New York Times reported that 
``China [has] stepped up the shipment of specialty steels, guidance 
systems and technical expertise to Pakistan * * * Chinese experts have 
also been sighted around Pakistan's newest missile factory, which 
appears to be partly based on a Chinese design, and shipments to 
Pakistan have been continued over the past 8 to 18 months. * * *''
  According to the Washington Times, evidence of the M-11 sale also 
includes photographs of missile canisters in Pakistan and electronic 
intercepts regarding payments by Pakistan to China for the missiles. 
Yet despite this evidence, the administration has not imposed the 
sanctions required under U.S. law.
  As Assistant Secretary of State for Nonproliferation Robert Einhorn 
said in Senate testimony in 1997, sanctions have not been invoked on 
China for the sale of M-11's to Pakistan ``* * * because our level of 
confidence is not sufficient to take a decision that has very far-
reaching consequences.'' But the administration appears to have 
purposely set a standard of evidence so high that it is unattainable. 
As Gary Milhollin, Director of the Wisconsin Project on Nuclear Arms 
Control, testified to the Senate in 1997, ``I think the State 
Department just continues to raise the level over which you have to 
jump higher and higher as the evidence comes in so that sanctions will 
never have to be applied and the engagement policy can simply be 
continued. The effect is to really nullify the act of Congress that 
imposes sanctions, because unless the State Department is willing to go 
forward in good faith and complete the administrative process, then the 
law cannot take any effect.''
  Another area where the administration has not lived up to its legal 
obligations concerns the sale of advanced Chinese C-802 anti-ship 
cruise missiles to Iran. These missiles pose a grave threat to U.S. 
forces operating in the crowded Persian Gulf. I would remind my 
colleagues of one example of this danger; in 1987, a similar Exocet 
cruise missile killed 37 sailors on the U.S.S. Stark.
  Of course, parenthetically, when these events occur, everyone in the 
Congress and all of the pundits and a lot of American people say: Who 
are the people in charge? What are they doing? When did they know? What 
did they know? Why aren't they doing something to protect our soldiers 
and sailors and our folks deployed abroad? Why aren't they doing 
something?
  The next time Americans are killed by a missile, the technology for 
which came from China, I am going to answer that question. I am going 
to say I stood on the floor of the Senate when we were debating PNTR 
and begged all of you to support an amendment which would at least 
allow us to impose sanctions on China when it engages in proliferation, 
and you wouldn't. No, no. PNTR with China is far more important than 
protecting American sailors or American soldiers or American citizens 
abroad. God forbid that time should come. I will be here again 
reminding my colleagues of what they are failing to do today to protect 
against the threat which probably will have an adverse impact on 
America in the future.
  Continuing on about the Iranian issue, it is very interesting.
  Iran's possession of this missile was first disclosed in January 1996 
by Vice Admiral Scott Redd, then-commander of the U.S. Fifth Fleet. 
Admiral Redd said the C-802 gave the Iranian military increased 
firepower and represented a new dimension to the threat faced by the 
U.S. Navy, stating, ``It used to be we just had to worry about land-
based cruise missiles. Now they have the potential to have that 
throughout the Gulf mounted on ships.'' In addition, Secretary of 
Defense Cohen has said that Iran has tested an air-launched version of 
the anti-ship cruise missile.
  According to the Washington Times, in 1995, Defense Department 
officials recommended declaring that China had violated the Gore-McCain 
Iran-Iraq Arms Nonproliferation Act of 1992, which requires sanctions 
for the transfer to either country of ``. . . destabilizing numbers and 
types of advanced conventional weapons. . . .'' Yet State Department 
officials opposed invoking sanctions to avoid damaging relations with 
China.
  In his Senate testimony in 1997, Assistant Secretary of State Einhorn 
acknowledged the transaction, stating, ``. . . the question of whether 
China transferred the C-802 anti-ship cruise missiles to Iran is not in 
doubt.'' He noted that ``Such missiles increase China's maritime 
advantage over other Gulf states, they put commercial shipping at risk, 
and they pose a new threat to U.S. forces operating in the region.'' 
But Mr. Einhorn maintained that the transfer was not ``destabilizing'' 
and thus did not meet the legal requirement for sanctions to be 
imposed.
  Such thinking illustrates how the Clinton administration has refused 
to implement nonproliferation laws. If the arrival of weapons which 
directly threaten the U.S. Navy is not ``destabilizing,'' it is hard to 
imagine what the administration might find sufficiently destabilizing 
for sanctions under the Gore-McCain Iran-Iraq Arms Nonproliferation 
Act.
  The Senate has specifically addressed the issue of Chinese cruise 
missile sales. In June 1997, we passed an amendment offered by Senator 
Bennett by a vote of 96 to 0, stating: ``The delivery of cruise 
missiles to Iran is a violation of the Iran-Iraq Arms Nonproliferation 
Act of 1992. It is the sense of the Senate to urge the Clinton 
administration to enforce the provisions of the [Act] with respect to 
the acquisition by Iran of C-802 model cruise missiles.'' Despite this 
unanimous expression by the Senate of the need to enforce the law, the 
administration has refused to take action in this case.
  I note, parenthetically, that is the reason Senator Thompson is 
forced to come to the floor and offer this amendment. Time after time 
after time, we have said to the administration: Enforce the law that 
exists--the act I just spoke of, and others--and it won't be necessary 
to take action such as this. But when, time after time, existing laws 
are ignored or are enforced in ways that undercut their intent, 
eventually, if you are serious about the defense of the United States, 
you have to take action.
  That is what has forced Senator Thompson to bring this issue to a 
head now at the moment when we are considering PNTR for China.
  There have been several instances of Chinese proliferation where the 
administration has not invoked sanctions as required by law.
  According to press reports, China has sold Iran ballistic missile 
guidance components, test equipment, computerized machine tools used to 
manufacture missiles, and telemetry equipment which sends and collects 
missile guidance data during flight tests.
  Earlier this year, the Washington Times disclosed that China is 
assisting Libya's missile program. According to the Times, China's 
premier training center for missile scientists and technicians is 
training Libyan missile specialists; the director of Libya's Al-Fatah 
missile program was planning to visit China; and Beijing is building a 
hypersonic wind tunnel in Libya used to design rockets and simulate 
missile flight.

[[Page 17532]]

  China has reportedly supplied missile guidance components and 
specialty steel to North Korea. This January, the CIA's semi-annual 
report to Congress on the proliferation of ballistic missiles and 
weapons of mass destruction indicated that China has aided Syria's 
liquid-fuel ballistic missile program.
  And yet despite this evidence, the Clinton administration has not 
completed the necessary findings and imposed sanctions as required by 
law in any of these cases.
  On rare occasions, the Clinton administration has obeyed sanctions 
requirements in laws, but only symbolically, thereby undermining the 
effectiveness of the action. For example, in May 1997, it sanctioned 
two Chinese companies, five Chinese executives, and a Hong Kong firm 
for knowingly assisting Iran's chemical weapons program. The companies 
and executives were banned from trading with the United States for one 
year, pursuant to the Chemical and Biological Weapons Control and 
Warfare Elimination Act of 1991.
  Because the sanctions were not applied to the Chinese government, but 
only to a handful of Chinese individuals and companies, while they met 
the bare requirements of the law their impact was minimal. As the 
Washington Post reported, ``The sanctions announced yesterday will have 
minimal economic effect on China, officials said, because they are 
aimed at individuals and companies that do little business with this 
country.''
  Secretary of State Albright defended the administration's decision 
not to sanction the Chinese government, stating that the United States 
had ``. . . no evidence that the Chinese government was involved'' in 
the chemical sales to Iran. But other administration officials 
acknowledge that the U.S. has raised concerns about chemical weapons-
related sales to Iran with Beijing on numerous occasions. China's 
government may or may not have approved the sales, but government 
officials in Beijing clearly knew of the transfers, if only because of 
the concerns expressed by U.S. officials. We should not allow China's 
Government to take a ``see no evil, hear no evil'' approach to 
proliferation.
  Finally, let me point out when the Clinton administration has levied 
modest sanctions, they have had some success in curbing Chinese 
proliferation. While the China's nuclear proliferation behavior seems 
to have improved in response to U.S. sanctions, it has not been trouble 
free. Some nuclear assistance to Pakistan may be continuing.
  The CIA report from January 21 also states that our intelligence 
agencies cannot preclude ongoing contacts between Chinese and Pakistani 
nuclear organizations. In addition, in May of this year, the Washington 
Times disclosed that sales of U.S. nuclear reactors to China have been 
held up because China has refused to provide the necessary assurances 
that it will not re-export U.S. nuclear technology to other countries. 
The administration has correctly refused to approve 16 export licenses 
from American firms until China provides these assurances. My point in 
discussing China's response to even mild sanctions imposed by the U.S. 
in these particular cases is to illustrate that economic sanctions have 
altered China's proliferation behavior in the past. They can do so in 
the future, if we are serious.
  I am not satisfied that even in this particular area the Clinton 
administration has lived up to the requirements of the law. The 1994 
Nuclear Non-Proliferation Act requires additional sanctions beyond the 
suspension of Export-Import Bank loans by the Clinton administration in 
the ring magnet case. I referred to Assistant Secretary of State for 
Nonproliferation Robert Einhorn, who explained in Senate testimony that 
the administration avoided this legal requirement by claiming that it 
lacked proof that China's senior most leaders had approved the ring 
magnet sale and that the transaction, therefore, did not constitute ``a 
willful aiding or abetting of Pakistan's unsafeguarded nuclear program 
by the Government of China.''
  This is a flawed argument, of course, because the Chinese company 
involved, the China Nuclear Energy Industry Corporation, is owned by 
the Chinese Government. Most companies owned by the Chinese Government 
can't act in China without the knowledge of the Government. In fact, 
most people in China can't act without the knowledge of the Chinese 
Government.
  As Professor Gary Milhollin, Director of the Wisconsin Project on 
Nuclear Arms Control explained,

       These [ring magnets] are specialized items. We are not 
     talking about dual-use equipment. We are talking about 
     magnets that are made specifically to go into centrifuges 
     that make enriched uranium for bombs. Those were sold by an 
     arm of the China National Nuclear Corporation, which is an 
     arm of the Chinese government. This was a sale by a Chinese 
     government organization directly to a secret nuclear weapon-
     making facility in Pakistan of items that were specifically 
     designed to help make nuclear weapon material. In my opinion, 
     it violated China's pledge under the Nuclear Nonproliferation 
     Treaty, which China signed in 1992. The treaty says if you 
     export something like that, you have to export it with 
     international inspection. China did not.

  Under Secretary of State Lynn Davis made a similar assessment in 
testimony to the House International Relations Committee in 1996, 
saying China's ring magnet sale was ``. . . not consistent with their 
obligations as a party to the Nonproliferation Treaty.''
  It is clear that time and time again the Clinton administration has 
not lived up to its legal obligations under several U.S. laws requiring 
sanctions to combat the proliferation of ballistic missiles and weapons 
of mass destruction. In some very revealing remarks in 1998, President 
Clinton explained his administration's record in this area. In what it 
described as ``. . . unusually frank remarks during an appearance 
before a group of 60 evangelical Christian leaders at the White 
House,'' the New York Times reported on April 28, 1998 that ``President 
Clinton criticized laws today that automatically impose sanctions on 
countries for behavior that Americans find unacceptable. He said such 
legislation put pressure on the executive branch to `fudge,' or 
overlook, violations so that it would not have to carry out the 
sanctions.''
  What the President acknowledged is only what many, many people in the 
know have been saying for a long time; namely, that the relationship 
with China has gotten to be so important to this administration that it 
is willing to ``fudge'' the requirements of U.S. law to impose 
sanctions because they would get in the way of this budding 
relationship between President Clinton and the People's Republic of 
China.
  According to the New York Times, in response to criticism that his 
administration has ``ignor[ed] or excus[ed] obvious violations of 
United States sanction laws to justify continuing to do business with 
certain countries,'' President Clinton said, ``What happens if you have 
automatic sanctions legislation is it puts enormous pressure on whoever 
is in the executive branch to fudge an evaluation of the facts of what 
is going on.''
  It might put enormous pressure on the President of the United States 
to follow the law. When repeatedly he hasn't done so, a Senate that is 
worth its salt will stand up and finally do what Senator Thompson has 
done and say: Enough of this. The U.S. Government has got to see to it 
that our national security needs are protected, at least if we are 
going now to grant PNTR, permanent trading relations with China, and 
grant its admission to the World Trade Organization, thus precluding us 
from a whole series of unilateral actions that otherwise we could have 
taken. When you are in the WTO, you abide by its rules. You can't just 
willy-nilly be imposing sanctions on countries; otherwise, you will be 
held accountable under the WTO.
  Fortunately, the way Senator Thompson has drafted his amendment, the 
President of the United States would be able, under limited 
circumstances, to impose sanctions based upon national security 
requirements, and he would also incidentally have the ability to waive 
those requirements in the national security interest. He is not bound 
to do anything that he shouldn't do.
  One wonders, however, if a President is suggesting that he needs to 
``fudge'' the requirements of the law in order to

[[Page 17533]]

maintain this great relationship with China, what even the requirements 
of the Thompson amendment would do. Fortunately, he has accounted for 
that possibility by also requiring a report of the President to the 
Congress of why he didn't impose sanctions, if he didn't, and requiring 
some specificity so we will at least understand what is at stake and 
whether or not the President should have imposed sanctions so that we 
might at least take some other steps.
  Senator Levin, incidentally, summarized the view of many when he said 
the examination of China's proliferation record at a 1997 Senate 
hearing had shed light on ``an area where I think we have not lived up 
fully to our own domestic requirements in terms of the imposition of 
sanctions where evidence is plenty clear, or clear enough for me, at 
least.''
  Senator Stevens made a similar point during the same Senate hearing 
in 1997, stating, ``I am coming to the conclusion that maybe the 
administration is so narrowly interpreting our laws that we would have 
the situation that if a country moved a missile or a poison gas or 
bacterial warfare system piece by piece, grain by grain, you could not 
do anything about it until all the grains were there and then it would 
be a fait accompli.''
  The Thompson amendment would significantly improve the current 
situation. It would require an annual report to Congress on the people, 
organizations, and countries on which our government has credible 
information indicating they have been engaged in the proliferation of 
nuclear, biological, or chemical weapons or ballistic or cruise 
missiles. This requirement for full disclosure should eliminate the 
ability of the Clinton administration or those of future 
administration's to ``fudge'' the facts. They use the President's 
words. It should greatly improve the ability of the Congress to 
exercise effective oversight over this and future administrations.
  Second, it will send a clear signal to organizations in China and 
other nations, such as Russia and North Korea, that if they engage in 
proliferation, sanctions will surely follow. As I mentioned earlier, 
sanctions have been one of the foreign policy tools that have moderated 
China's behavior. When our Government has been serious about effective 
change in China and has been willing to use sanctions, we have seen 
results. Perhaps had the administration been more willing to implement 
the laws in this area and used sanctions more frequently, we would have 
seen less proliferation of these extraordinarily lethal technologies to 
rogue nations.
  Finally, I point out the amendment contains a waiver provision, as I 
said before, which allows the President to waive the requirement for 
sanctions under the legislation if it is important to the national 
security of the United States not to apply these provisions.
  So there is no reason for anyone to suggest that this amendment is a 
poison pill; that it would somehow tie the President's hands; or that 
it should not be adopted because it would jeopardize the passage of 
PNTR or the future security of the United States.
  Madam President, sanctions should not be the first or only tool used 
in the fight against proliferation. But this tool should not grow rusty 
from disuse either. As the Washington Post noted in an editorial as 
recently as July 14 of this year:

       . . . China's continuing assistance to Pakistan's weapons 
     program in the face of so many U.S. efforts to talk Beijing 
     out of it shows the limits of a nonconfrontational approach.

  The United States must back our frequent expressions of concern with 
actions if our words are to be perceived by China and other 
proliferators as credible. We must enforce our own laws if we are to be 
successful in persuading other nations to live up to their 
international commitments in treaties and other international 
agreements. And we need to be realistic in our dealings with nations 
such as China, Russia, and North Korea.
  I urge my colleagues to support the Thompson amendment. It is an 
amendment which will help to guarantee the national security interests 
of the United States. It will do nothing to impede trade or otherwise 
interfere with the operation of the WTO or the passage of the PNTR.
  Therefore, Madam President, as I said, I urge my colleagues to 
support the Thompson amendment.
  Mr. THOMAS. Madam President, I ask unanimous consent that now, 
following the conclusion of the statement by Senator Kyl, the following 
Senators be recognized: Senator Kerry, Senator Inhofe, Senator Graham 
of Florida, and Senator Smith of New Hampshire, in that order.
  The PRESIDING OFFICER (Mrs. Hutchison). Without objection, it is so 
ordered.
  The Senator from Massachusetts.
  Mr. KERRY. Madam President, I rise to oppose the Thompson amendment. 
I want to talk a little bit about the reasons I oppose it, and perhaps 
respond a little bit to some of the comments that have been made in the 
course of the afternoon.
  Having been part of these debates now for some period of time, I have 
begun to notice the ebb and flow on how we approach these issues of 
concern about foreign countries, about issues of national security and 
how they do and do not impact us. It is interesting because we tend to 
go to the extremes. That is perhaps part of the nature of the Senate. 
It is part of the nature of the political process. But what is clear to 
me, after observing this over a long period of time, is that it is not 
always beneficial to furthering the larger national security concerns 
of the country.
  I approached this issue originally with much the same concern as the 
Senator from Tennessee. I think all of us are deeply concerned about 
the degree to which certain countries seem to be contributing to the 
potential of instability in the world. Obviously, there is nothing more 
destabilizing or threatening than weapons of mass destruction. We have 
spent an enormous amount of time and energy focused on Iraq, on Iran, 
on Russia, on loose nukes, on nuclear materials, and of course on China 
and on the issue of the transfer of technology to Pakistan.
  So I took the time to go to the Intelligence Committee briefing on 
this subject, to really get a handle and try to get a sense of how 
concerned should I be about this: Are we really at a point where this 
is so clear-cut and such an egregious violation of Presidential 
discretion that the Congress of the United States ought to step in and, 
in a sense, take away from the President whatever flexibility he has 
been left with to date?
  May I say I went into that briefing with a sense of: Boy, these guys 
have really screwed up and now is the time to bring the hammer down. I 
came out of it, however, with a much different sense of the road that 
has been traveled and of the choices we ought to be making and we face 
in the Senate today.
  The fact is, on nuclear issues--separate from missile technology 
transfers--we have made rather remarkable progress in the last 8 years, 
with a country that very recently accepted no norms of international 
proliferation behavior.
  On March 9, 1992--let's recollect here, this is only 8 years ago, a 
very short span of time in terms of the evolutionary process occurring 
in China, and particularly a short span of time in terms of our period 
of real engagement with China.
  On March 9, 1992, China acceded to the Nuclear Nonproliferation 
Treaty.
  Later in 1992, China agreed not to export complete missile systems 
which fall within the payload and range parameters governed by the 
Missile Technology Control Regime.
  On January 13, 1993, China signed the Chemical Weapons Convention.
  In May of 1996, China agreed not to provide any assistance to nuclear 
facilities not under the International Atomic Energy Agency safeguards.
  In September of 1996, China signed the Comprehensive Test Ban Treaty.
  In September of 1997, China promulgated new export controls, and that 
control list is substantively identical to the dual-use list used by 
the Nuclear Suppliers Group.

[[Page 17534]]

  On October 16, 1997, China joined the Zangger Committee which 
coordinates nuclear export policies among NPT members.
  On April 25, 1997, China ratified the Chemical Weapons Convention and 
began to enforce export controls on the dual-use chemical technology.
  In June of 1998, China published a detailed export control regulation 
governing dual-use nuclear items.
  In 1998, China agreed to phase out all support for Iran's nuclear 
energy program, even support to safeguarded facilities, which was not 
prohibited by the Nuclear Non-Proliferation Treaty.
  So that is a rather remarkable series of progressive movements 
towards the community of nations whereby China not only signed 
agreements but began to lay down a substantive record of making choices 
to enforce and to adhere to those standards.
  With respect to missiles and missile control technology, I am not 
going to stand here in front of the Senator from Tennessee or my other 
colleagues and suggest there are not some concerns. I am not going to 
suggest that, with respect to the 1994 agreement under the Missile 
Technology Control Regime, that with respect to the complete production 
facility there is not a question about Pakistan being in violation. 
That is what, in fact, prompted me to suggest perhaps the 
administration had erred and we ought to be doing more.
  After 1997, that progress clearly tapers off. But I ask my colleagues 
to think hard about this--how do you best build a relationship with a 
nation that is neither friend nor enemy but a nation with which you 
have a developing relationship? How do you best build the capacity to 
achieve the kind of national security standards you want adhered to.
  I suggest very respectfully that this unilateral, rather draconian, 
inflexible approach that is being offered in the Thompson amendment is 
precisely not the kind of step we should be taking.
  Some colleagues of mine will focus on the PNTR components of this, 
the clean PNTR component. I am not going to focus on that now. That is 
a pretty simple argument, and they have done their part in articulating 
it.
  I know the Senator from Tennessee did not intend to wind up in this 
predicament, offering his amendment to PNTR. In fairness to the 
Senator, there are colleagues in the Senate who saw political advantage 
in guaranteeing we come to the floor in the particular parliamentary 
knot we are in. He would have preferred an alternative venue for 
considering his amendment. That does not mean the argument can be 
ignored. I want my colleagues to vote against the Thompson amendment 
not only to preserve a ``clean'' PNTR, but because there are 
substantive reasons that thoughtful foreign policy and thoughtful 
relationships between the Senate and the executive branch mandate we 
refuse to accept this amendment in its current form. Specifically, let 
me talk about that for a minute.
  There are a number of questions the Thompson amendment in its current 
form presents the Senate with. One, and the most evident of all, is 
will this amendment cause China to clean up its act on the issue of 
proliferation?
  I say to my colleagues, if you look at the record of China's 
statements with respect to the annex of the missile technology and 
control regime, and if you measure where China has traveled in these 
past years, I think this act could have the opposite effect. It could 
drive China away from this slow process of understanding we have been 
working toward on proliferation.
  I ask my colleagues to remember that as recently as only 1997, China 
did not even have an office that dealt with the issues of missile 
technology exports. In the last 5 or 6 years, China had no record 
whatsoever of restraining its companies from making any sales 
whatsoever. Yet already, because the United States of America has 
raised this issue again and again in a diplomatic context, we now are 
at a point where companies in China are being refused export rights for 
certain kinds of technology that are deemed to be dual use. In other 
words, China is moving towards the international community in its 
efforts to enforce the spirit--not the letter because they have not 
signed on to the law yet--but to enforce the spirit of the law.
  I say to my colleagues, if you want China to sign on to the letter of 
the law and to sit down and negotiate with you a realistic regime by 
which we can lay out a mutual agreement on these issues, I guarantee 
that adopting this amendment will end those discussions and push us in 
the opposite direction from the direction in which we are trying to 
move.
  We should also ask ourselves the question: Will this legislation 
force the President to sanction China for a proliferation violation? 
Does this legislation accomplish the goal which it sets out to 
accomplish? For all of the talk on the floor of the Senate and for all 
of the rhetoric about we have to send China a signal and we have to 
make certain that China toes the line, the bottom line is that even if 
this were passed and signed into law, it simply will not force the 
President to do what it sets out to do, because it offers the 
opportunity for the President to define a waiver in national security 
terms that can not be overridden by the Congress, under the procedures 
outline in this bill.
  I will set out a series of reasons why I believe colleagues should 
oppose this amendment, strictly on substantive grounds.
  No. 1, this amendment takes a piecemeal approach to the global 
problem of proliferation by focusing on just a few countries. 
Originally, it was focused on China. Russia and North Korea are add-
ons, afterthoughts, if you will, to try to make it more palatable and 
to somehow suggest there is a rationale for doing what we are doing. 
But the fact is, if the rationale is proliferation, it ought to apply 
to every country. There is no reason to have a specific China-centric 
effort when, in fact, there are many other countries about which we are 
equally concerned.
  No. 2, it uses the blunt instrument of mandatory, unilateral 
sanctions to respond to any violation of the law no matter how 
inconsequential or unintentional.
  No. 3, it bases those sanctions on unreasonably low standards of 
evidence.
  No. 4, it imposes a burdensome reporting requirement on agencies 
whose time is arguably better spent stopping proliferation rather than 
simply collating thousands of pieces of information, some of which is 
based on such a low standard with respect to ``credible information'' 
that it could literally tie you up forever, and I will show evidence of 
that a little later.
  No. 5, it introduces the U.S. capital markets for the first time in 
history into proliferation policy, a concept that Federal Reserve 
Chairman Alan Greenspan has strongly questioned.
  In short, in my judgment, this legislation as currently drafted, 
would hinder rather than help U.S. efforts to address the problem of 
proliferation in China or particularly elsewhere in the world.
  I think the problems with this amendment start at the very beginning. 
The legislation is titled ``The China Nonproliferation Act.'' While 
Senator Thompson has, as I said, included a couple of other countries 
as targets, China remains singled out in the title and China remains 
the focus, as everybody understands.
  Whether or not he intends it, that will certainly be the way it is 
read by the Chinese, and I know no observer, neutral or biased, who 
would not agree that would, in fact, be the result of this legislation.
  So rather than heeding the next President and his advisers when they 
tell China its proliferation of WMD and ballistic missile technology 
has to end, China's leadership is going to point to this legislation as 
evidence that the United States is simply using the proliferation as an 
excuse to single them out.
  Again, I repeat, we have spent decades working to pull China into a 
serious dialog about serious issues. China has come to acknowledge that 
it is important to embrace some of these international norms. And we 
should not force the next administration, whoever it is, to waste 
valuable diplomatic energy persuading China that we take proliferation 
seriously, whatever the

[[Page 17535]]

source, even though the Senate in the context of this particular treaty 
is singling them out.
  I do not believe we should set aside U.S. national interests simply 
to avoid angering the nations targeted by this amendment. That is not 
what I am suggesting. But I do think it is foolish of us to ignore real 
sensitivities and real reactions that occur and which we have 
especially seen historically with China.
  This amendment essentially sends a signal to the world that we are 
less bothered by proliferation that does not come from the three states 
named in this legislation: If you are not China, if you are not North 
Korea, and if you are not Russia, somehow there we care less about your 
proliferation activities. I think that is a mistake in terms of any 
messages sent by the Senate.
  The second major flaw in the amendment is its reliance on mandatory 
unilateral sanctions. We have had a number of debates on the floor of 
the Senate in the last couple of years about the negative impact of 
mandatory sanctions. It has almost, I think, become a consensus in the 
Senate that we want to move away from mandatory unilateral sanctions.
  The sanctions that have been proven to work globally are the 
sanctions that are applied multilaterally. That is what happened in 
South Africa with apartheid. We have a long list of sanctions 
unilaterally applied by the United States of America which simply open 
up opportunities to other countries to fill the vacuum created we are 
unilaterally taken off the playing field. The question is whether or 
not that really helps us in terms of our nonproliferation objectives.
  There is, in effect in this legislation a sledge-hammer approach; 
there is no subtlety. There is no ability to provide a President with 
flexibility. There is no ability even to allow a sufficient amount of 
time for the diplomatic process to work.
  Because the requirement of this legislation is that the President has 
to impose all of the sanctions simultaneously in response to one 
proliferation violation. This is a heavyhanded, one-size-fits-all 
approach that destroys some of the flexibility to calibrate appropriate 
responses to inappropriate proliferation behavior. It destroys any 
potential that we might be able to change China's behavior as we go 
down the road.
  I know it is not easy to argue for that sort of approach. It is 
always easier to come to the floor and talk tough or pass a tough kind 
of signal. But every time we have done that in the Senate, we have come 
back later questioning why it is that other countries are not following 
us, questioning why it is that other countries are, in fact, engaged in 
an overt effort to circumvent what the United States is doing, 
questioning how, in fact, we could have had a more effective policy in 
the first place.
  I will fault this administration on its lack of focus and energy on 
the proliferation issue as a whole. They will not like to hear that. 
Nevertheless, I am convinced that unless you have a more visible, 
multilateral effort, then you are simply opening a Pandora's box of 
opportunity for the competitive marketplace to undermine what you are 
trying to achieve and, in the process, making it far more difficult to 
achieve a larger set of goals which require a more sophisticated 
approach.
  The Thompson amendment also does not allow the United States to 
coordinate its proliferation response in China, North Korea, or Russia 
with our allies. By forcing the President to impose sweeping unilateral 
sanctions within 30 days of submitting a report to Congress on 
proliferation it severely limits the President's ability to consult 
with either the government of the covered country or with U.S. allies 
in order to develop the most effective response.
  This amendment ensures that the United States will therefore come 
into conflict with key allies in Europe and in Asia over how to best 
manage important relationships with China, Russia, and North Korea. I 
think that is of enormous concern. It is also, I may say, almost 
guaranteed to fail in changing the proliferation activity of a 
particular country.
  Let's say China were caught in some particular effort, and we were 
unsuccessful, and you wind up unilaterally imposing the sanction. Do 
you really believe that at that point you have made it more likely they 
are going to acknowledge it, at least in the near term, by suddenly 
putting up their hands and saying, OK, you caught us red-handed? No pun 
intended.
  The fact is, you have a much greater opportunity of holding people 
accountable if you use diplomacy to allow people sufficient opportunity 
to back down or to find alternative forms of behavior.
  The third major failing of this amendment is that it creates an 
unreasonable standard for imposing sanctions, targeting even 
inadvertent and immaterial transfers of technology. All of the power 
the President needs to be able to hold a country accountable for 
proliferation violations already exists in the law today. You do not 
have to do what the Senator from Tennessee is seeking to do in order to 
hold these countries accountable.
  I understand why he is doing it. He is doing it because the 
administration does not seem to want to do it.
  So supporters of this amendment are trying to legislate the political 
will for a President to do something that, for whatever reasons, the 
current President has decided not to do. They have every right in the 
world to try to do that. But I ask my colleagues if we ought to take 
the permanent normal trade relations and put that on the table with 
respect to achieving something that is already in the law?
  We have the Arms Export Control Act, section 3(f). We have the Arms 
Export Control Act, section 101, 102. We have section 129 of the Atomic 
Energy Act. We have section 821 of the Nuclear Proliferation Prevention 
Act of 1994. We have section 824 of the Nuclear Proliferation 
Prevention Act of 1994. We have section 2(b)(4) of the Export-Import 
Bank Act. We have sections 72 and 73 of the Arms Export Control Act; 
section 11(b) of the Export Administration Act. We have section 
498(a)(b) of the Foreign Assistance Act. We have section 81 of the Arms 
Export Control Act; section 11(c) of the Export Administration Act with 
respect to chemical and biological weapons proliferation. We have 
Executive Order No. 12938 with respect to all weapons of mass 
destruction technology and delivery systems. We have the Iran-Iraq Arms 
Nonproliferation Act of 1992 and the Iran Nonproliferation Act of the 
year 2000.
  In fact, missile technology transfers are already subject to U.S. 
law, and the President has the authority to sanction those violations.
  Senator Thompson will argue: Well, we are going to make the 
Administration do it because they haven't done it.
  That is the whole purpose of being here. I understand that argument. 
But in fact he won't necessarily make them do it because, of course, 
there is the waiver.
  Well, then they have a redress. They can have one-fifth of the 
Congress, either House, which is 20 Senators who don't particularly 
like trade with China, they can come back and tell the President: Well, 
we don't like the fact that you haven't applied sanctions. So they can 
try to go around that decision, which means we could be tied up on a 
standard that simply doesn't make sense for the Congress of the United 
States to be tied up on with respect to the potential of some kind of 
``credible information'' suggesting some dual-use technology transfer 
that might contribute to the creation of a missile or some kind of 
missile capacity. That is the standard in here. Those U.S. sanctions 
laws I cited--with only one or two exceptions--includes the standard 
that a violation must be a knowing transfer of sensitive technology 
that makes a material contribution to a weapon of mass destruction 
program. A knowing transfer with a material contribution. The standard 
in this legislation requires any kind of contribution made with no 
deliberate knowing whatsoever.
  So you have all five mandatory sanctions that could be put in place 
absent, obviously, the waiver I described, or if the Congress wanted to 
fight over it, which we can all find 100,000 reasons

[[Page 17536]]

why it might choose to do so, given the nature of this institution in 
the last years. I don't think we should open ourselves up to that 
situation.
  The new standard under this is any transfer that ``contributes to'' 
instead of the ``materially contributes to,'' the design, development, 
production, or acquisition of weapons of mass destruction. That could 
mean that the President could be required to impose sanctions on a 
company that makes legal and legitimate sales to a person or a 
government engaged in WMD development.
  Fourth, the Thompson amendment requires a rather remarkably 
burdensome report identifying every person in China, Russia, and North 
Korea for whom there is ``credible information indicating that that 
person is engaged in proliferation activity.'' The flood of information 
guaranteed by this amendment will tie up already limited resources in 
the executive branch that could, in fact, be doing a far more serious 
job of working on proliferation itself.
  The low credible information standard, I know, is derived from the 
Iran Nonproliferation Act of 2000, but that doesn't make it an 
advisable standard, No. 1, and, No. 2, under that standard, any piece 
of information from a source deemed to be credible has to be reported 
without discretion, even if the information later proves to be false.
  Now, Congress has yet to receive the first report that was required 
under the INA, in part because the intelligence community has so far 
generated 8,000 pages of information that is deemed credible just on 
chemical and biological weapons and missile proliferation alone. 
Analyzing that mountain of data to determine what should be included in 
a report to Congress requires obviously countless man-hours. And as 
burdensome as the reporting requirement for INA is proving to be, 
believe me, that law, since it focuses only on one country with a far 
more identifiable set of sources because of the limits of commerce, 
trade, presents us with a gargantuan task. The Thompson amendment 
applies the same reporting requirement to possible proliferation from 
three nations: Russia, a gigantic task; China, a gigantic task; and 
North Korea, a far more limited task but nevertheless real.
  It will also require reporting on all dual-use exports by the United 
States and key allies. The amendment's reporting requirement is tied to 
a report by the Director of Central Intelligence on suppliers of dual 
use and other technology. And because that report covers global exports 
of these technologies, the 1997 DCI report included information about 
legal and legitimate exports by the United States, Italy, Germany, 
France, and the United Kingdom.
  According to the DCI, these nations were ``favorite targets of 
acquisition for foreign WMD programs.'' So the report required under 
section 3 of the Thompson amendment will likely include information on 
Western countries just so long as the information is credible. Firms in 
these countries can probably avoid the mandatory sanctions because 
those countries qualify for exemption for membership in multilateral 
nonproliferation regimes. It doesn't mean you won't report; it simply 
means you won't have the sanctions. But you still have to go through 
the convoluted process of providing the reports themselves and 
analyzing the information.
  Finally, the Thompson amendment introduces U.S. capital markets for 
the first time in history into proliferation policy. It will impose 
indirect sanctions against those entities included in the President's 
report that are publicly traded on stock markets regulated by the U.S. 
Securities and Exchange Commission.
  Companies named in the President's report will have to so inform 
investors, according to the requirements of this legislation. 
Supporters of the amendment argue that those provisions are simply to 
provide transparency for American investors in entities that are active 
in U.S. capital markets and involved in proliferation activities.
  In fact, because the reporting standard is so low, it is likely that 
many of the entities implicated in the report will, with further 
investigation, be proven innocent of engaging in proscribed 
proliferation activities. In short, the President must shoot first, and 
ask questions later--after the financial damage has been done to firms 
that are innocent.
  I don't want to step over the line as to what was classified and what 
is not classified with respect to the briefings. I think it is fair to 
say that the intelligence community will tell you that this is not a 
clear cut and dry process by which there is a clear understanding at 
every level of government in China as to who is doing what. There are 
many people in the intelligence community who have a sense that because 
of the orders given to the military a number of years ago with respect 
to their dependency on revenue in order to survive, that there are 
certain military entities that weren't necessarily under direct orders 
to effect something.
  There are certain companies that weren't under central control, and 
the process of education with respect to America's concern and their 
own interests in adhering to these standards has been an ongoing 
process, which has brought a greater level of understanding and a 
greater level of commitment.
  Now, I would personally prefer that China formally adopt and embrace 
the full measure of the Missile Technology Control Regime. That should 
be the immediate and first priority of our diplomacy. That should be 
the immediate and first effort of our country and of the multilateral 
efforts of our allies to guarantee that we are all on the same page, 
that we are all operating from the same level of understanding.
  But the intelligence community acknowledges that there is a 
difference of opinion as to precisely what the understandings were or 
what was agreed to with respect to certain kinds of transfers, and that 
there is clearly progress being made with respect to the development of 
that understanding. And while it is difficult sometimes to take this 
position in the Senate, I argue that we have a much greater opportunity 
of reaching a fuller understanding and of guaranteeing that we move 
down a road of multilateral understanding and interest if we do not 
pass the Thompson amendment at this particular point in time.
  The truth is that the United States-China relationship is our most 
complex and difficult bilateral relationship. It is one of the most 
important that we have. It is yet to be fully defined. As I said 
earlier, China cannot be considered a friend; but China cannot yet--and 
should not, we hope--ultimately be considered an enemy. There are many 
adversarial aspects of our relationship. There is much we wish would 
change more rapidly in China. Thirty years of engagement with China has 
taught us that you can't necessarily advance one issue at the expense 
of another.
  While I am under no illusions that supporting PNTR is going to 
produce overnight changes in other aspects of China's policy that we 
care about, I am absolutely confident that singling China out with this 
amendment will make it more difficult to draw China into an 
international nonproliferation regime, and it will undermine the 
limited success that we have achieved in the arms control arena over 
the last 10 years. I am absolutely convinced that in the near term it 
will make progress more difficult without bringing us closer to the 
goal that we may well be able to achieve in the near term through other 
approaches.
  I believe Senator Thompson has done the Senate and the country a 
service by raising this issue. It is important for us in the Senate to 
talk about the degrees to which there are currently misunderstandings, 
or the degrees to which we believe there are just overt violations by 
China of understandings. It is important for China to understand the 
full measure of our concern and determination to hold them and other 
countries accountable to the international norms with respect to 
proliferation issues.
  But I believe that will best be done not by singling out three 
countries, but rather by continuing in the Senate to push all nations 
toward a stronger regime and a better understanding. I

[[Page 17537]]

think this amendment is flawed, therefore, in its current definition, 
for the reasons I have stated. It is not the right response. It is not 
the right forum for addressing this issue that does deserve thoughtful 
and full consideration. I urge my colleagues, therefore, to oppose the 
Thompson amendment.
  I ask unanimous consent that a letter from the president of the New 
York Stock Exchange regarding the stock exchange components of this and 
the opposition of the SEC to it be printed in the Record.
  Thre being no objection, the letter was ordered to be printed in the 
Record, as follows:

     Hon. Trent Lott,
     Majority Leader,
     The Capitol, Washington, DC.
       Dear Mr. Majority Leader: I am writing to express the 
     strong opposition of the New York Stock Exchange, Inc. (NYSE) 
     to the provisions of S. 2654, the China Nonproliferation Act, 
     pertaining to access to U.S. capital markets. The NYSE is the 
     world's largest equities marketplace and is home to more than 
     3,000 companies with more than $17 trillion in global market 
     capitalization. Non-U.S. issuers play an increasingly 
     important role on the NYSE. The NYSE list more than 380 non-
     U.S. companies--more than triple the number listed five years 
     ago.
       While the NYSE does not in any way condone the 
     proliferation activities that S. 2654 attempts to address, 
     the NYSE believes that one of the bill's sanctions--denial of 
     access to the U.S. capital markets--will hurt U.S. investors 
     while failing to deter these activities. Under S. 2654, the 
     NYSE could be prohibited from listing additional Chinese 
     companies or be required to delist Chinese companies trading 
     on the Exchange. The reach of these expansive provisions is 
     not limited to companies involved in proliferation activities 
     but could extend to any company owned or controlled by 
     nationals of the PRC, including those in Hong Kong.
       If the NYSE is required to de-list a company as a result of 
     S. 2654, U.S. investors in the company will be harmed. 
     However, companies denied access to the U.S. capital markets 
     by S. 2654 sanctions would not be deprived of the ability to 
     raise capital. Non-U.S. exchanges actively compete with the 
     NYSE for non-U.S. listings. These exchange would be happy to 
     list the stock of any company denied access to the U.S. 
     capital markets by S. 2654. As Federal Reserve Chairman Alan 
     Greenspan stated in response to a question about S. 2654 at a 
     July 20 Senate Banking Committee hearing ``a most fundamental 
     concern about this particular amendment is it doesn't have 
     any capacity of which I'm aware to work. And by being put in 
     effect, the only thing that strikes me is a reasonable 
     expectation that it would harm us more than it would harm 
     others.''
       We appreciate your consideration of our views on this 
     matter.
           Sincerely,
                                                Richard A. Grasso,
                                                  President, NYSE.

  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. INHOFE. Madam President, national security must take precedence 
over trade. Granting permanent trade favors to China in the face of its 
openly threatening actions of recent years is unconscionable.
  We cannot allow the pursuit of dollars to blind us to certain 
realities about the ruling communist regime in China, including: 
repeated threats against the United States and Taiwan; massive military 
modernization and buildup; its proliferation of dangerous weapons to 
rogue states; theft of U.S. nuclear secrets; demonstrated strategy to 
exploit commercial relationships to acquire advanced military 
technology; attempts to corrupt the U.S. political system; violation of 
international agreements; and brutal repression of dissidents.
  To ignore these actions in the belief they can be separated from what 
we do in our trading relationship is dangerously misguided. China's 
trade surpluses are helping to finance the regime's military buildup 
and aggressive foreign policy, while strengthening its hold on economic 
and political power.
  Similarly, to suggest that increased trade is by itself going to 
reverse China's negative behavior is belied by recent history. Trade 
with China has been steadily increasing for the past decade while its 
behavior in these security areas has grown substantially worse.
  America should require from China some measure of permanent 
normalized international behavior as a prerequisite to permanent 
normalized trade relations. Otherwise, it is predictable that the 
favors we grant to China will be exploited to enhance its military 
buildup, while the market-opening favors and prosperity we expect from 
China will be much less than many in our country anticipate.
  I want to emphasize that I am not philosophically opposed to free 
trade. I voted for the recent Africa-Caribbean trade bill and I am a 
strong supporter of a measure to end the use of agricultural trade 
sanctions as a means to achieve policy goals.
  I am very skeptical about the extent to which China will actually 
open its markets to U.S. products. Despite tariff-lowering measures in 
trade agreements, China has--in the past--sought to erect other 
complicated trade barriers to block imports. Especially with regard to 
agricultural products, China is unlikely to offer the wide-open market 
some in the U.S. are anticipating. China will go to great lengths to 
protect its own huge labor-intensive agricultural sector, because of 
the difficulty of absorbing displaced agriculture workers in scarcer 
city jobs.
  Permanently opening the U.S. market to China now--in the face of its 
bullying at home and abroad--would be viewed by Chinese leaders less as 
an act of friendship than as an act of weakness. It would signal to 
them that there is going to be no meaningful consequence to their bad 
behavior and that America is content to put the pursuit of dollars 
ahead of any obligation to protect its own values and security.
  The following are examples of the major national security issues that 
must be considered in the debate over PNTR for China:
  Threats to the United States: In recent years, China has issued 
direct military threats against the United States of a kind that even 
the Soviet Union largely avoided in the darkest days of the Cold War. 
These included a threat to destroy Los Angeles with nuclear weapons; 
other threats to launch missile strikes on the United States and 
neutron bomb strikes on U.S. aircraft carriers if we should intervene 
to defend Taiwan. In 1998, the CIA confirmed that at least 13 of 
China's 18 land-based ICBMs were targeted on American cities. In Dec. 
1999, China's defense minister, reflecting well-documented military 
thinking in China, stated, ``War (with the U.S.) is inevitable. We 
cannot avoid it.''
  Threats to Taiwan: China has openly threatened military action 
against democratic Taiwan. In 1996, China fired M-9 missiles off the 
coasts of Taiwan in an attempt to intimidate voters during its 
presidential election. In Feb. 2000, it issued a ``white paper'' openly 
threatening ``all drastic measures, including the use of force'' if 
Taiwan delayed reunification talks, a threat previously reserved only 
for a Taiwanese declaration of independence. In 1995, China had 40 M-9 
missiles targeted on Taiwan. By 1999, it had deployed at least 200 such 
missiles and the number is increasing at a rate of 50 per year. The 
Pentagon estimates that by 2005, China could have 800 missiles targeted 
on Taiwan.
  Military buildup: China is engaged in a massive long-term military 
modernization largely designed to counter U.S. power projection 
capabilities. In March 2000, China announced a 13 percent increase in 
military spending, which U.S. analysts believe is probably a lot less 
than the true number. China's new JL-2 submarine-launched ICBM will be 
able to hit the United States from Chinese territorial waters. China's 
new DF-31 truck-mounted mobile ICBM was test-fired in August 1999 and 
described by U.S. Air Force analysts as ``a significant threat not only 
to U.S. forces . . . in the Pacific theater, but to the continental 
U.S. and many of our allies.'' In January 2000, China signed a 
multibillion dollar deal to purchase weapons from Russia, adding to 
what it has already purchased, including: 4 heavy destroyers armed with 
SS-N-22 ``Sunburn'' nuclear-capable cruise missiles designed 
specifically to attack U.S. aircraft carriers; 200 SU-27 jet fighters, 
which are more capable than the U.S. F-15; 40 SU-30 jet fighters with 
precision guided weapons; 4 Kilo-class (quiet) attack submarines; 24 
Mi-17 assault helicopters; and 50 T-72 tanks. China is also purchasing 
up to 4 Airborne Warning and Control System--AWACS--aircraft. In 
addition, China is employing all means--legal

[[Page 17538]]

and illegal--to purchase improvements in a whole range of advanced 
military technologies, including: computers; lasers; space launch and 
space control systems; cyber-warfare; stealth; and chemical, biological 
and nuclear weapons.
  Proliferation: China is doing more than any other country to spread 
dangerous weapons and military technology to rogue states around the 
world. In recent years, China has transferred technology on such items 
as missiles, nuclear weapons, and chemical and biological weapons to 
North Korea, Iran, Pakistan, Libya, Iraq, and Syria, among others--
often in direct violation of commitments to refrain from such behavior.
  Thefts and compromises of nuclear secrets: In 1999, the Cox Report 
revealed that China had stolen or otherwise acquired advanced U.S. 
technology on ballistic missiles, nuclear weapons, reentry vehicles, 
high performance computers, anti-submarine warfare techniques and much 
more. It confirmed that China had acquired information on our most 
advanced miniaturized nuclear warhead, the W-88, helping to give China 
MIRV capability--multiple warheads on a single rocket.
  As I reported in a major speech on the Senate floor on June 23, 1999, 
what we learned is that 16 of the 17 most significant major technology 
breaches to China revealed in the Cox Report were first discovered 
after 1994--during the Clinton-Gore administration. And that at least 8 
of these actually occurred during the Clinton-Gore administration.
  I have compiled this important information in a chart that clearly 
illustrates what the Clinton-Gore administration has been trying to 
cover up for over 5 years.
  It helps reveal the fact that Clinton and Gore have not protected 
national security in our relations with China; that their appeasement 
of China has extended to selling, transferring, and overlooking the 
theft of some of our most sensitive nuclear and missile-related 
secrets. Coupled with their receipt--in the 1996 campaign--of hundreds 
of thousands of dollars in illegal campaign contributions from China, 
this is a scandal of huge proportions.
  The American people need to know the truth, but they are not going to 
get it by listening to the self-serving spin being spewed by this 
President and his equally culpable and subservient Vice President.
  Exploitation of commercial arrangements to acquire technology: The 
Cox Report also revealed the massive efforts China is making to acquire 
advanced military technology through its dealings with U.S. companies 
in the commercial sphere. For example, it confirmed that through its 
arrangements to launch satellites for U.S. companies such as Loral and 
Hughes, China acquired technology which improved the accuracy and 
reliability of its long-range military rockets which are targeted at 
the United States.
  Attempts to corrupt U.S. political process: During the 1996 election 
cycle, people with close ties to the Chinese government funneled 
hundreds of thousands of dollars in illegal campaign contributions in 
an attempt to influence U.S. elections. The full extent of this scandal 
is not yet known. But we do know that the FBI director, Louis Freeh, 
and the hand-picked Justice Department investigator, Charles LaBella, 
believed it was serious enough to require the appointment of an 
independent counsel to fully investigate. Serious questions remain 
about the activities of John Huang, Charlie Trie, James Riady and a 
host of others who were involved. One of the important critical 
questions is whether national security was compromised in return for 
campaign cash. Neither China not the Clinton Administration has 
cooperated in these investigations.
  Violations of agreements: China has failed to abide by international 
agreements it has made in the past. For example, despite promises to 
abide by the norms of the multilateral Missile Technology Control 
Regime, China has repeatedly engaged in weapons proliferation 
activities.
  Human rights--repression of dissidents: The U.S. State Department 
confirms that China's record on human rights has deteriorated in recent 
years, that it has engaged in such activities as arrests and repression 
of political dissidents, persecution of religious expression, 
exploitation of slave labor, and forced abortions. China has never 
repudiated its actions in brutally crushing China's democracy movement 
at Tiananmen Square in 1989 or its ethnic cleansing in Tibet.
  These issues cannot be ignored or swept under the rug in an exclusive 
pursuit of trade. Our first obligation is protecting national security. 
We will not do it by evading the truth. Granting China permanent normal 
trade status without any progress on these issues is appeasement. 
Granting it in the naive hope that it is going to bring about such 
progress is a delusion.
  Madam President, once again, I support the Thompson amendment. I 
think most of the people who are supporting it also support PNTR. I am 
going to be opposing PNTR. However, I think he is addressing one of the 
many areas where we have a problem with proliferation.
  As I have said, I think national security must take precedence over 
trade. Granting permanent normal trade status to China in the face of 
its openly threatened action in recent years is, I believe, 
unconscionable.
  While Senator Thompson is correct when he talks about the problems 
with proliferation, there are many other problems, too, which include 
China's repeated threats against the United States and Taiwan; China's 
massive military modernization buildup; China's proliferation of 
dangerous weapons to rogue states; China's theft of U.S. nuclear 
secrets; China's demonstrated strategy to exploit commercial 
relationships to acquire advanced military technology; China's attempts 
to corrupt the U.S. political system; China's violation of 
international agreements, and China's brutal repression of dissidents.
  I think to ignore these actions in the belief that they can be 
separated from what we do in our trade relationship is dangerously 
misguided. China's trade surpluses are helping finance the regime's 
military buildup, while strengthening its hold on economic and 
political power. Similarly, to suggest that increased trade by itself 
is going to reverse China's negative behavior is belied by recent 
history. Trade with China has been on the upswing. We are trading more 
with them: Yet their behavior in security areas has grown substantially 
worse.
  I believe America should require from China some measure of permanent 
normalized international behavior as a prerequisite to permanent 
normalized trade relations. Otherwise, it is predictable that the 
favors we grant to China will be exploited to enhance its military 
buildup, while the market-opening favors and prosperity we expect from 
China will be much less than many in our country anticipate.
  I emphasize that I am not philosophically opposed to free trade. I 
did oppose NAFTA in 1994. In fact, I did it for two reasons. One was 
that I knew what was going to happen to our infrastructure as a result 
of allowing trucks from Mexico to go through our corridors--being from 
Oklahoma, we are pretty close to it, and the occupant of the Chair 
being from Texas, she understands this--without having to comply with 
our environmental standards, wage and hour standards, and safety 
standards. The competition isn't open. It is not a level playing field. 
We know that. The other reason is, it seemed to me it would damage our 
trade deficit. If you will remember, in 1994, we had a trade surplus 
with Mexico of $1.3 billion. It is now a $22 billion trade deficit.
  On the other hand, I voted for the recent Africa-Caribbean trade 
bill. I am a strong supporter, along with Senator Ashcroft, of 
exempting agricultural products from the sanctions. I am very skeptical 
about the extent to which China will actually open its markets to U.S. 
products. Despite tariff-lowering measures in trade agreements, China 
has in the past sought to erect other complicated trade barriers to 
block imports--especially with regard to agricultural products.

[[Page 17539]]

  I think it is very unlikely that China is going to go to great 
lengths to protect its own huge labor-intensive agricultural sector 
because of the difficulty of absorbing displaced agricultural workers 
in scarcer city jobs. I had a chance to visit the other day with Wei 
Jing Sheng. He was a dissident who was imprisoned for some period of 
time in China. He is exiled now; he is here. He said it made perfectly 
good sense. Why would we expect China to import wheat grown in Oklahoma 
or someplace in the United States, when all that would do would be to 
take the very labor-intensive, antiquated technology that they use in 
their agricultural programs in China and then move those people to the 
cities where they can't absorb it? This individual was absolutely 
convinced that would be the end result.
  Permanently opening the U.S market to China now--in the face of its 
bullying at home and abroad--would be viewed by Chinese leaders less as 
an act of friendship than as an act of weakness. It would signal to 
them that there is going to be no meaningful consequence to their bad 
behavior and that America is content to put the pursuit of dollars 
ahead of any obligation to protect its own values and security.
  The following are some examples of the major national security issues 
that I think should be considered in the debate over PNTR to China. Of 
course, this amendment only deals with one of them.
  First of all, the threats to the United States.
  In recent years, China has issued direct military threats against the 
United States of a kind that even the Soviet Union in the midst of the 
cold war would never have made. These include a threat to destroy Los 
Angeles with nuclear weapons. Another threat was to launch missile 
strikes on the United States; neutron bomb strikes on U.S. aircraft 
carriers if we should intervene to defend Taiwan.
  In 1998, the CIA confirmed that at least 13 of China's 18 land-based 
ICBMs were targeted on American cities. We knew it a long time before 
that. But somehow there was a leak, and I believe the Washington Times 
was able to disclose that.
  In December of 1999, China's Defense Minister said war with America 
was inevitable.
  I hesitate to say this, but I remember so well when we were warned by 
Senator Bob Kerrey, a Democrat Senator from Nebraska. Some of you may 
not know it. In 1992, before the election of Bill Clinton to the White 
House, he said Bill Clinton is an awfully good liar. He was very 
prophetic.
  I think of all of the things this President has said that are untrue, 
probably the one that inflicted the most damage on the United States is 
the one he repeated 133 times. Keep in mind that at the time he said 
this, he knew the Chinese were targeting American cities. He said: For 
the first time in the history of the nuclear age, there is not one--I 
repeat, not one--missile aimed at an American child tonight. Everybody 
cheered. Yet we knew at that time that missiles from China were aimed 
at American cities. They still are today. We know that. It is not even 
classified.
  China is engaged in a massive, long-term military modernization 
largely designed to counter U.S. power projection capabilities. In 
March 2000, China announced it was going to have a 13-percent increase 
in military spending. Most of our U.S. analysts believe that is far 
from the true figure; it is really far greater than that. China's new 
JL-2 submarine-launched ICBM will be able to hit the United States from 
Chinese territorial waters. China's new DF-31 truck-mounted mobile ICBM 
was test-fired in August of 1999 and described by U.S. Air Force 
analysts as ``a significant threat not only to U.S. . . . forces in the 
Pacific theater, but to the continental United States and many of our 
allies.''
  In January of 2000, China signed a multibillion-dollar deal to 
purchase weapons from Russia adding to what it already had purchased, 
including four heavy destroyers armed with SS-N-22 ``Sunburn'' nuclear-
capable cruise missiles designed specifically to attack U.S. aircraft 
carriers; 200 SU-27 jet fighters--this is a jet fighter that we know 
now is better than any air-to-air combat vehicle we have, including the 
F-15--40 SU-30 jet fighters with precision-guided missiles; 4 Kilo 
class, quiet class, attack submarines; 24 MI-17 assault helicopters; 
and 50 T-72 tanks. China is also purchasing up to four airborne warning 
and control systems--AWACS systems--that they are purchasing from 
Israel. In addition, China is employing all means legal and illegal to 
pursue improvements in a whole range of advanced military technologies, 
including computers, lasers, space launch and space control systems; 
cyberwarfare; stealth, chemical, biological, and nuclear weapons.
  Let me repeat: On the SU-27 and SU-30, I was very proud of Gen. John 
Jumper a few months ago when he had the courage to stand up and tell 
the American people the truth.
  There is this myth floating around, particularly among people who are 
anti-defense to start with, that there is no threat out there--that 
America has the best of everything. We don't have the best of 
everything. Gen. John Jumper, the air commander at that time, made the 
statement that Russia, in the position of manufacturing their SU-27s, 
SU-30s, and SU-35s and selling them on the open market to countries 
such as Iran, Iraq, Syria, Pakistan, and North Korea--this is something 
they have. The proliferation is going on and on. They already have more 
modern equipment and better equipment in some areas of combat than the 
United States has.
  China is doing more than any other country to spread dangerous 
weapons and military technology to rogue states around the world. In 
recent years, China has transferred technology and such items as 
missiles, nuclear weapons, and chemical and biological weapons to all 
the countries I just mentioned--North Korea, Pakistan, Libya, Iraq, 
Iran, Syria, and other countries, which is a direct violation of 
commitments to refrain from such behavior.
  I guess what I am saying is China has been working. It is not a 
matter of what they have and how you trust China. It is the same with 
Russia. They are trading technologies and trading systems with these 
other countries. That is compromising nuclear secrets.
  The 1999 Cox report revealed that China had stolen or otherwise 
acquired advanced U.S. technology on ballistic missiles, nuclear 
weapons reentry vehicles, high-performance computers, anti-submarine-
warfare systems, and much more. It confirmed that China had acquired 
information on our most advanced miniaturized nuclear warhead, the W-
88, helping to give China a MIRV capability--a multiple warhead on one 
single rocket.
  In fairness to China, I have to say that they have had a lot of help. 
The administration has been very helpful to China.
  By the way, I have frequently said things about the President that 
other people do not say. I would suggest to you, Mr. President, that 
Teddy Roosevelt said ``patriotism means to stand by your country.'' It 
doesn't mean to stand by the President or any other elected officials 
to the exact degree that he himself stands by his country. It is 
unpatriotic not to oppose a President to the same degree that he, by 
inefficiency or otherwise, fails to stand by his country. I believe 
President Clinton has failed to stand by his country.
  As reported in a major speech on the Senate floor in March and again 
on June 23rd, what we learned, as revealed in the Cox report, is that 
if you take away these other 17 compromises of our nuclear secrets--the 
first one, the W-70 warhead, you can forget about that. It happened in 
the Carter administration. It is obsolete. So it doesn't matter. These 
16 do--at least 16, including the W-88 warhead I just referred to, 
which is our crown jewel. The first of these happened perhaps in a 
previous administration. The second eight all happened during the 
Clinton administration. These happened on Bill Clinton's watch. As far 
the first ones are concerned, the W-88 warhead technology, W-87 
warhead, W-78 warhead, W-76 and W-62 warheads--all of these

[[Page 17540]]

happened perhaps in a previous administration.
  But we found out in the Cox report that there was a Chinese ``walk'' 
into a CIA office where they said that in 1994 they informed the 
administration the Chinese had all of these secrets. These are from 
perhaps other administrations. But the President knew about it. The 
President covered it up. Berger and the rest of them covered it up 
until the Cox report, through their investigation in January of 1999, 
discovered that in fact these were discovered 5 years before. It was a 
coverup until 1999.
  I think it is an appropriate place to bring this up again just for 
the purpose of discussing this because we have got to remind the 
American people exactly what happened. All of this talk about what has 
happened in our energy lab, all the talk about passing laws that 
something such as this cannot happen again--I can tell you right now, 
if you have a President of the United States such as President Clinton 
who willfully goes out and stops the security at these laboratories--
one of his first acts after becoming President--of course there is 
going to be a problem. This is what this President did. In 1993, when 
he first got into office, he removed the color-coded security badges 
that had been used for years by the Department of Energy's weapons 
labs. They were removed as being discriminatory. We don't want to hurt 
anyone's feelings, so we can't have color-coded badges.
  Second, he stopped the FBI background checks. In 1993, the FBI 
background checks for workers and visitors of the weapons labs were put 
on hold, dramatically increasing the number of people going into the 
labs who had previously not had access.
  Third, he overturned the DOE's security decision. In 1995, the 
Department of Energy personnel action revoking the security clearance 
of an employee found to have compromised classified information was 
overturned, giving him back his classification after it was proven he 
compromised secrets.
  No. 5, he rejected the FBI request for wiretaps. Since 1996, four 
requests for wiretaps on the prime suspect in the investigation of the 
loss of information on the W-88 warhead technology were rejected. The 
suspect was allowed to keep his job before being fired in the wake of 
news reports in 1999, the Cox report.
  No. 6, he leaked classified information to the media. In 1995, a 
classified design drawing of the W-87 nuclear warhead was leaked to and 
represented in the U.S. News and World Report magazine. The leak 
investigation was stopped when it pointed directly to the Secretary of 
Energy and this administration.
  No. 7, President Clinton or the Clinton-Gore administration thwarted 
whistleblowers. Career Government employees, such as the Energy 
Department's former Director of Intelligence, Notra Trulock, and its 
former security and safeguards Chief, Ed McCollum, who tried to warn of 
security concerns, were thwarted for years by political appointees. We 
had hearings in the Intelligence Committee on this, and the Readiness 
Subcommittee, which I chair, of the Senate Armed Services Committee.
  No. 8, the administration switched export license authority. They did 
this in 1996, from the State Department to the Commerce Department. 
This was over the objection of both the State and the Defense 
Departments.
  No. 9, he granted waivers allowing missile technology transfers. You 
may remember the most notorious. President Clinton took a signed waiver 
to allow the Chinese to buy the guidance technology to put on their 
missiles that was made by the Loral Corporation; their CEO was the 
single largest contributor to the Clinton-Gore campaigns.
  No. 10, he ended COCOM. In 1994, the Coordinating Committee on 
Multinational Export Controls, called COCOM, the multinational 
agreement among U.S. allies to restrict technology sales to China, he 
dissolved that.
  The list goes on and on. China had a lot of help in getting virtually 
everything that we had.
  Exploitation of commerce, commercial arrangements to acquire 
technology. The Cox report revealed engagement of a massive effort by 
China in acquiring advanced military technology through its dealings 
with U.S. companies. We have talked about that.
  China has it all. In the first chart, there were 16 compromises. We 
don't know what they have done with this information. I don't think our 
intelligence knows. We now know that all 16 compromises took place and 
China has the technology. What they have built with this technology, we 
don't really know for sure.
  In the attempt to corrupt the 1996 election cycle, people with close 
ties to the Chinese Government funneled hundreds of thousands into 
illegal campaign contributions in an attempt to influence U.S. 
elections.
  Remember the pictures of Al Gore at the temple? This full extent of 
the scandal is not yet known, but Louis Freeh, the Director of the FBI, 
as well as the hand-picked Justice Department investigator, Charles 
LaBella, believed it was serious enough to require the appointment of 
an independent counsel to fully investigate the Clinton-Gore scandal. 
Serious questions remain about the activities of John Huang, Charlie 
Trie, James Riady, and the list goes on and on. Of course, Janet Reno 
has refused to appoint counsel. I don't think we will hear more from 
this administration.
  China has failed to abide by international agreements it has made in 
the past. For example, despite promises to abide by the norms of the 
multinational missile technology control regime, China has engaged in 
weapons proliferation. The distinguished Senator from Arizona, Mr. Kyl, 
was talking about this a few minutes ago.
  Lastly, the U.S. State Department confirms that China's record on 
human rights has deteriorated in recent years. It has deteriorated, not 
gotten better. Trade has increased but the relationships have 
deteriorated. They have engaged in such activities as arrests, 
repression of political dissidents, persecution of religious 
expression, exploitation of slave labor, and forced abortions in China, 
and have never repudiated its actions in brutality curbing China's 
democracy movement in Tiananmen Square in 1989.
  These issues cannot be ignored or swept under the rug exclusively, 
pursuant of trade. Our first obligation is to protect our national 
security. We will not try to do it by evading the truth. Granting China 
permanent normal trade status without any progress in these areas is 
appeasement. An appeaser is a guy who feeds his friends to the 
alligators hoping they will eat him last.
  No man survives when freedom fails, the best men rot in filthy jails, 
and those who cry ``appease'' are hanged by those they try to appease.
  In October of 1995, when we were preparing to intervene when they 
were doing the missile tests to try to influence the elections in 
Taiwan, China's top official said: We are not concerned about the 
United States coming to the defense of Taiwan because they would rather 
defend Los Angeles than defend Taipei.
  That is, at the very least, an indirect threat at a missile coming to 
the United States of America.
  Just a few weeks ago, the Defense Minister of China said war with 
America is inevitable.
  When we are talking about giving a country such as this preferred 
status, we will not be doing it with my vote.
  Mr. GRAHAM. Mr. President, in March of 1999, I traveled, for the 
first time, to the People's Republic of China with a number of our 
colleagues. At the end of a long flight from Detroit to Beijing, I 
looked out the window as we were on the final approach to the airport. 
I was struck by the mass of humanity, from horizon to horizon, that lay 
before me. That scene underscored one of the greatest challenges in the 
21st century, and it will be that we and China together take all 
necessary steps to work to assure and maintain peaceful relations 
between our peoples.
  With almost one-quarter of the world's population within its borders, 
China could represent the greatest threat to our Nation's national 
security. However, if we maintain a sense

[[Page 17541]]

of respect and strive for peace between the United States and China, 
and if that remains among the highest priorities of U.S. diplomacy, we 
can continue to build the permanent institutional relationships that 
will give us the greatest assurance of peace in the years to come.
  As we enter the new millennium, I can think of no better way to 
demonstrate America's leadership than by advancing and expanding our 
trade and investment policy with the world's most populous nation. 
Before we discuss the details of this vote, I would like to take this 
opportunity to recognize the enormous cooperative effort of the 
President, the leadership of the Congress, the agricultural communities 
of the United States, and many other citizens in support of this 
measure.
  Today we are debating an amendment offered by Senator Thompson of 
Tennessee. I wish to commend Senator Thompson for calling the attention 
of the Nation and of this body to the proliferation of weapons of mass 
destruction and their delivery systems. I agree that this is an issue 
that is vital to our national security and merits the closest 
attention. This is an issue which I have personally followed through my 
work on the Senate Select Committee on Intelligence.
  Unfortunately, the amendment that is before us, an amendment which 
has been entitled ``The China Nonproliferation Act,'' does not give the 
issue of proliferation the comprehensive and serious treatment which I 
believe it deserves. We need to do more than send a message to the 
Chinese. We need to develop a comprehensive program that will 
effectively deal with the proliferation problem on a global basis. If 
our goal is to deter proliferation, it must be a global effort at 
deterrence. Although I will oppose the Thompson amendment when we vote 
on it tomorrow, I do hope we will be able to work together to develop 
legislation that will effectively and comprehensively deal with 
proliferation.
  As we commence this stage of the debate, it is important that each of 
us completely understand the specific issue which we are debating, the 
details of what the Senate is being asked to vote upon, and the likely 
consequences of this vote.
  Let me first describe in very simple terms the substance of the vote 
to grant permanent normal trade relations to China. In order to clarify 
the fact that this status is not a unique or a special status, 
Congress, in 1998, passed legislation to redefine the designation, to 
redefine from the phrase ``most favored nation'' to the more 
appropriate phrase ``normal trade relations.''
  China has had most favored nation and now normal trade relations 
status each year since 1979, when the United States first established 
diplomatic relations with the People's Republic of China. This status 
has been subject to annual review and annual renewal. It is worth 
mentioning that not once in the past 21 years has China been denied 
normal trade status.
  Currently, the United States denies normal trade relations status to 
Cuba and North Korea. That denial is required by the Jackson-Vanik 
amendment to the Trade Act of 1974 because those nations deny, 
seriously restrict, or burden their citizens' right to emigrate.
  The United States also denies normal trade relations status to 
Afghanistan, Laos, Serbia, and Montenegro, as directed by more recent 
legislative or Presidential action.
  It is important to note that, although economic sanctions have been 
levied against Iran, Iraq, and Libya, these nations still legally 
retain their normal trade relations status with the United States.
  By granting China permanent normal trade relations status, we will 
fulfill our commitments under the World Trade Organization and will 
then be able to take advantage of the special concessions which were 
obtained from China in bilateral agreements negotiated by this 
administration. However, if we fail to grant China permanent normal 
trade relations status and China is granted membership in the World 
Trade Organization, every other WTO member country in the world will be 
able to take advantage of the range of benefits that we, the United 
States, negotiated for ourselves, except the United States of America.
  With that brief description in mind, it is important to clearly 
outline the issues that will not be affected by this vote.
  First, we are not voting on whether or not we agree with, like, or 
trust the Chinese Communist Government. We are simply voting on a 
change and, in my view, an enhancement, in our 21-year economic 
relations with China.
  Second, we are not voting on whether or not to allow China to enter 
the World Trade Organization. This will take place regardless of what 
actions the Senate takes on permanent NTR status.
  Third, we are not voting on the bilateral WTO accession agreement 
between China and the United States. That agreement has been signed and 
will not be changed or renegotiated.
  Fourth, we are not voting on a trade agreement with multilateral 
concessions like the North American Free Trade Agreement. The bilateral 
agreement this administration has already negotiated is a one-way 
agreement in which China agrees to eliminate or reduce tariffs and 
makes other concessions to WTO members. All WTO members, including the 
United States, have made no concessions to China. Granting permanent 
normal trade relations status to China does not require us to give the 
Chinese any additional access to our markets. They have made all of the 
concessions.
  Fifth, we are not voting on any of the issues surrounding the 
relationship between mainland China and Taiwan. In fact, the Taiwanese 
position on this vote could not have been more clearly stated than by 
the Taiwanese President, Chen Shui-bian, in a March 22, 2000, interview 
with the Los Angeles Times. In that interview, the President stated:

       We would welcome the normalization of U.S.-China trade 
     relations, just like we hope the cross strait relations 
     [between Taiwan and China] also can be normalized. We look 
     forward to both the People's Republic of China and Taiwan's 
     accession to the WTO.

  If the United States continues to be concerned about protecting 
Taiwanese security and other interests, then should we not pay close 
attention to the strong support of the President of Taiwan for granting 
PNTR to China?
  I ask unanimous consent to print the full text of this March 22, 
2000, Los Angeles Times interview in the Record immediately following 
my remarks.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. GRAHAM. I thank the Chair.
  Finally, we will not prevent the continued importation of Chinese 
products to the United States by voting against this legislation. For 
example, under the WTO agreement on textiles and clothing, U.S. import 
quotas on Asian textiles will be phased out in 2005. China is currently 
scheduled to benefit by that 2005 phaseout of Asian quotas. It is 
anticipated that this phaseout of Asian quotas will result in 
significant increases in imports of textiles and garments that have 
been manufactured and assembled generally from Asian raw materials and 
textiles into the United States.
  However, under the bilateral accession agreement, the United States 
negotiated a special textile-specific import safeguard which will 
remain in place until the end of 2008. Therefore, by defeating this 
underlying legislation to grant permanent normal trade relations to 
China, we will actually be doing harm to the U.S. textile and apparel 
industry.
  We will not, by failure to pass this legislation, affirmatively 
address any of the genuine concerns which have been expressed about our 
relations with China. None of those concerns will be affirmatively 
addressed by voting against this bill. In fact, a ``no'' vote will 
result in both tangible losses, such as the loss of the special textile 
safeguard, as well as some important intangible losses. Killing this 
legislation now may create the illusion that we are making a strong, 
positive statement about our relationship with

[[Page 17542]]

China when, in fact, the failure to engage China now may have much more 
serious negative effects into the future.
  What have we accomplished thus far? In considering this modification 
of our trade relationship with China, it is helpful to examine the 
substance and scope of our most recent bilateral trade negotiations.
  First, in April of 1999, the United States and China signed a 
bilateral agricultural cooperation agreement which removed unfair trade 
barriers to U.S. wheat, meat, citrus, and poultry products. The 
agreement signified a new era in our bilateral agricultural 
relationship, an era based on sound science and the mutual benefits of 
open markets.
  When the agreement was signed, Agriculture Secretary Dan Glickman 
stated it was a fundamental breakthrough for American agriculture. He 
estimated that Chinese trade restrictions had cost America's 
competitive producers billions of dollars in sales. This agreement to 
lift longstanding and contentious barriers to our grain, citrus, and 
meat would have significant benefits in terms of greatly expanded 
exports of these products to the vast Chinese market.
  Second, it is important to note the critical provisions of the 
bilateral WTO accession agreement signed by the United States and China 
in November of 1999. These provisions include:
  First, on U.S. priority agricultural products, tariffs will drop from 
an average of 31 percent today to 14 percent by January of 2004, with 
even sharper declines for beef, poultry, pork, cheese, and other 
commodities. China will significantly expand export opportunities for 
bulk commodities, such as wheat, corn, and rice, and it will eliminate 
trade-distorting export subsidies. These are all goals that have been 
long sought by the United States.
  Second, the industrial tariffs on U.S. products will fall from 
today's average of 24.6 percent--that was the average in 1997--to an 
average of 9.4 percent by 2005.
  Third, China will participate in the information technology agreement 
and will eliminate tariffs on products such as computers, 
semiconductors, and related products by 2005.
  Fourth, under the agreement, China will phase in trading rights and 
distribution services over 3 years and also will open up sectors 
related to distribution services, such as repair and maintenance, 
warehousing, trucking, and air courier services.
  Presently, China severely restricts trading rights and the ability to 
own and operate distribution networks, both of which are essential to 
move goods and compete effectively in any market.
  Fifth, the agreement opens China's market for services. For the first 
time, China will open its telecommunications sector and significantly 
expand investment and other activities for financial services firms.
  It will greatly increase the opportunities open to professional 
services, such as law firms, management consulting, accountants, and 
environmental services.
  Finally, with regard to safeguards, no agreement on WTO accession has 
ever contained stronger measures to strengthen guarantees of free trade 
and to address practices that distort trade and investment. For 
example, for the first 12 years of its WTO membership, China has agreed 
to a country-specific safeguard that is stronger and more targeted 
relief than that provided under our own current section 201 law. This 
safeguard applies to all industries, permits us to act based on a lower 
showing of injury, and permits the United States to act specifically 
against imports from China.
  The agreement includes a provision recognizing that the United States 
may employ special methods designed for nonmarket economies to 
counteract dumping for 15 years after China's accession to the World 
Trade Organization.
  For the first time, Americans will have a means to combat such 
measures as forced technology transfer, mandated offsets, local content 
requirements, and other practices intended to drain jobs and technology 
away from the United States.
  However, if we fail to pass this legislation, all of these benefits--
all of the benefits which I have just enumerated--will be lost.
  So what is at stake? With the passage of this legislation, and 
China's accession to the WTO, the United States stands to reap enormous 
benefits.
  My home State of Florida provides many excellent examples of this 
potential windfall.
  In 1998, China was Florida's 11th largest export market. Under this 
negotiated accession agreement, China will reduce tariffs on fresh 
citrus by 70 percent, on vegetables by up to 60 percent, and on poultry 
by 50 percent.
  In addition, China will substantially reduce tariffs on value-added 
wood products and will eliminate tariffs on a wide variety of 
information technology products and civil aircraft materials, all of 
which are important export industries for Florida.
  We must accept the fact that China is going to be a member of the 
World Trade Organization. One obligation of the World Trade 
Organization is to provide every other member with unconditional normal 
trade relations status. In order for the United States to fulfill our 
WTO commitments, we must grant China permanent normal trade relations 
status.
  By refusing to grant China permanent normal trade relations status, 
we only deny benefits to ourselves. In fact, if we fail to give them 
permanent normal trade relations status, every other WTO member 
country--every other country in the world--will be able to take 
advantage of the benefits that we negotiated except ourselves. Voting 
no on this measure does not deny anything to China, but it will put all 
U.S. industry and agriculture at a severe disadvantage in relation to 
our competitors around the world.
  Furthermore, China will enjoy all the benefits of WTO membership, and 
it will still have the same access to the U.S. market that they have 
had for 21 years.
  As many Americans, I have been concerned about China's compliance 
with trade agreements. In the past, it has taken intensive work to 
assure that the Chinese fully comply with the provisions of trade 
agreements that we have negotiated with them.
  I am certain that compliance will continue to be an issue that will 
require close monitoring. It will require considerable and sustained 
effort. It is important to note that thus far, China has lived up to 
the concessions the U.S. gained as a result of the April 1999 
agricultural cooperation agreement.
  For the first time in over two decades, the Chinese have opened their 
market to wheat from the Pacific Northwest. They have already purchased 
50,000 metric tons of wheat. In an important breakthrough for the 
Florida citrus industry, the first shipment of fresh citrus from 
Florida left for China during the last week of March of this year.
  In his May 3, 2000, testimony before the House Ways and Means 
Committee, former Commerce Secretary William Daley stated that the 
administration intends to vigorously monitor and aggressively enforce 
the terms of this agreement. To that end, the administration has 
requested a $22 million budget increase to fund new compliance and 
enforcement resources for Commerce, the U.S. Trade Representative's 
Office, the U.S. Department of Agriculture, and the State Department.
  He also outlined the administration's five-point plan for monitoring 
China's compliance with its commitments and ensuring that we will get 
the full benefits of the WTO from our bilateral agreement.
  The plan includes: One, a rapid response compliance team, led by a 
new Deputy Assistant Secretary for China within the Commerce 
Department; two, prompt redress of market access problems with tight 
deadlines for investigating market access and commercial problems 
inside China; three, statistical monitoring of Chinese trade flows and 
a special trade law enforcement program modeled on the import surge 
monitoring program established for the steel industry; four, a 
comparative law dialog and technical assistance to closely monitor 
China as it

[[Page 17543]]

amends its laws and regulations; and fifth and finally, a China-
specific WTO training and export promotion program to assure that our 
exporters take advantage of all the opportunities presented by China's 
new commitments.
  Those were the commitments made on behalf of the President and the 
administration by the former Secretary of Commerce, William Daley. The 
new Secretary of Commerce, Norman Mineta, restated the Department's 
commitment to implementing such enhancements in a July 27, 2000, speech 
at the Washington International Trade Association.
  I have asked myself this question: Is compliance better served by 
granting or denying China permanent normal trade relations status?
  By denying them permanent normal trade relations status, we will be 
prevented from using the dispute settlement tools that exist within the 
WTO system, tools such as the bilateral dispute mechanism, where the 
United States has won 23 of the 23 cases that we have pressed before 
that panel.
  It seems clear to me, then, that U.S. trade with China under the 
auspices of a multinational body such as the World Trade Organization 
can be more easily monitored, with fewer political obstacles, than can 
trade on a strictly bilateral basis.
  In summary, the U.S. goal of an open Chinese market is more likely to 
be achieved through the WTO discipline than by unilateral actions. 
Denying China permanent normal trade relations status gives us no 
additional leverage with the Chinese Government. In fact, it serves 
exactly the opposite purpose.
  Denying China PNTR status does not in any way constrain China. They 
receive all the benefits of any WTO member. Denying them PNTR status 
will only hurt us, the United States of America, by preventing our 
workers and our companies from taking advantage of the benefits that we 
have for so long negotiated and now have achieved. This will actually 
help China keep our goods out of its market and make it easier for them 
to ignore compliance with the bilateral agreement. More importantly, we 
will also deny ourselves the special surge protections that were 
negotiated in the bilateral agreement. These surge protections are 
particularly critical for industries such as steel.
  Again, it seems clear we will be more likely to get compliance to the 
agreement from China by using these special surge protections and the 
WTO dispute settlement mechanism than we would without them.
  To me, the implications of a denial of permanent normal trade 
relations to China are clear, ominous, and negative.
  The historical importance and gravity of this vote cannot be 
overstated. Given the current state of the world and the almost 
universal recognition of the United States as the lone remaining global 
superpower, economically, militarily, politically, culturally, the next 
President of the United States may well represent the most powerful 
concentration of power in one human being in the history of this 
planet. How he exercises such enormous power in foreign affairs will be 
critical in shaping the future of this planet. Granting permanent 
normal trade relations to China, working to strengthen ties between our 
two nations, further developing a relationship of mutual respect and 
peace are all critically important challenges which we, the world's 
superpower, must be ready to meet.
  We stand on the threshold of a new and substantially improved 
economic relationship with the People's Republic of China. By voting 
yes, we will reaffirm the leadership of the United States in matters of 
trade and global economic expansion.
  I ask my colleagues to oppose the Thompson amendment, reserving the 
complex issues of global proliferation to a more comprehensive measure, 
avoiding the likely consequence that by the passage of the Thompson 
amendment, we will kill permanent normal trade relations with China. 
Rather, I urge our colleagues to vote in favor of permanent normal 
trade relations with the People's Republic of China and, by so doing, 
vote in favor of a policy of constructive engagement, mutual respect, 
and peace among our peoples.

                               Exhibit 1

              [From the Los Angeles Times, March 22, 2000]

            Taiwan's New President Backs Sino-American Trade

                             (By Jim Mann)

       Taipei, Taiwan.--In a gesture to Beijing and the Clinton 
     administration, Taiwanese President-elect Chen Shui-bian said 
     Tuesday that he hopes to see China enter the World Trade 
     Organization and have normal trade relations with the United 
     States.
       ``We would welcome the normalization of U.S.-China trade 
     relations, just like we hope the cross-strait relations 
     [between Taiwan and China] can also be normalized,'' Chen 
     said. ``We look forward to both the People's Republic of 
     China's and Taiwan's accession to the WTO.''
       Chen made these remarks during an hour-long exclusive 
     interview with the Times, the first he has granted since his 
     election Saturday as Taiwan's next president. He will be the 
     first leader from the Democratic Progressive Party, which has 
     in the past advocated independence for the island. Beijing 
     claims sovereignty over Taiwan.
       Chen's support for Sino-American trade is certain to be 
     welcomed and distributed widely by supporters of the pending 
     legislation to grant China normal trade benefits in the 
     United States on a permanent basis. The bill--strongly 
     supported by the White House and the business community, but 
     opposed by organized labor--faces what could be a close vote 
     later this year in the House of Representatives.
       Despite the friction between Taipei and Beijing on other 
     issues, Taiwan has a strong but little-recognized economic 
     interest in making sure that China has normal trade relations 
     with the United States. Many Taiwanese companies manufacture 
     on the Chinese mainland and export their products from China 
     to the U.S. market.
       Nevertheless, over the past decade while Hong Kong leaders 
     repeatedly campaigned in Washington on behalf of unrestricted 
     U.S. trade with China, Taiwan stayed in the background. 
     Chen's praise for Sino-American trade thus represents a 
     departure from the approach of the outgoing Nationalist Party 
     government.
       During the wide-ranging interview at his office, Chen 
     looking relaxed and speaking in Mandarin Chinese through a 
     translator, made these other points:
       He doesn't believe that last week's bellicose attack on his 
     candidacy by Chinese Premier Zhu Rongji had any impact on the 
     Taiwanese election. ``The effects were not significant,'' 
     Chen said, neither scaring voters away from him nor pushing 
     undecided Taiwanese to vote for him.
       Despite some divisions within his own party, there is a 
     ``mainstream consensus'' in favor of Chen's own pragmatic 
     approach toward dealing with China. For example, Chen said, 
     the Democratic Progressive Party's mainstream agrees that 
     Taiwan should be willing to discuss with Beijing the idea 
     that Taiwan and the People's Republic are both part of ``one 
     China.''
       Peace and coexistence across the Taiwan Strait will be his 
     ``top priority'' as president--more important that domestic 
     concerns such as the economy or fighting corruption. ``Only 
     with peace in the strait'' can his other goals be achieved, 
     Chen asserted.
       Chen repeatedly came back to the theme that he is eager to 
     improve Taiwan's relations with China. He said he is trying 
     to be especially cautious as he prepares to take office.
       ``Not only are people of Taiwan watching us,'' Chen said, 
     ``China is watching us. The whole world is watching us. And 
     history is also watching us.''
       Yet while proclaiming his desire for peace, Chen also made 
     it plain that he doesn't think Taiwan should be intimidated 
     by China.
       ``What we mean by peace is a very firm and free, autonomous 
     peace,'' he said. ``We don't want the peace that is weak or 
     peace that comes under pressure.''
       Chen repeated an assurance made during this campaign that, 
     as president, he won't hold a popular referendum on whether 
     Taiwan should be independent or reunified with China. The 
     idea of such a referendum had often been proposed by leaders 
     of his party, but China vehemently opposes it.
       Furthermore, Chen promised that, despite his party's past 
     support for independence, as president he will not declare 
     Taiwan to be independent ``unless Taiwan faces a military 
     attack or invasion from China.''
       Asked whether he felt prepared to deal with any military 
     action or threats from China, the president-elect replied:
       ``I believe that across the strait, leaders of both sides 
     want peace. . . . The Chinese leaders have said repeatedly 
     that `Chinese do not fight Chinese.' But if they use threats 
     or force against us, then wouldn't that phrase be 
     meaningless?''
       Chen asserted that when leaders in Beijing threaten force 
     against Taiwan while at the same time proclaiming that 
     ``Chinese do not fight Chinese,'' their words could be 
     interpreted to mean that ``they don't see us [Taiwanese] as 
     Chinese.''

[[Page 17544]]

       Although Chen said he would be willing to discuss with 
     Beijing the idea of ``one China,'' he rejected Chinese 
     President Jiang Zemin's assertion this week that Taiwan 
     should embrace ``one China'' as a precondition for talks.
       If Taiwan accepted Jiang's idea, he said, ``it would be 
     very difficult actually to enter into discussions [with 
     China] on an equal basis.''
       Instead, Chen suggested, perhaps the two governments could 
     reach agreement on other, smaller issues that do not define 
     Taiwan's relationship to China.
       ``We feel that we can first put aside the differences and 
     discuss areas of agreement and cooperation,'' He said, ``And 
     maybe once these other areas of agreement are resolved or 
     improved, then we would in the process gradually overcome the 
     differences that we have and build more trust.''
       Chen went out of his way to court the goodwill of the 
     Clinton administration. Chen praised President Clinton for 
     ``his very strong and firm rejection of [China's] threat to 
     use force'' against Taiwan.
       He also quoted with approval Clinton's recent statement 
     that any settlement of Taiwan's future should have the 
     consent of the people of Taiwan.
       Chen insisted that he has a sufficient mandate to govern in 
     Taiwan, even though he won the presidency with only 39% of 
     the vote. His closest rival, independent candidate James 
     Soong, won 37%, while Vice President Lien Chan of the 
     Nationalist Party, which has ruled Taiwan for 51 years, 
     garnered 23%.
       ``In many countries, the presidents are elected with only 
     20% or 30% of the vote,'' Chen said. ``[Former President 
     Fidel] Ramos of the Philippines had 20-something percent. 
     Former South Korean President Roh Tae Woo only had 30-
     something percent, and President Kim Dae Jung had roughly 
     40%. But this did not affect their ability to govern.
       ``In the same way. President Kennedy defeated his opponent 
     by only 0.1% of the vote, and that was 110,000 votes, which 
     is a very small number compared to the population of the U.S. 
     But this did not affect his ability to govern effectively.''
       Chen is clearly hoping to broaden his political appeal 
     beyond his party base.
       ``Although I am a very proud member of the Democratic 
     Progressive Party, and I hope to continue to contribute to 
     this party and the democratic values it represents, as 
     president of Taiwan or as the national leader, I am the 
     leader not just of the DPP but of the entire nation,'' he 
     said.
       ``And therefore, the national interest must come before 
     partisan interests or individual interests. When there is a 
     conflict of interest between the national interest and party 
     interests, I must consider first the national interest.''
       At the end of the interview, Chen--the son of an 
     impoverished family in rural Taiwan who entered politics as a 
     lawyer for imprisoned Taiwanese dissidents--said he never 
     imagined he would become president.
       ``I didn't even dream of it,'' he said. ``Growing up, when 
     I was small, I was so poor, and we were under such hardship, 
     that my first dream was to become an elementary school 
     teacher.''
       Moreover, he continued, ``after I started taking part in 
     politics, I did not imagine that one day, the president of 
     Taiwan would be directly elected. [And] two years ago, when I 
     lost the reelection bid for Taipei mayor, I did not know if I 
     could stand up again.
       ``The spirit of Taiwan is going from having nothing to 
     creating, and from the bottom to the top.''

  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. I compliment the occupant of the chair for being so 
patient at this late hour.
  I rise to speak on behalf of permanent trade relations with China and 
in support of H.R. 4444, which is PNTR for China. I come to this body, 
after some 20 years, no stranger to China, having traveled there on 
numerous occasions, more recently a journey down the Yangtze River to 
observe the controversial construction of the building of the Three 
Gorges Dam. It has been a great concern by America's environmental 
community as to the legitimacy of this project. It will be one of the 
largest construction projects in the world.
  But looking back at what we did in the United States in the 1930s 
with the TVA project, the flood control, the power generation, what we 
have done in the Columbia River system, it is very much in parallel to 
what China is attempting to do: flood control, power generation, and 
cleaning up their air.
  It is interesting to reflect on the experience of U.S. participation 
in this project. The Eximbank believed that the project did not meet 
its environmental examination sufficiently so it exempted any U.S. 
firms from participating in the sense of funding two Chinese 
contractors to buy American equipment. As a result of the inability of 
the Eximbank to get a clearance on the environmental consequences and 
adequacy, there was no U.S. construction material that went into this. 
As a consequence, Caterpillar alone lost over $1 billion in sales.
  I point this out to reflect on the merits of the current debate on 
certain restrictions that we should or should not have in association 
with PNTR for China. I know there is a great deal of interest in the 
business community. Some see it as a great opportunity. I see it as 
incremental gains for American businesses in the near term. But unlike 
many in the business lobby, my own feeling is that it is going to take 
a period of time. In my own State of Alaska, we may see some gains in 
agricultural and seafood exports, but for the most part, it is going to 
take a number of years to build up this trade. The question comes to 
mind: Are the gains worth the hew and cry this bill is bringing about 
and the extensive debate?
  I have a little different view. Why, if I am not necessarily swayed 
by the arguments of the business community, do I rise in support of 
PNTR? As with most of my colleagues, I spent a good deal of time 
considering the merits of the debate. I have heard the arguments on 
both sides. I continue to listen carefully to the amendments proposed 
and the considered opinions of my colleagues, which I respect. 
Furthermore, as a member of the Finance Committee, I have discussed the 
subject. We have had debates as it played out over the course of the 
past weeks. I noticed throughout this time a reoccurring theme from 
both opponents and supporters of the bill.
  We have tended throughout the course of these many months and 
whenever we have discussed China, either on the floor or in the 
committee, to refer to China as some sort of a monolith. We say China 
brutalizes her people. We say China represses religious freedom. We say 
China is the world's greatest proliferator of weapons of mass 
destruction, or we say we should not reward China for her misconduct by 
passing PNTR.
  Occasionally, we are guilty in this body of painting in broad brush 
strokes. We have a tendency to generalize. We use verbal shortcuts. We 
say ``China'' when we mean China's Government or even certain members 
of China's Government.
  In this instance, however, our reference to a monolithic China is not 
only misplaced, it goes to the heart of the fundamental 
misunderstanding regarding this bill. PNTR does not reward the Chinese 
Government. PNTR does not help the Chinese Government maintain 
repressive control. Passage of this bill, as has been pointed out, will 
not mean that China gets into WTO. They will get into WTO whether we 
vote for PNTR or not.
  We are voting instead on a basic question of U.S.-China policy, 
whether trade with China is in America's national interest.
  We talk a lot about the messages this vote will send to the Chinese 
Government. The message we should send is that we believe trade between 
American and the Chinese people should be fostered and should be 
strengthened. As I said at the outset, I do not believe American 
business interests are our primary concern in this matter. American 
foreign policy interests trump business interests in this matter.
  So what is our primary foreign policy interest in China? Our primary 
foreign policy interest in China is to see the democratization of 
China. At the heart of this bill is nothing more than the formal 
recognition of the profound economic effect and shift in China which 
has occurred since 1979, when we first began the annual debate over our 
trade relationship with China.
  In 1979, China's economy was dominated by Government-owned, 
Government-managed companies. This is the point that justifies my 
position on supporting PNTR, because we have seen a change since 1979, 
when the economy was dominated by Government-owned, Government-managed 
companies. Virtually 100 percent of China's gross national product at 
that time was derived

[[Page 17545]]

from the industrial and commercial activities of not private enterprise 
but of Government. Private enterprise simply didn't exist at that time. 
That is not the case anymore.
  Twenty years after we began normal trade relations with China, 
private enterprise not only exists today in China but now it dominates 
the Chinese economy. The private sector accounts for nearly 70 percent 
of China's economic output, compared with just 30 percent for the 
Government-owned sector.
  Normal trade relations with China are not the same as they were in 
1979--again, that is my point--when all trade flowed through the 
Chinese Government. At that time, if we had said ``PNTR for China,'' we 
would have meant PNTR for the Chinese Government. Now the vast majority 
of trade with China is between private enterprise here and private 
enterprise there. PNTR means normal trade relations between American 
and Chinese peoples.
  Now, an ever-increasing number of Chinese do not depend on the 
Chinese Government for their livelihoods, as they did back in 1979. By 
joining the World Trade Organization, China's reformers are attempting 
to add to the ranks of the private sector and deal a final blow to the 
bloated, anticompetitive, and inefficient state-owned enterprises.
  The overwhelming consensus of experts on China's political economy is 
that China's attempt to join the WTO is a tactic to pressure the 
remaining state-owned enterprises to either privatize or fail. As such, 
the Chinese Communist Party is, in effect, making the ultimate 
admission that communism, for its practical purposes, is dead. Voting 
for PNTR is, in effect, recognition that the China of the year 2000 is 
a China of unprecedented economic self-determination--economic freedom 
for individual Chinese people.
  Well, some of the skeptics say, big deal; Chinese citizens may have 
greater economic freedom, but they lack political freedom. That is 
true; I concede that. They say the Chinese lack religious freedom. True 
enough. They say the Chinese are unable to freely organize labor 
unions. True again. But to say that PNTR will only strengthen the hand 
of China's Government I don't think is a credible argument.
  The Chinese Communist Party is betting China can have a modern, 
efficient, capitalist economy, one that generates significant tax 
revenue, without giving up any political control. They are gambling 
that Chinese citizens will be happy to earn a better living and will be 
happy to pay taxes unquestioningly to their Government. That is the 
difference. This is a profound shift in a country in which the 
Government was responsible to support its citizens, rather than the 
citizens responsible to support the Government. That is a big change, 
Mr. President.
  For years, China's governmental revenues have come directly from 
state-owned companies. That is where the revenue has come from. The 
profits of these enterprises go directly to the Government to fund its 
activities. But state-owned enterprises, as I have said, are inherently 
inefficient and are failing badly--more than 50 percent of them are de 
facto insolvent; they are broke; they cannot now provide the Chinese 
Government with the funds it needs.
  For this reason, China's reformers have been pushing for a market 
economy led by a robust private sector--the private sector which will 
not deliver its profits directly to the Government but will, through 
its companies and employees, pay taxes to that Government. These days, 
entrepreneurs are not paid by the Government; they pay to the 
Government. For the first time in the history of the People's Republic 
of China, the Government relies more on its citizens than its citizens 
rely on their Government.
  Is taxation without representation a good bet for the Chinese 
Government? It seems to me we know a little about that here. We have 
had a few lessons from our own history that would be instructive to the 
Chinese Government. My own bet is that there is no better catalyst for 
democracy than a group of irate taxpayers.
  Does supporting PNTR suggest that the Senate approves of the Chinese 
Government's actions to suppress freedom, organized labor, bully 
democratic Taiwan, or engage in missile proliferation? Not one bit. 
PNTR is nothing more than a recognition of the strides toward economic 
freedom the Chinese people have made. PNTR supports the Chinese people 
in their quest to break free of the yoke of communism.
  What happens if we don't grant PNTR? Will the Chinese people applaud 
us for standing up for their rights? Will the Chinese people recognize 
that we believe our refusal to grant PNTR strikes a blow for political 
or religious freedoms?
  No. The Chinese people will take it as a slight, a sense that we do 
not somehow want them to develop the economic freedoms that we in the 
United States enjoy today, a sense that the United States is the enemy 
of China's development. The Chinese Government, which has no longer any 
ideological claim to power, will employ this sense of U.S. antagonism 
to fuel the fires of Chinese nationalism. In our rush to help save the 
Chinese people from their Government, we will ourselves be the 
instrument of their further repression.
  Let us not choose that course. Let us recognize that this bill 
encourages the growth of relations between Chinese and American 
citizens and vote to support PNTR.
  I yield the floor, and I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. THOMPSON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. THOMPSON. Mr. President, I understand my colleague from Minnesota 
shortly will be wanting to take the floor. When he is ready, I will 
accede to him. In the meantime, I thought I would make a couple of 
observations.
  As the Chair knows, I have introduced this amendment on behalf of 
Senator Torricelli and myself because of our concern of what is 
happening in the world, especially with regard to China, at a time when 
we are entering into a new trade relationship with them. Our strong 
belief is that we cannot ignore the one thing they do that poses a 
direct threat to this Nation, and that is a continued pattern of 
proliferation of weapons of mass destruction, and selling those items 
to rogue nations which, in turn, pose a threat to us--the very reason 
we say we need a missile defense system.
  So we have put down the amendment, and there is strong opposition 
against it by some in the business community--frankly, some who really 
don't have any dogs in this fight, but who have been told they do, or 
think they do, and therefore they oppose it. There will be a handful of 
people who would even theoretically be affected by this legislation. It 
is not a broad parade-dampening situation. It is WTO-compliant. The 
only ones affected would be the ones selling armaments and munitions 
and dual-use items. Even then, the President has discretion to cut 
those items off if he wants. That is the limited focus, despite what 
you might hear all day. That is the limited focus of this legislation.
  I have sat here and listened to my colleagues who have problems with 
this legislation, and they say it will kill PNTR, which it will not. It 
is an insult to this body to say we have to adopt the House bill 
exactly the way the House did it--a House bill that addressed things 
such as labor concerns, Radio Free Asia, and others. They sent it over 
here, and now we are told we can't address proliferation which, with 
all due respect, I think should have somewhat of a more elevated status 
than the things the House addressed. I can't think of anything more 
important than the safety and welfare of this Nation.
  I have been listening to the concerns expressed, and it is quite 
clear that the opponents have not gotten together and plotted any 
strategy on this because some of them say our amendment is too broad 
and some say our amendment is not broad enough--if we focused in on 
three countries. And we should be focusing in on more.

[[Page 17546]]

  Some say that if we pass this unilateral legislation with unilateral 
sanctions there will be terrible ramifications; that it will have 
ramifications with regard to our foreign policy and with regard to our 
allies; that we will set back the cause of freedom and set back the 
cause of peace.
  Others point out that we already have numerous unilateral sanctions 
and laws on the books; that they work; and that they have been somewhat 
successful depending on which ones you are talking about. Even Sandy 
Berger said that.
  Some opponents have said that our legislation ties the President's 
hands. But other opponents say that the amendment is defective because 
you can't force the President to do anything under this bill because he 
has a Presidential waiver. Of course, they are correct.
  Some say that it makes our allies angry while others say our allies 
will be more than willing to be there to sell what we refuse to sell. 
Some say we have real proliferation problems, and yet they can see 
nothing that has worked so far. Others claim all we need to do is 
engage in diplomacy, and that will work. We have a myriad of 
contradictions.
  I think the bottom line is that there is opposition in search for a 
rationale because a lot of people do not want to do anything that they 
think might irritate the leaders in the Chinese Government at this 
particular point because they in some way, without being able to put 
their finger on it--even though it is very limited and even though it 
gives the President discretion, nothing can happen until he makes a 
finding and even then he has a waiver. The rest of it is totally 
discretionary. Even under those circumstances, nothing happens until a 
company has been found to be a proliferator and a threat to our Nation, 
in effect. Even in light of all of that, there is a vague feeling that 
this in some way may complicate the trade deal. That is why I said I 
hope we never get into the position in this country where our friends 
and allies and enemies perceive us to be more interested in trade than 
in our own national security.
  There have been several inaccurate representations with regard to 
what to do with us. I mention the discretion the President has. Some 
say we have to take people out of our capital markets and close our 
capital markets down to them. It is one of a list of things the 
President has the discretion to do. He probably has the discretion to 
do it now anyway.
  The Deutch Commission of distinguished Americans--Democrats and 
Republicans, former Members of this body, the House and others, 
including scientists--points out that we really ought to look at our 
capital market situation and the fact that known proliferators are 
raising billions of dollars in our capital markets from Chinese 
companies; billions of dollars in our capital markets to, in some 
cases, go back and use those funds to enhance their own military. That 
is the Deutch Commission. So we said this should be, if it is not 
already, something that the Chinese know about. Put it down in black 
and white. They should know that the President specifically has that 
authority. If he determines a particular company, after it has been 
found to have been selling weapons of mass destruction to our enemies 
and people who pose a threat to us--after that finding has been made, 
and after the decision has been made by the President not to exercise a 
waiver, if then the President chooses to tell that company it can't 
raise money in our capital markets, he ought to have the discretion to 
do that. Some will say: Well, they can go elsewhere. Maybe they will.
  But if it was that easy you would not be seeing the kind of 
resistance and commotion now, even because of the potential threat that 
the President might exercise that kind of waiver.
  We saw the China petro offer not too long ago. It was a precursor. 
They are looking. There are other major Chinese entities looking at our 
capital markets and ready to come forth with offerings that will raise 
billions of dollars. It is important to them. There are other markets, 
but there are not other markets such as the ones we have. And American 
investors, American investors could go abroad. But it is important to 
them.
  That is the point. There is no inherent right of the People's 
Republic of China or companies related to them or controlled by them to 
have access to our capital markets.
  One item, one potential, so as not to be trade related--it is not a 
trade sanction bill the way some people have thought in times past--is 
the low standard of evidence. Some of my colleagues, I don't think, 
have read the bill quite as carefully as they might. I think the 
implication has been that based upon credible evidence the President 
could impose sanctions. That is not accurate. Based upon credible 
evidence, if a company is found to have been proliferating, they must 
report. Then the President can look at that report and make his 
determination, and Congress will have access to that report, too.
  They talk about mandatory sanctions. There is nothing mandatory about 
them in the strict sense of the word. When it comes to countries and it 
is only strictly discretionary when it has to do with a company, the 
President has to make a determination. Then, as I say, he has a waiver 
on the back end.
  They are still talking about another misapprehension. As articulated 
today, they are still talking about agriculture and small business. 
There are no agricultural concerns anymore in this legislation. We 
removed any concern. However, my friend from Wyoming today said that 
some of his people in the farm community were concerned that if we did 
anything to irritate the Chinese they might retaliate against us and 
they might do it with regard to farm items.
  I can't help my friend there. I don't think that is a farmer's 
concern. The farmers I know would be primarily concerned about China 
and Russia and North Korea selling weapons of mass destruction to these 
rogue nations. If we did something to stop that, and that in some 
indirect way caused China to turn its back on the $69 billion a year 
trade surplus advantage they have, which is highly unlikely, I don't 
think they would think that was a bad thing.
  I think my colleague from Minnesota is prepared now. If that be the 
case, I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. GRAMS. Mr. President, I rise in strong opposition to the 
Thompson-Torricelli amendment, both in principle and, as all amendments 
to PNTR, this one is a killer that will delay PNTR until another 
Congress. I appreciate what they are trying to accomplish but disagree 
with the direction.
  Despite what you have heard, this is a very controversial amendment 
that carries more of a political message than is a legislative proposal 
that would accomplish its purpose. This legislation has not gone 
through the committee process, nor has it been thoroughly analyzed by 
many Members of this body. I urge my colleagues to read the latest 
version carefully before we vote--there have been four versions of this 
legislation, the last one presented this morning.
  I agree we should work with China to reduce its proliferation, just 
as we should work with all countries which proliferate. And I believe 
the President should exercise his authority under the 11 statutes we 
have now to sanction when that is necessary. I am not ready to give up 
on bilateral efforts and existing laws, especially as we are close to a 
new administration. This legislation is simply not appropriate since we 
don't know how the new administration will address nonproliferation.
  Recently Alan Greenspan commented at a hearing I attended that he 
opposes this legislation. Chairman Greenspan noted ``. . . there is a 
very serious question as to whether it will produce indeed what is 
suggested it will produce.'' He went on, ``But most importantly, to the 
extent that we block foreigners from investing or raising funds in the 
United States, we probably undercut the viability of our own system. 
But far more important is I'm not even sure how such a law would be 
effectively implemented because there is

[[Page 17547]]

a huge amount of transfer of funds around the world.'' He says, ``the 
only thing that strikes me as a reasonable expectation is it can harm 
us more than it would harm others.''
  This again begs the question of an amendment that could actually be 
counterproductive to our efforts to curb Chinese proliferation?
  Before I discuss my concerns about this amendment more specifically, 
I want to address charges I have heard against those of us who oppose 
this legislation. We are accused of being pawns of the business and 
agriculture communities. We are accused of not caring about nuclear 
proliferation. Some of us are accused of opposing the Thompson-
Torricelli legislation because Senator Thompson has blocked some 
legislation we strongly supported. We have been accused of 
misrepresenting the amendment. The Senator has the right to question 
legislation or oppose it; so do I and others who oppose the approach of 
this amendment. I will state as firmly as I can--every position I take 
in the Senate is based on policy--not on politics, not on 
contributions, not on retribution--not on anything but whether the 
legislation is good policy and whether it can accomplish its purpose. 
This fails on both counts.
  At the same time, I respect my colleagues' belief that this 
legislation can accomplish its purpose. They firmly believe it takes a 
``club 'em over the head'' approach to achieve any progress with China. 
I respect their right to that analysis, but very strongly disagree. And 
I strongly urge all of you to look at this legislation from a policy 
perspective, and nothing more. This is why we were sent here--not to 
punish a country which has leaders we don't agree with; not to vote for 
something that balances our PNTR vote; not to send a message to an 
outgoing administration.
  I share some of the concerns you will hear today about this 
administration's China policy. If there was evidence of proliferation 
that violated international agreements, it should be pursued under 
existing laws. But to pass new, tougher laws because one administration 
may not have been tough enough--particularly at the end of the 
administration--is surely ill-advised and inappropriate. We have no 
reason to believe that either Presidential candidate would not use 
existing laws to their full intent. I am especially concerned about 
this because of my own optimism that the Presidency will change 
parties, and I don't want the new administration's hands to be tied so 
severely in this way. Some have termed the broad congressional 
authority under this legislation as contrary to the President's 
authority as Commander in Chief under the Constitution.
  Many of you are aspiring Presidential candidates in the future. I ask 
you, Would you want this severe limitation on your authority as 
President?
  Mr. President, many of us sat down and tried to come up with a way to 
achieve a compromise with the sponsors when they tried to bring this 
amendment up before. This is now the fourth draft of the original 
Thompson-Torricelli legislation, and you have heard earlier today that 
it answers all of our concerns. There were some improvements, but many 
new issues of concern have been added, and the core problems remain. 
Clearly, proponents and opponents are still very far apart on this 
issue, and I do not believe it should be considered here today without 
committee hearings and action.
  Let's take a look at where we are with China on proliferation. We 
have a long way to go, but we shouldn't leave the impression that there 
has been no progress. We have just started talks again on 
nonproliferation after the Chinese called off our dialogue due to their 
concerns about the bombing of their embassy in Belgrade. Before that 
time, we had made some progress with China on sales to Iran. China has 
also followed up on various intelligence reports of proliferation. They 
have worked with U.S. officials to develop an export control system, 
and have admitted they need help administering an effective system as a 
developing nation with many people, many companies and many 
opportunities for proliferation that may or not be intended. We can 
hold their feet to the fire by providing support to help them improve--
or by enforcing existing laws if necessary.
  China has signed the Nuclear Non-Proliferation Treaty, the Chemical 
Weapons Convention, the Zangger Committee and has committed to adhere 
to the Missile Technology Control Regime guidelines. I believe it has 
the will to improve. I also believe it has security concerns of its own 
that must be factored in. It has an alliance with Pakistan and it has 
concerns about how our missile defense system might affect their own 
security interests. Whether we agree with those positions or not, we 
cannot expect other countries not to be concerned when we improve our 
own security--or when other nations do so. I still believe engagement 
between two countries that have differences works better when both 
countries act out of respect for each other. When we work with others 
rather than dictating what the results should be and when. To threaten 
a country's sovereignty rights by imposing sanctions for proliferation 
we may not even be able to prove only promotes an adversarial 
relationship that will achieve no progress.
  Will an adversarial relationship continually worsened by an annual 
proliferation report which includes ``credible information'' of 
proliferation with an automatic expedited congressional review 
overturning a President's decisions not to sanction have any impact 
whatsoever on China's will to improve? Especially after China thought 
PNTR would bring an end to the annual review? Thompson-Torricelli 
continues the annual review and will make it easier for the Congress to 
sanction.
  Before the embassy bombing, we saw some good signs China did want to 
improve. That can start again, but not if this legislation represents 
the terms under which we will request improvement. This approach would 
threaten any country's sovereignty--and China has just as many of those 
concerns as we do. In fact, its long history probably makes them more 
concerned about how to respond to world powers wielding huge clubs.
  Further, U.S. leadership is jeopardized since no other country is 
likely to follow our lead, and I believe the U.S. should be a leader on 
proliferation issues. Other countries will also strongly object to the 
extraterritorial reach in the Thompson amendment. The amendment covers 
commercial items not controlled under existing multilateral 
arrangements. Therefore, the U.S. alone will decide whether these 
agreements have been violated by both adversaries and allies.
  My concerns about this legislation are many--and most of them would 
continue no matter how many concessions are made by the authors.
  First--unilateral sanctions do not work. Each year the President 
would submit a report to Congress detailing proliferation by companies 
and governments. His standard for identifying proliferation is 
``credible information.'' By no means can this be defined as proof of 
proliferation. The President then would either impose the mandatory 
sanctions on the persons, companies, or government entities or indicate 
why he has not done so. The report also includes sales to Chinese 
companies which ``contributed to the design, development, production'' 
of nuclear, chemical or biological weapons. That could draw in a lot of 
companies--contributed is a very broad term. A ``contribution'' could 
be unknowing and it may not even be material to developing a weapon or 
missile. Also in the report, the President would list noncompliance 
with international agreements, with export control laws by covered 
countries, which, if not sanctioned through a national security waiver, 
could result in a congressional sanction of the entire country--whether 
or not that country was attempting to help improve its nonproliferation 
record, laws and enforcement of its laws. It would also include a 
report on the Commerce Department's role in exporting licensing and 
post-shipment verifications--inferring Congress could also quickly 
reverse some of these decisions. To make matters worse, the report 
would include technology transfers the CIA determines would have ``a

[[Page 17548]]

significant potential to make a contribution to the development'' of 
nuclear, biological or chemical weapons.
  Now the CIA is making policy under a fairly low evidentiary standard 
that could result in congressional action overturning any Presidential 
decision not to sanction, other than a national security waiver.
  This report, what is included in it, what is sanctioned under what 
evidentiary standard and what is not, opens up a can of worms we should 
not be considering here today in a floor amendment. To say trade 
sanctions are not included is simply inaccurate.
  Second--if the President chooses not to sanction, determining the low 
evidentiary standard of ``credible information'' cannot prove a 
national security risk in certain instances, there is an automatic 
congressional review, if 20 Senators agree, which would provide 
expedited congressional procedures that would allow Congress to quickly 
overturn any alleged proliferation in the report that is not 
sanctioned, thus putting Congress in the business of routinely 
sanctioning persons, companies or the government of China, Russia, or 
North Korea. This raises serious constitutional concerns and would 
allow Congress to politicize these decisions. This revised Thompson-
Torricelli amendment exempts congressional review of alleged 
proliferation exempted from sanctions under the President's national 
security waiver authority which is an improvement.
  Congress cannot take the time to fully analyze these matters, no 
matter how much we would like that to happen. And since most of our 
personal staff doesn't have access to the highest clearance, we would 
rely on the advice of a very few staffers to make these very sensitive 
foreign policy decisions normally made by the President.
  At a recent Foreign Relation Committee hearing, even Elliott Abrams, 
an opponent of PNTR, indicated it was bad policy to have this kind of 
legislative review. He also opposed the insufficient waiver authority 
and thought the legislation should be broadened to more countries.
  Next--this amendment started out focusing just on China--even though 
there are other proliferators. Senator Thompson, after reviewing this 
criticism, broadened it to include North Korea and Russia, but still 
titles the bill the ``China Nonproliferation Act''. He claims after the 
third draft that his bill covers all countries, but it only covers 
``key'' countries as determined by the CIA--once again we are letting 
the CIA dictate policy. I recall some of the past mistakes when CIA had 
too great a role in policy decisions.
  This legislation should include all countries, not just a couple, and 
not just ``key'' countries. No country should be exempt if there are 
proliferation concerns.
  It is only after I concluded this legislation would not accomplish 
its purpose of curbing proliferation that I object to the way 
unilateral sanctions would harm American workers and farmers. The 
actual sanctions under this legislation harm our workers despite what 
the authors claim. China would buy from other countries, not us, and 
the U.S.-China WTO agreement would be ignored. There are plenty of 
other countries willing to step in and take our share of this market 
from us. The claims that agriculture is exempted from the sanctions is 
meaningless, as agriculture exports from the U.S. would be the first 
point of retaliation by China if we impose sanctions.
  The author claims there are no mandatory trade sanctions. However, I 
believe my constituents who produce dual-use items and sell under Ex-Im 
Bank programs would strongly differ with that statement.
  While the latest draft claims that sanctions against countries are 
discretionary, the ability of the Congress to impose sanctions on 
countries listed in the reporting requirements as violators definitely 
could result in countries being sanctioned, if not by the President, by 
the Congress under the congressional review. Further, the definition of 
``persons'' subject to mandatory sanctions still includes government 
entities, so it seems clear to me that countries still are covered.
  Mandatory sanctions would prohibit the sales of dual-use exports and 
U.S. assistance, including Ex-Im Bank programs. The discretionary 
sanctions against countries include scientific and academic exchanges 
as well as rule of law and human rights programs--programs that help us 
achieve progress with China in many areas of difference. Access to U.S. 
financial markets, all of which will seriously harm U.S. exporters, 
and, again serve no purpose since those sanctions will just force China 
to trade with other nations, risking the jobs of many American workers.
  As noted earlier, the President would also include on his annual list 
those who ``contribute to'' proliferation which could easily catch U.S. 
companies, as well as those in other countries, which export commercial 
items that are not controlled under multilateral agreements yet many 
end up being used in the design or production of nuclear weapons 
without the exporter's knowledge. The standard used under existing 
nonproliferation laws for sanctions is there would be a ``knowing'' 
transfer of technology that makes a ``direct and material 
contribution'' to weapons of mass destruction development, production 
or use. This is a major weakening of our current standard that could 
sanction many companies in the U.S. by cutting off their exports of 
dual-use items, some of which may have been diverted to an illegal end 
user without knowledge of the U.S. seller. Also, U.S. exports of nearly 
anything could be determined as ``contributing to the design, 
development, production,'' etc. of nuclear weapons. While the 
legislation claims to only cut off our exports to companies in China 
engaging in proliferation, the ``contribution to'' standard is very 
broad indeed, and at the very least could sanction companies engaging 
in joint ventures in China and Russia. And of course the Congress, in 
its expedited review, could well choose to cut off all exports of 
certain items without much debate or consideration.
  While the authors claim to only sanction under existing multilateral 
export control arrangements, the ``contribute to'' standard could reach 
far beyond these agreements, as discussed previously.
  The revised version claims to only enforce China's international 
nonproliferation commitments, but it lists the Missile Technology 
Control Regime annex which China has not agreed to implement. There are 
bilateral discussions addressing this matter which I hope will result 
in China agreeing to abide by the MTCR annex but the claim made by the 
authors is not accurate.
  Again, the President has sanctions authority under the Arms Export 
Control Act, Chemical and Biological Weapons Control and Warfare 
Elimination Act, IEEPA which currently covers our dual use export 
control laws, Export-Import Bank Act, Arms Control and Disarmament Act, 
Iran-Iraq Arms Nonproliferation Act, Nuclear Proliferation Prevention 
Act, 1997 Intelligence Authorization Act, Defense Authorization Act for 
Fiscal 2000, and the Iran Nonproliferation Act of 2000. China was 
sanctioned by President Bush in 1991 and by President Clinton in 1993 
and 1997. I agree with Senator Thompson that these laws should be used 
to address proliferation by all countries.
  This legislation, for the first time, draws the SEC into 
nonproliferation policy by requiring it to come up with guidelines and 
regulations regarding notification of investors of any company listed 
in the report which have securities that are either listed or 
authorized for listing on one of our exchanges. Notice of listing would 
have to be included in all filings or statements submitted to the SEC. 
This would include companies the President has chosen not to sanction 
because progress is being made, or when he has exercised his national 
security waiver. This, too, is an extremely controversial new 
government mandate that brings the SEC into an area it knows nothing 
about and is an expansion of its authority that would be opposed by 
many of us.
  The revised version would also tie the President's hands on Russian 
and North Korean foreign policy matters.

[[Page 17549]]

  This legislation would involve the jurisdictions of four different 
committees, yet it also has many references to dual-use exports, which 
is the jurisdiction of the Banking Committee. There is no reference to 
the Banking Committee in this legislation, yet supporters of the bill 
claim Banking Committee members are opposing this legislation due to 
differences with the authors of this bill. By refusing to involve 
Senators with committee jurisdiction in consideration of this 
legislation, or by reference in this amendment, I believe it is clear 
the problem is in the other direction.
  There are, I believe, inconsistencies in the way this bill is 
drafted. There are too many to justify considering this amendment 
without ample hearings and committee markup. The second, third and 
fourth drafts of the bill do not solve concerns raised in the original 
S. 2645. In fact, they have raised even more concerns and new issues.
  Because of these concerns, I urge a ``no'' vote on this amendment.
  Again, I want to say I appreciate the Senator's intent, but I just 
disagree with the direction of this bill.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Tennessee.
  Mr. THOMPSON. Let me address a couple of points my colleague has 
made. In terms of the numerous references to second, third, and fourth 
drafts, these, of course, were attempts to address some of the concerns 
that opponents of the amendment were raising; the implication being, if 
we could and would be willing to address those concerns, that we might 
enjoy some support for the amendment.
  Of course, as we addressed those concerns, the goalposts kept being 
moved, and we soon realized that even after all these things that were 
originally addressed when raised, it was impossible to satisfy the 
critics of the amendment because basically they did not want to do 
anything to irritate the leadership of the People's Republic of China 
at this delicate moment when we are about to give them permanent normal 
trade relations.
  As to the hearings, there have been about 60 hours of hearings with 
regard to proliferation issues. There have been 30 hours in the 
committee I chair, the Governmental Affairs Committee. I point out the 
chairman of the Foreign Relations Committee spoke on this legislation 
today and strongly endorses this legislation.
  I thought at least we could agree on the nature of the problem 
persistently and consistently without apology presented by the 
leadership in the People's Republic of China, but now it seems that 
some think the PRC leadership just needs help in order to be better 
people; that we are impinging upon the PRC's authority; that we might 
be doing something that might in some way be interpreted as being 
unfair to the leadership of the PRC; that we are requiring too much in 
a report; that we might identify some Chinese company that might in 
some way later on be determined, even though there is credible 
evidence, to be innocent, even though we broadened it at the request of 
the detractors of the amendment to include other countries.
  There is still concern that the word ``China'' appears in the title 
and that the leadership in the Chinese Government presumably are going 
to be upset because of that and, therefore, we should not do anything 
about it.
  My colleague from Minnesota takes the Chinese position with regard to 
whether or not they agreed to the annex to the Missile Technology 
Control Regime. My understanding is that our Government and the best 
evidence is that they agreed to the MTCR. They are coming back and 
saying they did not agree to the annex. That is not a position I 
thought we were taking in this Nation.
  There is concern there might be a requirement to report these 
proliferating companies to the SEC; the SEC does not know anything 
about giving information to investors, which, of course, is not the 
case.
  I guess we have greater problems than even I thought because I 
thought that while certainly we can have disagreements on the best way 
to approach this, now I find that some of us apparently do not even 
have any problems with the activities from the People's Republic of 
China over these last few years.
  I wonder where my colleagues were when the Rumsfeld Commission came 
out 2 years ago and talked about this threat. Where was everybody when 
the Deutch Commission, the bipartisan group of former Members of this 
body and former Members of the House, scientists, and experts in the 
area, talked about this threat and talked about the fact that, as late 
as 1996, China was leading the pack in the entire world in terms of 
proliferators?
  Now they are just identified as one of the top three of nations that 
are doing things to serve as threats to this country, and the 
information in the intelligence reports we continue to see is that with 
regard to part of their activities anyway, it is increasing as we 
speak; let's not do anything to upset the leadership of the People's 
Republic of China.
  I wish we were dealing with the people of China. We would not have 
this problem. But the leadership over there, counting on having this 
trade and keeping dictatorial control, too, is an entity whose 
attention we need to get. Diplomacy has not worked.
  It is true; we have numerous laws on the books. I said earlier that 
some of my colleagues were arguing that this would be catastrophic, on 
the one hand, and yet we have similar laws already on the books, we do 
not need them, on the other. I did not expect to hear that in the same 
argument, but I think I just heard it. We have numerous laws on the 
books that are unilateral sanctions with regard to countries that 
proliferate weapons of mass destruction. That is nothing new. We pass 
those bills unanimously usually.
  What is new about this legislation is the fact that a detailed report 
is required; the President has to give a reason for not exercising 
sanctions when a determination is made that companies are 
proliferating; and Congress has a voice. If 20 Members of Congress 
decide to file a petition, then we can address it ourselves. The 
President, of course, still has to sign the bill. The President, of 
course, can still veto legislation, but it does give Congress some 
additional voice, a voice that is needed.
  If this had worked out all right, if we did not have this continuous 
pattern of behavior and continuous pattern by this administration in 
not requiring the Chinese to clean up their act, we would not be here 
tonight and we would not need this kind of legislation.
  I make no apologies for this amendment. It is needed. It is something 
that is not going to go away. The People's Republic of China has made 
it clear they do not intend to amend their activities. It is not as if 
we are making progress. They told us and our delegations we sent over 
there in June and July of this year, and with the President of the 
United States and the head of the Chinese Government as late as last 
Friday, they continue to tell us that as long as we try to get a 
missile defense system through here and as long as we befriend Taiwan, 
they are going to continue their activities and we can take it or leave 
it.
  Obviously, many of my colleagues think we ought to take it because of 
the enormous benefits we are going to get from this trade deal; surely 
we can move forward and be optimistic and be hopeful in terms of what 
trade might bring because free trade leads to free markets and free 
markets can lead to more open societies in the long run.
  In the meantime, in addition to that, can we afford to blind 
ourselves to the only activity engaged in by this country or any other 
country--I am talking about the Chinese Government--that poses a direct 
and mortal threat, as we are continually told by our own commissions 
and intelligence community to this country? I think not, and I look 
forward to a resuming of the debate tomorrow.
  I yield the floor.

                          ____________________