Text: Senator Wellstone July 19 Statement on PNTR for China
(Trade agreements should include human and labor rights)

Senator Paul Wellstone (Democrat of Minnesota) told fellow members of the Senate Foreign Relations Committee in a July 19 hearing that he supports renegotiating the terms under which China would be granted Permanent Normal Trade Relations (PNTR) status with the United States and admission to the World Trade Organization (WTO).

The current PNTR legislation does not accurately reflect the priorities of the American people because it fails to address human rights, religious freedom, labor rights, and environmental protections, Wellstone said in his statement during the hearing on the implications of granting China PNTR.

The senator called the current bilateral agreement for China's accession to the WTO a "virtual wish list for multinational corporations." The agreement would make it easier for American companies to relocate in China and companies would be unlikely to raise the human and labor rights standards of Chinese workers, Wellstone argued.

"We need a more forward-looking approach to the new challenges of a global economy," Wellstone said, "not the same old trade and investment model that PNTR embodies."

Following is the text of Wellstone's remarks:

(begin text)

STATEMENT OF SENATOR PAUL WELLSTONE
SENATE COMMITTEE ON FOREIGN RELATIONS
HEARING ON GIVING PNTR TO CHINA:
HUMAN RIGHTS, LABOR, TRADE,
AND ECONOMIC IMPLICATIONS
July 19, 2000

Mr. Chairman, thank you for calling this timely hearing on the human rights, labor, trade, and economic implications of Permanent Normal Trade Relations (PNTR) for China.

I strongly believe that these issues must be fully and thoroughly discussed and debated -- not only in the Foreign Relations Committee and on the floor of the United States Senate, but in the kitchens and living rooms of every American family. The issues we are examining today affect all Americans in many important ways.

People engaged in human rights issues have long understood this basic truth: that Americans can never be indifferent to the desperate circumstances of exploited and abused people in the far reaches of the globe. When the most basic human rights and freedoms of others are infringed or endangered, we are diminished by our own failure to act. But when we embrace the cause of human rights, we reaffirm one of the greatest traditions of American democracy.

Fortunately, this truth is now reaching a larger public. A rapidly growing number of working families and their union representatives have come to understand that their own well-being depends to a considerable degree on the welfare of people they've never met, living halfway across the planet.

One of the public figures most responsible for this remarkable shift in attitudes is President George Becker of the United Steelworkers of America, who we are very fortunate to have testifying before the Committee today. I want to extend my warmest welcome to President Becker, a towering figure in the American labor movement.

President Becker has been at the forefront of advocacy for labor rights around the globe. President Becker was there in Seattle last November, alongside tens of thousands of union members, demanding that workers overseas be allowed to organize and bargain collectively. And President Becker has been extremely farsighted in his work with the environmental community to ensure that the global economy works for the environment.

As President Becker has recognized, this is the urgent challenge that we cannot escape or ignore: how do we make the global economy work for human rights -- at home and abroad? How do we make the global economy work for working families -- at home and abroad? And how do we make the global economy work for the environment -- at home and abroad?

This is why China's integration into the world economy looms so large in our consciousness. China is like no other country. The size of its population will give it a preponderant influence on the evolution of the global economy. And the character of its government gives us cause for alarm over the direction the global economy may be taken.

But let us be clear. The issue before Congress is not whether we trade with China: we will continue to expand our trade relations regardless of whether Congress passes PNTR. The issue before us is not whether we talk to the Chinese or engage the Chinese government; we will continue to do so regardless of PNTR. There has been no suggestion of boycotting China, or isolating China, or walling them off from their economic partners.

The question, really, is not even whether we integrate China into the world economy. The question is on what terms do we integrate them. What will the rules be? Who will decide those rules? Who will benefit from those decisions? And who will be harmed by them?

The bilateral agreement negotiated by the U.S. and China last November, and the PNTR legislation currently before the Senate, provide discouraging answers to those questions. Our bilateral agreement contains page after page of protections for U.S. investors. It is a virtual wish list for multinational corporations operating in China, and for those who wish to move there. But it contains not a word concerning human rights, nothing on religious freedom, nothing on labor rights, and nothing on the environment.

It has been said that the U.S. could not have demanded such things because we concede nothing in our deal with China. This is far from the truth. With PNTR, the U.S. would give up annual review of China's MFN trading privileges, as well as our bilateral trade remedies.

Annual MFN review has not been used as it should have been. But it remains our best leverage over China's behavior on human rights, and on labor rights. And it remains the only remaining leverage in our trading relationship to promote important non-commercial values.

Our bilateral trade remedies have not been used as they should have been, or as they were intended. But Section 301, for example, remains our only explicit remedy against China's violation of core labor standards.

I believe we could have negotiated a different deal with China, one that better reflects the priorities of the American people. I believe we still can. We have what China wants. The U.S. absorbs over 40 percent of China's exports. China desperately wants to eliminate the annual MFN review process, not only to free itself from external pressure on issues it considers to be sensitive, but also to attract foreign investment with guaranteed access to the U.S. market. And China wants to join the World Trade Organization (WTO), which requires U.S. consent to the report of the WTO Working Party on China's accession.

In exchange for these concessions to China, however, we extracted no concessions with regard to human rights. Yet this year's annual report by the State Department says that China's human rights performance continued to worsen in 1999.

Nor did we obtain any concessions with regard to religious freedom. Yet the Report of the U.S. Commission on International Religious Freedom flatly recommends delaying PNTR until China makes "substantial improvement" in allowing its people the freedom to worship, as measured by several concrete benchmarks.

We demanded no concessions from the Chinese on their persecution of labor organizers. We extracted no concessions on reforming their labor laws to allow free and independent union organizing, as the International Labor Organization has recommended. And we obtained no concessions from the Chinese on complying with their existing commitments on prison labor.

Notwithstanding our failure to take any of these steps to improve the lives of millions of Chinese, it is said that PNTR and China's WTO membership would benefit Chinese workers and ordinary citizens. Yet Chinese dissident Harry Wu points out that exponential increases in trade and investment over the past 20 years have coincided with a deterioration of China's record on human rights. And WTO membership has resulted in no noticeable improvement in the records of other countries such as Burma, Cuba, and Colombia.

Instead, absent any minimum standards for human rights, labor, or the environment, the most likely scenario is for China to become an export platform attracting foreign manufacturers with wages as low as 3 cents an hour. The tens of millions of Chinese expected to lose their jobs as a result of this deal would join a "floating population," already numbering in the tens of millions, exerting downward pressure on wages and working conditions.

Even in U.S.-controlled factories, a recent report by the National Labor Committee documented payment of below-subsistence wages and violations of fundamental worker rights by U.S. companies and their contractors in China, often in open collaboration with repressive government authorities. Any attempt to form an independent union in China is met with firing, arrest, and imprisonment without trial, usually for three to eight years in a hard labor camp.

And what about the effects of PNTR on American working families? Unfortunately, many of the concessions we chose to demand from China will make it easier for U.S. corporations to relocate there, taking advantage of weak Chinese labor and environmental standards, and export back to the United States in competition with American workers.

As emphasized by recent articles in the Wall Street Journal and Washington Post, the trade agreement with China is much more about investment than exports. Indeed, the International Trade Commission (ITC) has found that the trade deal with China will actually increase our bilateral trade deficit with China.

Most alarmingly, rock-bottom wages in China threaten to act as a magnet for employers seeking to avoid organizing efforts by American workers. Already, half of all U.S. employers threaten to shut down operations whenever employees choose to form a union. And studies have shown that threats by employers to move jobs to Mexico increased dramatically following passage of the North American Free Trade Agreement (NAFTA) in 1993.

It is commonly argued that our country as a whole benefits from current trade policies, but no one can deny that the benefits are distributed unequally. Even free trade economists now conclude that trade policy is the single largest cause of growing inequality since 1979, accounting for 20 to 25 percent. While the loss of good-paying manufacturing jobs is being matched by additional employment in the service sector, the new jobs pay less on average and have fewer benefits.

If the welfare of American working families were really a top priority of our trade policies, trade initiatives such as PNTR would be accompanied by legislation that makes it easier for American workers to organize and bargain collectively, at the very least. To restore some of the bargaining power lost by workers due to PNTR and other trade policies, to help spread the gains from trade more broadly, and to promote unionization of new jobs in the service sector, we must strengthen the right of workers to organize and bargain collectively.

We need a more forward-looking approach to the new challenges of a global economy, not the same, old trade and investment model that PNTR embodies. There's ample evidence that our trade policies over the past 20 years are a major reason why inequality has reached record levels in America, and why inequality has risen dramatically within and between nations over the past couple decades.

We are forever being told that we now live in a global economy, which is certainly true. But to me the implications of this development are seldom recognized. It means that if we truly care about human rights, we can no longer concern ourselves only with human rights at home. If we truly care about religious freedom, we can no longer concern ourselves only with religious freedom at home. If we truly care about the right of workers to organize and bargain collectively and earn a better living for themselves and their families, we can no longer concern ourselves only with labor rights at home. If we truly care about the environment, we can no longer concern ourselves only with environmental protections at home.

To those who argue that global markets will take care of themselves, or that they can never be tamed, I point to the lessons of our own economic history. At the end of the last century, America underwent the wrenching transition from a collection of local markets to one national economy. Today we are making a similar transition from a national economy to a global one.

In this country, however, we made the national economy work for working people by setting minimum standards for labor, the environment, public health, and consumer safety. We managed to write rules for the domestic economy that reflect values other than just the narrow commercial interests of big business. Why should those values be banished from the rules of the global economy? Can it really be impossible to make the global economy work for working people?

Of course not. But it all depends on who's writing the rules, because the rules determine who the winners and losers will be. Right now, the way those rules are written is not very democratic at all. We simply cannot afford to let decisions such as PNTR be made by a small circle of trade specialists and special interests.

Surprisingly, large majorities in survey after survey support these objectives. Americans oppose eliminating annual reviews of China's human rights and trade record by a margin of 65 to 18 percent. 67 percent oppose China's admission to the WTO without further progress on human rights and religious freedom. And 83 percent support inclusion of strong environmental and labor standards in future trade agreements.

But the American people have hardly been consulted in this debate. If they had been, I think it unlikely that PNTR would be favored by such large margins in the House and Senate.

Mr. Chairman, I believe the PNTR legislation before the Senate is a step in the wrong direction. We must do better. And I believe we still can.

(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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