11 September 2000 Senator Baucus on China Proliferation, Trade Senator Max Baucus (Democrat of Montana) says he opposes the Thompson-Torricelli amendment on nonproliferation proposed for H.R. 4444, the legislation that would give China Permanent Normal Trade Relations (PNTR). In comments delivered on the Senate floor September 11, Baucus said the amendment does nothing to help American nonproliferation interests and could hurt U.S. economic interests by killing the PNTR bill. "We already have a broad body of law covering proliferation of missiles, weapons of mass destruction, and the inputs to those weapons," Baucus told the Senate. He added that the amendment would reduce the President's flexibility in dealing with proliferation issues. Baucus warned that "If this, or any, amendment passes, it will be a sign that the Senate has voted to kill PNTR." Following is a transcript of his remarks: Senator Max Baucus Comments on Thompson/Torricelli Amendment on China Non-Proliferation to the China Permanent Normal Trade Relations (PNTR) Bill United States Senate September 11, 2000 I rise in opposition to the Thompson/Torricelli Amendment. I am very concerned, along with all of my colleagues, about missile proliferation and the development of weapons of mass destruction. However, this particular amendment does not enhance our ability to prevent dangerous proliferation. Just the reverse. The amendment will make it even harder for the United States to contain proliferation. It will seriously damage important American economic interests. And, if added to HR 4444, it will kill PNTR. Let me outline some of the principal problems I see in this proposal. First, we already have a broad body of law covering proliferation of missiles, weapons of mass destruction, and the inputs to those weapons. Those laws provide sufficient authority to the President to take action. Some may argue that there are cases where the President has not acted in a timely fashion or in the appropriate way. But he does have the proper authority and needs no more. Second, the proposal effectively ties the hands of the next President and all future Presidents. The proposal reduces a President's flexibility in using the threat of sanctions as leverage to force a change in behavior by a proliferating state. In recent months, we have seen, for the first time in fifty years, that reconciliation between South Korea and North Korea seems possible. We have been able to resume discussions with the North on missiles. What a tragedy it would be if we were required to impose sanctions against North Korea just at the moment when significant progress is possible in that potential tinderbox! Third, the scope of this proposal is so broad that sanctions would hurt innocent people and innocent entities. It could restrict purely commercial transactions. Stop scientific and academic exchanges that are important to our nation. And reduce military-to-military discussions that provide our own military forces with the information and insight necessary for them to do their job. Fourth, these sanctions are unilateral. We have seen, repeatedly over the last two decades, that unilateral sanctions don't work. Multilateral sanctions do work. Enactment of this legislation would antagonize some of our closest allies, with the result that they may not cooperate with us in the future on multilateral non-proliferation regimes. It may feel good to take a unilateral sanction. But any effective program to stop proliferation must involve all of our allies. Unilateral sanctions also hurt American farmers, workers, and businesses. While we are taking these unilateral measures and reducing the ability of Americans to pursue commercial activities with China, our Japanese and European competitors will be very happy to take our place in that growing market. Little harm to China. Great economic harm to America. A real boon for Japan and Europe. And once markets are lost, getting them back at some later time will be very, very hard. The impact of this proposal on our agricultural sector could be very serious. It would prevent the use of various commodity credit programs for sales to China. Our European, Canadian, and Australian competitors would happily step in. Also, our farmers would be the likely first target of Chinese counter-retaliation. For these reasons, almost every major agricultural organization involved in trade opposes this legislation. Finally, possible sanctions in this amendment include being barred from access to U.S. capital markets. Alan Greenspan, Chairman of the Federal Reserve Bank, testified on July 20 at the Senate Banking Committee. He said: Most importantly, to the extent we block foreigners from investing or raising funds in the United States, we probably undercut the viability of our own system...The only thing that strikes me as a reasonable expectation is it can harm us more than it would harm others. This would be the first time America's capital markets have been used as a unilateral foreign policy sanction. Why would we want to damage the capital markets that have contributed so much to our current prosperity? As we vote on granting China permanent Normal Trade Relations status, this amendment would effectively nullify much of the progress we have made in our economic negotiations with China. We need to integrate China into the international community. Chinese participation in the World Trade Organization and our granting them PNTR is a critically important first step. We also need to work closely with our allies to bring China into the Missile Technology Control Regime and to ensure Chinese compliance with it and other weapons control agreements. We need to work with our allies to address Chinese human rights abuses forcefully at the United Nations Commission on Human rights and elsewhere. We need to work with the international community to help ensure peace and stability across the Taiwan Strait. I support strong action against proliferation of missiles or weapons of mass destruction by China or any other country. But the Thompson-Torricelli amendment moves us backwards in these efforts. In addition to these very important substantive reasons to vote against this amendment, there is another reason -- the very survival of the underlying PNTR legislation. This amendment, like all amendments, are killers. An amendment to HR 4444 means a conference will be required. At this stage of the Congressional session in this Presidential election year, there can be no conference. There will be no conference. A positive vote on this amendment is a vote to kill PNTR. Every Senator must understand this and decide whether you want to kill PNTR, with all the negative ramifications for our economy and our ability to influence China in the future. If this, or any, amendment passes, it will be a sign that the Senate has voted to kill PNTR. I will not be complicit in that effort. Therefore, if there is a successful amendment, I will vote against invoking cloture, and I will encourage all my colleagues to join me. (Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov) Return to the Washington File