*EPF403 02/17/00
Text: Rep. Moran Feb. 16 on Normal Trade Relations for China
(Moran cites benefits of permanent NTR for China) (1590)
Extending permanent Normal Trade Relations (NTR) status to China, says a Democratic lawmaker, "gives our country its fullest opportunity to compete and succeed."
Representative James Moran (Democrat of Virginia) called on members of the House Ways and Means Committee February 16 to support the agreement reached by China and the United States last year regarding the terms for China's accession to the World Trade Organization (WTO). The agreement, he said, "is largely a one way street for the United States."
The Chinese, Moran said, agreed to "far reaching trade concessions in exchange for a commitment by the United States to keep our markets open and to support Chinese accession to the WTO."
"Assuming that China does enter the WTO, the agreement allows us to take action in the event of an import surge from China. That authority lasts for 12 years after accession," he continued. "China's membership in the WTO would also carry with it all of the reciprocal responsibilities that are attendant to any member nation, thus providing the United States a level playing field and an objective multinational forum within which to enforce agreements."
"I urge this Committee to support permanent NTR," Moran said.
Following is the text of Moran's remarks, as prepared for delivery:
(begin text)
Testimony of
Rep. James P. Moran
Before the
Committee on Ways and Means
U.S. House of Representatives
February 16, 2000
I appreciate the opportunity to testify this morning about whether this nation should establish Permanent Normal Trade Relations (PNTR) with the People's Republic of China. This may be the most important issue this Congress will decide all year.
At the outset, I want to commend you, Chairman Archer, as well as our ranking minority member, Mr. Rangel, for the bipartisan approach that this Committee has taken with respect to trade policy. These are obviously difficult and contentious issues. There have been times when the House has been unable to form a consensus on important trade legislation. The failure of Congress to grant Fast Track authority to the President in 1997 is a case in point. It is the members of the Ways and Means Committee who best understand the complexities and the conflicts in trade policy. The House would have been well served by following the bipartisan leadership of this Committee. Let us hope that we will be more successful this year with CBI, Africa and China.
Mr. Chairman, I am privileged to represent a region with one of the strongest and most vibrant economies anywhere in the United States. The Greater Washington Metropolitan region and Northern Virginia in particular are quickly becoming the Silicon Valley of the east. More than half the Internet traffic in the world is routed through Northern Virginia. In the last 30 years, our region has created 1.7 million new jobs with 95 percent of them in the private sector. This is during the same period that saw a cut of 50,000 Federal employees in our area. These new jobs are almost entirely in the service sector, particularly in information technology. More than 3,000 regional Information Technology companies have sales greater than $1 million. The unemployment rate in my district is below two percent.
We are just one part of a larger service sector that provides 86 million private sector jobs nationwide and accounts for $5.5 trillion worth of production. That equals more than 75 percent of our nation's private sector economic production and is a major contributing factor to our unprecedented levels of sustained productivity growth.
Our service-based industries have an enormous stake in open trade with China. The November 15th agreement between the US and China on WTO accession stands as a victory for many parts of our economy, but it is particularly good news for the service sector. It presents industries like those I represent with new opportunities to succeed in a market with 1.25 billion people and an annual rate of growth that exceeded 11 percent between 1990 and 1997. The Chinese people want the services we sell them.
The agreement provides that China will adhere to the WTO's Basic Telecommunications Agreement. This marks the first time China has agreed to open its telecommunications sector to direct foreign investment and to implement regulatory policies that foster more competition. This part of the agreement specifies that the Internet will become available at the same rate as other telecommunications services are made available to the Chinese people. Equally encouraging tariffs on computers, semiconductors and other information technology equipment will fall from an average of 13.3 percent to zero by 2005. These changes should result in more Chinese receiving more information through the Internet than ever before. Information is empowering and transforming.
The agreement contains market-opening concessions by the Chinese in financial services, banking insurance and securities. It will give American companies a greater ability to own their own distribution chains, which is essential if our domestic manufactures are to build and sustain markets in China for their goods. Currently, foreigners may only own distribution networks for goods made in China. But while we will be retaining ownership, we will be recruiting locally, and creating corporate capitalism that will have profound changes on Chinese society.
In the professional services, the agreement will allow expanded access in a broad range of areas, including accounting, engineering, management consulting, and law. Western expertise in these areas will further accelerate the pace of change in China by helping to develop modern management and financial systems, transparency of transactions, and encouraging a uniform body of business law.
What perhaps is most remarkable about this agreement is that it is largely a one way street for the United States. The Chinese agreed to these and other far reaching trade concessions in exchange for a commitment by the United states to keep our markets open and to support Chinese accession to the WTO. Assuming that China does enter the WTO, the agreement allows us to take action in the event of an import surge from China. That authority lasts for 12 years after accession. China's membership in the WTO would also carry with it all of the reciprocal responsibilities that are attendant to any member nation, thus providing the United States a level playing field and an objective multinational forum within which to enforce agreements.
Many will oppose Permanent Normal Trade Relations with China. They no doubt will be motivated by a deep and sincere concern over China's record on human rights. I think all of us share their concerns. The recent brutal oppression of practitioners of Falun Gong, the detention of protesters, and the thousands that remain imprisoned simply because of their political beliefs underscore the fact that the United States must remain extremely vigilant in pressing China whenever and however we can to improve its record of human rights.
This is, however, a debate that is more about the means to achieving an objective than it is about the objective itself. I am convinced that the best way of effecting change in China is through engagement, which will lift more of the Chinese people out of poverty, spread our values and increase the interdependence of nations. The alternative of isolating China will only exacerbate the suffering and deprivation of their people.
There is a danger in viewing China through the snapshot of today's headlines. To look only at China in the present is to see a nation beset with human rights abuses, municipal corruption and inefficiency. To look at China over the span of twenty years or even five years is to see a dynamic nation moving inexorably toward a market oriented economy and genuine reform. With economic change will come prosperity, and with this broader prosperity the people will demand political change.
It is no coincidence that some of the biggest proponents of change support PNTR. The leader of Hong Kong's Democratic Party, Martin Lee, supports the agreement, as do others who support reform and change. They all want constructive, permanent change -- not destructive, political conflict.
Mr. Chairman, earlier this morning I hosted an informational breakfast in Arlington for several dozen business leaders from throughout Northern Virginia. This morning's breakfast featured a presentation by Ambassador Barshefsky. As she has been doing all over the world, Ambassador Barshefsky briefed the group on the administration's trade agenda, discussed the enormous opportunities in the global economy, listened to audience concerns, and answered questions.
The men and women that Ambassador Barshefsky and I met with this morning were but a small sample of the New Economy in Northern Virginia. They were drawn from the high technology sector, telecommunications, and professional services. They understand perhaps better than any of us the realities of globalization in the 21st century.
They understand that in a world of dynamic change, real time communication, and intense competition, it is no longer possible for the United States to "go it alone." There is no way that this country alone can possibly consume what we are capable of producing. To sustain the growth that we have enjoyed in Northern Virginia, we must compete and succeed everywhere -- including China.
Extending Permanent Normal Trade Relations to China gives our country its fullest opportunity to compete and succeed. I urge this Committee to support PNTR.
Thank you.
(end text)
(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: usinfo.state.gov)
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