Text: Rep. Sander Levin Statement on China, WTO
(Levin urges lawmakers to avoid "polarization")The challenge for lawmakers at a February 16 hearing of the House Ways and Means Committee on a bilateral trade agreement between the United States and China and the accession of China to the World Trade Organization (WTO) is to decide whether they will be "active participants in an effort to shape globalization," according to Sander Levin (Democrat of Michigan).
The United States and China concluded an agreement in November of last year that would lead to China's accession to the WTO. The Clinton Administration is seeking bipartisan support for the trade accord and congressional approval of permanent Normal Trade Relations (NTR) status for China.
In a statement prepared for the hearing, Levin, the ranking minority member of the House Ways and Means Subcommittee on Trade, noted the agreement between China and the United States "would open to the U.S. one of the fastest growing markets for American goods and services" and "would draw China, with weak rule of law, into an international rules-based system."
The Michigan Democrat offered his thoughts on how the United States should deal with China's accession to the WTO, while at the same time urging them to forego the polarization that has beset discussion of trade issues in the recent past.
"The issues involved in China/WTO are too important for such polarization," Levin said.
"Because of its unique size and economic and political structures far different from the models on which the WTO is based," Levin said, "China's potential accession to the WTO presents unique opportunities and challenges."
China's contradictions, he said, "are manifested in this last decade that started with the violent crackdown in Tiananmen Square and ended with what is likely a futile effort to control the Internet for over 5 million and growing users."
Levin urged the establishment of a special commission on China comprised of congressional and administration officials that "would maintain pressure on China to improve its record in a number of areas, including human rights, compliance with core labor standards, and development of the rule of law."
The congressman suggested this commission could be modeled after the Commission on Security and Cooperation in Europe that was established in 1976 to monitor compliance by Soviet bloc countries with the security and human rights principles set forth in the Helsinki Final Act.
Levin also said the United States should seek to have within the WTO "an annual review of China's compliance with its WTO commitments."
Following is the text of Levin's remarks, as prepared for delivery:
(begin text)
OPENING STATEMENT OF
THE HONORABLE SANDER M. LEVIN
FEBRUARY 16, 2000
HEARING OF THE WAYS & MEANS COMMITTEE
CHINA'S POTENTIAL ACCESSION TO THE WTOThe question before the Committee today is not whether we should stand in the way of globalization or blindly embrace it. As the President stated in his recent speech to the Davos World Economic Forum, "Those who wish to roll back the forces of globalization because they fear its disruptive consequences I believe are plainly wrong.... [T]hose who believe globalization is only about market economics, however, are wrong, too."
The question before the Committee is whether we will become active participants in an effort to shape globalization so that it raises living standards and maximizes opportunities for all Americans. China's potential accession to the WTO challenges us to demonstrate our commitment to the principle of active internationalism.
Because of its unique size and economic and political structures far different from the models on which the WTO is based, China's potential accession to the WTO presents unique opportunities and challenges.
The agreement negotiated with China would open to the U.S. one of the fastest growing markets for American goods and services. It would draw China, with weak rule of law, into an international rules-based system.
But, it is clearly not that simple.
China is the world's largest state-controlled economy, where free markets and the rule of law are still in the rudimentary stages of development. During a recent ten days in Beijing and Hong Kong, I saw graphically that change is irreversible, but its direction is not inevitable. There is certainly more economic freedom, but Chinese leaders still describe their course as "market socialism." And while there is more political freedom then twenty years ago, there remains tight one-Party control. China's contradictions are manifested in this last decade that started with the violent crackdown in Tiananmen Square and ended with what is likely a futile effort to control the Internet for over 5 million and growing users.
The President got it right in his State of the Union address when he said: "[W]e need to know we did everything we possible could to maximize the chance that China will choose the right future."
This means we must do more than "Just Say No," which is basically a passive policy. It also means we must do more than "Just Say Yes," an equally passive approach. Neither will work as an American policy -- just standing in the way, nor just looking the other way.
The challenge is to propose specifics, a plan of action to help to impact the direction in which China moves as it integrates into the world trading system. I would like to suggest several components of such a plan of action. Some are steps the United States can take itself, others are steps that require a concerted American effort to enlist the cooperation of our trading partners to enable the WTO to handle the new issues it will face, with or without China (and even more so with China).
1. First, we should establish a special U.S. congressional-executive commission on China. This commission would maintain pressure on China to improve its record in a number of areas, including human rights, compliance with core labor standards, and development of the rule of law. Here, a good model is the Commission on Security and Cooperation in Europe, an entity that we established in 1976 to monitor compliance by Soviet bloc countries with the security and human rights principles set forth in the Helsinki Final Act.
A China commission would bring together Members of Congress and representatives of the Administration to coordinate on specific areas of concern. It would place a permanent spotlight on China. It would have a staff and a budget devoted exclusively to monitoring China. Commission staff could investigate allegations of human rights abuses, non-compliance with WTO commitments, or violations of core labor standards. The commission also could serve as a formal channel of communication between the U.S. Government and non-governmental organizations monitoring China.
The commission would be required to report to Congress annually, providing a high profile review of China's record, presenting specific recommendations for actions by the Administration and Congress.
2. Second, we should seek within the WTO an annual review of China's compliance with its WTO commitments. It would be done through the WTO's Trade Policy Review Mechanism (TPRM). The TPRM was created at the time the WTO was established to promote "greater transparency in, and understanding of, the trade policies and practices of Members."
The Trade Policy Review Board examines the policies and practices of Member countries, based on reports provided by the Members themselves and analyses by the WTO Secretariat. Currently, the most frequent review is every two years for the United States, the European Union, Japan and Canada. Special scrutiny through an annual review is warranted in China's case due to the size of its economy and the evolving nature of a free market and rule of law in China.
3. Third, the Congress, in order to enhance enforcement of China's commitments, should put into legislation procedures for invoking the special anti-import surge provision of the U.S.-China bilateral agreement. We also should take this opportunity to strengthen, consistent with WTO rules, the general anti-import surge provision in U.S. law (section 201), as well as the market-opening provisions in section 301 of the Trade Act.
We also should commit resources to the Department of Commerce and USTR for the express purpose of monitoring and enforcing China's compliance with its WTO obligations. Enhanced monitoring and enforcement by these agencies should include an annual report to the Congress on China's record in meeting those obligations.
4. Fourth, the U.S. must be committed to pursuing the establishment of a working group on labor within the WTO. China's potential accession to the WTO makes it all the more important that we begin to incorporate labor market issues into trade policy making. As China becomes increasingly integrated into the world trading system, its lack of a free labor market will have a growing impact on its competition with producers and workers in other countries. That impact should be taken into account as the rules governing world trade evolve.
The United States can also act immediately in several areas to implement labor market issues in trade policy. Current law recognizes that link. For example, section 307 of the Tariff Act prohibits the importation of goods made from forced or prison labor. The United States should strengthen enforcement of that provision by establishing a special task force to investigate alleged violations. This would press China to eliminate the egregious practice of using forced and prison labor to produce goods for export.
5. Fifth, just as we press China to be more open with the WTO, the U.S. must map out how it will pursue institutional reforms of the WTO to make its operation more consistent with the principles of openness and rule of law. Accordingly, the United States should seek (a) prompt public release of all documents filed in connection with WTO dispute settlement proceedings; (b) open meetings of dispute settlement panels; and (c) acceptance of amicus briefs by dispute settlement panels. Adopting these practices in the WTO itself should have a positive influence on the domestic practices of WTO Members, including China.
In recent decades, discussions of trade issues have been beset by intense polarization. In the 1980s, efforts in our nation to open markets of other industrialized nations, particularly for our manufactured goods in Japan, were labeled "protectionism." In recent years, the trade debate has increasingly revolved around how a developed economy such as ours should react to growing trade and competition with evolving economies with very different economic structures. It has raised new issues, including the role in trade of core labor and environmental standards. Some have dismissed what are essentially economic concerns as "social issues" or re-invoked the cry of "protectionism." But this time, some others have parried by taking a leaf out of the polarization play book, inveighing against "the evils of globalization." The view is too often that issues are simple--either/or; yes/no, for or against.
The issues involved in China/WTO are too important for such polarization. We can do better; surely it is worth the effort.
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