TEXT: SEN. LIEBERMAN 5/27 REMARKS IN SUPPORT OF MFN FOR CHINA
('China's economy is its main engine of reform')

Washington -- The United States should renew China's most-favored-nation (MFN) trading status in order to help promote reform in that country, according to Senator Joe Lieberman (Democrat of Connecticut).

"China's economy is its main engine of reform," Lieberman said at a May 27 news conference. "Economic stability and growth, which renewing MFN will promote, helps fuel China's transformation toward a more democratically oriented, free market society. That is in our own best interest and it reflects our fundamental values as a nation."

A stable trade relationship with China helps to expand freedom and the rule of law, Lieberman continued.

"It brings to individuals within China increased freedom of choice, better working conditions, respect for the rule of law in business transactions, and the expectation that individual effort and initiative matter," he said. "Trade with American businesses that reflect American values brings with it respect for individual rights and dignity."

Rep. Bob Matsui (Democrat of California), who joined Lieberman at the news conference, warned that ending China's MFN status "would be equivalent to cutting off diplomatic relationships with the Chinese."

"The elimination of most-favored-nation status, which is basically normalized trade relations with the Chinese, will give you nothing," Matsui, the Ranking Member of the House Ways and Means Subcommittee on Trade, said. "It would merely put China on a course that could result in a Cold War over the next decade and a half."

Matsui and Lieberman called for patience in dealing with China and stressed that the United States must continue its policy of active engagement.

"China will not be transformed overnight. But if we interrupt trade, it will be many more long nights before China changes," Lieberman said.

Following is the text of Lieberman's remarks, as prepared for delivery:

(begin text)

The timing of this news conference is not coincidental. It has been called to respond to Dick Gephardt's announcement today that he will oppose MFN for China. We are here to call on our fellow Democrats in both chambers to vote for MFN, not because it is good for China, but because it is good for America; and not because it is good for American business, but because it is good for America's workers and consumers.

For us, Dick Gephardt's announcement and our response to it is about economics and it is about politics. Economically, we accept as an article of New Democratic faith that economic growth and new job creation will not happen without free and vigorous trade throughout the world. That faith has been vindicated by the millions of new jobs created during the last four-and-one-half years of the Clinton-Gore pro-trade Administration.

Politically, this debate is really about the future of the Democratic Party, about the unfinished revolution we began in 1985 to break the Party from old ideas and ways that were not working for America's working families, and were not electing Democratic candidates to political office. It is about having the guts to disagree with special interest groups so that we can serve the national interest. And it is about standing boldly for growth and jobs, not defensively for tariffs and protectionism.

We support renewing China's most favored nation status for another year. President Clinton's recommendation to do so is the right one. Trade with China is simply a fact, a desirable fact, of life. It means jobs and prosperity for workers in the U. S., and it means continued pressure for democratic reform in China.

Numbers matter. Connecticut alone exported goods and services worth well more than $100 million last year to China, and thousands of jobs in the state are either directly or indirectly dependent on that trade. Overall in the United States, more than 200,000 jobs are directly related to trade with China. And those figures will grow. Between 1985 and 1995, our bilateral trade expanded by 643 percent. To reverse direction now by rejecting MFN and erecting barriers which would only facilitate other nations' business with China at our expense, is both unrealistic and unwise.

The numbers do tell a compelling story about why we should continue to trade with China on the same terms we extend to almost every other nation on earth. But human rights violations, illicit weapons deals, restrictions against Hong Kong's democracy, and refusal to renounce the threat of force against Taiwan tell why China is, in fact, different than most other countries. Capitalism may have come to China, but Beijing's rulers still do not trust the agents of capitalism, the people themselves, to determine their own futures. We want to see China change. That is what the debate is really about in Congress. And here, again, the President's recommendation is the right one.

China's economy is its main engine of reform. Economic stability and growth, which renewing MFN will promote, helps fuel China's transformation toward a more democratically oriented, free market society. That is in our own best interest and it reflects our fundamental values as a nation. We seek to expand freedom and the rule of law. A stable trade relationship with China helps to do this. It brings to individuals within China increased freedom of choice, better working conditions, respect for the rule of law in business transactions, and the expectation that individual effort and initiative matter. In other words, trade with American businesses that reflect American values brings with it respect for individual rights and dignity. China will not be transformed overnight. But if we interrupt trade, it will be many more long nights before China changes.

I will support MFN renewal for China. That is the issue immediately at hand. But I also think it is time to move beyond the annual MFN debate to a more comprehensive expression of China policy, one that does not constantly find our moral values in conflict with our commercial interests. A good first step is normalizing our economic relationship by brining China into the World Trade Organization and thereby opening its markets more fully to American services and products. It means bringing our anger about China's human rights and proliferation policies to the center of our bilateral relationship and being willing to invoke sanctions when necessary, as we did last week. But it does not mean denying MFN, which amounts to shooting not just the Chinese, but ourselves in the foot, economically and politically.

Perhaps within our lifetimes, and almost certainly in the lives of our children, China will become the premier Asian power. Whether that is a threat or a promise depends in large part on how we treat China today. Building a stable, normal, honest, and demanding relationship with China is an important step in that desired direction.

(end text)

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