U.S. Dept. of State - IIP: The United States and China

Text: Senator Baucus Statement at Markup of China Trade Bill
(Supports PNTR, decries inadequate enforcement of trade deals)

In a Senate Finance Committee hearing to mark up a bill to grant permanent Normal Trade Relations Status (PNTR) to China May 17, Senator Max Baucus said prominent human rights leaders, labor rights advocates, democratic activists, and even the newly elected president of Taiwan support the normalization of trade with China -- while opponents of the bill have not explained how rejection of PNTR would be in anybody's best interest.

"Rejection of PNTR would undercut the reform elements in China, empowering reactionary forces that would slow down and, perhaps, reverse change in China," Baucus said.

He said the only question he had concerning the bill is how to ensure that China complies with its trade commitments, but added that the issue of noncompliance "is part of a much larger problem."

He said although individual U.S. trade agencies may negotiate good agreements with foreign countries, an interagency process takes over once the negotiations are completed.

"Foreign policy interests then often overpower economic interests," Baucus said, "(resulting in) minimalist efforts at enforcement."

Baucus recommended supporting Congressmen Sandy Levin and Doug Bereuter's proposals to establish a joint Congressional-Executive Commission to monitor human rights in China; beef up monitoring by the Administration; incorporate agreed changes to the product-specific safeguard with China into American law; establish a task force to deal with the prohibition on imports produced by forced or prison labor; and help develop the legal infrastructure in China to comply with World Trade Organization commitments.

Senator Max Baucus
Hearing to Mark Up a Bill to Grant Permanent
Normal Trade Relations (PNTR) Status to China
Senate Finance Committee
May 17, 2000

Today's mark up in the Finance Committee is the first formal step in the process of Congressional approval of extending to China Permanent Normal Trade Relations status, PNTR. I have always believed that it was a vital national interest of the United States to incorporate China into the world community. That is why I worked so hard every year over the last decade to ensure the annual extension of MFN status to China without conditions.

With today's vote in the Finance Committee, which I expect to be overwhelming in its support of PNTR, we will be closer to the end of this process of annual debates on MFN which has served no one. This afternoon, the House Ways and Means Committee will follow the Finance Committee with its own mark up. Next week, the House will vote, and that will be followed quickly in early June by the Senate. I encourage all supporters of PNTR to continue their work in convincing those House members who are still undecided just how important PNTR is to America. I am convinced that when the full House votes, a majority will support PNTR, and we will follow suit on the Senate floor. The benefits on the trade side are unarguable. China has committed to an unprecedented opening of its markets to American and other foreign agricultural products, manufactured goods, and services. We must grant China PNTR in order to take advantage of this opening. If we don't, then our Japanese and European competitors will be active in China's market, while American farmers, ranchers, workers, and businesses will be left behind.

Much of the argument against granting China PNTR focuses on non-trade issues. Opponents have two major themes. One is that, by granting PNTR, we will no longer have the annual NTR debate and, therefore, our leverage to influence Chinese behavior in non-trade areas will disappear. Another theme, perhaps less clearly articulated, but underlying many arguments, is simply that China is a bad actor on the world scene and a vote against PNTR says that the US rejects China's behavior.

I would like to focus on how we can help influence change in China, that is, how we can promote change for the good in China's domestic and regional behavior. Let me briefly address four issues, and do so in a very pragmatic way.

First, human rights. Many Americans have toiled for years to improve human rights conditions in China. Our nation was founded on certain principles about basic human rights, and those Americans who have worked so hard to promote these principles in China deserve the gratitude of our nation. John Kamm, who runs the Dui Hua Foundation, has probably been the single most effective American in promoting the release of political prisoners, garnering invitations to China by human rights groups, and uncovering the names of previously unknown prisoners. In testimony before the House Ways and Means Committee two weeks ago, John said that "one of the worst things this country could do regarding human rights in China would be to terminate or curtail trade relations."

Those who oppose PNTR have an obligation to explain to the Congress and to the American people precisely how the rejection of PNTR will help John Kamm in his efforts to promote improved human rights in China, account for political prisoners, and free political and religious prisoners. I have seen no such explanation.

Second, democracy. It would be hard to find anyone more committed to democratic principles than Martin Lee, head of the Democratic Party of Hong Kong. Lee was recently in Washington speaking in favor of PNTR as a way to bolster those in China who understand the need to embrace the rule of law.

Those who oppose PNTR have an obligation to explain to the Congress and to the American people precisely how the rejection of PNTR will help Martin Lee in his efforts to promote respect for democratic principles and democracy in Hong Kong and China. I have seen no such explanation.

Third, labor. Leonard Woodcock spent decades as a labor organizer, fighting for the rights of American workers and for workers throughout the world. His experience as President of the United Auto Workers and, later, as the U.S. Ambassador to China, makes him unique in understanding how China's entry into the world trading system will affect both American and Chinese workers. Woodcock believes that PNTR and improved access by American firms to China will eventually improve conditions for Chinese workers. And he argues persuasively that American workers will benefit both from the strengthened protection against surges in imports from China, as well as China's increased openness to US exports.

Those who oppose PNTR have an obligation to explain to the Congress and to the American people precisely how the rejection of PNTR will help promote respect for core internationally recognized worker rights and how the rejection of PNTR will help American workers. I have seen no such explanation.

Fourth, Taiwan, one of the three potential flash-points in Asia, along with the Korean Peninsula and the Indo-Pakistani border. There are few people in the world who want to see peace and stability across the Taiwan Strait more than President-elect Chen Shui-bian. Chen has said that "We would welcome the normalization of US-China trade relations." He recognizes that PNTR is the sine qua non for a US-Taiwan-PRC trilateral relationship that will help ensure peace and stability in the region and prosperity and democracy in Taiwan.

Those who oppose PNTR have an obligation to explain to the Congress and to the American public precisely how the rejection of PNTR will help Chen Shui-bian attain these goals, all of which we share. I have seen no such explanation.

There is one area in our trade relationship with China that troubles me, and that is compliance with trade agreements. Frankly, the challenge in ensuring that China complies with its commitments is part of a much larger problem. Our trade agencies negotiate agreements, generally good agreements. But, when it comes time to enforce them, an interagency process takes over. Foreign policy interests then often overpower economic interests. The result is minimalist efforts at enforcement.

The American Chamber of Commerce in Japan has pointed out how ineffective the US-Japan trade agreements of the last twenty years have been. The General Accounting Office has told us there is no central repository for trade agreements. How can we be sure monitoring and compliance is effective if our Executive Branch does not know what agreements to monitor? We in the Congress need to address the problem of utterly inadequate enforcement of trade agreements. This is a priority of mine.

Part of the challenge is that we seem to have forgotten that Congress has a Constitutional responsibility for trade. We have delegated too much of that authority to the Executive Branch, and it is time to bring some of it back here. There is a case before the Supreme Court, Browner v. American Trucking Association, which deals with the issue of whether the Congress has violated the Constitution by over-delegating power to the Executive. No matter what the Court decides in this environmental case, we must address the over-delegation issue in the context of trade policy and, in particular, trade agreement compliance.

In this vein, I support the proposal put together by Congressmen Sandy Levin and Doug Bereuter. They propose a joint Congressional-Executive Commission to monitor human rights in China, much like the Helsinki Commission did for the Soviet Union and Soviet-dominated Eastern Europe a quarter of a century ago. Their proposal also requires beefed up monitoring by the Administration, incorporation into US law of agreed changes to the product-specific safeguard with China, a task force to deal with the prohibition on imports produced by forced or prison labor, and help in developing the legal infrastructure to comply with WTO commitments.

Yesterday, Senator Hatch and I sent a letter to all our Senate colleagues, encouraging them to support the Levin/Bereuter proposal when it comes up in the Senate. It deserves the support of all of us, and I congratulate them for their work on these ideas.

In addition to these ideas, I have proposed several other monitoring activities. The General Accounting Office would annually survey American companies doing business with China and report the results directly to Congress. The one thousand private sector members of our trade advisory committees would act on their responsibility to provide information about compliance with trade agreements. Without good information, we cannot make good decisions. I hope members of this Committee will join in supporting these requests to the GAO, the Secretary of Commerce, and the U. S. Trade Representative.

To conclude, granting China PNTR is a good decision for the United States. It does not prevent us from pursuing issues of vital importance to our country, such as objectionable Chinese policies on human rights, weapons proliferation, Taiwan, Tibet, religious minorities. It gives up no leverage, since that leverage was never there in the first place. Rejection of PNTR would undercut the reform elements in China, empowering reactionary forces that would slow down and, perhaps, reverse change in China. I urge my colleagues to support PNTR for China.

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)