[Congressional Record (Bound Edition), Volume 146 (2000), Part 6]
[House]
[Pages 8739-8742]
[From the U.S. Government Publishing Office, www.gpo.gov]



               PERMANENT NORMAL TRADE RELATIONS FOR CHINA

  The SPEAKER pro tempore (Mr. Pease). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Georgia (Mr. Norwood) is 
recognized for 60 minutes.
  Mr. NORWOOOD. Mr. Speaker, I am grateful for this time tonight to 
talk about what I think all of us have in our heart today and knowing 
that the China vote, the trade issues will come up this week, as early, 
perhaps, as Wednesday. My colleagues that have preceded me and all of 
us have been very thoughtful, I hope, and very concerned. I hope that 
we all realize that there are good people on both sides of this issue, 
people who are trying their best to understand what is right, people 
from both parties that are for and people from both parties that are 
against.
  Now, Mr. Speaker, the President has called on us to approve trade 
with China, based on a philosophy that we should be, and I would quote 
the President ``reaching out a hand, not shaking a clenched fist.'' 
Well, I agree with that philosophy. The problem is I believe that for 
the last 5 years, we have been reaching out a hand, while Beijing 
continues to shake their fist at us.
  Before we even begin discussing why we should not extend new trade 
privileges to China, the American people need to be made aware that we 
are not talking about stopping trade with China. The gentleman from New 
Jersey (Mr. Frelinghuysen) listed CEO after CEO that presently is doing 
business with China. If we do not approve the PNTR, it does not mean at 
all that we will not continue doing business with China just as they 
are today.
  Far too many factions in this debate have attempted, I believe, to 
build a strawman argument by insisting that a vote against PNTR is a 
vote to block trade with China or isolate China or even the United 
States from world trade. That is simply not the case.
  Here is the truth about a ``no'' vote on PNTR. If we vote no, China 
and the U.S. continue trading just as they are today with China 
receiving most favored nation's status, or normal trade relations, 
whichever way one prefers to call it. Nothing necessarily changes. 
Later this year, Congress will need to approve, then, a normal trade 
relations for another year, just as we have done every year since I 
have been here, after we examine China's progress on human rights, on 
trade practices, and on our national defense concerns. That is the same 
process that we have used every year since 1979.
  Supporters of PNTR claim that a ``no'' vote by Congress will upset 
the entire World Trade Organization movement with America blocked from 
participation. But according to Professor Mark Barenberg of Columbia 
University, that is just nonsense. I would like to quote the learned 
profession: ``If China grants market-opening concessions to WTO 
members, then existing bilateral trade agreements between China and the 
United States require that China grant those same concessions to the 
United States, even if Congress does not grant PNTR to China.'' That is 
through our existing bilateral trade agreements.
  Mr. Speaker, I will offer Professor Mark Barenberg's statement for 
the Record.
  So if we vote no, nothing about our existing or future trade with 
China really changes. The only thing that really changes will be the 
monitoring of Communist China's records on human rights, fair trade, 
and military expansion. It stops.
  These, then, bring up for me three powerful reasons that we should 
oppose bringing China into the WTO and extending permanent normal trade 
relations at this time. Many people are going to vote no Wednesday who 
might, under different circumstances, be very ready to vote yes a year 
from now. But at this time we should not extend permanent normal trade 
relations. We have normal trade relations with China. We are asked to 
do it permanently.
  The first reason is trade itself. China has normal trade relations 
with us today, and they simply do not keep their agreements with us at 
all. For instance, they do not let us sell tobacco to them under the 
false pretense that our tobacco has blue mold spores. Now, we know that 
the Chinese Government simply made that up to keep us from exporting 
tobacco.
  They agree to ship a limited amount of textiles to America each year, 
and we agree with that, with that bilateral trade agreement. Yet they 
still tranship millions of dollars of textiles beyond that agreement 
through Africa.
  They can currently, today, buy all the cotton and chickens that they 
want from America. But they do not do it. Why should they do that? They 
have a surplus of cotton, cheap cotton that they produce with slave 
labor. Why would they buy ours?
  They currently export chickens to America, probably not to my home 
State of Georgia. We grow a few, too. But we are not going to send them 
any

[[Page 8740]]

chickens, at least any more than we presently do.
  We have agreements with them not to steal our technology, military or 
otherwise, but they do. They have a larger espionage operation going on 
in our country for these purposes today than any time in our history.
  We have agreements that they are not to steal our intellectual 
property, but they do. We have agreements that they are not to force 
American companies to turn over technology in order to just do business 
in China, but they do. They are not supposed to attempt to corrupt our 
political system, but they do.
  Chinese military leaders have and are contributing to Federal 
election campaigns in an attempt to sway this very vote. They do not 
keep their word. They totally ignore agreements.
  How do we respond to that? We offer them permanent trade relations 
for all of their good deeds. Why? Well, we say, if only they were in 
the WTO, we could make them behave. To enter the WTO, they once again 
enter into an agreement.
  Why does anyone believe, all of a sudden, they are going to keep 
their word with agreements that are not enforceable, particularly when 
China would then have a vote on what was enforced? The WTO would 
enforce only what it wants enforced, not what America needs to have 
enforced.
  Supporters of PNTR say if China would only lower their tariffs, we 
could sell to them. Well, Mr. Speaker, the ``them'' is the Chinese 
Government, not private Chinese businesses or even the people, but the 
government alone.
  We have normal trade relations with China today. Why does the Chinese 
government not buy from us now? They set the tariffs. They could lower 
the tariffs if they are so anxious to buy from America. There is no 
reason to believe that they will improve after being in the WTO. They 
can buy cotton or chicken or Coca-colas or beef from us today. We are 
glad to sell it to them. Why do they not?
  Well, the answer in one case is that they grow cotton, cheap cotton 
because of slave labor and/or low wages, no regulations from the EPA or 
OSHA. They export this cheap cotton. Do my colleagues know why? Our 
textile mills need cheap cotton in order to compete globally. It is 
understandable they are sending us their cotton. That is not going to 
help our cotton farmers.
  We say over and over again this agreement will help the American 
farmer. How? China is trying to do the same thing we are, that is, to 
feed themselves and furnish their own fiber. Why will they buy cotton 
from us when they have a surplus which they gained after we taught them 
how to grow cotton more efficiently, for goodness sakes.

                              {time}  2130

  Yes, they are going to buy some of our products, particularly those 
that they cannot currently produce for themselves, and they are going 
to continue to do that whether we make this permanent or not. But 
before we count on those sales, we need to remind ourselves of the 
Chinese doctrine. It mandates that if we sell any product there, we 
also have to provide the technology for China to produce the products 
themselves. And where did they learn to gin cotton? From us.
  This situation occurs between the Chinese Government and American 
companies who are forced to enter into joint ventures in order to sell 
product in China. WTO rules say China cannot do that. We say that if we 
could only get them into the WTO, the WTO would enforce this agreement. 
How? If a big sale to China is dependent on giving them technology, 
some American companies, or their international competitors, will do 
it. How do I know that? They already have done it.
  Chinese business is government business. It is run with the same 
goals in mind as private business, as we know it in this country, with 
one critical twist. Instead of profiting stockholders or individual 
entrepreneurs, it profits only the Chinese Government.
  Instead of failing or succeeding based on profits in global 
competition, it succeeds entirely on whether specific operations meet 
the needs of the Chinese Government. Chinese export successes help 
China's Communist government and no one else, unless we want to count 
the $1 a day discretionary allowance granted the workers by the 
Communist party.
  I want to remind my colleagues that the Chinese Government can buy 
from America today if they want to. If we have normal trade relations 
with China now, why do they simply not lower their tariffs now and buy 
from us, if that indeed is what this agreement is all about, us 
exporting to China?
  Bringing China into the WTO helps China and it hurts America, in my 
opinion. It will encourage American companies to move their factories 
to China to take advantage of cheap labor, no health or safety 
regulations, and low cost of production. These goods will then be 
imported back to America to compete against our companies; that is our 
companies that have not already been put out of business under our 
existing trade agreements with our high cost of production, including, 
I might add, the high cost of a justice system and a lawsuit-happy 
Nation.
  Today, Wal-Mart is the single largest importer in the United States. 
Half of their imports come from China. Does Wal-Mart have factories in 
China? Who has the majority interest and control of those factories? 
The Chinese Government, not private Chinese business interests. These 
imports are not promoting Chinese capitalism, they are funding the 
Chinese Communist government.
  If we approve PNTR and China's entry into the WTO, we will witness 
the total and complete collapse of the textile industry in America, 
along with some other industries.
  Reason number two that I oppose PNTR is national security. I have 
attended over the last 2 weeks two top-secret briefings from the CIA. 
What I have learned, that I can tell, is this: The Chinese military 
considers us to be their main enemy that they must fight one day. They 
are building missiles with Russian cooperation just as fast as they can 
go. These missiles are aimed at our friend Taiwan and U.S. carrier 
forces. Does anybody remember the Taiwan Relations Act?
  They are preparing to attack our satellites. They are working on 
long-range missiles aimed at the American heartland. Remember Los 
Alamos, where they stole our secrets on nuclear warhead technology? 
They are buying military hardware anywhere in the world as fast they 
can, including AWACS from Israel.
  They are doing this to the tune of $40 billion a year. They are using 
our own money because we believe that we must have $2 hammers. 
Remember, they receive $70 billion U.S. dollars per year because of the 
trade deficit we have with them today. They are buying weapons with 
cash, our cash, not credit. On top of this, they are selling military 
hardware to Pakistan, Iran, North Korea, and others.
  Reason number three for me is human rights. I voted for MFN in 1995, 
and I did so because I was told that we would be able to sell more 
goods to this great nation called China with her population of 1.2 
billion consumers. I was asked to believe that if China just had enough 
blue jeans to wear they would turn into this kind, friendly nation. 
Slave labor would go away, human rights would be better, and the 
Chinese people would have the freedom to worship God as they saw fit, 
if I would just vote for MFN in 1995.
  The fact is the opposite has occurred over the last 5 years. All of 
these things are worse after 5 years of normal trade relations with 
America. So I am not just a ``no'' on this vote, I am a ``hell no.'' 
But only for this year. We must look at this year by year and reserve 
the right to reward China for proven progress in human rights and in 
fair trade and in peaceful relations. But this year, of all years, is 
not the year to help China.
  Are we going to reward them? Do we allow China to profit from trying 
to corrupt our system of free elections with illegal campaign money? Do 
they profit from stealing our technology, including nuclear weapons 
secrets? Do they profit from violating our existing

[[Page 8741]]

trade agreements and throwing hardworking Americans out of their 
manufacturing jobs? Or do they profit because they threaten an invasion 
of our friend and ally, Taiwan? Or do they profit from threatening a 
nuclear attack on American cities? Do they profit from invading islands 
belonging to the Philippines, Indonesia, and Vietnam? Do they profit 
from holding those Tiananmen Square protesters at gun point and forcing 
them to make shoes to export to America? Do they profit from forcing 
young Chinese mothers to endure forced abortions and sterilizations and 
watch government doctors kill their own child as it is being born? Do 
they profit from throwing Christians in jail just for having a Bible, 
or crushing the right of the people of Tibet to worship as they see 
fit?
  I am for free trade, but I am also for fair trade and smart trade. 
Permanent normal trade with China, while these conditions exist, is not 
free and it is not fair and it is not smart.
  There are many who support PNTR because they honestly believe that 
all-out global trade with no restrictions or oversight has a chance of 
simply overwhelming China's corrupt political and economic system. 
Although I disagree with that, I respect their position and do not 
doubt their honest motives.
  But there is a seamier side of the PNTR lobby that has successfully 
spread false information to America's business leaders and, frankly, 
many of our colleagues, and have taken advantage of those honest 
motives. This side of the China lobby has but one motive: Profit for a 
few at the expense of many. They do not care about the people of 
America or Taiwan or Europe or China. They only care about the bottom 
line of corporations that are really no longer American businesses.
  This new breed of corporation recognizes no border, no nation and no 
law, just the ability to sell their goods and services produced in the 
cheapest possible manner on Earth, anywhere they choose, with no 
restrictions and no concern for the national security or sovereignty of 
the United States or of any nation.
  We have a choice here in this House. Our collective voice will be 
heard by billions of people around the world, people who are yearning 
and struggling against tyranny, hoping, fighting and praying for 
democracy, human rights, and peace. Our choice will determine whether 
those masses of humanity locked in the darkness and our own citizens 
continue to believe in America as the great beacon of human decency and 
divine providence, a Nation by whose light all mankind can see that 
liberty still shines brighter than gold. The choice is between freedom 
and greed. I choose freedom and I urge my colleagues to do the same.
  I ask my colleagues to vote this year ``no'' on permanent normal 
trade with China, knowing that we do have normal trade with China, and 
let us review that again next year.
  Mr. Speaker, I include for the Record the article I referred to 
earlier:

   The Debate on PNTR for China: A Response to Barshefsky and Jackson

                          (By Mark Barenberg)


                              introduction

       On March 1, 2000, I issued a statement analyzing the legal 
     implications of the Congressional vote on PNTR for China. 
     That analysis reached the following conclusion: ``If China, 
     in acceding to the WTO, grants market-opening concessions to 
     WTO members other than the United States, then existing 
     bilateral trade agreements between China and the United 
     States require that China grant those same concessions to the 
     United States, even if Congress does not grant PNTR to 
     China.''
       Subsequently, in a March 8, 2000 letter advocating 
     enactment of the sPNTR legislation, Ms. Charlene Barshefsky 
     asserted that the 1979 Bilateral Agreement between China and 
     the United States will not legally obligate China to grant to 
     the United States all market-opening benefits that our 
     competitors will gain, if China enters the WTO while the 
     United States Congress votes against the PNTR legislation.
       In a March 28, 2000, letter responding to a query from 
     several Congressmen, Professor John Jackson explicitly 
     declined to undertake a full legal analysis of Ms. 
     Barshefsky's claim. Jackson nonetheless ventured an opinion 
     that the US-China bilateral trade relationship will face 
     `many interpretive controversies' if the Congress votes 
     against the PNTR legislation. While Professor Jackson 
     concedes that `such interpretive problems' will still arise 
     if Congress votes in favor of the PNTR legislation, he 
     predicts that the WTO multilateral settlement procedures 
     applicable to those interpretive disputes would provide a 
     better `juridical institutional framework' than would 
     bilateral procedures. On this basis, Jackson supports PNTR.
       In this paper, I respond to the arguments made by Ms. 
     Barshefsky and Professor Jackson:


  executive summary: a response to ms. barshefsky's and mr. jackson's 
                               arguments

       Ms. Barshefsky's claim, summarized above in the 
     Introduction, is legally incorrect. That simple fact is that 
     China is obligated by binding international law to grant the 
     United States substantially all the economic benefits it 
     grants to our competitors, even if Congress declines to enact 
     PNTR.
       If Congress does not enact PNTR, our trade relationship 
     with China will be governed by the international law 
     contained in the bilateral trade agreements between China and 
     the United States. Article III(A) of the 1979 bilateral 
     Agreement states in full and without exception or 
     qualification:
       ``For the purpose of promoting economic and trade relations 
     between their two countries, the Contracting Parties [the 
     U.S. and China] agree to accord firms, companies and 
     corporations, and trading organizations of the other Party 
     treatment no less favorable than is afforded to any third 
     country or region.''
       Therefore, if China grants our competitors any economic 
     concessions in order to join the WTO, this clear, sweeping 
     provision of the 1979 Bilateral Agreement requires that China 
     grant the same benefits to United States businesses. That 
     provision, on its face, applies to all U.S. businesses in all 
     areas of economic and trade relations, without exception or 
     qualification.
       It is striking that none of the proponents of PNTR--neither 
     Barshefsky, Jackson, nor any China Lobbyist--quotes Article 
     III(A) in full and without qualification in their written 
     statements. As a matter of law, the plain language of that 
     provision is manifestly devastating to their position. It is 
     not surprising that the only ``arguments'' on this point by 
     commentators are bald assertions unsupported by an reasoning 
     or legal principles, let alone analysis of the actual 
     language of Article III(A). Mr. Gary Hufbauer, for example, 
     says simply that Article III(A) can indeed be read as broadly 
     as its plain meaning, but that it is ``doubtful'' that it 
     should be so read. See G. Hufbauer, ``American Access to 
     China's Market'' (April, 2000). Professor Jackson's letter 
     explicitly disavows undertaking a careful legal analysis of 
     the question, but then asserts that the words of the 
     Bilateral must be ``stretched'' to mean what they plainly 
     say.
       In straining to give the narrowest possible interpretation 
     to China's obligations to the United States, Ms. Barshefsky 
     directs attention toward irrelevant, ancillary legislation 
     and treaties, and away from the plain meaning of Article 
     III(A), the central, broadly worded provision of the 1979 
     bilateral Agreement. This legal exercise runs directly 
     contrary to the Vienna Convention on the Law of Treaties, 
     which provides the authoritative rules for the interpretation 
     of international agreements.
       Indeed, in advancing a narrow, strained interpretation of 
     the commitments made by China to the United States in the 
     1979 Bilateral Agreement, the USTR contradicts her own and 
     president Clinton's pledge--often repeated, prior to their 
     current all-out lobbying campaign--to interpret and enforce 
     our trading partners' obligations aggressively for the 
     benefit of American businesses, farmers, and workers. This is 
     especially remarkable, in light of the fact that even zealous 
     proponents of PNTR concede that Article III(A) of the 1979 
     bilateral Agreement is indeed open to the broader 
     interpretation which would give effect--and properly so under 
     the international law of treaty interpretation--to the plain 
     meaning of that provision. See, for example, G. Hufbauer, 
     supra.
       John Jackson's argument--that Congress should enact PNTR 
     because the WTO's multilateral dispute procedure is 
     juridically superior to bilateral dispute procedures--simply 
     fails to address the two most serious ``procedural'' concerns 
     raised by opponents of PNTR.
       The first concern is that a Congressional vote in favor of 
     PNTR would commit the United States to use the WTO dispute 
     procedure, and only the WTO dispute procedure, to enforce our 
     trade-related interests vis-a-vis China. Such a U.S. 
     commitment to WTO procedures in our trade relationship with 
     China would allow the U.S. to bring complaints only against 
     those Chinese unfair practices that are narrowly defined in 
     WTO rules. Further, such a U.S. commitment would render 
     illegal any and all trade-related dispute resolution and 
     enforcement by the United States, whether multilateral or 
     bilateral, in response to China's human-rights, labor-rights, 
     and environmental abuses and, indeed, purely commercial 
     abuses that fall outside WTO-defined unfair practices, no 
     matter how horrendous those abuses may be.
       Through such disarmament, the United States would give up 
     the bilateral enforcement tools (such as Section 301 of the 
     1974

[[Page 8742]]

     Trade Act, or similar future Congressional enactments) that 
     enforced the GATT agreements for decades before the 
     establishment of the WTO, and that managed the U.S.-China 
     bilateral trade relation for the last 21 years. Those tools, 
     if retained by a Congressional vote against PNTR and 
     implemented consistently, will provide the basis for 
     adequately disciplining China in its bilateral trade 
     relationship with the United States.
       Indeed, prior to the Clinton Administration's current 
     campaign to enact PNTR, Charlene Barshefsky repeatedly 
     testified to Congress that the credible threat of United 
     States unilateral sanctions were indispensable to ensure that 
     China implemented any trade concessions it might make. Such 
     testimony based on actual experience weakens Jackson's 
     prediction that abandonment of bilateral disciplines will 
     serve U.S. interests in its future trade relations with 
     China. Today, China remains heavily dependent on access to 
     United States markets, in order to maintain the economic 
     growth that is the single most important prop to the current 
     Chinese regime. Chinese exports into the U.S. market are 
     vital to the Chinese regime, while U.S. exports and 
     investment into the Chinese market are trivial relative to 
     U.S. domestic and international economic activity. China is 
     therefore quite susceptible to the kind of United States 
     bilateral tools that enforced the GATT system and U.S.-China 
     bilateral trade deals for decades, if those tools are 
     effectively and consistently deployed.
       In fact, if China joins the WTO and Congress votes against 
     PNTR, China will be subject both to bilateral disciplines by 
     the United States and to WTO multilateral disciplines by 
     Europe, Japan, and other WTO members. Furthermore, if the WTO 
     resolves any disputes against China in a way that affords 
     economic benefits to our competitors, the United States is 
     also entitled to receive those benefits, since the 1979 
     Bilateral Agreement requires China to grant to the United 
     States any benefits it grants to third countries.
       The first ``procedural'' concern ignored by Jackson--
     unilateral disarmament by the United States--is compounded by 
     a second. The WTO is an intergovernmental organization that 
     operates by negotiated consensus. The world's most powerful 
     countries play a disproportionate role in shaping that 
     consensus. Upon joining the WTO, China--the world's largest 
     Police State--will therefore have a powerful vote, and an 
     effective veto, in any future WTO efforts to reform the 
     ground rules of global markets.
       In other words, China will be authorized to block any 
     proposals--of the kind supported in Seattle by the Clinton 
     Administration itself--to add basic human, labor, and 
     environmental rights to the WTO system. This would mark a 
     significant set-back for all those individuals, governments, 
     and non-governmental organizations who aspire to ensure that 
     the rules of the global economy protect not only commercial 
     rights but fundamental personal and social rights.
       In sum: At a minimum, Ms. Barshefsky greatly understates 
     the economic concessions which China will remain legally 
     obligated to grant the United States if Congress votes 
     against PNTR; and Professor Jackson greatly overstates the 
     net benefits to the United States, in terms of capacity to 
     enforce United States interests, if Congress votes for PNTR 
     and the United States enters a ``binding WTO relationship'' 
     with China.
       Equally important, Ms. Barshefsky and Professor Jackson 
     both examine only one side of the scale--namely, the 
     potential benefits to United States commercial interests. 
     They do not examine the costs of U.S. abandonment of all 
     trade-related enforcement measures--multilateral or 
     unilateral--aimed toward ensuring that the global regime 
     protects fundamental individual rights of autonomy and 
     associated, and safeguards distributive justice and social 
     wellbeing of a sort that cannot be measured by maximization 
     of corporate shareholder returns or aggregate monetary 
     wealth.
       The ``cost'' side of the scale is all the weightier, 
     relatively speaking, once Ms. Barshefsky's and Professor 
     Jackson's overstatement of the commercial ``benefits'' of 
     PNTR is fully recognized.
       In deciding which way to vote on PNTR, our Representatives 
     should at least have an accurate understanding of the costs 
     and benefits they must weigh.

                          ____________________