Text: Agriculture Secretary Glickman Mar. 6 on China Trade Deal
(Glickman pushes Normal Trade Relations for China)For the United States, says Secretary of Agriculture Dan Glickman, granting China permanent Normal Trading Relations (NTR) status is a good deal.
Speaking March 6 at the "2000 Commodity Classic" Orlando, Florida to various representatives of American agriculture, Glickman said the agreement negotiated between the United States and China regarding that country's accession to the World Trade Organization (WTO) was a deal where the United States gave up "absolutely nothing."
Addressing the skepticism Americans sometime evince over negotiations with foreign countries, Glickman noted that "the first question most Americans ask when our trade negotiators bring home a new agreement is: 'What did we give up?' Well, the answer in this case is: 'Absolutely nothing.'"
The U.S. market, he said "is already open to the Chinese, as evidenced by our current 5-to-1 trade deficit with them."
All the concessions in the trade negotiations between China and the United States in November of last year in Beijing, Glickman said, "are on their side, and all the benefits are on ours."
The United States, he stressed, has "nothing to lose" by passing permanent NTR and bringing China into the WTO.
But, he warned, if the United States did not grant China permanent NTR status, it would see the market opening agreement it negotiated with China benefit other nations.
While speaking to a group that could clearly benefit from greater market access to China, Glickman also sought to make the case that getting China into the WTO served larger American interests.
"As important as it is to boost exports, there's more at stake here than dollars and cents," Glickman said, "we cannot continue to be the world's only superpower if we disengage from China at precisely the moment that it stands on the precipice of wholesale political, economic and social reform."
China, he reminded his audience, "has access to weapons of mass destruction," and "holds the key to peace and stability in Asia."
The United States, Glickman warned, "simply cannot afford to isolate such a regional and emerging global power from the world's trading system.
"For our national security as well as our economic security, we have to engage China," Glickman said.
Following are excerpts of Glickman's remarks, as prepared for delivery:
(begin excerpts)
Remarks by U.S. Secretary of Agriculture Dan Glickman
2000 Commodity Classic
Orlando, Florida
March 6, 2000Thank you, Lynn. It's a pleasure to be with you in person this morning, especially since I've only been able to address you electronically for the last few Commodity Classics. I'm sure some of you were beginning to wonder if I was anything more than a digital image.
I would have liked to spend a little more time down here, whether to participate in some of your sessions and activities...or just to catch a Braves spring training game. But the fact is that I can do a lot more for you by returning to Washington tonight for an important meeting about our efforts to pass Permanent Normal Trade Relations (PNTR) and ease China's accession to the World Trade Organization.
I want to spend a minute talking about this because I believe it is the most important trade issue facing the agriculture community this year. And furthermore, it's an issue that has implications beyond agriculture, and even beyond just trade and commerce.
Agriculture is very dependent on exports, more than twice as dependent, in fact, than the overall economy. And no nation offers more export potential -- and has delivered fewer results -- than China. We're talking about the world's largest country, home to one out of every five people on earth, with an economy growing at 7 percent a year. Yet last fiscal year, every man, woman and child in China consumed less than 1 dollar's worth of American agricultural goods. In one year...less than a dollar a person.
But by joining the WTO, China would agree to open its market to us as never before. They would cut tariffs dramatically, to a point lower than many of those levied by our traditional trading partners. Florida oranges, for example, would face only a 12 percent tariff, as opposed to the current 40 percent. China would bind the tariffs on soybeans and soybean meal at 3 and 5 percent respectively. We expect that trade in soybean oil would be completely liberalized by 2006. And a new tariff-rate quota would allow Chinese corn imports of up to 7.2 million metric tons at a mere 1 percent duty by 2004.
On the non-tariff side, China would: eliminate export subsidies; cap and reduce trade-distorting domestic support; lift trade barriers that couch protectionism in scientifically questionable health standards; allow business to be done between private individuals without the interference of State Trading Enterprises. And, of course, China would agree to accept the authority of a rules-based multilateral trading system.
We'll be right there to ensure that China honors its commitments. Passing PNTR does not mean going soft on China and just assuming that they'll live up to their obligations. Quite the contrary. The Administration intends to be vigilant about monitoring China's progress and enforcing the terms of the accession deal.
When it's all said and done, we estimate conservatively that China's accession to the WTO will mean an additional $2 billion a year in total U.S. farm exports to China by 2005. China will go from being a net corn exporter to a net corn importer before the decade is out, and there's every reason to believe that American farmers will get a healthy share of that business. What's more, fewer Chinese corn exports will mean less competition for us in other Asian markets like Korea and Japan. It's the same story in soybeans, as WTO accession figures to increase average annual Chinese soy complex imports by $171 million dollars during the next ten years. This deal is really a no-brainer. The first question most Americans ask when our trade negotiators bring home a new agreement is: "What did we give up?" Well, the answer in this case is: "Absolutely nothing." Because our market is already open to the Chinese, as evidenced by our current 5-to-1 trade deficit with them. This is not like NAFTA, where we had to give in order to get. In this case, all the concessions are on their side, and all the benefits are on ours. We've got nothing to lose by passing PNTR and bringing China into the WTO.
Perhaps more importantly, we've got everything to lose by rejecting it. American farmers and workers would lose the benefits of increased exports to China, while China's WTO concessions would be extended to our competitors. The European Union, Canada, Brazil, Japan, Australia and others would eat our lunch. They'd be more than happy to fill the orders that we lose, and it would take us years to regain any kind of foothold in China.
Now, there are some who object to PNTR and the WTO agreement because they're concerned about China's human rights violations, or their lax labor standards, or their aggressive posture toward Taiwan. We share these concerns, and we're addressing them through appropriate channels. But in the long run, the surefire way to ensure that China does not change is to walk away from this bilateral relationship. If we want to open China, if we want to expose China to our values...to democratic principles...to the concept of religious freedom...then we have to bring them into a rules-based global system. If we help China become a more open economy, eventually they will become a more open society.
As important as it is to boost exports, there's more at stake here than dollars and cents. We cannot continue to be the world's only superpower if we disengage from China at precisely the moment that it stands on the precipice of wholesale political, economic and social reform.
Let's remember also that China has access to weapons of mass destruction, that China holds the key to peace and stability in Asia. We simply cannot afford to isolate such a regional and emerging global power from the world's trading system. For our national security as well as our economic security, we have to engage China.
Of course, trade is just one piece of the farm policy puzzle. Access to the Chinese market alone won't turn the farm economy around.
(end excerpts)
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)
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