March 23,2000

Roth & Moynihan Introduce Legislation to Make Normal Trade Relations with China Permanent

WASHINGTON -- Senate Finance Committee Chairman William V. Roth, Jr. (R-DE) and Ranking Democratic Member Daniel Patrick Moynihan (D-NY) today introduced legislation that would make permanent normal trade relations between the U.S. and China upon China's accession to the WTO. Chairman Roth delivered the following statement on the floor of the Senate:

"Mr. President, I rise today for myself and Sen. Moynihan to introduce legislation that will make normal trade relations with the People's Republic of China permanent when China accedes to the World Trade Organization. The legislation I am introducing is the same as that sent up by the Administration. It is a clean bill, and I believe we should keep it that way.

"Mr. President, last year, the Chinese made a series of bold commitments to U.S. negotiators to open their market in return for WTO accession. In sector after sector -- and by a date certain -- the Chinese have pledged to open their markets to foreign goods, investment and services. These openings represent an unparalleled opportunity for U.S. farmers, manufacturers, and service providers to expand their exports into a rapidly growing market.

"Those commitments will help move the Chinese economy towards a rules-based system and end many forms of state control. In essence, China has conceded that its future depends on the replacement of its communist-style economy with an open, market-oriented system based on the rule of law. Indeed, in a number of sectors, economically backward China will be more open to American exports than some of our developed-country trading partners in Asia and Europe.

"What must the United States give away in terms of access to our market in return for China's pledge to enact these sweeping reforms? The answer is as striking as it is simple: absolutely nothing. The cost of our access to China's market is simply to comply with our own WTO obligations. Indeed, for the United States to reap the benefits of China's open markets once it joins the WTO, the only act necessary is passage of this legislation. This legislation will thus end the annual normal trade relations renewal process required by the Jackson-Vanik provisions in current trade law.

"Some believe we must retain the annual renewal process because it gives us leverage in checking China's conduct on a number of fronts. But the annual debate on renewing normal trade relations has not been a very effective means of achieving any of the goals we all share with respect to China: peaceful settlement of the Taiwan question; enhanced human rights, religious freedom and stronger worker rights for the Chinese people or curbing China's irresponsible behavior on security matters. But, the active involvement of U.S. firms in China can only help open that society and reinforce the changes already under way in China toward free markets and a rules-based society.

"The enormous benefits of enacting permanent normal trade relations, on the other hand, are clear. Just as clear is the huge cost of failing to do so. In passing PNTR, American workers, farmers and exporters will gain access to market-opening concessions the Chinese made to our negotiators after 13 long years of hard negotiations.

"If we fail to pass PNTR, then every member economy of the World Trade Organization will gain such access except the United States. Our European, Japanese and Asian competitors could not hope for a more lucrative gift, and all at the expense of our farmers and workers.

"Here's what Leonard Woodcock, former President of the United Auto Workers, had to say in support of PNTR two weeks ago: 'American labor has a tremendous interest in China's trading on fair terms with the U.S. The agreement we signed with China this past November marks the largest single step ever taken toward achieving that goal. The agreement expands American jobs. And while China already enjoys WTO-based access to our economy, this agreement will open China's economy to unprecedented levels of American exports, many of which are high-quality goods produced by high-paying jobs.' I agree.

"What about the rights of Chinese workers themselves? On this point I agree with Mr. Woodcock. To be sure, nothing in the U.S.-China trade agreement requires that free trade unions be formed in China. Yet the WTO does not require this of any of its 136 member countries, and the WTO is the wrong instrument to use to achieve that goal. We should, instead, be asking a more important question: Are Chinese workers better off with this agreement? The answer is a resounding yes.

"With so little to lose in ending the annual renewal process and so much to gain by enacting PNTR, I would hope this body will pass this legislation overwhelmingly."