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

Text: Representative Gephardt on China's Trade Status, WTO
(Democratic leader opposes permanent Normal Trade Relations)
U.S. House of Representatives Minority Leader Dick Gephardt announced at Webster University in St. Louis, Missouri April 19 that he has decided to oppose granting permanent Normal Trade Relations (PNTR) status to China this year because he believes "America should not trust the Chinese government to make progress on its own, and unilaterally surrender our nation's ability to influence Chinese policy through trade."
"At the end of the day, maintaining the annual trade review remains the best way to keep the pressure on the Chinese government to reform its human rights policies," Gephardt said. "Only when there is real progress that addresses our concerns, PNTR should be granted."
"While I share the hopes of many advocates of PNTR that commercial dealings will help hasten the spread of pluralism within China, at this point it is a hope that is not yet been proven right," Gephardt said.
He cited the arrest of a group of practitioners of the self-help/exercise group Falun Gong who were peacefully protesting in Tiananmen Square the previous week as an illustration that "the Chinese government has continued to backslide in the areas of human rights, worker rights, religious freedom, and democracy over the last few years, despite large annual increases in US-China trade."
Gephardt said he believes he is promoting America's long-term economic interest as well in opposing PNTR for China because "granting PNTR this year surrenders all leverage we hold in our trading relationship to the Chinese government, and renders the United States powerless to protect our values and interests."
"Once the Congress passes PNTR, America's ability to use our trade laws and other unilateral enforcement efforts will be in serious jeopardy," he said. "If we don't pass PNTR, we will still enjoy the benefits of the 1979 bilateral agreement ... [which] preserves our ability to use our considerable unilateral leverage."
Even if Congress votes not to grant China PNTR, Gephardt said, "to be consistent with its WTO obligations, China must grant the US all of its World Trade Organization (WTO) tariff cuts on all exported goods."
Gephardt also voiced doubts about the desirability of China's acceding to the WTO this year because he fears that China will "block US efforts to reform the WTO.
"It appears inevitable that the Chinese government will work to stifle any US effort to raise worker rights and sustainable development at the WTO," he said.
"The WTO dispute resolution system could be brought to a halt by a multitude of cases filed against a Chinese government that fails to implement its WTO deal," he added.
Gephardt concluded that "contrary to the view of some proponents of China's entry into the WTO, China doesn't have to join this year ... In the long run, Americans and Chinese alike will be better off when China joins under the right terms -- not with a carte blanche handed to it by the world community."
Following is the text of Gephardt's remarks:
(begin text)

Date: 4/19/00
Speaker: Richard A. Gephardt
Location: Webster University, St. Louis, MO
Gephardt Speech on China PNTR

This week, the issues of trade and globalization are increasingly on the minds of our fellow Americans. The issues that are being debated are global in nature -- they are about abstract concepts like development banks and debt repayment. But make no mistake: these issues affect each and every worker in our economy.
No one is immune any longer from the revolutionary changes that have transformed our economy, and no American has the luxury to ignore the important forces that are bringing the world closer together. I am pleased to be here, at home in the Third District, to talk about these issues. Global issues have a local impact and require the involvement of every citizen if we want to successfully change the terms of the debate that is going on in Washington to ensure that our global trading system serves American values and interests.
For some, the debate over granting Permanent Normal Trade Relations (PNTR) to China is a just a debate about dollars and cents. The advocates of granting PNTR repeatedly argue that it is in America's economic self-interest to grant normal trade status to the Chinese government. I question that assumption. This debate for me has never just been about economics. It's been about something much larger than that.
America is the greatest nation in the history of the world. But our greatness isn't just derived from our material achievements. Of course, our economy is the envy of the world -- every day, people risk their lives to have the chance to come to this country for a piece of the American dream. But the core value that defines us as a nation isn't the sheer value of our national wealth. It's about our national values of human freedom and liberty.
And it has always been important to me -- and central to my work in Congress over the last two decades -- that the United States pursue a foreign policy and a trade policy that doesn't lose sight of this fact.
For many years now I have been trying to help define what I call a progressive internationalist position on trade and international economic issues. This entails opening markets around the world to US products and insuring that market opening enhances the standard of living of the American people. I am not a protectionist, nor am I a free trader. I seek an approach to trade that dispenses with outdated theories, and addresses the reality of today's competition.
I believe that sustainable development and worker rights must be at the core of our trade policy. Otherwise, we have no assurance that trade will contribute to enhanced living standards at home and abroad. The NAFTA in 1993 and fast track authority bills in 1997 and 1998 all lacked meaningful worker rights and environmental provisions, which is why I strongly opposed them.
However, I believe in a system of rules-based international trade, and continue to think that with concerted effort, the major international trade institutions such as the International Monetary Fund (IMF), the World Bank, and the WTO can be reformed. Their mandates must be broadened to include sustainable development, worker rights, and human rights. That's why I led the effort in Congress for implementing the WTO in 1994 and for the 1998 IMF replenishment that stopped the financial crisis in Asia that threatened the world economy. And that's why I have been urging House Republican leaders to pass funding for a multilateral program to provide debt relief for the poorest countries in the world.
At the same time we work to open markets for our goods and services, we need to work to open the minds of world leaders to democratic change. I believe that human rights, worker rights, and sustainable development must be at the core of US trade policy. Otherwise, we surrender our most powerful tools to bring about global change, and as a result, jeopardize our values and interests.
Protection of liberty and trade go hand in hand. Governments that don't respect individual liberty generally have the same attitude towards property rights. As I've said before, international commerce can only be truly stable, progressive, and mutually beneficial when the domestic legal system of all trading partners are based on rules that are consistent and enforceable.
I have struggled over the last few months about how to reconcile what is a bedrock value of our nation -- promoting freedom at home and abroad -- with the strong interest by all of us to increase global trade, in this case, with the People's Republic of China.
I generally applauded the Clinton Administration's efforts in negotiating a WTO agreement with China. I believed that bringing China into the rules-based regime of the WTO could assist US efforts to open the closed Chinese market to US exports. But I never agreed with the proposition that supporting China's admission to WTO meant surrendering our ability to influence China's behavior.
Over the last several months, I have made it clear that I could support PNTR for China if ways could be found to keep meaningful America pressure on the Chinese authorities to reform their egregious practices. Since November, I have attempted to work with the Clinton Administration and environmental, human rights, labor, and business communities to support PNTR while also continuing meaningful American pressure on China to change. I have attempted to persuade the Clinton Administration to support three additional legislative measures: 1) to keep Congressional pressure on Chinese human rights practices; 2) to provide for better enforcement of Chinese implementation of the WTO deal; and 3) to get US companies to support a systematic Corporate Code of Conduct.
Initially I believed that the China WTO deal gave us an opportunity to restore the national consensus on trade policy that has been badly frayed. Unfortunately I could not get broad engagement from either side in this debate to condition the deal with meaningful benchmarks to hold China to progress on human rights and suitable enforcement mechanisms.
As a result, the debate has become overly polarized. Members of Congress are now being asked to simply support or oppose PNTR. And both sides are trying to portray this as a litmus test vote. I think reasonable minds should be able to disagree on this important issue. Both sides should remember this is not the only issue important to the country and the American people.
Since, in the end, efforts to forge a new consensus on this issue were unsuccessful, I am announcing my opposition to PNTR for China this year. America should not trust the Chinese government to make progress on its own and unilaterally surrender our nation's ability to influence Chinese policy through trade. At the end of the day, maintaining the annual trade review remains the best way to keep the pressure on the Chinese government to reform its human rights policies. Only when there is real progress that addresses our concerns, PNTR should be granted.
This was a difficult decision to make. But I believe that to truly honor our values, I have no choice but to oppose granting preferential trade status to China. And in so doing, I believe that I am promoting America's long-term economic interest as well.
There's no question that China will have a huge impact on the world economic and political stage in the 21st century. There's no debate about whether America should engage China; the question is how to engage so trade access can be matched with steady progress toward greater human rights and rule of law in China. We must shape the dialogue to best to promote American values and interests.
Simply put, American policy must induce economic and political reform in China that benefits both the American and the Chinese people. I don't believe that a unconditional grant of PNTR will achieve this goal.
The goal of integrating China into the WTO should be twofold: to raise the living standards of American workers by increasing the export markets of American businesses, and to speed China's transition to a prosperous, rules-based society that frees its people and embraces free markets.
Granting PNTR this year surrenders all leverage we hold in our trading relationship to the Chinese government, and renders the United States powerless to protect our values and interests.
The most reliable trading partners are countries that embrace the rule of law, support the tradition of an independent legal system, and who adhere to democratic self-government at home. Democracies tend to live up to trade and other agreements negotiated with the US because the governments in those countries are ultimately responsible to their citizens. And even with those countries, we must often rely on international organizations like the WTO to mediate disputes we have with them over trade issues.
The WTO gives us a rules-based international trade regime that relies on the member countries to follow its rules and decisions. The probability is fairly high that a country that has a tradition of a rules-based system at home will obey the WTO's rules. But unfortunately, China has no such tradition. I believe that in the absence of external enforcement mechanisms, allowing China's entry into the WTO and trusting the Chinese government to adhere to international agreements and trading rules is a recipe for serious trouble.
It's morally right to energetically promote human rights in China. But it's also in the long-term interest of US companies that do business in China. The annual scrutiny of Chinese human rights helps promote the rule of law in China. Greater adherence to the rule of law in China means greater US exports and protections for US investments.
Remember, a nation that refuses to allow its greatest intellectuals the liberty of speaking their minds freely certainly can't be relied upon to protect American intellectual property. And our economic self-interest is enhanced through trade with countries that allow their people to share in the fruits of their labor rights that are severely limited by the Chinese government.
Some say that having China in the WTO will actually promote change. But I am concerned that allowing China into the WTO without these enforcement mechanisms would embolden China, once admitted, to block US efforts to reform the WTO. China imprisons any worker that tries to organize an independent trade union. China imprisons activists that attempt to note the environmental shortcomings of the Three Gorges Dam and other large infrastructure projects. It appears inevitable that the Chinese government will work to stifle any US effort to raise worker rights and sustainable development at the WTO.
In addition, The WTO dispute resolution system could be brought to a halt by a multitude of cases filed against a Chinese government that fails to implement its WTO deal. Already we have heard from the Chinese official who negotiated the WTO deal that Chinese WTO commitments are only " a theoretical market opening opportunity." This is not a comforting signal as to the Chinese government's intentions once it is admitted to the WTO.
If the WTO agreement with China is only "in theory," as some Chinese leaders seem to think, China can continue to accumulate $70 billion surpluses with the US and block our exports. Right now the US-China trade relationship is profoundly unequal. The US exports more to Singapore, a nation of 3.5 million people, than we do to China. In fact in 1999, US exports to China actually declined. According to the International Trade Commission, once PNTR is granted, the US trade deficit with China will actually increase. Without strong unilateral US enforcement efforts, US-China trade will remain a one-way street. Remember that over forty percent of China's exports come to the United States. Over the short term, we need to use the leverage we already have to attain progress.
Despite what some may think, rejecting PNTR in 2000 does not spell the end of US-China trade. Once the Congress passes PNTR, America's ability to use our trade laws and other unilateral enforcement efforts will be in serious jeopardy. If we don't pass PNTR, we will still enjoy the benefits of the 1979 bilateral agreement. To be consistent with its WTO obligations, China must grant the US all of its WTO tariff cuts on all exported goods. And the 1979 bilateral agreement preserves our ability to use our considerable unilateral leverage.
And contrary to the view of some proponents of China's entry into the WTO, China doesn't have to join this year. The next round of WTO negotiations will take at least 5 years and will probably not be launched until 2001. In the long run, Americans and Chinese alike will be better off when China joins under the right terms -- not with a carte blanche handed to it by the world community.
One of the principal reasons why we should not give China a free pass into the WTO derives from the trade record of the Chinese government over the last decade. Increased trade and investment has not moved China toward the rule of law. In fact, China has moved in the opposite direction. China has failed to fully live up to each of the major trade deals signed by its government in the 1990s.
The 1992 Memorandum of Understanding (MOU) on Market Access, the 1992 MOU on prison labor, and the 1995 and 1996 MOUs on Intellectual Property all share one common element: they were all unfulfilled by the Chinese government. While some progress has been made in combating intellectual property piracy in China, the situation is deteriorating in Hong Kong and Macao. And according to activist Harry Wu, China has seven million people engaged in prison labor. The Chinese authorities have permitted no recent international inspection of any prison camps, and goods they produce could be headed directly to the US in violation of the 1992 agreement.
More importantly, there has not been any fundamental change in the Chinese government that indicates a transformation in its attitude about complying with trade agreements with the US. Unfortunately, it's naive to expect the Chinese government to behave any differently in terms of the recently negotiated WTO agreement.
While I share the hopes of many advocates of PNTR that commercial dealings will help hasten the spread of pluralism within China, at this point it is a hope that is not yet been proven right. The Chinese government has continued to backslide in the areas of human rights, worker rights, religious freedom, and democracy over the last few years, despite large annual increases in US-China trade.
According to the State Department's Human Rights Report issued this year, the Chinese government's "poor human rights record deteriorated markedly throughout the year, as the government intensified effort to suppress dissent." Labor rights activists continue to face repression, and the new Chinese democracy party was destroyed last year before it could even begin. The most fundamental freedom, the right to worship, is under greater assault today in China than it was a few years ago. Brutal crackdowns continue in Buddhist Tibet and the Muslim regions. Legitimate Catholic bishops continue to be arrested and imprisoned, while the Chinese government appoints its own pretender bishops. As Pope John Paul said last year, "if the fundamental right of religious freedom is violated, then the entire structure of human dignity collapses."
Just last week, Chinese authorities again arrested a group of peaceful Falun Gong protesters in Tiananmen Square. They join the thousands of their colleagues already under arrest. The Chinese government is so insecure in its power, any group that is not officially sanctioned is automatically branded subversive -- even a non-political, self-help movement like Falun Gong.
Given the objective political and legal conditions in China, it is important that Congress not abandon its moral responsibility. In the absence of progress by the Chinese government, the Congress must maintain annual scrutiny of Chinese human rights behavior.
Our annual NTR review is criticized by PNTR proponents as "divisive and unproductive." I strongly disagree -- the annual NTR vote is the best single yearly spotlight on the behavior of the Chinese government.
In my discussions with Chinese dissidents, they have told me how important our annual NTR vote is. The Chinese government pays attention to our debate. What we do here matters and often exerts pressure on the Chinese government in their treatment of detainees. Absent major progress from China on human rights, I am unwilling to dispose of the only tool at hand in our haste to allow China to join the WTO.
We have to be honest and admit that China may not yet be ready to join the WTO -- because the rule of law is too rudimentary in China. The Chinese government continues to maintain that the rule of law and democracy is a form of Western imperialism. They couldn't be more wrong. All you have to do is look at the Philippines, at Indonesia, at Burma and many other countries throughout Asia to see that the thirst for basic human rights and democracy are universal aspirations -- they aren't particular to America or to Western nations.
There is no better example of how far the Chinese government has to go before it joins the world community as a real partner for democratic change than its reaction to recent developments in Taiwan. The successful presidential election in Taiwan, the victory of the Democratic Party leader Chen, profoundly unsettled and threatened the Communist Chinese leadership. The transition of power from the KMT to the Democratic Party proves that Taiwanese democracy is here to stay, less than 100 miles from the Chinese mainland. And the reaction of the Chinese government shows how threatened it is by the seeds of democratic change so close to home.
Now is the time for the United States to stand up for what is right, and what is at the heart of more than two centuries of our global leadership. Many of us in Congress, led by Congresswoman Nancy Pelosi, believe it is the obligation of America to make sure we honor our commitment to the universal democratic values by pursuing a strong pro-human rights policy abroad. This is our gift to share with all the people of the world who labor under tyranny and oppression at the dawn of the second millennium.
Modern day heroes of democracy, people like Wei Jingsheng of China, Lech Walesa of Poland, Nelson Mandela of South Africa, Aung San Suu Kyi of Burma remind us that aspirations of freedom and liberty are more noble and lasting than commerce. And these aspirations are not a form of western imperialism. Abraham Lincoln said the Declaration of Independence "gave liberty not alone to the people of this country, but hope to all the world for future time." This is echoed by Wei: "Like objective existence and objective laws, (human rights) are objective truths."
Throughout the 1980s and 1990s the spirit of democracy has relentlessly marched forward. Through South Africa, Eastern Europe, Russia, Latin America, throughout Africa and around the globe. More people live under the flag of democracy than ever before. Unfortunately the 1.3 billion people in China have yet to experience these fruits of liberty.
Americans often are accused of thinking they can change the world. We know this isn't true. But surely, the seeds of change exist right now in China, and it's our obligation to do everything we can to cultivate them to help bring a democratic transformation to the largest nation on earth.
Eleven years ago demonstrators in Tiananmen Square sacrificed life and limb for the principle of liberty. They knew their chances of toppling the totalitarian Chinese system were minimal at that time, but they idealistically sacrificed their liberty and their lives for the dream of a future Chinese democracy. In the words of an anonymous student demonstrator and poet:
"We have awakened the people. We have seeded democracy. We will win.
Our next generation will continue. It doesn't matter if we don't succeed."
They didn't succeed in 1989. But as surely as every movement for democratic change eventually succeeds, so will China's. Until that time, it is our obligation, for that student, for the people of China, for oppressed people around the globe, to do everything within our power to promote the fight for democracy and rule of law across the globe.
It is our birthright as Americans to keep the flame of freedom glowing for everyone, not just ourselves. That's what this debate is really about, and that is why I will cast a vote to show the world that the spirit of liberty burns strong and bright in this new millennium.
(end text)
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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